How to grow Lim­popo

The prov­ince of­fers many op­por­tu­ni­ties for en­trepreneurs with great ideas, the IDC’s Kgampi Bapela tells Setumo Stone

CityPress - - Business -

Lim­popo grows more toma­toes than any other place in the south­ern hemi­sphere – that in­cludes South Amer­ica where toma­toes orig­i­nate. The prov­ince grows two thirds of the toma­toes in South Africa as well as three quar­ters of the coun­try’s man­goes and 60% of the av­o­ca­dos. It also has a num­ber of game re­serves all ripe for de­vel­op­ment and a wealth of min­eral riches to be un­earthed. Para­dox­i­cally, a shop­per in Polok­wane is more than likely pay­ing more for that fruit than a shop­per in Gaut­eng, says Lim­popo re­gional man­ager of the In­dus­trial De­vel­op­ment Cor­po­ra­tion (IDC) Kgampi Bapela.

This is be­cause some of these agri­cul­tural prod­ucts move from Lim­popo – where they are grown – to Gaut­eng, where the prod­ucts are pack­aged and brought back to Lim­popo through gro­cery chain stores.

“It means Polok­wane res­i­dents, for ex­am­ple, are buy­ing their fruit and veg­eta­bles less fresh be­cause though they come from their own back yard, the pro­duce trav­els all the way to Jo­han­nes­burg or Tsh­wane and back,” says Bapela.

The IDC’s so­lu­tion is to foster ben­e­fi­cial plat­forms in Lim­popo, which en­joys sig­nif­i­cant busi­ness op­por­tu­ni­ties for en­trepreneurs with an in­ter­est in min­ing, agri­cul­ture and tourism, among oth­ers.

He ex­plains that de­spite so many toma­toes be­ing grown in the prov­ince “up to 30% of those toma­toes are thrown away ev­ery year be­cause of grad­ing is­sues”.

This is de­spite the de­mand in Europe for de­hy­drated prod­ucts. This is where the IDC comes in – it iden­ti­fies po­ten­tial mar­ket gaps and, where en­trepreneurs present good busi­ness plans, it can help fund and nur­ture those busi­nesses.

Sim­i­lar op­por­tu­ni­ties are avail­able in the frozen veg­eta­bles space and though a few multi­na­tion­als are play­ing in that space, they also only cater for do­mes­tic or house­hold mar­kets. Here there’s a chance for ex­port­ing a lo­cally man­u­fac­tured prod­uct.

Bapela says the cor­po­ra­tion pri­mar­ily tar­gets en­trepreneurs who are al­ready man­u­fac­tur­ing to check if there is ca­pac­ity for them to ex­pand or di­ver­sify and add other prod­ucts.

A good ex­am­ple is a woman who pre­serves beet­root in jars and who is al­ready sup­ply­ing to one of the gro­cery chain stores. Be­fore, she was op­er­at­ing from a small space that did not meet safety stan­dards and re­quire­ments. Now, thanks to sup­port from the IDC, she has ex­panded her busi­ness to bet­ter premises and can ex­pand her small man­u­fac­tur­ing busi­ness.

“These are the peo­ple who we can as­sist and take to the next level. We make them aware of some of the leg­isla­tive re­quire­ments as well as of­fer­ing fi­nan­cial and non­fi­nan­cial sup­port in other ar­eas,” he says.

The IDC in­ter­acts with would-be en­trepreneurs and small busi­ness own­ers from all spheres of life, says Bapela, but it is those who have a clear idea of their mar­ket and how they are go­ing to get their prod­uct to that mar­ket that are most likely to be suc­cess­ful.

“For ex­am­ple, a guy who is an en­gi­neer in the mines and who has been do­ing that job and man­ag­ing a sec­tion for some years, we find that those are the guys who have what it takes. So, there is this op­por­tu­nity for them to jump to the other side and be the sup­plier or provider of ser­vices to the same in­dus­try that they are work­ing in.”

On the min­ing front, Lim­popo is on a growth tra­jec­tory. It has just un­der 70 op­er­at­ing mines, mainly in the Sekhukhune area and Water­berg re­gion. Close to 90 are in the pipe­line, de­pend­ing on whether there is wa­ter avail­abil­ity, which is usu­ally an im­ped­i­ment for the de­vel­op­ment of new mines, he says.

“That is also one of the rea­sons for the mas­sive hous­ing de­vel­op­ments in ru­ral Lim­popo. It means more peo­ple are get­ting em­ployed and more money is be­ing pumped into the vil­lages, and that is where the growth is tak­ing place.”

The min­ing de­vel­op­ments are mainly in the plat­inum space. How­ever, coal min­ing op­por­tu­ni­ties ex­ist in the Water­berg area, from Thabaz­imbi all the way to the Vhembe dis­trict around the Makhado area.

“Coal has been around Mpumalanga for many years, but we have al­ways known that there were big re­serves in Lim­popo,” says Bapela, adding that this ex­plains why Eskom has one of its big­gest new power sta­tions, Medupi, in Lim­popo.

The de­vel­op­ment of the new power sta­tion also led to the de­vel­op­ment of new ju­nior mines com­ing in and tak­ing ad­van­tage of sup­ply­ing Eskom.

“An­glo Plat­inum has off­loaded some of its as­sets in North West and cho­sen to ex­pand in Lim­popo. The qual­ity of the re­serves is sig­nif­i­cantly bet­ter and the cost of ex­tract­ing is less in Lim­popo, be­cause in North West they have to dig deeper.

“With the ex­pan­sion of mines, you start see­ing the de­vel­op­ment of new res­i­den­tial es­tates, shop­ping malls and with all that there is de­mand for pri­vate hos­pi­tals, schools and so forth.”

He says one of the rea­sons be­hind the plan to have a spe­cial eco­nomic zone (SEZ) in Tu­batse was to lever­age the ben­e­fits of hav­ing up to 40 mines in the area. The idea is to lo­cate all min­ing-re­lated ac­tiv­i­ties in one area to im­prove ef­fi­ciency in trade. The SEZs bring in the pri­vate sec­tor to be part owner of that de­vel­op­ment.

The sec­ond SEZ in Lim­popo is the Musina SEZ, which will host the R38.8 bil­lion South African En­ergy Met­al­lur­gi­cal Base Project. This project can trans­form the econ­omy in Lim­popo. Built off a min­eral re­source base, it will de­velop busi­nesses around it that process the riches that come out of the ground.

Bapela says the Lim­popo pro­vin­cial govern­ment and the lo­cal min­ing houses have given an un­der­tak­ing that up to 20% of their spend would be in the prov­ince. This means in­creas­ing lo­cal­i­sa­tion and en­sur­ing that where pos­si­ble the com­pa­nies op­er­at­ing there buy from Lim­popo busi­nesses.

“We are look­ing at op­por­tu­ni­ties for im­port re­place­ment. You will find that mines are con­sum­ing cer­tain com­modi­ties and it is com­mon to im­port these from over­seas. We are look­ing into those op­por­tu­ni­ties to see how best we could set up small man­u­fac­tur­ing.”

Lim­popo also has a lot of po­ten­tial for growth in the tourism sec­tor. Up to 80% of the Kruger Na­tional Park is sit­u­ated in Lim­popo, but the first prov­ince that comes to mind when peo­ple think of the park is Mpumalanga. The prov­ince has not done enough to mar­ket Lim­popo as a tourism des­ti­na­tion, he says.

The prov­ince has 53 state-owned game re­serves cov­er­ing just over 200 000 hectares and that this has the po­ten­tial to cre­ate many op­por­tu­ni­ties. A small game re­serve such as Madikwe in North West, he says, has been suc­cess­fully com­mer­cialised. Nam­biti in KwaZulu-Natal cov­ers only 20 000 hectares, but is equally suc­cess­ful.

“We have been ac­tive in the tourism space. In the cur­rent fi­nan­cial year, we are deal­ing with sev­eral ho­tel trans­ac­tions.”

One of them is a Radis­son that will open in Polok­wane soon. “It is the first lux­ury ho­tel in Polok­wane with 160 rooms and it is 100% black­owned,” he says. There are also ho­tels are in Tho­hoyan­dou, Ma­goe­baskloof and Bela-Bela.

Bapela says the IDC takes ad­van­tage of govern­ment ini­tia­tives such as the de­part­ment of trade and in­dus­try’s black in­dus­tri­al­ist pro­gramme, which funds up to 50% of the value of a project lim­ited to R60 mil­lion.

“We man­aged to get 100 ap­pli­ca­tions re­cently. Ob­vi­ously, not all of them will make it through, but some are promis­ing,” he says.

“I al­ways say I see Lim­popo as what Gaut­eng was maybe 80 years ago. The re­sources are here and there is no other prov­ince that has the level of min­ing de­vel­op­ments like Lim­popo,” Bapela says.

“With more peo­ple with buy­ing power re­sid­ing in the prov­ince, things will start to fall into place.”

His wish is that ev­ery busi­ness ap­pli­ca­tion that comes through the door will make it.

He says the IDC is sec­tor-fo­cused and there­fore there are busi­nesses where it can not get in­volved, such as re­tail and prop­erty.

All the IDC’s re­gional of­fices of­fer sup­port to help busi­nesses be­come more fund­ing ready, so that when they for­mally ap­proach the cor­po­ra­tion for fi­nan­cial back­ing they have bank­able busi­ness plans.

“What makes me want to wake up and come to the of­fice ev­ery day is know­ing that we are mak­ing a dif­fer­ence. When I drive around the prov­ince and see smoke out of a chim­ney some­where where the IDC has funded, it makes me proud to say that this or­gan­i­sa­tion is bring about real change. And I want to see that hap­pen­ing through­out the prov­ince.”

True to his vi­sion and pas­sion, in the past fi­nan­cial year, Lim­popo ac­counted for 40% or R6.7 bil­lion of the R15 bil­lion of the IDC’s to­tal ap­provals. This se­ries is re­ported by City Press and sup­ported by the IDC


FARM FRESH Lim­popo is the largest pro­ducer of toma­toes in the south­ern hemi­sphere


Lim­popo IDC re­gional man­ager Kgampi Bapela

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