Gauteng Business 2016 edition

OVERVIEW • Packaging

OVERVIEW • Packaging of agro-processed goods; • Development of additional agro-processing facilities, • R&D in medicinal plant production; • The proposed Green Hub in the West Rand District Municipality, which will aim at promoting the growth of sustainable, green industries; • Opportunities in the non-core activities of the agricultural sector, such as transport, packaging and distribution; • R&D related to organic food production, as well as health foods and natural remedies; • Small business opportunities within the brewing industry, through development training; • Food and Beverage. Close to half of the companies operating in the food and beverage sector in South Africa are located in Gauteng, including Nestlé, Tiger Brands, Pioneer Foods, AVI and Astral. There are approximately 4 000 food processing companies operating in the province, employing roughly 50 000 workers and contributing more than R10-billion to Gauteng’s GDP. Many major food and beverage processing brands have a significant presence in Gauteng. For instance, Nestlé operates four manufacturing plants in the province. The company has spent R505-million on increasing its production capacity within South Africa, with the majority of this expenditure incurred within Gauteng. The poultry business in Gauteng presents significant opportunities for future investment. Earlybird Farm, one of Astral’s operations, processes 800 tons of chicken per day at its two factories in Olifantsfontein. Rainbow, the second biggest poultry producer, operates 18 farms and two feed mills in Gauteng alone. Daybreak Farms, an AFGRI operation, is located in Springs and produces about 650 000 broilers every week. Pioneer Foods has spent R150-million on a biscuit-making facility in Clayville. Astral Foods owns two broiler production operations located just east of Johannesburg, and two of its eight feed mills are located in Randfontein (to the west) and Delmas (to the east). Tiger Brands runs six plants in Germiston that produce a range of meat products, and the establishment of a new tomato sauce plant and pasta plant rank among the company’s recent investments in the province. McCain Foods, located in Springs, produces frozen vegetables for the Gauteng market. GAUTENG BUSINESS 2016 82

OVERVIEW Finally, a variety of the beverages in AVI’s portfolio (including Ciro) are produced at the group’s Kempton Park facilities. By the numbers About 84% of South African households engaged in agriculture are headed by people with incomes of less than R38,400 a year according to a Statistics South Africa survey. However, almost 2 800 of those in the high-earning category are from Gauteng. It is the highest number in this segment among the provinces, even though Gauteng (279 000 agricultural households) ranks only a distant fourth behind KwaZulu-Natal (717 000), the Eastern Cape (597 000) and Limpopo (468 000). Women make up 48% of agricultural household heads in South Africa. In the Eastern Cape (55%), KwaZulu-Natal (54%) and Limpopo (52%) they outnumber men. Regarding rural access to water, the survey found that 20% of the households nationally had no access to piped water, and a further 28% had piped water only outside their yards. In this respect again Gauteng and the Free State seem best served. Most of the rural households use electricity for lighting and cooking, though wood is also used to a great extent for cooking in KwaZulu-Natal, Limpopo and the Eastern Cape. Meanwhile, Economic Development, Agriculture and Rural Development MEC for Gauteng Lebogang Maile said access to land was key to transforming agriculture in the province, “The decline in mining activity and the attendant consequences of deindustrialisation, the agricultural industry presents real possibilities for a shift in the orientation of these regions. More importantly, as an industry that can propel growth in other sectors placing Gauteng on different economic trajectory. “We must emerge out of this summit with a strategy that merges our agenda to promote food security, integrate black farmers, lessened our dependence on food imports, and empower poor communities to take charge of their nutritional needs by supporting community and household food gardens on a massive scale. We must emerge with a resounding commitment to use agriculture as a launching pad toward the realization of the transformation, modernization and reindustrialisation programme. I believe that agro processing, along with a clear strategy for economic diversification, can give the economies of the West Rand and Sedibeng a new lease on life,” concludes Maile. 83 GAUTENG BUSINESS 2016