Ensuring a sustainable agricultural sector

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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.

Innovative technology contributes to increased food production

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Mechanisation and technological advances are crucial in the agricultural sector to improve crop yields through better efficiency and accuracy to feed the ever-growing population. Patrick Roux, MD of AFGRI Equipment, discusses the latest advances in equipment and highlights areas where technological innovation is already making a difference in the sector.

Mechanisation and technological advances in agriculture create new opportunities to improve food security by ensuring greater efficiency and accuracy in farming techniques to feed the ever-growing population.

Patrick Roux, Managing Director of AFGRI Equipment, the largest John Deere dealership network in Southern Africa and Western Australia, says implementing innovative technology and artificial intelligence will greatly improve the world’s agricultural production.

“From machinery that can inject fertiliser at precise depths, smart water management systems to precision drones, the use of technology will greatly impact the availability and affordability of food.”

Across the world, agribusinesses are developing new technologies for the agricultural sector and the growth in the market for agricultural machinery is predicted at 7% per annum over the next three years.

Areas where technological innovation is already taking place – and making a difference – are higher crop productivity, decreased use of water, fertiliser and pesticides, which also contribute to lower food prices.

Modern farm machinery allows farmers to control his entire operation through the cloud through telematics that send information about how machines are being used and crop information to smart phones.

Roux predicts that further developments in artificial intelligence farming and precision farming techniques to ensure increased production to meet the demands of the growing population.

“With mounting pressure on food systems and environmental concerns, the agricultural sector will lead the way in implementing technology to ensure food security for a rapidly growing world population, which by 2050 is predicted to reach 9,7 billion.”

“In 2015, research by the Population Reference Bureau included only one African country, Nigeria, in its top ten most populous countries. The Bureau predicts that by 2050, Nigeria, DRC and Ethiopia will feature in the top ten list. This rapid population growth is due to improved life expectancy as economic growth rates increase,” concludes Roux.

AFGRI Equipment Australia scoops sought after accolade

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AFGRI Equipment Australia, a subsidiary of South African-based AFGRI, and the largest distributor of agricultural machinery in South Africa and Western Australia, has been awarded the status of 2017 Platinum Medallion Dealer by John Deere Financial Limited in Australia and New Zealand.

“The Platinum Medallion is awarded to a dealer for achieving excellence through their finance portfolio based on volume financed and strike rate and AFGRI Equipment Australia is one of three dealers who can boast this achievement for 2017,” says Patrick Roux managing director at AFGRI Equipment.

AFGRI Equipment Australia has also achieved Platinum status in 2014 for achieving goals set by John Deere on the penetration rate and large finance volumes during a calendar year. AFGRI Equipment Australia was ranked bronze in 2015 after the criteria for the medallion awards were revised in 2015.

The dealership bounced back in 2016 to achieve a Silver Medallion, and topped it with the Platinum Medallion in 2017.

Coetzee believes the acquisitions of Jolly & Sons in 2015, followed by Greenline AG in 2016 by AFGRI Equipment Australia contributed to its success in 2017. “The acquisitions over the past 18 months have added to the portfolio volume for AFGRI as well as afforded them the scale to continue to provide high quality service to a growing finance portfolio,” he said.

AFGRI Equipment recently announced yet another acquisition in Australia, that of Rattan & Slatter.   “ The acquisition was made to further our well-established mission of being the preferred supplier of premium agricultural equipment, services and solutions,” concluded Roux.

AFGRI Equipment’s latest offerings on show at Arlington Tillage Day

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Centurion, 20 April 2017 – AFGRI Equipment is once again proud to be part of the Arlington Tillage Farmers Day taking place on 20 April. For the past couple of years, AFGRI Equipment, through its branch in Bethlehem and Marquard, has supported the Arlington Farmers Union by showcasing the latest high quality agricultural equipment.

This year will be no different and we look forward to giving our valued clients the opportunity to test the latest high quality, technologically advanced equipment we offer.

On show from AFGRI Equipment will be a variety of premium equipment to view and experience. (more information on the equipment to attract clients, it can include prices, especially if they are offering “special show prices”). Clients will be given the opportunity to test drive the equipment/tractors.

In the last three years, interest in the Arlington Tillage Farmers Day has grown and it is now one of the largest agricultural equipment demonstrations in the Free State.

AFGRI Equipment acquires Ratten & Slater in Western Australia

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AFGRI Equipment are delighted to announce the acquisition of Ratten & Slater.

 The acquisition took effect on the 4th April 2017 with AFGRI having acquired all three locations at Gnowangerup, Albany and Esperance. Ratten & Slater commenced operations in Esperance in 1964 and have since grown to service a large area in the south east and south west of WA. As AFGRI continues in its growth phase, we acquired Ratten & Slater to further expand our footprint and customer base in WA echoing our vision to be the market leader in our field with a strong and reputable brand. Whilst being John Deere dealers, we also have various other franchises including Manitou, Bourgault, Kuhn, Trufab and Croplands.

AFGRI made this acquisition to further our well-established mission, to be the preferred supplier of premium agricultural equipment, services and solutions. With the constant improvements in technology, additional experts in different fields are required. This further expansion will allow us to better cater to the needs of our customers, and meet their need for premium new and used equipment, competitive parts and reliable servicing.

AFGRI, a private company started over 90 years ago in South Africa, is a leading agricultural services and processing company. In 2004, AFGRI holdings acquired T & H Walton Stores and changed the name of their operations to AFGRI Equipment Pty Ltd in 2013. This current acquisition follows on from our previous acquisitions of Jolly & Sons in 2015 and Greenline in August 2016. The acquisition now means AFGRI will operate out of 14 dealerships across WA including our previous 11 branches of Boyup Brook, Carnamah, Dalwallinu, Geraldton, Perth-Guildford, Lake Grace, Moora, Pingelly, Wagin, Witchcliffe and Wongan Hills. Throughout our operations, our employees are from a mix of different cultures with a strong Australian backbone. From senior management through to our branches, we strongly believe in being engaged in our local community.

AFGRI Operations Director Gollie Coetzee said the management team have implemented the best practices to ensure AFGRI is ready to supply the market with premium products and service excellence at our newly-acquired locations. “This whole acquisition process has been absolutely positive. It was a willing-buyer, willing-seller scenario so there was no push from anybody and the way that the whole transition has gone has been tremendous,” he said. Mr Coetzee said an important aspect was making the transition for our new employees and customers smooth and comfortable. “The main message from this transition is to comfort our new employees and customers and let them know to not be alarmed,” he said.  “We had opportunity to talk to our new staff and our staff had the opportunity to put their concerns forward.  “Our employees are our business and we have a strong employee culture based on our values.” Mr Coetzee said he anticipates a great relationship moving forward. “With our mission and values being very similar to Ratten and Slater, we believe everything will continue to run smoothly and we are looking forward to what the future may bring,” he said.

Uplifting farmers will reduce poverty in Africa

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Centurion, 4 April 2017. – The agricultural sector in Africa has the potential to lift the continent and its people out of poverty.

Tinus Prinsloo, CEO of Agri Services at AFGRI, says Africa can take its rightful place as a major food producer if farmers in Africa can be uplifted from subsistence farmers to commercial farmers.

“It will happen, but it will take time as farmers in Africa and investors in the sector face a series of challenges,” Prinsloo said at the 2017 congress of the International Federation of Agricultural Journalists that kicked off in Pretoria yesterday. AFGRI is a diamond sponsor of the weeklong event themed Africa, it’s time!

In a panel discussion about how cooperation between regions, governments and sectors can contribute to the agricultural sector in Africa, Prinsloo said access to funding is a major challenge for farmers in Africa.

“The volatile currency markets and foreign exchange regulations make it difficult for farmers to raise capital to expand their operations.” Interest rates across the continent are also generally very high, which further discourage investments.

He said South African farmers are willing to invest in the agricultural sector in Africa, but their efforts are hampered as they are expected to use their South African assets as collateral to get financing. “If this can change, much more capital will be available for investment in the sector,” Prinsloo said.

A major benefit of improved access to funding and significant investments will help small scale farmers to mechanise, which will greatly improve their production.

“The agricultural sector on the continent can expand significantly if finance cost can be reduced in order to attract investments and to get South African farmers to help and train small scale farmers in Africa,” Prinsloo concluded.

BUSINESS DAY: Mandatory sale of Bank of Athens adds another string to AFGRI’s bow

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Bank of Athens’ parent, the National Bank of Greece, was compelled to sell its 99.81% interest in the bank as part of an agreement with the European Stability Mechanism

The South African Bank of Athens’ parent company was forced to offload its South African subsidiary, which had R1.5bn in deposits and R2.3bn in assets at the end of 2016, in terms of European Central Bank (ECB) conditions.

Afgri has snapped up the Greek bank’s interest, but declines to say at what price.

The agricultural services company is unwilling to divulge its plans for Bank of Athens, which Reserve Bank records show obtained the bulk of its deposits from the private non-financial corporate sector and households, while its two largest asset groups comprise residential mortgages and commercial and other mortgage advances.

This differs from Afgri’s R12bn debtors’ book, built up through Unigro Farmer Lending, Unigro Insurance Brokers and GroCapital Financial Services on behalf of the Land Bank. The Land Bank provides financial services to agribusiness.

Afgri CEO Chris Venter could not comment on how Bank of Athens’ clients complemented Afgri’s offering before the deal won regulatory approval.

“We … require all approvals. Afgri views this as a change in the holding structure, which will provide benefits to our clients.”

Afgri said on Tuesday that it had applied for regulatory approvals from the Reserve Bank, the minister of finance and the competition authorities.

Bank of Athens’ parent, the National Bank of Greece, was compelled to sell its 99.81% interest in the bank as part of an agreement with the European Stability Mechanism, which injected €2.71bn in capital in December 2015 after the ECB found a €4.6bn capital shortfall at the bank.

The ECB required National Bank of Greece to “dispose of noncore assets outside Greece” as a condition of the bail-out.

The rest of the shortfall was covered through “private means” and bolstered by the bank’s positive third-quarter results for 2015.

The National Bank of Greece is regarded as one of that country’s four systemically important financial institutions.

It expects the deal with Afgri to close within the second half of 2017 and enhance its liquidity by about €55m.

Venter said Afgri was impressed with the strides Bank of Athens had made in specialised offerings, especially in “the application of technology and innovative solutions”.

“Afgri, through its 94-year history, prides itself on knowing agriculture and agricultural cycles … [and is able] to use this knowledge in affording clients access to finance that will assist them through their production cycle,” said Venter.

“This acquisition provides an additional retail and alliance banking platform to current and prospective Afgri customers where deposit-taking and lending is possible.”

AFGRI acquires stake in bank and broadens financial offering

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AFGRI Holdings Proprietary Limited (“AFGRI”), the leading agricultural services and food processing company is pleased to announce the potential acquisition of the National Bank of Greece Group’s stake in the South African Bank of Athens Limited (“SABA”), corresponding to 99.81% of the issued share capital (the ‘’Transaction”) of SABA .

The Transaction is subject to customary closing conditions, including, regulatory approvals from the South African Reserve Bank (“SARB”), the South African Minister of Finance as well as the South-African Competition Authorities. AFGRI is liaising with SARB in this regard and is in the process of preparing the prescribed applications for the regulatory approvals under the guidance of appointed advisors.

“AFGRI values the support of clients, depositors and banking partners of the SABA and commits to continue to provide the service excellence they are accustomed to,” said AFGRI CEO, Chris Venter. He went on to say that acquisition would be a further enabler to both AFGRI and SABA customers.

Fairfax Africa Holdings Corporation, the indirect controlling shareholder of AFGRI, has provided its support for the proposed transaction.

SABA was established and has been operational in South Africa since 1947. It offers comprehensive traditional business banking such as lending, transaction banking, treasury and foreign exchange. It is further known for its focus on the development of market leading niche transactional banking offerings in partnership with businesses.

“We are impressed with the strides SABA has made in specialised banking offerings especially as these pertain to the application of technology and innovative solutions,” indicated Venter.

Venter concluded by indicating that the acquisition provides an additional retail and alliance banking platform to current and prospective AFGRI customers where deposit taking and lending is possible and in this way enables AFGRI to continue with its focus of innovation and an enabler to food security.

BUS BYWAY: Large South African Presence at Agritech Expo in April Indicates Strong Interest in Zambia’s Agri Sector

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Chisamba, Zambia, March 05, 2017 – “Zambia is an exciting market to explore, not just for South African suppliers to the agriculture sector, but also for South African farmers,” says Liam Beckett, commercial director for the upcoming Agritech Expo Zambia. The award-winning event is owned by the Zambia National Farmers Union (ZNFU) and returns to Chisamba for the fourth time this year from 27-29 April.

He adds, “In certain sectors the South African market has become saturated and many South African companies are looking to branch out across the border, in order to continue their business growth in Africa. In Zambia, there are approximately 400 registered commercial farming professionals, which represents a very lucrative potential market. The Zambian farming sector is also far more advanced than other neighbouring countries and farming methods are also similar to South Africa. Therefore, South African brands and products, such as implements and agro chemicals, are all applicable in Zambia.”

More international pavilions
Last year Agritech Expo Zambia drew a record-breaking attendance of 17 605 visitors. This year even more small-scale, emerging and commercial farmers are expected to descend on the GART research farm in the heart of Zambia’s agri-hub Chisamba, where the latest farming products and services will be showcased. The three-day expo will furthermore feature an even greater international presence with international pavilions from Germany, Zimbabwe, Czech Republic, the Netherlands, the UK and France already confirmed.

Says Liam Beckett, “Just judging from the big increase in international pavilions at Agritech Expo this year, the global interest in Zambia as an agri market is obvious. Already there is major international investment in the country at present as well as projects being planned and if a South African company wants to establish a footprint in Zambia, they need to make sure they grab this business development opportunity now before they miss out.”

The South African companies that have so far booked to exhibit or sponsor at Agritech Expo Zambia include AGRICO, Gallagher Power Fence SA Pty Ltd, Hydraform, Kempston Agri – Claas, Lindsay Africa, Neptun Boot, Organico, Senter 360, Teejet and ROFF. Many other suppliers have headquarters in South Africa, but they are exhibiting as the Zambian branch.

Liam adds, “For South African farmers, Zambia is of interest as there are many new technologies, agro chemicals and commercial farming methods that are available in Zambia that they can learn from. They can also explore renting land on a 99-year lease to expand on their existing South African operations.”

Agritech Expo Zambia will also offer free workshops again, as well as live machinery and product demonstrations and crop trials. New for this year will be specialised agri-sector industry zones and mowing and baling demonstrations.

Multi-award winning Agritech Expo
Agritech Expo Zambia recently won two coveted awards at the ROAR Organiser and Exhibitor Awards in Johannesburg which honour excellence in the exhibition and events industry on the continent. The awards were organised jointly by the Association of African Exhibition Organisers (AAXO) and the Exhibition & Event Association of Southern Africa (EXSA). Agritech Expo won for Best Trade & Consumer Exhibition +12000 sqm and for Distinction in Social Responsibility.

The expo also has an outreach programme at the local Golden Valley Basic School, where, with the assistance of numerous event sponsors, it is assisting the school with much needed infrastructure upgrades, equipment supplies and management of the school’s farm.

As in previous years, Agritech Expo enjoys extensive support from the agri industry with well-known suppliers AFGRI and John Deere returning as platinum sponsors again. Confirmed gold sponsors are Action Auto, Agricon, BHBW, Case Construction, Case Agriculture, Gourock and SARO.

Agritech Expo Zambia is organised by Spintelligent, leading Cape Town-based trade exhibition and conference organiser, and the African office of Clarion Events Ltd, based in the UK. The event is owned by the Zambia National Farmers Union. Other well-known events by Spintelligent include Agritech Expo Tanzania and Agribusiness Congress East Africa.

Agritech Expo Zambia 2017:
Dates: 27-29 April 2017
Location: Gart Research Centre, Chisamba, Zambia

Contact Information:
Agritech Expo Zambia
Annemarie Roodbol
+27217003558
Contact via Email
www.agritech-expo.com

East Africa recognises AFGRI’s contribution to food security

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AFGRI Uganda was recognised by the East African people as the largest contributor towards food security at the annual East Africa Book of Records (EABR) awards.

At the handover ceremony recently held in Uganda, attended by members of AFGRI’s management team, EABR honoured AFGRI with the award for Responsible Consumption and Production in recognition of its sustainable contribution to agriculture in the region.

Jacob de Villiers, Managing Director, Grain Management at AFGRI, says the award proves that AFGRI’s initiatives to assist small scale farmers in the region are paying off.  “AFGRI’s Grain Management business in Uganda began in 2013 with the purpose of managing grain for food security and to prevent post-harvest losses on grain commodities.”

Across the African continent, AFGRI assists farmers to develop subsistence farms into semi-commercial farms in its efforts to ensure food security. AFGRI Grain Management in Uganda incorporates Farmer assistance and mentoring services, grain handling, grain storage and grain marketing.

The EABR aims to inspire ordinary people into doing extraordinary things in line with the United Nations Sustainable Development Goals. At the annual awards ceremony, the EABR recognises ground breaking achievements in various categories and records such achievement by awarding certificates to the winners. Companies in East Africa have been enthusiastic about the possibilities in harnessing the unique appeal of being a record breaker. Previous winners of the East African Award include the President of Uganda Yoweri Museveni and other distinguished individuals and companies.

At the 2017 ceremony, the awards were handed over by the Burundi Ambassador to Uganda standing in for the Speaker of Parliament, Honourable Rebecca Kadaga.

De Villiers concluded by saying that this is a tremendous accolade for AFGRI in support of its vision of being an enabler to food security across the continent.