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Seafoods, vegetables, ready meals: Irvin & Johnson does it all.

South Africa's leading frozen food company has its own trawler fleets as well as processing plants, distribution system and export organization.

From its beginning as a humble two-boat fishing venture operating out of Cape Town Harbor in the early 1900s, Irvin and Johnson (I&J) today is both South Africa's leading fishing company and principal frozen foods manufacturer, marketer and distributor. A household name, it is part of the Anglovall G0roup, a conglomerate of mining, financial and industrial concerns. Anglovall's market capitalization totals R3.59 billion (US$ 1.33 billion), and I&J's contribution to earnings was 19% last year.

Also listed on the JSE in the food industry, I&J has a strong growth track record in both turnover and profits, with return on capital of 30% per annum. The company's current revenues of R1.6 billion (US$ 0.57 billion) saw profit before tax of $108 million (US$ 40 million, and a market capitalization of R1.148 billion (US$ 0.425 billion).

Situated in Cape Town, I&J's corporate headquarters directs the business as well as coordinates and controls major group functions. More than 7,000 people are employed system wide. Principal operations involve the procurement, processing, marketing and distribution of frozen and chilled foods. The seafoods division runs a fleet of deep sea fishing vessels and has a number of factories. Situated mainly in the Cape, they produce a range of frozen and canned fishery products. The prepared foods division has production facilities in the Transvaal, manufacturing frozen vegetables, ready meals and bottled pickles. There is a national cold storage and distribution network which handles the company's own and franchised products.

I&J places strong emphasis on the development of new products to satisfy changing trends in consumer and customer needs, as well as the improvement of existing products and processes. Consumer attention internationally and locally is focused on natural, healthy eating. In addition, an R&D team, consisting of internationally-trained food technologists and home economists, keeps abreast of international trends and carries out in-house development work both for local and international markets.

I&J's production, marketing and research and development executives travel extensively to stay on top of developments in the fishing, food and food processing industries. Charles Atkins, group general manager, and Rodger Williams, general manager-seafood marketing, regularly present papers at industry conferences and participate in international workshops. Williams will speak on the South African ground fishery in November at the International Seafood Conference in Lisbon, Portugal.

Product innovation, astute market segmentation, trends towards healthier lifestyles and spiraling red meat prices have combined to induce real growth in the frozen and fresh seafoods market. Trends in both household and catering eating habits clearly show the growth in consumption of white proteins. I&J's product availability is supported by strong marketing and a sophisticated computerized distribution system to ensure that products reach consumers in wholesome condition.

The company operates the biggest trawling fleet in the southern hemisphere, fishing an area of some 122,400 square miles in the Indian and Atlantic oceans. Some 42 vessels include factory/freezer, wet fish and crustacea catchers based in Cape Town, Mossel Bay, Port Elizabeth and Durban harbors. The freezer trawlers de-scale, clean, fillet, freeze and pack their catches in cartons ready for immediate off-loading and sale. A trawler's typical landing varies between 350-1,200 metric tons.

Trawling is mainly for hake (Merluccius capensis and Merluccius paradoxus) in South African and Namibian waters. Also fished is mackerel (Scomber japonicus), horse mackerel (Trachurus capensis), pilchard (Sardinops ocellata), monk (Lophius upsicephalus), kingklip (Genypterus capensis) and various other species. I&J holds a substantial portion of South Africa's hake quota, in addition to quotas in Namibia for hake, horse mackerel and pilchard.

The company fishes in Mozambiquan waters for crab, deep sea pink prawn, white prawn, and langoustine -- most of which is shipped to customers globally. Another international market for high value seafood products is the Far East, which buys abalone. The great demand for South African abalone has prompted I&J to initiate trial farming of this popular mollusk with an experimental station currently producing on the Cape coast.

Of I&J's total work force, more than 4,000 are engaged in the seafoods division. Some 1,200 of these employees are based at the company's major fish processing factory in Cape Town. It produces a diverse range of some 100 different frozen fish products using hake as the base raw material. The range varies from natural cuts such as fillets, cutlets and steaks to crumbed, battered or sauce-filled portions and co-extruded items, to more sophisticated microwaveable recipe dish products. A specialty seafoods plant has been added to the factory for the production of recipe dishes made from crustacea, mussels and calamari supplied under either the I&J brand or own labels.

I&J's other major coastal fishing and fish processing operations are situated in Durban (crustacea), Mossel Bay (hake and line fish), Port Elizabeth (squid) and Walvis Bay in Namibia (hake and pilchard). The company has various line fish purchasing operations and an abalone canning plant along the south west Cape coastline.

I&J began exporting of its products back in the 1940s, starting with the sale of fish meal and smoked fish. The United States became a valuable market for Cape whiting. Although sanctions against South Africa in some countries has hindered the free flow of trading, other export markets have been developed to the point where they now make a substantial contribution to turnover.

Hake, as sea-frozen fillets, headed and gutted or in value-added form, is shipped in large tonnages to reprocessors and distributors worldwide. Other valuable export markets include the Far East for abalone and global markets for sea-frozen prawns and squid. In addition to bulk supply to reprocessors, I&J branded retail fish packs are found in the food stores of West European and southern hemisphere countries.

I&J's prepared foods division produces and markets a comprehensive range of frozen vegetables (single varieties and mixes such as stir-fry); pastry and pastry products (pies, pizzas, sausage rolls); processed meats (burgers, pork ribs, sausage products, steakhouse grills, crumb-coated chicken and meat products, recipe dishes) and bottled pickles and condiments.

In the South African frozen vegetables sector, mixes constitute the largest category and one that continues to show real growth. I&J has a dedicated agricultural team and strong research and development program which constantly tests and evaluates existing and new varieties of vegetable products. The company also actively promotes to consumers the high nutritional value, ultra-convenience, good value and healthy eating that frozen vegetables provide.

Vegetables are grown under contract by some 150 farmers in various areas of the Transvaal (northern) region of South Africa, and suitable crops are mechanically harvested using I&J's own fleet of harvesters. Ancillary chilling and production facilities in the midst of growing areas ensure the availability of top quality vegetables ready for final processing at the company's prepared foods factory in the Transvaal.

I&J holds the major share of the South African frozen french fry market and is the largest supplier of fries to fast food chains such as Kentucky Fried Chicken and Wimpy. A major new investment to increase production three-fold has commenced.

South Africa is traditionally a meat eating nation, and the country's ready meals sector shows an emphasis on processed meat and chicken items. I&J is a leader in this market and produces an extensive and innovative range of value-added chicken, beef and pork products as well as pastry products such as pies and pizzas. Adding value to proteins is a successful strategy but, as with other South African meat product manufacturers, the company is experiencing spiraling red meat prices due to the ravages of the African continent's severe drought conditions.

However, over the past seven years I&J has taken a stance in the ready meals market with a dedication to quality, strong branding and marketing support that is unmatched by any other national manufacturer. In a relatively short time it has gained a major share of this highly fragmented market.

I&J lays claim to being South Africa's leader in frozen food distribution and service. Its nationwide computer-driven distribution centers provide high service levels, thus minimizing clients' stockholdings and optimizing their cash flow and profits.

The sales and distribution division is responsible for delivery of frozen food products, as well as franchise foods produced by contractual partners. The company's 250 refrigerated trucks distribute around 400,000 metric tons of finished product annually from 30 coldstores to more than 15,000 customers in the retail, wholesale, catering and institutional sectors of the South African economy. Some 750 product lines are available to 2,000 retail chain stores, 6,000 independent retailers, 750 wholesalers and 6,250 institutions and caterers. Deliveries are executed within 24 hours of orders being placed.

Among many established franchise lines is one which involves the country's largest producer of broiler chickens, Rainbow Chicken Farms, which is internationally renowned as among the world's most efficient production units. I&J, the sole marketer and distributor of that concern's frozen poultry, has brought chicken at competitive prices within the reach of the whole South African population.

A Word from D. De V. Graaff MP Deputy Minister Of Trade and Industry Republic of South Africa

In the two years since the reform process started in the Republic of South Africa, there have not only been far-reaching political changes but in several instances, reconciliation and commitment have been apparent in many economic areas. The re-entry of South Africa into the international milieu opens many new avenues for investment and will complement the international economy.

South Africa has a rich endowment, wide-based industrial, agricultural and service sectors as well as an excellent infrastructure. It is logical therefore that the process of capitalizing on these strengths to beneficiate products for export and for further downstream processing in South Africa, should be accelerated. These would include products for local consumption as well as for export with further industrialization in view. It can be expected that the RSA will increasingly seek to integrate its economy with that of the rest of the world to strengthen the ongoing process of international specialization.

The South African economy is a fascinating blend of First and Third world elements. It is also an open economy, largely dependent on trade for growth. South African agricultural and manufactured exports are doing well while transport equipment, plastics, chemicals and machinery equipment rate among the top performers in the manufactured export categories.

Recent export figures indicate that South Africa's trade surplus in the first six months of 1992 rose by 9.5 per cent to 8.78 billion rands vs. the first half of 1991.

With the new open-door trade era, South African exporters have access to markets which have until recently been closed to the country. Participation in capital projects as well as competing for other types of export contracts in these markets, pose special challenges.
COPYRIGHT 1992 E.W. Williams Publications, Inc.
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Title Annotation:Focus on South Africa; fishing and frozen foods company in South Africa
Publication:Quick Frozen Foods International
Article Type:Company Profile
Date:Oct 1, 1992
Words:1827
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