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Deregulation in the South African citrus industry

Thesis (MBA)--Stellenbosch University, 2003. / ENGLISH ABSTRACT: The South African citrus industry was deregulated in 1997. Before deregulation
only Outspan could export citrus from South Africa and no other export company
was allowed to do so. The deregulation process was not gradual, but came
suddenly and the industry changed from fully regulated to deregulated in a very
short time. This sudden deregulation created a lot of uncertainty in the industry.
More than one hundred new fruit export companies were established within a
year after deregulation. Most of these new entrants had very little experience in
exporting citrus. Many of them went bankrupt within a year or two and many
citrus producers suffered considerable financial losses as a result. Producers had
no experience in exports themselves and many were not qualified to choose
reputable export companies to export their fruit.
The face of the industry has been changed unrecognisably. In the past there was
one big company exporting all the citrus from South Africa. After deregulation a
lot of small to medium fruit export companies were established. These
companies playa very important role in the industry as it stands today.
Deregulation also opened the door for big international fruit marketing and
distribution companies to enter the South African fruit business. After some years of chaos and very little reliable information available in the
industry in terms of volumes produced and exported, the industry is stabilising. A
number of industry bodies like the Citrus Exporters Forum (CEF) and Citrus
South Africa (CSA) have been formed to represent the exporters and the
producers. These bodies have formed the Joint Marketing Forum (JMF) that
meets every month to discuss marketing and industry-related issues jointly.
The debate with regards to deregulation rages on. Most industry role players are
supportive of less regulation and free market principles. However, deregulation
could have been more gradually phased in. This would have given more people,
especially producers, the chance to adapt to the new environment. Most role
players are of the opinion that the citrus industry is more market driven and more
competitive after deregulation than before. Taking a look at the South African
citrus industry in the future, there will be increased competition due to increased
volume of citrus produced world wide. Producers can therefore no longer
produce unwanted varieties or produce in marginal areas where the yields are
low. Producers must take their destiny in their own hands and must educate
themselves in the export process so that they can make the right decisions about
production and exports. As a result of increased competition and lower margins
the distribution chain must be as short as possible with as few middle men as
possible. As a result of this producer exporters are on the increase. / AFRIKAANSE OPSOMMING: Die Suid Afrikaanse sitrusbedryf is in 1997 gedereguleer. Voor deregulering kon
slegs Outspan sitrus uit Suid Afrika uitvoer en geen ander maatskappy is
toegelaat om dit te doen nie. Die dereguleringsprosess was nie geleidelik nie,
maar die industrie het van ten volle gereguleerd tot gedureguleer verander in 'n
baie kort tyd. Die skielike deregulering het gelei tot groot onsekerheid in die
industrie. Meer as eenhonderd nuwe vrugte uitvoermaatskappy is binne 'n jaar
na deregulering gevorm. Meeste van die nuwe rolspelers het baie min
ondervinding in die uitvoer van sitrus gehad. Baie het dan ook bankrot gespeel
binne 'n jaar of twee en baie sitrusprodusente het groot finansiële verliese gelei
as gevolg daarvan. Meeste produsente het ook geen ondervinding in uitvoere
gehad nie 'en was dus nie gekwalifiseerd om betroubare uitvoermaatskappye te
kies om hulle sitrus uit te voer nie.
Die gesig van die industry is onherkenbaar verander. Tydens regularing was
daar slegs een groot maatskappy wat alle sitrus van Suid Afrika af uitgevoer het.
Na deregulering is 'n groot aantal klein tot medium vrugte uitvoermaatskappye
gevorm. Hierdie maatskappye speel 'n baie belangrike rol in die industrie soos dit
tans lyk. Deregulering het ook die deur vir groot internasionale vrugtebemarkings
en distribusiemaatskappye oopgemaak om die Suid Afrikaanse
industrie te betree. Na 'n aantal jare van chaos en baie min betroubare informasie wat beskikbaar
was in terme van volume geproduseer en uitgevoer, is die industrie besig om te
stabiliseer. Daar is ook 'n aantal industrieliggame soos die Sitrus Uitvoerders
Forum en Sitrus Suid Afrika gevorm om die belange van uitvoerders en
produsente te verteenwoordig. Hierdie liggame het die Gesamentlike Bemarkings
Forum gevorm wat elke maand vergader om bemarking en ander industrie
aangeleenthede gesaamentlik te bespreek.
Die debad met betrekking tot deregularing is steeds aan die gang. Meeste
industrierolspelers ondersteun minder regulering en vryemark beginsels. Hulle
stem egter saam dat die dereguleringsproses meer geleidelik ingefaseer moes
word. Dit sou produsente meer tyd gegee het om aan te pas by die nuwe
omgewing. Meeste rolspelers is van die opinie dat die sitrusindustrie in Suid
Afrika meer markgerig en ook meer kompeterend geword het na deregulering. In
die toekoms kan verwag word dat daar meer kompetisie in die sitrusbedryf sal
wees as gevolg van 'n toename in sitrusproduksie wêreldwyd in sitrusproduserende
lande. Produsente kan dus nie meer ongewenste variëteite
produseer of sitrus produseer in marginale areas waar opbrengste laag is nie.
Produsente moet hulle toekoms in hulle eie hande neem en moet die uitvoerproses
leer ken sodat hulle die regte besluite kan neem oor produksie en
uitvoere. As gevolg van toenemende kompetisie en kleiner marges moet die
logistiekeketting so kort en koste effektief as moontlik gehou word. As gevolg
hiervan is produsente uitvoermaatskappye aan die toeneem.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/49757
Date12 1900
CreatorsSinclair, Andries Ignatius
ContributorsOosthuizen, Hein, Stellenbosch University. Faculty of Economic & Management Sciences. Graduate School of Business.
PublisherStellenbosch : Stellenbosch University
Source SetsSouth African National ETD Portal
Languageen_ZA
Detected LanguageUnknown
TypeThesis
Format123 p.
RightsStellenbosch University

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