The “Adding value” chapter of Agribook.Digital (of which this page is a part) deals with, well, adding value to the primary agricultural product. This finished product is what the consumer wants and pays money for. Because of this, farmers are often advised to be more involved in the activities that happen beyond the farm gate.

The agro-processing industry consists of various sub-sectors, which include:

  • meat processing
  • dairy products
  • fruit and vegetables processing
  • grain mill products
  • sugar mills and refineries
  • wine fruit juices
  • beer
  • cocoa, chocolate and sugar confectionery
  • bakery products
  • prepared animal feeds

Other food products/ingredients include starch and starch products, baby food, chips, baking powder, yeast, condiments, flavours and fragrances, mustard, vinegar, edible salt refining, tea and coffee processing and packing. Non-food products include tobacco, essential oils, biofuels, biopolymers, bioplastics, paper and paper products, wood and wood products, textiles, wearing apparel, rubber products, footwear and leather and leather products.

Government views agro-processing as a sector to be strengthened as it delivers on vital areas like job creation, exports and “raising overall economic productivity” (see “National strategy and government contact” heading).

International business environment

Local business environment

Using Quantec figures from 2021 as its source, the Bureau for Food & Agricultural Policy (BFAP) 2021-2030 Baseline tells us:

  • Agro-processing made up 30% of South Africa’s R2.15 trillion output generated by the manufacturing sector.
  • The manufacturing sector made up 13% of GDP (agriculture, forestry and fisheries 3%).
  • The top agro-processing industries listed according to the percentage contribution to gross income: beverages (23%), wood & paper products (15%); macaroni & other food (10%). These are followed by grain mill & starch; processed meat; tobacco products; sugar & cocoa products; prepared animal feeds; dairy products; animal oils & fat; textiles; bakery products; processed fruit & veg; leather & fur.

Looking at the Gross Value Added (GVA) over the previous two decades, BFAP shows the largest contributor to value added in the agroprocessing sector has been food, beverages & tobacco, with a combined share of 75% of the total. Although the 2020 GVA numbers are not available, a drop is expected considering that the overall manufacturing sector has declined.

Whereas agriculture’s positive and growing trade balance reached R63.8 billion in 2020, the agroprocessing value was more than six times lower at R9.4 billion, but still positive.

 

Further reference:

  • The United States Department of Agriculture’s Foreign Agricultural Service (FAS) puts out a “Food Processing Ingredients” report on what is happening in South Africa. Find the latest one on the Internet.
  • A very useful diagnoses of the country’s agro-processing investment needs, constraints and opportunities was given in what was to be the last of government’s Industrial Action Policy Programme (IPAPs), 2018/19-2020/21.
  • The “Websites and publications” heading has several sources which will be of interest to the reader.

 

 

For the newcomer

Introduction to the General Principles of Agro-Processing:

Faced with the current economic realities, farmers worldwide are searching for new options of surviving, as well as expanding their business. One of the many opportunities to grow markets, turnover and profits, is by adding value to farm produce through further processing. Most value-added food products available to consumers have been processed in some way or other, even if the processing is as simple as cleaning produce before it is packed in plastic-or net bags. Two types of processing methods may be performed on raw materials:

  • Primary Processing: this type of processing includes the simplest of processes such as washing, peeling, chopping, ageing, the milling of wheat for flour production, and the processing of sugarcane;
  • Secondary Processing: this type of processing involves the conversion of primary processed products into more complex food products and includes procedures such as mixing, depositing, layering, extruding, drying, fortifying, fermentation, pasteurisation, clarification, heating etc
Source: Theresa Siebert in the introduction to the ARC manuals on agro-processing.

Find a list of the ARC manuals on agro-processing, crucial documents, under the “Websites & publications” heading.

The agro-processing industry consists of various sub-sectors, which include:

  • meat processing
  • dairy products
  • fruit and vegetables processing
  • grain mill products
  • sugar mills and refineries
  • wine
  • fruit juices
  • beer
  • cocoa, chocolate and sugar confectionery
  • bakery products
  • prepared animal feeds

Other food products/ingredients include starch and starch products, baby food, chips, baking powder, yeast, condiments, flavours and fragrances, mustard, vinegar, edible salt refining, tea and coffee processing and packing. Non-food products include tobacco, essential oils, biofuels, biopolymers, bioplastics, paper and paper products, wood and wood products, textiles, wearing apparel, rubber products, footwear and leather and leather products.

Government views agro-processing as a sector to be strengthened as it delivers on vital areas like job creation, exports and “raising overall economic productivity” (see “National strategy and government contact” heading). Business views agro-processing as “a high skilled, capital intensive and scale of economy business”. It welcomes government attention but lists concerns as being that interventions should not crowd out private sector investment or undermine the competitiveness of current players.

An interesting example of entrepreneurship on a fruit farm can be found at http://fruitlips.co.za. FruitLips processes fruit not exported, manufacturing jams, marmalades, chutneys etc. This offers jobs to “more than fifteen families”.

National strategy and government contact

Government has firmly identified agro-processing and its upstream sector, agriculture, as a critical driver of inclusive growth in South African economy, with very significant job creation potential. Agro-processing flies high in the Agriculture and Agroprocessing Master Plan (AAMP) (still to be released – 4 October 2021) “as a critical extension of the agricultural value chain to assist in driving development and growth” (BFAP, 2021). Previously it has featured in the National Development Plan (NDP), which postulated a million possible new job opportunities, and in other strategies and policy documents like the Industrial Action Policy Programmes (IPAPs) and the Agricultural Policy Action Plan (APAP). Find these document on www.gov.za.

Department of Trade, Industry and Competition (the dtic) Chief Directorate: Agro processing and Forestry Based Industries www.thedtic.gov.za

  • Agro-processing has enjoyed support under schemes such as the Agro-processing support scheme (APSS), Enterprise Investment Programme (EIP), the Co-operative Incentive Scheme and the Manufacturing Investment Programme and the Enterprise Investment Programme (MCEP). The dti has funded agro-processing facilities and projects through entities like the Coega Development Corporation (CDC).

Find details of Government incentives at www.investmentincentives.co.za. 

Competition Commission www.compcom.co.za  The Competition Amendment Act holds major implications for directors and senior management. The Act introduces provisions to hold personally accountable, and criminally liable, individuals who cause firms to engage in cartel activity.

Department of Agriculture, Land Reform and Rural Development (DALRRD) www.dalrrd.gov.za

Details of all DALRRD directorates can be found on the website. Included amongst the important ones for this chapter are:

  • (i) Agro-processing Support Read about this DALRRD offering on the website. Key among its interests is supporting SMEs in agro-processing.
  • (ii) Directorate: Food Safety and Quality Assurance Food Business Operators (i.e. producers, packers, processors, transporters, etc.) of regulated agricultural products of plant origin for export and local market can register their food business online. The electronic facility of registering Food Business Operators online will enable a process of tracing and tracking of the product in the supply chain. Find “Food Business Operator Codes” under the Food Safety and Quality Assurance pages at www.dalrrd.gov.za .
  • (iii) Directorate: Marketing
  • (iv) Directorate: Inspection Services

Read about requirements for Food Business Operators (FBOs) on the website. This is a prerequisite for packhouses, processing plants, exporters, grain storage facilities, retailers and municipal markets.

National Agricultural Marketing Council (NAMC) www.namc.co.za

Perishable Products Export Control Board (PPECB) www.ppecb.com

Department of Health www.health.gov.za

  • Food premises are regulated by R962 (dated Nov 2012) of the Foodstuffs, Cosmetics and Disinfectants Act, 1972 (Act 54 of 1972) under the mandate of the Department of Health. Regulations relating to the labelling and advertising of foodstuffs, R146 (dated Mar 2010) of the Foodstuffs, Cosmetics and Disinfectants Act, 1972 are also under the mandate of the Department of Health and enforced by local and municipal authorities.

 

 

Associations involved

The following are associations with which the Agro-processing unit at the Department of Trade and Industry has contact:

Find other umbrella bodies on the relevant pages of Agribook.Digital.

Training and research

Systems improvements and value-add was identified as a priority area in the National Agricultural Research and Development Strategy document. That was ten years ago, and the priority remains the same.

  • ARC-Infruitec Nietvoorbij Tel: 021 809 3100 www.arc.agric.za Training courses are given in post-harvest handling of fresh fruit, fruit beverages, value adding to dried fruit, fruit processing and jam processing.
  • ARC-Agricultural Engineering Tel: 012 842 4017 www.arc.agric.za ARC-AE training and research includes on farm processing – equipment, infrastructure, publications, advice etc. Find the list of publications under the last heading on this page.
  • The Provincial Departments of Agriculture working with the Agricultural Colleges offer a variety of value-add training courses. The following are on the list sent to this project by the KwaZulu-Natal Department of Agriculture at Cedara: (i) Peach Processing (ii) Tomato Processing (iii) Peanut Processing (iv) Dairy Processing (v) Soya Processing (vi) Jam Manufacturing (vii) Health & Food Safety. Further examples would include Fort Cox College (value adding technology training), Grootfontein (meat processing), Tsolo College (baking bread, buns, scones). All offer training in marketing concepts too. Find the list of Agricultural Colleges on the “Agricultural education and training” page.
  • Cape Peninsular University of Technology (CPUT) (i) Department of Consumer Sciences: food and nutrition (ii) Food Technology  (iii) AgriFood Technology Station www.cput.ac.za
  • CSIR http://biomanufacturing.csir.co.za  The CSIR includes agro-processing in its activities. Feasibility studies, business planning, due diligence, etc. as well as implementation and establishment of businesses. Projects include jam production, medicinal plants, hydroponics, mussel farming, leather works and wooden products.
  • Durban University of Technology (DUT) Department of Food and Nutrition: Consumer Sciences www.dut.ac.za
  • Dynamiko https://dynamiko.co.za For the dairy, peanut butter, jam and beverage industries
  • FoodBev is the Sector Education and Training Authority (SETA) responsible for facilitating education and training in the food and beverages manufacturing sector. Visit www.foodbev.co.za.
  • North-West University (i) Faculty of Engineering https://engineering.nwu.ac.za Services like product development provided to the food processing and “polymer and natural fibre composition” industry. Extruders and relevant equipment can be built. (ii) Consumer Sciences http://health-sciences.nwu.ac.za/consumer-sciences
  • SESTO www.sesto.co.za  SAQA accredited training provider delivering learnerships and skills programmes nationally.
  • Stellenbosch University Department of Food Science www.sun.ac.za/foodsci
  • Technology and Human Research for Industry Programme (THRIP) is a flagship research and development instrument of the dti and the National Research Foundation (NRF). Agro-processing is one of its interests. See www.nrf.ac.za.
  • University of the Free State www.ufs.ac.za (i) Centre for Sustainable Agriculture, Rural Development and Extension www.ufs.ac.za/censard  (ii) Department of Microbial, Biochemical and Food Biotechnology www.ufs.ac.za/biotech
  • University of KwaZulu-Natal Dietetics and Human Nutrition http://dietetics.ukzn.ac.za
  • University of Limpopo Limpopo Agri-Food Technology Station Tel: 015 268 2785 / 3359 www.ul.ac.za 
  • University of Pretoria www.up.ac.za (i) Institute for Food, Nutrition and Well-being (IFNuW) (ii) Centre for Nutrition (iii) Department of Consumer Science (iv) Department of Food Sciences
  • University of South Africa (UNISA) Department: Life and Consumer Sciences Tel: 011 471 2268 www.unisa.ac.za
  • University of Venda Department of Nutrition Tel: 015 962 8510 / 8114 www.univen.ac.za

 

Agribook.Digital’s Featured Partners

Dew Crisp – One of the leading providers of value-added salad products, to the retail and food services industries.

Click here to become a featured partner and have your Agribusiness listed here.

"This is a creative way of establishing a food oasis in any region and not only for the benefit of communities in need, but also to establish an income stream". See CFAM Technologies under "Companies involved".

Companies involved

 

Finances and services

  • Agri Bio Equipment and Solutions www.agribio.co.za
  • CFAM Technologies (Pty) Ltd www.cfaminternational.com and www.extruafrica.org.za CFAM is leading supplier of Extrusion plants in Southern Africa.
  • Coldsure Distribution Services www.coldsure.co.za
  • DMG Events www.dmgevents.com Africa’s Big Seven, which happens at Midrand, “brings together hundreds of global farm to fork suppliers with motivated buyers from each segment of the buying community”.
  • EVN Africa Consulting Services www.evn.co.za  Food processing plants are one of its offerings
  • GPB Consulting www.consultgpb.co.za
  • Industrial Development Corporation (IDC) Food, Beverages & Agro Industries www.idc.co.za Support is given mainly to horticultural activities, particularly those with a processing element.
  • Interpaarl Logistics Tel: 021 862 0445
  • Lejwe Le Putswa Development Agency (LDA) www.lejwelda.org.za LDA funds various agro-processing activities
  • MBB Consulting Engineers www.mbb.co.za Design and construction of agro-processing facilities. Branches countrywide.
  • National Cleaner Production Centre www.industrialefficiency.co.za Enables lower production costs through reduced energy and water usage, and waste management
  • Urban-Econ Development Economists  http://urban-econ.com Develops agro-processing strategies
  • Van Der Vyver Transport http://vdvtransport.co.za Refrigerated and general transporter

 

 

Equipment and ingredients

 

 

JSE-listed and general

 

Other companies listed on the JSE, not specifically agro-processing but nonetheless relevant to this publication include Kaap Agri, Mondi, Omnia, SASOL, Barloworld, Bell Equipment and the banks. Also relevant here are the many former co-ops, now companies, like AFGRI, GWK etc. (GWK has its own “GWK Farm Foods” division. See www.gwk.co.za/Farm-foods). Find their details on the “Agribusinesses” page.

 

Websites and publications

Visit the websites and documents listed earlier in this chapter. Contact the ARC-AE at 012 842 4000 / 17 for the many publications dealing with on-farm processing. These include:

  • Agro-processing of Field Crops (chilli, bell peppers, tomatoes)
  • Agro-processing of Marine Foods
  • Agro-processing of Poultry (chicken and turkey)
  • Oil processing in South Africa
  • Oil seed processing using the ram press
  • The extraction of essential oils from herbaceous materials by steam distillation
  • Agro-processing of Citrus Fruit (grapefruit, lemons, oranges)
  • Agro-processing of Dairy (butter, cream, buttermilk, cheese, yoghurt, milk and milk powder)
  • Agro-processing of Meat Products (Russians, tongue, hamburger patties, polony, frankfurters, bacon, ham, sausages)
  • Agro-processing of Berries, Volume 1 (blackberries, blackcurrant, blueberries, Cape gooseberries, cherries)
  • Agro-processing of Berries, Volume 2 (gooseberries, raspberries, redcurrants, strawberries)
  • Agro-processing of Cereal Crops Volume 1 (maize, oats, rice)
  • Agro-processing of Cereal Crops Volume 2 (sorghum, wheat)
  • Agro-processing of Cereal Crops Volume 3 (barley, sesame, poppy seed, rye)
  • Agro-processing of Cucurbits (butternut, cucumber, pumpkin, sweet melon, watermelon, baby marrow)
  • Agro-processing of Deciduous Fruit (apples, apricots, grapes, pears, plums, peaches, figs)
  • Agro-processing of Olives and Legumes (green peas, green beans, cowpeas, lentils, olives, peanuts, mushrooms)
  • Agro-processing subtropical fruit (avocado, bananas, figs, guava, kiwifruit, litchi, papaya, passion fruit, pineapple)
  • Agro-processing of Oil Seeds (soy beans, sunflower)
  • Agro-processing of Root Crops (asparagus, beetroot, carrots, garlic, onions, potatoes, sweet potato)
  • Agro-processing of Textile Crops (cotton, flax, hemp, sisal)
  • Agro-processing of Industrial Crops (chicory, coffee, sugar cane, tea)
  • Agro-processing of Herbs and Spices (cinnamon, paprika, jojoba, parsley)
  • Agro-processing of Legumes (cowpeas, beans, green beans, lentils, green peas, peanuts)
  • General food processing methods
  • Agro-processing of snack foods and confectionary
  • Manual on small-scale food processing (achar, jam, etc).

 

Find An easy guide for food entrepreneurs on the Western Cape Department of Agriculture website, www.elsenburg.com. It is also available in Afrikaans and isiXhosa.

The Embassy of the Kingdom of the Netherlands study The Current State of Fruit & Vegetable Agro-Processing in South Africa (February 2019) can be found at https://agbiz.co.za/uploads/AgbizNews19/190215_Current-state-of-agro-processing-in%20SA.pdf

Find the WWF SA report “Agri-Food Systems: Facts and Futures” (February 2019) at www.wwf.org.za.

Neves, M.F. 2017. Future of The Food Business: The FACTS The IMPACTS The ACTS. 2nd Edition. New Jersey: World Scientific.

The Bureau for Food & Agricultural Policy (BFAP) annual outlook includes processing in its baseline. Find the latest document at www.bfap.co.za.

On the internet, find “Structural transformation in agriculture and agro-processing value chains” (April 2018) – done by the then Department of Trade and Industry, Centre for Competition, Regulation and Economic Development (CCRED), and the University of Johannesburg – which looks at agro-processing with specific reference to the fruit, sugar and dairy value chains. An earlier report (September 2016) by CCRED is the excellent “Competition, barriers to entry and inclusive growth: Agro-processing”. That report focused on poultry, dairy and milling.

Paremoer,T. 2016. POLICY BRIEF: Barriers to entry and inclusive growth: policy recommendations for agro-processing. The paper’s conclusion is: “Focusing on facilitating entry at one discrete level of the value chain will likely fail as it will miss the binding competition bottlenecks elsewhere. Ultimately, addressing barriers to entry requires complementary measures across industrial policies, development finance and competition”.

Mkhathini, K & Zuu, S. 2015. Postharvest food drying technique using a solar tunnel dryer. Research & Technology Bulletin. KZNDARD. Find the document on www.kzndard.gov.za.

The Buyer’s Guide is an annual directory listing the providers of all processing aids, flavours, ingredients, antimicrobial agents, colorants, curing agents etc, food and beverage processing equipment – and more. Visit www.thebuyersguide.co.za.

Companies which sell processing equipment often have manuals and publications explaining the technology and/ or business opportunities involved.

Find the Buyers Guide at www.supermarket.co.za.

www.foodfocus.co.za – “Providing guidance & information for the food industry”.

Evans, J.A. 2008. Frozen Food Science & Technology. Indianapolis, USA: Wiley-Blackwell.

 

Some articles

Food & Beverage Reporter subscribers have access to agro-processing articles and an online, searchable directory. Visit www.fbreporter.com.

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