Philafrica Foods acquires majority stake in DADTCO to promote cassava production in sub-Saharan Africa

Philafrica Foods, one of the largest food processing companies in South Africa, has announced its acquisition of a majority stake in The Dutch Agricultural Development & Trading Company (DADTCO). DADTCO has pioneered an innovative mobile cassava processing technology that is having a major positive impact on Africa’s smallholder farmers.

With existing operations in Mozambique and advanced projects in West Africa, Philafrica Foods is looking to leverage DADTCO’s technology and its management team’s extensive experience to scale cassava processing in sub-Saharan Africa (“SSA”).

“Philafrica’s vision is to transform the lives of millions of African smallholder farmers by creating market demand by means of large-scale food processing. DADTCO’s vision to unleash the potential of cassava throughout Africa, the technical expertise of its management team, and innovative mobile processing technology, align perfectly with our vision and values,” said Roland Decorvet, CEO of Philafrica Foods.

Cassava is a root crop grown in tropical climates – in Africa it is the second largest source of carbohydrates after maize. “Currently eight of the top 10 producers globally are in SSA, with a total of 145 million MTs – 54% of global production – produced annually in Africa.”

There are many advantages to cassava, amongst these being that it needs less water to grow than maize and rice, making it an attractive crop for smallholder farmers, and it can remain underground for up to two years after maturity, reducing the need for large storage facilities.

Cassava flour can also be used as a substitute for wheat flour and corn-starch in the food processing, baking and beverage industries, which are poised to grow as the African middle class increases. It also offers a non-gluten and grain-free alternative to traditional products usually containing wheat and maize, thus catering to an increasingly health-conscious population.

“We see massive opportunity in cassava as currently less than 5% of total production in Africa is industrially processed at scale,” said Decorvet.

While the financial details of the transaction were not disclosed, Decorvet said that the company will actively pursue close collaboration with donors to make the mobile cassava processing technology available to as many smallholder farmers in SSA as possible.

Philafrica Foods is supported by the AFGRI Group, an investment holding company focused on food and agriculture with an underlying ethos as an enabler of food security in line with the Philafrica vision.

Philafrica Foods partners with Novos Horizontes in Mozambique in move to transform small agribusiness in the poultry sector

Philafrica Foods (Pty) Ltd (“Philafrica Foods”), part of AFGRI Group Holdings, and one of the largest food processing companies in South Africa, has entered into a 50/50 joint venture with Novos Horizontes (“New Horizons”), an integrated chicken producer located in northern Mozambique. This forms part of Philafrica Foods’ planned investment of between R1 billion and R1.5 billion over the next 18-24 months in Africa.

With a focus on investing in food categories across Africa, and on locally-sourced raw materials, Philafrica is actively seeking investment opportunities on the continent, with Novos Horizontes being the first of many.

Novos Horizontes was founded in 2005 with a core vision of unlocking the potential – both in terms of labour and land – in Mozambique by supporting smallholder farmers in agribusiness. The joint venture with Philafrica Foods will allow the company to continue its expansion in that country.

“We saw in Novos Horizontes a trusted partner, a profitable business, and importantly, having the same values as us in terms of transforming the lives of smallholder farmers. Moreover, our expertise in rendering, feed mixing and poultry will drive substantial synergies as the company expands in Mozambique,” said Roland Decorvet, CEO of Philafrica Foods.

Decorvet adds that currently 60-70% of the poultry consumed in Mozambique is imported, and thus there is massive opportunity. “We there see immense potential to replace imported products with local production and are pleased to have found a strong operating partner in Mozambique with decades of experience in the poultry value chain.”

Andrew Cunningham, Executive Chairman of Novos Horizontes, stated: “We are excited by the potential of this investment and partnership to enhance our vision to unlock potential in Mozambique. We aim to be the premier poultry producer in the country and to expand into other value chains where agro-industrial processing and building brands can pull production from smallholder farmers.”

In addressing potential concerns pertaining to the current outbreak of avian flu, Decorvet said that while there have fortunately been no reported cases in Mozambique to date, the company is actively developing contingency and risk management plans.

Philafrica Foods is supported by the AFGRI Group, an investment holding company focused on food and agriculture with an underlying ethos as an enabler of food security in line with the Philafrica vision.

New market player poised to enhance food processing in Africa

Food security a global concern – Africa well-positioned to provide the answer

 Newly-established Philafrica Food (Pty) Ltd (“Philafrica Foods”) – part of AFGRI Group Holdings, a leading investment holding company focused on food and agriculture – has plans to change the face of food processing both locally and across sub-Saharan Africa.

With a focus on investing in food categories across Africa, and on locally-sourced raw materials, the company is already actively seeking investment opportunities on the continent. This will include building greenfield production sites and making strategic acquisitions in South Africa, Côte d’Ivoire, Ghana, Ethiopia, Kenya, Nigeria, Mozambique, Rwanda, Senegal, Tanzania, Uganda and Zimbabwe, amongst others.

“We believe there is an incredible opportunity given the robust and growing demand from African consumers and global markets, and Africa’s huge potential of uncultivated arable land. The continent is well-positioned to fulfil this demand,” says Philafrica’s CEO, Roland Decorvet, a seasoned expert in the food processing sector in Africa, Europe and the Far East.

Decorvet cites several examples of why Africa can play a pivotal role in providing food for the burgeoning world population. “Sub-Saharan Africa boasts millions and millions of hectares of high-potential agricultural land, and yet less than 10% is under cultivation. What’s more is that this continent offers 60% of the world’s uncultivated arable land.”

Not only could the continent support global food demands, but should also be able to provide for its own people, which is becoming a priority. “Demand for food in Africa is rising – sub-Saharan African’s food and beverage market is set to triple by 2030, reaching US$1 trillion, with the middle class projected to rise from 123 million to over 1 billion by 2060, making it the fastest growing middle class in the world.”

With food production already under pressure – the Food and Agriculture Organisation of the United Nations (FAO) estimates that food production must increase by at least 60% to respond to the demands of the nine billion people that are expected to inhabit the planet by 2050 – it is crucial to look for viable solutions, Decorvet believes.

“Our goal is to become a key food operator across Africa in the next 25 years, supporting the transformation of the continent from one of subsistence agriculture to one that is food secure and a net exporter.”

Decorvet explains that farmers in Africa face many constraints that keep production yields low, and as a result large multinationals can’t get the raw materials they need for processing locally. “Our role is to change this – we believe that the most effective way to transform agriculture in Africa is to create market pull through large-scale food processing. To do this, we believe it’s critical to support each stage of the value chain and care for all stakeholders.”

For Philafrica Food this means vertical integration straight back to the farm gate; working closely with smallholder farmers on crop variety improvement and technical assistance; staying current on global commodity markets to ensure leading procurement practices; implementing best-in-class manufacturing practices and adapting the business model based on how the local market operates.

“We will leverage our South African based expertise and capabilities to expand here in South Africa as well as into new countries across sub-Saharan Africa. We are prioritising opportunities where we can substitute imported products with locally grown or processed products.”

Decorvet adds that the company’s expansion strategy is to invest in various crop categories, in countries where it sees long-term growth potential, which will also positively impact on the livelihood of smallholder farmers. As mentioned, this includes South Africa, where opportunities have been identified in KwaZulu-Natal and the Western Cape.

“When conducting business here and in the rest of the continent, we primarily look to source locally produced raw materials that can effectively replace imported raw materials and products. We strategically support each stage of the agricultural supply chain to ensure consistent quality supply of raw materials into our production sites — which means we look to engage both commercial and smallholder farmers across any new food category or country we enter.”

To support its expansion plans, Philafrica Foods will look to form partnerships on the supply-side and develop off-take relationships with those who share its vision for the transformation of African agriculture. “This includes partners within the food industry that want to secure processed raw material support that strengthens existing procurement processes or are looking to venture into new African markets with a trusted partner, as well as within the agricultural and donor communities on the supply-side of our new projects, who share our passion for strengthening smallholder farmers in sub-Saharan Africa to become food secure and net exporters.”

 Philafrica will further be supported by AFGRI Group, an investment holding company focused on food and agriculture with an underlying ethos as an enabler of food security in line with the Philafrica vision.

Another award for AFGRI’s unstoppable legal eagles!

AFGRI Legal Team wins “Best Legal Department in Africa” for fourth time

The AFGRI Legal team has secured yet another award for excellence, this time at the 2017 African Legal Awards, which were announced on Friday evening. The team won the award for “Best Legal Department in Africa (Small Team)” at the ceremony, making this the fourth time that AFGRI has won the coveted award.

“I am exceptionally proud of this team. During the past five years, they have been announced as finalists 11 times in various categories, and have gone on to win seven awards. They’ve also been both shortlisted and won more awards than any other in-house legal team in Africa,” said a delighted Chris Venter, CEO of the AFGRI Group.

Hosted by Legal Week and Corporate Counsel Association of South-Africa, the African Legal Awards is the biggest and most prestigious award ceremony of its kind on the continent. A major feature of is the credibility of the judging process as the finalists and winners are decided by an independent judging panel made up of general counsel and other senior members of the legal community across Africa.

Pieter Badenhorst, AFGRI Group Holdings Director of Legal, Risk and Compliance, added that the awards serve to motivate himself and his team. “These awards, acknowledged as the foremost of their kind in Africa, are extremely competitive and we compete against legal teams across the continent. It is thus both satisfying and humbling to receive such recognition from your peers. The criteria for the awards, which include such as teamwork, innovation, excellence, efficiency and client satisfaction also resonate with us. I can honestly say that I am very fortunate to work with such an amazing team.”

When asked how the team managed to be such consistently good performers, Pieter said that it started with recruiting the best people for the job, training them well and giving them exposure to challenging and rewarding work. “The team wants to be a truly strategic partner to the business and we understand we can be successful only if AFGRI is successful too. We therefore focus on the needs of the business, with the team setting high standards for themselves. We don’t shy away from complex and demanding challenges but embrace them instead. Our team spirit is excellent and we’re very aware that no individual is bigger than the team.”

Agtech to bring about the second “Green Revolution”

As the issue of food security takes grip around the world, agricultural technology (Agtech) is set to become one of the most impactful uses of modern technology, in that it is changing how we grow food. Fundamentally, it has introduced the second “Green Revolution”, putting to use real-time data and innovative technology to ensure effective farming practices and improved yields.

The post-war transformation of agriculture, known as the first “Green Revolution”, was led by American agronomist Norman Borlaug, who developed high-yielding varieties of cereal grains and the distribution of hybridised seeds, synthetic fertilisers, and pesticides to farmers. Borlaug’s contributions, as well as the widespread buildout of irrigation infrastructure and the adoption of modern management techniques, greatly increased yields without requiring an expansion in agricultural land, saving more than a billion people from starvation. Now, a second revolution, built largely on technologies that comprise precision agriculture, promises to make the farm of the future more productive and efficient.

With precision agriculture, farmers and soils work better, not harder. Think about precision agriculture as being ‘site-specific’ and ‘information-specific’, as in the most precise way of informing farming decisions. That is, farmers can take large fields and manage them as if they are a group of small fields through gathering information from the fields in real-time by observation and measurement, then responding to inter and intra-field variability in crops. This reduces the misapplication of inputs and increases crop and farm efficiency.

 Why is this so important? In South Africa alone, we face a massive challenge to feed our population. In 2009, the population was 49 million and is expected to grow to 82 million in 26 years. Food production must intensify and more than double to feed the expanding population using the same or fewer natural resources. The result, there is shifting trend towards intensified agriculture, which can only be brought about using Agtech. This is a global phenomenon as each country looks at innovative ways to deal with the problem – not only in production, but across the value chain.

Agtech innovations include satellite mapping, drones, Internet of Things (IoT) and robotics. In 2014 alone, investment in agricultural technology surpassed investment in Fintech; $2.36 billion and $2.1 billion respectively. The growth potential is monumental particularly because Agtech will seek to find solutions to mitigate against climate change, increasing population growth and land scarcity. An example of this level of investment is with John Deere – the company has recently made an acquisition of an agtech startup, Blue River for $305 million. Reason being that Blue River’s has created technology that uses computer vision and machine learning to help growers reduce the use of herbicides; while conducting analysis on each plant to determine if it is a weed.

The eight main categories of Agtech include:

  • Farm management software;
  • Precision agriculture and predictive data analytics;
  • Sensors that help farmers to collect data and to monitor crop health, weather and soil quality;
  • Animal data – software and hardware specifically aimed at better understanding livestock, from breeding patterns to genomics;
  • Robotics and drones;
  • Smart irrigation;
  • Next gen farms, where technology is used to provide alternative farming methods to enable farming in locations and settings that previously couldn’t support traditional farming; and marketplaces (technological platforms that connect farmers directly to suppliers or consumers without any middlemen).

Some of the most significant technological advances that are already revolutionising the agricultural sector in Africa include:

  • Water-saving sensors comprising networks of wireless sensors and smart water management systems;
  • Precision drones used for crop spraying in unmanned helicopters, precise aerial photography, soil and water surveys and spraying and watering assistance;
  • Chemical-free pest control – including systems that can trap, count and monitor pests, systems that trigger the release of EPA-approved pheromones that disrupt pests’ mating cycles, and real-time field monitoring and targeted, automated responses; and
  • Farming automation and management systems including interconnected machinery, machines that can inject fertiliser at precise depths, automated seed-spacing based on soil fertility and machines that measure harvest data in real-time.

Technology that increases the efficiency of farms has come a long way since the days when tractors and ploughs were the most important agricultural machines. More importantly though, it’s about food security and feeding the world’s burgeoning population. It’s also about sustaining profitable production – producers need to use the latest technology available, from seed to chemicals and mechanisation to training, including precision agriculture. It’s a case of maintaining a competitive advantage in a competitive global agricultural market; it’s not just a ‘nice-to-have’. And finally, it’s about reducing our impact on the environment too.

Sources:

https://soilsmatter.wordpress.com/2015/02/27/what-is-precision-agriculture-and-why-is-it-important/

https://en.wikipedia.org/wiki/Precision_agriculture

http://www.engineeringnews.co.za/article/iot-could-help-increase-agri-productivity-by-70-says-deloitte-report-2016-05-03

http://www.precisionag.com

https://www.afgri.co.za/geoagro/

www.planet.com

https://techcrunch-com.cdn.ampproject.org/c/s/techcrunch.com/2017/09/06/after-scraping-monsanto-deal-deere-agrees-to-buy-precision-farming-startup-blue-river-for-305m/amp/

 

FIN24: Tribunal approves SA Bank of Athens merger

The Competition Tribunal has approved a large merger between GroCapital Holdings, a subsidiary of AFGRI Holdings and Fairfax Africa Investment, and the South African Bank of Athens (SABA).

The merger was approved by the Tribunal on 22 August, 2017 without conditions.

Minister of Finance Malusi Gigaba has indicated that he will not oppose the merger.

Post-merger, GroCapital will control South African Bank of Athens. Target firm SABA is controlled by the National Bank of Greece S.A.

AFGRI Holdings is an agricultural services, financial services and food processing company operating in South Africa, and SABA is a South African-based bank providing business banking services to medium-sized local businesses, as well as niche transactional banking solutions to the broader market.

MONEYWEB: Sale of Greece’s National Bank’s SA unit gets green light

South Africa’s competition watchdog on Wednesday said it had given a green light to the sale of the South African Bank of Athens (SABA), owned by Greece’s National Bank (NBG), to a subsidiary of AFGRI Holdings and Fairfax Africa Investment.

Greece’s second-largest lender in March agreed to sell all its 99.8% stake in SABA to AFGRI Holdings as part of an EU-approved restructuring plan.

The Competition Tribunal said it had approved the merger on Tuesday, giving GroCapital control of SABA, with South Africa’s finance minister indicating he will not oppose the merger.

SABA, established in 1947, provides banking services to medium-sized local businesses. AFGRI is an agricultural, financial services and food processing company operating in South Africa and 14 other countries in Africa.

National Bank, late last year sold its United Bulgarian Bank to Belgium’s KBC Group in a 610 million euro ($720 million) deal.

Agriculture offers exciting career opportunities

The agricultural sector offers young people exciting career opportunities to leverage new innovative ways of farming to care for the food security of future generations.

The agricultural sector is an exciting and challenging global industry that offers young people far more job opportunities than planting seeds and rendering animals.

“The industry needs young people in that young people are key players in increasing farmer visibility and continue to rapidly leverage on current and developing innovative technology as well as collaborate with traditional farmers to produce and position farming as the future solution towards ensuring food security,” says Prudence Motseo, ?HR Systems and Admin Manager at AFGRI Operations.

Furthermore, this also applies to careers in our sector, as education in agriculture has evolved and is aligned with developed trends and innovative ways of farming; enabling the development of diverse players, such as small and large scale farmers facing economic challenges locally and globally.

“A career at AFGRI is broad in nature and offers endless range of opportunities in career choices within the agricultural sector,” says Motseo. “Within Agri Services, our subsidiaries, Grain Management, Equipment, Unigro Financial and Insurance Service and Harvest Time Investments, jobs range from farm workers, crop scientists, researchers, financial analysts, agronomists and product developers, including support functions such as Finance, Human Resources, Legal and Marketing to name but a few.”

There are also new developing trends in career opportunities in the sector. Motseo says skills that will be needed in future include that of technical advisors, qualified artisans, strategists, business development managers, innovation specialists, hydrologist, lab technicians and entomology product specialists.

Qualifications needed to further a career in agriculture will vary according to the path that you intend to pursue. For instance, a career in grain management may require a qualification in agricultural crop science, grain grading and management; at Equipment and Unigro job opportunities vary between artisans and Relationship managers as scarce critical skills.

AFGRI also offers opportunities in Africa. We currently operate at Zambia, Zimbabwe, Uganda, Ghana, Botswana, Congo, Mozambique and Australia. We envisage growth of our business, which may create opportunities in more countries.

Motseo says a career in agriculture will suit individuals with passion and dedication for agriculture, driven by innovation and possess an attitude of selflessness in caring for future generation’s food security.

The table below shows possible options in a career in agriculture. Qualifications will vary accordingly.

https://careers.afgri.co.za/ contains additional information.

 

Grain Management Equipment
·         Agricultural Crop Science

·         Grain Grading and Management

·         Artisans

·         Apprentices Technicians

Harvest Time Financial Services and Insurance
·         Business Management

·         Training and Development

·         CSI

·         Financial Planning and Management

·         Organisational Health and Wellness

·         Insurance Management

 

Ensuring a sustainable agricultural sector

Farmers face many complex decisions in order to ensure the sustainability of their enterprises and the food security of the nation.

In a panel discussion as part of the Nation in Conversation series at Nampo Harvest Day, Johan Geel, Group CFO of AFGRI, said to ensure the long-term financial sustainability of the agricultural sector farmers need to diversify and adapt to advanced technology to improve their crops.

“To succeed in an increasingly complex sector, farmers need sound financial planning as the sector is capital intensive, return on investments are generally low and it takes between 7 to 9 months for most crops to deliver an income,” says Geel. Added to that, modern technologically advanced equipment requires an adequately trained labour.

Consensus amongst the panellists is that the current debt ratio of farmers at 35% is acceptable, even though the debt burden is on a record high at R145 billion. Geel says the expected bumper crop in the current season will help farmers to pay back their debt quickly. “However, careful financial planning is needed given the economic and political uncertainties. The recent sovereign downgrades by ratings agencies will have a negative impact on the farming sector as the downgrades will result in higher interest rates, which in turn means that less capital will be available. A weaker South African currency will also mean a significant increase in the price of imported goods such as equipment, diesel, insecticides and fertiliser.”

Geel says the current political uncertainty is not factored into financing decisions. “Companies like AFGRI need to discount the political noise in favour of expertise and the ability of the farmer and the land to produce a positive return when evaluating financing to farmers. We have to stick to the facts.”

Diversification of products will also ensure the long-term sustainability of a farming enterprise as well as the agricultural sector, says Geel. “Farmers with healthy balance sheets are those who have successfully diversified their operations. Diversification presents its own challenges, but in AFGRI’s experience established businesses that can add land cost effectively can be successful.”

The agricultural sector can play a very important role in job creation, but what is needed is better training as more and more, workers are expected to operate high-tech equipment. This adoption of high-tech equipment assists in diversification and efficiencies.

A sustainable agricultural sector will go a long way to trigger economic growth and in creating employment. “Some agricultural sectors are very labour intensive and the development and progress of the small towns are directly link to the well-being of the agriculture sector,” says Geel.