Western Cape Business News

Send  Share  RSS  Twitter  25 Apr 2012

VENTURES: Just Fruit & Veg Is Bowing Out


Recent Western Cape Business News

CAPE TOWN-based agri-business Ububele Holdings looks set to throw the towel in on initiatives to build a food-processing hub after further setbacks at its Just Fruit and Veg division.

As recently as January CBN (See ‘Stealing the Initiative’) reported hopefully that Just Fruit and Veg – which provides custom made orders for retailers and catering companies – was determinedly on the comeback trail after sent reeling by large syndicated theft in its wholesale section.

At that point Just Fruit and Veg’s wholesale division at Killarney Gardens has been downscaled, and aggressive cost cutting initiatives were implemented – including the processing plant to a more cost effective production premises in Phillipi.

Unfortunately, things have not quite panned out. In the six months to end December 2011, a poor performance from the Just Fruit and Veg division was the main reason for Ububele’s food division showing a R1.4 million loss off turnover of R67 million. This prompted Ububele management to discontinue the fruit and vegetable operations, which also coincided with the liquidation of another Ububele food subsidiary, So Gourmet.

Ububele CEO Bertie Cloete pointed out that management spent a significant amount of time and effort to implement remedial actions and strategic plans to stimulate future growth potential at Just Fruit and Veg.

Various steps were introduced to improve productivity, including more stringent controls over stock, serious cost-cutting exercises, improved customer service as well as a significant drop in wastage.”

He said despite all management’s efforts it became clear that Just Fruit and Veg would not turn profitable in the near future.

Spiralling raw material costs and economies of scale are just some of the challenges faced in this industry.”

Cloete said the board decided to discontinue this business completely within the next 12 months.

While the decision to shut-down the Just Fruit and Veg operation is a blow to Ububele, there probably is every chance the operation may still be sold off to another player in the food sector.

In the meantime CBN notes from reports that Ububele will be bringing new dairy capacity to the Western Cape with plans to acquire or set-up a large ice cream manufacturing facility in Cape Town.

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