Enabling successful ESD through collaboration and ecosystems

Mishack Mthethwa, Group Manager: Strategic Sourcing and Enterprise and Supplier Development, AECI Limited

“In the same way that it takes a village to raise a child, it takes a village to raise a business,” says Mishack Mthethwa, Group Manager: Strategic Sourcing and Enterprise and Supplier Development (ESD) at AECI.

“This is why we go beyond B-BBEE box-ticking, point-scoring and cheque-writing to provide a dynamic ecosystem of external partners and internal specialists, committed to scaling and supporting SMMEs that are AECI’s customers and/or suppliers of the future! As a result, we build sustainable business-to-business relationships and foster a diverse, inclusive culture that celebrates the transformational capacity of entrepreneurship to create jobs, grow the economy and make a real difference. A case in point is the work we’re doing in the agricultural sector where we have a long, proud history.” AECI’s Agri Health businesses generated 25% of the Group’s total revenue in 2020.

A three-year pilot project provided the catalyst and framework to embark on an Emerging Farmers Support and Development Programme through the AECI ‘Good Chemistry’ Fund. The enabling ecosystem includes:

• AECI Agri Health – agricultural skills development and advisory services

• AECI ‘Good Chemistry’ Fund – available financial support of R30 million

• IDF Capital – Fund managers

• Khula! app – market access

• LEAP – sustainable business development and growth enablement

Since the inception of the pilot project and programme, AECI and IDF have worked together to:

• Assess the commercial viability of projects

• Design transaction structures

• Evaluate funding instruments and their pricing

• Facilitate due diligence processes

• Negotiate terms on behalf of emerging farmers with funders and off-takers

• Prepare and review legal agreements

Today, three emerging farmers are on the programme namely Farmers Hope, HempVest and Ithuba. Together, they employ at least 21 permanent employees and 110 seasonal workers on 3 042 hectares (Ha) in Gauteng, Mpumalanga and North West.

“In AECI’s Sustainability Report, we detailed the alignment of our strategy to carefully selected United Nations Sustainable Development Goals (SDGs), most notably in the ESD context “Decent work and economic growth” and “Partnerships for the goals”. Our Emerging Farmers Programme emboldens our commitment to “a better world of food systems” and the SDGs of “Zero hunger” and “Responsible consumption and production,” explains Mthethwa.

Agriculture is critically important to growing the economy.

The Africa Institute for Policy Analysis estimates that a 1% contribution by agriculture to GDP produces a 2% increase in the country’s growth and a R1 million investment in agriculture generates twice as many jobs as an equivalent investment in the manufacturing sector.

According to Statistics South Africa, agriculture was the only positive contributor to the economy in Q2 2020, growing by 15,1%. In Q3 2020, it grew by 18,5%.

The South African Government has committed R1,2 billion to enabling 150 000 emerging farmers.

“It’s clear that the market for AECI will continue to grow in the future. To realise full potential, however, the success of the Emerging Farmers Programme depends on the contributions and strengths of the individuals concerned as well as their ability to work together collaboratively.”