The Mataffin Mail Issue1

August 2013 | ISSUE 1

The

MATAFFIN MAIL Newsletter for employees and friends

Dear colleagues, friends and family

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t is a great pleasure and indeed a thrill to be resurrecting the Mataffin Mail again. Those older ones with good memories will recall that in the early 1990’s when we were going through considerable change we started a series of regular publications to communicate what we intended doing and to keep people abreast of what was on the go. We called it the Mataffin Mail.

A lot of water has passed under the bridge in the intervening years since we stopped publishing the Mataffin Mail. This is particularly the case since 2004 when we embarked on the new strategic direction which gave birth to Halls Investments and lead us to where we are today with our three businesses, Halls Fresh Produce, Halls Properties and Halls Investments.

For most of that time we pursued a deliberate strategy of flying below the radar and we did not broadcast or publish much about the company and where we were going. Recently, we have had to review that strategy.

Feedback from stakeholders and the community has told us that there is a lot of misunderstanding about the company, some of it negative and working against our interests. This

often happens when you leave a silence. The void gets filled with other people’s stories which in many instances are far from reality. This creates misperceptions. Reviving the Mataffin Mail is part of a more general campaign aimed at rectifying misperceptions of Halls. We believe that a newsletter of this kind provides an ideal vehicle for communicating our stories to our employees, shareholders and other stakeholders.

Regarding the editorial content of the publication, we hope to strike a nice balance between stories and information relating to the business itself and human stories about people involved in the business and the company’s history. We invite our readers (staff, shareholders and people who know Halls) to come forward with suggestions on how we might improve this newsletter and with stories which they would like to see published in future editions.

We do have some stories that need to get told fairly urgently in order to rectify some of the misperceptions that are floating around regarding important aspects of the business. We therefore plan to run a number of publications at short intervals in or-

der to achieve this goal. We expect that further down the road the interval between publications will lengthen again.

I do hope that you will find the content of the Mataffin Mail interesting and that you will engage with us in making it fun and informative. I look forward to hearing feedback and suggestions.

Best regards, Rob Snaddon

Mandela Day Action at Halls

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hursday 18th July dawned gloomy and damp, but it was no ordinary working day for some 170 Halls employees. A Mandela Day initiative put together by a task team from HL Hall & Sons and including donations and manpower from Waltons, Lithotech, AFGRI, Nelgas & Installations and Leon Baird Investments saw teams of people volunteering to help with an assortment of projects.

Mandela Day calls on people to spend 67 minutes performing good deeds within their community, and to find ways in which they can contribute towards making our society a better place for all. That’s a spirit that resonates with Halls, and in 2012 Mataffin staff kicked off Mandela Day efforts for the company with a litter clean up in Schoonplaas. This year all the divisions within Halls were called upon to come up with ideas for community projects in their area, and an invitation to participate was sent out to the broader community.

Leigh Green together with Karen Mostert & Dumisile Zitha are the Halls task team which coordinated the activities taking place across several locations – Mataffin tackling the Good Hope and Woodhouse Centres as well as the Schoonplaas Community, Halls Investments (Johannesburg) working

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with the Emmanuel Day Care Centre in Tembisa and Koeltehof Packers in Kiepersol undertaking tasks at Running Waters School.

The 67 minutes of service was scheduled to start at 15h00, but behind the scenes work began much earlier as volunteers prepared soup for the soup kitchens, and continued on into the week following as repair and installation projects were completed.

Halls are turning July into “Mandela Month” and running a food drive at the Crossings and Grove Spars as well as at Halls, collecting nonperishable foods for various nonprofit organizations and orphans in the greater Mbombela community.

Heavy rain on the day made the outdoor tasks unpleasant but spirits were high, especially at the Good Hope Centre where 140 children, staff and volunteers were entertained by the MPower Thundertruck and ‘Harry the Heart’. The soup kitchen provided a warm meal for all the children, who were overjoyed with the sweet packets handed out to them.

At the Woodhouse centre a soup kitchen was in full swing for the

children, who were also given food parcels.

Meanwhile, five tractor teams of 20 people descended upon five areas in the Mataffin community at Schoonplaas to clean up the unsightly and unhealthy litter and garbage which were both an eyesore and a health hazard.

In Kiepersol, Running Waters School received a kitchen upgrade and a vegetable garden was planted.

Further afield at the Emmanuel Day Care Centre in Tembisa the little ones were delighted with their care packages filled with toiletries, and their smiles broadened at the fun packs containing crisps, juice, crayons and colouring pictures.

“Participating in this day was very rewarding and it was heart warming to share a little with the children at Goodhope”, Leigh Green summed up the 2013 Halls Mandela Day activities.

She welcomes more input from all the staff at Halls as to which projects they’d like to support next year, and wants everyone in the company to get involved on the day, sharing the joy of giving and doing something small which is so meaningful to others.

AFTER MORE THAN A CENTURY, FARMING REMAINS A KEY BUSINESS AT H L HALL AND SONS

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rban myths begin with misconceptions and faulty conclusions drawn from half truths and faulty facts. And so it is with the rumours of HL Hall and Sons withdrawing from farming.

Both longstanding Lowvelders and the man in the street have fallen prey to this urban legend.

The misperceptions may be due to the uprooting of avocado orchards close to the city centre for property development. And longer memories will recall the sight of 600 ha of citrus trees being pulled up in 1989 and left to die where they fell. This had a profound visual impact on observers; the rumours of Halls abandoning farming began then and continue to this day.

Halls’ family and company roots have been deeply embedded in farming and the Lowveld since 1890, when the founder, H L Hall, acquired the leasehold title to the Farm Riverside from Paul Kruger’s government.

Notwithstanding many challenges he began a successful farming business on the banks of the Crocodile River.

Over a century of successful farming resulted in the acquisition of more farms and land, leading to HL Hall

& Sons owning a sizeable amount of property in the Lowveld, and being regarded as significant landowners.

The ‘golden years’ of agriculture surrounding WWII were very good for Halls. The innovative mail order business they set up after the war to deliver fruit and vegetables directly from the farm to households as far as Cape Town and the Karoo turned HL Hall & Sons into a national household name.

When the British Royal family visited South Africa in 1949 a visit to what was then the largest citrus producer in the Commonwealth was naturally in order. Lanion Hall and his wife were introduced to the Royal family when the Royal train stopped at Mataffin station, the visit causing immense excitement in the district as all and sundry lined up to catch a glimpse and elicit a Royal wave, especially from the Princesses!

But by the late 1960’s, citrus production in the Lowveld had begun to run into difficulty because of pests brought on by the large citrus monoculture that had been established. Diseases manifested, eventually wiping out almost all the citrus west of the Crocodile gorge.

Success in corporate agriculture requires focus and appropriate economies of scale. Citrus had been Halls big business and concurrent with the decision to get out of it, which was taken in the late 1980’s, the company chose to focus on avocados because they could farm these at scale. Also, Halls marketing and sales division in the United Kingdom had built a reputable and recognised brand in Halls avocados in the UK and Europe. Realigning the farming business and focussing on avocados enabled the company to participate in the full avocado value chain from propagating trees and producing fruit through to packing, marketing, distributing, exporting and selling the fruit overseas.

Consequently, Halls embarked on a new planting programme – this expansion resulted in HL Hall & Sons becoming the second largest avocado producer in South Africa by the mid 1990’s. At the same time, they concentrated on developing their reputation as exporters and marketers in the avocado industry.

Of course, tongues wagged that ‘Halls are property developers and no longer farmers’ when more avocado orchards were recently pulled up and replaced with a superstore.

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AFTER MORE THAN A CENTURY, FARMING REMAINS A KEY BUSINESS AT H L HALL AND SONS - continued However, this was only a small area of Halls orchards where urban creep had infringed on the farmland.

In fact, anticipating the evolutionary trajectory of Nelspruit’s growth, the company had turned the threat of urbanization into opportunity and had got into the property game.

And, with no new plantings visible in this area, it is understandable that it may appear to onlookers in Nelspruit as though the company’s focus has shifted from farming. But farming is the vital underpin of Halls Fresh Produce’s strategic growth path. Continuing to farm, Halls are shifting their avocado production to other parts of the country. By moving some of its production to Limpopo, the company is able to mitigate the

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risk of adverse weather events and to extend its production window seasonally. It also places the farms firmly back onto agricultural, rather than urban, land where security problems are more manageable.

This shift of avocado production away from Nelspruit is also part of a wider company strategy to de-risk the company from a concentration of wealth tied up in land around an urban node. A portion of the capital earned from real estate endeavors in Nelspruit has also been invested into businesses based on intellectual property; businesses such as pharmaceuticals and financial services. Halls is passionate about avocados. The fact that they are

visually attractive, nutritious and brim filled with health and taste is driving demand in the UK, Europe and the USA to the point where demand is outstripping the ability of the growing regions around the world to keep pace. Halls is the second largest avocado exporter in South Africa with ambitions to grow which will require further investment in avocado farms.

As sponsors of the annual Brondal Avo Festival, Halls reaffirm their investment in Lowveld commercial farming.

HL Hall and Sons are farmers; they’ve always farmed and had large areas under cultivation.

The company is building a fantastic business around avocados.

Cyril Clark High School rises to the eV Challenge with the help of HL Hall & Sons

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all’s CSI responsibilities took an interesting turn recently when they supported the Cyril Clark High School’s entry - Car-litric Flash in the 2013 eV Challenge.

The annual eV challenge is open to Grades 9 - 12 learners. The aim is for a team to design and build a single seat electric vehicle and complete as many circuit laps as possible within one hour.

While the objective is to raise awareness of electric-powered vehicles as a viable, less fossil fuel dependent means of transport, at the same time students are exposed to scientific concepts, design skills and the technologies relevant to electric vehicles and renewable energy models. Weaving disciplines such as Science, Physics, Design and Technology, Maths and the Environment together, the challenge encourages innovation, motivation and teamwork among participants.

Requested by White River Rotary Club to be sponsors, Halls engaged with the school and four Grade 10 students, two girls and two boys, took up the baton. It was agreed that Halls will sponsor one team in the Class A category.

The team‘s first assignment was to do research on the EV cars. The team went about doing research with the local people to gauge if anyone would assist them with the project and the design of the cart. In all their dealings they discovered that researching and designing a car was a more daunting task than they’d imagined.

Khonzaphi Mdaka, Project Manager at Halls, gave the students access to laptop computers and the internet, thus facilitating their research. Having completed their research, the team then made an impressive presentation to their school principal, the Science HOD, their science teacher Mrs Ukpe and Halls Properties. Halls made the commitment to assist the

team in their journey to compete with the other local schools.

Determined to do it all by themselves, the team got stuck in; however, in their enthusiasm to be self sufficient Khonzaphi had to point out to them that they needed to seek help for tasks beyond their skill level, such as welding the main frame.

As they struggled to get the difficult things like steering and the motor right, they were pointed in the right direction by their Halls mentor but still had to do the work themselves.

The team struggled with getting a motor for their cart. During the first inspection they got the idea of using a gate motor through the Rotarians.

Khonzaphi guided them towards gate motor suppliers Stafix, who gave them the correct motor. Again, their inexperience and knowledge was challenged – they installed the motor horizontally, not vertically as designed.

Unfortunately, this led to their motor shifting out of position after a few laps and to their immense disappointment; the team’s race was over.

Their disillusion soon melted, however, when the Cyril Clark team won the presentation section of the challenge! Doing all their own research and car building empowered the students, enabling them to answer the judges’ questions knowledgeably and with confidence. Team Cyril Clark is over the moon at the win and eagerly anticipating their prize – a trip to Port Elizabeth to visit the university and a motor manufacturer.

Quoting from the Rotary newsletter Rotavision, “Our disadvantaged schools did so well for a first venture into this project. To a large extent they had underestimated the effort needed to complete the task while fitting it into their existing school day and the availability of transport to ferry them to the agreed workshops. But, watching the teams actu-

ally venturing out onto the track was hugely rewarding. I have described their grins as stretching from Nelspruit to Cape Town! Will they be back? Absolutely, together with additional and excited drive from the support entities.”

The heartfelt letters written to Halls after the race by the Car-litric Flash team have blazed the same broad grins onto the faces of the sponsors.

Canatia, Machawe, Nobuhle & Nthando bubble over as they describe everything the opportunity has meant to them – teambuilding, learning to work with others under pressure, scientific and technical knowledge discovered, as well as the practical skills learnt as they built the car; from budgeting and keeping accounts to welding. For these young men and women, proving to themselves that dreams are achievable, and do come true has given them immeasurable confidence and self belief.

The common thread running through the team’s and school principal’s letters is pride – in themselves, in proving the naysayers wrong and in being able to put their school on the map.

Principal Masondo also reported how motivation from the eV challenge spread across the school, inspiring other learners to participate in science projects.

Small wonder then that Khonzaphi describes his deep satisfaction at being involved in the initiative, and because of their involvement, how Halls has enabled these young people to think big and to strive towards their dreams. Halls looks forward to supporting the next Cyril Clark team in eV Challenge 2014.

According to Khonzaphi, “People think that Halls is only about money – that is not true. We do care about people.” Cyril Clark High School’s winning eV team can attest to that.

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LIFE LESSONS FROM AN ULTRAMARATHON

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olding a Masters Degree in Development Economics from Williams College in Massachusetts, Ntokozo Majola, Non-Executive Director of HL Hall & Sons Holdings (Pty) Ltd and Provincial Manager of the Small Enterprise Development Agency (SEDA) also puts her body and mind through their paces when she tackles the annual Comrades Marathon.

Wise words from a woman who successfully uses the life lessons she’s learnt from the challenging ultramarathon in her working day.

Ntokozo shares with Mataffin Mail readers what running has taught her:

• Be realistic about what you want to achieve.

• Determination – you have to make it happen.

• Some days are good, some days are bad. Your body is different every day.

• Set realistic goals and know that success is relative to ability.

Petite, softly spoken and with a smile reaching across the room, Ntokozo’s unassuming elegance seems at odds with the steely toughness required to conquer the renowned ultramarathon. Seven times since 2005 she’s started the race, completing five races with a personal best time of 10h34 in 2006, her second Comrades.

Ntokozo jealously guards her precious “me time” – she thinks, plans, organizes and debriefs herself on her daily club runs with the Nedbank LVCC. She admits she finds it hard to fit in her strenuous schedule of running, work, travel, home and family commitments, but it does help that husband Lala and 15 year-old son Mnoqobi are fellow runners. A sporty family, Sunday mornings are kept as family time and spent together, with no early morning runs.

Depending on the training calendar, she runs between 40 and 90 kms a week, combined with gym strengthening sessions – a big chunk of time and energy out of anyone’s day, let alone a senior woman executive with both a family and a punishing work schedule.

Her eyes glow as she describes what running means to her, revealing that it has “taught me patience and to be tolerant of people. We are all individuals with different capabilities and limitations.” The many hours of contemplation she’s enjoyed while on the road have also shown her that “in life we are too busy to really enjoy life itself.”

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Ntokozo looking strong as she approaches the finishing line.

‘Alert Serenity’ Sown in the Halls Investment Field Reaps an Award

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n Wednesday 3rd July, Dr Nigel Gericke, on behalf of HG & H Pharmaceuticals, accepted the Indigenous Plant Use Forum (IPUF) 2013 Best New Plant Product Award for Zembrin® - a proprietary clinically studied standardised natural plant extract developed from the indigenous plant Sceletium tortuosum.

Dr Gericke has spent 18 years researching the ethnobotany, chemistry and pharmacology of Sceletium, a plant specific to the Karoo / Namaqualand region and used for centuries by the San people for stress relief. In 2006 Halls Investments joined Dr Gericke and partner Deon Hofmeyr in forming HG & H Pharmaceuticals. Halls came on board not only as financial investors, but brought much more to the table - the company’s extensive agricultural and business experience was invaluable in developing the indigenous plant into a commercial crop.

of this project is kept in South Africa - HG & H obtained prior informed consent from the San people, ensuring that they receive royalties from the product’s sales through a world’s best practice benefit-sharing agreement with the South African San Council. Striving for best practice in all aspects of the project, HG & H obtained the first bio prospecting and export license ever to be issued in South Africa.

Rigorous testing and three clinical trials have demonstrated the safety, rapid onset of anti-anxiety activity and significant cognitive function enhancing activity of Zembrin®, and in September 2012 the Elev8 brand of tablets containing Zembrin® as the

active ingredient went on sale in pharmacies throughout South Africa.

Introduced into the United States of American in November 2012, where it’s particular and unique signature has been described as ‘Alert Serenity’, Zembrin® has already won the Nutraingredient Editor’s Award for the most sustainable ingredient at the prestigious Natural Products Expo West held in Anaheim, USA, and been voted one of the Top 10 experiential anti-stress products on the US market. Halls is very proud to play a pioneering role in the commercial development of an indigenous, natural health remedy which empowers the original discoverers.

Zembrin®, a natural plant extract available over the counter in South Africa in Elev8 tablets, is exciting scientists and medical professionals across the globe for its experiential stress-relieving as well as its mood enhancing and focusing activities.

Describing the product as “San stress relief used originally to deal with a harsh physical environment now applied to stress relief in a modern industrial setting”, Dr Gericke explains that the Sceletium used for Zembrin® is not harvested from the wild, but is sustainably grown at scale; and mentions the major role played by Halls in developing a completely new commercial crop for South Africa.

Cultural fit is important to Halls Investments when they make investment decisions - shared values, integrity and passion make for great partnerships, and HG & H Pharmaceuticals recognised right from the start that they were using indigenous knowledge as a departure point of research into the plant. All the value

Nigel sharing his award moment with Rob. 7

PLANTING THE HALLS FLAG IN THE HEART OF PARIS

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here is some exciting news just in! Halls Fresh Produce is proud to announce their recent acquisition of French company Enterprise de Conditionnement Alimentaire Moderne (ECAM). ECAM, established in 1976 and located in the heart of Rungis, is a 1,300m2 handling facility of fruit and vegetables with extensive cold storage, packing lines and a ripening facility. This acquisition is a strategic enabler for Halls to gain an important brand foothold in France.

Rungis, 7km from Paris and spanning 600 ha, was created as a public market network for the sale of fresh produce (fish, fruit and vegetables, cheese, meat and flowers) with easy access for mass transport;

Rungis, the largest fresh produce market in the world, is a major gateway into the vast European retail and wholesale markets. Some interesting facts about Rungis:

The annual turnover of fresh produce sold through Rungis in 2010 was €7.864 billion.

The Paris food market was first established in Les Halles in 1110 – where it remained for over 8 centuries until it was moved to Rungis in 1964;

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1,204 companies operate within Rungis with 1.5 million tons of fresh produce being sold on the market annually. It is estimated that the Rungis market services a population of over 18 million consumers;

Although Halls has been operating a sales office within Rungis since 2011, the acquisition of an onsite packing, ripening and processing facility further promotes the company as a significant player to our wholesale and

retail customers. Planting the Halls brand and establishing roots in the largest fresh produce market in the world is a significant undertaking for the company’s growth aspirations.

ECAM has already been renamed “Halls Services” and we look forward to updating you with the progress in coming months.We congratulate the HL Hall International team on taking this significant step towards achieving their G2G18 goals.