Free State Business 2017 edition

OVERVIEW
separate regions for the rest of the
Free State (east, north and south)
as the province forms a vital part
of the group’s portfolio. The company
deals with no less than 20%
of the country’s oilseeds and grain
through its 68 silos.
At the NAMPO event, Senwes’
commodity trading company,
TradeVantage, signed a deal with
Meadow Feeds to supply the
animal feed supplier with 800
000 tons per year until April 2018.
This is said to be the largest single
maize contract to be signed in
Southern Africa. Meadow Feeds,
a subsidiary of Astral, will use the
maize to feed 37-million chickens
on a daily basis. The national feed
industry has an annual turnover of
R50-billion and if this money has
to be spent in dollars to buy the
raw materials, it becomes a very
expensive business.
VKB Agriculture, another of
the province’s large agricultural
companies that used to
be farmers’ co-operatives, has invested heavily in the Grain Field
Chicken abattoir in Reitz (together with the broiler houses in
Tweeling). The Industrial Development Corporation (IDC), which
has a 23% stake in the project, intends to help develop the Free
State as the poultry hub of South Africa.
The VKB headquarters are in the town of Reitz in the northeastern
part of the province and the group has nine brands
in sectors such as fuel, grains, animal feed and foods. The
financial division held information sessions with emerging farmers
in 2016 to explain how farmers can benefit from the partnership
between VKB and the Land Bank. VKB has development programmes
with 51 emerging commercial farmers (cultivated area
5000ha) in the Free State and data on 140 developing farmers on
its Free State database.
During the course of 2016, the IDC lent R400-million to the
Land Bank to help farmers deal with the multi-year drought,
which only broke in late July. Grain SA reported that more than
3.5-million tons of maize would have to be imported to South
Africa for the 2016/17 season.
The drought has had the effect of reducing the agricultural
sector’s influence on provincial GDP (from 8% to 5%) but the
province still supplies almost all the country’s cherries and about
half of the country’s maize and sunflower seed. In addition, a third
of South Africa’s wheat comes from the Free State.
About 24% of South African beef and 17.4% of sheep (mutton
and wool) is produced in the Free State. A recent development
has seen the province increase its share of the soya bean market. It
43 FREE STATE BUSINESS 2017