Vegtech 2000 designs, manufactures, delivers, erects and installs some of the most technologically advanced polyethylene greenhouses and other solutions for all undercover growing requirements. While expanding into Africa, this innovative agricultural specialist is also undertaking massive projects in South Africa. MD, Barney Isralls tells us more…
Earlier this year, the World Bank revised its predictions regarding the global food crisis. Apparently we now need ‘to produce at least 50% more food to feed nine billion people by 2050’ but land, biodiversity, oceans, forests, and other forms of natural capital are being depleted at unprecedented rates. Additionally, reports suggest that climate change is set to cut crop yields by more than 25%. All of this means we need to be much more savvy in the way that we grow, manage, sell and consumer our crops.
In Africa, the food crisis has hit home hard in recent years. Some of the most extreme cases saw the ‘horn of Africa’ region’s famines in the 80s, in 2006 and again in 2011. Malawi and Niger had extremely difficult times in 2005-06 and West Africa had its share of problems in 2010. This is despite some of these countries having the fastest growing economies in the world. One of the drivers behind these problems were severe droughts which cause harvest failure.
Focusing on growing techniques that have been developed in Africa, for the African environment is one way to combat the food problem. Even in times of difficulty there have been farmers that have been successful and manged to maintain a decent harvest. One company that is contributing in this regard is South Africa’s Vegtech 2000. Based near Cape Town, this agricultural specialist can provide products and turn-key services that help anyone with an undercover growing operation.
“I would say that greenhouses is our main product – polyethylene greenhouses,” says Managing Director, Barney Isralls. “In Africa, we don’t build glass houses like they do in Holland or the rest of Europe; in Africa it’s all polyethylene houses. We sell polyethylene tunnels, net houses and a lot of accessories that go into the greenhouses. Our main focus is undercover projects – any crop that needs to be grown under cover, we do those projects. Whether it’s under shade or plastic or a tunnel; that is what we do.
“Droughts can represent an opportunity for us as when you work under cover you can grow much more with much less water. In the times of drought, our systems are extremely efficient and helpful for farmers.
“Our focus is in Southern and Central Africa and we’re predicting that our business will double in size in five years. Food production is a massive issue in the world and we believe that we have a lot of answers for helping alleviate the food problems. I believe we are in the right industry at the right time. It’s like being involved in green energy – there’s no better time to be involved.”
OVER TWO DECADES IN BUSINESS
Since its formation over 20 years ago, operating in an industry that has seen many ups and downs, Vegtech has gone through many changes. In fact, the company that exists today is very different to the one that was founded by Isralls and his partners back in the eighties.
“The business was founded in 1989 as a consultancy company and it became the business we know today in 1992. That’s when we re-registered the company as a supplier of equipment rather than a consultancy and we’ve been operating ever since,” he says.
“I was one of the founding members of the company. In 1989 we were appointed consultants for a large agricultural project. It was a fixed term contract and when it ended, there was no more work in agricultural projects in South Africa so in 1992 we had the idea to supply equipment and refresh the brand. Originally, I was a farmer and a private consultant.
“The focus has definitely changed because previously we would teach people how to grow. We sold knowledge and nothing tangible. From 1992, we started selling equipment. Right now, we are going to add to our repertoire and offer agronomical back-up and start selling knowledge again but obviously equipment is our main focus,” he adds.
Clearly, the farming industry in South Africa has thrown up its fair share of challenges over the years, not always making the business environment an easy one in which to operate. There have been strikes, climate change issues, land reform troubles, political and legal indecision, a lack of investment in crop farming and difficult economic conditions. But Vegtech has not only managed to survive through these trials, it has managed to thrive.
“Working in South Africa is a very challenging environment. If you remain in business and you grow then you’re doing something right as the business environment is very difficult here,” says Isralls.
AN AFRICAN OPERATION
The products on offer from Vegtech are all made with the end user, and the end environment, in mind. The business is run by and for people with experience in African farming and the management offer first-hand experience and expert advice in exactly what is needed to suit local conditions.
Isralls says that speed, size and spread of operations sets the company apart from its competitors.
“Our main daily task is building and delivering projects, that is a very complex part of the operation. Selling it is a big thing but once is sold the work really begins. 95% of our projects are turnkey – we do the manufacturing, delivery, erection and we install all the accessories and commission the project. We have more than 120 labourers building in the field on any given day.
“The average project takes around one month to complete. We are currently working on a big project that will take eight months. We work very quickly, it’s one of the things we pride ourselves on. We keep a lot of stock and it’s one of our big trump cards – we’re very quick off the mark.
“We sell a lot into Africa. We’re not only active in South Africa. We sell projects all the way up into Central and Western Africa. We’re building in Malawi right now, we recently finished a project in the DRC, we’re building a project in Botswana and also in Angola. In Africa, we would send one or two supervisors and then hire local labour,” he says.
“There’s a big difference between the countries in Africa. Zambia and Malawi are quite business friendly and it’s quite easy to operate there but the DRC is more difficult especially when we’re shipping stuff there and hiring labour there. It varies from country to country.
“Being based in SA helps us a lot. We know how to work in Africa better than companies that come from Europe or America. You need a lot of patience when working in Africa,” he adds.
IMPRESSIVE PROJECTS
Vegtech uses as much locally produced material as possible in its installations. In fact, the company says that it now manufactures more than 60% of its products in South Africa.
“It depends on the complexity of the project and we only import stuff that we cannot get locally. We import from Italy, Holland, Israel and Turkey. On high-level complex projects we might have to import 70% of the product.”
As technology is developing so quickly, Vegtech stays in close contact with suppliers and customers to ensure it remains at the forefront of the market, supplying what is needed for long-term success and not flash-in-the-pan ideas.
One project, currently going up close to Durban, is an industry leading example from Vegtech. The development is a large coloured pepper grow and Isralls explains that this is a high-tech venture.
“This is a very high-tech operation. It’s about as high-tech as you can go without going into glass. I would be surprised if there’s a bigger operation, with this level of technology, in Africa,” he says.
“It’s in Kranskop, not far from Durban. It’s around 120,000 m2. This project is being built in phases. Every two years we do another phase. The current phase will take around eight months. It’s for a private company, a German missionary. This is certainly one of the most complex projects we’ve worked on.
“There’s a lot of different skills involved. There’s electrical work, civil work, engineering work, construction, irrigation and many more so there a lot of different teams on the site. The project manager has to make sure that everybody works together. When you have a multi-faceted project you have to make sure that everything goes at the right pace so that no one holds anyone else up. It’s like an orchestra; you need a conductor to make sure everybody is doing their thing at the right time at the right level and at the right pace.”
Vegtech is hoping to hand the current phase over in February and Isralls says that they’re already talking about the next phase.
GROWING IN THE FUTURE
South African farmers are under pressure to increase their production to keep up with a growing population. Now with over 52 million people (an increase of around 25% in 15 years) the farmers, both large and small, need all the help they can get. It’s the same story in Africa where food production is an ongoing focus. This stems back to 2004 when former UN secretary general Kofi Annan called for a uniquely African green revolution focused on the improvement of agricultural productivity through the replenishment of soil fertility, together with the use of improved seeds, and the promotion of human nutrition, market access, environmentally sustainable practices and enabling policies.
Vegtech products are already used is Africa but Isralls wants to grow further on the continent. “We would like to be involved in more African countries outside of SA,” he says. “We want our business to be more balanced and more weighted on other African nations rather than most of it coming from South Africa.”
To ensure Vegtech keeps moving in the right direction, Isralls says the business has started to implement a new marketing strategy in order to bring the brand right up to date.
“After 23 years, brands need to be refreshed and people become complacent and think everybody knows them. People think ‘we’ve got 70% of the market share and advertising and marketing are not necessary as we’re only in a small niche industry where we are the biggest player’ but that’s incorrect,” he says.
“We realised that we need to refresh the brand; the original branding was done in 1989 and we needed to modernise and try and market ourselves better so that is what we’re doing.
“It’s a three month project that we will come out of with a refreshed brand and some new marketing campaigns that will run throughout the whole of 2016,” he concludes.