Opportunities in value-chains
Investment in South Africa’s commodity value chains was identified as a priority for bringing economic development to rural areas. According to Elaine Alexander, Deputy Director-General: Economic Development, Trade and Marketing at the Department of Agriculture, Forestry and Fisheries, there is a lot of potential to develop agricultural commodity chains.
“From an investment perspective, we must investigate opportunities to create more vertical value chains. Key investments must be made in technology. Although there is a lot of interest from foreign investors, it would be great to see more domestic investment,” Alexander said at the recent Agricultural Business Chamber congress.
She encouraged closer cooperation between her department and the department of land reform and rural development. “We need an entrepreneurial approach and to get developing institutions involved. Government cannot do this alone and we are ready to join hands with the private sector.” Alexander further pointed out that profitability and sustainability should be the point of departure. “If we want the agricultural sector to create one million jobs by 2030, these jobs must be sustainable and government must establish the right environment. The development agenda can never be at the cost of jobs,” she emphasized.
Ronald Ramabulana, CEO of the National Agricultural Marketing Council (NAMC), explained that the council is managing an infrastructural project on behalf of government to determine why some of the productive sectors do not invest locally. The project also includes the gathering of statistics pertaining to infrastructure and problems relating to it. “How can we make it easier for you to invest locally? We want people to invest in exports and on-farm expansion.” Ramabulana said he believed there were a number of opportunities in the fruit, irrigation, grain and animal feed industries. It is also important to pursue opportunities in Africa, he said.
Rian Coetzee, Head of agro-industries at the Industrial Development Corporation (IDC), reminded the congress delegates that people aligned their investment strategies with sustainability strategies. “They will invest in your industry – if they could make money,” he said. He highlighted modern investment trends which include economies-of-scale; bigger units; processors looking for cheaper resources; and the farming industry investing in the rest of the value chain and vice versa and eliminating the middleman.
“There are a great many opportunities in concepts such as “fresh”, “healthy”, “non-GMO”, “green”, “natural flavours” and “convenience.” There are also many opportunities to export to BRICS countries (Brazil, Russia, India, China and South Africa), but you must know how to do this in a smart way,” Coetzee said.
Issued by Agbiz