Norfund, the Norwegian Investment Fund for Developing Countries, has announced an investment of $8 million (R120 million) in South African raisin processor and distributor Redsun.
Established in 2009, Redsun is based in Keimoes in the Northern Cape, a region where approximately 90% of South Africa’s raisins are produced.
The company is at an advantage at a key juncture in the international raisin and pecan industry, as the US production level is shrinking, but demand is growing worldwide, the fund said in an accompanying statement.
Norfund’s investment is expected to sustain 163 direct jobs, create more than 200 new permanent jobs and support more than 6,000 indirect jobs by investing in a rural part of South Africa where manufacturing job opportunities are scarce.
“This investment in Redsun fulfils our mandate by creating jobs and increasing value in the company,” said project manager André Kemp.
“It is also in line with our strategy to create jobs by processing agriculture locally. The new pecan wet cracking facility and raisin processing facilities are going to be instrumental for the company and the region. We are excited to partner with an experienced management team and to benefit from 1K1V’s access to Three-Dimensional Capital,” he said.
“Demand for South African raisins has risen after water shortages and rising labour costs in the USA impacted production levels, providing Redsun with a significant opportunity to gain global market share,” said Hendrik Jordaan, president and chief executive of private equity fund 1K1V.
“Norfund’s investment in a company committed to sharing high-quality products with the rest of the world is just one of the ways to increase economic activity and reduce poverty levels in Southern Africa.”
Jordaan noted the growth investment by Norfund will enable Redsun to double its current capacity by building the sole raisin processing facility in Vredendal, the fastest-growing frontier for raisin production in South Africa.
Vredendal provides diversification and logistical benefits due to it being based in a different intake region with a unique climate that is close to Cape Town, one of Africa’s main ports, he said.
He added that Redsun is also diversifying its dried fruit and nut offering by building a pecan nut facility adjacent to its Keimoes raisin facility as it entrenches itself in the fastest growing crop along the Orange River. These growth projects are expected to more than double Redsun’s current employees from 163 to 390.