According to ENCA Famous Brands has acquired a state-of-the-art tomato paste manufacturing plant, the Cape Concentrate, for an undisclosed amount to boost production and create strategic partnership with local farmers.
The South African food producer said on Monday that the acquisition was in line with its strategy to build supply-chain capability and capacity.
The practically unused facility, constructed in 2010 at a cost of R200m, is situated in the Coega precinct in the Eastern Cape.
Kevin Hedderwick, Famous Brands’ strategic advisor, said the acquisition would enhance the group’s capability to manufacture licensed products for its franchise network.
"We also plan to expand the customer base for this product beyond our own internal customers, capitalising on the shortage of
tomato paste which exists in the South African market," Hedderwick said in a statement.
Hedderwick said the local industry was unable to supply growing demand for the product, resulting in some 30,000 to 35,000 tons of tomato paste being imported by South Africa annually to meet the shortfall.
"Famous Brands itself currently imports in the order of 1,500 – 2,000 tons of tomato paste per year for use primarily in our Sauce and Spice plant, which manufactures sauce products for the Group’s 2,600-strong restaurant network as well as for our retail (trade) customers," Hedderwick said.
Famous Brands said its intention was to model the tomato paste manufacturing plant on its empowerment venture, Famous Brands Fine Cheese Company (FBFCC), formerly Coega Cheese Company.
FBFCC was established in 2013 as a green-field venture, in which local farmers were co-opted to supply milk for the production of Mozzarella, cheese slices and cream cheese for Famous Brands.
The new company would comprise a strategic alliance partnership between local farmers, who would grow tomatoes on contract, and
Famous Brands would be responsible for providing the customer base, as well as managing the production and route-to-market functions.
Famous Brands said the partnership would provide much needed employment in an economically distressed area and deliver substantial financial benefit for the farmers who will gain an instant, robust market for their produce and the potential to develop that market over time.
It is anticipated that the operation would be commissioned early next year.