Rhys evans

COMPANY PROFILE

2014

Rhys Evans Group

27 56 343 3311 | www.re.co.za

company profile

Precision, conservational, sustainability!

Editorial: Roland Douglas Production: Hal Hutchison

The Rhys Evans Group, based in Viljoenskroon, Free State, is constantly growing. With investments into new pieces of modern machinery and also into its workforce, there is no stopping this crop, meat and nut producing industry-leader. General Manager, Arno Cronje tells us more…

Over the years, the South African agricultural sector has developed into one of the world’s most productive and innovative industries of its kind, supplying global markets with a number of important products.

According to the Food and Agriculture Organisation Corporate Statistical Database (FAOSTAT), South Africa is one of world’s largest producers of; chicory roots, grapefruit, cereals, white maize, castor oil seed, pears, sisal, and fibre crops.

Significant employment is created by the farming and agricultural industry, some figures suggesting around 10% of the country’s formal employment. The industry also contributes approximately 2.6% of the country’s GDP meaning that agriculture is vitally important to South Africa’s economy.

But there are changes afoot in the industry and, as we are also seeing in other industries, the drive for improved efficiency and sustainability is forcing farmers to think

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about their methods and change their approach to a more conservational mind-set.

And it’s not just small scale operators. Large, established farming operations have investigated ways to become more sustainable and address some of the country’s most challenging agricultural issues including water shortages, top soil qualities and availability of land.

And just last year, Agri SA executive director, Hans van der Merwe told Business Day that it wasn’t just sustainability issues that need addressing, but also labour issues and infrastructural issues too.

“In many instances the basic infrastructure is totally lacking in deep rural areas and previous home land areas so that requires attention,” he said.

But one company operating across the agriculture and farming industry is seeing the benefits of investments and new ways of thinking and that company is the Rhys Evans Group – a seasoned member of the farming community in South Africa and a company that has been operating under

Rhys Evans Group

the guidance of the same family for over a century.

Rhys Evans Group specialises in crops, meat and ground nuts for both the export and local markets. IndustrySA recently spoke to general manager, Arno Cronje and he tells us more about the history of the company and how it is changing with sustainability in mind.

“The company is 110 years old,” he says. “It is a family business, currently with the third generation in charge. The current CEO, Anthony Evans took over the business from his father in 1967. Currently our main products include maize and peanuts; we are in the centre of the maize and peanut producing areas; and we also produce sunflowers and soy beans. Some year ago we also produced dry land potatoes, but it was not sustainable with increasing input costs.

“It’s an extensive farming business and apart from the crops we have the very well-known Huntersvlei Sussex stud, which has been operating for 69 years and is currently the oldest registered Sussex stud in South Africa. It has 220 breeding cows and a total of over 600 animals.

“We also have a commercial beef cattle operation of over 800 animals and we run two small beef feedlots of about 1000 head each. Apart from that we also have a 550 sow piggery from which we market about 250-280 baconers per week.

“In 1997, we purchased the local abattoir in the town of Viljoenskroon. It’s predominantly a pig abattoir where we slaughter about 800 pigs per week and 60-100 beef carcasses per week and around 50 sheep per week.

“On the farming side we employ about 100 permanent people and during the season we may add around 50 temporary employees,” he says.

PEANUTTERS Split into three main divisions (arable farming, non-arable farming and ground nuts) the company’s most recent focus has been on its peanuts. Its mission is to “offer the South African and the export market a consistently high quality, handpicked, selected product backed by excellent service and continuity of supplies.”

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company profile

Peanuts have, for a long time, been a big contributor to the Rhys Evans Group and the company has seen significant growth in this area. Located right in the centre of South Africa’s peanut growing hub, the group produces traditional Spanish type peanuts.

“In 1996, we built a peanut shelling plant from scratch and we’ve been enthusiastic about value adding to our products and there was an opportunity on the peanut side. It was also the first bulk handling peanut shelling plant in South Africa, and currently we come under one of the ten biggest shelling plants. We take in around 6000 tonnes of peanuts per year.

Three years ago we expanded our operations at the peanut plant by doing our own processed peanuts for peanut butter and different flavours of peanut snacks, under the brand name Nutty P,” explains Cronje.

“The market for peanuts is both local and export, for European and Far Eastern countries, mainly Germany and Japan. We also have a strong local market.

“On the meat side, beef is sold in a 300km radius around us. Pork goes nationwide and sheep is sold locally. On both sides of the business we have our own vehicles for transportation but for the abattoir, for long distance journeys, we make use of sub-contractors.”

BIGGER IS BETTER Over the years, the company’s growth has been fantastic, benefitting both the business, from a commercial point of view, and also the local community. Cronje suggests that taking into account all of its operations, Rhys Evans Group is probably one of the biggest agricultural firms in the region.

“In our region we are probably one of the largest as far as the diversification of our operations are concerned. There

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are a few other big companies especially on the peanut side but they don’t have the meat offering to the same extent that we do. Our divisions on their own would not be the biggest in the industry but the strength of the group is in its diversity of operations. For example; we are the biggest Valtra Tractor fleet owners in the country.”

And one thing that comes with a sizeable organisation is the ability to be flexible and try new ideas. One of the popular concepts that has been filtering into farming in South Africa over the past 10 years is no-till farming. No-till farming, sometimes called zero tillage or direct drilling, is a method of farming that involves growing crops or pasture from year to year without disturbing the soil through tillage. It has been reported that no-till farming increases the amount of water that infiltrates into the soil and increases organic matter retention and cycling of nutrients in the soil. In many agricultural regions around the world it can reduce or eliminate soil erosion. It increases the amount and variety of microbial activity in soil. The most poignant benefit of no-tillage farming is improvement in soil biological fertility, making soils more resilient which improves efficiency of operations.

Rhys Evans Group has invested in these methods of farming in a bid to become more sustainable and maximise returns from the land. Cronje explains the approach saying: “The biggest thing on the farming and agricultural side is the so called precision farming concept whereby you manage your farm much more optimally per soil type, or as we like to call it ‘management zones’.

“You do an analysis of the physical soil properties and this more or less determines your soil potential. You then, every three years, do a chemical analysis on a one hectare

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company profile grid where, followed by corrections on the fertility of the soil according to prescription maps. Then what you have is a yield mapping monitor that is mounted on the combine harvester and that records your actual yield data. Our ergonomist puts all that info together and uses this ‘normalised data’ to compile variable rate plant population as well as variable rate fertilizer application maps per management zone. We have taken our date from 2003, which gives you an accurate reflection of the soil potential over different seasons. Each year we will add more data which will contribute to the accuracy of the system.

“it’s been done in South Africa for 20 years but the capital outlay in terms of equipment is so large that we started out just doing tests and when we got in, we got in boots and all” “In other words the management zones are divided in five or six categories of yield potential. You then plant and fertilise accordingly, with a map that you upload onto the tractors computer – the tractor sends the data to the planter and the planter reacts accordingly,” he explains.

This process does require hefty investments in the early stages but the result is more sustainable production and an increase in profitability.

“If you take a combined saving of your input costs and your net increase in yield by using this method, you should increase your profitability of about 5-10%. For us, that still needs to be confirmed as we have only taken this approach for one year but we have so far seen over 5% difference in what was a fairly difficult year,” says Cronje.

Recent investments have allowed the company to further enhance its capabilities when it comes to the precision farming concept and the general manager expects this investment to continue.

“It’s the latest technology of tractors out of Finland, the latest planter technology out of Brazil and in Brazil and South America they’ve been in the game of conservational agriculture equipment much longer and that is why we chose to buy from there,” he says. “It’s being done in Australia where conditions are similar to ours, it’s been done in South Africa for 20 years but, but only started in our area about eight years ago. Initially we were reluctant to change until more

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research was done on our specific soil types. This, combined with the capital outlay in terms of equipment, prompted us to gradually change over to the new system, but we are now in boots and all.

“As far as the equipment is concerned, we talking around R3 million for one tractor and planter unit that we use. At the moment we have three and will need another three or four over the next few years.”

Now, the soil on Rhys Evan Group land is not disturbed at all and the only machines to move over the land are the no-till agricultural planters. “They put down the seed and the fertiliser and you follow up with chemical weed control and combine. By doing so, you reduce your compaction, you reduce your fuel by about 30% and due to the increased stubble on the land, you have hardly any run-off rain water, you have less weeds germinating and you have a much better chance in dry years,” explains Cronje.

With the weather and climate being one of South Africa’s most prominent challenges in the agricultural industry, this more sustainable approach to operations means that farmers will have a much better chance during dry seasons and Cronje believes that farmers who do not work with a conservational mind-set will struggle. “Over the next few years, in our part of South Africa, it will be difficult to survive if you do not go down the sustainable conservational agriculture route,” he says.

As well as cutting down on fuel consumption, the precision farming approach means that the number of chemicals used on the soil should reduce over time, providing further savings and improvements in efficiency. “In the long term, the conservational agricultural approach that we take will reduce our chemical fertiliser application to the soil and it will reduce the herbicides applied to the soil. A concern of ours is the amount of chemicals that we need to use for weed and pest control and this method will also reduce a lot of that in the long run but it won’t be without challenges.”

STILL GROWING 2014, like the past ten years, has been a year where growth has received a lot of attention at Rhys Evan Group. As well as the investments that have been made relating to sustainable farming, the ground nuts side of the business has also been an area of focus, where we expanded our bulk drying capacity at the shelling plant, which allowed us to take in more peanuts in a shorter period of time.

And growth is not just coming through capital investments in Viljoenskroon; the company is also looking at expanding its market place and the African continent is an area where Cronje sees potential.

“It’s certainly something we have investigated. Africa is a very difficult market, I don’t have a great deal of knowledge

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company profile about it but we have been to other African countries, especially our peanut people, so it will definitely be something to consider,” he says.

Importantly, growth has not been stunted by a lacklustre economy, as has been the case for other companies who trade internationally. The global economic slowdown, which kicked off around 2008, put paid to many companies’ growth plans but the Rhys Evans Group saw little impact – again a testament to the wide-ranging portfolio of products and services.

“We do all of our maize trading on SAFEX. This means we’re dependent on the international market, mainly the Chicago price, and the exchange rate. I think one of that the biggest influence on our maize market is the amount of white maize that we are able to export. This can have an impact on the price and cause it to change quickly.

“The peanut side is really up and down. This year we have almost doubled the national peanut crop compared to last year and the problem of over supply means we have to battle

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to sell the product.

“The peanut market fluctuates a lot. Sunflower and soy beans are similar to maize, we are dependent on the US price and the import/export parity.

“As far as sheep are concerned, stock theft is such a big risk in South Africa, and some farmers have now started switching to game farming. With pigs, you need to work on economies of scale. We’ve seen smaller farmers close their doors as it can be difficult to compete with the bigger role players in the industry. You have to be able to stay competitive,” Cronje explains.

The company is even reviewing opportunities to expand its local footprint; opportunities which have arisen as a result of the sale of land.

“What some people see as a threat, others see as an opportunity. The big buzz word in South Africa today is food security. If I look at the amount of farms around us in the market, a lot of them are just selling the land. Land owners who are not directly involved in farming themselves are

Rhys Evans Group selling their farms and we are certainly looking at this as an opportunity to expand our own operations.

“If someone gets out, it creates an opportunity and we are certainly not negative about that,” says Cronje.

PEOPLE POWER All of this progression and growth does not just happen overnight. It comes from planning and development and continued positive performance and all of this comes from the company’s team of employees.

The group has a large workforce and each member of the team is afforded every opportunity to develop and grow.

Cronje explains that he is an example of how the company fosters its internal talent.

“Coming out of agricultural college in 1986 I joined the Rhys Evans Group in 1991. I wanted to be part of a big organisation where people are treated well and where there are prospects to improve yourself. I joined here as a junior farm manager and worked my way up. I studied part-time for a business degree and became general manager in 2006.

I’m a crop farmer at heart.”

And even after a long career in the industry, Cronje suggests that he is still very much enjoying his work and the way that the group approaches business further enhances that enjoyment.

“This is not like a job for me, I enjoy it as much as one enjoys a hobby, he says. “The fourth generation of Evans, David, joined two years ago to follow in the footsteps to his father. He is young, and fresh out of university. He now works with me and, together with his dad, we will mentor him over the next few years. This is something which I enjoy very much. The way that we approach it - seeking out opportunities, staying on top of technology, trying to be leaders in the industry - makes it very exciting. We challenge ourselves to be better and better and that makes it so enjoyable and I just love it.”

As for building a workforce for the future, Cronje says that the company’s in-house training is extensive and includes not just working skills but life skills as well to ensure that employees have everything they need to succeed.

“I would like the people who work here to come to work every day like I do,” he says. “What we’ve always tried to do is focus the training that we deliver. We have in-house training and we have a permanent human resource manager who coordinates that together with all of the health and safety requirements. We have technical courses and courses on financial skills and other life skills which we hope uplift the people.”

But it’s not just employees that the Rhys Evans Group is focussed on uplifting. There is a drive within the company

to assist in the community and also with educational institutions.

“We also participate in learnerships where third year agricultural students from state agricultural colleges come and work on the farm. We host between two and four of these students every year. That affords us the opportunity to appoint those guys and take them further through the ranks if we wish. We have appointed at least seven of these people over the past few years and one has grown into a junior farm manager and there is another who is a precision machine operator and they will all have the opportunity for career development in the future,” explains Cronje.

“One of the local technical colleges visit us twice a year and we deliver a course where second year students will go to the abattoir and also learn about crop production and beef management. We give a lot to these institutions with the hope that we will be able to employ some of these young people in the future,” he says.

But it’s not just about contributing to people with the view of employing them. The company also works with the community, providing services which result in no commercial gain but make a real difference to daily life.

“We plough a lot of effort back into the community,” explains Cronje. “For example, we help local schools to maintain their sport facilities. We will also donate peanut butter and other products to hospices and other institutions.

There is no return involved for us at all, we consider it goodwill and we like to be seen as a good citizen. We hope that the community will see that we value people and in the long run we will then have the opportunity to employ top class people who want to work here.”

We have heard many times before that people are the real drivers behind business excellence and it seems that Rhys Evans Group is the perfect example of this. As we move into the future and the company continues to grow, taking on bright young people and always investing in sustainability, there is no reason why we won’t see further growth as the business comes into its fourth generation of Evans family ownership.

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“We challenge ourselves to be better and better and that makes it so enjoyable” sep 14 PAGE 9

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