A new financial entity was launched today with a specific focus on creating and managing a financial services operation, supporting all the stakeholders in the South African agricultural value chain. AgMerchant Capital (Pty) Ltd (“AgMerchant”) aims to be a keen participant in the agricultural financing services industry through the provision of custom-made solutions.
Founded by Chris Venter, a well-known and respected figure in the sector, AgMerchant aims to provide the entire value chain with financial support, backed by innovative, digitised, and long-term sustainable financial services solutions.
“The South African agricultural industry is critical to the continued growth of the economy, as well as to food security and job creation, and is expected to maintain and grow its food export capabilities, contributing to a positive trade balance,” says Venter.
“It is thus essential that the industry should be supported by a robust and focused commercial agricultural lender. Changes in the agricultural finance landscape – some of which were brought about by the COVID-19 pandemic – over the past three years support this viewpoint. In addition, we have seen Land Bank re-assessing its role as a commercial farmer financier. We believe there is room for a financier that understands the cyclicality of the industry and an entity that can finance the flow of the commodity rather than just relying on the strength of the balance sheet of the farmer. It is therefore our intention to provide the entire agricultural value chain with financial support to assist the sector in receiving the support it needs to grow and thrive.”
Venter goes on to indicate that the relatively small but extremely nimble company will be able to quickly react to what clients in the sector need, with efficient decision-making that can assist those who need rolling financial support.
“Like all businesses, the people involved are the most important element of success. It was therefore important to put a team of highly qualified and experienced people together – people who understand banking and finance but also have many years of experience in the agricultural market. It is exciting to build a company and position a new brand with an excellent team in the current agricultural sector and the opportunities it offers.”
Venter himself has some 30 years’ experience in financial services and agriculture, and a combination of both, so he has an exceptionally good idea of what is needed. In his banking career as well as in his time as CEO of AFGRI, he was responsible for managing and building high-performing teams. His 14 years of merchant and investment banking experience and 16 years’ experience in the agricultural and food industries and his vision for food certainty and the economic benefits this brings, not only to the country but to those directly employed in the sector, remains very close to his heart.
AgMerchant was established with a long-term investment focus and an understanding of the importance of food certainty in South Africa. It has the necessary licences and regulatory registrations to finance the agricultural market. It already supports customers with foreign exchange, asset and commodity finance and is constantly adding to its product offering.
In conclusion, Venter believes that the agricultural sector is critical to the well-being of South Africa, not only in pursuit of enabling job creation but also for food security and the ability to earn forex for the South African fiscus. “The sector has a history of producing and exporting quality produce and in some instances massive quantities are supplied to processors to ensure food security for the country.”
AgMerchant forms part of a group of companies founded by Sovereign Capital Holdings (Pty) Ltd, which has as its passion to support food certainty on the African continent. Part of the group is an online e-commerce platform for farmers that already offers more than 400 000 products. AgMarket will continue to expand its digital warehouse offering for it to eventually include all products required by farmers to produce food. Both AgMarket and AgMerchant are supported by a technology company, AgXchange, which focuses on digitalisation in the agricultural sector.
