Zeder sows seed of a bold plan to grow agribusiness in SA
Looking for a big payback from investment in marketing seeds, fruit exporting and logistics, and ‘urban farming’
With large new opportunities proving elusive, Zeder, the PSG-controlled agribusiness investment company, is looking for a big payback from two new greenfield ventures.
Speaking at an AGM on Friday, CEO Norman Celliers said that while Zeder was still determined to find one or two substantial new investments, there would be a focus on building on smaller growth investments.
“We have been in a position where we looked at substantial new investments … but, among other things price expectations were unrealistic, and we walked away.”
Zeder’s main value store is in its 27% stake in Pioneer Foods – but it was new developments at subsidiary companies Zaad, a seed marketing business, and Capespan, a fruit exporting and logistics group, that were highlighted at the AGM. A new urban farming venture is also underway.Celliers said Capespan’s operations had been restructured, refocused, realigned and reinforced over the past three years. He said the company now operated as two focused divisions.
The fruit division concentrated on procurement, exporting and more recently farming. Celliers said the investment in farming was critical in demonstrating to clients that Capespan was close to its fruit procurement efforts. “Clients don’t just want to deal with a ‘middle-man’.”
The logistics segment – which includes valuable port and terminal operations – has been successfully diversified from handling mainly fruit exports to include general cargo.
The logistics division had also invested in a start-up company that offered technology solution to transport operators.He said the The Logistics Company (TLC) offered transport management solutions and fuel management solutions for Capespan as well as third party logistics groups.
“Basically TLC is digitalising the agri-transport industry, allowing cargo owners to choose instant quotes from quality transport companies. We see it as an Uber version of the transport industry.”
Celliers reckoned rapid growth was possible – but stressed that the seed capital provided by Zeder acknowledged the venture capital type investment risk. He said the initial focus was SA, but added that a global application was possible.
Turning to Zaad, Celliers stressed the seed marketing business boasted strong intellectual property in a very attractive industry.He said Zeder had invested R145-million in Zaad during financial 2018, and had invested another R200-million via a rights issue recently. “Our goal is to build a leading global hybrid seed group of companies with market leadership in emerging markets.”
Celliers disclosed that Zeder had also partnered with Can-Agri, a specialist in smart farming facilities in urban areas.
Can-Agri offers farming solutions in areas where agricultural land is on the decline or where environmental damage has prompted a rethink of traditional farming methods.
Celliers said Can-Agri was a venture capital investment that allowed Zeder to test a new concept. “It’s at an early stage – but we think this is a concept that has legs. There could be global applications too.”
He said Zeder had committed to funding the construction of a full-size commercial farming unit in Pretoria with the first crop planting set for September this year. “Hopefully we will soon have a large fresh produce factory.”