OVERVIEW Agriculture
OVERVIEW Agriculture Macadamia nuts are spreading. SECTOR INSIGHT Tongaat Hulett’s business rescue process continues. Regarding macadamias, Phelisa Mangcu, CEO of SCTIE, says, “The area is already renowned for its banana production and the growth of the macadamia nut sector is bringing with it job creation and investment opportunities, with the domestic and international export markets primed for these quality-grown products.” Macadamia nuts have been trending in South Africa for nearly a decade, but the focus has been on the fertile growing areas of Limpopo and Mpumalanga provinces. No longer. The hot subtropical climate of the KwaZulu-Natal South Coast is perfect for the cultivation of macadamias and farmers in the area are increasingly starting to switch from bananas. The Kwa-Natal Banana company, which counts among its members farmers responsible for 80% of banana production by volume on the KZN South Coast, reports that most farmers have planted at least part of their farms with macadamias. The chairman of the company, James Miller, has converted half his farm to the nut. Fertiliser costs for bananas have risen because of Russia’s war with Ukraine and there is increasing competition from countries like Mozambique and Swaziland. Although macadamias are not as labour intensive, they do require a higher level of skill among the workforce. The global market for macadamias, which is expected to keep growing at an annual compound growth rate of 11.2% to 2032, was valued at R28.7-billion in 2022 (International Nut and Dried Fruit Council). The South Coast Tourism and Investment Enterprise (SCTIE), with a head office in Port Shepstone, has been formed to attract investment and position the KZN South Coast region as a prime tourism destination. 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 and fruit, with the north being particularly well suited to subtropical fruits. KwaZulu-Natal produces 7% of South Africa’s citrus fruit. The Coastal Farmers Cooperative represents 1 400 farmers. TWK is a R6-billion operation that originated in forestry but which is now a diverse agricultural company with seven operating divisions. It has 19 trade outlets in the province and 21 in Swaziland KWAZULU-NATAL BUSINESS 2024/25 26 PHOTO: SCTIE
OVERVIEW Pigs and fine horses thrive in the Midlands. 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. Enterprise iLembe, the development arm of the iLembe District Municipality, is looking for investors to further develop an agro-processing hub near the King Shaka International Airport and Dube TradePort. Sugar industry SA Canegrowers Association (SACA) has announced a five-year, R1- billion, commitment to the funding of transformation initiatives. There are approximately 21 000 small-scale farmers in the province, many of whom are involved in programmes with the bigger production companies or are affiliated to SACA. In January 2024, SACA paid out about R175-million for the benefit of smallscale farmers. SA Canegrowers represents 23 866 growers and is responsible for the production of 18.9-million cane tons. In the same month, the creditors of the troubled Tongaat Hulett Limited agreed to the business rescue plan put forward by the Vision Consortium. With the group’s CFO, Rob Aitken, appointed as interim CEO and a clear plan for the future, hopes were raised that the huge company that has played a major role in sugar industry for more than 100 years would soon be back on its feet. But then an urgent court ONLINE RESOURCES Milk Producers Organisation: www.mpo.co.za SA Canegrowers Association: www.sacanegrowers.co.za South African Sugar Association: www.sasa.org.za South Coast Tourism and Investment Enterprise: www.investkznsouthcoast.co. application was brought against the plan and a court also found that the company was liable for its commitments under the Sugar Act and the Sugar Industry Agreement. This included fees owed to the South African Sugar Association (SASA). In 2022 seven former Tongaat Hulett senior executives appeared in court on charges of fraud for allegedly backdating sales agreements of the company’s property division to score better bonuses. The sugar industry itself faces many challenges, not least the imposition of a sugar tax and imports from countries such as Brazil, India and Thailand. Diversification is vital for the future and power generation will be an important part of that. Neither of the Big Two companies relies exclusively on South African sugar earnings: the troubled Tongaat Hulett has a big property portfolio and Illovo draws most of its profit from operations elsewhere in Africa. A start has been made on tackling the many challenges faced by the sugar industry: the Sugarcane Value Chain Master Plan 2030 has been signed by two national government ministers and various sector participants. Of the 10 443 farmers who supply Tongaat Hulett, 94% are smallscale 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. 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. ■ PHOTO: Springvale Farm 27 KWAZULU-NATAL BUSINESS 2024/25
