South African Table Grape Industry (SATI) is a joint initiative involving all sectors in an attempt to centralise and co-ordinate information gathering, communication and the promotional side of the grape job.
Chief executive of the new operation is Elaine Sheppard, who was appointed on November 1, 2004, after four years as sector head of the agriculture and agro-processing section of the South African government of Thabo Mbeki.
SATI’s primary strategic objectives will be to effectively collate and disseminate credible information to facilitate a two-way flow between South Africa and the world grape markets, and to drive new market access as well as develop existing markets. “Knowledge is powerful, but only when you are prepared to share it,” says Sheppard. “Our objective is to create consolidation within the grape industry.
”Since the removal of the board structure and deregulation, there has been a free for all. Now, the time is right for a move back towards consolidation, and away from fragmentation. The South African government has been increasingly looking along the value chain in all the major industries, to find ways to add value to our country’s export offer.
Unless our chain is prepared to work together, industry will never move forward in a meaningful way.”
Sheppard also talks of finding synergies between the roles of growers and exporters to instill greater efficiencies throughout the chain. “There are other issues high on the agenda in South Africa - such as transformation - and we will keep a close eye on those as well,” she adds.
But the initial priority is to improve information sharing and communication within the industry. Sheppard spent her first month with SATI familiarising herself with the industry, travelling through the grape heartlands and meeting growers and exporters to take on board the view of the people she will be working with and on behalf of in the years to come.
“They are the stakeholders in SATI and for them, we will be looking to provide a service to clients in all of the major global marketplaces,” she says. “We want the marketplace to understand who we are, what we are and what we are capable of doing for them.
During my time with the government, I was involved in negotiations with the World Trade Organisation as well as on trade with the US and in the Far East. So I have a good international network and solid understanding of what we need to do to access new markets.”
Sheppard will certainly make herself known to the European and UK markets in the near future. “People will soon know exactly what SATI wants to achieve; I will be in there making sure that SATI takes up the positions it needs to in our export markets, including participating in different European representative bodies. ”We will be visible and accessible - the point to come to for industry information - as we build relationships all along the value chain from grower to consumer,” she says.
SATI has brought together South African Table Grapes and its 900 plus growers, and the Grape Exporters Forum (GEF). Both have a 50 per cent stake in the new body, which gives two factions of the industry, that have not always seen eye to eye, an equal footing from which to move the industry forward.
While a high proportion of the industry is represented within SATI, however, there is still a sizeable chunk of production and exports that remain outside its auspices. “We are not an exclusive club,” says Sheppard. “Anyone who is not yet participating is welcome to come on board.” To date, the group has held strategy meetings and formulated a planned approach.
SATI has taken over some of the grape functions of the Fresh Produce Exporters’ Forum and moved into new offices in Paarl. By consolidating information points, Sheppard hopes to optimise the understanding and use of that information to the industry’s advantage. “Any information going into the marketplace has to be accurate and timely. Our client base must be fully informed at all times.”
Graham Retief, chairman of the SATI board, says his advice to growers as SATI starts out is: “Patience is the watchword. We have only just embarked on what we need to do and it will take some time to bed in and get the system in place. We are emerging from a lengthy period when the industry has lacked an overall strategy and we need to re-build a strategy from the ground up. Eventually we want to give growers the information that allows them to make good decisions rather than bad decisions.”
Sarel Joubert of Capespan also sits on the board as the incumbent chairman of GEF. “Obviously, SATI is still in its infancy, but so far it has worked very well. We all want things to move quickly, but sometimes it is not that easy. More than 90 per cent of the industry voted in favour of the blueprint and the response has been extremely positive.
“We are all faced with a difficult financial position in South Africa at the moment and it is very important that exporters and growers work together, not separately. There are also some things that are best done generically and it will be to the advantage of the whole industry to have a dedicated body working on its behalf with government and in our key markets.”
Retief adds: “South Africa’s exporters have doubled their volumes over the last seven years, but at the same time we have not significantly increased our market access. The rand has also become very strong and is now back to the levels of five years ago, while increasing costs of production and a decline in price structures at the selling end - influenced by the weaker rand in the 2001-2 season - have all served to reduce the potential returns to growers. We need to reduce the volumes being sent into our key markets to redress the situation. And the only way we can do that is to work very hard in the same direction.”
Joubert agrees: “As individual exporters, we can access new markets, but it has been recognised that we need to do it in a way that benefits everybody, not just two or three companies. Negotiating with governments requires the industry to have one voice. Once markets are opened up, then every exporter will have the chance to take advantage of new opportunities, but those opportunities should be available to everyone.”
Unanimously, the Far East is singled out as a target in the drive to gain access to new markets. “China is one of our main areas of focus,” says Retief. “The Chinese and South African governments are involved in discussions which we hope will lead, in the next 12 months, to a bilateral agreement that allows our grapes access to the Chinese marketplace.
“The UK remains our second largest market after continental Europe,” he says, “and in terms of prices it is number one. As a general rule, we service it as our priority before we service the continent. However, it is vital that we develop other markets to take some of the pressure off the mid-season period, gaining access to markets and halting the slide in profitability at peak times of the season.”
Retief adds: “We must take any costs out of the chain that we can, of course, but we also need to make the financial institutions aware that we are working as hard as we can as an industry and any upturn in our fortunes will not happen overnight. Growers too will have to show patience - there is no doubt that some will not survive the process. There were less in production this year and almost certainly there will be less again next year. It has to be widely accepted that we can’t just snap our fingers and change everything.”
Prioritising key objectives and ensuring that each task is carried out effectively is paramount, Joubert says: “In the short term, we must concentrate on doing things right. If we have one success story this year, we should be content with that. If we attempt to take too many things on at once, we will not succeed, but we have decided on our initial focus and it will then be a case of tackling things as they come along.”
The reaction to the appointment of Sheppard, particularly after her tour of the growing regions, has been “quite dramatically positive”, says Retief. “That is down to two things. Firstly, the quality of the person, she is top notch and came across very well to growers. Despite this being her first job in the grape industry, she showed an immediate grasp of the industry and an understanding of its requirements. Second, growers are extremely hungry for the type of information that SATI is promising. I think to some extent they might be a little over-optimistic at the moment, but this is a move in the right direction and as long as we pull together we can achieve our objectives.”
