While farmers and consumers alike are still reeling after the Tshwane Fresh Produce Market was shut down due to covid-19 infections, an alternative trading facility was opened today in Midrand, Gauteng – and RSA Group CEO Jaco Oosthuizen says it is here to stay.
In an exclusive interview with Food For Mzansi’s podcast, Farmer’s Inside Track, Oosthuizen says if the first day is anything to go by, business at the Midrand facility is already comparing well to its other regional markets. “We certainly don’t see the Midrand facility as a temporary arrangement. It was originally set up as a black swan event (in the wake of the pandemic). We are going to stay there, but we are not leaving Tshwane.”
The Tshwane Fresh Produce Market is set to reopen tomorrow after being shut down for three days to complete deep cleaning as part of the covid-19 regulations. However, Agbiz has warned months ago that the market was on the brink of collapse due to poor management. With an annual turnover of nearly R3 billion, is the second largest market in South Africa.
The City of Tshwane, which had effectively become dysfunctional in November last year amid political infighting, pockets R150 million per year in taxes, although the market itself only gets around R3 million annually for maintenance. Oosthuizen estimates, however, that a complete overhaul will cost at least R750 million. Besides the market woes, residents of Pretoria are also suffering from service delivery issues.
“I don’t think it is that difficult to get the Tshwane market right, but there is a dysfunctionality in understanding the importance that fresh produce markets play in terms of food security. It concerns me. Just look at how the markets in Cape Town and Johannesburg are managed. It is phenomenal, although it is very difficult.”
Oosthuizen, who heads up South Africa’s leading fresh produce sales organisation, is adamant that the Tshwane Fresh Produce Market can still be restored to its original glory. “It just needs the basics. That is what makes it so frustrating. It has a solid, good infrastructure. Yes, it needs a lick of paint, and to update its cold storage and get proper consignment control, but it is not that difficult to fix. If you fix it, you will immediately increase its financial impact.”
The Tshwane market is also currently failing producers, says Oosthuizen. “It is getting riskier in terms of infrastructure degradation. The responsibility (for maintenance management) lies with the council, but it is starting to fail the producer that pays 5% for the facility. It also fails the market stakeholders because it is not keeping up to date with technology.”
Meanwhile, the RSA Group is set on growing the possibilities of the newly-launched Midrand facility. Today – its first day of business – saw over 340 pallets of fresh produce for sale, which the fresh produce giant describes as “an unprecedented volume given the speed with which the alternative facility was set up”.
The Midrand facility endeavours to support the country’s farmers and to ensure that buyers continue to have reliable access to produce, says Oosthuizen. “The Midrand facility was born out of need in terms of the new covid-economy, but I certainly think that it will stand the test of time and provide an alternative trading platform for producers and buyers.”
He adds, “It is a high tech system with excellent transparency, and produce can move very quickly. This is in line with the way markets are evolving globally into ‘low touch’ facilities that deliver excellent price discovery and meet the new demands of the economy. We are confident it will make a sustained contribution to the industry.”
Freshlinq, the company behind the market infrastructure and management, was quick to move in partnership with RSA Group. Its technology backbone and operational systems have played a key role in the Midrand facility’s ability to get trading with such speed. The alternative facility’s success also illustrates the reality that effective price discovery isn’t the sole domain of municipal facilities; and can thrive in any physical or online environment.
Oosthuizen tells Food For Mzansi that the new Midrand market is a welcome addition to the Gauteng fresh produce space. It is surrounded by two huge townships and also Centurion and Midrand which has both seen massive development in the last few years. “It might yet surprise us. The building is not ideal, but we have a few options to make it better. We’ve traded under a tree before, and I can tell you that this is much better.”
Tshwane market CEO refutes mismanagement claims
Food For Mzansi also reached out to Tshifhiwa Madima, the CEO of the Tshwane Fresh Produce Market. He confirms that the authorities have given them the green light to reopen the market at 05:00 tomorrow (27 June) after the covid-19 deep-clean. “Infected staff continue to receive medical attention. The last three days (of closure) has been a blow to business, but we will do our best to recover from the financial losses. As to whether we will be able to do it, remains to be seen.”
Madima, however, is adamant that the market is not poorly managed. “We inherited a lot of problems, but we are doing our best. Many people do not understand our challenges, and also the arrangements that are in place with the city council. The market is part of the council. It is very much removed from the business of the council, which is also posing some challenges in terms of getting the necessary attention and support (to fix inadequacies).”
Furthermore, he confirms that maintenance of the Tshwane Market will continue in July. “We are trying to address a huge backlog. Even at the time of closure this week, maintenance was being done. Maintenance will continue as per the budget for the 2020-2021 financial year.”
Oosthuizen adds, “I don’t see us pulling the plug in Tshwane. I believe we should be pushing, and we are pushing, to consolidate business on the market to one space. To have potatoes, onions, fruit and vegetables in one trading space, so we can innovate. Covid-19 highlighted it. If you just think in terms of social distancing and the number of entrances and exits at the market currently, it just doesn’t make sense. All that floor space doesn’t make sense. When you are in one space, it will be easier to innovate and manage.”