{"id":867933,"date":"2026-07-29T13:37:01","date_gmt":"2026-07-29T11:37:01","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=867933"},"modified":"2026-07-29T13:37:46","modified_gmt":"2026-07-29T11:37:46","slug":"united-states-tariffs-push-r1-billion-factory-to-shut-down-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/867933\/united-states-tariffs-push-r1-billion-factory-to-shut-down-in-south-africa\/","title":{"rendered":"United States tariffs push R1 billion factory to shut down in South Africa"},"content":{"rendered":"\n

Premier Foods has confirmed that it is in the process of shutting down its R1 billion Fruit Products Western Cape (FPWC) business in Tulbagh.<\/p>\n\n\n\n

The company cited declining global demand, pricing pressure, and rising input costs as reasons for the decision, with the United States’ tariffs imposed last year as a contributing factor. <\/p>\n\n\n\n

The Tulbagh factory started in the 1940s, when it was established as SA Preserving to process the Western Cape\u2019s abundant peach, pear, and apricot harvests for export after the Second World War. <\/p>\n\n\n\n

Over the decades, it expanded under Del Monte Fruits South Africa into a major export hub supplying markets in Europe and North America.<\/p>\n\n\n\n

In 2010, the business was acquired by Rhodes Food Group (RFG), which renamed the operation Fruit Products Western Cape and invested hundreds of millions of rands in modernising the site.<\/p>\n\n\n\n

The upgrades included automated canning lines, expanded cold-storage facilities, greater processing capacity, and production systems that met international food safety standards.<\/p>\n\n\n\n

Those investments helped grow the value of the factory and its assets to about R1 billion.<\/p>\n\n\n\n

The facility became part of Premier Foods earlier this year when the consumer goods group completed its R6.5 billion acquisition and delisting of RFG Holdings.<\/p>\n\n\n\n

However, the business has continued to struggle as export markets weakened.<\/p>\n\n\n\n

Before the takeover, RFG had already warned investors that its international division was under pressure from US tariffs.<\/p>\n\n\n\n

This made its products less competitive, while a global oversupply of deciduous fruit weighed on prices.<\/p>\n\n\n\n

The company said international revenue fell 7.9% during the year to September 2025 as export volumes declined by 6.8%.<\/p>\n\n\n\n

Although the international division generated 19% of total revenue, it became the group’s weakest-performing segment.<\/p>\n\n\n\n

Premier said FPWC is particularly exposed to global market conditions because around 90% of its canned fruit production is exported.<\/p>\n\n\n\n

Section 189 initiated <\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

In a statement to BusinessTech, the company confirmed that it has begun a Section 189 consultation process with affected employees and their representatives regarding the proposed closure.<\/p>\n\n\n\n

“Premier recognises that this is a deeply difficult and uncertain time for affected employees, many of whom have given years of service to FPWC,” the company said.<\/p>\n\n\n\n

“The company understands the impact that this process may have on employees, their families and the broader Tulbagh community, and is committed to managing the process with care, respect and transparency.”<\/p>\n\n\n\n

Premier said the operation is “no longer economically sustainable in its current form.”<\/p>\n\n\n\n

“The business has been affected by sustained pressure in the canned fruit market, including declining global demand, changing export market conditions, pricing pressure, rising input costs and the need for greater scale in an increasingly competitive global industry.”<\/p>\n\n\n\n

It added that demand for its exported canned fruit “has declined sharply, year on year.”<\/p>\n\n\n\n

According to Premier, the difficulties extend beyond Tulbagh and reflect wider structural changes in the global canned fruit industry, where production has increasingly been concentrated among fewer, larger operators.<\/p>\n\n\n\n

“The challenges facing FPWC reflect broader structural pressure in the canned fruit industry globally and in South Africa,” the company said.<\/p>\n\n\n\n

“South Africa faces a similar reality, with the local industry unlikely to sustainably support two sub-scale canning facilities over the long term.”<\/p>\n\n\n\n

Premier said it explored several alternatives before proposing the closure, including looking for a buyer, reducing operating costs, and assessing other measures to improve the business’s sustainability.<\/p>\n\n\n\n

The company added that it has been engaging with farmers, customers, suppliers, and grower representatives to ensure fruit from the upcoming harvest can still be processed through alternative arrangements where possible.<\/p>\n\n\n\n

It also stressed that the proposed shutdown is unrelated to its acquisition of RFG.<\/p>\n\n\n\n

“This is a separate business sustainability matter driven by the standalone operating position of FPWC and the structural pressures facing the canned fruit industry.\u201d <\/p>\n\n\n\n

\u201cIt is not related to the Premier\/RFG merger or any merger-specific conditions,” the company said.<\/p>\n","protected":false},"excerpt":{"rendered":"

One of South Africa’s biggest canneries is closing due to declining global demand, pricing pressure, and rising input costs, with the United States’ tariffs imposed last year as a contributing factor. <\/p>\n","protected":false},"author":92,"featured_media":867956,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2082430446592221338","_sma_x_attempts":1,"footnotes":""},"categories":[9872],"tags":[25970,25735,853],"class_list":["post-867933","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-fruit-products-western-cape-fpwc","tag-premier-foods","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/867933","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=867933"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/867933\/revisions"}],"predecessor-version":[{"id":867970,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/867933\/revisions\/867970"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/867956"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=867933"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=867933"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=867933"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}