RedSun Dried Fruit & Nuts – a Northern Cape-based processor and distributor of raisins and pecan nuts – has secured a R120 million investment from the Norwegian Investment Fund for Developing Countries (Norfund) to boost production.
The investment will be used to build two new processing factories which are expected to create up to 200 new permanent jobs, according to the privately-run company.
In turn, Norfund will take a shareholder role at the company and obtain a seat on its board.
RedSun’s founder and CEO Peter Kuilman tells Moneyweb the company had been searching for investors to finance its expansion for the past 18 months.
“The idea of securing money to build these two factories has been sitting with me for a long time. But I must say Norfund is quite brave for investing in the South African context, given everything that has been happening in the country.”
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The new processing facilities include a new pecan nut factory which is being built next to the company’s first raisin factory in Keimoes in the Northern Cape.
Kuilman believes the proximity of the factories will be advantageous for workers to collaborate and assist each other with the functionality of both facilities.
He expects the new facility to process up to 4 000 tons of pecans per month once processing takes place all-year round. This is likely within three years.
The second facility will be a new raisin processing plant in the Olifantsriver region in Vredendal, 540 km south west of the existing factory.
Kuilman says this decision was based on the growing production of raisins in the area – from 4 000 tons per month a few years ago, to 11 000 tons currently.
“The South African raisin industry needs additional capacity. We’re getting closer and closer to 100 000 tons of raisin production. There needs to be a new role player,” he adds.
He points out that Vredendal is the ideal location to build the new raisin processing factory because it will also significantly decrease expenditure on logistics moving forward.
In a statement by One Thousand and One Voices (1K1V), the company’s current investment partner, the fund says that it will also introduce the first wet cracking facility in the southern hemisphere which will lead to increased processing for pecan nuts.
“Since our first harvest, we have been using technology that has been developed in South Africa specifically for the macadamia industry which has also been well-suited for our pecan industry.”
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Kuilman says the wet cracking machine is the best route to achieving quality pecan nuts which are in high demand.
Reflecting on the company’s best run in 2020, Kuilman comments: “RedSun did not stop processing for one day despite our government’s hard lockdown, because we are integral in the agricultural value chain… Most importantly, the demand for our product escalated dramatically during the lockdown. People were adapting their diets to suit healthier lifestyles.”
He believes that the Norfund investment gives new impetus to small South African farmers in the region, who have been looking to break into new markets.
“There is a great opportunity for farmers to get into this business and diversify their markets. We are offering farmer’s security and different outlets for their products which is usually solely concentrated in China,” he says.
“Our markets are based all over the globe. I’m talking about South America, Europe, the Middle East, New Zealand, the United States and more.”
According to 1K1V, this investment is expected to support an additional 6 000 jobs indirectly, by “investing in a rural part of South Africa where manufacturing job opportunities are scarce.”
Nondumiso Lehutso is a Moneyweb intern