obaro feature
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SA Mag - Issue 7 - OBARO FEATURETRANSCRIPT
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O B A R O
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Obaro FEATURE
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Agriculture, which includes all economic activities from the provision of farming inputs, farming and value adding, is
an important sector in the South African economy despite its small direct share of GDP. Agriculture provides food and fibre to meet basic human needs.
South Africa magazine recently caught up with Obaro’s Phillip Coetzer, 48, and asked him about the company’s role in this vital sector and how it is positioning itself for the future.
Obara’s Philip Coetzer talks to South Africa magazine about the current state of the agricultural industry in this exclusive Q&A.
Q&Q&Aw i T h O b A R O D i R E c T O R P h i l l i P C O e t z e r
Q&AQ&Ato MGK Operating Company (Pty) Ltd. It divisionalised in 1998 and Obaro is one of the divisions in the group.
Who formed the business?Farmers in the Brits area formed the company; according to documents 25 farmers applied for membership and bought a share each.
What were its original goals and objectives?To achieve consistent prices for agricultural products, to help farmers achieve their goals and to stabilise their income.
What defines you as a business today?Obaro still focuses on the farmers. 90 percent of our customers are farmers. The MGK Group mission is to serve the farming community and to help farmers to farm successfully. Obaro’s main focus is irrigation farming. We established ourselves over many years as a leading supplier to irrigation farming.
Has the remit changed over the years?No, the reason for our existence is still the same.
How long have you worked for Obaro? Since February 1985.
Has your role as managing director been helped by previous experience?The fact that I started off as a receiving clerk in the then co-operative and developed through the ranks helped a lot. It helps to understand the company and its culture.
Do you have a farming background?Yes. I grew up as a farm boy in the North West province. My father farmed with cattle and maize.
Going back to Obaro, when was it formed?Obaro’s holding company, MGK Operating Company, was established in 1930. It was in the time of the big recession, agriculture dipped and agricultural product prices plummeted. The farmers came to the conclusion that the only way that consistent prices could be achieved was through the formation of agricultural co-operatives.
The result was the formation of the Magaliesbergse Wheat Co-operative on 17 September 1930. In 1998 the name changed
Obaro FEATURE
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www.obaro.co.zaAligned with the farmer
Proud supplier to Obarofor over 50 years Q&AQ&A
Q&AQ&AHow do you see the current state of the farming industry?Grain farming is under pressure due to low prices and over-production on certain products. Vegetable and fruit farmers are under less pressure as far as prices are concerned. Production cost will always be a big factor especially for exporters due to the fact that they compete with overseas farmers, which are subsidised by their local governments.
Low interest rates helped the farmers quite a lot in the previous year.
How has the business been performing?The recession had an impact on the business due to the drop in prices. It means we had to reduce prices on certain stock to sell it. The problems belong in the past now; in the current financial year business is good and we look forward to good results.
What areas are you performing best?The fertilizer and fuel product ranges of our business are doing quite good at this stage.
How would you review the last 18 months?They were quite tough due to the recession and the influence on prices. Some fertilizers prices drop by 60-70 percent. The same thing happened with certain chemicals.
This means we had to sell some products below cost to get rid of it. Despite this problem, we still managed to keep our customers happy and make a reasonable profit.
What big developments are you currently working on?We are busy developing a fuel site and branch in Naboomspruit. We are also upgrading some of our existing fuel stations.
Are you unique?Obaro is certainly unique. Firstly, we are a leading supplier to the irrigation farmers in South Africa. Secondly, the relationship with our clients and the open communication channel is something we cherish and must maintain. Thirdly, our personnel are well trained, professional and experienced in their jobs.
What is the Obaro’s mission statement?Our statement reads ‘Aligned with the farmer’ and that is very important to us. We must align with our farmers and support them.
Obaro has a very close relationship with clients and our doors are always open to them to speak about their problems, challenges and suggestions.
What makes you different to the competition?Obaro’s approach to business and to the farming community differs quite a lot from anything else available on the market. Our Marketing personnel visit farms regularly, support farmers and advise them on topics like how best to use fertilizer or chemicals and seed. Our team of financial advisers also help in planning of different crops and farmers’ cash flow. Irrigation planners also advise farmers on the different products available to suite their specific needs.
What services to you offer farmers?Obaro has a wide variety of products, which we offer clients such as irrigation components, hardware products, fertilizer, crop protection products, seed, fuel, animal health, horticulture and other agricultural products.
MGK, our holding company, has different divisions, which include Statusfin Financing and Statusfin Insurance that help farmers to finance and insure their crop throughout the duration of the season. They provide additional support.
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Obaro FEATURE
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Q&AQ&AHow do you see the industry developing?In view of the need for food in the world, and especially in Africa, I think agriculture is the sector for the future.
What will the future hold?The focus will be on water supply and the quality of water. Being an irrigation company we must help to maintain good water quality. Obaro will become the leading retail supplier to irrigation areas in South Africa.
How will that goal be achieved?With a good management group, good planning and good relationship with customers we will achieve our goals.
Obaro needs to grow its business therefore we must always be on the lookout for opportunities and make sure we use it in the best possible way.
To learn more about Obaro and how they might help you visit www.obaro.co.za eND
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