South African macadamia nut processor to greatly expand capacity
South African macadamia grower-processor Green Farms Nut Company (GFNC) has started major expansion works at its Mpumalanga facility amid expectations for phenonemal industry growth over the coming years.
Capacity at the company's White River plant is set to triple from the current 5,000 metric tons (MT) over two phases.
Phase 1 of construction that will see capacity increased to around 8,000MT is set to be completed in 2018.
GFNC general manager Alex Whyte said conservative estimates were for industry production of in-shell to grow 40% from 38,500MT in 2016 to around 65,000MT in 2020, but he mentioned some believed it could even reach 80,000MT by then.
"There have been a lot of plantings, and as these trees come into production they will produce a larger and larger crop," he told Fresh Fruit Portal.
"In the meantime, farmers are continuing to plant more macadamias and substituting them for more traditional crops like sugar cane, citrus, bananas and timber."
He said South Africa had largely become reliant on the Chinese market to take in-shell macadamia, but he expected demand to decrease somewhat in the future as Chinese growers were significantly increasing production.
"They’ve paid good money for nut in-shell and it's been a very easy thing to do, so no one’s really been increasing capacity and the kernel market has been kind of ignored," he said.
"I know the South African supply of kernels has been pretty flat over the last four or five years and I think the kernel market’s going to become more and more important.
"So [the expansion] is a strategic step to try and focus a little bit more on that market, ensure that we can produce the kernels when the volumes do come, and also have the ability to service the kernel markets more."
GFNC owns three processing facilities in South Africa's three main growing regions but the expansion will be focused at the Mpumalanga plant, which is set to grow from 3,000 square meters to just over 10,000 square meters.
Along with increasing capacity, Whyte explained the company would also increase efficiencies, install high-tech sorters and use the latest sterilization techniques to ensure food safety.
Whyte believes the global kernel market had been "vastly undersupplied" which had constrained growth, but he was optimistic high supply levels would help to stimulate demand in the future.
In a bid to provide a more reliable supply to overseas companies, GFNC joined forces with Australia's Suncoast Gold Macadamias and Stahmann Farms Enterprises to form Green & Gold - the world's single largest macadamia marketer.
Whyte said South Africa's main kernel markets were currently the U.S. and Europe, but he pointed out there was strong potential in less traditional markets like the Middle East and Southeast Asia.
"Macadamias have been such a small crop - they’ve only been about 1% of total tree nut volume - so there is a huge amount of room for growth if we can actually put the supply out there in the market place," he said.
GFNC has its own macadamia nut farms and also works with third-party suppliers.