In a bitter blow that has been described by Alexandria residents as a disaster, the jobs of permanent and seasonal workers in the chicory value chain are on the line.
The news came after 130-year-old Chicory SA, brought to its knees as a result of cheap imports of the key ingredient used in instant coffee and health drinks, informed staff that retrenchments were on the horizon.
From the person who supplies the tyres for the farm machinery, to the man who recruits and transports seasonal workers, and the employees themselves, an entire value chain stands to be hit hard as a result of the industry’s economic woes.
The agro-processor is the biggest employer in the Ndlambe region and is among the largest producers of chicory in the world.
Other than being used to produce beverages, chicory provides vital ingredients for products made by several top brands.
At the industry’s peak, SA produces 18,000 to 20,000 tonnes of chicory a year.
Chicory SA buys harvested roots from local farmers.
The roots are dried, roasted and then sold to big-brand companies.
The company is engaged in the production, marketing and distribution of dried chicory, roasted chicory, chicory powder and Woody Cape Chicory products for consumer markets.
All stakeholders benefit from its successes.
According to Agribook, SA’s largest farming and agriculture online handbook, Nestle, National Brands, SPAR, OK Foods, Pick n Pay, Shoprite Checkers and Dis-Chem have all stocked chicory products along the line.
The bulk of chicory in SA is produced in Alexandria, where the first chicory for commercial use was introduced to the area in 1895, making it a crucial driver of the local economy.
Chicory SA was bought by Humansdorp-based The Co-op in 2020.
The Co-op would not confirm if Chicory SA was closing down, saying only they were busy with Section 189 (retrenchment) engagements.
“Chicory SA has been the biggest employer in the area for decades,” an Alexandria businessman said.
“From seasonal and permanent workers on the farms and in the factory to all the service and logistics providers, the impact on the local economy is massive.”
Census 2022 puts Alexandria’s population (including KwaNonqubela and Wentzel Park) at about 10,000.
According to Stats SA, there are 2,917 households, 1,348 of them female-headed.
Industry role players said all that could turn the tide was government support for agro-processing and import tariffs to protect local production.
The bitter irony is that both the National Development Plan (NDP) 2030 and its 10-year review recognise agro-processing as key to an inclusive rural economy.
The NDP objective was an additional 643,000 direct jobs and 326,000 indirect jobs in the agriculture, agro-processing and related sectors by 2030.
The Eastern Cape rural development department has, meanwhile, called on the national government to assist with an action plan to save the beleaguered industry.
Department acting head Bongikhaya Dayimani said on Wednesday it had engaged various stakeholders in an effort to avert the situation.
“We are appealing to the DTIC [department of trade, industry and competition] to support the province,” Dayimani said.
“This is part of an action plan to assess the business, engage with The Co-op, including prospective investors, and engage the DTIC to provide incentives that will protect the industry from imports.
“We hope our intervention will go a long way in protecting the industry from imports.”
Businessman Mark Lake put his land under chicory 20 years ago.
At peak, he supplied 2,700 tonnes a year to Chicory SA for processing.
“Chicory was half of our farming turnover,” Lake said.
“So, this is going to a big loss. We’re all trying to deal with losing that income.”
Lake and other commercial farmers luckily have the depth to be able to pivot and switch focus.
“Beef farming is more profitable now,” he said.
According to him, input costs are high for chicory.
First, it is labour intensive, which is why it has been a major job creator.
With weeding and harvesting, there are six months of seasonal work a year for 70 people on Lake’s farm alone, most of them women.
“That’s in addition to the farm’s permanent staff,” Lake said.
“Chicory has to be grown meticulously.
“For about two weeks of every month that it’s growing, it has to be tended and weeded.
“Even if help does come from the government, it will probably be too late.
“You can’t grow a crop that is expensive to cultivate and not know if you’re going to get paid for it,” he said.
“Also, the factory needs a minimum of 15,000 tonnes a year to be viable and there aren’t enough farmers left who can grow that quantity of chicory.”
Lake said if there were a tariff on imports, local farmers would stand a chance.
He said the biggest chicory customers were now importing from abroad, which was cheaper than producing it.
“This is an entire value chain that’s gone.”
Transport operator Mthuthuzeli Fulela, 67, had done so well from the industry that he bought his own vehicle, and then another.
One was used to transport seasonal workers along the Sunshine Coast and he converted the other to a tipper truck so he could transport the chicory harvest to the factory.
“That was my main work,” he said.
“Both of those 8-ton trucks are [standing idle now] and I’m losing a lot of money.”
Sinethemba Tshintshitiki, 36, lives in KwaNonqubela.
She has worked on different chicory farms in the area for the past six years to support herself and her two young children.
Her last employment was in November.
“There is no other work here,” she said.
“We are still suffering because now there is no chicory.
“There is no food in my home at the moment.
“I have to empty rubbish bins to find cans to sell for money to buy food for my children.”
Freek Meyer, secretary for The Co-op and Chicory SA, said: “We are busy with the Section 189 process with Chicory SA.
“I can’t comment until that is finalised.”
The latest letter issued to workers reads: “As per the consultation which took place on August 23 2024, the company has unfortunately decided to proceed with the retrenchment.”
Meyer said Chicory SA employed 28 permanent staff and a number of seasonal workers.
He confirmed they had been in financial difficulty and acknowledged that cheap chicory imports were an issue.
About 16 years ago, the Ndlambe Municipality started discussions with commercial chicory farmers aimed at empowering emerging farmers.
“Chicory SA has always been an anchor employer in Alexandria,” municipal manager Rolly Dumezweni said.
He suggested that Chicory SA had worked so well for so long because it was directly invested in the local community, which in turn had invested in it.
Fifteen years ago, the Ndlambe Municipality and local commercial farmers piloted a visionary empowerment project.
“Ndlambe had land in the area which we made available to emerging farmers.
“Most of those farmers were women who were trained by the commercial farmers and their staff to grow chicory.
“Because we had the land, it was easy to involve locals.
“We set up channels for them to receive the right inputs like seeds, fertiliser, the use of tractors and other machinery.
“It was ideal. The skills and support were available and willing, and there was no need to worry about marketing and logistics as the factory was right there.”
Six months ago, in an attempt to rescue the situation, Dumezweni led efforts to engage the then political heads of agriculture and finance in the province to assist in keeping Chicory SA afloat.
“We knew we could not afford for Chicory SA to go down because Alexandria would become a ghost town.”
Despite several meetings, that support was not forthcoming.
“The core business of government is not to run a business, so our proposal was to bring in a business entity to take over the operation and run it with the government as collateral.”
Dumezweni emphasised that though this was a loss for commercial farmers, they could shift, while emerging farmers did not have that capacity.
“All their resources are focused on producing chicory.”
Dumezweni said Ndlambe mayor Khululwa Ncamiso was engaging with top structures to try to rescue Alexandria’s economic engine. — Additional reporting by Guy Rogers
HeraldLIVE
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.