SA food producers warn of higher prices as infrastructure crumbles | Business

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South African food producers, among the biggest on the continent, are spending hundreds of millions of rand mitigating prolonged rolling power blackouts, water supply issues and crumbling infrastructure. | News24_Business

This investment, sometimes at the cost of essential capital expenditure, will eventually be passed onto consumers, making food prices higher for longer, food companies, economists and lobby groups told Reuters.

The group, one of the biggest food producers in Africa, has allocated 120 million rand in capital expenditure for the second half of its financial year to mitigate the impact of power cuts, he said. Premier Group, amongst the top five food producers, has invested in diesel generators and boreholes to isolate any impact of power cuts up to 16 hours a day, Kobus Gertenbach, its CEO, said.Rival Libstar told Reuters it has built storage capacity to ensure up to three days of production at most sites.

Blackouts have eased in the past few weeks sparking hopes of better times ahead, but there is a palpable fear that as the southern hemisphere winter takes a deeper hold in July, power demand will far exceed generation.Their suppliers - farmers - are also being battered by power and water problems and general infrastructure bottlenecks.

 

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