AYANDA KANANACEO, Joburg Market

‘FRESH PRODUCE MARKETS – A RURAL AND URBAN ECONOMIC DRIVER IN SOUTH AFRICA’

10 JULY 2019PREMIER HOTEL O.R. TAMBO

JOHANNESBURG, SOUTH AFRICA© AYANDA KANANA

1

Access to Markets

The central point of excellence in SA

Agribusiness Africa Conference – Farmer’s Weekly 10 July 2019

Ayanda Kanana CA(SA)

CEO – Joburg Market SOC Ltd

The South African Agriculture

Industry: Vital Statistics

3Source: Economic Review of the South African Agriculture: 2018, DAFF

South African Agriculture Industry – Vital Statistics

2016/17 2017/2018

Value of SA Agriculture Production (Gross) R279.5 billion R288.6 billion*

Animal ProductionR 128 billion

(46.5%)R140 billion*

(48.5%)

HorticultureR77.4 billion

(27.7%)R84.6 billion*

(29.3%)

Field CropsR72.1 billion

(25.8%)R64.1 billion*

(22.2%)

NFPMs Trade (% of Horticulture) R 17 billion (22%) R18.6 billion (22%)*

JM Turnover /Market ShareR 7.5 Billion

(44.0%)R8.2 billion*

(44%)

*= estimate

The South African Agriculture

Industry: Vital Statistics

4Source: Economic Review of the South African Agriculture: 2018, DAFF

South African Agriculture Industry – Vital Statistics

2017/2018

SA primary agriculture growth since ’94 -2017

7.6%

Agriculture’s contribution to GDP since ’94 - 2017

From 3.5% to 2.3%

Employment by sector in SA 2018https://www.statista.com/statistics/578944/employment-by-economic-sector-in-south-africa/

Agriculture 5.61%Industry 23.24%

Services 71.6%

Unemployment in SA 26.96%

Total population in SA - 2018 57.7 million*

Competition in Horticulture Industry

Distribution Channels

5

R84.6

billion

54%

24%

22%

National Markets Turnover for a 10-year period…

6

PeriodLocal

Outlook

National OutlookGrossed

JM NFPM

2009 3 593 764 336 8 984 410 839

2010 3 788 511 733 9 471 279 333

2011 4 182 460 711 10 456 151 777

2012 4 930 981 838 12 327 454 594

2013 5 637 059 041 14 092 647 603

2014 5 769 804 311 14 424 510 777

2015 6 776 861 000 16 942 152 499

2016 6 786 901 844 16 967 254 611

2017 7 282 861 191 18 207 152 977

2018 7 894 231 461 19 735 578 652

Total 56 643 437 465 141 608 593 663

Assumptions:

• 10 year period

• JM at 40% M/Share

consistently

Inferences:

• The Role of JM is critical to

the country’s food economy

• JM contributed R56 billion

over 10 years; and

• The National markets

contributed R141billion to the

sector over the same period

Job Security & Sustainability

Reliability of Supply & Demand

Product Dependability

Consistent Growth

Their role in the Country…

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• Proponents for price discovery between the willing

buyer and seller;

• Champions for large and affordable distribution of

fresh produce (daily);

• Huge supporter of informal sector entrepreneurs;

• Efficient with one-stop shop services;

• Provider of complimentary services – cold chain

management;

• Creator of secure and sustainable jobs

The Long journey…

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• Markets have suffered a view that they are a dying

breed.

• Poor investment in the infrastructure has threatened

their existence and sustainability

• Integrity on the floor during trading has come under

scrutiny

• Transformation and inclusivity not immediately

evident

• Competition has intensified over time

• Unclear role with respect to food safety

Joburg Market is the largest of its type in Africa with the

following stats:

• 64 Hectares total area of facilities;

• 75 000sqm trading area;

• 40 000sqm Wholesale space

• 15 000sqm Office space

• Guaranteed all year supply from over 6 000

producers;

• A total of 18 Market Agents (with 10 BEE Agents) on

the facility;

• Over 99 081 buyers source optimum fresh produce on

a daily basis;

• Service to over 7283 farmers local and abroad (grapes

from Spain, some commodities from Egypt)

Joburg Market: Vital Statistics

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A SAFE, CLEAN, SMARTMARKET

Vision and mission…What Changed?

Vision

A Smart fresh produce trading hub that is globally competitive

Mission

Building a trading hub that catalyses the growth of the City’s economy

through an inclusive business environment

Values

The values of the Joburg Market are the following;

• Transparency

• Service excellence

• Integrity

• Innovation 10

CLEAN

SAFE

SMART

ON A NEW STRATEGIC TRAJECTORY TOWARDS 2021/22

• Physical cleanliness of Facilities • Promotes Good Governance

• Secure Business and Customer Environment• OH&S compliance• Food Safety Compliance

• Modern technological systems & services

• Optimised Floor space • Responds to the evolving

needs of its stakeholders

Towards 2021/22 to achieve a SMART Market

• Sales : R7.3 billion (2017/18)

• Mass: 1.4 million tons

• Record Monthly Sales : R752 million (October 2018)

• Record Daily Sales for a single business : R43 million

(December 2018)

• Average Monthly Sales: R616 million

• Average Daily Sales: R28 million

• Average Monthly Sales Transactions : 600 000

Transactions (24000 per day)

• Turnover Market Share: 44%

• Mass Market Share: 42% (NFPM – 3.371 Tons )

• Agents are paid daily at the market

12A SAFE, CLEAN, SMARTMARKET

Joburg Market: Vital Statistics

20 Years Organisational Performance Review

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Turnover

Mass

R/Kg

A SAFE, CLEAN, SMART

MARKET

Top 10 Products

Actual vs. Previous – June 2019

TURNOVER MASS Avg. p/kg

2018/19 2017/18 % 2018/19 2017/18 % 2018/19 2017/18 %

Potatoes 117 206 057 124 270 383 -5.68 38 762 473 41 190 425 -5.89 3.02 3.02 0.22

Onions 71 533 951 72 402 707 -1.20 14 307 246 18 336 733 -21.97 5.00 3.95 26.63

Tomatoes 69 935 126 79 439 842 -11.96 10 224 450 11 358 228 -9.98 6.84 6.99 -2.20

Apples 32 693 319 33 127 078 -1.31 4 721 513 4 741 374 -0.42 6.92 6.99 -0.89

Bananas 31 179 158 31 119 975 0.19 4 945 697 6 388 902 -22.59 6.30 4.87 29.43

Oranges 26 151 262 25 930 982 0.85 8 130 387 8 564 610 -5.07 3.22 3.03 6.24

Carrots 14 162 066 17 874 273 -20.77 5 889 712 5 623 989 4.72 2.40 3.18 -24.34

Butternut 13 536 655 12 346 175 9.64 4 153 050 4 541 470 -8.55 3.26 2.72 19.90

Green

Peppers12 759 397 11 701 288 9.04 1 975 361 2 045 606 -3.43 6.46 5.72 12.92

Naartjies 12 241 089 11 827 709 3.50 1 319 325 1 274 681 3.50 9.28 9.28 -0.01

401 398 080 420 040 412 -4.44 94 429 214 104 066 018 -9.26 4.25 4.04 5.31

The JM Emerging Farmers

Support Model

Access to post harvesting facilities

1950 m2

12 000sq m at full

capacity we can

handle 5000 tons of

produce daily

1950 m2

1950 m2

1950 m2

Food Safety & Standards

FOOD SAFETY

AND HYGIENE

MONITORING OF

JM FACILITIES

LABORATORY TESTING FOR

PESTICIDE RESIDUES (JM IN-HOUSE LAB ) &

MICROBIOLOGY (SABS LAB)

FOOD QUALITY

CONTROL INSPECTIONS

Access to market

AERIAL VIEW OF THE PROPOSED MANDELA MARKET PRECINCT

AERIAL PERSPECTIVE FROM HALLS 3 AND 4

Dignity to our

stakeholders

Impression of food court for cooking mamas and taxi Rank

Cleaner

facilities

Inside view under roof of the Mandela Market Precinct

From 78 to 98

stores with

cold rooms

Complementary Agri-Services

Access to training & Development

Opportunity Centre to be established at the Market

In partnership with the City of Johannesburg Department of Economic Development,

For informal trader development and training

In partnership with the Land Bank

Lobbying for the Land Bank to be locate in the Market

Logistics & distribution

An appeal to Government for a collaboration. We would like to provide

Farmers with transport from farm to market for Gauteng Farmers.

Limited influence

Johannesburg Women & Youth Farming Programme

Key Initiatives to boost access

Other key issues to consider:

• Centralise opportunities at the point of sale markets;

• Cities need to have an agricultural strategy or plan that is understood by all;

• Function a lot closer with the private sector to stimulate the economy through the

agricultural value chain

How:

• Technology and Innovation cannot be ignored

• Training & Development is critical – Market staff must remember they are

handling the Farmer’s product;

• City/Political Mandate must enable economic growth

Table stakes:

• Integrity on my floor

• Take care of the farmer’s product;

• We are partners in this game!

THANK YOU

Discussions & Closing Remarks

A Clean, Safe, Smart Market