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Impact of African Continental Free Trade Area agreement (AfCFTA) on Africa’s energy sector

The African Continental Free Trade Area agreement (AfCFTA) will constitute the world’s largest free trade area, consolidating an integrated market of 1.3 billion consumers with a combined gross domestic product (GDP) of approximately $3.4-trillion. The objective is to realise a continent-wide single market for goods and services with free movement of business, persons and investments.

The AfCFTA envisions to expand intra-African trade and intensify regional integration by successively eliminating tariffs on 90% of product categories. Removal of such trade barriers assures to not only improve efficiency, enhance competition, and incentivise development of strategic solutions to local challenges through regional economies of scale, but essentially advance the efficacy of resource allocation.

Successful implementation of the agreement is set to have a profound impact on the continent’s energy sector. Regional integration pertaining to energy represents a viable solution for emerging economies, to enhance their energy landscapes in furtherance of realizing social, environmental and economic benefits. Regional integration is pivotal to ensure that energy resources get from localities where they are most affordable, to where they are required.

Regional integration on account of the AfCFTA, is forecast to improve security of supply. Integrating operational reserves and installed capacity enables combined power systems from having to invest in additional facilities. In the event of emergency situations, regional collaboration provides an alternative source of supply for operating reserves and support thereof. Sharing with neighbouring countries can provide advanced system flexibility and reliability by expanding the supply portfolio of diverse energy resources, as opposed to exclusively relying on regional and established resources and supply infrastructure.

To address the continent’s existing energy infrastructure gap, African governments are proactively aiming to expand electricity access, deliver clean cooking solutions and pursue inclusive sustainable energy development.

While these efforts are locally supported through existing platforms such as the regional power pools, the AfCFTA provides an entirely new platform to expand these efforts regionally and pursue energy development to relieve the infrastructure restraint. For instance, one key anticipated outcome of the agreement is the acceleration of industrial output that would comparatively depend on the availability, affordability and security of energy supplies at a scale for industrial growth.

Improved energy trade and energy integration initiatives will boost economic development in Africa by reducing transaction costs and enabling market and economic collaboration, conclusively accelerating investment incentives. Furthermore, removal of impediments to intra-African trade by AfCFTA portends additional US public and private investment in Africa’s oil and power sectors, since increased investment is aligned with US policy as well as sound business consideration.

Africa is renowned for its abundance of renewable energy resources, which include wind, solar, geothermal and hydropower. These constitute a consequential impetus for regional energy integration. Progression and mobilisation of such clean renewable energy sources through regional collaboration efforts afford the continent’s citizens improved environmental quality. “Developing renewable energy resources to address the demand for energy in Africa, will be in the spotlight at the upcoming Africa Energy Indaba. The conference will discuss the AfCFTA and how investors and energy project developers can benefit from the agreement and how this can catalyse the development of renewable energy projects,” commented Liz Hart, Managing Director, Africa Energy Indaba.

The 2020 Africa Energy Indaba is set to assemble leaders from the regional and international power and energy community to discuss the status of critical projects, identify lucrative investment and development opportunities, how best to capitalise on those prospects, as well as to share industry best practice.

The 12th annual event will be hosted 3 – 4 March 2020 at the Cape Town International Convention Centre, South Africa.

Register to attend

 

SAI Global QPRO and SAIGAS acquisition deal closes

NOSA Group is pleased to announce the closing of the transaction to acquire QPRO and SAIGAS, the Assurance South African businesses of SAI Global, a recognised leading provider of integrated risk management solutions and assurance services.

This acquisition, through our wholly owned subsidiary Aspirata (trading as NOSA Testing, Inspection and Certification (TIC)), follows the acquisition on December 1 of the Deltamune Group, and enhances NOSA TIC’s position as the largest group of sector-focused laboratories in South Africa.

The newest acquisitions – QPRO and SAIGAS – are among the most highly regarded and recognised companies offering food safety assurance and certification in Southern Africa and neighbouring African countries.

Bringing these entities into our portfolio complements our overall process, retail food safety and occupational health and safety audit offerings, and will solidify our vision of being the ‘one-stop shop’ for Risk Management throughout South Africa, Africa and the Middle East.

SAI Global Assurance has welcomed the transaction, with John Rowley, CEO of SAI Global Assurance, saying: “We believe NOSA is the right partner for QPRO and SAIGAS, and that together they have an excellent opportunity to continue to develop on QPRO and SAIGAS’ track record with food safety auditing and microbiological testing, while also executing on existing customer commitments.”

For more information visit www.nosa.co.za

 

The President of the Democratic Republic of the Congo is confirmed to attend Mining Indaba 2020

His Excellency Felix Tshisekedi, President of the Democratic Republic of the Congo (DRC) [Source: Investing in African Mining Indaba - https://www.miningindaba.com/]

Investing in African Mining Indaba is excited to announce that His Excellency Felix Tshisekedi, President of the Democratic Republic of the Congo (DRC) has confirmed his attendance at the event taking place in Cape Town 3 – 6 February 2020. The President will be accompanied by a large delegation from the DRC including two newly appointed cabinet ministers, Hon. Eustache Muhanzi Mubembe, Minister for Energy and Hydrocarbons, and Hon. Willy Kitobo Samsoni, Minister of Mines.

President H.E. Felix Tshisekedi, became the leader of the Democratic of the Congo in January 2019, after the first peaceful and democratic transfer of power. He is known for his involvement and leadership in Union for Democracy and Social Progress (UDPS) and currently serves as the second vice president of the African Union.

The country’s large presence at Mining Indaba is aimed at positioning the DRC as a premier mining investment destination. His Excellence President Felix Tshisekedi will address Mining Indaba’s senior audience on the main stage on Monday 3rd February, the opening day of the event. The main stage will also see a DRC Focus session which will examine the rise of cobalt and how the government’s policy and new mining code positions the DRC in a positive investment light.

On 5th February Minister of Mines, Honourable Willy Kitobo Samsoni, will deliver a speech at the Intergovernmental Summit where he will highlight the Newly Developed Mining Code which was approved and signed in 2019.

“Mining Indaba’s Intergovernmental Summit is an open platform for African Ministers and senior government decision-makers from across the globe to debate issues affecting the mining sector and improve bilateral trade and economic relationships and it is very exciting for us that the platform is attracting such senior interest”, comments Simon Ford, Portfolio Director of Mining Indaba.

As one of the main government sponsors of the event, the DRC will also host its annual Breakfast session on Wednesday 6th February where an in-depth conversation about the latest mining developments in the country and gather the key public and private sector stakeholders for an open conversation on the future of mining in the DRC.

Secure your place now for the world’s largest mining investment event

Blueberries for job creation

Photo credit: iStock by Getty Images

In discussions about what crops to promote, Wandile Sihlobo of Agbiz believes that South Africa should focus on horticulture, partly because it is labour-intensive. He gives an example of blueberries, which need 2.64 workers for every hectare planted. There are signs that his advice is being followed: gross value rose from R15.8-million in 2008 to R1.25-billion in 2018 with the total area planted expanding four times.

Berries of all sorts thrive between George and Swellendam and sales of chippers in this area have grown because blueberries have to be vigorously pruned. This process produces lots of green waste which many farmers are choosing to process themselves. More than 70% of the blueberry crop is exported and two-thirds of production occurs in the Western Cape.

Swellendam, which lies beneath the Langeberg mountains, produces 90% of the world’s commercially grown youngberries, a crop of about 600 tons per annum. Youngberries are sensitive and labour-intensive.

The Agri-Processing Support Programme run by the Western Cape Department of Economic Development and Tourism (DEDAT) helps small, medium and micro enterprises (SMMEs) improve their business processes and get better access to markets. This is part of the broader Project Khulisa growth strategy that sees SMMEs as key for expanding economic growth.

New Western Cape Premier Alan Winde announced in his first State of the Province address in 2019 that the province intends making agriculture a bigger part of the educational offering available to pupils. He announced that to the traditional focus on STEM (science, technology, engineering and mathematics), two A’s (the Arts and Agriculture) would be added to create the concept of STEAMAC.

Nearly 30% of exports come from agriculture, with food and beverages contributing a further 24%. Key sectors in many of the province’s non-metro towns (such as retail and manufacturing) have a strong dependence on agriculture and agri-processing.

The Western Cape Provincial Government reached its target of 100 000 new jobs in agri-processing in 2016 but the sector has since been buffeted by bouts of avian flu and a once-in-a-generation drought.

The drought in 2015 and 2016 had severe consequences in Southern Africa. StatsSA noted the following price increases in that period: vegetables (12.7%), bread and cereals (16%), while nearly 400 000 ha less was planted in the country in 2017 than it was in 2014.

The agricultural sector has had to make the biggest adjustments to climate change. The Provincial Government introduced a Smart Agri plan to coordinate efforts to tackle the effects of climate change on agriculture.

The sector supports almost 10 000 farms and employs 214 000 people. Farming carried out on the Western Cape’s 13-million hectares of agricultural land comprises approximately 21% of South African commercial agriculture.

Seven of the 10 biggest export earners are either agricultural products or agri-processed goods. These are citrus, wine, apples and pears, grapes, fruit juice and tobacco.

The province’s climatic regions vary from Mediterranean around Cape Town and on the coast (where annual rainfall can be 2 000 mm at places) to the drier regions of the inland Karoo districts where annual rainfall figures can be below 150 mm. Just over three-million hectares of the province is cultivated and 270 000 ha are under irrigation.

The Breede River Valley is an especially fertile area for fruit. The Western Cape specialises in apples, plums, pears and cherries. Peaches and nectarines can be found in most parts of the province. Raisins are a speciality of the Vredendal area on the West Coast.

The Sandveld region on the West Coast is known as South Africa’s Potato Pantry. Citrusdal unsurprisingly does a strong line in citrus and, with nearby Clanwilliam, is also famous for rooibos and buchu.

Wheat is another of the province’s strong sectors: the Western Cape’s 310 000 ha planted to wheat represents 64% of South Africa’s crop. Japan is a major destination of the province’s maize production. In canola, the Western Cape is even more dominant, with 99% of the nation’s hectares (StatsSA).

Companies

The ostrich processing industry has two major players which merged in the course of 2019, subject to an agreement not to retrench any workers for a three-year period, a condition imposed by the Competition Tribunal. Between them, Klein Karoo International and Mosstrich have four abattoirs in three provinces and tannery facilities in Oudtshoorn and Mossel Bay. There are more than 400 registered ostrich farms in South Africa, the majority of which are in the Western Cape and the Eastern Cape.

Zeder Investments is the agricultural arm of investment holding company PSG Group. Zeder controls Capespan, which has a turnover of R7.6-billion across three divisions: farms, logistics and fruit. Zeder is also a 39.6% shareholder in Kaap Agri Ltd. Kaap Agri has more than 200 operating points.

Zeder also owns 27.2% of Pioneer Foods which makes and distributes many big food and drink brands across Southern Africa, including Weet-Bix, Liqui Fruit, Ceres, Sasko and White Star.

Caledon-based Overberg Agri is an unlisted company with a wide range of investments in several sectors, including mining, pet food and industrial fasteners. SSK (Sentraal Suid Ko-operasie) has outlets in the Overberg and in the Southern Cape as far east as George.

Resources:
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Your ultimate business connection in the Northern Cape

Image source: https://web.facebook.com/nocci.kimberley

Northern Cape Chamber of Commerce and Industry

Our heritage in brief

NOCCI was established on 22 February 2000 when the Chamber of Business and the Kimberley Afrikaanse Sakekamer amalgamated. At the time, these two organisations had served the business community of Kimberley for 120 years.

Membership advantages

A Chamber assesses and evaluates the needs of the local business community, especially regarding the need for services to small business at a reasonable cost:

  • Monitors developments at the local level
  • Mobilizes business opinion on local issues
  • Exerts a positive influence on the environment in which business operates and helps prospective members grow their business
  • Promotes and encourages the pursuit of a high standard of business ethics
  • Disseminates information that is useful to the business fraternity
  • Creates opportunities for improving business skills
  • Extends business contacts locally, regionally and nationally, and allows individual business people to share in the provincial and national business decision-making processes
  • Upholds the market economy and private enterprise system
  • Has committees which are ideal places for members of diverse interests to consolidate and unify their thinking as they work together – committees accurately sense the environment, process information and provide valuable guidance to the member
  • Holds functions and special events, allowing members to network and learn about interesting topics

Through affiliation with national organised business structures, the “Voice of Business” is representative as memberships grows. The “Voice of Business” is a binding force combining the skills and influences of men and women engaged in all forms and sectors of business.

Can you afford not to belong?

The increasingly complex business and social environment requires a comprehensive support structure to ensure the most favourable climate for the continued viable existence of individual businesses in a system of free enterprise. At the same time, the Chamber movement facilitates adjustment by business to those realities that cannot be altered.

Involvement in the Chamber movement bears abundant fruit for the well-being of each business. Thousands of successful business people can testify to the enrichment of their own skills and the development of a network base through active participation in the Chamber affairs. If you are a businessperson with vision, you cannot afford not to join the Chamber movement.

Contact NOCCI

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Visit the NOCCI website at www.nocci.co.za
Find more Northern Cape business and investment insight in the 2019/20 edition of Northern Cape Business (digital journal):

Water Quality Testing Laboratory sets high standards

Technicians from GSDM Water Quality Testing Laboratory during an awareness programme to schools.

The Water Quality Testing Laboratory is situated on the N17 corridor in Ermelo. This location is bounded by the Ekurhuleni Metro of the Gauteng Province to the west, Sedibeng District Municipality of the Northern Free State to the south-west, Ehlanzeni District Municipality to the north-east, Nkangala District Municipality to the north, Amajuba District Municipality to the south-east and eSwatini to the east.

The District Municipality’s Water Quality Testing Laboratory is the only SANAS-accredited, government-owned facility in Mpumalanga Province and is evidence of Gert Sibande District Municipality’s vision to be “A community-driven district of excellence and development”.

This is also in line with the National Development Plan (NDP) vision 2030 which is “To ensure that all South Africans have access to clean running water in their homes”.

The Water Quality Laboratory is an accredited facility meeting the requirements of the ISO/IEC 17025:2005. The centrality and the strategic location of this facility ensures easy accessibility by all stakeholders within the district and the neighbouring districts.

Services

Accredited Water Quality Testing Laboratory situated in Ermelo, Mpumalanga.

Informed by the need to improve water quality in the district, the laboratory was established in 2011 to guarantee safe drinking water provided to millions of citizens within the district according to section 9 (1) of the Water Services Act No. 108 of 1997.

The facility provides chemical analysis, microbiological analysis and physical analysis. These services are available to all stakeholders and customers, including local municipalities and industries. The price list for water quality testing offered is available on request.

In addition, the Gert Sibande Water Quality Testing Laboratory promotes water quality and care for water in communities through active involvement in awareness programmes offered by local municipalities in the district. It also promotes careers in science by providing opportunities to students in the form of in-service training.

The laboratory boasts the provision and delivery of superior laboratory services and aims to promote and support development and culture of scientific learning. The Gert Sibande Laboratory regards its clients as valuable stakeholders whose interests are a priority for the laboratory.

For more information, contact laboratoryservices@gsibande.gov.za or go to https://www.gsibande.gov.za/

Driekoppies Dam is the perfect event venue

The stunning beauty of the Driekoppies Dam and its surrounds has made it possible for the Komati Basin Water Authority (KOBWA) to convert the dam into a suitable site for commercial and private recreational use. This means that at a very low fee, the public can explore and discover the scenic beauty and entertainment attractions of the Driekoppies Dam.

In order to make the information about KOBWA’s trans-boundary nature more appealing, KOBWA uses the edutainment approach by hosting educational tours around the dam and sports tournaments. Here, people can be educated about KOBWA in a relaxed, enabling environment and this is accommodated at the Driekoppies Dam.

The Driekoppies Dam is a popular venue for music shows and private events such as picnics, braais, family fun days, baby showers, and weddings. This is because of its spacious entertainment area which overlooks the exquisite dam. Regulars are young entrepreneurs from areas surrounding the dam who host Sunday Sessions and the Food Market.

It also offers a venue for traditional authorities wishing to host cultural activities and traditional meetings. Bike rallies and fishing tournaments by various associations are also held at the dam.

KOBWA puts safety at the forefront of all planning. There is an implementable Emergency Preparedness Plan that involves every segment of society, from government agencies to traditional authorities at community level. This ensures that entertaining at the dam is not a risk.

The Driekoppies Dam is readily available for young people who live in the Nkomazi area as a way to promote entrepreneurship among young people. With so many interesting things to do, especially on weekends, the Driekoppies Dam is the perfect destination for any event.

About KOBWA

The Komati Basin Water Authority (KOBWA) is a bi-national company formed in 1992 through the Treaty of the Development and Utilisation of the Water Resources of the Komati River Basin. The treaty was signed by the Government of the Kingdom of Eswatini and the Government of the Republic of South Africa. The authority was tasked with designing, constructing, operating and maintaining two dams and associated infrastructure.

This resulted in the construction of Driekoppies Dam in Schoemansdal South Africa (1993 to 1998) and Maguga Dam in Eswatini (1998 to 2003). The two dams were constructed mainly to provide assurance of water supply to the irrigators in both member states.

Tourism is one of the spin-offs of the development of the Driekoppies and Maguga dams. There has been an increase in recreational activities around both dams.

Images courtesy of the Komati Basin Water Authority.

www.kobwa.co.za

 

South African sawmills are generating energy through co-generation

Forestry and paper

One of the biggest operations in the forestry and paper sector in Mpumalanga Province is Sappi’s Ngodwana mill. The mill produces 330 000 tons of paper pulp for its own consumption, 250 000 tons of dissolving wood pulp (DWP) and 380 000 tons of paper (newsprint and kraft linerboard used for packaging) annually. Exports account for 70% of the mill’s product.

Ongoing investment at Ngodwana Mill will contribute R13-billion to the provincial economy over 20 years. Sappi’s other large facility in the province, the Lomati Sawmill in Barberton, produces kiln-dried Southern African pine lumber from sawlogs supplied by Sappi Forests.

The mill generates its own energy through co-generation (steam and electricity from renewable and other sources). In 2017 Sappi built a sugar extraction demonstration plant at Ngodwana. Findings from the experiment will help to improve the process of extracting bio-renewable chemicals. Sappi is partnering with Valmet, a Finnish company. Other forestry companies are also looking into energy generation, including AFCOL.

Mpumalanga has 40% of South Africa’s forestry resources. This fact presents an opportunity to exploit the sector’s byproducts in the biomass-to-energy field.

The Zebra Pellets plant in Sabie is to be converted by national utility Eskom into a torrefied pellet plant. The wood will be provided to the plant (owned by the Industrial Development Corporation) and then heated without the use of oxygen (torrified) which creates a coal-like product without the carbon.

Mpumalanga has the ideal climate and topography for forests. Forestry accounts for about 8% of Mpumalanga’s gross domestic product. The sector comprises logging, saw-milling, wood product and pulp and paper manufacture. Pulp and paper are the main exports, along with sawn lumber, wood chips and wattle extract. Most sawn timber in South Africa is used in the construction sector.

[iStock by Getty Images]
Sabie and Graskop represent the hub of the industry, but commercial forests are also found to the east and south along the Swaziland border. About 11% of the land mass is forested, with 4% of that being natural forest. The province is the national leader in total hectares under forest (514 000 ha) and in export earnings.

The MTO Group, which has 39 900 ha of plantation under management in the Lowveld, teamed up in 2018 with mountain-bike enthusiasts of White River and Nelspruit to develop a set of trails through the hilly landscape of the area.

Plans to develop an Agriculture and Forestry Technology Park are being drawn up by the Provincial Government of Mpumalanga. The Mpumalanga Economic Growth and Development Path (MEGDP) intends to expand the industrial base of the provincial economy, with a focus on beneficiation, agri-processing and value chain development.

When forestry managers, contractor and forestry equipment suppliers gathered at the biannual Focus on Forestry conference in White River in 2019, the theme was “Bridging the digital divide in the African forestry sector”.

Sustainability is a key area for companies in the forestry sector and advances in the Internet of things and AI are being keenly monitored for ways to enhance margins in an environmentally sound way.

York Timbers owns and operates five processing plants, including the including the largest sawmill and plywood plants in South Africa and it has 60 470 planted hectares. The company is considering investing in biomass energy generation. The Industrial Development Corporation (IDC) has a stake in York Timbers and a 42.6% share in Hans Merensky Holdings, a company with timber and processing interests in three provinces. Merensky is responsible for 20% of South Africa’s sawn pine lumber.

The Mondi Group has extensive forestry holdings in the province and has been working on introducing a higher degree of mechanisation in its operations. Mondi has also instituted an ecosystem management plan throughout its forestry operations with the intention of better managing the impact its work has on the environment.

Responsible forest management involves increasing the long-term productivity and preserving eco-system values in rural landscapes and protecting high conservation value areas such as wetlands. [Source: Mondi South Africa]
Although local demand is dwindling, the export market for pulp and paper is strong. Pulp production figures have been on the rise for several years and companies like Mondi are increasingly focusing on pulp export because of better margins.

PG Bison has a board plant in Piet Retief. Sonae Rauco runs large plants at White River and Panbult. Komatiland Forests, a 100%-owned subsidiary of state company SAFCOL, has big plantations in several districts. TWK is a R6-billion agricultural company with its headquarters in Mkhondo (Piet Retief).

Asset management company Global Environment Fund created Imvelo Forests and in 2015 the company investigated using thermal imaging to detect fires. Among the other private timber growers in the province are Pull Scar Timber Co, and United Forest Products.

Article source: Forestry and paper sector insight, Mpumalanga Business 2019/20 edition. Find more business and investment insight (digital journal):

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Building a robust economy in Mpumalanga

What are the key goals of the IDC in Mpumalanga?

In line with the IDC’s mandate, our goal is to provide financial and non-financial support to entrepreneurs, thereby creating jobs and empowering youth and women, as well as supporting black industrialists.

What is your core business?

On a daily basis, we screen and assess business plans for viability. Based on the economic merit thereof, the IDC can then decide on funding the project under consideration. The corporation provides funding in the form of loans, equity and guarantees, among others, to cater for the funding needs of start-ups, expansion of existing capacities as well as acquisitions. Our funding ranges from R1-million to R1-billion per project.

The IDC also provides both pre- and post-investment business support as may be required for its clients, thereby ensuring that any gaps identified for the success of the funded entities are adequately addressed, thereby safeguarding the corporation’s investments. For example, if corporate governance within the funded entity is considered unacceptable, the IDC will, through its business support programme, ensure that appropriate interventions are implemented to address the gap as identified.

Do you sometime hold equity for a long period?

It depends on the strategic nature of the investment. These investments assist the IDC in fulfilling its developmental role where, for example, preference may be given to BEE parties at the time of disposal of shares in this regard, thereby enabling the corporation to achieve its empowerment and transformation agenda. Furthermore, dividends from these investments, along with interest income, contribute significantly towards the IDC’s internally generated funds.

Do you fund projects when times are tough?

Depending on the economic merit of the entity concerned, the IDC would provide funding because it is in our interest that these businesses remain viable and sustainable in the long run where they will continue to contribute meaningfully towards the success of the economy of South Africa through sustained employment opportunities, for example.

In actual fact the IDC’s developmental role is more pronounced during tough economic conditions, as the corporation is expected to play a counter-cyclical role in turning the economy around.

Mashewu Matsiela

Mr Mashweu Matsiela has been the Regional Manager of the IDC’s Mpumalanga office since 2013. He is currently also the Acting Manager of the corporation’s Limpopo office.

Having been awarded a British Council scholarship, Mr Matsiela pursued his tertiary education in Scotland where he obtained a BSc degree (Biological Sciences) from Stirling University. This was followed by an MBA qualification from the University of Pretoria, including a Graduate Diploma in Company Direction (GIMT). Mashweu also earned himself a distinction on the highly regarded Global Executive Development Programme (GIBS).

What prompted the IDC to open a second office in the province?

That decision was informed by the prevalence of economic activities in the “highveld” part of the province, mainly in Emalahleni and the surrounding areas. Through this new office, which is located in Emalahleni, the IDC would like to reach out to the rest of the province and thereby exploit the business opportunities further afield in areas such as Mkhondo, Secunda, Ermelo, Delmas and Kwa-Mhlanga.

Which sectors are you supporting the most?

The IDC provides funding across the various sectors that fall under the corporation’s funding mandate, such as tourism, mining, manufacturing and agriculture, all of which are some of the key economic sectors within Mpumalanga. Please refer to the IDC website to see the sectors that the corporation supports.

Where is the most growth coming from?

Mainly from mining and manufacturing. Agriculture and tourism also present significant growth and transformation opportunities for the IDC as evidenced by the projects currently in our pipeline. We have seen a number of big projects coming forward from these sectors which are expected to create a significant number of jobs, once implemented.

Can you share with us some success stories?

Some of the IDC’s success stories within Mpumalanga include F&K Hlakani Engineering which specialises in steel fabrication and engineering services. Through the IDC’s funding the company grew from humble beginnings to become a key player that is highly regarded in the market.

Another example of the IDC’s success in the province is Overlooked Colliery, a mining company which has also become a key player in the mining sector. The financial support assisted the BEE shareholder of Overlooked to buy the rest of the shares in the company as well as to acquire another mine nearby.

Are there special provisions for women and young people in IDC programmes?

Indeed, the IDC is committed towards youth and women empowerment. The corporation has set itself specific targets in this regard where performance on these targets is measured accordingly at the end of each financial year. Through its Gro-E Youth Fund Scheme, the IDC provides funding to youth-owned businesses at preferential interest rates.

For more information, visit www.idc.co.za

A 2020 vision of the agricultural sector in Limpopo

[iStock by Getty Images via Limpopo Business 2019/20 edition]

The percentage contribution of Limpopo agriculture to national agriculture is 7.6% although its contribution to provincial GDP is just 2.3%. Agri-processing has enormous potential to expand in every sub-sector. The establishment of agri-parks and co-operatives and support for youth in farming are key provincial government initiatives.

Cotton growing is experiencing a renewal in the province. Companies like ZZ2 are major contributors to the country’s annual production of 120 000 tons of avocadoes. Of the current crop, about half is produced in two Limpopo regions, Letaba and Tzaneen. Exports are rising exponentially. In response to this demand, and the potential of the Chinese market, almost 1 000 ha per year of new land is being planted with avocadoes in South Africa.

The same amount of new macadamia planting is underway every year, according to the Macadamias South Africa (SAMAC), adding to the existing 19 000 ha.

The other big sellers are mangoes and tomatoes. Limpopo grows three-quarters of South Africa’s mangoes and two-thirds of its tomatoes. The Waterberg District produces large quantities of red meat, Capricorn has potatoes in abundance, Vhembe in the north specialises in citrus and subtropical fruits, Mopani has those fruits too – and the Mopani worm. The Sekhukhune region in the south-east produces grain and the marula fruit that goes into Amarula cream liqueur.

The tasty marula fruit has a high vitamin C content and is much loved by elephants. [iStock by Getty Images]
The Limpopo Department of Agriculture and Rural Development has identified five Agricultural Development Zones (ADZs) where support will be given to farmers to promote production in the sector. More than 1 000 small-scale farmers are being trained annually to improve their skills and to improve production. Irrigation schemes have been revived in eight districts to assist farmers.

 

The Provincial Government of Limpopo’s nine-point economic plan includes RAAVC (the revitalization of the agriculture and agri-processing value chain).

National government’s Industrial Policy Action Plan (IPAP) acknowledges agri-processing as one of the best sectors for labour-intensive growth. In that context, the decision by Dursots-All Joy to relaunch and upgrade the tomato processing plant in Modjadjiskloof, Tzaneen, is important for the larger economy. At least 15 commercial farmers now have a ready market for one of Limpopo’s chief products and there is potential for the factory to employ as many as 300 people. There is a shortage of tomato paste in South Africa.

More support for farmers comes in the allocation of R32-million by the provincial government for the construction of the Molemole Agricultural Office in the Capricorn District Municipality. In addition to tackling drought, the Limpopo Department of Agriculture and Rural Development has had to put a strategy in place to fight Fall Army Worm.

All of South Africa’s major retailers have enterprise development programmes which connect farmers to suppliers. In Limpopo, Woolworths supports independent farmers by buying their produce and Spar channels produce from smallholders through its Fresh Assembly Point in Mopani.

Massmart’s five-year programme, which tailed off as the company focussed more on the manufacturing sector which is relevant to their main business, trained more than 700 farmers in logistics, food safety and financial management. At its peak, the programme was supporting 164 smallholder farmers.

Another example of an initiative to link farmers to markets was a Market Linkage Information Day, organised by the Limpopo Department of Agriculture and Rural Development (LDARD) in 2018 at Soekmekaar.

The Limpopo regional office of the Industrial Development Corporation (IDC) has helped expand the province’s agricultural sector by supporting the creation of two blueberry operations near Tzaneen. Tzaneen Blueberries used its own money to establish 17.5 ha of blueberry plantations but approached the IDC to fund later stages of development. The IDC’s R13.5-million assisted in the building of a packhouse. The expansion created 62 jobs.

In terms of the Provincial Red Meat Cluster Development as a catalyst towards sustainable rural livelihoods development through livestock farming, the Nguni cattle loan project saw a total of 350 livestock breeding animals distributed in 2017/18 to 16 farms. The scheme, a partnership between LDARD, the Industrial Development Corporation and the University of Limpopo, aims to improve the quality of breeding stock. It also forms part of the development of a provincial Red Meat Cluster.

ZZ2 is the major brand of Bertie van Zyl (Pty) Ltd, which produces 160 000 tons of tomatoes per year. Westfalia is another huge enterprise, part of the Hans Merensky Group, and it is the world’s largest avocado grower. It also produces significant quantities of mango, litchi, citrus and macadamia and has three agri-processing plants in the province. Greenway Farms supplies about 45% of the fresh-market carrots consumed in Southern Africa under the Rugani brand.

The two most active agricultural companies in Limpopo are NTKLA (with its headquarters in Modimolle) and Afgri, South Africa’s biggest agricultural company, which has its headquarters in Centurion (Gauteng).

NTKLA is a shareholder in Venda Roller Mills in Thohoyandou and operates 10 grain silos, 23 retail outlets, 28 flour depots and one cold storage facility.

Additional resource links:
More Limpopo business and investment insight in the Limpopo Business 2019/20 edition (digital journal):

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