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FEATURE


BANANA GROWER

Extraordinaire Umbhaba Estates’ founder, Roy Plath, is a vigorous advocate of free trade. He was instrumental in contributing to the deregulation of the then Banana Control Board in the early 1990s and says that government interference, even with the best of intentions, can have disastrous effects.

By Ian Armitage 2

www.southafricamag.com


Umbhaba FEATURE

R

oy and Cheryl Plath founded Umbhaba Estates from scratch in 1979. The entrepreneurial skills and qualities of the familybased management team have resulted in the prolific performance and growth of the business over the past 33 years, which is almost without equal in the agricultural sector. Mr Plath is a banana grower extraordinaire and has grown his business into one of the leading agricultural businesses in South Africa. If you think farming bananas is an idyllic, easy life in a sub-tropical paradise, you are dead wrong. Bananas are, in all honesty, a logistical nightmare - temperature sensitive and highly perishable products that need a lot of care and attention. In short they are one of the most labour intensive crops you can farm. “As an individual grower we supply around 20 percent of the South African market with bananas. We deliver up to 1,500 tons per week, sometimes more, in peak season,” says Plath. Umbhaba is much more than a banana grower. Bananas have a three-week window from the time of picking to being eaten by consumers. They grow, mature, ripen, must be picked, stored and delivered all year round. Careful irrigation and accurate

temperature control play a major role in the growth and ripening but processing and transporting are relentless pressures. “We prefer to remain in control. All ripening, transporting and marketing activities are done in-house. Our bananas are grown, harvested, packed according to customer’s specifications, ripened, transported and delivered to our customers in unblemished condition on a daily basis. We have become a vertically integrated business with numerous facets and specialised departments.”

we supply around 20 percent of the South African market with bananas. We deliver up to 1,500 tons per week, sometimes more, in peak season Roy Plath

This approach obviously pays off. Umbhaba counts some of South Africa’s leading chain stores amongst its loyal customer base. Plath is a passionate man, an outspoken advocate of free-market values and was instrumental in contributing to the deregulation of the then Banana Control Board in the early 1990s, after which other agricultural boards followed suit. He says that following the privatisation and scrapping of the various control boards and the ending of subsidies, government leaders, until recently at least, largely refrained www.southafricamag.com

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Umbhaba FEATURE

from over-regulating business. His business flourished as a result. “The deregulation gave us a relatively free-market environment in which to operate and that allowed our business to grow and provide more jobs as well as our customers to benefit from reduced prices and the improved quality that competition inevitably brings. Government interference, even with the best of intentions, typically creates distortions.” “It was not an easy ride, however,” Plath continues. “I had to grow my business through some of the toughest economic times including a period where the prime lending rate peaked at 24 percent per annum. I was over my head in debt and I received no preferential treatment or government allowances but where others saw danger I saw opportunity. The Grace of God, lots of hard work and a largely free market environment all contributed to the measure of success that I have been able to enjoy in this business.” The benefits of a free market economy with minimal government interference are self-evident, he says. “A free market enables creativity and initiative to thrive and results in better business, more jobs and a higher per capita income as opposed to an environment of big government and over-regulation. Government intervention is seldom good, whatever the intention. State controlled monopolies have a very poor record of delivery. They generally achieve very little while causing massive inefficiency and waste. More regulation generally 4

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I believe strongly in free market principles and believe they promote an environment where entrepreneurs are able to grow and flourish, bringing those they employ along with them and that means prosperity for all Roy Plath


Sunny Packs Manufacturing (Pty) Ltd is one of South Africa’s leading corrugated board and carton manufacturers. We supply the local market, commercial and agricultural, as well as export to other countries. Sunny Packs is privately owned. We are situated at 48 Denne Road, Boksburg, South Africa. Our staff compliment is between 250 and 300 people, from specialists to labourers. Our factory manufactures corrugated board, and we convert this board into custom designed cartons/products for our customers. We have our own laboratory to test our board and boxes for: crush tests, burst tests, box compression testing etc. These results are made available to customers on request. We are currently busy with BRC accreditation. Sunny Packs as a company operates within the complex and challenging economic and social landscape that characterizes South Africa. Added to this responsibility is the task of operating effectively in the global environment, and satisfying the demands of a wide consumer base. Contact us for more information

t: +27 11 878 5920 f: +27 11 823 6951 e: sunnypacks@telkomsa.net susan.sunnypacks@gmail.com www.sunnypacks.com

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Umbhaba FEATURE

means less prosperity. There is adequate evidence throughout the world that free-market environments are the only ones that ultimately deliver a better life for all.� Plath cites countries such as Germany, USA and the UK as examples of the benefits of free market and compares them to some of the worst such as North Korea and Zimbabwe where the majority of people live in abject poverty. “A free market can only flourish if there is freedom of association and freedom of choice in the context of a truly free society where individual rights are respected and protected irrespective of race or creed. A free market system relies more on competition and less on regulation. Competition brings out the best 6

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What counts are jobs for the poor and a vibrant free economy with as little red tape as possible


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Umbhaba FEATURE

in us by leading to high levels of innovation and the lowest prices. There is a strong incentive for individuals to create, improve, and generate progress. Thus, economically speaking, a free market economy sees much more success than other systems. “I believe strongly in free market principles and believe they promote an environment where entrepreneurs are able to grow and flourish, bringing those they employ along with them and that means prosperity for all. When our business grows, our people grow too. We give back. The majority of businesses do. Your people are your strongest asset. Without them you fail. You have to reward them. Even small one-man businesses play an important role in a sound economy. 8

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“I am nothing,” he says. “What counts are jobs for the poor and a vibrant free economy with as little red tape as possible.” Plath points out the sad reality that the people who suffer most when businesses become disincentivised due to onerous and excessive legislation are the poorest of the poor. “True profit is not something to be feared or to be ashamed of, because it works to the benefit of all. The only way to improve the standard of living of all South Africans is to grow the economy by creating wealth and this especially with the creation of employment opportunities.” Umbhaba has an annual bonus scheme for all staff and constantly invests in training and upliftment. “To enable an economy to operate at a high level, significant investment is required in order to support it,” Plath says. “Over the years we have invested large amounts of capital in the business and constant upgrading and technological enhancements have become part of our business model. We believe that we have developed a unique proposition to ensure that value is added to the economy and wealth is created for all of our employees.” He notes, with concern, an increasing trend


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Umbhaba FEATURE

by government towards overregulation and legislation. “If you over-legislate you end up bogging down rare and vitally important skills, you reduce the profitability of businesses as a result and you kill jobs. Instead of realising that business owners have a real necessity for and appreciation of workers and that a genuine cordial business working relationship must flourish and grow if the business is to succeed, the stance created by current legislation has become negative and destructive in that, too often, the employer/employee relationship is seen as one of two enemies colliding. That simply isn’t the case here. We are a family, all of us working together, for each other. “There are challenges, but we meet them head on,” says Plath. 10

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Umbhaba’s top-class transport fleet distributes its fruit across South Africa on a daily basis. Fuel and other costs have become a significant issue so drivers are trained to maximise fuel savings and are rewarded accordingly. Despite the challenges, Umbhaba is an undoubted success and has become a fully-fledged family business in which the next generation is efficiently running the business on a daily basis, with all the hard work and sacrifices this entails. Its continuing success lies in a hands-on approach by Plath together with his family and management team. And, of course, his belief in free trade. “We are looking forward to the future. We would certainly like to grow the business and see our country grow. South Africans are a great people.” When asked for a last thought he says, “Nkosi sikelel’ iAfrika. We need wisdom to go forward in our country, South Africa.” END South Africa Magazine would like to thank Roy for sharing his story. If you have a similar tale to tell or want to share your business experiences with us contact the editor – ian.armitage@southafricamag.com.


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UMBHABA FEATURE  

SA MAG 24 UMBHABA FEATURE

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