Agro-industries business unit at work

Agro-industries business unit at work

 

Businesses in the agro-processing sector received R738m from the Industrial Development Corporation in the past financial year, with some 4 000 jobs either created or saved.

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Businesses in the agro-processing sector received R738m in the past financial year, meaning almost 4 000 jobs were either created or saved. Particular emphasis was cutting food imports, developing land, and new industries and products.

The Industrial Development Corporation’s (IDC) core development activities are implemented by 13 strategic business units (SBUs), one of which is Agro-Industries. This unit falls within the Agro and New Industries operational division.

In the 2012/13 financial year, this SBU provided R581-million worth of financing to businesses in the sector. In addition, the sector benefited from approvals of R137-million through the Agro-Processing Competitiveness Fund and R20-million from the Manufacturing Competitiveness Enhancement Programme. The number of jobs expected to be created or saved from this funding activity adds up to 3 952.

The investments were in activities set up to lower dependence on food imported from outside Africa, to develop under-utilised land, and to create new and emerging industries and products. Rural small and medium enterprises (SMEs) in the grain processing, confectionery, edible oil, honey and malt industries, in particular, benefited.

In addition, IDC funding facilitated links between small-scale farmers and processors in the sugar and soya industries, as well as supported large-scale horticultural expansion projects in the table grape and berry sectors. For example, investment in the development of a greenfields soya crushing facility in Bronkhorstspruit will facilitate import substitution of soya cake, increase local soya bean cultivation, create at least 48 permanent jobs and have an indirect employment impact of more than 1 000 jobs.

Further, it will be the country’s first dedicated oil cake focused commercial-scale soya crushing facility. With an annual capacity of about 240 000 tons, the plant will convert soya beans into high quality soya oil cake, soya hulls and crude soya oil for distribution into the animal feed and industrial sectors.

In the dairy sector, the SBU’s key sector development goals include increased competition in the value chain, import substitution in the cheese industry and improved farmer participation in value-adding initiatives. Last year, the unit facilitated the formation of the Coega Dairies long-life milk facility in Eastern Cape, which is unique in that the plant is co-owned by local dairy farmers (both commercial and smaller scale), workers and local communities.

The IDC developed the initiative further in 2013 by boosting the empowerment portion of shareholding in the Coega Dairy Milk Producers Organisation, in partnership with the listed Famous Brands entity. This partnership will result in the creation of a cheese production facility in the Coega Industrial Development Zone, focusing specifically on mozzarella and cream cheese.

As well as increasing competition in cheese production in South Africa, this transaction will replace cheese imports and boost milk procurement from Eastern Cape as well as result in the creation of an estimated 269 jobs in the dairy and cheese functions.

Furthermore, rural development will be enhanced through the creation of a hub of activities around the dairy value chain; broad-based black economic empowerment will be bolstered through the participation of black farmers, workers and communities; and, farmers will benefit directly through their shareholding in value-adding activities.



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