Sundale Schreiber’s first shipment of dairy to the Middle East that leaves the Coega harbour last week, represents massive growth opportunity for local supply chains throughout the dairy sector in South Africa .
The Sundale Schreiber joint venture (JV) was established in 2021 and works through global offices in Singapore, a strategic hub for the company that represents significant growth potential to the quick service restaurant (QSR) sector in the region. Schreiber, a global leader in the processed cheese market, set up shop with Sundale at the East London Industrial Development Zone (ELIDZ) in 2021, where the new state-of-the-art processing facility is designed with the capacity to produce 25 000t/y of cheese slices in its final phase.
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According to Sundale CEO, Pierre van Rensburg, “Sundale Schreiber has achieved significant growth and supplies cheese slices to most of the big names in the fast food sector. Our strategic objective has always been to open global markets to stimulate demand through the local supply chain and the agreement we have reached to export to the Middle East is a significant milestone for us, and for the South African Dairy industry as a whole.”
The export agreement relates to a total of 2 000 tonnes of cheese slices leaving the port over the next 15 months. According to Van Rensburg, monthly exports are set to reach these levels within the period of the initial agreement. At the time of inception, the Sundale Schreiber plant had a capacity of 7 000t/y, and this agreement helps to fill the capacity in phase one, illustrating the size and impact of the export market out of Africa. The plant already exports into the SADC region, specifically to Lesotho, Mozambique, Botswana, Namibia and Zambia. The Middle Eastern agreement is significant because it opens global trade for the South African dairy industry, rated as one of the most competitive in the world.
Dairy is the fourth largest agricultural industry in South Africa but this deregulated sector has had to face international competition with no support in the form of subsidies or import tariffs. Despite overall milk production soaring 31% between 2009 and 2019, there has been a freefall of farm closures.
Farmers are squeezed by an intensely competitive, deregulated marketplace and worsening impacts of climate change-induced weather extremes. The impact of the industry now becoming exporters of dairy, represents a levelling of the playing fields for dairy farmers. The opening of new markets stimulates demand for dairy solids across the Eastern Cape providing certainty and route to market for many smaller concerns.
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The dairy industry accounts for 26 000 jobs, many of which are in rural areas where sustainable job creation remains challenging. Sundale Schreiber has already increased their staff complement to a total of 540 employees, an increase of 20% over two years.
In the words of Brad McNeely, Schreiber’s Operations Start-Up Manager, the Sundale Schreiber operation is “a game changer by virtue of the global customer relationships because as it grows, the export potential to increase their reach is magnified.”
