how the idc can stimulate sa agriculture … rian coetzee head: food, beverage & agro industries...
TRANSCRIPT
How the IDC can stimulate SA agriculture …How the IDC can stimulate SA agriculture …
Rian CoetzeeHead: Food, Beverage & Agro Industries
Agri Outlook Conference30 September 2009
The context – a Developmental State
“The developmental state concept is an attempt to bridge the gap between a centrally planned economy and a free market system,
without emphasizing an ideological position.”
Ben Turok
Wealth Doesn’t Tricle Down: The case for a Developmental State in SA
2008
Introducing the IDC …
IDC Head Office, Sandton
(also 8 regional offices)
• Established in 1940, owned by the Government of South African & 100% self-financing
• Provide risk capital to commercially viable businesses in various sectors
• Mandated to invest in the whole of Africa (since 2000)
• Strong capital base developed through years of sound investments
• Differentiation:
– Identification, development & funding of projects in partnerships with others
– Promotion of & investment in viable new industries
– through risk-taking and flexibility in structuring
Passion, Partnerships & Professionalism
Growing sectoral diversity
Leadership in Development
Vis
ion
Mis
sion
Obj
ect
ives
Out
com
es
To be “the primary driving force of commercially sustainable industrial development and innovation to the benefit of South Africa and the rest of the African continent”
The IDC is a self-financing national development finance institution whose primary objectives are to contribute to the generation of balanced, sustainable economic growth in Africa and to the economic
empowerment of the South African population, thereby promoting the economic prosperity of all citizens. The IDC achieves this by promoting entrepreneurship through the building of competitive industries and
enterprises based on sound business principles.
Supporting industrial development capacity
Promoting entrepreneurship
Sustainable employment
Broad-based black economic empowerment
New entrepreneurs entering the economy
Growing SME sectorRegional equity
Industrialisation in the rest of Africa
Environmentally sustainable growth
Growing export sectorLocal beneficiation
Agricultural value chain
Sector map
Biotechnology
Intermediate inputsEnergy; WaterIrrigation equipmentFertilizer; ImplementsPackaging; FencingStructures; ToolsPumps & generators; Medicine
Maize
Wheat
Hay
Grain sorghum
Sugar cane
Ground nuts
Tobacco
Sunflower seed
Cotton
Viticulture
Citrus
Subtropical fruit
Vegetables
Deciduous fruit
Tea
Coffee
Flower
Game
Ostriches
Pigs
Goats
Sheep
Cattle
Poultry
Beans
Nuts
Field crops Horticulture Livestock
Agriculture
Evergreen
Fishing
Aquaculture
Fishing
Meat processing
Dairy products
Fruit & vegetableproducts
Fish products
Oils & fats
Grain mill products
Bakery products
Sugar & related
Confectionary products
Other food
Animal feed
Agro -processing
Distilleries
Malt Beverages
Soft drinks
Beverages
Wineries
Other non -food
Essential oils
Fibres
Starch
Bio -fuels
Medicinal / Biotech
HouseholdExpenditure
Fragrance
Textiles
Fuel
Pharmaceutical
Feeding into other value chains
Foodservices(hotel; restaurant; caterers)
WholesaleRetailLogisticsTourism
ExportsAgentsLogistics
Automotive
Government Expenditure
Chemicals
Other …
PRIM
ARY S
ECTO
R
SECO
NDARY S
ECTO
R
Sector map
Biotechnology
Intermediate inputsEnergy; WaterIrrigation equipmentFertilizer; ImplementsPackaging; FencingStructures; ToolsPumps & generators; Medicine
Maize
Wheat
Hay
Grain sorghum
Sugar cane
Ground nuts
Tobacco
Sunflower seed
Cotton
Viticulture
Citrus
Subtropical fruit
Vegetables
Deciduous fruit
Tea
Coffee
Flower
Game
Ostriches
Pigs
Goats
Sheep
Cattle
Poultry
Beans
Nuts
Field crops Horticulture Livestock
Agriculture
Evergreen
Fishing
Aquaculture
Fishing
Meat processing
Dairy products
Fruit & vegetableproducts
Fish products
Oils & fats
Grain mill products
Bakery products
Sugar & related
Confectionary products
Other food
Animal feed
Agro -processing
Distilleries
Malt Beverages
Soft drinks
Beverages
Wineries
Other non -food
Essential oils
Fibres
Starch
Bio -fuels
Medicinal / Biotech
HouseholdExpenditure
Fragrance
Textiles
Fuel
Pharmaceutical
Feeding into other value chains
Foodservices(hotel; restaurant; caterers)
WholesaleRetailLogisticsTourism
ExportsAgentsLogistics
Automotive
Government Expenditure
Chemicals
Other …
PRIM
ARY S
ECTO
R
SECO
NDARY S
ECTO
R
Sector focus
Primary Agriculture Secondary Agriculture
Fishing & aquaculture
Field crops **
Horticulture
Livestock **
Food
Beverage
Agro-industrial
* Rest of Africa focus on Secondary or backward integrated projects
** Exceptions
• integrated projects
• Special government initiatives
IDC Agri-business portfolio
100.000.000 200.000.000 300.000.000 400.000.000 500.000.000 600.000.000
Other
VegetablesMeat processing
Fruit - CherryAcquaculture
BiotechProcessing - food
BeveragesFruit - Persimmon
StarchProcessing - Fish
Processing - SnacksFlowers
Fruit - SubtropicalFibre
Fruit - BerriesWholesale
Processing - MeatFruit - CitrusFruit - ApplesFruit - Grapes
NutsBio-ethanol
Sugar milling
Oils
Tea
ZAR
• Total exposure & commitment = ZAR3bn
• 20% (of value) outside South Africa
• 80% (of value) in equity investments
Opportunity drivers
Environmentalism
Sustain & growcompetitiveness
Indigenousresources
Competitiveimport
replacementFood security
SADC & rest of Africa
Megaconsumer trends
Small farmer development
Small farmers
170 emerging cash crop farmers in North West & Free State
Agribusiness
Wholesale partnerships
Strategicpartner
16 citrus farmers in Alice/Kat River area, Eastern Cape
“Hub” partnerships
Broad-based black economic empowerment
Community empowerment - Amajuba Berries
Description - 60ha raspberry farm in Volksrust, KZN
IDC investment – R14m equity; R11m debt
IDC role – project identification & facilitation; equity investment; partner identification; business support
Development outcomes – 440 jobs; community ownership; new industry; R30m/a exports; rural development
Worker empowerment - Keboes Fruit farms
Description – 500ha table grape development in Northern Cape, producing 1,91 million cartons of table grapes p/a
IDC investment – R60m equity & quasi-equity
IDC role – share warehousing for BEE group & workers
Development outcomes – 1,000 jobs, worker empowerment; rural development
BMFI
Pro-active project development
Biofuels - Arengo
Description – The production of 90 million liters of fuel grade bio-ethanol p/a from sugar beet in the Eastern Cape.
IDC investment – R414m equity & debt
IDC role – pre-feasibility & feasibility funding; sponsor role; equity & debt underwriting
Development outcomes – new sector; small scale farmer development; empowerment; rural development
Kenaf - Sustainable Fiber Solutions
Description – Plant based in Winterton, KZN, involved in the de-corticating of kenaf stalk and produces base fiber, core and fines used in the manufacture of bio-composites in the for automotive use – now also used for construction material & oil spillage
IDC investment – R85m in equity
IDC role – feasibility funding (trials);
Development outcomes – new industry; massive job creation through the agricultural development; rural development
Foreign direct investment in the rest of Africa
Matanuska, Mozambique
Description – 3,000ha of banana plantation, Nampula, Mozambique
IDC investment – USD10m quasi equity; USD10m debt
IDC role – co-investment & partner selection
Development outcomes – 5,000 jobs; infrastructure development; rural development
Casquip Starch, Swaziland
Description – Cultivates cassava and produces starch in Swaziland
IDC investment – R37m in quasi-equity
IDC role – co-investment & partner selection
Development outcomes – 1,500 jobs; rural development; SADC import replacement
Day Month Year
The Industrial Development Corporation19 Fredman Drive, SandownPO Box 784055, Sandton, 2146South AfricaTelephone (011) 269 3000Facsimile (011) 269 2116E-mail [email protected]
Passion, Partnerships & Professionalism