Absa’s success in the secondary Agri-sector promotes businesses throughout the value chain.
There is a famous quote by Gary Keller, the founder of Keller Williams, which says: “Extraordinary results are directly determined by how narrow you can make your focus.”
This sentiment sums up the focus of CIB Secondary Agri-Sector, a unit through which we have experienced great successes and market share growth over the past two years.
Our aim is not only to become the recognised market leader in South Africa, but also throughout the continent, where we are in a position to build on our existing experience in our presence countries through Barclays Africa.
Our aim is to capture the secondary agricultural value-chain, especially for SA Outbound, Global Corporates (such as soft commodity traders and input suppliers) and local clients involved with basic processing of key agriculture commodities in those countries.
Significant opportunities exist to finance the trade flows (import and export) of Agri commodities regionally and internationally, and also to finance new and expanded food processing facilities in replacement of imported products and to enhance export earnings.
We also have the opportunity to connect key sector players through the value chain, and also include Black Economic Empowerment on a sustainable basis as part of this process.
Supporting our agricultural partners
We are using our commitment to and knowledge of the agriculture sector, coupled with our expertise, to add real value to clients in order to form lasting and trusted client relationships.
Considering the volatility experienced (caused by external factors, such as droughts and global commodity prices) in the sector and the typical longer agriculture cycle, this is a key requirement for a successful and lasting banking/client relationship.
We do not pretend to be farmers, because we are not, but we use our banking experience to partner with our clients to understand their needs, offer suitable solutions and, most importantly, establish an enduring symbiotic relationship.
We are looking to support clients and grow our market share when the sector faces challenges as a result of uncontrollable external factors.
A case in point was the last drought we had in the summer rainfall area, the worst ever recorded, when we supported our clients and also grew our market share by acquiring new-to-bank clients.
Our growing market share and diversified portfolio across various agricultural commodities and regions assists us greatly to adopt this supporting approach without taking on any undue additional risks.
Passion drives results
Banks and other financiers in this sector need to be comfortable with the fact that they will face two or three challenges during a typical seven-year Agri cycle due to uncontrollable external factors, such as weather and diseases and/or huge commodity price fluctuations due to the fact that our prices are mainly determined by global agricultural markets.
We are passionate about the sector. We are in it for the long haul and we see our role as being not only key but also complementary to efforts to support the growth of the agricultural sector across the continent and also to contribute to food security through the support we provide to our clients.