1. The South African Fruit Industry & the National Development Plan
Konanani Liphadzi
CEO: Fruit SA

2. Content FSA Structure & Strategic Intent Fruit Industry Overview
Fruit Industry Contribution towards the NDP priorities
Key Challenges and Opportunities
Conclusion

3. FSA structure & strategic intent

4. Fruit South Africa Structure
FSA was established in the early 2000’s as an umbrella organisation for the different fruit sectors.
Initially FSA operated without any staffing and as an informal body.
In 2013 Fruit South Africa was formalised as a not for profit company.

5. Strategic Intent & Objectives
To enable the SA fruit industry to be competitive, equitable and sustainable
Objectives
Establish FSA as the collective platform for the fruit industry of SA
Engage constructively with government and other public institutions on policy, legislation and other fruit industry matter
Engage constructively with other strategic stakeholders
Promote and coordinate broad based BEE, transformation and skills development (training)
Gather and disseminate key industry related information
Communicate industry information to broader public and industry stakeholders

6. Key Priories Market access and Trade enabling
Government policy and legislation
Infrastructure
Information
Technology
Agricultural education and training
Biosecurity
Institutional arrangement
Brand Fruit SA

7. Fruit Industry Overview

8. SA Fruit Industry Statistics
4.4 million tons of fruit is produced annually

9. SA Fruit Production Foot Print

10. Average Market Segmentation of Fruit Produced

11. Market segmentation of fruit produced
Annually, 600 000 tons of fruit is supplied
to the local market, traded at wholesalers,
formal municipal and metropolitan markets
1.2 million tons is supplied to processing plants
for production of fruit concentrate, fruit juices
and Canned fruit
51 000 tons is processed into dried
fruits for both local and export markets

12. SA Fruit Industry Statistics
More than 50% of all agricultural
exports from South Africa is fresh fruit
2.7 million tons of fruit (out of 4.4
million tons produced) is exported to
more than 87 countries in the
world annually
Major export destinations: EU, UK, Far
East, Russia, Middle East, USA/Canada

13. South African fruit export markets (volume in 2013)4% 3%
UK 15%
Russia 9%
16%
19%
EU 34%

14. Fruit Industry Contribution towards the NDP priorities

15. National Development Plan (NDP)
The NDP sets out ambitious goals for poverty reduction, economic growth, economic transformation and job creation by 2030
Vision 2030: is for rural communities which are spatially, socially and economically well integrated – where there is economic growth, food security and jobs as a result of agrarian reform
The private sector has a major role to play in achieving these objectives

16. NDP: Agriculture Sector Objectives
Agriculture Milestones: by 2030,
agriculture is expected to create million new jobs
the country to realise food surplus, with one-third produced by small-scale farmers or households
ensure household and nutrition security

17. NDP - Picking The Winners
Ref. BFAP

18. Fruit Industry Contribution: GDP
The fruit industry contributes significantly to the RSA economy with an annual turnover of R24,4 billion composed of:
Exports - R19, 8 billion.
National (Local) sales of fresh produce – R2,6 billion
Fruit supplied for processing – R1,8 billion
Fruit supplied for drying – R0,3 billion
Given that Agriculture contributes 2,5% to the country’s GDP (±R98 billion), therefore, the fruit industry is a major contributor to agriculture’s contribution to the economy

19. Job creation and Employment
165 000 people directly employed
at an annual cost of R5,3 billion
This represents 10% contribution toward
the overall employment in the agric sector
8 000 people directly providing services to
the fruit industry at an annual cost of R1,6 billion
people employed in downstream service positions at R1,8 billion per annum
The fruits sector ranks highly in terms of labour intensiveness and growth potential
(NDP)

20. Transformation Initiatives
Annual Budget
(2014/15)
Number of beneficiaries
Estimated targets for the next 5 years ( )
Budget
Beneficiaries
Development and support of black owned enterprises
5 293
15 910
Equity schemes
4 023
4 224
Skills development and Training
2 119
8 314
Mentorship programs
2 308
6 018
Bursary
137
715
Social responsibility programs
2 310
3 493
Total
16 190
38 674

21. Transformation Capacity
Association
Transformation Champion
Contact Details
Mr Lukhanyo Nkombisa
Tel
Mr Phil Bowes
Tel
Mr Kevin Maart
Tel
Ms Nomvuyo Matlala
Tel

22. Key Challenges & Opportunities

23. Key Issues facing the Fruit Industry
Raising production costs (labour, electricity, fuel, agro-inputs, etc.)
Uneven international trade environment (tariffs, SPS, non-tariff barriers)
Inadequate infrastructure (road, rail, ports, etc.)
Policy uncertainties (land reform, NDP, etc.)
Transformation (snail pace, impatience, etc.)
Evolving production environment

24. Key Issues facing the Fruit Industry
Capacity within government to implement the various regulations and effectively monitor throughout the value chain (right people, right skills, right placing, adequate numbers, etc.).
Ability to provide the support and regulatory services which are necessary for the fruit to be export market ready.
Very high initial capital investment required
depending on the fruit type, an average estimated cost for establishment of an orchard is R250 000 per ha with annual maintenance cost of R40 000.
bearing in mind that most fruit trees will bear fruits after 5 to 7 years, cash-flow becomes an important success factor.
This may be a great barrier to entry, especially for small-holder farmers

25. From harvest to home: product chain

26. Key Issues facing the Fruit Industry
Capacity within government to implement the various regulations and effectively monitor throughout the value chain (right people, right skills, right placing, adequate numbers, etc.).
Ability to provide the support and regulatory services which are necessary for the fruit to be export market ready.
Very high initial capital investment required
depending on the fruit type, an average estimated cost for establishment of an orchard is R250 000 per ha with annual maintenance cost of R40 000.
bearing in mind that most fruit trees will bear fruits after 5 to 7 years, cash-flow becomes an important success factor.
This may be a great barrier to entry, especially for small-holder farmers

27. Opportunities

28. NDP Imperative: 1 million jobs created in Agriculture by 2030

29. Growth Opportunities Citrus 60 000 15 000 9 900 Grapes 23 526 4 705
 Commodity
Surface area 2010/2011(ha)
Additional surface area (expansion potential) (ha)
Additional jobs on farm
(Up) Downstream jobs
Citrus
60 000
15 000
9 900
Grapes
23 526
4 705
7 622
5 031
Deciduous
47 569
4 998
6 475
4 274
Subtropical
36 706
15 302
29 554
19 017
Total
40 005
58 651
38 222

30. Increased Production & Market Access
Domestic market is growing with the growth of the middle and upper class
New markets in the Far East, Asia, Russia and Africa
Potential for increased fruit production as land reform projects become fully productive

31. Conclusion
The labour intensiveness and growth potential of the fruit industry presents an opportunity for job creation, poverty alleviation and overall contribution towards rural economic development
This can only be fully realised through Private-Public-Partnership

32. Thank you

33. Fruit SA Contact details
FSA Board of Directors:
Mr D Donkin
Mr A Kruger
Mr A Rabe (Chairman)
Mr W Bestbier
Mr J Chadwick
Office details:
Dr Konanani Liphadzi: CEO
Tel:
Website: