5 July 2023
By: Michelle van der Spuy
An innovative model with mixed financing, fair ownership, mentorship and skills transfer has enabled FNB and Van Loveren to establish Middelburg Vineyards.
Last year, the first harvest took place at Middelburg Vineyards, a company jointly owned by Van Loveren and Mzala Wines. It marked the culmination of an almost decade-long process initiated by Van Loveren in 2011.
Van Loveren identified a developed piece of Karoo bushveld measuring 832 hectares near Robertson as suitable land for productive farming. It took seven years to secure water rights and an empowerment partnership was forged to commercialise the land and contribute to transformation.
Mzala Wines has a 30% ownership stake and two representatives on Middelburg Vineyards’ board of directors. The company’s empowerment structure consists of Van Loveren employees.
Van Loveren invested capital in the project, while FNB joined the team in 2018 and provided a combination of commercial debt and financing.
The project has already created significant value. When the land was initially identified, it was worth R6 million. In 2019, the first vineyard, as well as cherries, almonds and citrus, were planted and produce purchase agreements were signed.
After the planting as well as construction of dams, irrigation, trellising and other infrastructure, the land is worth R117 million, with its long-term value yet to be realised.
Gert Breet, head of business development at FNB Agriculture, says three factors have contributed to the success of the Middelburg project: the combination of partners and like-minded stakeholders; a partnership model that supported the desired outcomes within a specific timeframe; and an innovative way of thinking about the application of the model, as well as the structuring of ownership and financing.
“I am proud to say that all three of these factors have come together and, in my opinion, have led to a model that should be studied and replicated,” he says.
The next phase of the project will include addressing sustainability issues such as climate risk, as well as data management and project planning.
