Fresh produce: Firm friends The deciduous fruit and citrus industry has been a powerhouse of the South African agricultural economy, with a world reputation for quality and well established brands. The dominant force within it is Capespan, which grew out of the merger of Unifruco and Outspan at the beginning of last year, and it has been fighting to hold its position in the wake of deregulation of the industry two years ago. Until then marketing was under the statutory control of the Deciduous Fruit Board and the South African Co-operative Citrus Exchange. When the floodgates to new exporters opened, Capespan lost 10% of its volume share. This year managing director John Stanbury says its share of the market will be between 55% and 60%. "In putting the two companies together and getting economies of scale, we lost some focus on the needs of our suppliers. We are pleased to see we are now getting support within the grape and stone fruit sectors and we will increase our market share in the year ahead. "Some of the competition that came in bit off more than they could chew and the number of professional players which have the confidence of the suppliers will be limited ­ some are professional and some are not." Stanbury believes it will take another three or four years before the market settles down. The landscape of the South African economy changed against the backdrop of tough trading on the world markets caused by over supply and the use of government subsidies. Capespan's answer has been to look at new markets such as eastern Europe and China and form strategic alliances. The most important of these was the sale to Fyffes of 50% of the group's European marketing and distribution operation, Capespan International . This gave Capescan access to more facilities and product internationally and strengthened trading relationships. Stanbury says: "This is kicking in nicely. We have the wherewithal to have a low cost route to market with better services and back-up and we can command higher prices generally." At the beginning of this year the group also acquired 50% of FBI/Fisher, its longstanding agent in the US and Canada. In the Far East it has joint ventures in Hong Kong (Metspan) and Japan (Goldspan). "The biggest problem in our business is managing the logistics of large volumes while giving consideration to individual suppliers," Stanbury says. "Any practice which improves costs by a few percent has a major impact on farm incomes." And the effects could be widespread because Capespan now handles product from across southern Africa, including Swaziland, Namibia and Mozambique. Corporate affairs manager Fred Meintjes says the company deals with 2,000 supplier units belonging to about 1,000 growers. It handles 80 million cartons of produce a year. "We supply all types of deciduous and citrus fruit, as well as a range of sub tropical fruit, wine and fruit juices. "We have been through a tough time but we have sorted things out and will be more stable. "The competition between the UK retailers puts a lot of pressure on us. They still want reliability of supply and good service and they want partners they can trust and who can serve them over a 12-month period." The company has been looking at new markets around the world and diversifying into new food categories. It recently launched a new healthy food and drink range under the Outspan brand which will go to some of its international markets. The range includes 100% Pure Citrus Fruit Juice, Natural Iced Rooibos Tea with citrus juice and Muesli Bars with Real Orange and will be launched the Far and Middle East and Africa, with Europe and North America to follow. In the UK Princes Soft Drinks, in partnership with Capespan International, already produce an Outspan Orange juice. n {{Z SUPPLEMENTS }}

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