Aquaculture Finance and Investment Seminar 2021

Introduction and background

Aquaculture represents a sector with the potential to make a significant contribution towards the South African economy through the creation of skills-based employment and the selling of aquaculture products in domestic and foreign markets.

The need for investment and finance to support the development of aquaculture in South Africa has increased significantly over the years. Operation Phakisa: Oceans Economy was launched in 2014, which is an initiative of the South African government that aims to implement priority economic and social programmes better, faster and more effectively. The programme includes an aquaculture work stream of nine initiatives to fast-track sector growth.

In the implementation of the Aquaculture Operation Phakisa, by the end of 2019 the total actual investment committed to Operation Phakisa registered aquaculture projects was over R2.3 billion, of which over R341 million was from government. The total jobs for the aquaculture sector were 3 873 (including the crocodile subsector). The total value of the aquaculture sector in 2019 was estimated at over R1.2 billion.

Various strides were made in the last few years in terms of opening new water and land space for aquaculture ventures, but in order to realise the aspirations, investment into the sector is crucial. The Aquaculture Development Fund (ADF) is one of the nine initiatives identified during the aquaculture lab phase of the Operation Phakisa: Oceans Economy. It is an enabling initiative aimed at unblocking the financial issues hindering the development of aquaculture in South Africa. There is a growing need to build and further enhance capacity particularly in light of the very limited enabling resources. Investment is critical to meet the targets set through Operation Phakisa: Oceans Economy to grow sector revenue from R0.67 billion to R3 billion and ensure increase of jobs from 2 227 to 15 000 jobs.

About the Aquaculture Development Fund Working Group

The Aquaculture Development Fund (ADF) aims to provide end-to-end project financing and will be used as a tool for new entrants and small businesses to source funding from different entities in government and the private sector. Development Finance Institutions (DFI’s) and other government departments were identified as key stakeholders to collaborate towards the successful implementation of the ADF. The main focus of the working group is to discuss the funding of projects and to look at new applicants and make recommendations based on funding available. The concept for the Aquaculture Finance and Investment Seminar was founded with the ADF working group as an annual event.

The first Aquaculture Finance and Investment Seminar was held in Durban in March 2019. Various aquaculture businesses and government agencies presented to over 200 delegates. The seminar included live panel discussions on how DFI’s\ can support the sector. Case studies were presented from farmers who grew their business from start-up. Furthermore, the seminar included exhibition stands by various stakeholders and the event proved to be a good networking platform for investors, financers and the aquaculture industry.

Current challenges faced by the sector include the risks and high costs of starting an aquaculture farm, inadequate market opportunities, limited investment on infrastructure and security risks. It was proposed that additional government support is still required for clear trade agreements; research, development and innovation; red-tape reduction and funding initiatives that cater to small, medium and micro-enterprises (SMME’s), including ease of doing business.

About the 2021 Aquaculture Finance and Investment Seminar/Webinar

The Aquaculture Finance and Investment Seminar aims to create a platform for new and existing aquaculture projects to form meaningful partnerships with private local and foreign investors; DFI’s and key partners. The targeted audience for the seminar is noted below:

Small-scale aquaculture farmers (this would include the development of value chains)
Aquaculture farmers with potential of expanding
Established aquaculture farms
Aspiring farmers
Investors (local and international)
Development funding institutions (local and international)
Stakeholders interested in setting up farms within identified Aquaculture Development Zones throughout the country

Following the impact and strain of the COVID-19 pandemic on the aquaculture sector in South Africa, there is need to refocus investment towards sustainable economic recovery. Synergy is required to bring together key investor decision makers and industry participants in the value chain. By working together in a structured way, the promotion of a more common understanding and insight will lead to better strategic alignment shaping sustainable partnerships and investment in the sector.

The 2021 Theme

Refocusing investment into the aquaculture sector with emphasis on economic recovery

Sub theme:

The roadmap to investment in the South African aquaculture context

Schedule of activities

The structure of the seminar will split into three viewpoints/perspectives

1. The Investor Perspective (Parties looking to invest):

This session will give insight into what investors look for when deciding to invest in an entity.

Proposed speakers:

Mr Reghard Hamman; Shadow Capital (outline the pathways Shadow Capital takes assessing a viable investment; gaps found; audited financials; updated business plans etc.).
Department of Trade Industry and Competition (the dtic) Invest SA unit and the Aquaculture Development and Enhancement Programme (ADEP) unit (what entities require to have in place to ensure they are investor ready).
Provincial Investment Promotion Agencies (Wesgro, Trade Investment KwaZulu Natal; Gauteng Growth and Development Agency (GGDA)).

2. The investment seekers perspective (entities that require investment):

This session will give insight into positive and negative stories of aquaculture businesses looking for investment. It will also provide industry insight into the effects of COVID-19 from an industry perspective.

Proposed speakers:

Mr OR Kwape and Mr Entle Pule (Insight into their journey as tilapia farmers looking to secure investment).
Mr Nolan Adams or Mr Barend Stander (Representatives from industry associations providing insights on the challenges of COVID-19 on the sector).
Abalone sector presenter or Mr Andre Bok on Kingfisher farm (Positive story of ADEP recipients and Comprehensive Agriculture Support Programme (CASP)).

3. Investment readiness support:

This session will outline what support is available to entities in order to become investment ready.

Proposed topics and speakers:

Feasibility studies – Mr Keagan Halley or Mr Kishan Sankar from Department of Forestry, Fisheries and the Environment (DFFE)
Business plan support; training and capacity building; mentorship – Mr Alex Qunta from the Small Enterprise Development Agency (SEDA) and the Small Enterprise Finance Agency (SEFA)
Environmental Impact Assessment (EIA) pro-bono programme – Mr Takalani Nemarude from DFFE
Technical assessments process – Ms Pontsho Sibanda from DFFE
CASP Grant support – Ms Elder Mtshiza from Department of Agriculture, Land Reform and Rural Development (DALRRD)

Aims:

What are investors looking for deciding to invest
Looking for investment: challenges and success stories
To showcase support available to make businesses investment ready
To understand and stimulate the investment appetite for the sector

Date:

The investment seminar will be hosted online on either 24/25 November 2021.

Format:

The intended format for the seminar is to host a virtual webinar made of speakers from industry and the DFI’s. The seminar will be hosted via Zoom through the DFFE GITO unit. The seminar will be a one-day webinar of around 3-4 hours. The Zoom account can take up to 1 000 attendees.