April 21, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

The Norwegian Investment Fund for Developing Countries (Norfund) has made an $8 million growth capital investment in South Africa-based raisin processor and distributor Redsun Dried Fruit and Nuts (Redsun). 

Majority owned by One Thousand & One Voices (1K1V), a Denver-based private equity fund of which the limited partners are exclusively industry-leading families, Redsun processes high-quality dried fruit and nuts produced along the Orange River in the Northern Cape Province of South Africa.

Founded in 2009, the company has exported products valued at more than $60 million from Africa to more than 35 countries. This business activity has created thousands of jobs, and has reduced the poverty gap for tens of thousands of Africans.

1K1V initially invested in Redsun in 2015 enabling the company to expand its operations, expand its origination to 270 South African farmers per year, and increase production by more than 160 percent. Since that investment, Redsun has nearly tripled its revenues, and has almost doubled its market share. Today the company is one of the leading producers of raisins on the continent, exporting 95 percent of its produce to Europe, the Americas, and Asia.

Raisin Profits

As in many global markets, African consumers continue to grow increasingly health conscious in the food choices they make – even more so since the onslaught of the pandemic. Part of this dynamic is opting for healthier sweet components in snacks and baked goods, creating a growing market for raisins.

As a stand-alone item, raisins also have multiple factors giving them high consumer appeal, including being vegan, portable, non-GMO, and organic. Nutritionally, they have more potassium by weight than bananas, are rich in iron, calcium, amino acids, fiber, and antioxidants that prevent cell damage and can improve bone health, among other things.

South Africa’s hot and dry climate is ideal for raisin production, making it home to approximately 1,000 raisin producers and seven processors. Cultivation in the country is concentrated along the Orange River in the Northern Cape Province, where 90 percent of the country’s raisins are grown. The remaining 10 percent of production occurs in the Western Cape. 

Like most agricultural industries, South Africa’s raisin producers saw a hard time of it through 2020 and the pandemic. However, South Africa’s raisin industry was expected to rebound in the 2021/22 marketing year back to normal levels, increasing output by 19 percent to 85,000 metric tons, according to the USDA. 

Likewise, the global raisin market is expected to experience a CAGR of 4.77 percent to reach a value of $2.7 billion by 2026. 

To capitalize on these trends, South Africa has launched a new initiative called Project GAPP, an undertaking to unify best production and drying practices and standardize grading to develop export benchmarks and to re-examine existing parameters in partnership with both growers and processors.

Ferdie Botha, CEO of Raisins South Africa, told Bakery and Snacks in January 2021, “The aim of the project is to accommodate our new emerging black growers or any new entrant to the marketplace to ensure that high quality standards are set in terms of product quality, food safety, micros, free-flowing product, and the best possible shelf life for which South African product is well known for over the past 100 years.”

Raisin Market Share

Amid this market outlook, Norfund’s investment will enable Redsun to double its current capacity by building the only raisin processing facility in Vredendal – the fastest-growing frontier for raisin growing in South Africa. Due to it being located in a different intake region, Vredendal provides diversification and logistical benefits including a unique climate that is close to Cape Town, one of the country’s main ports.

Redsun is also diversifying its business via plans to build a pecan nut facility adjacent to its Keimoes raisin facility, giving it greater presence in one of the fastest growing crops along the Orange River. 

“Redsun is part of the dynamic, growing dried fruit and nut industry in South Africa,” said Peter Kullman, CEO, Redsun. “The Norfund investment in Redsun will enable us to expand our capacity in terms of product and volume, to supply our customers around the globe with high quality, healthy raisins and pecans.”

In support of these projects and expected increased output, Redsun also will be expanding its workforce from its current 163 to 390.

“Norfund sees a strategic opportunity to be a part of Redsun’s next growth phase as it diversifies the business into further dried fruit and nut categories and expands raisin processing capacity in the growing Vredendal region while creating good jobs in rural South Africa,” said Andre Kemp, investment manager, Norfund. “We are impressed with the impact 1K1V’s involvement has had on the company and region and look forward to exploring additional collaborations with them in the future.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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