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Send  Share  RSS  Twitter  02 Feb 2012

VENTURES: Stealing Back The Initiative

 



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CAPE TOWN-based food distributor Just Fruit and Veg – which is owned by JSE listed agribusiness Ububele Holdings – is on the comeback trail after being bruised by large syndicated theft in its wholesale section.

The theft required Ububele to institute a forensic investigation. While forensic investigators were able to identify guilty parties and determine the quantum of the syndicates operations, the exercise also revealed that Just Fruit and Veg’s wholesale division was no longer profitable after losing R2.4 million between the beginning of March and May last year.

Just Fruit and Veg has been one of Ububele’s stalwart divisions, supplying value added fruit and vegetables to clients such as airline catering companies, retail shops, five-star hotels, up-market restaurants and specialist catering companies.

The setback was not well timed for Ububele, which saw some encouraging top line growth in its food segment to R146 million from R132 million last year.

Just Fruit and Veg’s wholesale division at Killarney Gardens has been downscaled, but CEO Bertie Cloete stresses Ububele is still on the front foot in terms of building up Just Fruit and Veg’s profits again.

He says aggressive cost cutting initiatives have been implemented – including a lucky break (courtesy the City Council) in shifting to a more cost effective production premises in Phillipi.

Cloete says Just Fruit and Veg’s restructuring exercise should shave some R4.5 million off the cost base per annum.

Just Fruit and Veg – which will be renamed to Fine Cut – will alone save R600 000 a year at its new premises,.

He adds that the disposal of redundant machinery would save R540 000 per year and closing of the wholesale division will save another R2.1 million a year.

Cloete says the new focus in the re-alignment of Just Fruit and Veg will see the division undertaking to do only value-adding processing of fruit and vegetables as well as investigating various new methods and products to increase the value-adding side of the business.

Cloete says this can conceivably see Ububele – which already produces ice creams - investing in assets that allow the processing of jams or purees.


 
 
 
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