JOHANNESBURG, May 16 (Reuters) – South Africa’s Tiger Brands will sell its canned fruit business, Langeberg and Ashton Foods, as a going concern for a symbolic one rand to a new company set up by a consortium, the country’s biggest food producer said on Friday.
The sale of the business follows Tiger Brands’ strategic decision in May 2020 to exit the business to better align its portfolio with its strategy, focus on its local market and use resources for its core businesses.
The consortium consists of the Ashton Fruit Producers Co-operative, which brings agricultural sector expertise and insights, and a development finance institution, Tiger Brands said in a statement.
As part of the sale, Tiger Brands will commit 150 million rand ($8.31 million) towards a Community Trust, set up at the same time as the new company, with a view to providing socio-economic development initiatives for the local community.
The Community Trust will hold a 10% stake in the company with the consortium holding the remaining equity, the company said.
Tiger Brands also commits to completing an effluent plant upgrade with a further investment of 31 million rand, to ensure the operations continue to adhere to environmental regulations, it added.
“The success of this sale will ensure the sustainability of the South African deciduous fruit industry and consequently improve the livelihoods of the Langeberg and Ashton Foods employees and the broader communities in these areas,” Tjaart Kruger, CEO of Tiger Brands, said.
Tiger Brands and the new company, referred to only as NewCo, will also enter into a contract manufacturing agreement for the purchase of canned fruit under its KOO brand.
Langeberg and Ashton Foods, based in a small town Ashton in South Africa’s Western Cape province, employs more than 3,000 seasonal and permanent employees and exports over 80% of its canned fruit and purees.
Locally, it supplies the Tiger Brands Culinary business unit with canned fruit under its KOO brand, which is sold in Southern African markets.
($1 = 18.0563 rand)
(Reporting by Siyanda Mthethwa, editing by Nqobile Dludla and Barbara Lewis)
