Schweppes acquires Beitbridge Juicing Co

Published: 14 June 2014

SCHWEPPES Zimbabwe has acquired 100 percent stake of Beitbridge Juicing Co in a vertical integration move that will see the beverage company strengthening its supply chain by taking control of a key raw material - orange juice concentrate.

The transaction of an undisclosed amount has been granted all requisite regulatory approvals, Schweppes Zimbabwe chief executive Mr Charles Msipa said yesterday. The core business of BBJ is processing of citrus fruits into juices and various by-products.

BBJ supplies Schweppes Zimbabwe with 75 percent of the company's orange juice requirements for Mazoe Orange Crush while the remainder is imported from South Africa.
"This acquisition will enable us to secure a critical component in our supply chain," said Mr Msipa.

"We will increase capacity utilisation at BBJ so that we can obtain 100 percent of our juice for Mazoe Orange Crush locally which is a key raw material for the business. Our preferred position as an organisation is to increase local raw material sourcing without compromising on quality.

"This is not only beneficial for SZL but for the economy as a whole because BBJ will be in a position to meet the requirements of other local and regional manufacturers as well."

BBJ is operating at approximately 23 percent capacity due to seasonality of processing and blending of one fruit. Prior to the acquisition, BBJ was a subsidiary of Rift Valley Holdings.

The acquisition of BBJ is a huge stride for SZL which in itself was fully indigenised in 2010 with 51 percent of the business owned by indigenous consortium Whaterton Investments and the remaining 49 percent held by Delta Beverages (Private) Limited.

BBJ was established in 2005 and started operations in 2006. The company is head-quartered in Harare and the production plant is in Beitbridge near the raw material source of good quality oranges.

The business obtains its fruit from local farmers in Beitbridge who are located within a 30km radius of the plant. The plant is currently operating for 120 days in the year and processes 28 000 tonnes of oranges with plans to gradually increase output to 150 000 tonnes of fruit per annum.

"BBJ will continue to operate as an independent business servicing both local and regional requirements for juice supplies and related other by-products," said Mr Msipa.

"BBJ is an accredited supplier of juice for The Coca-Cola Company which presents growth opportunities for the business outside of Zimbabwe. We are planning to process and blend various other types of fruit and juices for the local and export markets.

"By so doing, we will manage the processing seasonality of oranges and increase capacity utilisation and consequently the BBJ customer base," said Mr Msipa.

The company's current customers include Lyons Zimbabwe and Probrands. BBJ is also a manufacturer of juice beverages which include an orange and lemon lime crush amongst other products that the organisation is in the process of launching.

The blending facility also has a market for essences and stock feeds which are by-products from the fruit processing.

The acquisition will benefit the local community in Beitbridge through employment creation as capacity utilisation increases.

BBJ employs a total of 79 permanent staff with an additional 60 employed on a seasonal basis during the processing period from June to October of each year.

The seasonal workforce comes mainly from the community surrounding the factory in Beitbridge. BBJ, in collaboration with citrus producers, Beitbridge Rural District Council and NGOs supports a 50-hectare community citrus out grower's scheme in the Shashe communal area.

"With the BBJ acquisition we will continue to support the community citrus out growers' scheme by buying the fruit they grow through BBJ and mobilising resources to expand to community citrus out growers schemes in the Beitbridge area and support production and processing of other fruits in the country.

"This way, we still meet our SZL objective of securing supplies of orange juice for Mazoe and being a regional player in the juice business," said Mr Msipa.
- The Herald

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