Current Issue 52
With the support of five industry heavyweight shareholders, VENCO Fruit Processors is reaching new geographies and new production capacities as it strives for market dominance
Reaping the Fruits of Hard Labour
Writer: Matthew Staff
Project Manager: Joshua Mann
With an astounding production volume of as much as 85,000 tonnes of citrus fruit per annum, VENCO Fruit Processors can confidently proclaim itself as one of the leading market operators in South Africa, but refuses to just stop there, with a host of innovative improvement strategies laid out for even more concerted future growth.
Comprising a variety of lemon cultivars, Valencia oranges, Navel oranges and a plethora of soft citrus fruits, the VENCO portfolio deriving from the Company’s head office in Sundays River Valley represents almost unparalleled levels of efficiency throughout the refined manufacturing processes; allowing for maximum return on raw materials, zero product waste, and the flexibility to upgrade and enhance processes according to capacity growth.
Such consistent operations can be attributed to the strength of combined ownership across Sundays River Citrus Company (SRCC) (35 percent), San Miguel Fruits South Africa (35 percent), Coerney Packers (10 percent), Sitrusrand Boerdery (10 percent) and Raptotron Investments (10 percent); a team that has seen VENCO branch out from its South African roots to export as far afield as Africa, Europe, the US, the Middle East, the Far East and Australia, and who can be lauded for setting the Company apart from its market competitors.
“VENCO has a very strong business model where shareholders are also suppliers of raw materials, to ensure a guaranteed supply of raw material and to ensure customers’ product availability. Roughly 98 percent of the fruit we process is supplied by shareholders of VENCO,” General Manager, Andre Swart says. “We also differentiate ourselves by our close proximity to the citrus growers and the two export ports (Port Elizabeth and Coega) which becomes a significant benefit within our supply chain management.”
VENCO’s ability to rapidly develop new and innovative products in line with customer demands, and off the back of its flexible process structure further cements its position as a provider of choice among customers; enabling the business to leverage its years of expertise to meet the most specialised and niche of taste demands.
Originally established in 1946 in Port Elizabeth under the name Val-Orange, the initial objective was to market high-end orange crushes and juices to the English Ministry of Food, but following a strategic acquisition of its assets in 1984, and a later rebranding following the deal with the current five shareholders in 2013, VENCO in its current guise was borne.
Despite the occasional change in the structure of the business, the overriding philosophies and targets have remained consistent though; to be the leading fruit processor in South Africa through innovation, and to maintain optimum value for money for its fruit among shareholders in order to secure a prosperous future for all stakeholders in the Company.
To achieve this, VENCO’s continuous improvement strategy integrates a strong commitment to areas of innovation, process optimisation, raw material optimisation and robust quality systems.
“By continuously developing new products and finding innovative applications for citrus raw materials, VENCO aims to be the preferred supplier of specialised citrus products, and by finding better and more efficient ways to process raw materials we also improve production yields year-on-year,” Swart affirms. “Also, by developing new markets for use of all citrus fruit components and citrus product derivatives, VENCO has managed to improve the percentage of yield from raw materials.”
VENCO complements this ethos by continuously evaluating quality systems, legislations and certification systems to ensure it complies with all international regulatory requirements for manufacturing and exporting to global markets.
In regards to the end-goal – the processes and products themselves – recent enhancements have been seen across the Company in the form of various new citrus comminutes and blends to meet more niche customer requirements, while the development of citrus extracts for secondary juice applications has also been introduced, including blending applications.
To facilitate ongoing external expansions and diversifications, the efforts put in behind the scenes from an operational standpoint are of paramount importance, and are fulfilled by the continuous involvement in wider industry research projects to evaluate sector trends, and through the installation of new equipment in reaction to these trends; including in more recent times a new R28 million lemon fruit processing line which has resulted in a 35 percent increase in processing capacity.
A new thermally accelerated short-time evaporator has also been added to the VENCO repertoire, and by the end of 2016, the entire factory building will have been upsized by 30 percent to facilitate future expansions as well.
And, of course, overseeing all of these improvements and ensuring their success, is a core team of loyal – and importantly, local – employees, as Swart discusses: “VENCO has a small contingent of permanent employees and management while the processing facility makes use of seasonal employees, all from within local communities to supplement the workforce during peak citrus production season.
“The Company has also this year launched its first Graduate in Training (GIT) programme to support qualified incumbents from the local communities to gain work experience. Our focus on employment is always from within local communities and we believe in developing scarce skills from within the Company rather than sourcing such skills externally.”
A strong corporate social responsibility presence in the local region further compounds the Company’s dedication to local communities and Swart firmly sees this enrichment of individuals as a differentiator in the market.
“VENCO differentiates itself from other employers by offering an incentive scheme not only for top management, but also for every fixed employee in the organisation. Incentive schemes are paid out based on certain key performance indicators and we endeavour to keep these as ‘SMART’ as possible.
“Employee development and training are key aspects to motivate and retain employees.”
South Africa is the second largest exporter of fresh fruit in the world, making the prospect of VENCO such an appealing one for its five shareholders back in 2013, but also making it a very competitive market in which to find extra quality.
San Miguel, one of the leading shareholders, has an especially important role to play in extracting that quality from the business’ operations.
“Our relationship with San Miguel is very special,” Swart emphasises. “They are responsible for selling all our products and also provide VENCO with technical knowhow and advice as they are one of the biggest lemon processors in the world. They sell fruit to VENCO and in some instances they also buy some of our final products.
“Our success is closely related to the guidance from them while our other big shareholder, SRCC, provides us with the biggest volumes.”
Having a game-changer from a shareholder perspective also facilitates a much more refined supply chain management strategy in the case of VENCO, with most of what is not exported by its shareholders, coming to the Company.
Swart continues: “Most of the fruit is coming from pack houses and not directly from farms so our logistics is important in the sense that fruit must be collected from a wide variety of sources in a timely manner and also to keep the factory running optimally.
“Our logistics and communication with our transporters is key in all of this to not only keep VENCO running but to also ensure the smooth production at each pack-house.”
Honing the distribution process is equally pivotal from a temperature, storage and timing perspective, especially considering that as much as 70 percent of the produce is exported to different continents. VENCO has once again perfected this facet throughout its facilities and supplier footprint; all harking back to its primary – and seemingly obvious – mission, to ensure that the fruit is collected at the most suitable time, is then efficiently processed into juice and distributed across continents to ensure that its shareholders get the biggest return for their fruit.
Swart adds: “In our region there is enough land but not enough water. We have irrigation water in the Sundays River Valley and that is key for producing quality fruit. You can erect a new juicing plant but if you haven’t got fruit volumes to process then you will not have a business. It’s pretty logical but that is what it is; you need fruit! But our shareholders provide us with the necessary fruit and as they are expanding, we will also expand.”
As part of this expansion, new citrus orchard developments are taking place in strategic locations to prepare for anticipated volume demands, while VENCO continuously monitors the consumption of citrus concentrates in order to plan ahead for future trend fluctuations.
“In the future, VENCO would like to further develop specialised and unique products and become known as a centre of innovation for citrus products,” Swart concludes in analysing the Company’s longer-term goals. “We would also like to diversify our operations to obtain maximum value out of secondary citrus products and citrus material derivatives.
“A second VENCO plant is also a likely scenario at a different site, as the growth at the current site will eventually be limited by space and other co