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Western Cape Business 2018 edition

  • Text
  • Nedbank
  • Sectors
  • Growth
  • Finance
  • Government
  • Africa
  • Management
  • Infrastructure
  • Transport
  • Opportunities
  • Energy
  • Development
  • Wesgro
  • Vodacom
  • Investment
  • Cape
  • Business
  • Tourism
  • Economic
  • Municipality
The 2018 edition of Western Cape Business is the 11th issue of this highly successful publication that, since its launch in 2005, has established itself as the premier business and investment guide for the Western Cape. In addition to the regular articles providing insight into each of the key economic sectors of the province, there are special features on the growth of tourism (spurred by an innovative programme designed to create more direct flights to Cape Town), medical technology as a growth sector and the pursuit of excellence that drives the Cape Winemakers Guild. The journal contains a message from Alan Winde, Minister of Economic Opportunities, and contributions from significant business leaders from Accelerate Cape Town, the Cape Chamber of Commerce and the Western Cape Business Opportunities Forum. An interview with Tim Harris, Wesgro’s CEO, reveals some of the recipe for the province’s economic success. Updated information on the Western Cape is also available through our monthly e-newsletter, which you can subscribe to online at, in addition to our complementary business-to-business titles that cover all nine provinces as well as our flagship South African Business title.

OVERVIEW Agriculture

OVERVIEW Agriculture Seven of the Cape’s biggest exports are agricultural. SECTOR INSIGHT Agriculture is attracting foreign investors. • A conference to promote halaal exports has been held. The long-term drought which was lifted for most South Africans in late 2016 persisted well into 2017 for farmers and residents of the western part of the Western Cape. An official told parliament in October that as many as 50 000 jobs might be lost and production levels of deciduous fruits were expected to be down by 20%. A tomato purée factory in Lutzville closed down for the season for lack of product. Many grain farmers will allow cattle to graze in the fields rather than take in the meagre harvest. Despite these setbacks, the agricultural sector remains a vital component of the provincial economy, not only in its own right (4.2% of regional GDP) but as the provider of the products that are exported as fruit or vegetables or as juice or wine. Nearly 40% of exports from the Western Cape derive from fruit or agri-processing, which makes this a vital sector all along the value chain. Interest in the sector from foreign investors has also been lively. The Agri-business Investment Unit (AIU) within investment agency Wesgro has helped to generate investment into the agricultural sector totalling R1.5-billion in the three years to 2017. The AIU attended nine conferences or sector events in 2017/18 and received a mission from Vietnam investigating ostrich meat and nuts. 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 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. Strawberries do well in the George area. The Stellenbosch and Swellendam districts are also good for berries, and several farmers are branching out into raspberries and blueberries. The WESTERN CAPE BUSINESS 2018 76

OVERVIEW latter berry is difficult to grow but gets very good returns on the European market as fresh fruit. Swellendam produces 90% of the world’s commercially grown youngberries, a crop of about 600 tons per annum. Wheat is another of the province’s strong sectors: the Western Cape’s 310 000ha 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). The province’s climatic regions vary from Mediterranean around Cape Town and on the coast (where rainfall can be 2 000mm at places) to the drier regions of the inland Karoo districts where annual rainfall figures can be below 150mm. Just over threemillion hectares of the province is cultivated and 270 000ha are under irrigation. 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. The Provincial Government of the Western Cape has identified agri-processing as one of the key sectors that can deliver high growth and lots of jobs, especially in rural areas. It could add up to 100 000 jobs and generate R26-billion for the economy under a high-growth scenario. The Western Cape Minister for Economic Opportunities Alan Winde, whose ministry is responsible for agriculture, lists initiatives that can encourage that scenario: expansion of African imports; increasing the amount of land under irrigation to provide more input for agriprocessing; keeping up the surge in wine sales and investigating the halaal market. With a global market valued at about .3-trillion, a step towards preparing the Western Cape to compete in that market was made in 2017 with a small-scale conference on halaal exports. The Western Cape, as part of its Project Khulisa strategy, aims to double overall exports from the region by 2025. Companies 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 stretching from its headquarters in Malmesbury in the Swartland with eight business units covering everything from grain (Wesgraan), to packaging (Pakmark) and retail (Agrimark). 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. SSK has increased its reach with the acquisition of Tuinroete Agri. The Klein Karoo group based in Oudtshoorn focusses on ostriches through Klein Karoo International. Separate units deal in fashion products, feathers, leather, skins and meat production. Other companies in the group cover seed sales, auctions and a retailer, Klein Karoo Agri. ONLINE RESOURCES Agricultural Research Council: Citrus Growers’ Association: HORTGRO: Fresh Produce Exporters’ Forum: Klein Karoo: National Department of Agriculture, Forestry and Fisheries: SA Grain Information Service: Western Cape Department of Agriculture: 77 WESTERN CAPE BUSINESS 2018

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