AFGRI
AFGRI AGRI SERVICES
AFGRI Embracing
Digital Farming Revolution PRODUCTION: Manelesi Dumasi
For 95 years, AFGRI has been leading the way in South Africa’s agricultural industry and now it is looking to the future and a digital revolution. The company has developed an eAccounts system and has invested into a financial institution so that its clients can make use of a full service package when managing their business. 28 / www.enterprise-africa.net
INDUSTRY FOCUS: AGRICULTURE
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South Africa’s agricultural sector has long been viewed as a key contributor to the economic prosperity of the nation, and the region. Famous for maize, wheat, sugar cane, various fruits, flowers and wines, South Africa is a major player on the global agri scene. The country’s agri sector employs more than 800,000 people and is responsible for driving food security and employment. But the agriculture sector is changing. Traditional farming methods are less common. Technology, like in any industry sector, is becoming more and more prevalent. Job creation in agriculture is slowing and big businesses are looking to diversify offerings to avoid slowdowns that arise as a result of unpredictable situations such as drought, political instability, global economic crisis, or climate change.
South Africa’s National Development Plan (NDP) set out ambitions to create almost one million jobs in agriculture by 2030, and while this is entirely possible, the SA government must ensure it has the backing of big businesses. AFGRI is an example of a South African agricultural business that is advancing employment creation across the entire value chain. Investing in growth across the continent, AFGRI is not only creating opportunities for farmers, it is crafting an entire agriculture ecosystem so that customers can focus on their core business. Whether it’s finance, infrastructure, equipment, or anything in between, AFGRI can deliver. Established in 1923 as a cooperative style farming operation, AFGRI has expanded and diversified to become
a trusted, multi-faceted partner of the agricultural industry. Embracing the digital age, and looking forward to the fourth industrial revolution, AFGRI has advanced its online capabilities significantly and now offers a major digital platform that can help farmers make and receive payments, manage stocks, and keep fingers on the pulse of business from
// WE HAVE BEEN RUNNING WITH THE PROJECT FOR THE PAST 18 MONTHS AND WE HAVE HAD R9 BILLION THROUGH THE SYSTEM //
Applying extensive software development expertise to deliver high impact services +27 87 654 3300 +27 86 500 2626 30 / www.enterprise-africa.net
admin@synthesis.co.za
AFGRI AGRI SERVICES
// EVERYTHING IS LINKED AND ALL OF THE SYSTEMS TALK TO EACH OTHER. IT PUTS US AHEAD OF OUR COMPETITORS AS NO ONE HAS ANYTHING AS SOPHISTICATED AS THIS // anywhere in the country. “We have developed an electronic transaction system, eAccounts, and it works similarly to any other banking platform,” explains AFGRI Agri Services CEO, Tinus Prinsloo. “We don’t have a banking license so we do not call it a banking platform, but it allows people to log into the system, discover the best price, sell maize or pay a deposit on a tractor, and pay the balance to the farmer. Everything is linked and all of the systems talk to each other. It puts us ahead of our competitors as no one has
anything as sophisticated as this.” AFGRI calls its eAccounts system ‘the future of farming in the palm of your hand’. Delivered through AFGRI’s financial services division, UNIGRO, the eAccounts system has been called a ‘ground breaking electronic account management solution’ by users that have so far processed more than R9 billion through the platform. The company developed the system in response to demands from the industry for up to date information, and the ability to make effortless
transactions. But, those demands quickly changed and advanced, and the next step was farmers looking for a full scale financial solution to streamline their financial operations. Created by a local fintech software company, AFGRI’s eAccounts system is the first online transaction system to be delivered in South Africa by any business that isn’t a mainstream bank. “We started the E platform to enable the farmer to do transactions from home – he can pay suppliers or do anything that internet banking can offer apart from drawing cash,” says Prinsloo. AFGRI Agri Services CFO, Jacob de Villiers explains that eAccounts will probably need another 12 months of development before it is a complete project. “We have been running with the project for the past 18 months and we have had R9 billion through the system.
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INDUSTRY FOCUS: AGRICULTURE
Development continues and we will be busy for another year, fine tuning what we offer on the platform. “When we started the project eAccounts we budgeted for development costs of R10 million. It was designed for the finance division to do online payments and create accounts. Since then, we have involved all other divisions and the project is much bigger.” eAccounts is accessible through any device at any time of day. The system allows users to manage stock, view grain prices, make transfers, schedule payments, access accounts, monitor rainfall, and much more. But it still left AFGRI feeling that more could be done for its clients. And so, in March 2017, AFGRI completed its purchase of the
// WE ALWAYS SAY THAT WE ARE NOT HERE JUST FOR PROFITS. WE UNDERSTAND THAT YOU NEED TO DO WELL TO DO GOOD, SO FROM THAT POINT OF VIEW WE KNOW IT IS IMPORTANT TO BE EXCELLENT IN WHATEVER WE DO // South African Bank of Athens. “Success with eAccounts brought us to the next step where we realised if we want to offer the full package for the client, we have to look at obtaining a banking license so that we can offer credit cards or even for taking deposits as some clients sit with surplus cash. This is why we looked at buying a bank, and that is latest initiative that AFGRI has undertaken. We want to be
Tinus Prinsloo - AFGRI CEO
32 / www.enterprise-africa.net
involved in banking so that we can offer the client a full-service spectrum. That process has been approved by the Minister of Finance and the Reserve Bank. The only outstanding issue is one of the other shareholders must gain competition commission approval for their involvement,” says Prinsloo. A complete service package makes AFGRI attractive as it will become the first and only ‘one stop shop’ in South African agriculture. “Not only will we offer all of the traditional UNIGRO products, we will also now do anything financial,” says Prinsloo. “We will take deposits, do transactional banking, offer credit cards; and that opens new doors for us. The Bank of Athens has seven branches. That is obviously not enough, and they are obviously not in the right places. We sit with 69 shops scattered all over the country and that will help us offer some sort of ATM service but with time we will expand the bank’s branch network to areas where we service our clients.” But agriculture remains at the heart of AFGRI and brining financial products into the service portfolio represents an added benefit for clients rather than a full diversification strategy. “For now, we are purely focussed on the agriculture sector and servicing our existing clients,” reminds Prinsloo. AFGRI Group CEO, Chris Venter says that the deal to acquire the bank is now in the final stages. “We want to remain agile so that we can attach to opportunities that come our way. One of those opportunities was investment into the South African Bank of Athens which is something we can use to expand our financial services sector with banking opportunities
AFGRI AGRI SERVICES
and products. The process is almost complete and we can then expand the group further, incorporating banking products for our customers.” He reminds of the group’s vision and suggests that these new digital services will assist in this regard. “Our group strategy is to drive food security across Africa and we want to do that by making sure that we have excellent management teams. We always say that we are not here just for profits. We understand that you need to do well to do good, so from that point of view we know it is important to be excellent in whatever we do.” In the space of just a few years, AFGRI has moved from continental agricultural powerhouse, to African agricultural industry leader, with a digital financial presence to rival anyone. Driven from the top, AFGRI’s
strategy is ambitious, and Venter is keen for the group’s thousands of employees to realise things are achievable. “A lot of the things we have done, two-years ago I would have said a lot of it was impossible. But I have the saying from Nelson Mandela in my office – ‘things seem impossible until they are done’. It is important for me to drive that and I do believe that people need to stretch themselves. I stretch myself, and when we look at the way forward we shouldn’t be looking at what we think we can do, we should be thinking outside the box,” he says. “Looking back at 2017, I do believe we have been successful,” he adds. Stats SA says that agriculture will undoubtedly be one of the key drivers of job creation in the coming years and combined with digital, there’s no
telling what direction this exciting industry could take next. Earlier this year, several new apps were released for the use of farmers in Kenya; a Canadian company is utilising aerial imagery apps to assist in crop monitoring; and Nigerian companies are developing apps that can link technology across a farmer’s operation. There is no doubt that those that do not embrace the digital age will fall to the wayside. Fortunately for South Africa, AFGRI is at the forefront of this revolution and looks likely to achieve its vision now and in the future.
WWW.AFGRI.COM
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July 2018
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