African expansion carries 'too much risk', says SA fruit company - FreshFruitPortal.com

African expansion carries 'too much risk', says SA fruit company

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African expansion carries 'too much risk', says SA fruit company

The South African Government has urged local farmers to expand their plantations abroad, but Unifrutti SA plans to stick to the more stable conditions of domestic production.

Unifrutti SA chief financial officer (CFO) Nicolas Kolatsis has told www.freshfruitportal.com the South African government's calls for agricultural expansion are merely a point-scoring exercise with neighboring countries.

Kolatsis says his business has no need to expand at the moment as its South African production is sufficient to meet client demand, while production in other African countries also carries risk.

"Should we need to expand we may need to go to neighboring states, but with the political climate like it is in Zimbabwe, until that’s rested and things have stabilized there, I wouldn’t risk sending anyone else there as you don’t know where you’re going to end up," he says.

"We are part of a worldwide group so we basically act under the direct instructions of our directors based abroad. It’s important primarily to source fruits for our distribution network abroad and our loyal customer base - we're not planning on expanding into Africa at this stage."

In a recent interview with website Arabianbusiness.com, Unifrutti Group owner Giancarlo De Nadai pointed out the business lost all its farms in Eritrea in the mid-70's following fruit industry nationalization.

Kolatsis says there is a social responsibility to assist other countries with food security where possible, but South Africa has enough problems of its own.

"How can you assist someone else when you haven’t sorted out your own problems, for example crime, political corruption? These are all indications of problems," he says.

"I think the government has got a few more important things to sort out at home. You’ve got to sort out your own backyard I say before you go to someone else’s front door. For instance they’ve had enough indications here of problems like poor delivery.

"My personal view is that they’re trying to score points for themselves in Africa."

Photo: www.ibtimes.com

Expropriation concerns

Kolatsis says expropriation worries continue in South Africa but the current willing buyer-seller system has kept the issue from getting out of hand.

"As long as there’s a willing buyer-willing seller system in place that’s fine, because some farmers say they’ve had enough, they’d like to get out of farming and the government is willing to pay market rates.

"Now some are thinking of getting rid of the willing buyer-willing seller concept to have expropriation as it was done in Zimbabwe – it’s starting to creep in.

"As long as that hasn’t been condemned in Zimbabwe by the South African government, maybe that’s the way the South African government is looking at going in the future."

He says Unifrutti SA is currently involved in a legal land claim process for a section of a farm in the northern region of the Blyder River.

"As long as the judicial system is in place and you have willing parties that’s fine, but if they then say we’ve had enough of the law, it’s not working and they take land by force like in Zimbabwe, then there is concern.

"As soon as that happens once and they’re allowed to expropriate like that, I’m sure international investors would all pull out of South Africa overnight."

Related story: SA farmers urged to expand plantations abroad

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