Investment big boost for SA pistachio industry


Uitdraai Boerdery and Karoo Pistachios, on Prieska in the Northern Cape, takes advantage of the harsh semi-desert environment’s sweltering summers, cold winters and low rainfall to produce what is popularly known as the emerald of the desert.

An investment by the financial services provider Fedgroup will now give South Africa’s pistachio industry a well-deserved boost by supporting the local market until the local demand for pistachios can be fully met.

According to Warren Winchester, general manager of venture capital at Fedgroup, pistachios are the fourth most traded nut worldwide by volume and revenue – and producers are struggling to keep up with global demand.

The world’s four largest pistachio producers are Iran, Syria, the USA and Turkey.

“They supply 98% of the world’s pistachios, but although many of these markets are established, they are limited by expansion opportunities and some are even shrinking in production.

“South Africa’s role in the industry can therefore mean a substantial victory for agricultural exports,” says Winchester.

Shufra and Aryeh – the pistachio varieties grown in South Africa – were first discovered in a trial orchard in the late 1990s, after which they were brought to South Africa.

“These varieties provide exceptionally large nuts for the world market and have a wonderful taste with a deliciously sweet undertone,” says Winchester.

A detailed study by the Industrial Development Corporation (IDC) shows the potential for a growing pistachio industry in South Africa.

The investment by the NOC was expected to challenge the top performing countries in the pistachio nut industry, namely the USA and Iran, from South Africa and ultimately lead to the production of between 2,500 and 3,000 tonnes of nuts that could be exported annually.

“However, the NOC withdrew its investments in Green Valley Nuts in 2011, which dimmed the hope of strengthening South Africa’s pistachio industry.”

However, Uitdraai Boerdery, under the management of David Muller, continued with pistachio production.

“Later, Uitdraai Boerdery became a founding member of the Pistachio Growers Association, The Pistachio Nut Company and Karoo Pistachios,” says Winchester.

Fedgroup finances Uitdraai Boerdery’s pistachio farming using the Fedgroup Impact Farming venture; it enables retail and institutional investors to invest in a pistachio tree on a sustainable farm for a minimum investment amount of R2 500.

“It offers a projected annual return of 15% per annum over a period of 15 years,” says Winchester.

Muller says the Fedgroup financing model is invaluable and is not “just about the cash injection they offer us, but the specialist expertise they bring”.

“It’s not like taking out a loan from a bank; for Fedgroup it’s about building a sustainable partnership to support future growth,” says Muller.

“Pistachios flourish in marginal and remote areas and therefore create employment opportunities within local communities. In addition, these farming operations require little water, which will not put additional pressure on the current water shortage in South Africa.”