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KwaZulu-Natal Business 2019-20 edition

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A unique business and investment guide to KwaZulu-Natal Province in South Africa. The 2019/20 edition of KwaZulu-Natal Business is the 11th issue of this highly successful publication that, since its launch in 2008, has established itself as the premier business and investment guide for the KwaZulu-Natal Province. In addition to the regular articles providing insight into each of the key economic sectors of the province, there is a special feature on the surge in investment in new tourism projects, from casino expansions to the building of a dedicated cruise-liner terminal. Another special feature surveys other large investments in a wide variety of sectors, showing the diversity and strength of the provincial economy. For monthly updates about the region, subscribe at or visit our portal at

OVERVIEW Agriculture New

OVERVIEW Agriculture New crops are adding to the export basket. The award of Toyota SA/Agri SA Young Farmer of the Year for 2017 went to a Richmond farmer who is one of only four farmers in the province cultivating golden kiwifruit. There are only 16 farmers in all of South Africa doing what Ross Lowe does, but he believes that the particular strain of kiwifruit he has chosen is the best in terms of taste and yield. Typically for the modern KwaZulu-Natal farmer, he also intends to increase his export volumes. So-called superfoods have potential to grow the agricultural sector via greatly increased exports: these include avocados, pecans and dates. The province’s Premier has mentioned possibilities in macadamia nuts (already a thriving sector in other parts of the country) and in new areas such as cannabis and the farming of rabbits. The opening of a R99-million cold-storage facility at the Dube TradePort in 2017 has given farmers and exporters additional flexibility, allowing them to store chilled and frozen perishable goods. Eighteen percent of KwaZulu-Natal’s 6.5-million hectares of agricultural land is arable, and the balance is suitable for the rearing of livestock. The province’s forests occur mostly in the southern and northern edges of the province. In 2018, a summit was held at which consultation took place towards the creation of an Agricultural Development Masterplan for the province. The resulting plan includes priorities such as the expansion of irrigable land, improving market access for producers and adding value to agricultural products before they reach local and international markets. The Agribusiness Development Agency (ADA) works with Department of Agriculture and Rural Development (DARD) to stimulate agribusiness that covers the entire value chain and promotes development in all areas. The coastal areas lend themselves to sugar production and fruit growing, with subtropical fruits doing particularly well in the north. KwaZulu-Natal produces 7% of South Africa’s citrus fruit. ONLINE RESOURCES Fresh Produce Exporters Forum: KwaZulu-Natal Agricultural Union: KwaZulu-Natal Department of Agriculture and Rural Development: SECTOR INSIGHT Increased agricultural freight volumes are expected at the Dube TradePort. Beef originates mainly in the Highveld and Midlands areas, with dairy production being undertaken in the Midlands and south. The province produces 18% of South Africa’s milk. KwaZulu-Natal’s subsistence farmers hold 1.5-million cattle, which represents 55% of the provincial beef herd, and their goat herds account for 74% of the province’s stock. The Midlands is also home to some of the country’s finest racehorse stud farms. The area around Camperdown is one of the country’s most important areas for pig farming. Enterprise iLembe, the development arm of the iLembe District Municipality, is looking for investors to further develop an agri-processing hub near the King Shaka International Airport and Dube TradePort. KWAZULU-NATAL BUSINESS 2019/20 30

Sugar OVERVIEW KwaZulu-Natal leads in sugar production. SECTOR INSIGHT Times are tough in the sugar industry. For the first time in nearly a decade, some commercial sugar farmers in the Pongola area have returned to planting cotton as a rotational crop. This is according to the 2018 annual report of the KwaZulu-Natal Agricultural Union. Diversification is a good thing, but this move perhaps also points to the downward trend in overall sugar production. KwaZulu-Natal is South Africa’s biggest sugar producer. Most of South Africa's 14 sugar mills are in KwaZulu-Natal, as are the headquarters of the biggest companies. The South Africa Cane Growers’ Association (SACGA) described the 2017/18 season as “one of the toughest in the history of the South African sugar industry”. Although more land was cultivated (after the drought) and revenue was up, the price of sugar was so low that some growers were said to be at risk of business failure. Fourteen sugar mills crushed a total crop of 17 388 177 tons of cane to produce 1 994 607 tons of sugar during the 2017/18 crushing season. The cane crop was 2 313 567 tons larger than the 2016/17 crop of 15 074 610 tons. About 40% of local production is exported. The SACGA represents about 24 000 growers who produce about 20-million tons of cane. A new industry structure, allowing for multiple grower associations, has been agreed to by the SACGA, the Department of Trade and Industry ONLINE RESOURCES South African Cane Growers’ Association: South African Sugar Association: South African Sugar Technologists Association: Sugar Milling Research Institute: (dti) and the relevant parliamentary portfolio committee. Neither of the Big Two companies relies exclusively on South African sugar earnings: Tongaat Hulett has a big property portfolio and Illovo draws most of its profit from operations elsewhere in Africa. Tongaat Hullet Sugar has agreed to a R52-million sugarcane-growing project which will see co-operatives and contract farmers plant cane on 3 000ha at Felixton, Maidstone and Darnall. Illovo and Tongaat Hulett are the major operators of sugar mills. Other millers are Gledhow, ULC, Umfolozi and Tsb (which has a further two mills in Mpumalanga). Illovo has four mills, three sugarcane estates, four sugar factories, a refinery and three downstream operations that make products such as furfural, furfuryl alcohol, ethyl alcohol and lactulose. The four mills run by Tongaat Hulett are located on the North Coast while the central refinery is in Durban and the animal feed plant, Voermol, is near Tongaat. The Sugar Terminal at Maydon Wharf, Durban, serves 11 mills and can store more than half-amillion tons of sugar. It also has a molasses mixing plant. 31 KWAZULU-NATAL BUSINESS 2019/20

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