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STEPHEN MOHALE’S PACKHOUSE :
An example of commercial enterprise collaborating in a government rural upliftment project
Ian van BrouwershavenIan van Brouwershaven
2010
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Alfa…Alfa…
MathReasonLogic
EmotionsPerceptionsIntuition
dAd Sparrius, the economy is not a toaster, 2008
Tegnies
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Presentation ScopePresentation Scope
• Example of an individual project!Example of an individual project!– Commercial agriculture viewpoint
• Why should commercial farming play a role in• Why should commercial farming play a role in rural development?
• What role can commercial farming play in rural development?
• How can commercial farming enage in rural development?
Tegnies
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OverviewOverview
Stephen MohaleStephen MohaleMarketing
Outbound LogisticsPost Harvest
HandlingFarming Operation
Inbound Logs
Inbound Logs
j o a t
LabsHRStores &AdminTechnical
Horti‐culture
Financial Security…
j.o.a.t
350h F ( 50h ti )• 350ha Farm ( 50ha active p.a)• 2000 ton of tomatoes p.a. • 125 workers• Operating the past 25 Years
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OverviewOverview
Limpopo D.O.A
MopaniDistrict
LetabaBranch
Land reforms
EngineeringGOVERMENT
Stephen Mohale
MarketingOutbound LogisticsPost Harvest
HandlingFarming Operation
Inbound Logs
Inbound Logs
TegniesLabsHR
Stores &AdminTechnical
Horti‐culture
Financial Security…
j.o.a.t
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OverviewOverview
The request..• a New Packhouse
Limpopo D.O.AGOVERMENT
• a New Packhouse• Underroof loading area
Requ
est
Stephen Mohale
MarketingOutbound LogisticsPost Harvest
HandlingFarming Operation
Inbound Logs
Inbound Logs
TegniesLabsHR
Stores &AdminTechnical
Horti‐culture
Financial Security…
j.o.a.t
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OverviewOverview
Tegnies
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Overview MarketingOutbound Logistics
Post Harvest Handling
Farming OperationInbound Logistics Overview
LabsHRStores &AdminTechnical
Horti‐culture
Financial Security…
• 1600ha active• 150 000 ton of tomatoes p aGOVERMENT
Limpopo D.O.A
• 150,000 ton of tomatoes p.a• 7000 workers R.I.E
Professional services
Vela VKE
Stephen Mohale
MarketingOutbound LogisticsPost Harvest
HandlingFarming Operation
Inbound Logs
Inbound Logs
TegniesLabsHR
Stores &AdminTechnical
Horti‐culture
Financial Security…
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MarketingOutbound Logistics
Post Harvest Handling
Farming OperationInbound Logistics
LabsHRStores &AdminTechnical
Horti‐culture
Financial Security…
Vela VKEDesign + Spec
Functional requirement / conceptual designProject
Context?
GOVR.I.E
Professionalservices
Tender docs / process
Contractors
L,DOAEng Facilitator
Stephen Mohale
Contractors
DeliverableFinal Project
Project Management
Stephen Mohale
MarketingOutbound LogisticsPost Harvest
HandlingFarming Operation
Inbound Logs
Inbound Logs
Requ
est
LabsHRStores &AdminTechnical
Horti‐culture
Financial Security…Tegnies
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Presentation ScopePresentation Scope
• Why should commercial farming play a role inWhy should commercial farming play a role in rural development?
• What role can commercial farming play in• What role can commercial farming play in rural development?
H i l f i i l• How can commercial farming engage in rural development?
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Why…Why…
• Hard reasons:Hard reasons:• Better competition serves the “client”
• Soft reasons:• Soft reasons:• Values and principles of the “social responsibility”
• Opportunity to create partnership / establish relationsOpportunity to create partnership / establish relations
• Personal relation with Stephen…
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Presentation ScopePresentation Scope
• Why should commercial farming play a role inWhy should commercial farming play a role in rural development?
• What role can commercial farming play in• What role can commercial farming play in rural development?
H i l f i i l• How can commercial farming engage in rural development?
Tegnies
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What role…What role…
• Money / financial assistance??Money / financial assistance??• What about tax!!
• Help manage / implement projects??• Help manage / implement projects??• Time, resources, responsibility!!
• Partnerships / Collaboration??• Partnerships / Collaboration??• Conflicting objectives
• Unbalanced power• Unbalanced power
• Efficiency poor
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What role…What role…
Suggestion :Suggestion :
• Share ‘non‐sensitive’ intellectual property• Time efficient• Time efficient
• Requires no cash flow
• Greatly increase probability of successGreatly increase probability of success
• Create value for the economy
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What role…What role…
MarketingOutbound Logistics
Post Harvest Handling
Farming OperationInbound Logistics
Labs
gLogisticsHandling
g pLogistics
HRStores &AdminTechnical
Horti‐culture
Financial Security…Natuurboerdery®
Plantmaterial, Packaging material, Farming advice
Stephen Mohale
MarketingOutbound LogisticsPost Harvest
Farming Operation
Inbound Logs
Farming advice
Labs
gHandling
Farming OperationInbound Logs
HRStores &AdminTechnical
Horti‐c lt re
Financial Security…
j.o.a.t
Admin culturey
The New Start‐up
Tegnies
200 beneficiaries
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Presentation ScopePresentation Scope
• Why should commercial farming play a role inWhy should commercial farming play a role in rural development?
• What role can commercial farming play in• What role can commercial farming play in rural development?
H i l f i i l• How can commercial farming engage in rural development?
Tegnies
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How…How…
1 Exposure to ZZ2’s system1. Exposure to ZZ2 s system1. Farm and packhouse visits
2. Discussions and advice
3. Playing open cards
2. Professional assisted IP transfer2. Professional assisted IP transfer1. Needs analysis
2. Functional requirement / recommendations
3. Concept designs
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How…How…
2 1 Needs Analysis2.1 Needs Analysis
Government/Stephen• Under roof loading area mechanized packline to• Under roof loading area, mechanized packline to improve labour eff, glass office, catwalk…
ZZ2• Grading/cooling facility to improve income potential,Grading/cooling facility to improve income potential, Handling procedures, Running cost issues, farm infrastructure, Foodsafety requirements
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How…How…
2 2 Functional requirements2.2 Functional requirements
ZZ2• Documented for reference guidance• Documented for reference, guidance
• Conceptual calculations
• Ballpark budgetBallpark budget
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How…How…
2 2 Functional requirements2.2 Functional requirements
ZZ2• Documented for reference guidance• Documented for reference, guidance
Tegnies
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How…How…
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How…How…
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How…How…
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How…How…
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How…How…
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ResultResult
ZZ2’s involvement hasZZ2 s involvement has
• Provided impetus to the project
fi d di i f l i• Defined a direction of value creation
• Increased the possibility of a successful rural development project– Spinoffs for the economy as a whole
Tegnies
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OpportunitiesOpportunities
Value increase:Value increase:
• + R 600,000 p.a in market value of produceM j b– More jobs
– More money in the rural economy
– More tax for the next government project.
Tegnies
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ChallengesChallenges
• Efficiency of the government / processEfficiency of the government / process– 3 to 4 years for a R5/6m project
Stephen Mohale:– Stephen Mohale: "I only hear about tenders every day. They then keep on announcing in
the media that they are helping us. What help? When? I would like to h d ffi i l h h h l dmeet the government department or official that has helped me one
day," Mohale said. *Business report, 31 March 2010
*http://www.busrep.co.za/index.php?from=rss_&fArticleId=5412312
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ChallengesChallenges
• SuccessionSuccession– Stephen is 62 years old, who will follow up?
Will the investment bear fruit?– Will the investment bear fruit?
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In ConclusionIn Conclusion
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The “”Hard” ironyThe Hard irony
• Is commercial farming not successful ruralIs commercial farming not successful rural development??
• Reason has a formidable enemy in human• Reason has a formidable enemy in human behaviour!!
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The ‘Soft’ RealityThe Soft Reality
• Why should commercial farming play a role in rural development?
• What role can commercial farming play in rural development?
• How can commercial farming engage in rural development?
Wh• When…
• Where…
• What else…
Tegnies
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Ending noteEnding note
• Stephen’s packhouse project is still activeStephen s packhouse project is still active• Initialized in 2008/9?
• ZZ2 involved in November 2009
• RIE, Vela VKE contracted in 2010
• Delivery likely in 2011Delivery likely in 2011
Tegnies