SECTOR EXPERTISE | 14 NOVEMBER 2022 Harvesting Client Relations in the Western Cape Absa | Corporate and Investment Banking > Insights and Events > Harvesting Client Relations in the Western Cape Stephan van der Merwe Relationship Executive, Absa CIB SHARE Absa CIB’s on-the-ground team in the Western Cape is well positioned to help businesses in the region with their growth ambitions For many visitors, the Western Cape is synonymous with lush fruit valleys, rolling vineyards and fields of grain. Absa’s clients in the Fairest Cape reflect that basket of businesses, comprising major players from across the agricultural sector. “My portfolio stretches from Swellendam in the southern Cape up to St Helena Bay on the West Coast,” says Stephan van der Merwe, Relationship Executive at Absa CIB. “Our clients consist of listed entities, companies specialising in agricultural products and services like packhouses, fruit processors, fruit exporters. Then we also have clients in fishing, canning, packaging, processing, manufacturing, construction, with the primary focus on companies trading in the secondary agricultural sector. One of our listed clients started as a traditional agri co-op and has since diversified into retail and fuel offerings.” The regional team in the Western Cape also works with businesses ranging in size from mid-corps to large, listed companies. “We’ve expanded our team here in the Western Cape, because of the growth that our portfolio has experienced over the past three years,” says Van der Merwe. “We have a dedicated credit team that looks after applications, which have been coming through thick and fast as businesses in the region look to grow their operations.” Ready for growth The region is ripe for growth, Van der Merwe says. “Remember that before the pandemic, the Western Cape experienced three consecutive years of below-average rainfall, which brought the worst drought in more than a century. Then 2019, 2020 and 2021 brought record harvests, so most of our clients here are showing improved results. There is a positive sentiment in the Western Cape, and a clear desire and commitment from our clients to keep on growing their businesses.” This is driven in part by environmental, social and governance (ESG) trends – particularly around renewable energy. “This is at the forefront of most of our clients’ minds,” he says. “Most have made plans to address electricity supply, installing solar panels and in some cases battery solutions as well. One of our clients has one of the biggest single-site solar installations in the southern hemisphere.” Van der Merwe adds that clients’ commitment to capital expenditure is an indication of their current positive sentiment and long-term commitment to growth. “They’re putting money where their mouth is,” he says. That, he says, translates into increased demand for capital facilities – especially for property finance to assist the expansion of packhouses. “That demand shows that businesses are growing and that the pandemic has not put too much of a dampener on agribusiness in the region.” Building on a track record Those unique local needs demand the on-the-ground servicing that the distributed leadership of Absa’s Western Cape regional offices provides. Van der Merwe appreciates this more than most, having joined Absa in January 2019. “When the hard lockdown began in March 2020, just a year later, I didn’t yet know all our clients all that well,” he says. “But during that period we proved that we were able to support our clients, assisting them with their requests for funding and helping them through the working capital crunch. From a risk perspective, businesses in the agri and secondary agri spaces are very exposed to what’s happening with the farmers, and the events of the drought and the pandemic placed a lot of pressure on those farmers. That pressure flowed through to our clients, many of whom came to us for help with increased facilities.” Now, as the sector recovers, Absa’s on-the-ground regional team is well placed to assist businesses in the Western Cape with their growth ambitions. “We’ve built a relationship of trust,” Van der Merwe concludes. “But that trust was developed through our action and our track records. That’s the only way you can do it.” Stephan van der MerweRelationship Executive, Absa CIB https://cib.absa.africa/wp-content/uploads/2020/07/file_example_MP3_700KB.mp3 Related Articles RISK MANAGEMENT David vs Goliath – CBAM’s threat to South African manufacturers As the global mean temperature rises above the 1.5°C hurdle, we are entering a new phase of environmental regulation. 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