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Gqebhera-based trader succeeds in global market

Home Business Management Finance & Investment Gqebhera-based trader succeeds in global market

GROWING from modest beginnings operating retail butcheries in Gqebhera, food distributor Hume International now trades in 27 countries globally and sells more than 398 products, from fresh fruit to frozen meat and dairy products to juices and powdered milk. The company employs over 300 people across the country and is expanding.

Founder and managing director, Fred Hume (pictured), announced that the company is investing R30 million towards expanding its dry store facilities over the next twelve months as the company seeks to meet surging local demand and grow its export business.

The company plans to build a new 1 300 sqm dry store facility in Gqeberha and is finalising a new 500 sqm building in Johannesburg and increasing its storage capacity in Pinetown. It further plans to expand its storage facilities and presence in Cape Town by July 2023.
Hume says that around 15% of the company’s imports flow through the port at Port Elizabeth. “The majority comes through Durban which gives us a more direct route to the main market in Gauteng.”

Through its subsidiary company Ziqenye Food Services, it is currently the only meat, poultry and seafood import and export-approved commercial cold storage facility in the Eastern Cape. “We would double our capacity in Port Elizabeth in a heartbeat if we could lift the regulatory ceiling placed on the number of containers we can process a day,” says Hume.

“We have traditionally been known as a frozen food commodities trading business, importing some 180 million kilograms of frozen food over 2022. But over the past three years, we’ve slowly ventured into dry goods, as we’ve noticed increased demand for dry products,” says Hume. “We have broadened our product basket to include locally manufactured starches, sunflower oil and other consumer goods for the sub-Saharan market.”

Opportunities in African markets

Hume identified a gap in the African market and has grown their operations across the continent by 40% in the past year. “The big multinationals run their own operations, with little space for us to add value. It’s their competitors, who shop around for suppliers, that see great value in the service we provide.”

When the company gets involved, they buy into the local businesses. “This makes us part of their operations and, from our base in Gqebhera, we have sight of trading, stock movement and what the balance sheet looks like. This way we are also able to react to currency volatility, rather than be tied to predetermined schedules.”

On the supply side, the company partners with various local producers to bring South African-made goods to countries such as Kenya, Ghana, Nigeria, Uganda, the Democratic Republic of Congo, Swaziland, Mozambique, and Botswana. “The Indian Ocean Islands – Mauritius and the Seychelles – although not high-volume markets, are also steadily increasing” says Hume.

With sluggish growth at home, increased demand from these export markets is a welcome boost for local producers. “Exports have been a key focus for Hume International, where we’ve become involved in selling goods such as cereals, ice-cream, soda drinks and even soaps.”

Freight normalising

Hume says they’ve learnt valuable lessons over the past three years, during which sea freight, in particular, faced major disruption. “Sailings are more regular and sea freight rates have decreased and are still trending lower, which is a relief after the astronomical highs we experienced in 2021, although still far higher than pre-Covid levels.”

“Unless the destination is in West Africa, we tend to use road freight, even though it’s more expensive. Road freight allows us to maintain the integrity of our logistics schedule. By comparison, with sea freight, once you’ve dropped off the containers, the delivery is out of your control.”

An open economy

Importers like Hume supplement what the country cannot produce in sufficient quantities, and what there’s too much of, they export. “We don’t see ourselves as competing with local production – we make our profits by interfacing with producers to smooth out their shortages or over-supply.”

Hume notes that creating local jobs is a priority, but questions whether maintaining high duties on products like poultry when local suppliers are drastically cutting production makes economic sense. Owing to a number of local factors such as loadshedding, he believes that
immense pressure faced by local producers could stimulate a move for more imports across more sectors. “When loadshedding and erratic water supply forces production cuts, market supply decreases and that will only cause prices to rise even more,” he says.

“It’s in the best interests of the country for local producers and importers to work together to create the balance our economy desperately needs.”

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