Despite the drought, more than 100 000 jobs have been added to the Western Cape’s agri processing and agriculture sectors since the launch of the province’s Project Khulisa growth strategy.

Alan Winde, Minister of Economic Opportunities, the Western Cape Government team who are driving the strategy and Wesgro delivered a mid-term update on Project Khulisa Agri-processing on 17 October 2017. Jobs growth, progress on skills development and transformation since its establishment in 2014, were among the key points raised at this morning’s briefing.

The impact of threats like drought and avian influenza (AI) on the economy were also discussed.

Project Khulisa was launched in 2014 with the target of adding 100 000 jobs to the agri-processing sector, and growing the Gross Value Add (an indicator of all the goods and services produced by the sector).

In order to achieve these objectives, we have identified three strategic initiatives:

  1. a)     Capture a larger share of the Western Cape’s global Halal market.
  2. b)     Increase exports of wine to China and Angola.
  3. c)     Improve local production capacity for domestic and key strategic markets.

“Since 2014, we have added 127 497 jobs to the agri-processing and agriculture sectors, and GVA has grown by R179 million. Wesgro’s Agri Business unit has secured investment worth in excess of R1.4 billion, exceeding its three-year target of R1.1 billion. We’ve also seen wine exports to China growing by 80%. We are now entering the third year of the drought, and these numbers are phenomenal against that background.”

Towfiq Hendricks, Wesgro Agribusiness: Portfolio Manager, said:

“Wesgro’s 8-year-old agri-investment unit has been very successful to date and it is clear that our work is having a real, positive impact in the Province.

“In the past 3 years the unit has secured R1.4 billion in investment, creating 1 268 jobs in the Western Cape. Both of these were well above the targets set.

“There are also currently 26 exciting opportunities in the unit’s pipeline to the value of R1.5 billion. The Western Cape has a wealth of opportunities in the sector and our message remains – the Western Cape and Cape Town are a great place to invest!”

Ché Smith, Wesgro International Trade Manager: Asia, said:

“Wesgro has been tasked by DEDAT, under the Project Khulisa programme, to develop and implement the Western Cape Halal Export Promotion Strategy.

“The Wesgro Trade Unit will be presenting an update on our export strategy to assist Western Cape based companies to capitalise on the growing halal international market. This is now the second year that we are implementing the strategy.

“In the international markets, we have noticed that there is great interest and demand for halal products and services.”

Minister Winde said a key objective of the growth strategy was to expand access to the agri processing and agriculture sectors: “I am also especially pleased to announce that we’ve expanded access to the industry, through transformation projects and support for emerging farmers.”

Minister Winde said this included a supplier development programme targeting businesses in the Halal Industry.

“An analysis of the Halal Industry found that globally, $1.26 trillion is spent each year on Halal food, pharma and cosmetics. Of this about $250 billion is imported across international borders. The Western Cape currently has a share of about 0.3% of this market.  If the province could capture 1% of global trade in Halal products and 1% of the global Muslim tourism market, it would add R56 billion to the Western Cape economy. Since the launch of Project Khulisa, we have made significant progress in equipping our local industry to take advantage of these opportunities.”

Darryl Jacobs, Deputy Director-General of the Western Cape Department of Agriculture, provided an update on the drought.

“We have surveyed producers in the sector, and they expect an average decline in production of around 36.9%. If this scenario transpires, this would translate to R4.96 billion Gross Value Add (GVA) decline for 2017/2018, which represents 27% of our sector. The potential impact is job losses of 35 634. This is why we have committed to supporting commercial and emerging farmers, and have spent R67 million to date in monthly support.

Below is a snapshot of the key indicators:

  2014 2016 Growth
Agri Processing Jobs 2014, Q4: 201 105 2016, Q4: 231 340 30 235
Primary Agriculture Jobs 2014, Q4: 132 147 2016, Q4: 253 293 121 146
Agriculture and agri-processing Jobs (double counting corrected) 2014, Q4: 320 736 2016, Q4: 448 233 127 497
Wine exports to China (litres): 8 713 864 15 760 054 7 046 190

(81%)

Gross Value Add of agri-processing (Real) R21,938 billion R22,117 billion R 179 million (0,82%)

 

In 2014, Project Khulisa outlined the following interventions to grow the size of the agri-processing sector:

Grow the Western Cape’s share of the global Halal market
2014 Khulisa goal 2017 update
Halal value chain analysis An analysis, from global to local, of the Halal Industry was completed in 2016, which outlined the value of the industry.  In order to develop this market, the Western Cape is focussing on the following five priorities:

a)     Information sharing and networking.

b)     Removal of market access barriers.

c)     “Future proofing” the Industry through accreditation and certification.

d)     Promotion and marketing.

e)     Skills and talent attraction.

 

Establish a Halal processing hub A pre-feasibility study on a Halal Industrial Park was completed in 2016.  Following this, feasibility studies and investor prospectuses for the 3 preferred sites (Klapmuts, Lynedoch and the Airport) were completed. A general investment prospectus for the Western Cape Halal Industry was also developed.  Wesgro will embark on a marketing process to solicit private sector investors for the proposed processing hub.
Promote SA Halal products in key markets Seven target markets for the Western Cape’s Halal exports have been identified.

·         Nigeria

·         Senegal

·         UAE

·         Singapore

·         Malaysia

·         Thailand

·         China

Wesgro is driving this project and missions have been undertaken to Senegal (R100 million in business secured), Singapore, Malaysia, and Thailand. An inward buying mission is scheduled to take place later this month, which will bring together international buyers and local Halal certified producers.  An international Cape Halal Expo is also planned for 2018.

Ensure SMME and PDI access to the Halal value chain The Western Cape Government completed a Halal Supply Chain Strategy aimed at unlocking opportunities for SMMEs in the Halal value chain. In order to support SMMEs to grow their businesses and create market access, we have developed a supplier development programme. In total, we received 40 applications. We are working with the certifiers to further expand this project.
Ensure effective governance in the Halal industry To ensure that there is private sector buy-in, proper consultation and interaction with our Muslim population and effective coordination between various organs of state, a governance structure has been created to support the Halal Industry.  This structure consists of three levels and they are all fully functional with quarterly scheduled meetings:

a)     Western Cape Halal Intergovernmental Task Team

b)     Halal Stakeholder Forum (Halal industry representatives)

c)     Muslim Consultative Forum.

 

The Intergovernmental Task Team met for the first time in January 2016 and the inaugural meeting of the Muslim Consultative Forum took place in April 2017.

Ensure a Halal certification standard In spite of its small percentage of Muslims (1.2 million), South Africa has emerged as a leader in the Halal food industry. This is due to advanced Halal certification programmes. It is estimated that around 60% of all products on display at retail outlets in South Africa are Halal certified.

Halal certification gives companies a competitive edge and increases access to more consumers domestically, and more export markets.

We are seeking to develop best practice on Halal certification, with the following objectives:

·         Gain better understanding of Halal certification process

·         Ensure proper market access

·         Build capacity of local support institutions

The Western Cape Government has initiated engagements with the following major Halal certification bodies:

  • The Muslim Judicial Council (MJC),
  • South African National Halal Authority (SANHA)
  • National Independent Halal Trust (NIHT)
  • Islamic Council of South Africa (ICSA)
  • Majlis Shura

 

Double the value of wine and brandy to China and Angola by 2025
2014 Khulisa goal 2017 update
Develop and implement a campaign to promote SA wine and brandy in China In collaboration with WOSA and WESGRO, the Western Cape completed several promotion activities in China in 2016 and 2017.  These included participation in Prowine China, networking events and inward buying missions.  These actions contributed to a steady rise in wine exports to China (81% growth over the period 2014 to 2016).
Develop and implement a campaign to promote SA wine and branding in Angola WOSA and WESGRO also led a range of promotions to Angola. Despite a significant contraction in the Angolan economy due to the oil slump, our preliminary 2017 data projects a 50% year-on-year increase for the first six months of this year.
Domestic promotion of high end brandy We have supported the SA Brandy Foundation by co-funding a process to develop a GI (Geographic Indication) for premium potstill brandy. GI sets out to legally protect a product with a unique geographical origin.
Develop infrastructure to address critical constraints (Brandvlei) By increasing the inlet-canal of the Brandvlei dam by 30 cm, an additional 33 million m3 of water can be stored.  This is enough to irrigate 4 200 hectares and it will attract R2.2 billion in investment, create 8 000 jobs and lead to the achievement of 56% of the land reform target in the area.  To this end an inter-governmental platform was established.

The current and prospective land owners have reached a consensus on the allocation of the water and a development framework for the water use was completed.

Transformation Over the past two years the Western Cape Department of Agriculture has supported 14 projects to the value of R20.3 million leading to the creation of 279 jobs.

Five BBBEE wineries were supported to participate in Prowine China in 2016.

Increase local capacity to process agricultural goods for the domestic and international market
2014 Khulisa goal 2017 update
Develop a database of products which can be produced in the Western Cape The purpose of this project is to identify alternative products, currently being imported, which could be produced in the Western Cape.  An analysis of food products consumed by permanent residents in South Africa has been completed. The focus is on products consumed by immigrants to South Africa, who import products from their home countries in large volumes.

A further analysis to identify the Western Cape’s competitive industries, down to the Harmonized System (HS), level 6; this is an internationally standardised system to describe and classify traded products. This allows for comparative data to be captured internationally and import and export figures can be compared between countries.  Through this project, 1 351 agricultural and agri-processing products have been analysed.

Build residue and quality testing facilities Residue testing, for hormones and heavy metals, will increase market access for our exports.  The Western Cape Department of Agriculture is establishing a residue testing facility at its Veterinary Laboratory in Stellenbosch.  Testing for the local market will start at the end of this year. After testing, accreditation for exports can be finalised.
Innovate and gain efficiencies in agri-processing To share practical advice with the industry, we partnered with the AgriFood Technology Station at the Cape Peninsula University of Technology (CPUT) to develop a booklet on “How to start a Food Company”. The booklet was produced in three languages (English, Afrikaans and isiXhosa). We have also collated an index of agri-processing equipment at research- and other institutions in our country.  This index (or list) will enable start-up (and existing) food processing businesses to access specialised equipment for small production runs.
Inland Port Terminal A feasibility analysis of an inland port terminal for the export of fresh fruit was completed.  This facility will make the cold sterilisation or irradiation of fruit possible and it will also enable fruit to be transported by rail from the facility to Cape Town harbour.  However, it was found that, under current conditions, this project is not yet financially feasible.
Build skills required to grow the agri-processing sector To develop skills in the agri-processing sector, we have established the Technical Advisory Forum and launched an apprenticeship programme. The forum and programme are engaging industry in partnerships. In 2016, 30 blockmen were trained. By the end of 2017, 40 slaughterers will have been trained.

We are also offering mentor training and Recognition of Prior Learning (RPL) programmes to industry, and will be engaging industry stakeholders to increase uptake on 19 October.

Enhance access for emerging farmers Over the past two years, 112 projects in the fruit and red meat industries were supported to the amount of R65 million.  These projects created 1 335 jobs.

 

 

 

 

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