Africa provides a new market for agribusiness firms

December 18, 2013. CAPE-TOWN, South-Africa. News Release - African Press Organization (APO) Charles Brewer, Managing Director of DHL Express Sub-Saharan Africa, says that one particular sector which has seen significant growth in Africa is agribusiness, which entails the full value chain from agricultural production/farming through secondary processing, distribution and retailing to the end user/consumer (farm-to-fork concept). 

“The retail sector is booming in Africa, as is the rapid growth of populations and the African middle class. As a result of this expansion, there is a greater availability of and demand for good quality agricultural produce and processed food products than ever before.”

He points to the recent report by World Bank - Growing Africa: Unlocking the Potential of Agribusiness – which revealed that Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030 – a three-fold increase from the current size of the market which is estimated to be worth $313 billion.

“This expected growth highlights the growing market and many opportunities for South African agribusiness and related value chain role players to expand into Africa,” says Brewer.

Hennie Heymans, Managing Director of DHL Express South Africa, says that:

"While it was previously a great risk to get involved in Africa, today it is an even bigger risk not to be involved in Africa. Most major South African brands are now involved in Africa and small and medium enterprises (SMEs) are now also actively seeking opportunities. A big differentiator between businesses which are successful in Africa and those which aren’t is effective supply chain management, as the continent is still relatively new to businesses expanding into the area.”

According to Hennie van der Merwe, CEO of the Agribusiness Development Corporation (ADC), based in South Africa, Africa provides a new market for agribusiness firms.

“Given its increased spending power, demand for goods and untapped land resources, Africa is currently experiencing a revival in terms of its focus on agribusiness, not only to increase food self-sufficiency, but also to create jobs and economic activity, specifically in rural areas. In the current climate, Africa is increasingly offering greater growth forecasts. While Africa is well-endowed with resources, it often lacks much of the necessary expertise to unlock the commercial potential of its agriculture resources, whereas South Africa is well regarded for its expertise in commercial farming and agribusiness. One of the major limitations on agribusiness development in Africa is a human capacity and human skills constraint. The ability and experience to develop and manage commercial farming and agribusiness ventures are largely lacking in the African environment and that major technology transfer and capacity building would be necessary in this regard.” 

Van der Merwe says this is where the opportunity lies for local businesses and farmers to expand beyond their borders and offer expertise in neighbouring countries. It is vital to have partnerships in place before venturing into projects in Africa. 

“Partnerships with a local business or association in the specific country are necessary as business owners need to be provided with assistance, guidance and sometimes protection when in the area. It is also essential/indispensable to ensure that all the building blocks for working value chains are in place to ensure and support successful operation. A local partnership will also assist with analysing the market carefully to evaluate what the real market needs, requirements and opportunities are.”

About the ADC

• The Agribusiness Development Corporation (ADC) is a Cape Town based firm specialising in agribusiness project identification, development, 

  

  Hennie van der Merwe, 

  
  

  CEO of the Agribusiness 

  
  

  Development Corporation (ADC).

  facilitation and management across the African continent. Their vision is to see the development and growth of the agribusiness sector in Africa to become a major driver of economic development, job creation and empowerment on the continent.
• Its core competence is its knowledge and understanding of the principles and requirements of commercial agribusiness projects in the African environment and ability to mobilise skilled professionals and other role players that can add value, enhance profitability and ensure sustainability of interventions.
• It is currently working with over 60 product and service providers – from aquaculture firms and irrigation system manufactures, to greenhouse suppliers and cold storage specialists – to develop agribusiness and rural development solutions for Africa.
• The ADC has been involved with numerous agribusiness projects across the continent and has experience in a number of countries, including Nigeria, Tanzania, the Democratic Republic of Congo, Sudan, Angola and Mauritius, to name a few.

Related:

1. Forthcoming events Agribusiness Africa
2. 14 June 2012 Africa Agribusiness Forum

Important Business Initiatives Introduced: A short description by Corin Mitchell (AECF) about the funds available and how to qualify to get these funds. Right-click to download presentation(s):

• Corin Mitchell [.pdf – 0.8MB]

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