Amadlelo- Poised to Transform South Africa's Agribusiness Sector

Amadlelo Agri CEO Simpiwe Somdyala (left) with a young graduate of the Amadlelo internship programme.

For nearly two decades, Amadlelo Agri has been at the forefront of dairy farming in South Africa.

The Eastern Cape-based agribusiness, established in 2004, operates dairy farms and is a strategic investor in a macadamia farm, a piggery farm, and food manufacturing company Coega Food Group.

In 2006, Amadlelo teamed up with government and the University of Fort Hare to launch the company’s first dairy farm in Alice, Eastern Cape. Since then, the number of dairy farms under Amadlelo’s management has grown to five, laying the foundation for the company to add more dairies to its portfolio and to diversify into non-dairy agribusinesses.

The five dairies produce 28 million litres of milk a year. The milk is processed by Coega Dairies in Gqeberha, formerly Port Elizabeth.

The company operates mainly in rural areas on land owned by the communities. It engages in sharemilk partnership agreements with the communities, whereby it provides management skills, movable assets, and livestock required to operate the dairy farms.

In turn, the communities bring to the table land and physical infrastructure. Amadlelo’s sharemilk model is based on New Zealand’s sharemilk model, whereby the company also facilitates skills transfer to communities and creates market access for the milk produced by the dairies. Amadlelo operates dairies in Alice, Middledrift, Shiloh, Keiskammahoek, and Ncora.

Amadlelo’s chief executive officer, Simpiwe Somdyala, has been driving the next phase of the company’s expansion. The seasoned corporate executive took over the reins in 2019 from dairy guru and agri-business entrepreneur, Jeff Every, who played an instrumental role in establishing the company.

The management shake-up was preceded by an acquisition of an equity stake in 2017 by investment outfit Tulsacap, which transformed Amadlelo into a 72% broad-based, black-owned company.

The remainder of the shares is held by Amadlelo Milk Producers Investment Company (AMPIC). AMPIC represents 50 commercial farmers from KwaZulu Natal and the Eastern Cape, who supported the company when it was established. Over the years, the company has identified dormant or underutilized land parcels, unlock value by partnering with rural communities and established commercial farmers.

“Amadlelo has undergone major structural changes and is now a transformed 72% black-owned agribusiness, with established rural community partnerships and a strong network of successful commercial farmers,” says Somdyala.

Having recently crossed the R1 billion combined farm revenue mark since its inception, Amadlelo has also transformed the lives of communities where it operates. Since the company’s establishment, it has paid R869 million into communities in the form of wages, distributions, land rentals, and community partnerships.

Through its community partnerships, the company has access to 2205 hectares of irrigated land, where it keeps 10, 024 cows including heifers and calves. On the irrigated land, Amadlelo plants maize, lucerne, and other feedstock that is used to feed the cows.

At its dairies, Amadlelo utilises state-of the-art equipment and management systems. The company has a long-term vision of contributing to the development of an inclusive prosperous future through sustainable and profitable agribusinesses.

“We aim to position Amadlelo as a preferred empowered company that unlocks latent agricultural assets and expands existing capacity into profitable and sustainable agribusinesses, through mutually beneficial partnerships and long-term joint ventures,” says Somdyala.

Amadlelo also prides itself in nurturing black talent. Recently six graduates completed were sent to New Zealand to the New Zealand Internship Programme (NZIP) and two managers have also participated in talent development programmes.

Through Amadlelo’s programmes, nine junior managers received mentorship and training on commercial farms that are partners of Amadlelo. The company also dispatched 15 young trainees to various commercial farms for practical training.

Amadlelo is fully supportive of the vision to turn South Africa into Africa’s breadbasket. To contribute to this vision, it plans to expand the Ncora dairy farm and collaborate with a strategic partner to revive the Keiskamma Sevens Stars Dairy Factory, where amasi, butter, and Gouda cheese will be produced and supplied to retailers through off-take agreements.

“We will continue to strengthen partnerships, strengthen our balance sheet, diversify income streams, transfer skills and empower communities to achieve sustainable development impact in areas where we operate,” concludes Somdyala.

CONTACT DETAILS

Zipho Makwabe Phone: 063 634 8363 Email: zipho@amadlelo.co.za Address: 23 Lourie Street, Fort Beaufort, 5720