Agri-business

Driving economic development through value-add processing

Agriculture and agribusiness is one of the most important sectors in the Western Cape, and involves all the different activities that link the entire value chain from the farm/forest/fishery to the consumer. This includes inputs, production, processing, marketing and distribution of agricultural, forestry and fishing products.

The combined contribution of agriculture to the gross regional domestic product (GRDP) of the Western Cape is just under 5%, but these sectors are very important to the provincial economy and its export profile. The winter rainfall of the Boland and the year-round rainfall of the Southern Cape provides agricultural conditions that make the crop mix and production potential unique. As many as 11 commodities contribute significantly to agricultural production, with fruit, poultry/eggs, winter grains, viticulture and vegetables together comprising more than 75% of total output.

The Industry in Numbers:

• The Western Cape’s 13 million ha of agricultural land produces 55-60% of South Africa’s agricultural exports, and more than 20% of South Africa’s total agricultural output
• There are over 9,700 farms in the Western Cape, with an average farm size of 1,000ha
• The City of Cape Town accounts for approx. 27% of agri-business activities in the Western Cape
• The main processed agricultural products exported from the City of Cape Town are beverages and spirits worth ZAR660m, processed meat and fish worth ZAR240m, and processed vegetables and fruit worth ZAR200m
• Foreign Direct Investment (FDI) in the Western Cape since January 2003 to date is just under ZAR600m
• The industry has witnessed 2.3% growth p.a. in real output between 2003 and 2009

Main Advantages of Investing in the Western Cape in Agribusiness:

• Cape Town has excellent transport and cold chain infrastructure – including road, rail, harbour, airport and processing facilities
• There are long established and sophisticated research and development (R&D) facilities at several locations in the Western Cape, including two universities offering advanced programmes in cereal science, fruit technology, plant biotechnology and viticulture
• There are still a large number of unprocessed agricultural exports from Cape Town, providing a large number of food segments that remain underdeveloped as opportunities for further investment
• Incentives The South African Government provides an array of funding opportunities for international and domestic investors. Based on the New Growth Path, South Africa’s foremost policy document that supports job creation and economic development, the incentives mainly promote value-added manufacturing and processing facilities rather than primary agriculture. The incentives offered include the Manufacturing Investment Programme (MIP), as well as some R&D incentives for technology design and research. There is also industrial financing that is made available to agro-processing through the Industrial Development Corporation (IDC). For more information, please click here to be directed to our incentive brochure. Contacts For further information, please contact one of the Agriculture Portfolio Managers below:

• Salman Kajie – Agribusiness Portfolio Manager, Email: salman@wesgro.co.za

Tel: +27 (0)21 487 8600