KwaZulu-Natal Business 2022-23

The 2022/23 edition of KwaZulu-Natal Business is the 14th 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 national government’s campaign to encourage private investment in ports. The vital role of the ports of Durban and Richards Bay in the South African economy cannot be understated and putting them in a better position to deal with commodities and cargoes of every sort is clearly in the national interest. A special purpose vehicle is to be created within Transnet to make dealing with private companies less complicated. The increasing importance of the Oceans Economy to the future of the provincial and national economy is relevant to any examination of the economy of KwaZulu-Natal. This applies as much to trade and ship-repair as it does to the exciting gas discoveries which have been made off the coast of Mozambique and South Africa.

OVERVIEW Agriculture

OVERVIEW Agriculture Packaging firm expands on increased agricultural production. The decision by processing and packaging company Tetra Pak to spend R500-million on expanding capacity at its packaging material plant in Pinetown indicates an uptick in agricultural production. The new plant allows the company to increase its local content to 80% and to make the Pinetown plant a production hub for the region. Among the company’s clients are dairy companies such as Clover and Woodlands Dairy which package milk for major retailers. The Provincial Government of KwaZulu-Natal has announced that nurseries are to be the focus of targeted development: the Makhathini Nursery will be brought to full operational status during 2022, and two new large nurseries are to be built at Cedara and Dundee. These nurseries will produce varieties of seedlings for distribution to small-scale farmers. The Department of Agriculture and Rural Development (DARD) has been working with the Tembe Traditional Council to bring a marula-processing plant near Manguzi in the municipality of Umhlabuyalingana into production. There are an estimated twomillion fruit-bearing trees in KwaZulu-Natal, and DARD estimates that they have the potential to create 1 000 seasonal fruit-harvesting jobs. KwaZulu-Natal is South Africa’s major sugar-producing province. A start has been made on tackling the many challenges faced by the sugar industry: in 2020 the Sugarcane Value Chain Master Plan 2030 was signed by two national government ministers and various sector participants. Among the steps to be taken include diversifying revenue streams and an agreement by users and retailers to buy more South African sugar. Imports have a devastating impact on the local industry. Two mills have recently closed, the Umzimkulu mill run by Illovo Sugar and Tongaat Hulett’s Darnall mill. This will put additional pressure on the country’s remaining 12 mills. 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. Diversification is vital for the future of sugar producers and power generation will be an important part of that. Tongaat Hulett continues to search for ways to reduce its huge debt. Shareholders were faced with tough choices in 2021 and 2022 as what the Financial Times called “an opportunistic new investor”, Magister Investments, made a play for the group. An important part of the transformation of the sugar industry involves supporting small-scale farmers. Of the 10 443 farmers who SECTOR INSIGHT New nurseries will supply high-quality seed. supply Tongaat Hulett, 94% are small-scale farmers. The Illovo Small-Scale Grower Cane Development Project used 119 local contractors to develop the fields of 1 630 new growers on 3 000ha. Production sent to the company’s Sezela factory more than doubled and income for the growers is expected to be about R64-million annually. National Treasury and the SA Canegrowers were partners in the project. SA Canegrowers represents 23 866 growers and is responsible for the production of 18.9-million cane tons. The Sugar Terminal at Maydon Wharf, Durban, serves 11 mills and can store more than half-a-million tons of sugar. It also has a molasses mixing plant. Agricultural assets Of KwaZulu-Natal’s 6.5-million hectares of agricultural land, 18% 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. The coastal areas lend themselves to sugar production KWAZULU-NATAL BUSINESS 2022/23 28

Select milk dairy equipment. Credit: Tetra Pak Group ONLINE RESOURCES Fresh Produce Exporters Forum: www.fpef.co.za KwaZulu-Natal Agricultural Union: www.kwanalu.co.za Milk Producers Organisation: www.mpo.co.za South African Cane Growers’ Association: www.sacanegrowers.co.za South African Sugar Association: www.sasa.org.za and fruit, with subtropical fruits doing particularly well in the north. KwaZulu-Natal produces 7% of South Africa’s citrus fruit. The Coastal Farmers Co-operative represents 1 400 farmers. TWK is a R6-billion operation that originated in forestry (as Transvaal Wattlegrowers Co-operative) but which is now a diverse agricultural company with seven operating divisions. It has 19 trade outlets in the province and 21 in Swaziland and Mpumalanga. 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. Vegetables grow well in most areas, and some maize is grown in the north-west. Nuts such as pecan and macadamia thrive. KwaZulu-Natal has two colleges offering higher qualifications in agriculture, Cedara in the Midlands and the Owen Sitole College of Agriculture near Empangeni. Enterprise iLembe is the development arm of the iLembe District Municipality and is looking for investors to further develop an agriprocessing hub near the King Shaka International Airport and Dube TradePort. So-called superfoods have potential to grow the agricultural sector via greatly increased exports: these include avocados, pecans and dates. Another possibility is macadamia nuts (already a thriving sector in other parts of the country) and in new areas such as the farming of rabbits. Among the new lines of agricultural produce being investigated is cannabis. The provincial government initiated a feasibility study to identify opportunities in the production of cannabis and downstream beneficiation. A Cannabis Investor Protocol has been developed and a dedicated Cannabis Unit has been established within the Moses Kotane Institute to assist emerging cultivators and entrepreneurs with infrastructure assistance, funding and licensing. ■ 29 KWAZULU-NATAL BUSINESS 2022/23