Ellis Brown Creamer

AVI boosts coffee creamer, Tiger Brands consolidates the mayo

Some interesting production news that’s come to light from two of SA’s food giants… AVI is investing about R65m to grow its coffee creamer production capacity as demand for the milk and cream substitute grows, while Tiger Brands has shifted all its mayonnaise production to Gauteng.

AVI injects R65m into its coffee creamer business

AVI, reports BDLive.co.za, grew creamer revenue 23.9% in the six months ended December thanks to greater demand, market share gains and higher selling prices.

It spent R17m on growing creamer capacity at a factory in Isando, Gauteng, while the bulk of the investment will be spent in the remainder of AVI’s 2015 financial year to June.

AVI CEO Simon Crutchley estimates it has grown its share of the South African creamers market to slightly below 40%.

Creamer forms part of AVI’s Entyce Beverages business, which also sells tea and coffee and grew revenue 10.8% to R1.57bn for the six-month period. Lifted by fishing business I&J, AVI reported an 11.1% increase in half-year group revenue to R6bn and a 13% improvement in operating profit to R1.15bn.

Its four food and beverages businesses all reported revenue and operating profit growth of more than 10% thanks to volume gains and selling price hikes.

CrosseBlackwell MayoTiger brings mayo to Gauteng

Meanwhile, Tiger Brands reports it has moved its Crosse & Blackwell plant from Bellville, Cape Town, to a larger, new facility in Boksburg.

Grattan Kirk, who heads the group’s consumer brands business, says that it had spent about R230m on the new factory.

Tiger Brands, which bought Crosse & Blackwell and the Bellville plant from Nestlé in 2012, had planned to close the factory late last year as part of its cost-cutting and efficiency programme, but has decided to keep both factories open until the end of March given strong summer demand.

Tiger Brands’ cost-saving plan includes new equipment installed in the Boksburg site “which will automate quite a lot of functionality on high-speed lines”. The group expects to realise the full savings from the Bellville plant closure and the Boksburg automation from the second half of its 2016 financial year.

In other Tiger news, in an effort to mitigate risks associated with power outages, the company reports its will have “full generating capacity” installed in its factories from generators by April.

A company spokesman says that most of Tiger Brands’ plants had backup generators “for the critical path items” of its manufacturing processes.

“Full generating capacity will be installed at the Boksburg plant. We are reviewing the installation of generators as well as other alternatives such as biogas and solar-generated power for other smaller plants,” the spokesman notes.

Source: BDlive.co.za