From worker to board member – that is what a R200m investment initiative for the citrus industry in the Sundays River Valley will mean for 120 employees.
San Miguel, global experts in fresh fruit and processed citrus, officially launched the Thudana Citrus Trust in Addo on Monday.
The trust gives a select number of workers 30% ownership of the Thudana Citrus Company, a broad-based black ownership scheme.
But San Miguel Fruits SA country manager Andries du Preez said the initiative was not aimed at just handing a farm to employees.
“Thudana Citrus is a complete citrus operation and our aim is to empower the community over the long term, through education, training and providing a unique opportunity to become part of a fully functioning citrus company,” he said.
The San Miguel group of companies, a global Argentine agri-business listed on the Argentine stock exchange, has operated in SA as San Miguel Fruits SA since 2010. The company is the largest fresh citrus producer and exporter in the southern hemisphere.
With 62 years of experience, San Miguel provides supermarkets and multinational consumer goods companies with fresh fruit (lemons, oranges, mandarins and grapefruit) as well as their processed byproducts.
In June, San Miguel Fruits SA invested in additional citrus operations in the country, which included:
● 40% of Sun Orange Farms, a citrus-producing farm in Kirkwood with a cultivated area of about 242ha;
● 100% of Thudana Fruit, through which fruit is sold to the South African market, and
● Sun Citrus Packers, with assets which include a pack house with two lines and a maximum capacity to pack 140,000 bins (56,000 tons).
An undisclosed but large portion of the Thudana Citrus transaction was funded by Standard Bank, the bank’s head of agri-business, Nico Groenewald, said.
“South Africa is one of the leading citrus-exporting countries, and the citrus industry could play a significant role in achieving Vision 2030 of South Africa’s National Development Plan,” he said.
“A plan which aims to grow the local gross domestic product at an annual rate of 5.4% and to add a further million jobs in the agricultural and agro-processing sector.
“Partnerships like this create sustainable and successful transformation initiatives which benefit local communities and the wider South Africa,” he said.
Sivuyile Ceke, one of the 120 beneficiaries, said being a shareholder of an agricultural company meant being able to contribute towards the future of Sundays River Valley’s children.
Ceke, a safety officer at San Miguel Fruits, said being part-owner of the company could ensure long-term financial sustainability for both his family and the community.
“This venture is a completely new experience for me.
“We want this business to grow and we want it to work well,” he said.
As the new shareholders, the beneficiaries will also undergo training and be part of development programmes to make the transition from worker to board member a smooth process.
Another beneficiary, Sherif Jordaan, the shift manager at San Miguel Sunnybank, said it was important for all the beneficiaries to understand that the initiative was not a get-richquick scheme.
He said San Miguel, in educating the members, must make it understood that it could take years to generate consistent cash flow for the new owners.
“When you go into a venture like this, everyone must realise that it is a R200m loan for the business to be able to function,” Jordaan said. “We can’t just assume that by 2020 or 2021 money is going to be flowing in. It’s a long-term venture.”
Each member received a letter at the launch at the Africacons Country Estate to confirm their participation.
The trust beneficiaries from among the San Miguel and Sunnybank Pack House employees comprise 33 men and 20 women from San Miguel Fruits, 27 men from San Miguel Farming Services and 29 men and 11 women from San Miguel Sunnybank.
Speaking at the launch, deputy agriculture minister Nonhlanhla Buthelezi said the initiative was a clear response to the challenges of food security and job creation.
“If agriculture doesn’t work, we will never be able to deal with unemployment in this country.
“We hope that this initiative will increase black agri-business success and improve access to markets and help existing black agri-businesses to grow their operations to ensure that the food basket of this region overflows from generation to generation,” Buthelezi said.
“Agriculture remains a very sensitive industry as the drought disaster continues to affect various parts of the country.
“We are in constant contact with industries to find mitigating strategies to deal with this challenge.
“As you know, when agriculture sneezes, the whole economy catches a cold.
“The technical recession that we experienced last year was partly due to the poor performance of the sector – we should avoid that at all costs.”