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Off-take agreements with Emerging Livestock Farmers of R30–R90 million announced by Al Mawashi

Emerging farmers to access between R30 Million - R90 Million over next three years in first-round of off-take agreements.
 In Blog

Seated (L-R): Emerging Farmers:  Nomthunzi Boyce, Mandisi Nofumba & Zandile Mfingwana. 

Standing (L-R): Thabo Shenxane (Head of Trade, Investment & Innovation, ECDC) & Ilyaas Ally (Director of Commercial & Operations for Al Mawashi)

  • Emerging farmers to access between R30 Million – R90 Million over next three years in first-round of off-take agreements
  • Al Mawashi off-take agreement spins off vision and plan for ‘Youth Development Centre’ in Northern Cape

East London, 04 March 2020 — Al Mawashi South Africa, the South African subsidiary of the Kuwait Stock Exchange listed Al Mawashi (KSE: KLTT) – one of the largest international livestock transport and trading companies in the world, announced the country’s first-ever live export, off-take agreement for sheep with emerging South African black livestock farmers.

The announcement, made yesterday at Al Mawashi South Africa’s East London head office in Beacon Bay, involved signing and concluding five preferential procurement off-take agreements.  It forms part of the company’s empowerment strategy to grow, foster and support the development of an emerging farmer live export industry alongside commercial farmers.

Based on future estimations, Al Mawashi said the off-take agreements allow for preferential procurement of 25 000 to 75 000 head of sheep valued between R30 million to R90 million over the next three years, on the condition of farmers meeting specifications of live export.

Mr. Mandisi Nofumba, who rears sheep in Richmond, Northern Cape said: “We need more opportunities such as this one that will provide opportunities for emerging farmers to grow and commercialise their businesses. At some point, we have to outgrow the emerging farmer phase and join the big league of commercial farming. This agreement will enable me to expand my business and has opened us up to new avenues. Through the Al Mawashi deal, we are also busy with proposals to develop a training centre in Richmond in the Northern Cape province where our focus will be on training youth in the agricultural sector”.

According to Mr. Gcina Madasa, “emerging and commercial farmers are allowed a great opportunity to participate in a new industry.” Madasa has been farming in Elliot for 16 years.

“It allows farmers access to a sustainable market.  This also presents an opportunity for farmers to improve the quality of their breed. It puts us in a position to plan our breeding product in a consistent way.  We are exploring initiatives to create a collection point from other emerging farmers for Al Mawashi,” he said.

Since establishing its South African operation in 2019, Al Mawashi has built the largest feed lot in Southern Africa, 40 kilometres outside the Port of East London. It has procured, transported and shipped 56 000 heads of sheep from South Africa to Kuwait offering market-related rates to 150 South African livestock farmers.  This, in turn, injected approximately R155 million into the Eastern Cape’s regional economy in under 12 months.

The company also achieved a 0,2% live animal transport mortality rate during its voyage in October 2019, well below the international benchmark of 2% on board its accredited, twin-tier, and ventilated livestock vessels in 2019.

“The company has supported distressed South African farmers whose livestock was in danger of dying, because of feed and water shortages as a result of the draught, offering market-related prices. To be clear, these animals were destined for certain death by drought-induced starvation.”

Mr. Ally said the company is also exported a mixture of mutton and lamb carcases of 240 232 kg to Kuwait.

Al Mawashi South Africa’s Kuwait-based parent company, is Australia’s largest buyer of sheep, and the company has been in existence for 47 years.   The company announced on the Kuwait Stock Exchange that it will seek out reliable sources of live sheep in the future, and established its first operation on the African continent noting South Africa’s potential as a source for food security for countries in the Middle East.

Al Mawashi operates various abattoirs in the Middle East, supplying meat to the UAE, Oman and Kuwait. The company is further expanding its reach into other countries around the Persian Gulf.

“We are looking to engage and sign more emerging and commercial livestock farmers in South Africa over the next few months.  We have set an ambitious target of building our South African business to turn over R1 billion per annum by the end of 2025,” announced Mr. Ilyaas Ally, Managing Director of Al Mawashi South Africa.

“Our operation has a direct multiplier effect on various industries in the value chain including animal welfare transport, animal medicine, feed and shipping industries, as well as government.”

“We are excited to announce the off-take agreements, and will offer and introduce layers of support to the farmers.  Importantly, through the off-take agreements, we essentially remove barriers of entry for farmers into new global markets.”

Ally said: “The message that we want to get out to red meat exporters in the country is that we are not taking away your business or a market.  We are simply opening up an entirely new market for the country, which never existed before.”

Ally said South Africa also needed to be educated on aspects of live export for slaughter industries, which is as “old as the age of dawn, but has become highly modernised and sophisticated to comply with animal welfare standards.”

“Animals are routinely shipped via sea, and there is nothing strange, novel or cruel about this practice.  We will work closely with organisations promoting animal rights helping them to understand the industry.  Similarly, we will not take lightly any reckless activism, defamation and in some instances, skewed or misrepresented media reporting on the industry.”

Eastern Cape Development Corporation’s (ECDC) head: trade, investment and innovation, Thabo Shenxane said:  “This is exactly why ECDC promotes trade to ensure that benefits acme to everybody that lives in the Eastern Cape.”

Relevant pages on AgribookDigital include “Mutton (sheep)” and “Exporting“.

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