The Karsten Group: International fruit giant

-

Recently named the Agricultural Writer of SA’s Farmer of the Year for 2015, Piet Karsten has built a farming empire on the Orange River, where some of SA’s top export fruit is grown. Susan Marais visited the Karsten Group’s headquarters in Kanoneiland in the Northern Cape to learn more.

The Karsten Group: International fruit giant
The Karsten Group farm. Photo: Courtesy of of the Karsten Group

Travel 30km in a westerly direction from Upington in the Northern Cape and you will arrive at one of South Africa’s largest farming operations the Karsten Group.

The Karsten Group

The Karsten Group was established in 1968 when Piet Karsten (68) and his wife Babs, now deceased, settled on 6ha of land near Kanoneiland on the banks of the Orange River. In 1980 they acquired Roepersfontein, which now serves as the headquarters of the agribusiness. Fruit is grown on several farms along the Orange River – the furthest no less than 250km from Kanoneiland.

The business has also expanded to the Western Cape, where numerous other water sources feed the apples, dates, cherries and pears destined for mainland Europe, the UK, Asia, the Middle East, Russia, Canada, Nigeria and Ghana. This is according to Pieter Karsten, Piet’s eldest child and managing director of New Vision Fruit, the fruit marketing subsidiary of the Karsten Group.

Healthy workforce, healthy profits
The Karsten Group is a family business and a business of families. All four of Piet and Babs’s children, as well as their spouses, work at the Karsten Group. The group permanently employs almost 1 850 people and seasonally employs between 4 500 and 5 500 people. Piet stresses that people are the backbone of the business’s success.

“Healthy profits are generated through a healthy workforce, which is why the ‘people factor’ forms a key element in our philosophy,” he says. It is thus critical to take care of their workers’ financial and social needs.

According to Pieter, the implementation of a national minimum wage for farm workers has had a positive effect on their business.

“It has helped us to utilise our employees effectively. Labour might seem relatively cheap in South Africa, but it becomes expensive due to low productivity,” he explains. Bearing this in mind, the group’s management team is constantly looking to other regions of the world for management methods and ways to increase productivity.


Piet Karsten

Training and career planning are unique to each permanent worker, ensuring that the person has a clear vision of his or her future and can plan accordingly. Vacancies are advertised internally and continual training and development are carried out to ensure that workers are equipped with the basic skills necessary for the next level for which they might qualify.

The group’s success will always be dependent on labour. It thus tries to incorporate the latest farming technology without sacrificing its workforce.

“The world is a tough place and therefore we like to help people by employing them at a higher salary rate,” says Pieter.

Education

The Karsten Group spends hundreds of thousands of rands annually on education to ensure a more productive and educated workforce. Education starts at an early age, with a full-day crèche for children under six on all of its Northern and Western Cape farms. Three farms have after-school centres where children from Grade 0 to Grade 7 are assisted with homework by teachers.

Social responsibility
Piet takes his social responsibility towards the community seriously, with alcohol abuse being a primary concern. “Farm workers, especially seasonal workers, don’t earn a huge salary. Of the little that there is, a huge chunk is used to buy alcohol.”

To address this issue, a team of social workers work with employees in their homes and the company hosts money management courses. According to Pieter, seasonal workers are their greatest challenge.“They’re only on the farm for a short period and unfortunately we can’t spend the necessary time to try to improve their quality of life.”

Uplifting the wider community
In addition to ensuring the welfare of its employees, the group believes in empowering the community at large. This is achieved through preschool care, bursary and study schemes for workers’ children, health care, and housing for both permanent staff and temporary workers.

Community involvement projects include, among others, gardening programmes at schools in the region, women’s clubs, adult literacy classes, computer training, sports programmes, social skills training, leadership training, various social activities, and spiritual counselling.

The importance of achieving a balance between career and social development is continually emphasised, and the group spends ample resources to facilitate and develop both. An HIV/Aids programme, which has run for over a decade, focuses primarily on education on the dangers of the disease and its prevention.

Peer group leaders are trained regularly and supported by a full-time coordinator, health workers and production managers. The group ensures that workers have access to the associated counselling, vitamins and medication.

Crop production
The Karsten Group’s products are as diverse as their markets and the soil in which they are grown. Each farming area has soil that is specific to it, says Pieter. It includes sandy loam (on river banks), loam, clay, sand and stone. In most instances, micro-sprinkler systems are used for irrigation, but 200ha of yellow maize are planted under pivots.

“Although the maize is sold, we mainly plant this crop to use the maize rests as compost for our fruit trees,” says Pieter. “The production cost of maize in this region is simply too high to make it an economically viable business for us. But if we didn’t plant maize, we’d have to buy in all the compost, which would drive up the logistical and production costs.”

A need for research
According to him, a lack of agricultural research is hampering the sector at present. “Better research is needed when it comes to pests,” he says. With so many new bilateral agreements in place, phytosanitary measures are becoming more crucial by the day, he stresses.“Government needs to improve its support in this regard,” he warns. “If export destinations are lost due to this issue, we’ll lose numerous jobs. This isn’t something that the private sector can do on its own. If we want to secure South African agriculture, it’s crucial that the working relationship between government and the private sector improves.”

Fruit
Table grapes form the core of the group’s fruit exportation business. Production stretches across 250km of the Orange River, South Africa’s most important early grape-growing region. The group also produces grapes in the Western Cape, a late-growing region.

The fruit is harvested between November and the beginning of April and includes a range of red, white and black seedless varieties. Supplies from the Orange River and Western Cape are complemented with supplies sourced from South America from April to August.

Apples are produced at the farm Hoogland, which lies at a high altitude in the Swaarmoed region of Ceres. A climate of cold winters and hot summers is ideal for apple production, and the fruit is harvested between December and April. Varieties include Sundowner, Fuji, Pink Lady, Granny Smith, Brayeburn, Oregon Spur, Early Red One, Starking, Golden Delicious, Pacific Gala, Ruby gala, Royal Gala and the Pacific Golden Delicious.


Optimal use is made of packaging. In 2015, for example, characters from the Universal Pictures film Minions were used to market these apples. This was the same year that the film was released.

Hoogland also grows cherries and pears. The group focuses on the pear varieties Williams’ bon chrétien (Barlett), Packham’s Triumph and Forelle, and harvesting takes place between the middle of January and the middle of March. In partnership with SA businessman Christo Wiese, apples, pears, plums and proteas are produced on the farm Lourensford near Somerset West.

Dates are produced in the desert-like conditions of the Klein Pella area in the Lower Orange River region. Production is concentrated on the Medjoul variety, which is harvested during March and April and marketed from March to October. The group’s citrus component focuses on the production of red grapefruit, navel and Valencia oranges, and late mandarins, all of which are grown at Mosplaas Citrus near Kakamas.

“The climate at Mosplaas allows us to harvest and pack citrus fruit relatively early in the season,” says Pieter. “The warm temperatures mean the citrus fruit has a good brix content and are favoured by global buyers.”

Animal production
The Karsten Group’s large animal production component comprises goats, sheep, cattle and game. In 2008 it began farming Boer goats after purchasing 50 ewes and two rams. Today the flock consists of 350 stud ewes and 300 flock ewes. Only top-quality stud rams are used and all animals are registered with the Agricultural Research Council and SA Stud Book. Ewes and rams are sold as they become available, and the semen of top rams is sold.

The Karsten Family Trust Dorper Stud, previously owned by Albie van Niekerk, is 50 years old. It is managed by the Karsten Group and any animals rejected as stud animals are sold to the nearest feedlots and abattoirs. The group has diversified into game farming and owns a 8 000ha game farm near Upington. Springbok – 1 300 of them – are the main focus, with animals marketed mostly as breeding material. The focus is on breeding larger animals with longer horns.

The farm’s tough environment results in hardened springboks that are well-acclimatised to their environment.

Logistics and marketing
The exchange rate currently favours South African exporters, driving up their international competitiveness. However, Pieter maintains that it is the quality of the Karsten Group’s fruit that gives it an edge on overseas competitors and determines long-term success. He ascribes the quality to the climatic conditions in which their fruit – especially the grapes – are grown.

In 2004, New Vision Fruit was established as the export and logistics arm of the group. More recently, Horizon Fruits was established to take care of the logistical services, in addition to sharing some of the marketing functions of New Vision Fruit.
In 2005, Karsten UK was established as the distribution service provider of the group in the UK to handle the group’s affairs in Europe. In addition, in 2013 New Vision Fruit BV in Rotterdam was established to supply and deliver services to Europe.

In partnership with other South African companies, the group has also established a marketing structure, Hydix, to promote and market its products in both the Middle and Far East. The group has a strong logistics and international marketing structure, with companies and offices in Cape Town, Spalding in the UK, Rotterdam in the Netherlands, and St Petersburg in Russia.

Visit the Karsten Group website at www.karsten.co.za.

This article was originally published in the 27 November 2015 issue of Farmers Weekly.