Our Business Model
Farm. Aggregate. Supply.
In keeping with our slogan of Farm, Aggregate, Supply, we pride ourselves in being directly involved in primary agriculture. With our first-hand experience of the challenges and opportunities within the industry, the application of best practices and modern technology, our business model ensures consistent supply from our shareholders' own farms, further strengthened by our role as aggregator for several farmers in South Africa. This not only allows us to stay relevant, but also empowers us to market greater volumes, manage quality and ensure reliable supply.
With Alfalfa forming the cornerstone of our business, we also have a proven track record in the export of other commodities, including groundnuts and pecan nuts. This, in conjunction with our collective expertise in sourcing, logistics and market access, forms the basis for expansion into various new product categories and services.
Our business is built on five pillars:
- Farming
- Aggregate & supply
- Logistics
- Processing
- Contracting services
Farming
Our farming knowledge and experience have been passed on from generation to generation. We have first-hand experience of modern-day agriculture and of remaining relevant as far as best practices are concerned. We are actively involved in the production of alfalfa, pecan nuts, peanuts, popcorn, teff and other crop-rotational commodities.
A key focus of our future strategy is contract farming, an agricultural production model whereby a farmer signs an agreement with a buyer to produce a specific crop or livestock according to certain predetermined terms and conditions on their behalf. In this type of commercial arrangement, the buyer usually provides the farmer with the necessary input guarantees to purchase the produce at an agreed-upon price and quality.
Contract farming has become increasingly popular in recent years with a view to improving the efficiency and productivity of the agricultural supply chain. It facilitates improved coordination between farmers and buyers, reduces market risk for both parties, and ensures a consistent supply of high-quality products.
Aggregate & supply
We procure directly from producers to create volumes of scale to complement our own crops, and through our partnerships with 150+ farms we can add their production output to our local and export volumes.
The objective of volume aggregation is to increase the value of agricultural products by pooling resources, expertise and market access. By aggregating products, farmers can achieve economies of scale, reduce transaction costs, and access export markets that they may not be able to reach on their own.
Agricultural aggregation can be beneficial for both producers and clients. For producers, aggregation can result in cost effectiveness, sustainable prices, and better market access. For clients, aggregation can ensure a consistent supply of high-quality products at reasonable prices.
Agricultural aggregation plays a crucial role in the development of the agricultural sector and can contribute significantly to poverty reduction, food security, and the economy.
Logistics
Our logistics business unit is responsible for the transportation of our products from the various farms to our depot, to South African clients, and to ports for export. Effective logistic execution is essential to ensure customer satisfaction, reduce costs, manage risks, and provide visibility of the products in the supply chain.
Terradam Logistics is a dedicated business unit positioned as a service provider for the logistic execution of our own products, and also services external clients. We can offer a fully integrated solution that includes the following services:
- Transport
- Warehousing
- Clearing and forwarding
- Shipping
Processing
In addition to the hammermill plant Terradam operates in Jan Kempdorp, its shareholders have a vested interest in SA Pecans, SA Peanuts and Vaalharts Cotton.
Further expansion into processing is an important component of our strategy and we will continue to explore opportunities for diversification into processing to increase our relevance, improve competitiveness, and create value added products.
Contracting services
Linked to our diversification and integration strategy, we have invested in modern, high-performance machinery. Our state-of-the-art machine fleet undergoes routine inspections and maintenance to guarantee unwavering reliability and peak performance. Our team's expertise, diverse skills, ongoing training, and capabilities enable us to handle all agricultural operations internally, ensuring the delivery of the exceptional standards our valued customers expect.
Our services include the cutting, baling, loading and transportation of bales, as well as groundworks and soil preparation.