Mpumalanga eyes R10bn agroprocessing fruit hub


Mpumalanga is about to build its first agroprocessing fruit hub worth about R10 billion, which promises to be a game-changer for the province.

According to Xola Sithole, CEO of the Mpumalanga Economic Growth Agency (Mega), this project is one of many that the province will implement to grow the economy and create much-needed jobs.

Other envisaged multibillion-rand projects which Mega intends implementing involve renewable energy, particularly biomass – fuel that is developed from organic materials – as the province is home to 40% of the country’s forestry industry and mining.

The agency hosted the province’s first investment conference this week to sell Mpumalanga’s economic potential to investors.

“Mpumalanga is sitting on gold. We have met potential investors and showed them the opportunities available in the province,” said Sithole.

The agroprocessing project – the first of its kind in the province – is set to create 15 000 jobs in the rural Nkomazi Special Economic Zone.

Johan van Tonder, the CEO of Agustin Equity Management – which has partnered with Mega – said the project would deal with the whole value chain of fruit farming. Mpumalanga’s climate is suitable for citrus and subtropical fruit production.

The hub will grow fruit that will be supplied to a factory to produce concentrate juice, fruit salads and feedstock for animals.

“We will control the whole value chain, including logistics,” said Van Tonder.

“This project will drive the promotion of black industrialists, the incubation of small business and employment opportunities for women and youth.”

Sithole said the construction of the province’s Fresh Produce Market was critical for the success of the agroprocessing fruit hub.

“The fruit produced here has to be taken somewhere else to be processed, and that has to change,” he said.

“It is clear to us that this project is viable. Mpumalanga has the advantage of being close to the harbour in Mozambique for the export of our products. We want to ensure that housewives in Amsterdam and London who want fresh fruit, which is not there, get it sliced and packaged.”

Sithole said the province would also be going all out to implement a biomass project.

“Solar and wind energy projects are not feasible for this province, but we have 40% of forestry resources here.”

This project will be undertaken with Eskom, which wants to reduce its carbon emissions. These contribute 50% of the country’s greenhouse gases.

Eskom has announced that the first biomass project will be in Sabie.

The power utility will develop the Industrial Development Corporation’s (IDC’s) Zebra Pellets plant, located in Sabie, into a torrefied pellet plant.

Wood produced by the SA Forestry Company Limited will be torrefied – meaning that it will be heated without oxygen, breaking its fibrous structure and removing moisture and some volatiles to give it coal-like properties.

Torrefied wood is a renewable, carbon-neutral energy source.

Sithole said Mega was also looking at opportunities to invest in mining.

To this end, it has partnered with the IDC to invest R150 million in the expansion of the 11 000-hectare Nkomati Anthracite Mine, situated near Malalane.

Mega is a 40% shareholder in the mine, while Sentula Mining holds 60%.

Sithole said Mega and Sentula would dilute their shareholding so that 60% would be transferred to the community.

“If we want to change the economic growth trajectory, we need to be involved in mining, which contributes 15% to GDP.”

Sithole said the parastatal was also looking at investing in Lily Gold Mine in Louisville, near Barberton.

The mine closed operations last year after a collapse at the entrance of its shaft, and was eventually put under business rescue. It is scheduled to resume operations after its proprietor, Vantage Goldfields, and Canadian company Galane Gold decided to merge.

Read Fin24's top stories trending on Twitter:

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Yes. We need the money.
11% - 976 votes
It depends on how the funds are used.
74% - 6473 votes
No. We should have gotten the loan elsewhere.
15% - 1342 votes