The slow transformation of SA's dairy industry

Effecting change in the dairy industry is not for the short-sighted or faint of heart. Simpiwe Somdyala, CEO of Amadlelo Agri, spoke to Susan Marais about the agricultural investment company’s quest to uplift rural farmers in the Eastern Cape and KwaZulu-Natal, and the challenges it faces in the process.

- Susan Marais

Milk production is a complex business, but add farming on communal tribal land into the mix, and you're destined to walk a rocky road.

Nonetheless, this is the path that several communities, business people and commercial farmers in the Eastern Cape and KwaZulu-Natal chose to follow in 2004 when they formed Amadlelo Agri, a company that runs dairy farms and helps emerging black producers grow their operations into profitable agribusinesses.

In 2019, businessman Simpiwe Somdyala took over the reins as CEO of Amadlelo and restructured the company into a 72% majority black-owned agribusiness. Today, its ownership is comprised as follows:

• Tulsacap (46,4% share), a group of black professionals and business people, which includes Somdyala, who pooled funds into the company in 2017;

• Amadlelo Milk Producers' Investment Company (AMPIC), with a 26,8% share. This consists of about 50 white commercial farmers from KwaZulu-Natal and the Eastern Cape;

• Vuwa Investments (18,8% stake), a 100% black-owned holding company; and

• Amadlelo Empowerment Trust (8%), which represents 500 black farmworkers of AMPIC members.

According to Somdyala, the dream behind the establishment of Amadlelo "has always been to unlock dormant [tribal] land and create viable rural or agricultural areas with the help of commercial farming knowledge".

For the first three years or so, it might have seemed that little was taking place at Amadlelo.

But this was certainly not the case; during this time, a group of commercial farmers and black business people were meeting and trying to decide which dairy farming model would best serve their dream.

Working through Vuwa Investments, they approached the University of Fort Hare in the Eastern Cape, and looked at various funding models.