LOCAL seed manufacturer Agriseeds (Pvt) Ltd is now looking into the southern African region for potential synergies, as the company looks to lift its capacity to 100% in the next two years.
— Staff Writer.
The regional market would enable the firm to generate foreign currency and escape the vagaries of forex shortages paralysing operations of many companies in the country.
Agriseeds sales and marketing director Ivan Craig told businessdigest recently that his company had started making inroads into neighbouring countries to establish export markets.
Craig said the company, which is operating at 70% capacity utilisation, is making use of its factory to the fullest.
“We are working on it because it benefits the company and the nation through generation of foreign currency. We have started inroads into some neighbouring countries to see where we can export our products into the region. In terms of export quantities, the sky is the limit,” he said.
“As we are looking into the region we will be able to ascertain how much we need to produce to be able to supply into the regional market. We are 60 to 70% in terms of capacity utilisation, we will certainly surpass that.”
He added that while the company was operating at 70% capacity utilisation, this did not mean Agriseeds was doing well given the need for investment. “As we produce more seed, we will then need to invest more in plant processing and facilities. We will then need to put extra investments into machinery,” Craig said.
He added that the company was eying more growth in seed production as part of its growth strategies. “Last season, we sold all our seeds and we are hoping to continue with the trend and see more growth, “he said.
Agriseeds is eying 25% growth rate in the next five years. The company was mid last year producing 4 000-5 000 tonnes of seed per season.
Its growth has also been buoyed by a US$5 million recapitalisation investment by its parent company, Klein Karoo, last year. South Africa’s Klein Karoo Saad Bemarking, a subsidiary of Johannesburg Stock Exchange-listed Zaad Investment, acquired an 80% equity stake in Agresseds and has been planning further investments.