2. MANUFACTURING : Food processing cluster

The potential investment opportunity comprises the establishment of a food processing cluster in the Capricorn DM.

Generally, the food processing cluster consists of enterprises whose principal activities are the growing, harvesting, processing, and/or distribution of food. Defined more precisely, food processing encompasses companies that add value to agricultural resources and those companies and institutions that support those activities. The food processing cluster can be divided into five components:

• Individual farmers
• Farmer entrepreneurs
• Larger agricultural enterprises
• Processing enterprises
• Supporting enterprises

The development of a food processing cluster would have a positive impact on the sustainability of the red and white meat cluster and the horticulture cluster which are two of the industrial clusters to be developed by the Province.

The food processing cluster could include the following activities:

• Milling
• Packaging of fresh fruit
• Vegetable and fruit canning and processing
• Potato processing
• Tomato processing (tomato paste and dried tomatoes)
• Juice making
• Oil extraction
• Meat processing
• Bakery
• Marula beer manufacturing

Limpopo Provincial Government has adopted the industrial cluster approach, as contained in the Limpopo Economic Growth and Development Plan (LEGDP), as the key strategy for economic growth and development. Seven industrial clusters were proposed for development including a food processing cluster.

Processing firms are mostly concentrated in Polokwane. Where firms are concentrated, there can be an advantage in collaborating. Manufacturing is a very important sector in the Polokwane LM. It is therefore suggested that the cluster be established in Polokwane where the infrastructure (in terms of industrial parks) are most developed, and where most processing firms are concentrated.

The project will create job opportunities, promote entrepreneurship and curb poverty through income generation and skills training of the labourers of the project. The food processing cluster could also lead to improved food security, increased productivity, diversification of agricultural production and additional income by marketing of other crops.

This investment opportunity will create backward- and forward linkages for this cluster.

• Backward linkage opportunities - Supply of services, crop production, logistic and research, training and extension.
• Forward linkage opportunities – Processing, retailing and packaging, tourism and processing/value-adding industries.