Deal #3636

Location #1

Spatial accuracy level
Administrative region
Location
Cape Town, South Africa

Target country
South Africa
Comment on location
Farmsecure is headquartered in Cape Town (South Africa) and its operations are well spread across South Africa.

Land area

Intended size (in ha)
140000
Size under contract (leased or purchased area, in ha)
[2011] 140000

Intention of investment

Intention of investment
Food crops, Livestock

Nature of the deal

Nature of the deal
Lease
Comment on nature of the deal
Also short term contract farming agreements.

Negotiation status

Negotiation status
[2004] Concluded (Contract signed)
Comment on negotiation status
The company started in 2004 and has grown since, incorporating more farms.

Implementation status

Implementation status
[2004] In operation (production)

Contract farming

Contract farming
Yes
On leased / purchased area
Yes
Comment on contract farming
Under the grain contract-farming model, Farmsecure provides pre-harvest working capital through a Contract Farming agreement with selected farmers. Through this Contract Farming agreement, Farmsecure establishes conditions for scientific implementation of the production, working capital, insurance, including weather risk cover, and marketing of the grains to be produced. The Company agrees with the farmer, among other parameters, on farming practices (including scientific farming) to be applied to ensure maximization of the yields (under the supervision of Farmsecure Agri Science). Under the livestock contract-farming model, the Company provides selected farmers with working capital towards purchasing young animals to raise/fatten-up for sale to a slaughter house. As with crops, Farmsecure agrees with the farmers on best veterinary practice to be applied to ensure maximization of the weight of the animal at slaughter (under the supervision of Farmsecure’s animal scientists).

Number of domestic jobs created

Jobs created (domestic)
Yes
Current number of jobs (domestic)
4700

Operating company

Operating company
Comment on investment chain
The IFC investment (the “Project”) consists of an up to 500 million South African Rands ($64mn) funded risk participation in Standard Chartered Bank South Africa (“SCB” or the “Bank”) financing facility to Farmsecure. The Project will enable SCB to increase its exposure to Farmsecure while the Group expands its operations in and potentially outside of South Africa

 

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Data source #1

Data source type
Other (Please specify in comment field)
File
Comment on data source
IFC project brief

Data source #2

Data source type
Company sources
File
Comment on data source
Link no longer works- http://farmsecure.co.za/services/primary-agriculture2/

Data source #3

Data source type
Other (Please specify in comment field)
File
Comment on data source
IFC Summary of Proposed Investment

Data source #4

Data source type
Company sources
File

Former land owner (not by constitution)

Former land owner
Private (large-scale farm)

Former land use

Former land use
Commercial (large-scale) agriculture

Former land cover

Former land cover
Cropland

Detailed crop, animal and mineral information

Crops area
Apple, Citrus Fruits (unspecified), Fruit (unspecified), Grains (unspecified), Grapes, Oil Seeds (unspecified)
Livestock area
Cattle

Use of produce

Has domestic use
Yes

In country processing of produce

In country processing of produce
Yes
Comment on in country processing of produce
Packaging

Overall comment

Overall comment
Since 2004, the Company has continued to grow both organically and through acquisitions and currently contracts and or partners with farmers on approximately 140 000 hectares on which they farm about 650 000 tons of grains and oilseeds (approximately 7% of South Africa’s grain production), raise 100 000 heads of cattle and farm 3 200 hectares of fruit across the nine provinces of South Africa. The Company is currently considered to be an innovative participator and service provider in the areas of, agri-inputs, primary agriculture and agri-outputs through its contracting of and partnerships with large-scale farmers in South Africa. In 2011, Farmsecure introduced Farmsecure Optimized Farming (FOF) an enhanced variant of the original grain contract-farming model. FOF, which is the Company’s preferred model going forward, currently covers 55 farmers compared to 352 farmers in the contract farming model. In this model, Farmsecure signs a long term farming and lease contract with the farmer (as opposed to the annual contract under contract farming). Farmsecure takes over the farming operations and the farmer is employed to farm on behalf of Farmsecure.

Oct. 4, 2016, 5:18 p.m.

overwritten

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July 21, 2016, 6:10 p.m.

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March 18, 2016, 12:18 p.m.

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July 15, 2013, 2:53 p.m.

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May 16, 2013, 3:31 p.m.

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April 24, 2013, 12:14 p.m.

active

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