Partners pull together to finalise Skutwater farming operations

By Magda du Toit | 1 August 2024 | 9:25 am

Letsitele citrus and avocado producer Mahela Group and the ZZ2 Group, an avocado and tomato producer from Mooketsi, are developing a 400ha avocado and citrus farming operation in Weipe, Limpopo, with a non-controlling minority equity investment from AgDevCo. This transaction was supported by DLA Piper and Bowmans in South Africa.

AgDevCo, Mahela and ZZ2 are to further develop the Skutwater avocado and citrus farming operations at Weipe in Limpopo.

According to a news release, this partnership enhances Mahela Group and ZZ2’s existing relationship, which already combines their expertise in other farming operations as some of South Africa’s largest citrus and avocado producers respectively.

The Skutwater project will see the combined orchard size increase from 190ha to 400ha under the first phase, with a potential to expand to 1,500ha in the second phase, with plans to develop expansion opportunities in neighbouring countries, including Mozambique.

Skutwater is anticipated to employ over 1 200 equivalent full-time employees on completion.

“We believe that, with trusted partners such as ZZ2 and AgDevCo, we will be able to unlock exciting opportunities in the global market. With innovative and efficient farming practices, the Skutwater project will not only add to agricultural development in the area, but also many new and needed job opportunities to people from the nearby communities,” said Mahela Group CEO Barend Vorster.

The global market for citrus and avocados remains favourable, and with sophisticated and sustainable agronomic practices under favourable conditions in Weipe, higher yields of quality fruit can be achieved, focused on the earlier international market window.

“The partnership with the Mahela Group and AgDevCo enables ZZ2’s team to join forces with astute agriculturalists. We look forward not only to make a success of the operation at Weipe, but also to explore other opportunities in Africa with our partners over time,” said Tommie van Zyl, ZZ2 Group CEO.

According to AgDevCo’s CEO, Daniel Hulls, AgDevCo is delighted to partner with the ZZ2 and Mahela groups to contribute to the commercial and impact success of Skutwater.

“We are deeply impressed by the farming capabilities and business ethos of both and are excited to learn from them in South Africa and to actively explore opportunities elsewhere in Africa,” said Hulls.

The Mahela Group is one of South Africa’s largest privately owned citrus producers and exporters, with an added diversified portfolio in avocados, bananas, macadamia nuts, litchis and kiwis produced across Limpopo as well as in the Southern Cape.

The group sees itself as a custodian of nature, striving towards producing fruit in an environmentally sustainable and responsible manner.

The ZZ2 Group is one of the largest tomato producers globally and a leading producer of export avocados and deciduous fruits. It also produces Medjool dates, cherries, almonds and onions.

ZZ2’s purpose is to grow differentiated primary agricultural products for customers worldwide, and to optimise resources and to farm in harmony with nature in a sustainable way.

AgDevCo is a specialist investor in African agriculture, growing sustainable and impactful agribusinesses, with US$280 million (about R5,1 billion) under management. Its vision is a thriving commercial agriculture sector that benefits both people and the planet by investing in and supporting agribusinesses to grow, jobs, produce and process food, and link farmers to markets.