SOUTH AFRICA – Sundale Schreiber has made its first shipment of dairy products to the Middle East in a move that is expected to further open more international markets for South Africa.
The shipment originates from a new state-of-the-art processing facility in the East London Industrial Development Zone (ELIDZ) that was established in 2021 shortly after a formation of the Sundale-Schreiber JV.
At the time of inception, the Sundale Schreiber plant had a capacity of 7 000t/y with the ultimate goal of turning out 25,000 metric tons per year of cheese slices.
The first export agreement relates to a total of 2 000 tonnes of cheese slices leaving the port over the next 15 months.
According to Pierre van Van Rensburg, the CEO of Sundale, monthly exports are set to reach these levels within the period of the initial agreement.
“Our strategic objective has always been to open global markets to stimulate demand through the local supply chain and the agreement we have reached to export to the Middle East is a significant milestone for us, and for the South African Dairy industry as a whole,” he added.
Exports to the Middle East help to fill the capacity in phase one of the Sundale Schreiber plant demonstrating the size and impact of the export market outside of Africa.
Furthermore, the South Africa’s dairy industry, widely regarded as one of the most competitive in the world, will benefit greatly from the opening of global trade made possible by the agreement with the Middle East.
South Africa’s dairy industry is the country’s fourth largest, but since it was deregulated, it has had to compete internationally without the benefit of government subsidies or import tariffs.
With government support withdrawn, there has been a precipitous decline in the number of operating farms despite a 31% increase in annual milk output between 2009 and 2019.
The effects of climate change-induced weather extremes are further worsening, and farmers are already feeling the effects of a highly competitive, deregulated market.
With the introduction of new markets, many smaller enterprises in the Eastern Cape now have more predictability and a clearer path to market, which increases demand for dairy solids.
Exports markets will also help protect many of the 26,000 jobs in the dairy industry which are located in rural areas where it is difficult to create stable employment.
The Sundale Schreiber JV is testimony to this as the plant has gone from 480 to 540 workers in just two years, an increase of 20%.