All Joy as AH-Vest’s tomato factory reduces imports and creates jobs


All Joy as AH-Vest’s tomato factory reduces imports and creates jobs

Published Date: 2017-10-16 | Source: Stephen Gunnion | Author: Stephen Gunnion

All Joy as AH-Vest’s tomato factory reduces imports and creates jobs

The company is now eyeing export markets for its "authentically South African" tomato products

AH-Vest says its new tomato paste factory in Tzaneen, Limpopo will produce bulk paste for the entire tomato season in the year ahead. While that will result in improved efficiencies and costs for the food group, it will also do a lot for the South African tomato industry and reduce the dependency on imported tomato paste. It's set up a canning factory nearby to take up the additional production from farmers in Limpopo, the country's biggest tomato-growing region. The new processing plant will increase AH-Vest's capacity to 750 tons a day, to produce about a third of the country's tomato paste requirement. AH-Vest says it will also help dent high unemployment in Limpopo. Unsurprisingly, the company says it supports maintaining an import tariff that was imposed on imported tomato paste to deter dumping by foreign companies and protect local farmers.

Turnover rose 16.3% in the year to June as its new factory started to achieve its production targets. This helped lift its gross profit margins to 34% from 32% due to increased production capacity, but it also benefited from increased market share for its added value products including Veri-Peri, All Joy Spaghetti Sauce and its Big Squeeze range. A tax bill of R892 070 left net profit 17% lower at R1.3 million. Headline earnings per share fell 17% to 1.29c. Like last year, it hasn't declared a dividend.

AH-Vest says its holding company, Easter Trading Company, is exploring the installation of a 10MW solar farm at its Eikenhoff premises, which has had to resort to running day and night shifts due to power shortages. It says the solar farm has the potential to reduce its electricity expenses by moving it off the grid.

Its shares ended 14% lower at 30c on Friday following a single trade in the stock.

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