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South African Business 2021

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Welcome to the ninth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa. This issue has a focus on economic recovery plans which have been put in place to tackle the challenges thrown up by the global Covid-19 pandemic. National government’s focus on infrastructure and the use of Special Economic Zones is highlighted, together with a feature on the nascent maritime economy. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at


OVERVIEW Food and beverages Starch mills are changing hands. SECTOR INSIGHT South Africans love chicken and hamburgers. Tongaat Hulett, best known as a sugar producer, is selling its starch business (with three milling plants in Gauteng and one in the Western Cape) to the KLL Group, a whollyowned subsidiary of Barloworld Logistics Africa. The Germiston plant is pictured. The R5.3-billion transaction was in doubt because of concerns about the value of the business expressed by the buyer in the context of Covid-19 but the Competition Tribunal in July 2020 approved the deal. The top five fast-food companies in terms of outlets in 2019 were KFC (900), Steers (600), Debonairs (569), Wimpy (467) and Nando’s (340). McDonald’s, FishAways and King Pie were close together in the next three positions in a survey done by Business Tech. The survey found a total of 5 287 stores, which includes the somewhat vague “over 200 stores” claimed by Chicken Licken. Famous Brands owns Steers, Debonairs, Wimpy and FishAways, a typical scenario in the South African fast-food sector. The Spur Corporation has outlets in several segments including family diners, pizzerias, hamburger outlets and steak houses, including the Hussar Grill. Taste Holdings announced in 2020 that it was placing its food business into voluntary liquidation after a failed attempt to sell the Domino’s Pizza business. The Starbucks franchise was sold for R7-million. More than half of the companies operating in the food and beverage sector in South Africa are in Gauteng, including Nestlé, Tiger Brands, Pioneer Foods, RCL, AVI and Astral. There are approximately 4 000 food processing companies in the province, employing more than 100 000 people. ONLINE RESOURCES Agricultural Research Council: FoodBev SETA: National Agricultural Marketing Council: Two of the best-known large companies in South Africa’s food and beverages sector were purchased by international companies in 2019. PepsiCo bought Pioneer Foods and Central Bottling Co of Israel made on offer on dairy company Clover. Clover’s action in 2019 in closing three small-town plants in rural areas illustrated a less positive aspect of South African manufacturing: the inability of small municipalities to adequately supply services to companies. Clover moved production to Port Elizabeth, Durban and Johannesburg. Food and beverages makes up 26% of the South African consumer products sector, just ahead of agro-business (25%), diversified companies (23%) and sugar producers. Recent capital expenditure in the industry has targeted improving efficiency rather than expansion of production. The food and beverages sector employs about 230 000 people. Beverages accounts for just over 4% of all manufacturing sales while food is responsible for 13.5%. Within the sector, beverages accounts for 24% of sales. One quarter of the 37% of national GDP that is generated by agro-industries derives from agro-processing. ■ SOUTH AFRICAN BUSINESS 2021 76

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