Page 54 - IDC

6 CITY PRESS, 15 OCTOBER, 2017

business

Agriculture

IN NUMBERS

6%

THE CONTRIBUTION
AGRICULTURE MAKES
TO THE SA GDP

4th

LARGEST PRODUCER
OF CHICORY ROOTS
IN THE WORLD ABUNDANT HARVEST Manoj Seonath, the head of agroprocessing and agriculture for the Industrial Development Corporation PHOTO: DEON RAATH

4 300 Seeding future

DAIRY PRODUCERS

IN SA

60 000

PEOPLE EMPLOYED IN entrepreneurs
THE DAIRY INDUSTRY

10th

LARGEST SUGAR Balancing job creation, opportunity and innovation in the agricultural
PRODUCER IN THE

WORLD sector is a challenge. Manoj Seonath, head of agroprocessing at the

R78bn IDC, tells Gayle Edmunds how they are approaching it

AGROPROCESSING’S hether you chose cereal, eggs, toast or transformation is realised and the farmers may be further “We are all aware of the drought in the Western Cape and
CONTRIBUTION TO fruit and yogurt for breakfast this morning, included in all parts of the value chain. the farmers are especially affected on the growing side. The
This focus on inclusion and transformation has meant that the
THE SA GDP your breakfast was possible because of the IDC considers differently their role in funding workers’ trusts or distressed farmers affect local consumption, but it [the drought]
agroprocessing value chain.
also has a major impact on export,” said Seonath.
This sector of the economy ensures that, trusts that benefit whole communities. “There are also unforeseen consequences of the drought. For
362 000 Wwhen we visit our favourite supermarket, buy workers a significant stake in farms on which they work. example, the windbreaks on farms are trees, but when water is
In a classic funding model, a funder could provide capital to
there is variety of goods on the shelves to feed us. And as such,
scarce farmers chop down these trees that use up water, which
PEOPLE EMPLOYED it has an inportant role in growing our economy. In the last But a better long-term strategy is to ensure that those workers in turn exposes the farms to additional risks.”
see real benefits of ownership (from the first year of ownership)
three to four years, the IDC has created in excess of 7 500
The dynamic nature of the sector – a result of ever-changing
IN AGROPROCESSING direct jobs in the sector, and this financial year to date the IDC in the form of trickle dividends. climate patterns – means that those working in agroprocessing
has created in excess of 1 300 jobs and is anticipated to create a
These trusts then immediately improve the lives of these
need to keep a constant eye on emerging opportunities, Seonath
IN SA few thousand more before the financial year end in March. workers whereas the classic model results in years (or explains. An excess of maize can encourage farmers to
Manoj Seonath, the Industrial Development Corporation’s
start planting soy, for example, or farmers with the
even decades) of waiting – usually while a capital
(IDC’s) agroprocessing and agriculture head, says there is a lot debt is paid off – before they see any results right soil type can instead grow blueberries and
R17 067m of “positivity” in the sector. This has the potential to create an from their investment. project in macadamia nuts – both of which are high-value
A
Another regional level strategy is to
enormous number of jobs and have a positive impact the
exports for South Africa.
While the sector’s reliance on the weather
THE VALUE OF CITRUS economy. acquire businesses that are currently run partnership offers a specific set of challenges,
“You can still make a good success out of agriculture with
by people who wish to pass on their skills,
FRUIT EXPORTS FROM hard work and if you have done your research. But it is not a and ultimately their business, to an with the innovation and technology also present
‘get rich quick’ sector. I do see more educated youth going back
emerging entrepreneur. Such an example
opportunities in the sector. Seonath says
the corporation works closely with a range
SA IN 2016 to agriculture, however,” Seonath says. would be where a new entrepreneur of agricultural organisations to tap into their
might be funded to become a partial
He added that, because of the sector’s potential in driving
transformation and the possibilities for creating a more inclusive IDC would then ensure that the existing skills IDC ongoing and up-to-date research around
shareholder in an established business. The
2.33m economy, the corporation has started to fund entrepreneurs and remain in the business for three to four years, climate change and technological advances.
“Technology is a trade-off with job creation.
businesses throughout the sector’s value chain. This approach
As a country, we don’t want to be left behind, but
OF ALL HOUSEHOLDS IN has made the corporation’s involvement more dynamic as they or at least until the emerging shareholder is jobs are crucial.
adapt to gaps and opportunities all along the chain.
ready to take over. This ensures that skills and
The corporation is looking to help entrepreneurs and existing
“Technology is on our doorstep, and is being seen
SA ARE AGRICULTURAL businesses looking to expand in high-value field crops; wheat businesses that are crucial to the agroprocessing value throughout the agricultural value chain, both on the primary
chain don’t retire or die with their current owners.
While the sector itself holds a great deal of potential,
HOUSEHOLDS and sugar; the livestock value chain such as cattle, poultry and agroprocessing is held hostage by Mother Nature. Regional and agroprocessing sides.
pigs; fishing and aquaculture; beverages; forestry: and
“We have to create and save as many jobs as we can, but we
horticultures including fruit, vegetables, nuts, tea and coffee. droughts around the country have presented farmers with some also have to look at farmer profitability. Job creation at the IDC
1 120 233 Even though the bulk of raw material (in the form of milk) unforeseen challenges. is always vitally important, but it is also about big innovations.
Seonath explains, using the dairy industry as an example.
To balance the trade-off between job creation and technology
AGRICULTURAL comes from big commercial farmers, there is also room for the CONTACT THE IDC: enhancements which replace manual labour, it is vital that we
involvement of emergent black farmers. These emerging farmers
find ways to grow the capacity base in the sector, so that we
Call the IDC 0860 693 888 or email
HOUSEHOLDS FOCUS ON could require funding to form a collective that provides a callcentre@idc.co.za or apply online: www.idc.co.za are able to absorb more jobs despite technological
percentage of the milk to the leading dairy. This investment
advancements.
POULTRY PRODUCTION would be a way for the IDC to promote the inclusion of those The pre-investment business centre walk-in centre is grow that industrial space to produce more demand for local
“We have a certain amount of industrial capacity, how do we
at the IDC head office at 19 Fredman Drive,
farmers in that value chain. This would also give the farmers
the opportunity to move up the value chain, where they could Sandton or visit one of the regional offices and export market?”
55% perhaps become shareholders in the dairy. In such instances, This is a question every sector is facing.
OF ALL LARGE- Luxury pet food takes a bigger bite out of the market
SCALE SHEEP FARMING
TAKES PLACE IN CHIMWEMWE MWANZA EDIBLE FUNDING WOMEN-LED
EASTERN CAPE AND business@citypress.co.za PROPOSITION BUSINESSES IN NUMBERS:
NORTHERN CAPE Fazielah Allie, the managing director and majority owner of K-9 Fazielah THE IDC APPROVED
Allie, the
Pet Foods, says the business was launched out of necessity two owner of K-9 R3.2bn
24% decades ago. She couldn’t find pet food that she considered Pet Foods, FOR BUSINESSES WITH FEMALE
believes her
healthy enough for her dogs, so she began cooking their food
herself. Her dogs’ new-found health was a great advertisement, and
product has
OF ALL VEGETABLE so her business started. found its OWNERSHIP OF MORE THAN
niche in a
Now the company produces frozen pet food out of a factory in
PRODUCTION IN SA Montague Gardens in Cape Town and, as part of its growth plan, K-9 competitive 25%
market
Pet Foods has secured a contract to manufacture wet pet food for
IS TOMATOES Woolworths, among other retailers. FOR THE FINANCIAL YEAR TO
MARCH 31, 2017. THIS IS A
“We see a lot of potential for growth in the local market,” says
60% K-9, which is a female-owned and female-empowered manufacturer, 178%
Allie, despite the industry being fiercely competitive.
Having identified a unique growth opportunity in its niche market,
OF ALL AGRICULTURAL approached the Industrial Development Corporation (IDC) for INCREASE COMPARED WITH THE
PREVIOUS PERIOD
funding so that it could buy the plant machinery required to extend
LAND IS DEVOTED TO its product offering and fulfil its new contractual commitment.
To the end of the financial year on March 31, the corporation had
Since then, the manufacturer has been on a growth curve, which
GRAINS AND CEREALS is a remarkable feat considering that South Africa’s pet food industry approved R3.2 billion for businesses with female ownership of more imported wet pet food with K-9’s locally produced food. This
increases local manufacturing capacity, but also ensures that jobs are
is dominated by local and multinational heavyweights whose scale than 25% – a 178% increase compared with the previous period. generated in South Africa.
15m newcomers. received funding support from the IDC have invested in primary development initiatives and allows the pet food manufacturer to
A number of female-owned entities, such as K-9, that have
The five-year procurement deal also fits in with Woolworths’
strategically gives them an edge against smaller players and
“This market is difficult to penetrate considering the strength of
benefit from the resealable tub packaging – designed specifically for
industries such as agriculture, forestry and fishing, as well as the
HECTARES, OR 12% established companies. But we believe in the quality of our product manufacturing of food products – activities that form part of the Woolworths – giving K-9 an advantage in the local pet food market.
core of the corporation’s Agroprocessing and Agriculture Strategic
offering. What is more encouraging to us is that local retailers, some
Another notable feature of the IDC’s partnership with K-9 is that it
OF SA’S LAND AREA, of whom are an extension of international brands, now stock our Business Unit. fulfils the corporation’s objective to create a steady stream of black
products,” says Allie.
Encouraged by potential growth prospects, Allie says that the
industrialists who are not only capable of growing their businesses,
IS USED FOR FARMING In recent years, the IDC has significantly increased funding to IDC’s support has enabled the company to build a modern but who will also create jobs.
female-owned and female-empowered businesses, which reflects an production plant that will enable K-9 to expand. Allie, who still uses the same recipes and has the same attention
increasing shift to support women’s roles in advancing economic One of the most important elements of the contract with to detail she did when she started out in 1996, says that, with the
and social transformation. Woolworths is to facilitate import replacement, thereby replacing growth of the business, K-9 will create 37 jobs.