Seeing more boom than doom and gloom

The past five years have seen the exponential growth of an agricultural and equipment sales and service centre, Malcomess Tempe, in the somewhat derelict industrial zone of Butterworth. Mike Burgess reports on how this business has benefited from governme

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The past five years have seen the exponential growth of an agricultural and equipment sales and service centre, Malcomess Tempe, in the somewhat derelict industrial zone of Butterworth. Mike Burgess reports on how this business has benefited from government investment in agriculture and how Gerrit and Marius Potgieter have challenged stereotypical perceptions of the former Transkei as agriculturally inactive and crime ridden.

“This is the last place I would like to live and work,” I thought to myself as turned a corner in the rundown Butterworth industrial zone and drove up to Malcomess Tempe. But this is definitely not the attitude of the Potgieter brothers. Gerrit and his brother Marius own Malcomess Tempe, a garage and tractor dealership in Butterworth that supplies Landini and McCormick tractors (on one year service plans), made by Argo industrial manufacturers. The business also sells a range of farming implements and does tractor, truck and other commercial vehicle repairs, and there is a spare part sales division.

The brothers were able to set up the successful business because the big companies that pulled out of Butterworth after 1994 left established infrastructure.
“In 1994, government incentives were scrapped and big names like Tanda Milling and Braun Engineering disappeared from Butterworth,” explains Gerrit Potgieter. Anyone with an entrepreneurial spirit and the inclination to embrace the culture of the former Transkei had the opportunity to become successful.

Gerrit explains how negative perceptions of the town as a crime-ridden, former-homeland backwater have proved to be largely untrue over the past 13 years. "live here with my wife and two kids. We have been burgled once and have had a car stolen – not from our premises. Nothing serious," he says.

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How the brothers built the business n 1994, Marius leased two warehouses where monolithic converters for Mercedes Benz and BMW had previously been made. He then bought what was a repairs garage called Malcomess Tempe that was already housed in the warehouses by the time he got there. He later bought the warehouses, with the help of two business partners from Komga.

Gerrit arrived in Butterworth a few months after school in 1995 and joined Malcomess Tempe in the spare parts department. He completed his diesel mechanic’s apprenticeship and six years later he and his brother decided to buy out the Komga partners. Gerrit took control of the management of what has become the tractor outlet, while Marius farms on a Kei River frontage farm along the border of the former Transkei. He runs a stud of over 500 Simbras. Both businesses form part of a 50/50 partnership between the brothers and today gleaming new tractors, agricultural implements and trailers stand on display quite literally outside Gerrit’s home, which is a converted office area linked to the warehouse.

In the large warehouse behind the display area, it’s business as usual. There are six technicians (two for tractors, two for trucks and two for other commercial vehicles) and 24 employees hurrying to get the work done in the rapidly expanding business. ‘’If I had 12 technicians I would have enough work for them. I would say we take on only a third of the work offered, there’s just too much,” says Gerrit. But it hasn’t always been that way, it took 12 years to build the business. Today Malcomess Tempe is indirectly profiting from government funding, such as the 2007/08 financial year’s R161 million operational project budget of the Eastern Cape’s Department of Agriculture (ECDA).

Blossoming potential

The surge in agricultural business in the Eastern Cape over the past five years is well illustrated by tractor sales, which jumped from one in 2002 to 41 in 2007, along with regular sales of implements. Much of the access to agricultural equipment sales has been fuelled by the brothers creating a BEE agricultural supply company, Landini Eastern Cape, in 2004. It’s a partnership between Malcomess Tempe and the Kali family from Nqamakwe. Businesswoman Electra Kali passed away and was replaced by her daughter, Bongiwe Kali. What’s more, since Landini Eastern Cape’s inception in 2004, the BEE company has been given the green light by Argo industrial manufacturers to sell tractors everywhere in the Eastern Cape and not only in the usual “dedicated area” normally assigned to dealers.

"We now sell tractors as far away as in Port Elizabeth and Willowmore without ignoring our dedicated area – the former Transkei," says Gerrit. He says a positive attitude drives the success of Malcomess Tempe and it’s also the reason Farmer’s Weekly visited Butterworth in the first place. Gerrit sent an e-mail to the magazine suggesting that we had printed unbalanced coverage of the ECDA’s Massive Food Production Programme (MFPP) started five years ago.

In the report Farmer’s Weekly outlined how some farmers and government officials were abusing the programme’s grant system by fraudulently stating they had bought equipment and done the ploughing and harvesting they were contracted to do in terms of the grant allocation stipulations, when in fact they had done nothing. They would then say the harvest had failed and the grant would be written off by the ECDA, while the corrupt officials and farmers kept the money. The corruption has meanwhile been addressed by the department.

Appreciating the silver lining

"There is so much negativity in this country. Give credit where it is due. I believe government’s plan with the MFPP is a brilliant one. Maize production has improved radically in the past few years,’’ explains Gerrit. ‘’The tractors sold here work, I know because I service them,’’ he says.

Along a small dirt road near Willowvale Gerrit points out gardens of potatoes, cabbage and maize and explains that household production has visibly increased in the area thanks to small ploughing contractors who work for the MFPP and move from village to village. Gerrit says he takes local wisdom to heart. His brother was working as a ploughing contractor when an old black farmer said to him, “It’s the three A’s that count – attitude, ability and action”.

Along a winding road 20km outside Butterworth, 50ha of maize is planted. ‘’Look at this – here the MFPP is happening,’’ remarks Gerrit. A farmer in the area Mike Beshe, bought three Landini tractors from Malcomess Tempe. He does contract ploughing for the MFPP. ‘’I was involved in insurance in Johannesburg and decided to come back here,” says Mike. He has a brick production factory and ploughs 50ha blocks of maize on behalf of farmers for the MFPP, near Etyeni. He also uses another older tractor to plough household gardens.

‘’There is huge potential for maize production in this region as the soil is very good. I remember when I was a boy these areas produced a lot of maize,’’ says Mike. “Political and social factors such as the trend among the local people to move to the cities, led to a dramatic decrease in maize production, but that is changing again because of initiatives such as the MFPP,” he adds. He explains that the number of ploughing contractors has increased steadily. ‘’In my area, five years ago, there were only a couple of contractors, now there are eight or nine.”

Kleinboet van Zyl who works for the MFPP as a mentor to farmers and contractors in the Amatola region, says maize yield have increased considerably. Some areas that used to produce yields of between 0,5t/ha now produce 5t/ha to 6t/ha,’’ he says. ‘’The farmers can now buy bread, meat and other commodities.’’ More importantly more farmers are now able to pay back the required percentage of each season’s MFPP grant after harvest.This suggests increased financial stability in the MFPP process.

In fact, according to the ECDA service-delivery report made available in August 2007, the MFPP has assisted no less than 11 000 farmers operating through 424 farming entities. They have planted 15 000ha of maize and other food crops, yielding 50 000t of maize in 2006 and an estimated 60 000t in 2007.

“Yes, sure, this is way below realising the full agricultural potential of the region, but at least there is movement in the right direction,’’ says Gerrit, before starting to discuss unlocking the potential of growing biofuel. “Canola trials have already begun in the Transkei,’’ he notes.

Contact Gerrit Potgieter on 083 598 8286.