Norfund, the Norwegian Investment Fund for Developing Countries, has announced a $8 million (R120 million) investment in Redsun, a South African raisin processor and distributor.
Redsun was founded in 2009 in Keimoes, Northern Cape, a region that produces approximately 90% of South Africa’s raisins.
The company is at a crucial stage in the international raisin and pecan industry, as US production is declining while demand is increasing globally, according to an accompanying statement from the fund.
Norfund’s investment in a rural area of South Africa where manufacturing job opportunities are scarce is expected to sustain 163 direct jobs, create more than 200 new permanent jobs, and support more than 6,000 indirect jobs.
“This investment in Redsun fulfills our mandate by creating jobs and increasing the company’s value,” project manager André Kemp said.
“It also aligns with our strategy of creating jobs through local agriculture processing.” The new pecan wet cracking and raisin processing facilities will be beneficial to both the company and the region. “We are thrilled to be working with such an experienced management team and to benefit from 1K1V’s access to Three-Dimensional Capital,” he said.
“Demand for South African raisins has increased as a result of water shortages and rising labor costs in the United States, providing Redsun with a significant opportunity to gain global market share,” Hendrik Jordaan, president and CEO of private equity fund 1K1V, said.
“Norfund’s investment in a company dedicated to sharing high-quality products with the rest of the world is just one of the ways to boost economic activity and reduce poverty in Southern Africa.”
Jordaan stated that Norfund’s growth investment will allow Redsun to double its current capacity by constructing the sole raisin processing facility in Vredendal, South Africa’s fastest-growing raisin production frontier.
Vredendal offers diversification and logistical advantages because it is based in a different intake region with a unique climate close to Cape Town, one of Africa’s main ports, he said.
He also stated that Redsun is diversifying its dried fruit and nut offering by constructing a pecan nut facility adjacent to its Keimoes raisin facility, as it seeks to establish itself in the fastest growing crop along the Orange River. These expansion plans are expected to more than double Redsun’s current workforce from 163 to 390.
