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Pig genetics deal foundation of new agribusiness

by 5m Editor
21 May 2007, at 11:38am

SOUTH AFRICA - Khehla Mthembu has bought into a thriving R500-million-a-year agribusiness. As Chairman of Kanhym Estates, he has joined forces with Afrikaners to clinch a major agricultural deal. It's a significant step for the founding member and former president of the Azanian People’s Organisation (Azapo) and it is one of the first black empowerment deals in the agricultural sector.

Mthembu put together the consortium, which has bought 28% of Kanhym. He won’t divulge how much his consortium paid, but it is believed to be around R140-million. Eight percent of the 28% stake will be held by Kanhym’s black workers. The remaining 20%, was funded by Standard Bank, Mthembu and two other partners.

Using Kanhym as a vehicle, he intends providing access to modern technology and sustainable markets to emerging black farmers. Kanhym specialises in pig farming and producing feed for chickens, cattle and pigs. Its most valuable asset, says Mthembu, is a deal with the UK-based Pig Improvement Company, which gives it the right to market and sell its sophisticated pig-breeding genetic technology throughout sub-Saharan Africa.

This will greatly enhance the quality, and marketability, of the pigs emerging farmers produce. And when thinking of markets for Kanhym’s pig genetics, feedlot technology and feed don’t just think 40 million in South Africa, he says. Think 200 million in Southern Africa. Think of the huge potential market in Mozambique and in Zimbabwe when white farmers get their farms back and it begins to rebuild its shattered agricultural sector.

Sizable investment
Mthembu says his interest in a sector, that has been pretty much shunned by most ambitious black people, is driven by idealism as well as the business opportunity it represents.

This is a sizeable amount of money to invest in a sector that he admits is not nearly as “sexy” as mining, banking and information technology — which have attracted most black interest up to now.

He admits that agriculture is a new world for him, which is why he has joined forces with Afrikaner Thys Pelser. Pelser studied agriculture and has a serious farming background. The partnership are now close friends and also joint owners of a 2000- hectare cattle farm in Naboomspruit.

His motivation is the belief that agriculture is “the main base for any economy. "If black people don’t look into food security, making sure that they participate in serious commercial farming, you are leaving the whole responsibility for this to other people,” he adds.

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5m Editor