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Home>> Industrial Development>> Sectors >> Agro Processing

Agro Processing Sector

Despite the continued ripple effect of the 2008 economic meltdown, food processing remains resilient. It is one of the largest manufacturing sectors by employment, with an estimated 207 893 jobs in the third quarter of 2013, and makes a significant contribution to total manufacturing value-add. Agro-processing has been identified as a segment with the potential to actualise macro-economic objectives as pronounced in the New Growth Path (NGP) and National Development Plan (NDP).

A key characteristic of the agro-processing sector is its strong up- and downstream linkages. Upstream, the sector links to primary agriculture across a variety of farming models and products. Downstream, agro-processing outputs are both intermediate products to which further value is added and final goods, which are marketed through wholesale and retail chains as well as a diverse array of restaurants, pubs, shebeens and fast-food franchises. This link with agriculture makes it critical for employment creation and poverty eradication.

For the purposes of data continuity, the agro-processing sector is defined in statistical terms by the food-processing and beverage manufacturing sub-sectors.

Sector Economic Data

Variable Contribution in 3rd Q of 2013
Agro-processing (% of GDP (R49bn) in manufacturing) R7.7bn (16%)
Agro-processing employment (% of manufacturing) 207 893 (18,2%)
Trade balance -R1.4bn
Source: Quantec and StatsSA

Key Opportunities

Agro-Processing

  1. This Directorate oversees the development of the various sub-sectors in agro-processing by providing strategic interventions to increase production and competition and grow exports. To achieve this, the directorate develops policies, sub-sector strategies, programmes and projects in consultation with the various affected industries.
  2. The following form the basis for the above interventions:

    • Conducting research and analysis to inform policies, strategies, projects and programmes;
    • Facilitating the implementation of policies, strategies and interventions in agro-processing sub-sectors; and
    • Monitoring and evaluating policies, strategies and interventions in agro-processing sub-sectors.

    The following sub-sectors reflect the scope covered by the unit in the agro-processing sector:

    • Aquaculture (marine and fresh water sub-sector);
    • Floriculture;
    • Fruit and vegetables;
    • Dairy;
    • Meat (poultry, exotic meat, ostrich, equine, sheep, beef and goat);
    • Grains (maize, barley, wheat , sorghum and rice);
    • Beverages (tea, non-alcoholic beverages, fruits juice and alcoholic beverages);
    • Edible oils (soybean, sunflower, canola, olives, dry bean, ground nuts and other nuts (macadamia, almonds, hazelnuts, etc.);
    • Sugar and confectionery sector; and
    • Tobacco.

    In the short to medium term, the focus for the unit is on the following:

    • Expansion of domestic market for locally produced soybeans through facilitating off-take agreement between producers and processors supported by the dti incentives;
    • Development and implementation of measures to increase the affordability of soy-based food products by reviewing pricing of wet soy-based food products on retail shelves;
    • Collaboration with Food Science Institutions such as VUT to implement the development of new soy foods;
    • Expansion of domestic and export markets for South Africa's macadamia nuts by developing action plans with industry associations and individual companies through the dti incentives;
    • Increased investment in the aquaculture sector, thereby leading to increased production, job creation and diversification of the sector through the dti ADEP incentive;
    • Development and implementation of domestic and international marketing campaigns for South Africa's aquaculture sub-sectors or species;
    • Development plan of the South African poultry industry;
    • Acceleration of local production of GMO-free maize for the beverage industry; and
    • Development of general research on the sub-sector value chain (natural casings value chain for the meat-processing industry, dairy sector and dry bean sector).

  3. Secondly it is also responsible for co-ordinating the ABU's work in key cross-cutting thematic areas. The expertise in this area is more varied and requires more generic skills such as trade and regulatory as well as innovation and technology development expertise. Key themes for the Directorate are:
    • Technology and innovation;
    • Competition policy and regulatory affairs;
    • Intellectual property rights and brand development;
    • Food security; and
    • New product innovation

    Current activities in the sector include but are not limited to the following:

    • Small-scale milling;
    • Establishment of new industries (commercialisation of starch);
    • Commercialisation of organic products;
    • Wet milling;
    • Company-specific interventions;
    • Production efficiency in the vegetables and canning industry; and
    • Innovation and skills.

Historically Disadvantaged Individuals (HDIs) importers workshop

South Africa has granted a quota of 65 000 MT of United States of America's bone-in chicken portions into the South African market from which anti-dumping duties would be exempt. To encourage economic transformation, 50% of the quota will be allocated to the Historically Disadvantaged Individuals (HDIs). the dti, in conjuction with the Department of Agriculture, Forestry and Fisheries, the US Embassy and the US Poultry and Egg Export Council, hosted a training workshop for HDIs in Pretoria, 1-3 March 2016. The workshop was attended by 62 participants including HDIs companies, government officials, State Owned Enterprises (SOEs), industry, and the private sector. The main purpose of the workshop was to equip the HDIs with the necessary information regarding import processes, custom procedure, as well as veterinary health issues, since most of the HDIs have not imported or exported before. Further, the workshop provided networking opportunity.

The topics presented and presenters with their organisations

For more information kindly contact: Mr Solly Molepo, Deputy Director: Agro-processing, Industrial Development Division (IDD), e-mail: SMolepo@thedti.gov.za

Success Stories from 2012-2014

Organic Retailers Programme Launch with Pick n Pay at Furrow Hotel in Johannesburg


Minister Dr Rob Davies, executive members from Pick n Pay and Mr Mushwana of Nkomamonta at a media briefing in Johannesburg
On 23 March 2012, the Minister of Trade and Industry, Dr Rob Davies (MP), launched the Organic Retailers Programme (ORP) with Pick n Pay in Johannesburg. The objective of is to promote poor-resourced small-scale producers to sell directly to formal retailers. Pick n Pay agreed to set aside shelf space for organic products in its stores.



Nkomamonta launch on 31 May 2012 in Limpopo

Bheki Dlamini Nkomamonta launch on 31 May 2012 in Limpopo

Pick n Pay has signed an agreement with Nkomamonta, a registered co-operative comprising 15 individual farmers located in and around the Great Tzaneen Municipality (GTM) in Mopani District, Limpopo. The primary activity for the co-operative is the organic production of vegetables. The co-operative also benefitted from the organic certification programme, whereby the dti has taken full responsibility to pay for the certification costs of small-scale organic producers. In addition, this co-operative received assistance through the Co-operative Incentive Scheme (CIS) in 2013.


the dti and African Micro Mills Launch in Kwazulu-Natal


Minister Dr Rob Davies, DG Lionel Lionel October, Se` Higgins

the dti and African Micro Mills launched the first of smaller scale maize mills under the Kuvusa Mills banner on 6 December 2012 as part of this initiative.

In an attempt to address high basic food prices and increase competition in the milling sector, the dti earmarked the small-scale milling industry as an Industrial Policy Action Plan (IPAP) priority intervention. The project supports and facilitates the market entry of small-scale maize mills through financial assistance from the dti's Manufacturing Investment Programme (MIP).


the dti and Buhler Launch New Innovation for Agro-Processing


the dti DDG Mr Garth Strachan and Buhler GCEO Calvin Griender

On Friday 12 April 2013,the dti in collaboration with Buhler launched Isigayo, a new innovation to boost agro-processing, in Johannesburg. The launch was attended by more than 100 stakeholders in the maize-milling industry. Isigayo is in line with the dti's IPAP in establishing a commercially viable, small-scale maize-milling sector that will increase competition in the currently concentrated milling industry.

The Isigayo maize-milling machine is a new technology that brings new entries into the market including small, medium and micro enterprises (SMMEs). It is fitted with standard Buhler equipment, pre-assembled in two containers and pre-engineered as a complete milling plant. Very little infrastructure is necessary and the mill is easily transportable. This is particularly beneficial for SMMEs that are expanding into milling.

Deputy Director-General at the dti Mr Garth Strachan launched the mobile machine technology.


The Eat Safe, Eat Well, Eat Local Campaign at Maponya Mall Soweto on 16 April 2013

The ABU of the dti hosted a generic domestic market campaign in collaboration with the South African Fruit and Vegetable Canners Association (SAFVCA), Proudly South African and the Culinary Arts Association of South Africa (CAASA). The nature of the event was two-pronged. It aimed, firstly, to educate the general public about nutrition and, secondly, function as a platform to market and promote the consumption of local produce to preserve and protect jobs in the agro-processing sector. It will also act as a conduit for Boland Pulp to showcase and launch its new products.

The company proudly supports local growers and works together with fruit farmers in the area, creating job opportunities and reducing the level of poverty. The Western Cape consists of municipalities with the lowest poverty rates in South Africa. Despite the low rates, households living in poverty have sunk deeper into poverty and the gap between rich and poor has widened. Hence Boland Pulp's existence in Wellington has to a certain extent created employment, improved people's standard of living and alleviated poverty.


Eat Well, Eat Safe, Eat Local South African Campaign and Exhibition at Vangate Mall

Minister Davies hosted the Eat Well, Eat Safe, Eat Local South African campaign and exhibition in collaboration with SAFVCA and Proudly South African. The event took place at the Vangate Mall in Cape Town on Tuesday, 22 October 2013.

The exhibition serves as a conduit to market and promote the consumption of local produce in order to preserve and protect jobs in the agro-processing sector. It is a platform for food demonstration and safety tips on food handling and preparation.

The Rhodes Foods Group launched and showcased new products as part of its exercise to revitalise the canning industry in South Africa. The products included various permutations of fruit cocktails, jams and vegetables with easy-open lids that do not require the use of a tin opener.

Food-processing companies such as Tiger Brands and others under the SAFVCA umbrella exhibited their product range and made available food items for the demonstrations.


The Memorandum of Understanding (Mou) Between the Old Mutual Masisizane Fund, the Foundation for African Business and Consumer Services (Fabcos) and the dti on 24 October 2013


Agro-processing Business Unit: Chief Director Ms Unati Speirs

the dti's Agro-processing Unit and Strategic Partnership and Customer Care Unit recognises that collaboration with the Old Mutual Masisizane Fund and FABCOS is necessary to ensure that the development of agro-processing enterprises leads to sustainable market-driven employment opportunities. The mutual exchange of information and services was a critical success factor to develop SMMEs in different sectors, particularly the historically disadvantaged individuals (HDIs). The main objective of this agreement was to assist HDI-controlled/owned businesses to become sustainable and to secure funding for the establishment of agro-processing enterprises. With this objective in mind, parties commit themselves to joint efforts within the parameters of their respective mandates.


Chief Executive Officers' Forum on 7 March 2014 at Cape Peninsula University of Technology (Bellville, Cape Town)

The Minister of Trade and Industry and the senior management of food-processing companies in South Africa agreed to the formation of a platform that would allow the agro-processing sector and Government to engage and share views on a variety of matters pertinent to the sector. Since the last sitting of the Forum there have been many developments in the domestic sector, some of which have resulted from the continued impact of the global financial crisis, e.g. declining exports as well as imports penetration.


Resourced-Based Industries

The mandate of this directorate is to lead and manage the development of forestry, timber, pulp and paper and furniture industries by developing policies and strategies for the advancement of these industries. Furthermore, the directorate continuously reviews the existing forestry, timber, pulp, paper and furniture industry policies and strategies with a view to reprioritise and identify areas of improvement. It is also the responsibility of this directorate to provide strategic support in the three spheres of Government in developing and implementing their projects for these industries.

The scope of work covered for this financial year and beyond includes the following:

Forestry Development

  • Charcoal Industry Development
    RBI hosted a successful charcoal workshop for the first time and charcoal producers and manufacturers came together to tackle issues affecting the industry. The charcoal industry is now working on establishing the association and organising the industry.
  • Environmental Impact Assessments/Forestry Development
    Through the integrated approach to forestry development, the dti helps fund Environmental Impact Assessments (EIAs) for afforestation in the rural communities of the Eastern Cape and KwaZulu-Natal. In 2011/2012, Eastern Cape communities benefited from this support and received afforestation licences from the Department of Water Affairs. The unit is currently funding EIAs in the Umzimkhulu Local Municipality.
  • Collaboration with Mozambique on Forestry/Regional Development
    Through RBI, the governments of South Africa and Mozambique are working on establishing a vibrant forestry value chain in Mozambique driven by South African investments. Two investment conferences/workshops will be held in 2014, one in Mozambique and the other in South Africa.

Enhance competitiveness in the furniture industry

  • Skills Development
    Furniture designs: The Forestry-based Industries unit is collaborating with FP&M Seta and SABS Design Institute to develop a furniture design course. This seeks to address the critical need for design skills in the furniture industry and increase the industry's competitiveness. Design workshops will also be held across the country in 2014.

Furniture clusters

  • the dti is working with furniture manufacturers, particularly SMMEs, to organise them into clusters. Cluster development aims to encourage co-operation and specialisation in the industry.

Company-Based Action Plans

Company-specific action plans for furniture and saw mills

  • As part of industry development, the RBI unit conducts factory visits for companies in the sawmilling and furniture industry. The purpose is to propose interventions that that can improve companies' competitiveness

Promotion of local content

  • Designation of local procurement of furniture by government departments and State-Owned Entities. The following categories were designated:
    • Office Furniture;
    • School Furniture; and
    • Bedding and Mattress.

Support Rendered By Various Government Departments

Contact Details
Ms Unati Speirs
Chief Director: Agro -processing and Resource Based Industries
Tel: 012 349 1149
Fax: 012 394 2149
E-mail: USpeirs@thedti.gov.za or LNgalo@thedti.gov.za