In a very unfortunate turn of events, the Denny’s Fresh Mushrooms Cape Town facility near Fisantekraal will close its doors before the end of January next year after being in business for 40 years.
The closure of the business, which was established in 1986, will affect 376 employees, of whom 70% is from Fisantekraal and Durbanville, says Natasha Evason, communications and investor relations manager on enquiry by TygerBurger.
Challenges
Libstar, of which Denny’s Fresh Mushrooms Cape Town is part of, announced the decision of the closure on 16 September at the announcement of its first-half year results.
“The facility has unfortunately been operating at a sustained loss due to structural production challenges, including rising input costs, resource constraints and biosecurity pressures.
“Despite extensive negotiations, no viable commercial agreements could be secured to safeguard the site’s long-term future. As a result, Libstar has commenced labour consultations regarding the closure,” Evason says.
Recovery unviable
“Wherever possible, Libstar is working to absorb staff into other business units and is engaging transparently with stakeholders to support employees and the surrounding farming community. Given the current labour consultations and processes underway, no further details can be shared at this stage,” she says.
Charl de Villiers, chief executive officer of Libstar, says closing the facility has been an incredibly difficult, but necessary decision given the site’s ongoing losses and the structural pressures that have made its recovery unviable.
“Our priority is to support our people through this transition, while ensuring continuity of mushroom supply for our customers,” De Villiers says.
Their fresh mushroom facility in Johannesburg will continue to operate, supplying Denny’s national volumes. “While this site can meet ongoing market demand, the fresh mushrooms business remains under long-term review as we sharpen our focus on value-added food categories. Libstar remains committed to engaging openly with employees, customers, and industry stakeholders throughout this process,” he says.
The Denny fresh mushroom farm in KwaZulu-Natal was destroyed in a fire in September 2022 and the assets will also be sold.
