Labat has big plans to grow the ‘black gold’ industry ... and create 4-million jobs
JSE-listed Labat Africa, which has businesses in technology, transport and logistics, has added cannabis to its portfolio. It recently bought a 70% stake in privately owned Zarenka, which has cannabis licences in Lesotho.
Labat Africa CEO Brian van Rooyen spoke to Business Day about the company’s plans in the cannabis industry, which he calls black gold.
What is the plan for Labat in the cannabis industry?
We are the first listed company in Africa with a cannabis stock to it and we are going to try to develop that quickly. Part of this whole deal is to set up an infrastructure where farmers will bring their crops and we will pay them for their crops. We will also do the industrial separation for plastic, fibre, proteins. That industrial hemp has got more omega 3 and omega 6s that are currently extracted from fish oil. But you need the infrastructure to extract it.
How significant is the cannabis industry to the economy?
It is estimated that in 2020 the cannabis business in SA will be a R27bn industry. It’s huge. Labat will probably be [contributing] 5%-10% of that. The industry worldwide is estimated in the same period to be about $300bn-$400bn.
Will Labat put all its focus on the cannabis business?
We will eventually separate the transport, logistics and ICT businesses from the cannabis business. That is the plan and will happen sooner rather than later.
What will the cannabis industry contribute to SA’s economic landscape?
If the government makes millions of hectares of land available for agriculture as part of land distribution, what are the guys going to plant? The best to plant is hemp because it grows quickly and doesn’t need a lot of nutrients. Out of that, you can make plastic. At the moment, all imported from China, because we the’cars’ ve got dashboards no hemp industry. are made out of hemp plastic and that’s all
Plastic is widely rejected nowadays given its negative impact on the environment. Will hemp not worsen the situation?
Hemp absorbs 10 times more carbon dioxide than any other plant. This means the more hemp you plant, the less carbon dioxide emissions you’ve got in SA. Normal plastic takes 300 years to disintegrate if you throw it away. It takes one and a half years to disintegrate if you use hemp plastic because it’s biodegradable. We are partnering with a big Chinese pharmaceutical and industrial company called Sino Farm, on setting up big factories for plastic manufacturing, paper manufacturing and all that.
Are there any specific products you will produce out of cannabis soon?
Cannabis oil in SA is still heavily regulated. For instance, the THC content in cannabis oil locally is 0.001% and that’s very, very little. Also, the oils must not contain more than 20mg of CBD [cannabidoil]. Our facility in Durban can make those oils.
What will be done with medical cannabis?
The plan with Zarenka is that they are setting up their facilities in Lesotho. They are targeting the mass market, while we are targeting the high-end market of the medicinal side ... that is all your high-end stuff such as cancer, Alzheimer’s and Parkinson’s. We want to register our medical files in the US and Europe.
How will you curb joblessness through the cannabis industry?
On a hectare of land, you can create three to four jobs. If you take the million hectares of land that the president said must be made available to people, that is 4-million jobs. We will set up businesses — woman owned, community owned — and we’ll put up the seed funding.
We will train and help them with funding. We will run their books for them because it is our best interest to get that crop so they don’t have to worry about what they are going to do with their crops. They will bring their crops to us and we will do the rest through industrial factories that will be owned by youth, communities and by women.
PART OF THIS WHOLE DEAL IS TO SET UP AN INFRASTRUCTURE WHERE FARMERS WILL BRING THEIR CROPS AND WE WILL PAY THEM
IF THE GOVERNMENT MAKES MILLIONS OF HECTARES OF LAND AVAILABLE FOR AGRICULTURE, WHAT ARE THE GUYS GOING TO PLANT?