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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 Grapes and wine

OVERVIEW Grapes and wine Exports are still strong despite the drought. SECTOR INSIGHT Cape Town wineries have created their own label of origin. • Grape exports to China have been growing at 30%. South African wine exports in 2016 earned a very healthy R9-billion, nearly 10% up on the previous year’s earnings. This increase notwithstanding, there are several areas where South Africa is looking to increase its exports, not least the BRICS countries, with China being a promising market for both wine and grapes. Because China has changed its cold treatment protocol, South Africa can now increase its exports to that country to R2.5-billion within five years. In 2015, 10 600 tons of table grapes were sold into China but the figure could not be increased because of the cold treatment protocol relating to the South Africa product, which affected quality, market share and price. The Chinese market for table grapes has been growing at 30% since 2000 and stands at about 0-million. The Chenin Blanc Association of SA believes that the US is a ripe market for its wines. Financial Mail reported in 2017 that South Africa’s 17 799ha of Chenin plantings is greater than the rest of the world combined, and many of the vines are old, which creates better quality. SA currently exports 11Ml/year into the US, a small fraction of the 920Ml/ year that that country imports. In a recent development, wineries in greater Cape Town now have their own regional identity. The likes of Groot and Klein Constantia, Buitenverwacthing, Diermersdal and Cape Point Vineyards will from now on carry the label “Wine of Origin Cape Town”, linking them to one of the best-known city brands in the world. The long-term drought afflicting the Western Cape is having an effect on the grape and wine industry. It has been estimated that a 5% lower vine production rate results in a R175-million loss to a farmer, with the broader value chain losing something like R525-million. There is a move to try to shift South Africa’s focus away from bulk wine sales, to bottled wines. The website quoted the managing director of Origin Wines stating that for every 10-million litres of additional wine bottled in South Africa in 2016, additional direct income of R200-million should accrue to the Cape Winelands. WESTERN CAPE BUSINESS 2018 78

OVERVIEW The decision by Britain’s electorate to extract the country from the EU will lead to some complications, but Western Cape Minister for Economic Opportunities Alan Winde believes that the new situation could lead to many new opportunities. The EU may push for the reduction in some of the figures set for imports (on the basis that a chunk of the allocation would be going to Britain), but Britain will surely want to negotiate a good deal with South Africa as quickly as possible. There are over 3 500 wine producers in South Africa, with the large majority located in the Western Cape. Wine is produced by estates, independent cellars and producer cellars or co-operatives. The Distell group runs five distilleries and seven wineries in the Western Cape, produces about a third of the country’s natural and sparkling wine and is ranked 12th in the world in terms of global wine volume sales. The multi-brand KWV was sold in 2016 to consumer investment group Vasari. The reported sale price was R1.15-billion. Niveus, the previous owner of KWV, retains the company headquarters building in Paarl (La Concorde) and the Laborie wine estate. Wellington Wines is a new venture that arose from the merger of the Wellington Co-operative and the Wamakersvallei Co-operative. DGB is a large wine and spirits company that makes much of its own product at five famous wineries. These include Boschendal, Bellingham and Douglas Green. Edward Snell & Co is a wine and spirits wholesaler that also makes its own line of spirits. Fourteen brandy distilleries can be visited on the Western Cape Brandy Route and a further six on the R62 Brandy Route on the road east. Table grapes South African Table Grape Industry Partnership (SATGI) is a partnership whose board membership represents every growing region. The industry’s contribution to the national GDP is estimated at more than R3-billion. The table grape industry provided over 46 000 direct jobs during the 2015/16 harvest to the Western Cape. The Western Cape is responsible for 65% of total production volumes in table grapes. There is also a significant contribution to downstream production income – R3.2-billion to other product input providers, R720-million to packaging material suppliers and R250-million to logistics suppliers. On farms with black ownership, income of R183-million was gen er ated in 2014/15. Key industry figures for the annual national harvest: • more than 85 000 jobs • wages valued at R950-million • additional R600-million job creation by suppliers in the value chain. Three of South Africa’s grape-growing regions are located in the Western Cape: • Olifants River: the river flows from the Cedarburg Mountains westwards towards the Atlantic Ocean via Namaqualand. • Berg River: the Du Toitskloof Mountains are the main geographical feature of this region named for the strong-running river which irrigates the fields of grape varieties such as Red Globe, La Rochelle and Bonheur. • Hex River: the river runs past the Matroosberg where snow falls are a regular occurrence. Popular varieties are La Rochelle, Sunred Seedless and Barlinka. ONLINE RESOURCES Nietvoorbij Institute for Viticulture and Oenology: SA Wine Industry Information & Systems: South African Table Grape Industry: Western Cape Department of Agriculture: Wines of South Africa: 79 WESTERN CAPE BUSINESS 2018

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