Gert Breet
In 2007 the Sundays River Farming Trust was formed by citrus workers in Sundays River Valley in the Eastern Cape. The trust was granted 30-year leases to work four citrus farms in the area, but, because government would not permit them to purchase the land outright, the members struggled to access financing to grow their operations.
In 2012 the trust – thanks to a loan from a strategic partner the Sundays River Citrus Company (SRCC) – purchased their own 123-hectare, virgin-soil farm – Siyaphambili. They planted citrus trees and formed a company – Sikhula Sonke Enterprises – as an operating entity.
The SRCC loan has since been fully repaid, and Siyaphambili, worth approximately R11 million ten years ago, is now valued conservatively at around R60 million and boasts 93 hectares of productive citrus. It is a remarkable success story for the 37 beneficiaries of the trust. A tremendous amount of wealth and equity has been created in the farm they own and the four farms leased from government, which together comprise 373 hectares of planted land.
Today, Sikhula Sonke employs 49 permanent and nearly 300 seasonal workers. Although only 302 hectares are currently in production, it is expected that the full 373 hectares will be in production by 2027, meaning there remains considerable upside in the medium term. Sikhula Sonke exported 379 197 cartons during the 2021 season and 529 415 this year. By 2027, when in full production, they are expected to export more than 676 000 cartons. It is estimated that the farm income will exceed R63 million by the end of 2026 with a projected profit of around R10 million.
Siyaphambili is well served with physical infrastructure that includes Sikhula Sonke’s headquarters, two dams, an 850 m2 store complex with a fitted workshop, a clinic, ten houses and a hostel with accommodation for 50 seasonal workers. The group has access to 435 hectares of allocated water rights from the Sundays River Water Scheme – more than sufficient for the total area planted.
The SRCC continues to play a crucial role in the development of the farms and organisation. They manage the packaging, marketing and exporting of produce, assist with marketing, accounting services and day-to-day farm management, conduct training and mentorship for the emerging black farmers, and have an agronomist on hand who specialises in citrus production.
In 2021, in the wake of sharply rising fertiliser and other input costs as a result of the war in Ukraine, South African citrus faced a set of critical challenges. Fortunately, the trust had recently applied for Jobs Fund assistance, which was granted through the Economic Transformation of Black Citrus Growers (ETBCG) programme, a partnership between the Jobs Fund, Citrus Growers Association and FNB.
In 2022 FNB, via the ETBCG programme, provided a R6 million loan facility of which R2.1 million was a pure grant and the balance a blended loan to assist with the replanting of 43.5 hectares of citrus. In 2023 FNB provided an additional facility of R15.6 million through the ETBCG – split between a R5.6 million pure grant and R10 million working capital facility with a blended-finance interest rate. This will be used to pay suppliers and orchard maintenance over the next few years. A R1 million asset-based finance facility was also provided to assist with the acquisition of orchard equipment.
The assistance, according to Steri Ndyenga, a shareholder in and director of Sikhula Sonke Enterprises and the Chairman of the Sundays River Farming Trust, “couldn’t have come at a more opportune time. The ETBCG loan was used to purchase two spray machines, a tractor, and several kilometres of security fencing, and allowed us to continue to pay seasonal workers at the height of the citrus crisis.”
“I can’t overstate the value of a low-interest-rate loan to small-scale farmers,” Ndyenga says.” That, alongside the patient and understanding approach taken by the ETBCG partners, has allowed us to keep investing in much-needed capacity during a very difficult time for the industry. Beyond the loan, we’ve built stronger relationships with all the partners as a result of the ETBCG – We now bank with FNB, and have benefited greatly from learning from the agronomic teams involved.”
Gert Breet, head of business development at FNB Agribusines. He writes in his personal capacity.
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