Thebe Investment Corporation has acquired a 51 per cent holding in the R1-billion turnover a year Botha Roodt Agency – one of the three largest agencies active in the Johannesburg Market, South Africa’s highest-volume fresh produce market (with annual sales of around R6-billion).
This was announced today (29 November 2016) by Thebe chairman Vusi Khanyile. He says the transaction is still subject to the approval of the Competition Commission Authorities.
“Nhlanhla Nene, resident advisor to Thebe, former Finance Minister of South Africa (and himself a small-time farmer), will be Thebe’s key man on the transformation-enabling new venture,” says Khanyile.
“Housed under the umbrella of the Thebe Services Division – headed by Jerry Mabena, who will also play a vital management role – the acquisition will be the springboard for Thebe’s entry into the supply aggregation of fresh produce.
“Furthermore, the Botha Roodt Agency acquisition is the key first step in the planned positioning of Thebe as a strategic partner in the national food sector as a whole,” says the chairman.
Thebe intends to replicate the new venture in other food market sectors (including meat and dairy produce) as part of a three-pronged strategy to
- facilitate primary agriculture by enabling the entrance of emerging farmers into the commercial food supply chain – by making them market-ready through training, mentoring and other interventions
- enable Government agencies to deliver sustainable agricultural projects, such as the development of agri-parks and agro processing facilities for farmers, and
- provide to the farmers access to both local and international markets.
In the process, Thebe will help generate an increase in demand both for established white farmers as well as new-entrant black farmers who need access to markets, says Khanyile.
First of its kind
This latest Thebe empowerment-driven initiative is the first of its kind in South Africa’s fresh produce sector,” according to Mabena.
“In its first phase, the venture will effectively raise Black grower participation in the country’s largest fresh produce market from an existing mere 5% to almost 30%, thus providing a springboard to huge potential job creation,” he adds.
The new venture is also a key element of a transformed, and transform-enabling, Thebe food business portfolio that allows existing players to maintain and extend their horizons to access both local and global markets while, at the same time, making it easier for new entrants to become part of the process.
Business as usual for Botha Roodt
The Botha Roodt Agency has been in existence since the 1960s and currently accounts for one third of the turnover of the Johannesburg Market.
Its current management will remain in place on day-to-day activities and will be part of the decision-making process under the new structure, says director Paul Botha.
“The transaction not only gives us access to a broader spectrum of producers and buyers but also opens the way to new markets. Our future plans include an enhanced service presence on more local and export markets,” says Botha.
“We look forward to integrating the perspectives and views of the founders and leadership team of Botha Roodt with the Thebe strategic vision of an African company that is doing business on an internationally competitive scale,” Botha concludes.
The new venture fits seamlessly with Thebe’s founding corporate statement…’to promote black economic performance to a level that is internationally competitive’, says Mabena.
“The entire point of the project is to build a value chain and open markets for small-scale farmers to access both at home and in the rest of sub-Saharan Africa – and, ultimately further afield internationally.
“In the process, we will be creating jobs, stimulating economies and, not least, promoting food security.
“This is the first of a number of projects that will be rolled out under the umbrella of Thebe’s new Food Division – and it lines up well with the company’s philosophy of building communities,” says Mabena.
“It also ties in with group’s policy to partner with local communities in creating a platform of strategic fresh produce assets that will move emerging farmers closer to mainstream end customers,” Mabena concludes.
A difficult sector to transform
“Until now, fresh produce – historically the domain of formal farming – has been one of the most difficult sectors to transform. Thebe’s acquisition of BRA will change that,” says Khanyile.
“It is the first step of an initiative that will take emerging farmers to the centre stage of agro-processing – by way of access to markets through strategic partnerships.
“The core strategy of Thebe’s new food division is to nurture emerging farmers into understanding how the formal market works, and then expose them to, and guide them on, how to take advantage of the opportunities it offers,” says the chairman.
“We can also put them in touch with existing commercial farmers, many of whom are actively seeking emerging farmers to partner with in the transformation of the fresh produce aspect of the food sector.
“Furthermore, with the market intelligence now at our disposal, we can educate them on economies of scale; advise them on what crops to grow, and when to grow them; and generally assist them along the way as they establish and develop their market share.
“As these emerging farmers grow their wings on the back of this process, they will create more and more jobs as they progress,” Khanyile concludes.
Joburg Market is dominant
The Joburg Market, which is located at City Deep, just a few kilometres from the Johannesburg CBD, accounts for 42% of the turnover of South Africa’s fresh produce markets – followed by Pretoria (22%), Durban (10%), and Cape Town (6%).
The sheer size of South Africa’s fresh produce sector is reflected in the fact that fruit alone (which accounts for about half of the country’s agricultural exports) is currently generating close to R25-billion a year in foreign exchange.*
Commenting on Thebe’s new venture, Joe Mazibuko, CEO of Joburg Market, says: “This is massive news – with huge positive implications for the transformation of South Africa’s fresh produce supply chain.”
* Source: Fresh Produce Exporters Forum