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20 Jan 2009EXPORTS: Some Notable Achievements
Recent Western Cape Business News
SOME of Capespan’s more notable export achievements recently include the establishment of a significant presence in the Indian fresh produce market. Capespan and agri-business giant Mahindra Shubhlaabh Services signed a memorandum of understanding earlier last year to investigate forming a joint venture company in India.
The 12 month pilot project was rolled out in April to develop knowledge about the organised retail industry and Indian product supply dynamics, as well as develop a brand strategy and five-year business plan for a possible future joint venture.Capespan is providing the technical commercial support and expertise for grapes, citrus and apples; developing imports into India from South Africa and other source countries; and engaging with retailers to determine their long-term needs.
Both parties also will be responsible to further develop export opportunities for Indian produce. If the pilot plan proves successful, the two companies will enter into a mutually exclusive 50/50 joint venture in India. This JV will establish itself as a receiver, handler and distributor of selected produce into the emerging retail and food service sector.
Because India has become a priority market, Capespan wants to lead the way in that country’s fresh produce market.
Another achievement was that the Namibian Grape Company’s management and marketing agreement was extended in favour of Capespan a few months ago. Because of this and other initiatives Capespan will be able to offer its global customers between 55 and 60% of the early grapes from that region. The outstanding quality of Namibian grapes led to 99% of the crop being exported in 2007/8, with the European and UK market scrambling to buy these excellent grapes.
With a sales turnover target of 24 million euros, Capespan Central and Eastern Europe ended 2007 with a record 31 million-plus euros and a profit margin to match. Over the last two years, Capespan has managed to double sales in the Central and Eastern European markets.
And in Japan, the Goldspan division ended the 2007 financial year as one of the star performers within the Capespan Group. Turnover had increased by 10% in 2005/2006 and a staggering 40% in 2006/2007. From 2001 until 2007 the company upped turnover more than five times from $22 million to $115 million. And this year, it’s anticipating a 50% turnover growth finishing off at an impressive $170 million. Over the last five years, Goldspan’s gross turnover has increased by 450%. The company’s success is ascribed to its philosophy of adding value to earn profit, in addition to being open, fair and transparent in its dealings with business partners and producers.
During the 2007 citrus season, Goldspan handled 2.2 million of the 4.3 million South African grapefruit cartons into Japan, translating to a 43.4% share. This compared to 40% in 2006 and 33% in 2005. Clearly, the company’s concerted drive of developing its supermarket customer base and promoting RSA citrus has paid off handsomely. From a base of 11 customers in 2000, the number stood at more than 250 last year.
In 2007, 35% of Goldspan’s product originated in South Africa. To do the best possible job for South African growers, the company had to start supplying citrus for 12 months of the year, so as to increase its importance to the Japanese market.
Having obtained permission to pack Sunkist-branded citrus from South Africa for ParknShop supermarket in Hong Kong, Capespan Group company Metspan has become one of only two South African suppliers delivering this brand to the Far East. The Sunkist deal was the result of responding to customer requirements.
Capespan also secured an exclusivity contract on Juvalle oranges for the Iranian market. Juvalle is the trademark for the Turkey orange, which is popular in international markets mainly for its juicing qualities.
A current study in China will indicate possible joint venture partners for imminent projects in that country.
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