NAMPO, 17 May 2019 – With grain, including maize, wheat and several other crops, set to remain the staple diet of South Africans for many years to come, it’s essential that the industry is supported in order to thrive.

This is the view of AFGRI, one of South Africa’s leading agricultural companies, home to AFGRI Grain Management, which handles and stores not only maize, but also wheat, sunflower, soya beans, barley and sorghum at more than 100 operational points throughout South and Southern Africa, including Congo-Brazzaville, Uganda, Tanzania, Zimbabwe, Mozambique and Zambia.

The current storage capacity of around 4,7 million tons in South Africa is due to get a boost from the recent announcement by parent holding company, AFGRI Group Holdings (AGH) and its BEE partner, Izitsalo Employee Investments, of the creation of a strategic grain storage platform vehicle in collaboration with STANLIB Infrastructure Investments, Wiphold, and the Land Bank.  The consortium will initially own storage facilities with a total value of R3,6 billion, while AFGRI will manage these storage facilities in terms of a management agreement.

“The AFGRI Grain Silo Company has the clear objective of expanding the current storage capacity to six million tons or more in the near future, allowing us not only to cater for grain storage, but to expand into the storage of other types of commodities,” said Chris Venter, the CEO of AGH, when the deal was announced.

According to Jacob de Villiers, MD of AFGRI Grain Management and CFO of AFGRI, this bodes well for the grain industry, the future of which already looks very positive, with maize farmers in particular increasingly embracing the rotation of their maize crop with oil seeds, boosting the output of both as a result.

In the case of soya beans, increasing local demand has also led to improved production, says de Villiers, which is further good news for the industry as a whole. However, the recent rain during what would have been the traditional harvest time for soya has led to the first challenging harvest period in the county for a number of years, which is challenging for farmers. “This, factored in with the increasing price and yield differential between maize and soya beans, is making the decision fairly difficult for farmers, who might be more inclined to plant maize next year. However, we are optimistic that soya bean production will rebound.”

Given the reality of the growing global population, the role of the grain industry in feeding not only the nation, but also South Africa’s neighbouring states, particularly Zimbabwe, where demand is high, as well as being able to export to international markets, with the hope that government-run rail and port infrastructure will continue to improve, is likely to stimulate the industry even further, says de Villiers.

AFGRI is of course set to play a bigger role in South Africa’s ports going forward, with the announcement in November last year that Transnet had indicated its intent to enter into a 15-year concession agreement with AFGRI for the operation and maintenance of two strategic agri-ports in the country, the Grain Elevator in the Port of East London and the Agri-Port at the Port of Durban. This initiative is aimed at breathing new life into the two terminals through refurbishment, funding, and marketing projects.

De Villiers stresses though that it is of utmost importance that maize production remains financially viable for South African farmers, and as such government should continue to allow free market principles to prevail.

Apart from food security, AFGRI also ensures that grains are handled and stored safely and responsibly, and with a growing worldwide demand for cleaner and safer food, will strive to stay abreast of the latest technologies to ensure it continues to adhere to world-class standards in this regard.

“As mentioned, the new storage platform will give us the ability to expand storage infrastructure in future, which includes putting up new facilities in areas where it is not currently economically feasible, but which will be important in the future,” says de Villiers.

“We need to ensure that as a responsible corporate citizen we support these areas to give them the best possible chance of success, and that farmers have a safe place to store their grain once its harvested. It goes without saying that job creation is just one of the positive spin-offs of such initiatives.”

In addition, other commodities will also be stored in future, enhancing AFGRI’s role in ensuring food security in South Africa and throughout the continent.

De Villiers concludes: “We recognise that it will take massive investment to drive food security, which remains our core vision, and this relates not only the availability of food, but also its affordability. For this reason, we are also cognisant of helping drive down the price of food to the consumer by consolidating our own costs and being open to opportunities to form consortiums with like-minded investors like we’d done on the storage platform to benefit from additional funding and other synergies.”

NAMPO, 15 May 2019 – With climatic changes worsening and the economy under strain, farmers across South Africa are having to do more with less, with many struggling to make ends meet. During the past two years alone, farmers have had to contend with drought, hail, foot and mouth disease, armyworm invasions and wildfires, to name but a few. While several funds have been established in support of local farmers, AFGRI’s Support Fund offers a significant beacon of hope to agricultural communities across South Africa.

The Fund, established in February this year, offers financial support to beneficiaries in the agricultural sector, focusing on those operating within the AFGRI ecosystem and geographic areas. However, recognising that funds such as these need to be sustainable to make a real difference, AFGRI, apart from committing an annual donation of a minimum of R3 million, will make use of a host of events, including golf and farmers days as well as ad hoc opportunities, to raise additional money for the Support Fund.

It also is accepting contributions from external individuals and organisations, and will, in addition, continue to have an account into which farmers are able to donate grain for sale, the proceeds of which will be transferred to the Fund account.

When asked what drove the establishment of the Fund, AFGRI’s CEO Tinus Prinsloo explains: “We know all too well the publicised issues and get asked by so many to assist. We want to ensure that support reaches those in need as much too often donations don’t reach those who truly need them.”

AFGRI’s CFO Jacob de Villiers, who was instrumental in setting up the Fund, says that so far AFGRI has been inundated with requests for assistance, showing just how much support South African farmers and those involved in agriculture-related industries need currently, and validating that the Fund is serving the purpose it was created for.

“Many of the requests have been from new era farmers asking for help in starting farming operations, or for access to finance, training, and equipment. These have been redirected either to Lemang Agricultural Services, which focuses on developing black farmers ready to take the next steps to full commercialisation, or to Harvest Time Investments, which focuses on small new era farmers, for further evaluation so that we can offer support through the correct channels. However, a large portion are coming from farmers who really need a helping hand.”

Ten requests from across the country meeting the Fund’s criteria have already been put before the executive management team, with a number of these being approved for funding in the amount of R400,000. “We have already started engaging with the beneficiaries, whose requests ranged from assistance in providing additional security measures on farms to money to repair hail damage. One project involves assisting farmers in the Middelburg area who are sending animal feed to farmers in need in the Northern Cape.”

De Villiers adds that a further R350,000 was raised at a recent AFGRI golf day. “We have just received confirmation that we will be hosting another golf event in the Western Cape towards on the end of 2nd of August, and are already receiving bookings for this, which is so encouraging. We will of course continue to leverage other events and initiatives to raise money for the Fund.”

More important though, says de Villiers, is the fact that AFGRI has started engaging the farming community to get involved and contribute, so that farmers support farmers. An example of this working well is when the proceeds from the sale of grain is made available by those farmers willing to assist. “This money can be contributed to the Fund, while grain itself can also be donated for sale.” He estimates this could raise another R500,000 during the upcoming harvest time. “Of course, we will also look to assist farmers who have set up their own help initiatives to grow critical mass, as is the case with the one project we will now be helping to fund.”

Knowing the power of the media, AFGRI is looking at bringing a local media partner on board to assist its efforts in creating awareness of the Support Fund, with de Villiers saying that AFGRI would soon be in a position to divulge this information. “We are, in all honesty, blown away by the response to the Fund – this truly shows that setting it up was the right thing to do at the right time and we are very proud and excited to be making a real difference to the lives of those in need through it.”

Another factor in ensuring sustainability is sound management and governance. De Villiers, along with AFGRI Group senior executives, Marion Shikwinya and Ross Simmonds, are the directors of the Fund and will be responsible for the evaluation and disbursements of requests received. Furthermore, AFGRI is committed to and follows strict corporate governance procedures. “Both the impact and the measurement of the difference we are making will be noted with the purpose of continual improvement to safeguard a growing and sustainable Fund,” says de Villiers.

“This will ensure that financial support is available to all involved in agriculture in the long-term. In this way AFGRI will continue to make a positive impact on the agricultural sector in our country, just as we have for the past nine decades and more.”

Moreover, AFGRI’s assistance to farmers is not a recent development but has been part of the company’s ethos since it was established over 95 years ago. More recently, in 2016 during one of the worst droughts ever recorded in South Africa, AFGRI donated R5 million in drought aid to farmers. It also offered a zero increase on storage fees for a period, knowing that these gestures would assist farmers caught in the grips of the drought.

Similarly, in 2017 AFGRI partnered with farmers in the Free State and the KwaZulu-Natal Midlands, as far afield as Bothaville, Koppies, Danielsrus and Tweeling, to facilitate a process through which large-scale hay donations could be sent to farms in the Thornhill district in the Eastern Cape. The donation amounted to more than a
1,000 round bales. AFGRI Grain Producers further donated maize for trading, using the proceeds to support the project.