The history of what became JBT South Africa in many ways reflects the development of the country in the years since the dismantling of the apartheid system. In December 1987, the South African subsidiary of JBT (then known as FMC Corporation) was divested by the company in response to calls from anti-apartheid campaigners and was subsequently bought by management.
Current managing director, Dirk VanWyk, entered the business in 1990 following the retirement of his father, a shareholder of the business, before taking over the reins a year later.
With the collapse of the apartheid regime during the subsequent decade, JBT reentered South Africa, acquiring its former subsidiary once again in 1999 and taking the business from strength to strength in the years that followed.
JBT South Africa’s current business includes the lease and sale of specialty systems for citrus processing and juice extraction, fresh produce technologies, and sterilization, filling and closing systems for canning companies in the country.
The company continues to be guided by Dirk VanWyk, who explains that the recent opening of a new South African pilot plant will help boost JBT South Africa’s reach and capabilities in not only its domestic market, but across the region.
What importance does South Africa as a market have for JBT?
Dirk VanWyk (DVW): South Africa is a good market for JBT in the sense that we make reasonable margins and we have our fair share of the market. In citrus processing, our market share is approximately 90% on leased machinery equipment, while on the canning sterilization side, we have close to 100% of the market. We also have a substantial share of the market for fresh produce technologies.
With the opening of JBT’s first technology center pilot plant in South Africa late last year, our customers are now able to put in special requests where they want to change or optimize a process to get the most out of their raw materials.
Where do you see potential for further expansion?
DVW: I think Sub-Saharan Africa is still an untapped market for us. There is substantial competition from Chinese companies north of our borders, but we definitely see potential there.
Outside South Africa, JBT already has a presence in several African countries including Mozambique and Zambia. However, paperwork can be prohibitive and there are sometimes regulatory issues, so it can be a challenge to work in Africa.
The problem in Africa and South Africa is the lack of political stability and the difficulties in creating a climate for investment. One of our big hurdles is supply issues, where we don’t have enough electricity to grow the South African businesses. There’s a lot of investment that could come in here, but our power stations have not kept up with the requirements.
The exchange rate and events in developing markets also have an impact. The Chinese are going through a bad patch, so commodity prices are under pressure. As soon as gold and oil are under pressure, then the South African currency is under pressure. So that affects affordability as well.
However, in spite of having its challenges, we believe that Africa has the potential to grow and we want to be there.
What further opportunities does the South African market offer?
DVW: I think we have our fair share of the South African market and most probably offer the best value. We want to be number one in the markets we serve in terms of technology and quality, while also offering the best value for your rand or dollar.
Service is a very important part of our offer – the fact that we can back-up our products makes a big difference.
For JBT, there is still big potential in South Africa. While there is likely to be slow growth in the citrus business, we can still gain some traction on the fresh produce technology side. We are also likely to see more growth in the sterilization business because the higher-speed lines are going to be the way of the future to make exports more efficient and competitive on world markets.
What advantages can South African – and African – companies gain from working with JBT?
DVW: Number one is the technology and the product itself. FMC and JBT have been long renowned for their absolute top quality. If you look at citrus extraction, we are probably more expensive than our competitors, but our yields are much better.
We offer extremely good service, back-up and spares. Our technology centers are exceptional. We have technology centers in South America, North America and Spain, and we have recently opened our first pilot plant in South Africa. This can offer additional services to customers on optimizing processes and yields, and meeting customer requirements, so we are definitely way ahead of the pack as far as that is concerned.
In terms of the cost of ownership of our products, we have fillers, closers and rotary sterilizers which can run for 50, 55, 60 years and we continue to maintain them. This makes a real difference to companies in South Africa and makes the cost of ownership of JBT products value for money.
The initial capital outlet may be slightly more, but from a yield, processing and reliability point of view, we are more than competitive.