Coega to launch a R50m dairy processing plant

Posted On Thursday, 30 June 2011 02:00 Published by eProp Commercial Property News
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The Coega Development Corporation (CDC) will launch a dairy processing plant with an initial investment of R50 million in September

Rael Levitt"Coega Dairy (Pty) Ltd is owned by Coega Milk Producers Organisation (Pty) Ltd (CDMPO) and will invest initially approximately R50 million required to tool and operate the plant," CDC said in a statement on Wednesday.

The CDMPO is owned by 13 commercial dairy farmers.

The business operations would take place in a 3956 square metre building in Zone 3 of the Coega Industrial Development Zone, which is situated outside Port Elizabeth.

It would create 754 indirect jobs, 200 farm jobs, 70 operational jobs and 50 construction jobs, the CDC said.

"By the end of 2013, the investment would have grown to R150 million.

"The company is currently raising finance for a 40 percent equity stake for their empowerment partners."

The shareholding would be modified in 2012 to include the Coega Empowerment Trust, a body which would include previously disadvantaged community commercial dairy projects, black factory employees of Coega Dairy, and dairy farm labourers.

The CDC said the processing plant would consume 50 percent less water, energy and chemicals than other plants.

"In the first and second quarters of 2011, we have seen that any improvement in house prices is still far off, and an increase in borrowing costs will simply prolong the housing recovery and thrust the market into an extended downward cycle."

Levitt maintained that on the commercial property side, many investors, particularly the larger investors and funds, had already discounted interest rate hikes into their purchase costs. "That said, commercial property is a yield based play and when interest rates go up, prices inevitably go down", he added.  If one added in the supplementary inflationary costs that commercial landlords were now facing, the news of an interest rate hike was not ideal for the South African commercial property market which had largely been impervious to any downturn.

"We still believe that commercial property investment in SA will remain rock solid through interest rate hikes, but will have an effect on supply, demand and consequently, pricing", Levitt concluded.

Last modified on Wednesday, 25 June 2014 10:34

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