South Africa’s biggest food producer to sell canned fruit business for one rand

Key Points

• Tiger Brands to sell Langeberg and Ashton Foods for 1 rand to a local consortium, refocusing on core South African operations.
• The deal includes $8.3 million community trust and a supply agreement for Tiger’s KOO brand to ensure continuity and local benefits.
• Tiger Brands stock up 5% in 2024 as it exits non-core assets and posts R3.06 billion ($163.2 million) profit amid strategic restructuring.

Tiger Brands Limited, the Durban-based packaged goods group chaired by South African business leader Geraldine Fraser-Moleketi, has agreed to sell its canned fruit division, Langeberg and Ashton Foods, for a symbolic one rand. This is part of the company’s ongoing efforts to streamline its operations and concentrate on its core business in the local market.

The buyer is a new company formed by a consortium that includes the Ashton Fruit Producers Co-operative and a development finance institution. The agreement will see Langeberg and Ashton Foods sold as a going concern, keeping the business intact and continuing operations. The co-operative brings deep knowledge of the agricultural sector, which is expected to help sustain the company’s long-term viability.

Tiger Brands commits $8.3 million to trust

Langeberg and Ashton Foods is based in Ashton, a small town in South Africa’s Western Cape Province. It employs more than 3,000 permanent and seasonal workers and exports more than 80 percent of its canned fruit and purees. As part of the deal, Tiger Brands and the new company will enter into a contract manufacturing agreement to supply canned fruit for Tiger’s popular KOO brand.

To support the local community, Tiger Brands is also committing R150 million ($8.31 million) to establish a Community Trust, which will hold a 10 percent stake in the new business. The trust aims to fund local development projects, while the rest of the equity will be held by the consortium.

Tiger Brands up amid strategic shift

Tiger Brands, which has a market value of about $3 billion on the Johannesburg Stock Exchange, remains one of Africa’s largest listed consumer goods manufacturers. Since Fraser-Moleketi took the helm in 2020, the company has been working to recover from past challenges. Its stock is up more than 5 percent this year, reflecting renewed investor confidence.

The decision to let go of Langeberg and Ashton Foods isn’t a surprise. Tiger Brands first announced plans to exit the business in May 2020. At the time, the company said it needed to sharpen its focus on high-performing segments and allocate resources more effectively.

South African giant refocuses on home

Despite the tough economic environment, Tiger Brands reported steady financials in its 2024 fiscal year. Revenue rose to R37.7 billion ($2.01 billion), while profit after tax, covering both ongoing and discontinued operations, climbed from R2.73 billion ($145.6 million) to R3.06 billion ($163.2 million). The second half of the year showed stronger results, suggesting that changes in its operating model are beginning to pay off.

In a separate move to streamline its portfolio, Tiger Brands announced in January the sale of its 24.38 percent stake in Empresas Carozzi S.A., a Chilean consumer goods firm. The R4.44 billion ($240 million) deal, completed through its wholly owned subsidiary Inversiones Tiger Brands South America Limitada, marked another step in exiting non-core international assets and focusing on growth closer to home.