Local sourcing could cut production costs

Because of its logistics
infrastructure, strong global and
regional access (via road, rail and
air) and its proximity to agricultural
production regions, Gauteng is
“well positioned” to grow its agroprocessing
sector.
“There is a rise in global demand
for value-added agricultural produce
and we are increasingly seeing
international investment in this
sector,” said Saki Zamxaka, chief
executive officer of the Gauteng
Growth and Development Agency
(GGDA).
He pointed to Gauteng’s strong
labour force and manufacturing
skills, its “extensive” global, domestic
and regional logistics infrastructure
and its “natural” status as a gateway
into Africa as being some of the
opportunities to grow this industry.
Zamxaka quoted statistician
general Pali Lehohla’s recent statistic
that about half of what Africa ate
on a daily basis was imported. “We
often export our raw produce only to
import it again in value-added form
at a much higher price. We need to
look at attracting investment in this
sector by highlighting our strengths
and offering incentives,” he said.
And, Zamxaka added, investors
in agro-processing plants would
benefit local producers of raw
produce and help build additional
production capabilities in the
province.
“An example of this is a
Portuguese company that
established a fruit and dairy
processing plant in Midrand
recently. They need about 800
tonnes of high-quality fresh
strawberries annually to make
their yoghurt products. We were
able to facilitate this for them with
a local supplier in the Magaliesberg
region, which eliminated the need
for them to import the fruit,” he
explained.
Unilever South Africa, which
produces a number of processed
food products such as soups, also
imports a “significant” portion of
its agricultural ingredients. “If they
could source these locally, they could
cut down on production costs and
stimulate increased local demand.”