Clovers cashes in US$2.9m from sale of cold storage, distribution center in push to consolidate operations

SOUTH AFRICA – South Africa’s branded foods and beverages group, Clover Industries Limited, has disposed its cold storage and distribution centre in City Deep, Johannesburg for R52.5 million (US$2.9m).

The dairy group, according to reports by IOL, has sold off the warehouse to a private Durban investor, who will lease the premises out to a cold storage operator.

City Deep is an industrial suburb of Johannesburg and is Africa’s largest dry port. The container terminal is connected to the Port Durban, Port of Ngqura, Port of Cape Town, as well as Southern Africa by road and rail.

The move by Clover is part of its strategy to centralise operations to main plants, having faced service delivery issues in many of its outlying assets.

This follows the sale of its R50m Bellville, Western Cape facility in 2021, also concluded by private treaty by Cushman & Wakefield/Broll to a private buyer.

Steven Velthuysen, Clover’s group manager: Legal & Secretarial, confirmed that the sale was part of centralising operations.

Clover developed a strategy in 2014 called project Sencillo aimed at simplifying its processes, and addressing service delivery issues in various municipalities by semi-centralising operations to areas where the company could be most effective and profitable.

“It is well documented that we are consolidating our operations to bigger plants like Queensburgh. We have had some struggles with municipalities in terms of poor service delivery and although we have had engagements, nothing has come of it,” said Steven.

Early last year, the company closed down its cheese factory in Lichtenburg, North West, blaming the move on “ongoing poor service delivery” by the local municipality after large losses due to long-standing water and electricity disruptions.

After large losses, it subsequently moved its production activities to Queensburgh in Durban, where the company already has a plant.

Clover has not been the only culprit of poor service delivery in the country, as poultry producer Astral Foods last year obtained a High Court order against government and the Treasury after the Lekwa (Standerton) municipality failed to delivery basic water and electricity supply services to its factory.

Packaging manufacturer Nampak and food brands group Libstar have also suffered due to poor service delivery at their production plants which has costed then millions of rands.

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