South Africa’s Sundale Dairy forms US$4.25m JV with cheese processor Schreiber

SOUTH AFRICA – South African dairy processor, Sundale Dairy has formed a joint venture with International cheese processor Schreiber Foods, investing R70 million (US$4.25m) in the construction of a new cheese processing factory in August at the East London Industrial Development Zone, southeast coast of South Africa.

The investment according to Money Web, will see production of local cheese for quick serve restaurants, delivering 7 000 tonnes of preservative-free cheese slices to the African market per annum.

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Sundale Dairy currently supplies Burger King and McDonald’s South Africa with imported cheese slices.

Sundale Dairy CEO Pierre van Rensburg says it has been in negotiations for three years to get this venture off the ground and says the partnership “is a value-add solution for the local economy”.

He says the partnership with Schreiber creates opportunities for skilled labour in the province for food technologists, process engineers and technicians and is a welcome boost for a sector that relies on export opportunities for sustainability.

Van Rensburg adds that the Eastern Cape is in need of this boost, considering development has stagnated for some time.

“The environment for investing in East London has not been this good for the last couple of decades. On top of that, the Eastern Cape is now the premier producer of milk nationally, with the biggest factories processing milk.”

He says despite the country’s economic outlook amid the pandemic, with many shops shutting their doors and jobs being shed, they are positive this JV will succeed.

“We have weighed up the operating environment and effects of the pandemic and are very comfortable to maintain and increase momentum on the project’s investment we have planned.”

This latest venture is part of Sundale’s aggressive growth strategy and complements Sundale’s continuous investment in their expanding cheese business.

In 2018, Sundale joined forces with Just Milk to buy the old Dairybelle Cheese factory in Cookhouse, a R 20 million (US$1.2m) investment, and in August 2019 invested another R 10 million (US$607,000) to open a cheese factory in Braelyn, where they process 200 tonnes of cheese per month into fixed weight sizes.

ProVeg International, a food awareness organisation based in Berlin, recently conducted a large-scale consumer survey across nine European countries i.e. the UK, Germany, Austria, France, Belgium, the Netherlands, Switzerland, Denmark and the Czech Republic, to identify priorities for product improvement and development in the plant-based food market.

This novel research, which is based on consumers’ purchasing and consumption patterns, identifies several gaps in the market that South African food manufacturers could be taking advantage of.

When looking for specific gaps in the market, the ProVeg research zeroed in on plant-based cheese as the biggest opportunity for plant-based food producers.

According to Verena Wiederkehr, Head of Food Industry and Retail at ProVeg International, who oversaw the research, “The data supports the view that good quality, affordable, plant-based cheeses have a good chance of penetrating, capturing and retaining a large part of this fast-growing and lucrative sector.”

The opportunity for South African manufacturers is two-fold. Firstly, gaps have been identified in the European market, and there’s good reason to think these export opportunities exist elsewhere to be tapped.

Additionally, there is an opportunity for the processors to be the first mover in some of these categories in South Africa as all of the plant-based cheeses that are available in the country’s large retailers are currently imported.

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