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Mncane Mthunzi

The man who will head Massmart’s R100-million Supplier Development Programme

In line with Massmart and Walmart’s commitment to develop local suppliers, Massmart announced the appointment of Mncane Mthunzi, current CEO of the Consumer Goods Council of South Africa (CGCSA), as Supplier Development Executive.

In this role, Mthunzi will be responsible for leading the R100-million Supplier Development Programme first proposed by the merging parties as a voluntary condition during the Competition Tribunal hearings. It is also consistent with Walmart’s approach to local supplier development in the markets in which it operates.

According to Massmart CEO Grant Pattison, Mthunzi had a profoundly positive impact on the CGCSA during his two years at the helm of the organisation.

“We are delighted that someone of Mncane Mthunzi’s stature has agreed to take on this exciting challenge. Mncane’s key focus will be on the development of local manufacturers, emerging farmers and SME suppliers to the Group and he will have R100 million fund to facilitate achievement of this mandate,” said Pattison.

“During his time at the CGCSA, he has developed good insights into some of the challenges that emerging FMCG suppliers experience in accessing retail markets, making him a good choice for this supplier development role,” he added.

Whilst the specific activities of the fund still have to be finalised initial interventions are likely to involve developing 1 500 emerging farmers to supply Massmart’s evolving fresh produce business, hosting local manufacturer fairs to promote potential Walmart facilitated exports and identifying SMEs that can be scaled to enable reliable supply to stores in the group. These are also activities in which Walmart has significant expertise, based on experience in markets in Central America, India and China.

Mthunzi will serve on the Massmart Executive Committee. The appointment comes into effect on 1 September 2011.

In other Massmart-Walmart news…

Walmart’s South African operations plan to purchase R60bn worth of food locally and employ 15 000 people over the next five years, Massmart CEO Grant Pattison said this week. Pattison appeared before a parliamentary committee which is holding hearings into Walmart’s R16.5bn acquisition of Massmart Holdings.

Massmart announces intention to buy Fruitspot: The wheels of Massmart’s grand food plan are in motion, with the company announcing its intention to buy fruit and vegetable supplier The Fruitspot for an undisclosed amount.

“We can confirm that an application relating to the potential acquisition of Fruitspot by Massmart was lodged with the Competition Commission,” Massmart’s spokesman, Brian Leroni, told I-Net Bride/BusinessLIVE.

The acquisition is in line with Massmart’s ambitious food retail strategy – 100 stores within the next three years, and a target of a R20-billion food retail business within five years.

Fruitspot will be housed in the group’s Masswarehouse division if the transaction is approved by competition authorities. The division operates 14 warehouse stores branded as Makro, whose big-box warehouse club format with its no-frills approach sells food, liquor and general merchandise to retail and wholesale customers.

The Fruitspot was established in 1989 by three brothers, Charles, Johnny and Lino Ferreira, in Johannesburg. The company, which doubled in size every three years, moved into a 12 000sqm facility in Marlboro in 2008, representing an investment of R60-million.

The Fruitspot serves retailers including Spar (SPP) and Famous Brands (FSB), as well as the catering industry. It buys much of its produce directly from farmers.

Last month, Massmart CE Grant Pattison said the group had made a number of acquisitions in SA in the food sector, including that of Jumbo Cash & Carry. He said the company would announce any further acquisitions, noting that its targets were “obvious”.

The world’s largest retailer, Wal-Mart, completed its purchase of 51% of Massmart in June, after winning approval from the Competition Tribunal with minimal conditions.

One of the conditions was the set-up of a R100-million development fund to boost local suppliers. It will be spent on establishing farms to help rural farmers grow and supply fresh produce to Massmart stores, and farmers will also be trained to assist in the company’s fresh food strategy.

Massmart’s foray into food retailing has mainly been aimed at commuting shoppers in inner-city areas like taxi ranks, through its Cambridge Food stores.

The group aims to open 20 Cambridge stores a year for the next three years and will also expand Makro’s existing fresh food offering and Foodco, a concept store and supermarket within Game stores.

Doug McMillon, CE of Wal-Mart International, said the group fully supported Massmart’s objective of dramatic growth in its food business.

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