{"id":875446,"date":"2026-09-15T08:51:01","date_gmt":"2026-09-15T06:51:01","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=875446"},"modified":"2026-09-15T08:51:04","modified_gmt":"2026-09-15T06:51:04","slug":"72-year-old-r1-billion-factory-officially-shutting-down-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/875446\/72-year-old-r1-billion-factory-officially-shutting-down-in-south-africa\/","title":{"rendered":"72-year-old R1 billion factory officially shutting down in South Africa"},"content":{"rendered":"\n

Following a comprehensive assessment of the Fruit Processing Western Cape (FPWC) business and the global fruit-canning industry, Premier Group has decided not to reopen its cannery for the upcoming harvest season.<\/p>\n\n\n\n

This was announced by Premier Group Limited’s trading statement for the six months ending 30 September 2026. <\/p>\n\n\n\n

The FPWC is a large fruit-processing operation in the Western Cape that has been affected by deteriorating conditions in the global canned-fruit industry.<\/p>\n\n\n\n

In its trading statement, Premier said its board had decided in July not to reopen the factory for the upcoming harvest season after a detailed assessment of the business and international market.<\/p>\n\n\n\n

Premier said the decision was driven by long-term structural problems in the global industry.<\/p>\n\n\n\n

\u201cThe industry has been in long-term decline, with canneries closing globally as demand for canned fruit products has dramatically decreased,\u201d the group said.<\/p>\n\n\n\n

FPWC’s problems have been particularly severe because it relies heavily on international markets. Premier said approximately 90% of the factory’s production is exported, but those prospects have deteriorated rapidly.<\/p>\n\n\n\n

\u201cThe export prospects of the FPWC business, which exports approximately 90% of its production, have deteriorated rapidly to the point where the facility is no longer economically viable,\u201d Premier said.<\/p>\n\n\n\n

The factory has a history stretching back to the 1940s, when it began operating as SA Preserving. By 1954, it had developed into an established fruit-processing plant.<\/p>\n\n\n\n

The operation later expanded under Del Monte Fruits South Africa and became an important export facility supplying markets in Europe and North America.<\/p>\n\n\n\n

Rhodes Food Group acquired the business in 2010 and renamed it Fruit Products Western Cape. <\/p>\n\n\n\n

RFG subsequently invested hundreds of millions of rand in upgrading the facility, including automated canning lines, expanded cold storage and increased processing capacity.<\/p>\n\n\n\n

These investments helped turn the Tulbagh operation into a substantial industrial asset, with the value of the factory and related assets estimated at around R1 billion.<\/p>\n\n\n\n

Expect strong results despite FPWC closure <\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

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

Premier, however, stressed that the closure decision was not caused by the acquisition.<\/p>\n\n\n\n

\u201cThe proposed closure of the FPWC facility is solely as a result of the significant structural economic challenges affecting the global fruit-canning industry and is thus independent of the RFG transaction,\u201d it said.<\/p>\n\n\n\n

Premier has initiated a Section 189 consultation process affecting 424 employees. It also remains open to selling the operation as a going concern.<\/p>\n\n\n\n

\u201cPremier remains open to engaging with parties interested in acquiring the FPWC business as a going concern,\u201d the group said.<\/p>\n\n\n\n

The company is also negotiating with Langeberg Foods, South Africa’s other deciduous-fruit cannery, to potentially transfer a significant portion of FPWC’s fruit-supply contracts and provide equipment.<\/p>\n\n\n\n

Premier said it would process as much fruit as economically viable into pulp and pur\u00e9e at its Groot Drakenstein facility.<\/p>\n\n\n\n

It will also compensate producers for contractual shortfalls between the fruit volumes they agreed to supply and the volumes ultimately processed.<\/p>\n\n\n\n

The Tulbagh site has also been made available for possible repurposing into alternative products if viable global markets can be found. The closure comes as Premier reports strong overall financial growth.<\/p>\n\n\n\n

Revenue for the six months to September is expected to rise by 35% to 45%, largely due to the RFG acquisition, while headline earnings per share are expected to increase by 22% to 32%.<\/p>\n\n\n\n

Premier expects the FPWC decision to result in financial losses as it manages the consequences, although it does not expect this to materially change its overall financial guidance.<\/p>\n\n\n\n

The closure is also being examined by the Competition Commission after a complaint from the South African Clothing and Textile Workers\u2019 Union.<\/p>\n\n\n\n

The investigation concerns whether retrenchments at FPWC could breach the three-year no-retrenchment condition attached to the RFG acquisition, which was approved in March 2026.<\/p>\n\n\n\n

Premier said it is fully cooperating with the investigation.<\/p>\n\n\n\n

Here is a summary of the key financial metrics and share capital figures reported in Premier\u2019s trading statement for the six months ending 30 September 2026 (H1-FY2027):<\/p>\n\n\n\n

Key Financial Results & Forecast Guidance<\/h2>\n\n\n\n
Financial Metric<\/th>Reported H1-FY2026<\/th>Expected Range H1-FY2027<\/th>Expected Increase (%)<\/th><\/tr>
Earnings per share (EPS)<\/strong><\/td>558 cents<\/td>681 \u2013 736 cents<\/td>22% \u2013 32%<\/td><\/tr>
Headline earnings per share (HEPS)<\/strong><\/td>560 cents<\/td>683 \u2013 739 cents<\/td>22% \u2013 32%<\/td><\/tr>
Weighted average number of shares<\/strong><\/td>129 million<\/td>164 million<\/td>27%<\/td><\/tr>
Group Revenue<\/strong><\/td>\u2014<\/td>\u2014<\/td>+35% to +45%<\/strong><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

Premier Group has decided not to reopen its cannery for the upcoming harvest season.<\/p>\n","protected":false},"author":92,"featured_media":870998,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"failed","_sma_x_autopost_error":"Instagram publishing failed: Instagram returned HTTP 400: Media ID is not available","_sma_x_post_id":"2099753342754820202","_sma_facebook_post_id":"191437357620492_2206000176887048","_sma_instagram_post_id":"","_sma_x_attempts":2,"footnotes":""},"categories":[9872],"tags":[26518,22213,853,26224],"class_list":["post-875446","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-fruit-processing-western-cape-fpwc","tag-premier-group","tag-south-africa","tag-tulbagh"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/875446","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=875446"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/875446\/revisions"}],"predecessor-version":[{"id":875454,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/875446\/revisions\/875454"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/870998"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=875446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=875446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=875446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}