This case study of the Swartklip Wine Farm is a toast to well-implemented and managed empowerment.
The Swartklip Wine Farm in one of South Africa's wine districts is owned by the Pieter van Jaarsveld Family Trust. According to Hans van Jaarsveld, Pieter's son, it was always Pieter's desire to empower the 72 workers on the farm, as many of them were born there.
The workers applied for LRAD grants (Land Redistribution for Agricultural Development) to acquire a 51% share in the newly-formed Swartklip Wynlandgoed (Pty) Ltd, through a farm worker equity share scheme named the Swartklip Workers' Trust. Their financial institution advised them on a business structure that would enable the bank to finance the workers' shareholding.
Swartklip Wynlandgoed owns the land. It will also acquire a 51% share in another company, to be formed, that will rent a separate farm from the local municipality. This farm is also home to VJ Wines wine cellar, of which Klein Swartklip Wynlandgoed and the Pieter van Jaarsveld Family Trust own 40% and 60% respectively.
Wine grapes will be bought from the Swartklip Workers' Trust for the production of quality wines, which will be bottled and sold under the VJ Wines label. For this reason, the project was not designed with subsistence farming in mind, but rather as an economically viable agricultural enterprise with long-term sustainability and built-in mentorship.
This is the first BEE deal of this nature involving municipal land. Empowerment deals like this ensure the future of agriculture and the transformation of the industry.
Howdy pardner
If you are considering black ownership as a way of empowering your business, remember that BBBEE deals are as prone to failure as any other business agreement. Consider the following pros and cons of the different types of potential empowerment partners:
Established black investment companies: PROs - high profile with significant influence and capital resources. CONs - often have many other commitments; might not be long term.
Community-based organisations: PROs - grassroots representation; credible; long-term commitment. CONs - limited influence, value-add and capital resources.
Operational empowerment companies: PROs - credibility; long-term commitment. CONs - difficult to find; potential conflict of interest with other investments.
Key individuals: PROs - significant influence and capital resources. CONs - might not be long term; limited commercial expertise and grassroots representation.
Employees: PROs - ongoing value-add, grassroots representation and commercial expertise; can be financed through a share scheme. CONs - limited influence and capital resources.
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