South African fresh produce exporter Lonrho Fresh is to be wound up after operating at a loss for a number of years, Eurofruit has learned. Citing a number of 'adverse events' including its inability to pay for continued losses, the company said it was no longer able to meet its financial obligations and would therefore go into liquidation.
Those contributing factors include the loss of its main customer, which accounted for 80 per cent of total revenue.
The company has also found it difficult to source good quality product, especially in the past 12 months as South Africa’s worst drought on record has taken its toll.
“Despite considerable resources invested into Lonrho Fresh, the impact of recent events has resulted in the business becoming financially distressed, requiring a significant injection of capital,” explained Lonrho’s executive chairman Christopher Chambers.
“Unfortunately after the loss of the largest customer contributing per cent of total revenue, this was not viable.”
Lonrho Fresh reportedly makes up a very small part of the Lonrho Group, which indicated that the operation accounted for less than 5 per cent of its total sales in 2015 and did not therefore form a core part of its strategic growth plans.
“The winding-up of the business will consequently not impact Lonrho’s ambition to become the leading African investment platform,” Chambers added.
Lonrho Fresh's business included the procurement, handling and delivery of a wide range of fruit, vegetables and salads.
The news that Lonrho Fresh is to stop trading follows the recent sale of Lonrho Group’s 49 per cent stake in Lonrho Fresh Exports Zimbabwe, formerly known as Rollex, to local partner Edwin Moyo.
