Agri-tech entrepreneur and CEO of Livestock Wealth Ntuthuko Shezi is bullish about South Africa’s agriculture sector. He has good reason to be – his ‘crowdfarming’ venture has just secured financial backing from Rand Merchant Investment Holdings (RMI) and has started supplying retail giant Woolworths with free-range beef.
Speaking to Moneyweb during a presentation at its Johannesburg offices on Wednesday, Shezi confirmed RMI’s financial support but said he could not reveal the value of the investment.
“It’s a big boost for us both in terms of capital to grow the business and from a profile perspective,” he says.
“Livestock Wealth now has more than 2 000 cattle on several farms in different parts of the country and about 1 000 investors currently. Now that we’re gaining traction, our target is to have about 10 000 investors by the end of our financial year in February.
“Late last year, we secured a lucrative agreement to supply Woolworths with free-range beef and we sent through our first supplies in April. In the last three months we have supplied Woolworths with around 64 tons of beef. Woolworths is a great brand to be working with and it naturally has strict supplier protocols, which we must adhere to.”
Shezi says the Woolworths contract is a start, and that there is big growth potential considering the increasing popularity of free-range meat.
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Livestock Wealth was started in 2015 when Shezi realised there was an untapped commercial opportunity around livestock farming in SA that could leverage off the African community’s close links to cattle.
“Historically, wealth in the African community has been around the number of cattle you had.
“While things have changed since 1994, with black South Africans having access to more job opportunities and generating wealth in different ways, cows are still an important part of Africa tradition,” he explains.
Shezi says around half of SA’s 14 million cattle are still owned by black South Africans – largely in rural areas – who do communal farming without access to markets. “Livestock Wealth bridges that gap. It gives communal farmers access to markets, while offering investors a chance to invest in cattle. They [investors] can chose to invest in cattle that will be grown on the farms we work with to supply either meat or cows that produce offspring,” he adds.
According to Shezi, investors can put their capital into buying individual cows or bulls; alternatively, multiple investors can invest smaller amounts for a ‘share’ in the animal. Livestock Wealth works with farmers who raise the cattle until they are around two years old and ready to be sold.
He says the farmers benefit since the biggest challenge they face is access to capital.
The whole process is linked to an app and investors can view and track the cattle they buy on the farm at almost any time. Livestock Wealth has joined forces with MTN and Huawei on the livestock tracking technology.
The company won the SAB Foundation’s Social Innovation Award in 2017, which included prize money of R1.3 million to further develop his business.
Things have progressed significantly since then – Shezi says the business is now a R100 million enterprise with its eye on further investments into SA’s agriculture sector. High-value vegetable and macadamia nut farming could be on the horizon.
Shezi, graduated as an electromechanical engineer from the University of Cape Town and is no stranger to tech start-up innovation. After leaving professional services heavyweight Accenture in 2006, he launched Scratch Mobile. He was born in rural Ndwedwe on KwaZulu-Natal’s North Coast, which he says has influenced his rural-urban agri-tech innovation.
Agricultural Business Chamber chief economist Wandile Sihlobo says SA is currently estimated to have around 12.8 million head of cattle, with some 40% owned by rural people or communal farmers. He says the drought in 2015 led to cattle numbers declining from around the 14 million mark.
“Cattle farming is worth around R142 billion and is a growing agricultural sector in SA, considering the growth of beef exports from the country over the past few years,” says Sihlobo.
“Cattle farming is the second-biggest sector within livestock farming after poultry in SA. Innovative ventures like Livestock Wealth are important to grow the agriculture sector, and useful in the development of previously disadvantaged areas and communities in the country.”