In 2004, the retief Family bought a nearby farm, De Goree, and decided to start a BEE project to benefit their farmworkers. “Even though at that stage there wasn’t a scorecard in place, we felt it was the right thing to do,” says Philip. T he farm was 138ha with 50ha of established vineyards and the Retiefs signed a deal with their workers that established the De Goree Trust.
A business plan was put in place and the relevant applications were put forward to access the LRAD grant programme. I t took 18 months to sort through all the red tape, but farming on De continued as if all the bureaucracy had already been navigated. Minor issues could have become major stumbling blocks, for example, if the Retiefs had lent the money to the beneficiaries outright, for them to buy the farm, they would not have qualified to access LRAD grants as they would no longer have been regarded as disadvantaged. “To secure enough capital from the Department of Land Affairs through LRAD, we had to include 116 people, each qualifying for R26 000,” explains Philip.
“The De Employees Trust includes retired workers and pensioners of Van and all the workers at De Goree. In hindsight, working with a smaller group would have simplified many aspects of the venture and am relieved to see that previously disadvantaged individuals now qualify for R111 000 from LRAD. The Department of Agriculture played a crucial role. lot of training had to be done and the group’s expectations had to become more realistic.
An independent mediator has more credibility in such situations and the department did an excellent job.” Currently the Employees Trust owns 52% of De Goree, and the farm Van Loveren owns the other 48%. There is also a board comprised of four Van representatives and four De representatives. The De representatives were chosen by the workers. here is a clause in the agreement that prohibits the sale of any shares in the Employees Trust for the first 10 years of the venture and after that other workers have first option to buy shares put up for sale.
“We don’t want to encourage De Goree shareholders to sell, but if they want to, it would be best to sell to other shareholders,” says Philip. Van Loveren has signed a 15-year contract with De Goree, securing a market for the grapes produced by the trust. Van pays market-related prices and the terms of payment are 60 days. “These are very favourable terms,” says Philip. De Goree was a productive unit when it was bought and because of the LRAD contribution, it has no debt. All these factors have helped the new business succeed.
“The first three years have seen good production and the workers were able to buy a new bakkie after the first year and for the second and third years, dividends were paid to all shareholders,“ explains Philip. “A new brand name, Fives Reserve, has also been launched and the De Goree Employees Trust owns 25% of that. The idea is to use De Goree grapes for that range and to give the workers the opportunity to share in adding value to their product.”
A solid support structure Comprehensive Agricultural Support Programme (CASP) funds have been accessed from the Department of Agriculture for training courses and to buy equipment. At present Hennie Retief, one of the Retief cousins, acts as farm manager, as there is not yet a suitable candidate for the responsibility from among the workers’ trust. “We initially hoped to have a manager from within the group in five years, but I now think 10 years is a more realistic target,” says Philip. “In the meantime, training will stimulate the workers and suitable candidates for responsible positions will emerge.”
The workers need computer, marketing and business skills. “All CASP contributions are matched by Van Loveren, as skills development is in our direct interest,” says Philip. “Workers’ ability to accept responsibility and shoulder criticism needs to be developed especially if they serve as board members. Since the Retief family is a large shareholder, we drive the need for success just as hard at De Goree as in our other business activities.”
“Being a shareholder and one of the De Goree representatives on the board is a huge challenge for me,” says Maritsa Jansen, whose grandmother is also a shareholder. “I was initially shocked at the amount of money spent on a daily basis to keep a wine farm going. In the beginning the workers were sceptical about the new business, but since the dividends paid over the last two seasons, things have changed.
Personally, I would like to buy more shares and become more involved in the management of the business. I see it as security for me and my future family.” Joint ventures are definitely the way to go in agriculture,” says Philip. “We have been fortunate enough to have had three good years, but in agriculture, there will also be challenging times and then the De Goree Trust will have to prove its mettle.” Contact Philip Retief on (023) 615 1505. |
