This was according to CEO Chris Venter, following the recent announcement that the company’s revenue from all operations was up by 10% for the year ended 30 June 2013.
“The result demonstrates both the promise and challenges of a business operating in Africa and which has to defend its position in a mature SA agriculture market,” said Venter.
With some 60% of the world’s arable land found in Africa, there were lots of opportunities on the continent, he said. “Obviously we’ll have to do long-term investments to take advantage of these.” Currently, Afgri operates in Zimbabwe, Zambia, Ghana, Nigeria, Congo Brazzaville, Uganda, Mozambique and Mauritius. However, Venter said lack of infrastructure and, in some countries, adverse political situations will remain a challenge.
According to Venter, high opening stock levels in the silo business and excellent tractor sales across the continent resulted in a 50% increase in the agri services segment. There was also a 56.9% improvement in profitability in financial services due to a well-implemented fee-income model and a broader product offering.
Venter said Unigro, which is dedicated to supporting farmers, grew the average debtor’s book under management on behalf of Land Bank to R2,9 billion, while GroCapital was able to raise volumes in the brokering business to produce a 19% increase in fee-based income compared to the previous year.
On the other hand, this year was a disappointing one for the animal protein division, which saw a total loss of R141 million at the profit-before-tax level.
Venter also said that Afgri continues to participate in discussions with government and industry bodies regarding tariff protection – the implementation of which “is imperative if the sector is to avoid a calamity.”
