20 September 2023
By: Lucille Botha
Redsun Dried Fruit & Nuts intends to buy crates and equipment from BKB’s struggling raisin facility, Desert Raisins in Upington, to use at a new raisin plant in Vredendal.
The competition commission has already indicated it has no objections to the plan.
BKB’s board decided earlier this year to close Desert Raisins and discontinue operations, except for a few remaining contracts. The entire process has cost BKB a significant amount, and it had to lay off employees.
In a trading update, BKB said Desert Raisins suffered significant operating losses in the past financial year.
“The South African raisin industry model requires a significant working capital outlay from packers to obtain, package and sell raisins,” the update says.
“Consumer demand for the product has sharply declined due to the cost of living crisis locally and in the company’s overseas target markets. This, along with tough economic conditions and low harvest volumes in the past two seasons, has resulted in significant financial losses over the past few years.”
New factory and job opportunities
Redsun, which produces about 15 000 tons of export raisins at its facility in Keimoes, has offered to buy 31,591 raisin crates and raisin processing and packaging equipment from Desert Raisins for an undisclosed amount.
According to Peter Kuilman, director at Redsun, the company decided two years ago to establish a raisin plant in Vredendal in the Western Cape, where it will produce currants and jumbo-sized raisins, among other products. He abandoned his initial plan to buy new equipment and decided to purchase Desert Raisins’ assets instead.
As part of the transaction’s conditions, Redsun must create 100 new job opportunities in the raisin industry within seven years after the plant is established.
Kuilman says Redsun is “incredibly optimistic” about the future of the raisin industry.
“We have had three difficult seasons behind us. The first two were due to rain, which resulted in small crops of poor quality, and in the third, the vineyards were affected by the rainfall’s carryover effect.
“However, we believe these challenging conditions are not the norm. We believe the norm is that South Africa produces high-quality products that the world is currently seeking, as California and Australia scale down their production due to high costs and limited labour.
“Therefore, there is a golden opportunity for the South African harvest to grow and fill a critical gap in the market for high-quality raisins with low residue levels.”
Kuilman says Redsun has already transported 4 000 tons of raisins from the Western Cape to the Northern Cape for processing this year.
“There are relatively specialised cultivars produced only in the Vredendal area. These are currants and jumbo-sized raisins, because more and more table grape farmers are converting a portion of their farms to raisins. Therefore, jumbo sizes are becoming an increasingly important part of the South African product.”
Although the currant market is still struggling after the hospitality industry collapsed during the Covid-19 pandemic, Kuilman believes Redsun and other stakeholders are well-positioned to restore it to previous levels.
Redsun is owned by One Thousand & One Voices Africa 1 and One Thousand and One Voices Funding Solutions, which are wholly owned by One Thousand & One Voices Africa 1 Fund, controlled by an individual. The group is involved in the processing and supply of raisins, pecans and trout.
