Last year proved to be one of its most challenging years yet for Capespan with total volumes of fruit marketed and net profits considerably down on previous seasons, its annual report revealed this week.
“The total volume of fruit marketed by the group during the year declined by 15 per cent to 59 million cartons,” said Neil Oosthuizen. “The South African volumes, which were negatively affected by climatic conditions and a reduction in the supply share, declined from 51m to 44m cartons. The non-South African procurement also declined and volumes were 15 per cent lower at 15m cartons.”
The group blamed overall international marketing conditions which it described as “extremely disappointing”, as many markets were oversupplied.
“The UK marketed 2.5m cartons less fruit than in the previous year as a result of an equal reduction in South African and non-RSA volumes,” said Oosthuizen. “The market continues to experience pricing pressure from the leading retailers and price deflation is a concerning trend. In the UK, 44 per cent of product marketed now comes from non-RSA sources.”
Highlights of the group’s performance in the UK market include its position as a significant supplier to the School Fruit & Vegetable Scheme - to market small-sized apples and easy-peelers. And its business with the foodservice sector grew by 336 per cent.
But group net profit was down by almost 24 per cent annually to R44m (£3.5m) and despite the fact that the group’s logistics and investment divisions both performed well, the Capespan group result was strongly overshadowed by the weak performance of its fruit division.
“The continued strength of the rand together with inflationary pressures at production level has meant that the farm-gate returns have decreased significantly over the year, placing on-going pressure on the financial viability of horticulture in South Africa,” warned chairman Paul Clüver. “Further, the ever-changing climatic conditions have also posed increased production challenges with more frequent abnormal weather patterns resulting in inconsistent quality and yields.”
