AFGRI Equipment, part of the AFGRI Group, is proud to announce that it has been appointed the sole distributor of John Deere’s Construction & Forestry range of equipment in Botswana, Zambia, Zimbabwe, and AFGRI’s areas of operation in South Africa.

According to Patrick Roux, Managing Director of AFGRI Equipment, this builds on the successful partnership already in place with John Deere in Western Australia, where AFGRI Equipment is the single largest distributor of the Construction & Forestry range. The extensive AFGRI Equipment branch network in Western Australia has been instrumental in further building the John Deere brand since AFGRI Equipment’s appointment to market the range in early 2019.

“The success we’ve enjoyed with the John Deere agricultural range in these markets, i.e. Botswana, Zimbabwe, Zambia and our areas of operation in South Africa, combined with our outstanding service levels and ethos, as well as excellent customer relationships, established a solid base of operations to further build out and strengthen the Deere brand, given the synergies that exist between the agricultural and construction equipment ranges.”

Roux added that AFGRI Equipment was delighted with the appointment, which certainly cements the relationship with John Deere. “However, more important is the ability to now offer these markets access to this well-respected and premium range of equipment. John Deere is well aware of our established footprint in these countries, and certainly that was another factor in their decision.”

This appointment provides AFGRI Equipment with a solid diversification angle to the business and sector to support, which will strongly underpin sustainability and growth.

Roux added that he was confident that AFGRI Equipment’s deep retail knowledge and experience in the agricultural sector could easily be transferred to the construction and forestry space. “We have  become the ‘go to’ company for many farmers, and we’re truly delighted to extend our services to local mining, construction, and forestry companies, with the hope that we will earn this same reputation.”

Initially, the Construction & Forestry range will be available through selected AFGRI Equipment branches, with the idea being to develop a stand-alone Construction & Forestry business unit in due course. To this end, Pieter Nel has been appointed to head up the business. Nel has extensive experience in construction and agricultural equipment.

“We look forward to working with new clients to introduce an extensive range of solutions, purposefully built on the backbone of technology to drive down the costs of operation and increase efficiency,” concluded Roux.

In April 2020 I updated you on the position that the Land Bank (“the Bank”) found itself in. In line with the commitment to keeping you informed on this issue, please take the time to read this important update outlining some new developments. As ever, UNIGRO remains committed to ensuring it is doing all it can to ensure our customers’ needs are addressed, even in tough situations.

Background

You may recall that on 21 January 2020 Moody’s Investor Service (“Moody’s”) announced the downgrade of the Bank’s issuer rating from Baa3 to Ba1, and its long-term national scale issuer rating from Aa1 to Aa3.  Following Moody’s subsequent downgrade of South Africa’s sovereign credit rating on 27 March 2020, another downward rating adjustment was made to all state-owned entities, including the Land Bank, meaning that the Bank’s issuer rating was downgraded again from Ba1 to Ba2.

As I explained previously, these events had a significant impact on the liquidity position (cash flow) of the Bank, meaning it was not able to meet immediate obligations to settle a repayment under the terms of a revolving credit facility with one of its lenders. The non-payment constituted a default. At the time, the Bank indicated that it was in consultation with the lender concerned to negotiate a waiver and an extension of the repayment date. These consultations are ongoing and have not to our knowledge been finalised.

I also said at the time that any potential default could prevent the Bank from raising funding. The Land Bank’s inability to raise funding would make it difficult for it to meet its disbursement obligations under a Service Level Agreement. This in turn could negatively impact on UNIGRO’s ability to provide liquidity to farmers through our loan agreements.

Current situation

Because UNIGRO and the Bank have had a significant partnership in place through the Service Level Agreement since 2011, we have held several meetings with the Bank both before this situation developed and throughout the crisis, and we remain in constant communication with key stakeholders.

As far as UNIGRO is aware, the R3 billion injection approved by Government has unfortunately not yet materialised. As the situation remains unremedied by both the Bank and by Government, what I warned against has now happened, with an unfortunate knock-on effect on UNIGRO and potentially our ability to lend fully to customers.

We have therefore proactively started a process of sourcing alternative funding and are in the process of securing a maximum of R2 billion in short-term finance, R7 billion in longer-term finance as well as additional short-term syndicated and other funding for facilities to try to mitigate this crisis.

UNIGRO will further ensure that going forward, even if the Bank receives the R3 billion in funding from Government, our own funding lines are diversified to limit risk to our customers. However, due to the size of these funding lines, and in the current economic climate, negotiations are taking a little longer than expected and this in turn means that UNIGRO disbursements to farmers could be at a reduced rate until such time as liquidity is restored, and the Land Bank is able to meet its commitments under our Service Level Agreement. We ask for your understanding in this regard, and expect that the new secured lines of funding will be in place by the end of the year.

In the interim. I urge you to please remain in contact with your relationship manager, as things can change at very short notice in this climate of uncertainty.

Finally, thank you for your continued support of UNIGRO and the AFGRI Group. Please liaise with your relationship manager for updates, although as soon as we have further clarity on developments with regards to the Bank, I will communicate with you again.

Together we will make it through this unprecedented time for our area and the country.

Ross Simmonds
Managing Director: UNIGRO

Centurion, 3 June 2020 – AFGRI Group Holdings, an investment holding company with interests in a number of food, agriculture and financial services related companies providing products and services to ensure sustainable agriculture and food security, is proud to announce that its in-house legal department won three awards at the In-House Community Counsels of the Year Awards 2020, held from Hong Kong last week.

The winners of this annual competition were announced last week via a unique virtual ceremony, during which the AFGRI Group Legal team was announced as the “South African Legal Team of the Year”, the “South African Small Team of the Year” and the “South African Energy and Natural Resources Team of the Year”.

This is the third consecutive year that the AFGRI Group Legal team has won the “South African Legal Team of the Year” award and it’s the second consecutive time that they have won the “South African Small Team of the  Year” award. The international judging panel was particularly impressed with the team’s demonstrated ability to be innovative, efficient, and cost-effective in a challenging environment.

According to Acting CEO of AFGRI Group Holdings, Tinus Prinsloo, “By winning such awards, the AFGRI Legal team does us all proud and ensures that our brand is held in high esteem in such global communities, given that the In-House Community is comprised of over 20,000 individual members with a responsibility for legal and compliance issues in the Asia, Middle East and Africa regions.”

Pieter Badenhorst, who heads up the award-winning team, is no stranger to accolades such as this, and last year became the first General Counsel in Africa to win the “General Counsel of the Year” Award twice at the African Legal Awards. The team has also won several other awards.

“I would like to congratulate my entire team for this remarkable achievement, which endorses the winning qualities and reflects both the work ethic and the values we uphold. There can be no greater honour than being recognised by our peers internationally,” said Badenhorst.

Centurion, 20 May 2020 – AFGRI Agri Services, one of the country’s leading agricultural services companies, is again leading the charge in the sector, with the unveiling today of a new disruptive agtech platform, the first of its kind in South Africa, known simply as “Axl”.

This online platform is designed to enable the convenient rental of farm equipment, facilitating the contract between the renter and the owner in a few simple steps, all without either having to set foot outside their own door.

In a nutshell, Axl allows farmers to find, rent, and pay for agricultural equipment through a secure online portal, enabling service providers – equipment owners, retailers, and contractors – to build their business and grow revenue streams and optimising the process of renting out their machines. Axl provides world-class payment solutions that ease the cash-flow challenges for service providers while connecting renters to a quality rated service.

Access to the right machinery at the right time is a critical success factor for farmers. “Whether it is a small, emerging, or large commercial farmer, this is an ongoing challenge for farmers of all sizes. Especially now, as the global pandemic has left global supply chains under immense pressure, uncertainty remains in the minds of our customers and currency volatility has resulted in the increase in equipment costs,” says Niki Neumann, the head of AFGRI’s strategic innovation division, AFGRI Technology Services (“ATS’’), which has developed this product, along with AFGRI Equipment.

“We have decided to open the platform up sooner than originally planned due to the increased need for an alternative solution. As with all new products we expect some teething issues, however, we have already had successful rentals via the platform.”

Axl’s first customer and a member of AFGRI’s Future Farmer Forum, Hardu Prinsloo, shares his experience using the service, “It’s always very fulfilling to be part of something new that can make a difference to agriculture as a whole.”

“When we set about developing the concept, we understood that with farming comes many unforeseen challenges, we wanted to build a community of quality-rated equipment service providers to be there for farmers when they need them the most. Uncertainty and change are something we will never see the back of, it is inherent in our lives now and going forward. We are adapting and excited to embark on this journey with our Axl customers,” says Neumann.

AFGRI Equipment branches will be the first to offer the rental service to their customers. However, the platform is for all South African farmers and equipment owners, including contractors and retailers alike.

UNIGRO customers have the added benefit of using their revolving credit or production facilities to pay for rentals via the Axl service. “Axl is an exciting platform, and UNIGRO is excited to integrate its financial services offering in support of the platform.  If a quality product offering like Axl enabled with convenient access to finance, delights our customers then we have been successful,” according to Ross Simmonds, the Managing Director of UNIGRO.

Axl goes beyond an online service – it breaks down the traditional barriers to accessing mechanisation for all farmers; it is creating a secure and shared environment and encourages us to do more with less. In times like these, this has never been more important.

According to Patrick Roux, the Managing Director of AFGRI Equipment, the platform is an exciting product. “It will further allow equipment owners to fully utilise their equipment throughout the year, and I am optimistic that this platform will change the way we utilise farm equipment in the future.”

He said that by launching Axl during the lockdown, AFGRI Agri Services can support farmers through uncertain times in a way not offered in the sector before now. ‘’In the long-term, the aim is to deliver an innovative digital service that both enables our customers to drive sustainability, profitability, and productivity for their business. We are positively transforming the equipment market for the better, starting now.”

Quite simply, Axl keeps the wheels turning.

For more information, visit https://axl.app