1. How the IDC can stimulate SA agriculture … Rian Coetzee Head: Food, Beverage & Agro Industries Agri Outlook Conference 30 September 2009

2. The context – a Developmental State “The developmental state concept is an attempt to bridge the gap between a centrally planned economy and a free market system, without emphasizing an ideological position.” Ben Turok Wealth Doesn’t Tricle Down: The case for a Developmental State in SA 2008

3. Introducing the IDC … IDC Head Office, Sandton (also 8 regional offices) Established in 1940, owned by the Government of South African & 100% self-financing Provide risk capital to commercially viable businesses in various sectors Mandated to invest in the whole of Africa (since 2000) Strong capital base developed through years of sound investments Differentiation: –Identification, development & funding of projects in partnerships with others –Promotion of & investment in viable new industries –through risk-taking and flexibility in structuring Passion, Partnerships & Professionalism

4. Growing sectoral diversity Leadership in Development Vision Mission Objectives Outcomes To be “the primary driving force of commercially sustainable industrial development and innovation to the benefit of South Africa and the rest of the African continent” The IDC is a self-financing national development finance institution whose primary objectives are to contribute to the generation of balanced, sustainable economic growth in Africa and to the economic empowerment of the South African population, thereby promoting the economic prosperity of all citizens. The IDC achieves this by promoting entrepreneurship through the building of competitive industries and enterprises based on sound business principles. Supporting industrial development capacity Promoting entrepreneurship Sustainable employment Broad-based black economic empowerment New entrepreneurs entering the economy Growing SME sectorRegional equity Industrialisation in the rest of Africa Environmentally sustainable growth Growing export sectorLocal beneficiation

5. Agricultural value chain

6. Sector focus Primary AgricultureSecondary Agriculture Fishing & aquaculture Field crops ** Horticulture Livestock ** Food Beverage Agro-industrial * Rest of Africa focus on Secondary or backward integrated projects ** Exceptions integrated projects Special government initiatives

7. IDC Agri-business portfolio 100.000.000200.000.000300.000.000400.000.000500.000.000600.000.000 Other Vegetables Meat processing Fruit - Cherry Acquaculture Biotech Processing - food Beverages Fruit - Persimmon Starch Processing - Fish Processing - Snacks Flowers Fruit - Subtropical Fibre Fruit - Berries Wholesale Processing - Meat Fruit - Citrus Fruit - Apples Fruit - Grapes Nuts Bio-ethanol Sugar milling Oils Tea ZAR Total exposure & commitment = ZAR3bn 20% (of value) outside South Africa 80% (of value) in equity investments

8. Opportunity drivers Environmentalism Sustain & grow competitiveness Indigenous resources Competitive import replacement Food security SADC & rest of Africa Mega consumer trends

9. Small farmer development Small farmers 170 emerging cash crop farmers in North West & Free State Agribusiness Wholesale partnerships Strategic partner 16 citrus farmers in Alice/Kat River area, Eastern Cape “Hub” partnerships

10. Broad-based black economic empowerment Community empowerment - Amajuba Berries Description - 60ha raspberry farm in Volksrust, KZN IDC investment – R14m equity; R11m debt IDC role – project identification & facilitation; equity investment; partner identification; business support Development outcomes – 440 jobs; community ownership; new industry; R30m/a exports; rural development Worker empowerment - Keboes Fruit farms Description – 500ha table grape development in Northern Cape, producing 1,91 million cartons of table grapes p/a IDC investment – R60m equity & quasi-equity IDC role – share warehousing for BEE group & workers Development outcomes – 1,000 jobs, worker empowerment; rural development BMFI

11. Pro-active project development Biofuels - Arengo Description – The production of 90 million liters of fuel grade bio-ethanol p/a from sugar beet in the Eastern Cape. IDC investment – R414m equity & debt IDC role – pre-feasibility & feasibility funding; sponsor role; equity & debt underwriting Development outcomes – new sector; small scale farmer development; empowerment; rural development Kenaf - Sustainable Fiber Solutions Description – Plant based in Winterton, KZN, involved in the de-corticating of kenaf stalk and produces base fiber, core and fines used in the manufacture of bio- composites in the for automotive use – now also used for construction material & oil spillage IDC investment – R85m in equity IDC role – feasibility funding (trials); Development outcomes – new industry; massive job creation through the agricultural development; rural development

12. Foreign direct investment in the rest of Africa Matanuska, Mozambique Description – 3,000ha of banana plantation, Nampula, Mozambique IDC investment – USD10m quasi equity; USD10m debt IDC role – co-investment & partner selection Development outcomes – 5,000 jobs; infrastructure development; rural development Casquip Starch, Swaziland Description – Cultivates cassava and produces starch in Swaziland IDC investment – R37m in quasi-equity IDC role – co-investment & partner selection Development outcomes – 1,500 jobs; rural development; SADC import replacement

13. Day Month Year The Industrial Development Corporation 19 Fredman Drive, Sandown PO Box 784055, Sandton, 2146 South Africa Telephone (011) 269 3000 Facsimile (011) 269 2116 E-mail callcentre@idc.co.za Passion, Partnerships & Professionalism