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China-Africa Trade Information Service
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Agriculture, agro-processing and the food and beverage industry is offering a large number of business opportunities for investors in South Africa.
South Africa has the most advanced food and beverage market on the African continent. It is reported that the industry's growth in 2020 is expected to be 4%-7%.
The South African government, The Department of Trade and Industry (DTI) and the Department of Trade and Investment in South Africa (TISA) have identified these sectors as a focus for local manufacturing opportunities, import substitution, employment as well as export and economic growth.
South Africa's agricultural sector accounts for approximately 12% of its export earnings with the fruit and vegetable industry showing rapid growth during the past 20 years. Exports reached nearly 60% of local production.
Stock farming also remains a viable investment opportunity for South Africa, with over 80% of the country's land suitable land for grazing and livestock playing a significant part by contributing 48% towards the country's output valued at approximately R50 billion.
Agro-processing is South Africa's largest subsector of manufacturing with 64% - 74% of the raw materials locally sourced. With the agro-processing industry and its products accounting for 19.4% of the employment in the manufacturing industry and 21% of the GDP is from the manufacturing sector, opportunities exist to extend exports to the growing Middle-East and Asia markets, while sustaining growth in exports to the more developed Global North. Value added products like artificial and organic energy drinks or products will see more prominence in the market.
Increased local demand combined with peak interest from export destinations sees the alcoholic beverage industry provides a lucrative opportunity as South Africa has seen a 30% growth in its alcoholic beverage exports. Although the country only contributes 2% of China's wine imports, South Africa accounts for over 30% of African imports in the alcoholic and beverage sector.