20 Jun 2013 Willowton in JV to enter branded rice market

A new FMCG company has been formed through a joint venture of Pietermaritzburg-based Willowton Group, and global commodities giant, Louis Dreyfus. The former is one of SA’s largest sunflower seed crushers and producer of cooking oil, margarine, candles and soap, while the latter is the world’s biggest rice player. [Click to enlarge]

The JV company, Allsome Brands, made its public debut last week with the launch of new branded rice products and the unveiling of a multimillion-rand rice cleaning and packing facility, in Pietermaritzburg, KZN.

The venture will allow both companies to draw on core competencies. In Willowton’s case, it can leverage its international partner’s expertise in trading grains, oilseeds, rice, sugar, ethanol, coffee, cotton and citrus fruit to grow the basket of products in the future. Louis Dreyfus, whose global turnover tops $60-billion is also active in the biofuels industry and trades in ocean freight; metals, such as copper and cobalt; and financial instruments.

Louis Dreyfus Commodities CE, Serge Schoen, described the new Allsome Brands plant as a flagship project that was a first for the company in the region. The rapidly expanding market for food, as well as other commodities in Africa, made the investment in this plant, as well as further investments a must.

Pictured celebrating the inauguration of the Allsome Rice plant in Pietermaritzburg were (L–R) Serge Schoen (CEO of Louis Dreyfus Commodities), Razak Moosa (CEO of the Willowton Group), Margarita Louis–Dreyfus (Chairperson of Louis Dreyfus Commodities) and Shoaib Moosa (Willowton Director of Sales and Marketing). Click pic to enlarge

He pointed out that 70% of the three-million tons of rice that the group trades globally each year ended up on the plates of African families.

Schoen said Louis Dreyfus would take a multi-commodity approach to growth in the region. “We want to grow across the value chain and we are finding that, as Africa grows, strong brands and access to supermarket shelves is becoming more and more crucial.”

Louis Dreyfus operates in 90 countries globally and has a strong African presence. Although it has an African head office in Gauteng, much of its business has been focused on the rest of Africa.

Willowton sales and marketing director, Shoaib Moosa, said that because Louis Dreyfus was the world’s largest rice merchandiser, this seemed the logical entry point for the JV. He added that Willowton had been a client of Louis Dreyfus for a number of years and that the group had approached it to set up Allsome Brands.

“We saw this as a natural category extension to our current brands and an exciting venture into new territory. Willowton Group has grown from a family business into a significant producer of edible oil-based products. We believe that our knowledge of the South African fast-moving consumer goods industry – from a production, logistics, sales and marketing perspective – will ensure that the new brand will succeed,” he said.

The new packing facility, which is situated at Willowton’s existing KZN facility, measures 7 000 m2 and processes 10 000 t/d of rice. It has created 50 new permanent jobs.

The plant has been sourced both locally and from Italy, with Louis Dreyfus working with local experts to plan and build the facility.

He said the plant was currently working a single-shift, five-day week. There is sufficient space to double the size of the Pietermaritzburg operation. The JV plans to quickly increase production by introducing a seven-day, double-shift week that would more than double capacity.

In addition, Moosa said there were also advanced plans in place to create a second facility elsewhere in the country to limit “geographical constraints” by the first quarter of 2014. This will increase employment to 200.

The Allsome brand

The aim is to establish Allsome as the mother brand spanning a number of foodstuffs, and to slot in a variety of sub-brands serving different segments of the market beneath this.

Rice was selected as the first category of entry for the new company, following extensive market and consumer research. The initial offering is Allsome Rice, a high quality long-grain parboiled rice in five convenient sizes, ranging from 500 grams to 10 kilos, and which will compete with Tastic, Spekko and Aunt Caroline, among other brands.

The D’Lite brand should be out in shops already, while the Allsome premium brand would be available on the retailers’ shelves next month.

Allsome Rice has acquired approval from the Heart and Stroke Foundation of South Africa.

“This is in line with the brand’s promise to make life easier for busy consumers, which also involves sourcing the highest quality products and making them readily available throughout South Africa,” said Ishaque Essack, GM of Allsome Brands.

“Combining the global leadership position of Louis Dreyfus Commodities in rice merchandising and Willowton Group’s extensive expertise in the FMCG market, we expect this partnership to break new ground, offering more choice to consumers in South Africa and beyond,” said Thomas Couteaudier, GM of Louis Dreyfus Commodities Southern Africa.

“We saw this as a natural category extension to our current brands and an exciting venture into new territory,” added Moosa.

“The group has grown from a family business into a leading producer of edible oil-based products. We believe that our knowledge and reputation in the South African FMCG industry, from a production, sales and marketing perspective, will ensure that the new brand will exceed market expectations.”

Source: Engineering News and Willowton Group