Key sector contents

KEY SECTORS

Overviews of the main economic sectors of the Northern Cape.

KEY SECTORS Agriculture Water 32 35

Wine and grapes

Overviews of the main economic Mining

36 38

sectors of the Northern Cape Engineering

42 Tourism 44 Education and training 46 Agriculture Energy 34 50 Grapes and wineBanking and finance 38 52 Mining Development finance 42 Water and SMME support 50 53

Tourism

52 Banking and financial services 58The Mittah Seperepere Convention Centre Development finance and SMME support 60 in Kimberley can accommodate up to 2 500 delegates. Kimberley hosted the SA Open Chess Festival at this venue in 2019. Image: SAOpen2019.com.

Agriculture

Rooibos is a hit around the world.

From a funky coffee bar in Des Moines, Iowa, to the refined palates of discerning Japanese tea-drinkers, rooibos is on trend around the world. And that’s good news for farmers and producers in the Northern Cape.

Bill Bryson was famously sniffy about the sophistication of his hometown in the middle of America, but at Zanzibar’s Coffee

Adventure in downtown Des Moines, red cappuccino is now a popular favourite. Using rooibos allows for any style of espresso that comes without the caffeine kick.

Rooibos has not yet made a big dent in the 200 000 tons of tea consumed by Japan every year, but sales grew 7% in 2018 and introducing a new variety to a country of tea aficionados is easier than tackling a nation of coffee drinkers. A total of 2 000 tons were shipped to Japan from South Africa in 2018.

Rooibos is competing in the “Healthy Tea” segment and a popular restaurant chain’s decision to use the tea as a complement to its pork bone broth has helped to promote the product. Brazil is being explored as a potential market.

Recent studies proving that rooibos tea increases antioxidant capacity in human blood are further proof of the beverage’s healthy qualities. The unique climate and soil of the western part of the province support this niche crop. About 6 000 tons of tea is exported to more than 30 countries and domestic consumption is about 8 000 tons. The South African Rooibos Council states that more than 5 000 people are employed in the rooibos industry.

Only the leaves of the Aspalathus linearis (a legume that is part of the fynbos family) are used in making rooibos (Afrikaans for “red bush”). Harvested while still green, the leaves are left to dry and ferment in the sun after being cut up. Naturally high in a range of vitamins and potassium, zinc and iron, its low tannin content makes it an excellent alternative as a hot drink.

Another niche product of the Northern Cape is karakul

Image: Bokkeveld Rooibos

Sector Insight • Food security is a key concern for social planners. • The successful goat kid project has expanded to Botswana.

pelt, which is a speciality of the Gordonia district of Upington. This exclusive product is distributed via the capital of Denmark and the Italian fashion capital of Milan. Copenhagen is the site of two auctions of karakul pelts that are held annually. Agri-company KLK is the only organisation that handles these pelts in South Africa. Glovemakers in Milan are among the international clients to whom farmers of the dorper sheep breed sell the wrinkle-free skins of their sheep, at good prices.

Another exclusive niche is horse stud breeding, a speciality of the area around Colesberg, where the cold evenings and warm days combine to drive out disease and promote strong growth. Among the studs are Henham and Southford, a 900ha property near the Gariep Dam which once was home to the famous stallion “Damask”.

Compared to other types of manufacturing, agri-processing can be scaled up relatively quickly with good financial rewards. It can also be labour-intensive. As such, agri-processing is a key plank in the growth plans of the Northern Cape.

Work has already been done in providing manufacturing facilities for rooibos at Niewoudtville and investments have been made in fisheries and new vineyard development for groups of people who previously had not had exposure to the grape and wine sector.

The Northern Cape Department of Agriculture, Land Reform and Rural Development (DALRRD) was behind the rooibos tea factory, which now trades as Bokkeveld Rooibos. The factory takes tea from 85 local farmers with the goal of helping to integrate these farmers into the agricultural and agri-processing business chain.

Two areas of interest to assist small-scale farmers are being explored with regard to hemp and crops that can produce liquor. The dry interior of the Northern Cape is suitable for the growing of Agave that provides the source material for tequila and there are several other opportunities. The rapidly-changing legislative environment for hemp and marijuana holds potential in textiles and medicine.

A programme to empower black farmers is supporting six farmers in 2020. The Commercialisation of Black Producers Programme targets farming and agri-processing in the expectation that graduates will mentor young people and create employment.

The commercialisation of the goat project which was successfully extended to Namibia has now been further expanded to include Botswana. Small-scale farmers are being given access to market and further expansion is expected.

Food security

The Integrated Food Security and Nutrition Programme aims to promote and support urban agriculture and to support community and institutional food gardens. Beneficiaries practising poultry farming in their backyards will receive broilers and layers for egg production. This will improve household nutrition and generate income.

Long-term thinking underpins the adoption by the provincial government of the Northern Cape Climate Change Adaptation Response Strategy. This allows for a framework to tackle drought and other climate change issues.

Occupying 36-million hectares, the Northern Cape is the largest province in the country, almost a third of South Africa’s total land area. Although the province is a predominantly semi-arid region, agriculture is a major component of the regional economy and the province’s farmers contribute 6.8% to South African agriculture.

The agricultural sector also plays a vital role in the broader economy of the Northern Cape, employing as it does about 45 000 people. This represents about 16% of employment, a much higher figure than the national figure of 5.5%.

Online Resources

Northern Cape Department of Agriculture, Land Reform and Rural Development: www.agrinc.gov.za Northern Cape Economic Development, Trade and Investment Promotion Agency: www.nceda.co.za South African Pecan Nut Producers Association: www.sappa.za.org South African Rooibos Council: www.sarooibos.co.za Zanzibar’s Coffee Adventure: www.zanzibarscoffee.com

BANDIT – EXPERIENCE THE BEST OF BOTH WORLDS

First-world technology and quality combined SABS-approved roadworthy trailers built at Africa with African simplicity. The main woodchipper Biomass Company in Worcester, South Africa. unit is manufactured by Bandit Industries, Inc. Engine-powered woodchippers are fitted with 35-plus years’ experience with Tier 3, South African standard, diesel or in innovation and international petrol engines, depending on the woodchippers’ research. These units specification or clients’ preference. Electric and PTO are shipped to options are also available in various Bandit models. South Africa The add-ons are specifically handpicked to give where they are you the best set-up and will provide you with a fitted onto well-balanced woodchipper that will outperform most other chippers in Africa.

www.abc.co.za

Agricultural development takes place along defined corridors within the province:

In the Orange River Valley, especially at Upington, Kakamas and Keimoes, grapes and fruit are cultivated intensively. High-value horticultural products such as table grapes, sultanas and wine grapes, dates, nuts, cotton, fodder and cereal crops are grown along the Orange River.

Wheat, fruit, groundnuts, maize and cotton are grown in the Vaalharts Irrigation Scheme in the vicinity of Hartswater and Jan Kempdorp. The Vaalharts Irrigation Scheme is one of the biggest systems of its kind in the world. Ranging over more than 30 000ha, it has transformed a semi-desert zone into a productive area that sustains cotton, wheat, maize, lucerne, citrus, peanuts, fruit, grapes, olives and pecan nuts.

Vegetables and cereal crops are farmed at the confluence of the Vaal River and the Orange River in the vicinity of Douglas. Of the nearly 40-million 10kg bags of onions produced in South Africa (outside of linked production chains set up by supermarkets), about 10-million 10kg bags come from the Northern Cape.

Wool, mohair, karakul, Karoo lamb, venison, ostrich meat and leather are farmed throughout most of the province. The province is second only to the Eastern Cape in terms of the number of sheep farmed and is the fourth-largest wool-producing province based on annual sale of producer lots. The Beefmaster abattoir in Kimberley is one of three abattoirs in South Africa to export frozen beef to China. The company processes and packages about 30 000 tons per annum at the abattoir.

Companies

KLK is based in Upington and does much more than karakul pelts. The company’s interests include 19 retail outlets, 12 petrol stations, four Build it franchises and a strong auction division. KLK runs three abattoirs in Calvinia, Carnarvon and Upington that slaughter lamb and beef carcasses. SA Dorper manages the production and export of dorper skins and the production of cattle hides. GWK is another company with its headquarters in the Northern Cape, in this case the town of Douglas.

Senwes is one of the country’s biggest agri-companies and its Northern Cape area of operation is mostly around the Vaalharts irrigation area, which is close to the headquarters just over the provincial border in North West, at Klerksdorp. Storage and handling of grains and oilseeds are the speciality of Senwes.

OVK controls the large Gariep abattoir at Strydenburg, which has a daily capacity of 1300 sheep, 100 cattle and either 250 ostriches or 750 small game animals. OVK also has trade branches, vehicle dealerships, a finance division and manufacturing facilities for maize meal and wheat meal.

Kaap Agri, a Western Cape company, has a significant presence in the Northern Cape and Namibia. ■

Water

A water equity scheme is under discussion.

The right to use water in a water-scarce area can often be a contentious issue. An analysis of Water Equity Schemes is underway to establish whether or not they are working to the benefit of intended beneficiaries.

It is thought that if the scheme is correctly applied, more than 3 000ha of land currently lying fallow could be brought into production for food security and for the cultivation of high-value crops.

One of the major private suppliers of water in the province is Sedibeng Water. Sedibeng Water’s Central Laboratory, based at Balkfontein near Bothaville, is accredited by the South African National Accreditation System (SANAS). A new laboratory has been built to monitor the quality of water at the revamped Vaal Gamagara scheme. The laboratory’s four sections cover Instrumentation, Wet Chemistry, Sewage and Microbiology.

Six municipalities have been identified for the eradication of informal settlements. A major obstacle in the municipalities of Sol Plaatje, Phokwane, Tsantsabane, Dawid Kruiper, Gamagara and Ga-Segonyana is the lack of bulk water and sanitation facilities. Ring-fenced funding in terms of the Division of Revenue Act has been approved.

Two of South Africa’s great rivers meet in the Northern Cape at a point south-west of Kimberley. After absorbing the Vaal River, the Orange River continues westwards to the Atlantic Ocean and provides the basis for agriculture all along its path.

The Eye of Kuruman

Online Resources

National Department of Water and Sanitation: www.dwa.gov.za South African Association of Water Utilities: www.saawu.org.za Water Institute of South Africa: www.wisa.org.za Water Research Commission: www.wrc.org.za Sector Insight The Vaal-Harts irrigation system supports intensive agriculture.

North of Kimberley, the confluence of the Vaal and the Harts rivers encompasses one of South Africa’s most intensely irrigated areas. The Vaal-Harts irrigation system is one of the most productive in the country, covering about 38 000 hectares with a variety of crops. Various water users’ associations (WUAs) representing particular areas (such as the Vaal-Harts) are recognised by the national water authority.

Two of South Africa’s biggest dams, the Gariep and Vanderkloof, also provide water for irrigation and hydro-electric power. Many parts of the province are dry with sections of the north and northwest classified as semi-arid and arid. The southern Kalahari Desert receives rain but the fact that mining is a primary economic activity in the dry regions of the province presents many challenges. The town of Kuruman is an exception in that it has a natural and prolific spring, the Eye of Kuruman.

Engineering group ELB Group has been appointed by Vedanta Zinc International to do a wide range of jobs at its new Gamsberg project. This includes laying a water pipe from the Orange River to the mining company’s processing plant. ■

Grapes and wine

The Orange River region punches above its weight in grape and wine production.

Photo: Dippenaar Choice Fruit

The word “audit” is normally associated with financial institutions or public bodies that must account for their expenses. But for the grape farmers and wine producers of the Northern Cape, meeting various health standards is a serious business on which rests access to lucrative export markets.

Although the province has just 3% of South Africa’s vineyards, 18% of the nation’s white wine grapes are cultivated along the Orange River. For grape producers such as the family-run company Dippenaar Choice Fruit, their three-person HACCP team is a vital element in operations. HACCP stands for Hazard Analysis and Critical Control Points. Among the audits which this team oversees are the BRC (British Retail Consortium) Version 8 Audit and SiZA, the Sustainability Initiative of South Africa.

An instructive feature of the Dippenaar Choice Fruit website is the Chinese language option, a strong signal of the growing popularity of South African grapes in China. The company farms seedless grapes on 306ha across eight farms, including Gamcaip Grape Farm (pictured), along the Lower Orange River. The intention is to expand to 340ha and increase production from one-million cartons (4.5kg carton equivalent) to 1.5-million cartons by 2022.

The region as a whole has 5688ha of vines and the Orange River Producer Alliance represents its farmers. According to the South African Table Grape Industry (SATI), the grape industry in the Northern Cape employs 1 215 people permanently, with a further 12 415 people finding seasonal work. Harvesting happens from early November to early February.

Almost a third of South Africa’s table grape crop is

Sector Insight Northern Cape wines are winning awards for quality.

produced in this fertile region. The South African table grape industry has been investing in hardier varietals which produce a better yield. A variety of seedless grapes dominate plantings, with Thompson Seedless, Prime, Sugraone, Grapaes and Crispy Flame Seedless among the most popular.

If ambitious plans to create a Special Economic Zone at Upington come to fruition, the grape, raisin and wine traders of the Northern Cape could get their products to market more quickly.

There are plans to add 40 000 tons of grapes for wine, juice and raisins to the Northern Cape’s capacity. A draft six-year plan has been developed for the Northern Cape Vineyard Development Scheme.

Of the Sultana grapes grown in the Lower Orange River Region, 70% are used for vine-fruit products. There are 1 250 Sultana grape growers in the province, producing three Sultana-type grapes which rank among the best in the world: the Sultana Clone H5, a new hybrid called Merbein Seedless, which has proved resistant to splitting after rain, and the most popular type, the 143B.

Wine

The 2019 season was a good one for Northern Cape wine farmers. Warm to hot conditions, coupled with the nutrient-rich land on the banks of the Orange River and sharply contrasting temperatures combine to produce consistently excellent wines. Average annual rainfall in the area is 150mm.

The Northern Cape’s Orange River wine region accounts for 25.6% of South Africa’s Colombar vines and 10% of Chenin Blanc. The focus is on Colombar and Hanepoot grapes.

Orange River Cellars (ORC) is the region’s biggest producer, sourcing its grapes from 850 grape producers in the area known as the Green Kalahari. ORC has a winery at its head office in Upington and a further four at Keimoes, Groblershoop, Kakamas and Grootdrink.

Orange River Concentrate Producers (part of the ORC group) produces about 7.5-million litres of white grape juice concentrate, a percentage of which is exported to Japan where the Itochu Corporation uses it in soft drinks and food.

ORC reported better yields in 2019 than the year before, at about 35 tons per hectare. Both Chenin Blanc and Colombar performed well with the latter doing exceptionally well.

At the 2019 Top 100 SA Wines/National Wine Challenge, ORC went some way to changing the narrative about the type of wine that the region produces. ORC is famous for its sweeter wines, such as Muscadel but a blend of Petit Verdot and Shiraz (Lyra Vega) won a spot among the competition’s top 100 wines. In addition, the cellar garnered two Grand Cru Awards (best in category) and a further two Double Platinum positions in the select 100.

The Douglas Wine Cellar produces about 6 000 cases per year. Together with the Landzicht cellar (just over the border in the Free State), the Douglas Wine Cellar is a GWK company. The Douglas cellar crushes 7 000 tons of grapes every year and produces 5.6-million litres of wine.

Hartswater Wine Cellar is a part of the region’s other big agricultural company, Senwes. Two wine brands (Overvaal and Elements) are produced in the Hartswater irrigation area north of Kimberley. Photo: Carpe Diem Estate

The 2019 national wine grape crop was slightly smaller than the previous year. The Orange River was one of four regions to record a slight increase, but that was off a low base in 2018. For 2019, the national crop estimate was 1.2-million tons (SAWIS, South African Wine Industry Information & Systems).

Vinpro is an organisation that 2 500 South African wine grape producers, wineries and wine-related businesses. ■

Online Resources

Northern Cape Department of Agriculture, Land Reform and Rural Development: www.agrinc.gov.za Raisins South Africa: www.raisinsa.co.za SA Wine Industry Information & Systems: www.sawis.co.za South African Table Grape Industry: www.satgi.co.za South African Wine and Brandy Company: www.sawb.co.za