Chief Directorate: Agro processing and Forestry Based Industries
Agro-processing refers to the sub-sector of the manufacturing that beneficiates primary materials and intermediate goods from agricultural, fisheries and forestry based sectors.
The sixth administration identified agriculture and agro-processing as one of the crucial economic sectors to transform the economy through sustainable employment creation, business opportunities, investment attraction and growing export base. This sector has a firm backward linkage with the primary sectors and forward linkages with the secondary as well as tertiary sectors of the economy. The upstream sector is characterised by phases such as pre-feasibility, feasibility, business planning and production the entire production processes. The downstream sector consists of sorting, grading, packaging, processing, drying facilities, wholesalers, retailers, resturants, ect.
The Food, Beverages and Tobacco subsector accounts for 20% of manufacturing employment. This has grown from 18% in the last 10 years, highlighting the significance of the subsector for job creation. The broad categories that have seen some increase in share of employment are grain mill products and dairy. As shown in Table 1, although off smaller bases, grain milling and dairy have increased employment numbers in absolute terms in the past 10 years. Digging deeper into these categories it is important to identify opportunities for growth. The slight decline in the production, processing and preservation of meat, fish, fruit, vegetables, oils and fats may be attributed to the increases in imports of poultry.
Table 1: Contribution of Food and Beverages to employment, 2009-2019
| 2015 | 2016 | 2017 | 2018 | 2019 | |
| Production, processing and preservation of meat, fish, fruit, vegetables, oils and fats | 57,712 | 59,514 | 56,568 | 54,517 | 52,014 |
| Dairy products | 22,994 | 23,824 | 24,821 | 23,560 | 23,019 |
| Grain mill products, starches and starch products and prepared animal fat | 27,187 | 27,971 | 27,467 | 27,979 | 28,678 |
| Other food products | 77,412 | 87,387 | 93,385 | 100,378 | 101,447 |
| Beverages and tobacco products | 41,265 | 43,083 | 41,802 | 39,381 | 39,175 |
| Total Food, Beverages and Tobacco | 226,569 | 241,778 | 244,042 | 245,814 | 244,333 |
| Total Manufacturing | 1,173,936 | 1,188,373 | 1,200,296 | 1,216,680 | 1,207,960 |
| Food, Beverages and Tobacco % of Total Manufacturing | 19% | 20% | 20% | 20% | 20% |
Source: Quarterly Employment Statistics (QES), StatsSA
Linkages
The food, beverages and tobacco subsectors exhibit strong backward linkages to agriculture, forestry and fishing. At the manufacturing level, the food, beverages and tobacco sector exhibit internal linkages sourcing 20% from within the sector while the other intermediate inputs come from agriculture, forestry and fishing (25%) and wholesale and retail trade (18%). Further downstream, food, beverage and tobacco has strong backward linkages to business services and petroleum products, chemicals, rubber and plastics which account for 9% and 6% respectively of intermediate inputs and costs.
Purpose of the Chief Directorate
The Chief Directorate oversees the development of the various sub-sectors in agro-processing by providing strategic interventions to increase production and competition and grow exports. To achieve this, the directorate develops policies, sub-sector strategies, programmes and projects in consultation with the various affected industries.
Objectives of the Chief Directorate
- To understand the agro-processing institutional support system, and actively align and build the capacity of key stakeholder across the various spheres of government in order for the agro-processing system to work more effectively.
- Support the mature agro-processing subsectors to higher growth paths through critical interventions along the value-chain
- Identify and facilitate investments by the private sector and the state in critical market-enabling agri-infra-structure that unlocks opportunities for agglomeration and rural development.
- Facilitate the development of high opportunity/ high growth niche sectors that have significant export potential
- Facilitate strategic mega-investments which are transformative to the sector, create jobs and unlock value-chain potential
- Develop high potential food processing suppliers on scale through facilitating upgrading programmes in partnership with the retailers and large agri-business players.
FOCUS FOR THE AGRO-PROCESSING BUSINESS UNIT
Following President Ramaphosa’s announcement in his State of the Nation Address on 20th of June 2019 that as part of Government’s re-imagined industrial strategy it will develop a number of Sector Master Plans to help create conducive conditions for industries to grow. The agriculture and agro-processing masterplan is currently being developed, the master plan aims to complement and advance the actualisation of national development priorities as set out in the National Development Plan (NDP), the Medium-Term Strategic Framework (MTSF, 2019-2024), and on-going programmes in land and agrarian reform. The plan’s primary purpose is to coordinate and guide investment, infrastructure and programmatic intervention in the agricultural and agro-processing sectors in an integrated mode that enhances stakeholders.
Prior to the re-imagined industrial strategy the dti together with industry and social partners developed the poultry masterplan, this master plan focused on identifying and addressing cross-cutting bottlenecks, industrial financing, export promotion, standards (including sanitary and phytosanitary requirements), innovation and technology, packaging, and skills. The Department has also commenced with the development of the Sugar Master Plan which involves a process of extensive engagement and consultation amongst sugar industry stakeholders and the social partners, particularly small and large cane growers, millers and refiners, retailers and industrial users of sugar and sugar-derived products as well as workers and government.
The Department has also commenced the development of the Furniture Master Plan in collaboration with the South African Furniture Industry (SAFI). The Masterplan process overall addresses South African national development objectives including those of large-scale job creation; small business support; increased black ownership of the economy (including workers and communities); equitable remuneration and career mobility; skills development and upgrade; and technology investment and improvement.
KEY SECTOR HIGHLIGHTS
- Launch and implementation of the agro-processing support scheme
- Launch and signing of the Poultry Master Plan was sign-off by all key stakeholders.
- Financial commitment to the tune of 5bn by SAPA, to invest in productive capacity
- Sugar industry financial commitment to support Sugar industry transformation interventions.
- The Transitional Provisions for the sugar industry have been Gazetted in order to allow more PDI participants in the Sugar Industry
- the dtic in collaboration with Western Cape government hosted an Africa Halal Week 2019, which was attended by investors from at least 26 countries. There were eleven companies halal companies endorsed to participate at the Food Moscow (National Pavilion).
- Sappi, Mondi and York Timbers announced investment of over R16bn at the 2019 Investment summit.
- the dtic is participated at Switch Africa Green regional workshop in Kenya which is meant to fast track the implementation process for Sustainable Development Goals (SDGs), 4 companies benefited from Switch Africa Green, these companies are within the meat industry, grains and other agro-processed products.
- the dtic participated at the SADC agro-processing regional value chain programme in Tanzania.
Contact details for the Chief Directorate: Agro-processing and Forestry Based Industry
Chief Director: Ms. Ncumisa Mcata-Mhlauli
Telephone: 012 394 1557
Cellphone: 083 861 2453
