City of Cape Town a hub for food and beverage manufacturing sector – deputy mayor

The City of Cape Town has set itself the goal of establishing Cape Town as a forward-looking, globally competitive business city, deputy mayor Ian Neilson said on Sunday.

Cape Town already boasted some of South Africa’s largest food and beverage manufacturing companies, making the city a well-established hub for the sector, he said.

According to the city’s economic performance indicators (EPIC) report for the fourth quarter of 2016, this was one of the few manufacturing industries in Cape Town that had a positive trade balance. As such, the sector was also an important earner of foreign exchange for the city.

The city’s proximity to a vast and productive agricultural hinterland, an international port, a growing consumer population, and a relatively strong skills base made it a very competitive location in which to base food and beverage manufacturing operations, Neilson said.

“The city has set itself the goal of establishing Cape Town as a forward-looking, globally competitive business city, which is one of our strategic priorities in the organisational development and transformation plan. We will continue to build an enabling environment for economic growth and job creation and foster a climate that is conducive for doing business in the city.

“Exports by the food and beverage manufacturing industry have grown strongly over the past five years. This industry is also well placed to exploit the export opportunities that can be gained by a weak exchange rate. Additionally, the sector boasts the fastest growing employment rate out of all of the manufacturing industries,” Neilson said.

The food and beverage manufacturing sector was the largest manufacturing sector by output, recording the highest growth rates in gross value add (3%) and employment (4.9%) over a ten-year period.

Further, employment in the food manufacturing sector grew strongly at 6.1% year-on-year for the second quarter of 2016; Atlantis was home to one of only three wheat biscuit factories in the world; a strong cluster of spice and saucing companies were based locally; and the country’s three largest seafood companies had their headquarters and main production facilities located in the city.

Cape Town was also home to two of the largest craft beer companies in the country; one of only two licence holders for bottling and distribution of Coca-Cola products in South Africa was based in Cape Town; a number of newer high-growth soft-drink producers had their operations were based there; and well established fruit juice manufacturers were also based in the city.

Beverage exports from Cape Town grew by 21% between 2015 and 2016 and fish exports grew by 22.7%.

“The industry can be considered as a comparative advantage industry for the city. There is a lot of scope for our food and beverage manufacturers to tap into the increasing demand for diversified, value-added food and beverage products,” Neilson said.