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CHEP assists banana trader to boost bottom line.

CHEP assisted a southern African banana trader in improving the supply chain journey of its produce thereby allowing the company to fetch premium prices for its bananas.

Desert Sun Trade markets sells their organic bananas in South Africa, with plans to expand exports and opportunities. Their bananas are certified organic by BCS Euko-Garantie*, according to international organic agricultural standards.

It is the sister company of the African Food Company (TAFC) and acts as the farm's marketing arm. TAFC is an environmentally sustainable, socially responsible banana plantation in Mozambique. The farm was established in 2010 to meet demand for premium organic bananas and uplift the local community through job creation, skills training and new technology.

The company has created more than 400 local jobs in Mozambique and is committed to the Principles and Rights at Work of the International Labour Organization (ILO) and the ETI Base Code (the Ethical Trading Initiative).

Desert Sun Trade facts

Trades primarily in bananas

Based in Nelspruit, South Africa

The marketing arm of African Food Company, a farm in Chokwe, Mozambique

Sells upwards of 10 000 tons of bananas a year

Marketing fruit mainly to pre packers and markets

Biggest logistical challenge

Desert Sun Trade needed to reduce pallet costs. The company consumed around 600 pallets per month, with no reuse, at a cost of more than R60 per pallet. They were also considering changing their marketing strategy to achieve higher grades and premium prices by supplying in crates, instead of single-use boxes, as they had previously.

'We were using single-use boxes to transport our bananas. Packing these boxes on pallets required costly corner pieces and bin sticks to ensure fruit quality,' says Jon Goosen, senior buyer for Desert Sun Trade. 'The boxes also attracted customs duty on import into Mozambique and again when the full boxes returned to South Africa.'

How was this challenge resolved?

Desert Sun Trade approached CHEP to assist in reducing pallet costs, and CHEP crates did not only reduce costs but opened a new distribution chain for Desert Sun Trade. The specially designed CHEP crates facilitate ventilation and protect the fruit through the supply chain journey. Prepackers only accept bananas in crates, and by meeting their requirements, the company was able to fetch premium prices for their bananas.

The foldable CHEP crates also occupy far less space than other solutions when they're not in use. This allowed the company to handle the return journeys to the farm efficiently and cost effectively, with less environmental impact.

'All of our clients, including Golden Harvest, our prepacker in Cape Town, have been very impressed with the CHEP crate. It's smooth and well aerated, so it doesn't damage the bananas on the long trip from the farm,' says Goosen.

Additional benefits

CHEP pallet rental was another solution, which Desert Sun adopted in January 2018. They have not bought another pallet since, and overall pallet costs have been reduced by 40 per cent.

'Because the CHEP crates are collapsible, we can (on our return trip) transport around 9 500 crates per truck -- seven times the previous capacity. This saves us around 20 per cent on costs per load, compared to crates that don't collapse, which require more transport journeys,' says Goosen.

'The new crate system saves us 30 per cent per crate, when compared to cardboard boxes. This translates to a 7.5 per cent saving per banana load. All in all, our CHEP solution has helped us decrease costs and increase our product's value add.'

* The European Organic Certifiers Council (EOCC) is an association of control bodies and authorities.

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Publication:South African Food Review
Geographic Code:6MOZA
Date:Aug 22, 2019
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