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More details on auction of Nestlé’s Potch SPP soy plant

Acquired in February 2011 for R106m – announced with a fair blaze of publicity and a further R150m allocated for upgrading – Nestlé South Africa has now decided to call it a day on soy protein and millk production at its SPP Potchefstroom plant.

The entire plant, not the building, will be sold via a three-day online auction on September 25 to October 2, by US-based Rabin Worldwide.


Background to the sale:

“As with any business, Nestlé continuously seeks opportunities to improve its operational efficiencies in order to maximise productivity and meet demand. It is for this reason that we are increasing our focus on our Cremora creamers production at the SPP factory. The investments we made will not be affected by this and there won’t be any job losses,” says Ravi Pillay, communications director for Nestlé South Africa.

His short comment leaves many questions unanswered, but it perhaps denotes that the market potential Nestlé envisaged for soy ingredients has not materialised.

SPP, Specialised Protein Products, was set up in 1999 and it had a troubled history from day one, by many accounts, never matching its technical promise and its hefty R140m price tag.

Over the years, there were often reports and rumours of major technical hiccups. Perhaps one of the key issues was its founding by Denel – why on earth was an arms company getting involved in food production, many queried at the time.

SPP’s ‘Potchefstroom Process’

SPP owed much of its existence to the initiative of Errol Collins, a South African food scientist whose ground-breaking research resolved the enigma of soybean enzyme activity which is the source of soy’s ‘beany’ taste that is difficult to mask.

Its processing reportedly differed substantially from chemical refining processes employed elsewhere in the world as it was a natural, water-extraction method.

Cape-based process engineering company, Solutions Technology, refined Collins’ concept sufficiently to convince Denel to invest R1,5 million in a pilot plant. The new process being proven, Denel acquired the rights from Solutions Technology to go into full-scale production at the specially constructed Potchefstroom plant.

The decision to commit to full-scale production with the new process was based on projections of an uptake of 800 tons per month with a steady increase over the next five years of 15%.

SPP was sold to a new private group of investors in early 2008, with reports then saying it had a production capacity of over 200 000 litres of concentrated soy milk/day, and 20 tons/day of high-quality soy milk powder.

In late 2009, US company, SunOpta, entered into a strategic alliance with SPP to sell its liquid and powdered soy ingredients and soy milk beverages in Africa and other international markets.

SPP was acquired by Nestle South Africa in February 2011.

The sale, which should interest many buyers in the dairy, wine and juice sectors both here and elsewhere in Africa, includes a Stork MVR evaporator, spray drying system by Steinmuller of South Africa, Siebtechnik decanter centrifuges, Fryma mills and dewatering systems, plus wide assortment of all stainless blending and bulk storage tanks etc.

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