Tshilidzi “Chilli” Matshidzula, winner of the 2020 MPO Nedbank Stewardship Award, took over a loss-making beef cattle farm at the tender age of 19 and turned it into a successful, award-winning and profitable dairy enterprise. His excellent farm-management skills, attention to detail, perseverance and dogged drive also saw him make history when became the first black farmer to win the coveted Eastern Cape Young Farmer of the Year Award. At just 31, this youngster is already one of South Africa’s black farming legends – but, as Peter Mashala discovered, none of it came easy!
When Tshilidzi Matshidzula arrived in Alexandria in the Eastern Cape in August 2007, he was just 19 and on a rescue mission. He had been recruited by well-known Eastern Cape commercial dairy farmer Walter Biggs of Oakleaf Business Trust in Alexandria as a trainee manager to try to save yet another failing land-reform project – the small dairy farm Little Barnet, owned by 17 black beneficiaries.
Affectionally known as Chilli, the youngster was thrown in at the deep end, being expected to manage the project from the get-go. Walter was part of Amadlelo Agri, a private initiative by some of the country’s leading commercial dairy farmers with the aim of driving empowerment and transformation projects in the Eastern Cape and KwaZulu-Natal. “Walter had committed himself to help the beneficiaries turn around their loss-making farm,” recalls Chilli.
Chilli arrived on the 532ha property to find only a straggly herd of mixed-breed beef cattle and an old, dilapidated dairy. Bush had encroached on the property and there wasn’t much infrastructure to speak of. The 17 beneficiaries, operating under Longvale Trust, had been awarded the farm in 1998 through the state’s Land Redistribution for Agricultural Development (LRAD) programme. They had received a state grant and a loan from Land Bank to establish a 300-head beef herd, but years of mismanagement saw the number of animals dwindle to 120.
Thirteen years later, Chilli, now a 40% shareholder in the farm, has transformed the business into a world-class, award-winning dairy farm that milks 900 cows and produces more than 5-million litres of milk a year. For this sterling work, he has received a string of accolades, including the recent MPO Nedbank Stewardship Award. Chilli says what seems to have impressed the judges most was his passion for both people and animals, the use of technology and regenerative farming practices, his in-depth knowledge and hands-on approach, as well as his compulsive training and upliftment of farm workers and community members.
NEARLY GIVING UP
Chilli is the first to admit it was anything but plain sailing, though. “I almost gave up. In fact, I had already decided to leave,” he says. As part of Amadlelo Agri’s development programme, Chilli had been at Bellington Farm in Coega for been a few months in January 2007. Fresh out of the Tshwane University of Technology and armed with a national diploma in animal production, the Eastern Cape was far from his home in Venda. Then his path crossed that of another Venda homeboy, Leonard Mavhungo. A formidable stockman who headed up some of Amadelo’s other dairies in the former Ciskei, Leonard became Chilli’s mentor. “We became close. We both grew up in Thohoyandou but only met in the Eastern Cape,” Chilli explains. “Everything about the Eastern Cape was new to me: the culture, the people, even the climate. I was about to leave when Leonard somehow heard about my plans and phoned my parents, who stopped me dead in my tracks!”
It was Leonard who helped him see the bigger picture. However, in July 2007, Leonard left Amadlelo Agri. “It was tough but I decided to soldier on,” recalls Chilli. Then fate presented him with a golden opportunity. Busy with admin work in the office one day, he overheard a conversation between Walter and the Amadlelo directors.
“They were talking about the Little Barnet farm project. I knew it was bad manners to eavesdrop, but I couldn’t help myself,” laughs Chilli. Afterwards he approached Walter and asked to be part of the project.
“At first Walter didn’t take me seriously. I was this youngster, just six months into my internship,” he says. But Chilli wouldn’t let it go. Two weeks later he was on the phone to Walter discussing his move to Alexandria. “And three days later I moved!”
The run-down farm was a mess and, as trainee manager, Walter expected Chilli to oversee operations. His first task was to establish as small dairy, with Walter agreeing to enter a share-milking arrangement with the Longvale trustees. Walter would provide all movable assets, like cows and machinery, as well as management, while Longvale provided the fixed assets like land, while also agreeing to some structural improvements. “I was management,” smiles Chilli. Unfortunately the Longvale trustees had to sell all their beef cattle to settle their Land Bank loan. Walter then loaned them R1.7 million for the necessary farm improvements.
By September 2007, bush was being cleared and pastures planted. “We refurbished the old dairy with a 11-point static parlor, sufficient to milk about 200 cows a day. We also fixed the house for me to live in,” Chilli says. Within a month they were milking 47 cows and by 2010 they reached their full capacity of 200 cows – a mixed herd of Holsteins, Jerseys and Jersey-Holstein crosses. At that point about 140ha of bush had been cleared and 90ha dryland kikuyu and 50ha dryland ryegrass pastures had been planted.
In 2011 the trustees offered Chilli shares. He managed to buy 5.05%. “Because it was all in a trust, I was actually buying beneficial interest, not really shares,” he explains. But in 2012 tragedy struck: when the managing trustee was murdered, most of the remaining elderly trustees opted to sell their shares and only two younger trustees remained.
“There was no money to buy out the trustees,” Chilli explains. So he and the remaining trustees established the company Matshibele (Pty) Ltd to raise capital for the buyout, and the three shareholders approached the Land Bank, which lent them money for the transaction.
“However, there was a shortfall, so we sold a 190ha portion of the farm.” Chilli now held 40%, whereas his two partners held 30% each. With the other partners silent, Chilli started overseeing the day-to-day running of the farm as Matshibele replaced the Longvale Trust in its share-milking arrangement with Walter.
“With big debts, we now only had 200 cows in milk. We couldn’t grow an inch and the banks wouldn’t lend us any money,” Chilli recalls. They had to increase the number of cattle and the size of their pastures, and – now with a smaller farm – their only option was irrigation.
After many failed attempts to attract investors, Chilli was finally able to secure R2 million from the Humansdorp Co-op. With this loan, he planned to install irrigation and buy more modern, second-hand milking machinery. “The old machines took forever to milk the cows and with us planning to increase cow numbers, we needed to be more efficient.”
However, when the Humansdorp deal finally came through, the secondhand machines they had their eye on were already sold. “This turned out to be a blessing in disguise, because the owner introduced me to Northfield Engineering,” Chilli says. “Northfield offered to build us a brand-new, modern 50-point rotary facility worth R8 million.” But there was a catch – Walter had to remain on board until the debt to Northfield was paid off.
Walter was sceptical initially but eventually agreed. Chilli then reviewed the share-milking scheme and proposed that Walter rather become a shareholder of Matshibele. As a director, Walter contributed cash, which was used to develop the pastures further and increase the herd from 350 to 1 100. “We were now leasing the cows from Walter,” Chilli explains.
The farm currently milks between 800 and 900 cows of a total herd of 1 116, including heifers and calves. Average production is between 14 000 and 15 000 litres a day. However, during lactation the daily production surges to 19 000 litres a day. Milk is marketed through Coega Dairy, which distributes it under the brand Coastal View.
“We want to have 1 000 cows in milk. We would have been there already, had that terrible drought not hit us a few years ago, forcing us to scale down again,” explains Chilli.
He says the dairy business is changing fast. “You need numbers to be competitive. When I started, milking anything between 150 to 200 cows made you money.” Now 500 cows are a minimum.
“The problem is we dairy farmers are price takers. We get just over than R5 per litre, but that can drop to R4.50 litre. It’s really hard to understand that price when you look at what consumers are paying.”
However, Chilli believes in managing what one can control, like efficiency. “I must simply produce more with less to keep my costs as low as possible,” he points out.
Chilli says their fodder-flow plan consists of planted pastures such as kikuyu, rye, chicory and lucerne, as well as silage. He says one cow consumes about 18.1kg dry matter a day. “So we try to feed supplementary feed of at least 6kg per cow. The remaining 12.1kg should be grass produced on the farm. Pastures must therefore be used optimally. If we can produce good-quality pastures cheaply, we are able to bring our variable costs down to where we want them.
The dominant pastures are kikuyu, a perennial grass that grows year-round in the coastal areas. Rye, chicory and lucerne are planted under irrigation. “You must always try to balance the nutritional status of the cow with that of the soil,” Chilli explains. He applies cattle and chicken manure rather than chemical fertilisers, and slurry water from the dairy is used for irrigation.
Productive cows are kept for five to seven years and culled when they no longer produce enough milk. “We do artificial insemination and use our own calves as replacement heifers,” Chilli says.
“We keep our breeding season purposefully between November and December, because that is when the farm is producing enough food for all the calves.”
As part of their growth strategy, Chilli and Walter are now also partners in a dairy farm in Stutterheim, 215km north of Alexandria. “We’ve already have started milking more than 800 cows there and hope to bring it to full capacity in the next few years,” Chilli says. The Stutterheim farm is modern and will be at least 30% to 40% larger than the Alexandria operation when it is fully developed. “Our irrigation system is already in and things are running well,” he says.
The two farms are managed together, with cattle being moved between the two properties, depending on the grazing conditions. “Both farms carry just about 1 000 cows each. When we’re low on grazing this side, we move about 20% of our stock to the other farm. It’s easier to build reserves this way,” he explains. This gives the pastures time to recover, as they only need 25 to 35 days to regrow.
Chilli believes the business’ biggest asset is its people. “I spend a lot of money and time training and upskilling employees.” The result is almost zero staff turnover.
“I’ve been training people from different universities and colleges from across the country for 12 years now. We have not been able to keep all the people we have trained, but all our managers, supervisors and assistant managers have been developed here,” Chilli explains proudly.
Half of his managers and supervisors at Little Barnet have already moved to the new Stutterheim farm.