The fruits of our labour
At Goede Hoop Citrus, the saying “you reap what you sow” has been taken literally, resulting in a citrus business that stretches the length and breadth of the globe, as Andrew Pelis discovers.
Goede Hoop Citrus has its headquarters in South Africa’s Western Cape, about 180 kilometres from Cape Town. Located in Citrusdal, between the Cedar Berg Mountains and the Olifants River Mountains, the company handles 100,000 tonnes of citrus each year (equating to roughly six per cent of the total South African yield) and uses 4.5 million cartons, selling fruit around the world to the likes of Wal-Mart, Sainsbury’s, Tesco and Loblaws, as well as on the local market.
The company has now become the largest single citrus packing operation on one premises in South Africa. Produce consists largely of oranges but also includes soft citrus and lemons, all cultivated locally, in a belt spanning 90 kilometres in length and five kilometres in width. The district is famous for its citrus orchards; what is presumed to be the oldest orange tree in the country is still bearing fruit on a local farm.
The Western Cape region has a significant advantage, in that it is free from black spot disease—a blight that prevents export to some of the largest markets including North America and Europe.
“Roughly 70 per cent of our volume is exported,” confirms managing director Gabrie van Eeden. “We sell to the USA, Europe, the Middle East, Russia and more recently China; we have just started exporting to Iran and continue to work on the Indian market. Our main competition comes from Australia for the lucrative American market. Europe tends to also use produce from Argentina and Chile.”
Van Eeden has been with Goede Hoop Citrus for 12 years now and has seen significant change during that period. “The company was established in 1926 as the first co-operative for citrus farmers in South Africa,” he explains. “Then in 2000 we became a private company, with a client base of 85 shareholders.”
The main reason for change was the exciting marketing opportunities that arose after the deregulation of market rules, resulting in an open and free environment. Prior to deregulation, co-operatives were to a large degree protected with regards to acquiring products and doing business. The company was, however, geared for this major change; hence it now had an opportunity to make better use of a sister firm already well versed in the marketing of citrus locally and deciduous fruit exports. Since then, business has thrived. “Until 2000 if you were a member of our co-operative, as a supplier you were obliged to deliver every single orange to us, whether we performed or not,” van Eeden continues. “We decided that we had to be good enough to earn the fruit of our suppliers by becoming a non-co-operative. We wanted to drive greater value for our suppliers which needed a different way of doing business, a different culture and different technology.
“As a result, we have grown and also acquired another company with pack house facilities and we have changed the outlay of our whole packing facilities from a production to a market focus. Today we look much more at what the market wants and how our sites can better serve our clients’ needs. We are not trying to be the biggest company—just the best.”
Goede Hoop Citrus has 106 permanent employees but this number soars to 1,500 in high season, a challenge for Paul Visser, manager of Human Resources and Communications. “Our busy time runs from March to mid-October and we always strive to have the same staff returning each year by offering attractive remuneration and training,” he asserts. “We have been successful with this and generally around 88 to 90 per cent of our temporary workers come back each year from Citrusdal and the surrounding area. Fortunately the grape season starts around the time our season ends, so there is work available for seasonal workers nearly all year round.”
Training is a key focus for the company, which has a policy to promote from within. “We offer management training which has proven very effective,” Visser says. “Roughly 75 per cent of our middle management team entered the company at ground level and while we train black employees to enter our management structure (we now have our first black director), we do not do so at the expense of our white workers.”
A scheme is in place at the company to encourage black ownership; 15 per cent of the company’s shares are currently owned by black employees with a further nine per cent being held in trust for future issuing to new employees or current employees who will qualify for more shares.
The focus on employees also extends to the home. Goede Hoop Citrus has embarked on a project to support staff in obtaining computers for use at home for educational purposes, which ties in nicely with its commitment to offering basic adult education, an important issue within South Africa.
The company recently invested around R23 million on refurbishment designed to ensure the business meets its clients’ expectations. “We push
through 1,500 metric tonnes per day in our peak season and our brand new pack house facility, which opened in June, offers the best technology in the world, sorting and sizing food through computer technology,” van Eeden describes. “We have to be cost-effective and produce quality for our markets and we are already seeing good results, with a full return on our investment expected within the next three years.”
As one would expect, quality remains at the heart of Goede Hoop Citrus’s global ambitions, evidenced by its achievement of HCCP and BRC accreditation. Furthermore, the company adheres to the principles of the ISO standards. “What makes us different from other South African exporters is that we are not only packing the fruit. We believe quality begins in the orchards, so we have a team of technical advisers on hand for all our growers and we provide feedback for them. We also retain samples of every overseas shipment,” says van Eeden.
The company has become recognised for its stance on industry issues and as such, van Eeden is closely involved with the Sterile Insect Technique (SIT) programme in South Africa, which attempts to reduce the risk posed to crops by the false codling moth. “The process is unique and is already attracting lots of global attention. The programme is now in its second year and has been very successful.
“We are also pursuing new markets,” continues van Eeden, “but one cannot ignore the current economic situation. We have a healthy balance sheet and have to first make sure of our own efficiencies and effectiveness. We must distinguish ourselves further from other South African suppliers. Maintaining quality and relationships are essential for our future.”