How the IDC can stimulate SA agriculture …

1. How the IDC can stimulate SA agriculture … Rian Coetzee Head: Food, Beverage & Agro Industries Agri Outlook Conference 30 September 2009

2. The context – a Developmental State “The developmental state concept is an attempt to bridge the gap between a centrally planned economy and a free market system, without emphasizing an ideological position.” Ben Turok Wealth Doesn’t Tricle Down: The case for a Developmental State in SA 2008

3. Introducing the IDC … • Established in 1940, owned by the Government of South African & 100% self-financing • Provide risk capital to commercially viable businesses in various sectors • Mandated to invest in the whole of Africa (since 2000) • Strong capital base developed through years of sound investments • Differentiation: • Identification, development & funding of projects in partnerships with others • Promotion of & investment in viable new industries • through risk-taking and flexibility in structuring IDC Head Office, Sandton (also 8 regional offices) Passion, Partnerships & Professionalism

4. Leadership in Development To be “the primary driving force of commercially sustainable industrial development and innovation to the benefit of South Africa and the rest of the African continent” Vision The IDC is a self-financing national development finance institution whose primary objectives are to contribute to the generation of balanced, sustainable economic growth in Africa and to the economic empowerment of the South African population, thereby promoting the economic prosperity of all citizens. The IDC achieves this by promoting entrepreneurship through the building of competitive industries and enterprises based on sound business principles. Mission Supporting industrial development capacity Objectives Promoting entrepreneurship Sustainable employment Growing sectoral diversity Regional equity Growing SME sector Industrialisation in the rest of Africa Broad-based black economic empowerment Outcomes Environmentally sustainable growth New entrepreneurs entering the economy Local beneficiation Growing export sector

5. Agricultural value chain

6. Sector focus Primary Agriculture Secondary Agriculture Food Field crops ** Beverage Horticulture Agro-industrial Livestock ** Fishing & aquaculture • * Rest of Africa focus on Secondary or backward integrated projects • ** Exceptions • integrated projects • Special government initiatives

7. IDC Agri-business portfolio Sugar milling Bio-ethanol Nuts Fruit - Grapes Fruit - Apples Fruit - Citrus Processing - Meat Tea Wholesale Fruit - Berries Fibre Fruit - Subtropical Flowers Processing - Snacks • Total exposure & commitment = ZAR3bn • 20% (of value) outside South Africa • 80% (of value) in equity investments Processing - Fish Starch Fruit - Persimmon Beverages Processing - food Biotech Acquaculture Fruit - Cherry Meat processing Vegetables Oils Other ZAR 100.000.000 200.000.000 300.000.000 400.000.000 500.000.000 600.000.000

8. Environmentalism Mega consumer trends Sustain & grow competitiveness Indigenous resources SADC & rest of Africa Competitive import replacement Food security Opportunity drivers

9. Wholesale partnerships “Hub” partnerships Strategic partner Agribusiness Small farmers 170 emerging cash crop farmers in North West & Free State 16 citrus farmers in Alice/Kat River area, Eastern Cape Small farmer development

10. Worker empowerment - Keboes Fruit farms Description – 500ha table grape development in Northern Cape, producing 1,91 million cartons of table grapes p/a IDC investment – R60m equity & quasi-equity IDC role – share warehousing for BEE group & workers Development outcomes – 1,000 jobs, worker empowerment; rural development BMFI Broad-based black economic empowerment Community empowerment - Amajuba Berries Description - 60ha raspberry farm in Volksrust, KZN IDC investment – R14m equity; R11m debt IDC role – project identification & facilitation; equity investment; partner identification; business support Development outcomes – 440 jobs; community ownership; new industry; R30m/a exports; rural development

11. Kenaf - Sustainable Fiber Solutions Description – Plant based in Winterton, KZN, involved in the de-corticating of kenaf stalk and produces base fiber, core and fines used in the manufacture of bio-composites in the for automotive use – now also used for construction material & oil spillage IDC investment – R85m in equity IDC role – feasibility funding (trials); Development outcomes – new industry; massive job creation through the agricultural development; rural development Pro-active project development Biofuels - Arengo Description – The production of 90 million liters of fuel grade bio-ethanol p/a from sugar beet in the Eastern Cape. IDC investment – R414m equity & debt IDC role – pre-feasibility & feasibility funding; sponsor role; equity & debt underwriting Development outcomes – new sector; small scale farmer development; empowerment; rural development

12. Casquip Starch, Swaziland Description – Cultivates cassava and produces starch in Swaziland IDC investment – R37m in quasi-equity IDC role – co-investment & partner selection Development outcomes – 1,500 jobs; rural development; SADC import replacement Foreign direct investment in the rest of Africa Matanuska, Mozambique Description – 3,000ha of banana plantation, Nampula, Mozambique IDC investment – USD10m quasi equity; USD10m debt IDC role – co-investment & partner selection Development outcomes – 5,000 jobs; infrastructure development; rural development

13. Day Month Year The Industrial Development Corporation 19 Fredman Drive, Sandown PO Box 784055, Sandton, 2146 South Africa Telephone (011) 269 3000 Facsimile (011) 269 2116 E-mail callcentre@idc.co.za Passion, Partnerships & Professionalism