Oscars of the Legal fraternity

AFGRI Legal Team - Robyn van Heerden and Pieter Badenhorst

Robyn van Heerden and Pieter Badenhorst

The team won Legal Department of the Year (for the second consecutive year) and the Innovation Award at the 2014 African Legal Awards. This is the first time an in-house legal team has won the Innovation award.

The team was also a finalist in the CSR category resulting in the team being the most nominated and awarded in-house legal team at the prestigious award ceremony. The African Legal Awards is an international competition which recognises exceptional achievement, excellence and innovation within the African legal profession. The judging panel is made up of 25 Africa-based general counsel and other senior members of the African legal community. More than 80 nominations were received by the judging panel this year.

African Legal Awards 2013: Legal Department of the Year Small Team     African Legal Awards 2014: Legal Department of the Year Small Team     African Legal Awards 2014: Winner Innovation Award

Read more on the Innovation Award on Legal Week: Innovation Award: AFGRI

AFGRI excels with collateral management solutions in Africa

AFGRI the leading agricultural solutions and industrial foods company has launched a successful entrée into collateral management across Africa. So successful has been the drive that Collateral Management International (“CMI”) (an AFGRI owned company) has more than 100 sites under collateral management and more than 400 sites to which stock monitoring and inspection services are provided across 14 African countries.

Just what is collateral management? Collateral management includes on site stock management (similar to acommodity exchange storage function) as well as independent control of commodities in third party facilities on behalf of a financier or trader.
Just what is stock monitoring and inspections? Stock monitoring is a function which monitors movements, actions and controls on a site, and includes on-site stock movements, vessel discharge supervision and logistics monitoring between locations. Inspection services is a function usually undertaken between sellers and buyers of commodities, where the two parties are not physically present at the loading site or port and requires independent verification such as grade, quantity, container seals, rail cars, trucks or vessel holds. The inspection report or certificate is then used as part of the transaction to control payment and risk between the buyer and seller.

The collateral management structure can be explained as follows. Banks wanting to take commodities as collateral to finance against an instrument (i.e. warehouse receipt), require an independent, reliable third party with impeccable people, commodity handling and storage knowledge, systems, governance and ethics to guarantee quality and/or quantity of a particular commodity via a warehouse receipt in order for the bank to finance against this instrument. Normally commodities in a collateralised storage facility, are either imported to or exported from his location. Once the commodity leaves the storage facility or before it arrives at the storage facility, stock
monitoring or inspection services compliment the collateral management discipline and gives clients (such as banks and traders) an all-inclusive service throughout the supply and logistics chain.
CMI is just such a third party operator which has accreditation from all local South Africa banks as well as most African banks and the most prominent large international European banks. CMI is further accredited by large commodity trading houses such as Louis Dreyfuss, BTG, Ameropa,Olam, METL etc.
AFGRI has, as a dedicated focus area, the grain value chain and this is another example of how AFGRI, with more than nine decades of agricultural experience, is harnessing its knowledge and expertise to offer a viable solution to clients at third party storage facilities. Not only can CMI manage sites on behalf of a third party, it can also store commodities in AFGRI’s extensive storage capacity in Africa in locations such as Zambia and Uganda.

 

CMI has an impeccable record of confidentiality, maintaining integrity between third party clients and AFGRI operations, diligence, accuracy and corporate governance and with strict compliance in place has gained the trust of large international and local banks and traders. In addition to CMI’s ability to provide collateral management to its clients for commodity funding purposes, it is able to assist clients throughout the value chain with storage and inspection related services associated with port and logistics activities required, an all-encompassing service offering making transaction flow easy and less complicated for banks and traders.

Sadly much of the downfall of agriculture in Africa hinges on the lack of storage, stock finance, guarantees and the ability to market and sell maize and other commodities when and where producers decide to sell. AFGRI, again through CMI, has joined forces with African Exchange Limited (“AFEX”) and its subsidiary in Rwanda, East African Exchange (“EAX”) and signed an agreement to work together with the Rwandan Ministry of Agriculture and Animal Resources to provide storage and warehousing services to support farming cooperative across Rwanda. Through the exchange, CMI will manage 13 warehouses, set up by the Rwandan Government in strategic production areas. Aside from storage solutions and management CMI will include all aspects of commodity management. In Nigeria CMI will be managing an initial seven Nigerian Government storage facilities sites in five states, namely Kanu, Kaduna, Katsina, Zamfara and Kebbi for AFEX, located within the grain belt of Nigeria.

AFGRI is a leader in silo or warehouse inventory management with the ability to provide electronic silo (warehouse) receipts which can be used as collateral. This technology is in use in CMI and electronic warehouse receipts can then be used by the farmers to trade their grain on the exchange on world class NASDEQ trading platforms.

Chris Venter, AFGRI’s CEO says, “AFGRI has a vision of food security for Africa. We are passionate about helping people and this solution drives directly to the heart of the problem many farmers face, the inability to store and market the grain they have worked hard to harvest. Together with Government, the EAX and the AFEX, CMI is able to help with the warehousing function, verify quality and quantity and help the farmer market the commodity and in this way, earn the money they have worked hard for. We are extremely proud of this solution that has been successfully implemented in Rwanda.”

CMI focuses not only on grains but also on fuel, ground nuts, vegetable and palm oil, cotton, sugar, rice and coffee, to name a few commodities.

 

Issued for: AFGRI Limited
Contact: Chris Venter, Chief Executive Officer (CEO)
Tel: 011-063-2007
Email: chris.venter@34.255.249.49
Website: new.afgri.antsneversleep.com
Account: Keyter Rech Investor Solutions
Contact: Vanessa Rech Lynne van der Schyff
Tel: 087-351-3814 or 083-307-5600 087-351-3815 or 082-920-4395
Date: September 2014

AFGRI leads the way in animal feed innovation

AFGRI, the leading agricultural solutions and industrial foods company, through its involvement with the Kansas State University, has developed a rumen bypass technology. The technology is installed and supports manufacturing at the Afgritech LLP (“Afgritech”) plant in Watertown, New York. It is the only product worldwide that utilizes canola in addition to soya beans to achieve high bypass protein value in both ingredients and the result is that 5%-10% more milk can, for example, be produced by a dairy cow.
Chris Venter, CEO of AFGRI says, “This technology is widely adopted in Europe through AFGRI’s bypass protein partners, Carr’s Milling Industries and in South Africa through feed produced by AFGRI Animal Feeds. We are extremely excited about the future of this technology and the products we are able to develop with it. Most of all, it provides a viable solution to our clients.”

Bypass Protein, also known as AminoMax Pro in the USA, was not available in America until 2011 when the Watertown plant was first commissioned. The plant is a joint venture between AFGRI and Carr’s Milling. Since commissioning the production, AminoMax Pro has increased by 45% and continues to increase annually, based largely on growing demand from northeast manufacturers like Whitman’s Feed. AminoMax Pro is a registered animal feeds brand of Carr’s Milling. AminoMax Pro is a unique, vegetable protein-rich feed that blends both soybean and canola to provide highly consistent levels of lysine, methionine and other essential amino acids to the cow.
Technology within animal feeds has advanced so far that dairy producers should increase their levels of knowledge about the importance of formulating rations for improved milk components.

“AminoMax Pro is by far the most consistent product out there”, said Art Whitman, owner of Whitman’s Feed in North Bennington, whose family-owned business has been serving northeast dairymen since 1945. “Because we know the amino acid profile, and are assured it’s the same every time, we’re able to very tightly control the protein portion of the mix for our customers. That’s important as the industry moves toward reducing nitrogen excretion in the environment, and increasing milk components.”
Dairy farmers in the States have become more aware of the economic importance of fat, protein and other dairy solids since multiple component pricing was implemented in 2000. However, many producers are still hard-wired to think in pounds of milk as opposed to components. Calvin Covington, the former CEO of Southeast Milk Inc., recently called upon the U.S. dairy industry to
adopt a model that rewards dairy farmers for maximizing components.
“Our goal is to make all producers aware of the importance of milk components, and that the cheapest load of grain doesn’t always deliver the best ROI,” said Whitman. “The milk check is based on total pounds of milk fat and milk protein, not just total pounds of milk. We’re finding that nextgeneration dairy farmers are very receptive to the idea of increasing components relative to milk volume – and to innovative products like AminoMax Pro.”
Unlike expeller-extruded soybean meal, AminoMax Pro is manufactured via a highly controlled, 400 sensor checkpoint process that reduces soybean and canola particles to a very fine, uniform size. This process produces non-water-soluble particles which remain suspended and protected in the rumen for high bio-availability, while greatly reducing variability in bypass protein levels.Whitman agrees. “There’s no fudge factor built in with AminoMax Pro,” he said. “By using consistent ingredients, we’re able to tweak the butterfat and protein components of the milk more precisely  for each farm.”

 

In conclusion, Izaak Breitenbach, MD of AFGRI’s Foods Divisions said, “We remain proud and committed to our association with Whitman’s Feed and the success of this technology goes to show the leading role AFGRI plays in agricultural solutions and support to our customers.”

Issued for: AFGRI Limited
Contact: Chris Venter, Chief Executive Officer (CEO)
Tel: 011-063-2007
Email: chris.venter@34.255.249.49
Website: new.afgri.antsneversleep.com
Account: Keyter Rech Investor Solutions
Contact: Vanessa Rech Lynne van der Schyff
Tel: 087-351-3814 or 083-307-5600 087-351-3815 or 082-920-4395
Date: August 2014

Note to the editor:
Carr’s Milling Industries PLC at a glance
Carr’s Milling Industries’ aims to be recognised as an international business at the forefront of innovation and technology across agriculture, food and engineering.

The Group is an international leader in the provision of essential industrial services focused on the agriculture, food and engineering sectors. The group offers a range of services including the manufacturing and supply of flour, remote handling equipment, farm machinery, feed blocks for livestock, and a UK network of rural stores, with a facility footprint spanning the UK, Europe and North America, supplying 31 countries around the world.

 

AFGRI builds 5 new bunkers, assisting farmers with storage solutions

4 June 2014, Pretoria – AFGRI Limited (“AFGRI”), South Africa’s leading agricultural services and diversified foods group, has increased storage capacity by building five new bunkers in strategic locations within South Africa.

Chris Venter, CEO of AFGRI, said that, “Our silo infrastructure is well distributed in our traditional area of operation and with the additional bunker facilities we are able to assist the farmers store grains closer to their farms which is a
huge advantage to the farmer as it reduces transportation costs and the grain is stored in accordance to strict criteria. AFGRI guarantees quantity and quality at all our Grain Management sites and this is extremely beneficial to the farmer in mitigating the risk associated with the storage of grain.”

Two new stand alone bunkers have been built at Sandspruit and Bergville. After consultation with farmers in the area, followed by a feasibility study the decision was taken to construct a bunker at Sandspruit. The area around Bergville traditionally had a shortage of storage capacity as a result of both summer grain and wheat cultivated in the area. “Grain producers are very excited about the bunkers as they can now participate in all the technology AFGRI has on offer in the storage facilities.” said Venter.
All AFGRI bunkers are SAFEX registered (except Sandspruit which is awaiting final approval) and therefore attract the same benefit as silo’s. Bunkers are much cheaper to construct and the main advantage is that a bunker can be constructed in the correct production location. The silo technology AFGRI makes use of can separate grades as well as other unique characteristics. Electronic certificates issued at the storage location are recognised by SAFEX. Bunkers furthermore provide an element of risk reduction to AFGRI capital and should production areas change; the bunker can easily be relocated and erected at a relevant site.

 

The remaining three bunkers were constructed at Afrikaskop and Eeram, both in the Free State, and Amersfoort in Mpumalanga. The bunkers have been placed close to AFGRI silo’s in the area in order to deal with increased capacity and storage demand. The Eeram bunker will be used to store summer grain due to the increased wheat stored at Harrismith as a result of the wheat mill commissioned by AFGRI Milling.
AFGRI manages a total of 15 stand alone bunkers and 8 temporary bunkers currently located on silo properties in South Africa, with a total storage capacity in the bunkers of 568 000 tonns.

 

Although this bunker technology can easily be erected in Africa, the market is structured differently in that bags and warehouse storage is more common as farmers are smaller and in most instances grain management has not moved to bulk handling yet. One bunker and eight warehouses are operated in Zambia, three warehouses in Uganda and one silo bag facility is managed in Congo Brazzaville.
“AFGRI is a leader in all facets of grain management and therefore the roll out of the service and facilities into Africa is a focus area for us. As we assist farmers in Africa with mechanisation and a greater variety of input options, they are scaling up and our bunkers will offer a sorely needed storage solution and access to markets for these farmers. In turn this puts AFGRI one step closer to our mission of being a functional player in ensuring food security for our continent,” concludes Venter.

Issued for: AFGRI Limited
Contact: Chris Venter, Chief Executive Officer (CEO)
Tel: 011-063-2001
Email: chris.venter@34.255.249.49
Website: new.afgri.antsneversleep.com
Issued by: Keyter Rech Investor Soloutions
Contact: Vanessa Rech
Tel: 011- 447-8656 or 083-307-5600
Email: vrech@kris.co.za
Date: 4 June 2014

AFGRI CEO Chris Venter discuss how to build a sustainable agriculture business with Theo Vorster on Kyknet’s Dagbreek.

Joint press statement from AFGRI and AgriGroupe

AgriGroupe completes acquisition of AFGRI
AFGRI to delist and go private

31 March 2014 – Centurion, AFGRI Limited (“AFGRI”), a leading South African agricultural services and foods group, and AgriGroupe are pleased to announce the conclusion of the privatisation transaction and the start of a new chapter for AFGRI as a private company.

AgriGroupe Investments will be the majority shareholder in AFGRI, holding 60% through an offshore structure, with the remaining 40% held by South African shareholders including the Public Investment Corporation (PIC), the Black Empowerment consortium Bafepi Agri (Pty) (Ltd) and AFGRI management. “AgriGroupe celebrates the consummation of the acquisition of AFGRI and looks forward to sustaining the company’s role as a preeminent agricultural services player in South Africa. We will support management’s strategic vision for African food security through development of critical supply chain infrastructure, logistics solutions and financial services for both smallholding and commercial farmers in Africa. AgriGroupe is determined to maintain AFGRI’s commitment to farmers, employees and communities in South Africa, and to participating in the ongoing consolidation of the sector” said AgriGroupe’s Michael Wilkerson.

“Investors in AgriGroupe will benefit from AFGRI’s strong cash-flow generative grain management business, the largest John Deere franchise on the continent, long-term growth into Africa (which potential has been demonstrated by AFGRI’s successful recent entries into attractive growth markets including Congo Brazzaville, Nigeria, Uganda, Zambia and Zimbabwe), and a ‘hidden gem’ financial services business poised for expansion in offering credit, insurance and trade finance solutions to an increasingly broad set of agricultural and corporate clients” Wilkerson concluded.

“Fairfax, as the largest investor in AgriGroupe Investments, is pleased to make its first investment in South Africa. We are aligned with the strategic vision of AFGRI through our common goal to profitably support food security and stimulate the agricultural sector in Africa” said Prem Watsa, Chairman and CEO of Fairfax Financial Holdings. Fairfax, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. Fairfax is based in Toronto, Canada and has been under present management since September 1985.

“For AFGRI it is an exciting evolution into the next 90 years. The collaboration with AgriGroupe, Fairfax and the PIC provides an opportunity to expand across Africa and to drive forward our vision of food security for Africa where we can make a meaningful contribution,” said Chris Venter, CEO of AFGRI.

Venter reiterated that current services and support structures to farming clients will remain unchanged. “We will continue to support, finance and provide technical services, products and storage solutions to our clients to the same standard as in the past. The transaction provides AFGRI with the necessary tools to expand our service offering into Africa, which AFGRI has identified as the largest growth prospect. Our base in South Africa is our history and
legacy and we are always mindful of that,” he concluded.

AFGRI will delist from the Main Board of the JSE on 1 April 2014. Additional information on AFGRI’s business, including its 2013 Annual Report and investor presentations, can be found at new.afgri.antsneversleep.com

Issued for: AFGRI Limited and AgriGroupe
Contact: Chris Venter, Chief Executive Officer (CEO)
Tel: 011-063-2007
Email: chris.venter@34.255.249.49
Website: new.afgri.antsneversleep.com
Account: Keyter Rech Investor Solutions
Contact: Vanessa Rech or Lynne van der Schyff
Tel: 011-447-8656 or 083-307-5600 or 011-447-2993 or 082-920-4395

 

AFGRI in support of the proposed poultry brining regulation

27 February 2014, Centurion– AFGRI Limited (“AFGRI”), a leading listed South African agricultural services and foods group, announced today that it is in support of the proposed brining legislation.
“After careful consideration of the proposal relating to the regulation of brining published on 15 December 2013, AFGRI Limited and its subsidiary AFGRI Poultry are in favour of the regulation,” said CEO of AFGRI, Chris Venter.

The Department of Agriculture, Forestry and Fisheries (“DAFF”) announced that it intends to cap the brining of chicken portions (IQF) at a level of 15% and to cap the brining of whole birds at 10%. The intended implementation date is 1 September 2014.
“AFGRI is in support of DAFF’s proposed regulation based on its opinion that the maximum brining levels suggested are ethical, fair, reasonable and scientifically justifiable said Izaak Breitenbach, MD of AFGRI Poultry. “It is an opportunity to provide clear guidance to the industry and it will level the playing field for all suppliers of poultry products in South Africa. A cap will eliminate the competitive pressure to up the brining levels that has been of concern.”
The reduction in brining levels will not only provide transparency to consumers but will furthermore create a better legal framework for compliance with the regulation. The reduced brining level will unfortunately financially impact the consumer and producers alike AFGRI is therefore keen to engage, interact and support Government departments in this regard. “We strongly believe that brining is only one aspect of the poultry value chain and it is also important for all parties to engage around issues of controlling and administering imports, administering packaging as well as other parts of the value chain,” Venter noted
It is important to understand the background to brining. The terminology “brining” is misleading as it insinuates that the product is injected with a water and salt mixture, which is not the case. Poultry producers, AFGRI included, use flavourants which are injected into the carcass or product to make it more succulent and tender. This is also the process required by quick service restaurants to obtain a distinct taste and tenderness profile to their respective
products. Treating the carcass or portion with a flavour enhancer (which costs less than meat) also reduces the cost per kilogram of meat, making individually quick frozen (IQF) portions the lowest cost animal protein source money can buy.

It is with the above in mind that DAFF initiated a consultative process to put a cap on the legally allowable percentage of injectable flavour enhancer, namely 15% for chicken portions and 10% for frozen whole birds.

“It is the consequence of the brining cap however that needs to be dealt with so as not to have a material negative effect on the consumer and the producer,” reiterated Breitenbach. “The nett effect will be that the cost of IQF will increase by approximately 15%,” he said.
Most poultry companies have endured losses for more than 30 months and will not be in a position to subsidise the additional cost and on the flip-side consumers (particularly those in the lower income groups) will find it difficult to pay 15% more for an IQF product when increases are felt by the consumer in fuel, other food products and the cost of services, putting them under further strain. Food inflation, as an example over the past year, was 37%, whereas poultry inflation has been 0% since 2007.
AFGRI currently has BEE ownership of 26%, employs a total of 2,500 staff within the poultry business and produces quality poultry products into the South African market place. Given this, it is open to discussions with the role 2 players to ensure that a smooth transition into the new brining regulation is in place by the suggested implementation date.
“AFGRI declares its willingness to engage in discussions with the relevant Government departments to determine how impacts can be mitigated against both for the consumer and poultry companies,” concluded Mr Venter.

Issued for: AFGRI Limited
Contact: Chris Venter, Chief Executive Officer (CEO)
Tel: 011-063-2007
Email: chris.venter@34.255.249.49
Contact: Izaak Breitenbach, MD AFGRI Poultry
Tel: 011-063-2339
Email: izaak.breitenbach@34.255.249.49
Website: new.afgri.antsneversleep.com
Account: Keyter Rech Investor Solutions
Contact: Vanessa Rech
Tel: (011) 447-8656 or 083-307-5600
Date: 27 February 2014
JSE Code: AFR