Vegtech 2000 (Pty) Ltd: Nurturing success

Modern farming methods have undergone dramatic transformation over the past few decades. As land and water availability has become a premium, the need to garner higher yields has driven an ever-evolving industry. At the cusp of this technology drive is Vegtech 2000 (Pty) Ltd., a company with its past deeply rooted in farming, but one with a typically global modern approach to agriculture.

Undoubtedly the experience that Barney Isralls and his wife had accumulated from years of farming (30 years in the Greenhouse Industry) came in very handy in the early years of Vegtech. The business was launched twenty years ago as a small ongoing family concern, but has blossomed into a major force in the Polyethylene covered greenhouse, tunnel and net-house market.

We started off as a farming company and grew vegetables and fruit and we used advanced technology,” recalls Isralls, the current Managing Director for Vegtech. “We realised that lots of farmers required this technology too so we started to supply this undercover technology until it grew so big that we closed the farming operation.”

The undercover technology encompasses Greenhouses (still Vegtech’s main product), net-houses and tunnels, plus a range of “furniture” inside, including but not limited to trellising accessories, growing troughs and medium, irrigation and sophisticated climate control equipment which can control heating and cooling within the Greenhouse.

Isralls had originally set up his farm in Paarl, a small town located roughly 60 kilometres from Cape Town, in a region famed not only for its wines but also its fruit and vegetables. The location provided dry summers and was conveniently located for export of produce from the Port of Cape Town.

Vegtech03However, with Vegtech growing, the company took the decision to relocate to Cape Town, where it is presently headquartered. As Isralls describes, adapting to the scenery change was not the only transition for the business:

One of the fundamentals of Vegtech that has helped us to build our success has been that we are not scared to market and implement cutting edge technology. Like all industries, the advances in technology in Agriculture have been huge: the Greenhouse and Nethouse structures are now made of steel and the plastic, net cladding and computer technology which controls temperatures and irrigation are changing on an almost daily basis.

Compared to when we started out, the Greenhouses are much lighter, yet the materials are a lot stronger and the designs a lot more efficient. The plastic cladding is evolving all the time and we have gone from one layer of film to five at the moment and soon this will increase to seven layers.”

Keeping abreast of all of the changes is a huge challenge, but Vegtech is able to rely on its partner company Netafim International, which part owns Netafim purchased shares in the business in 2005 from an Israeli steel company – and Isralls says the new relationship has worked well for Vegtech:

There is an excellent synergy (between Vegtech and Netafim); they are the biggest low pressure irrigation company in the world while we supply structures and accessories. Netafim manufacture the climate control systems and irrigation and we are able to call upon their financial muscle and research and development expertise. The partnership also gives us global exposure and has enabled us to enter markets together we would otherwise not have operated in.”

The small, family-run business had previously operated within South Africa’s borders. However the alliance with a corporate giant has given Vegtech and Netafim the scope to work on projects with the Botswana Government, within Angola, Mozambique and Zimbabwe, central Africa and the Middle East.

Isralls says that the global economic downturn has turned the heat up on competition, with financing for projects hard to acquire, fewer projects have got off the ground, resulting in fierce bidding competition. Undoubtedly Vegtech’s experience, corporate backing and leading technology have given the company an edge.

The company is able to procure irrigation equipment from Netafim’s factory, located just 500 metres from the head office, but does little manufacturing itself; “We do what we call value- added manufacturing, which means we will bend steel or drill holes into pipe,” Isralls explains .”We have 30 on site staff and a further 150 construction workers – who are permanent sub-contractors for the business,” he continues.

Our speciality is integration and we bring all the technology (manufactured elsewhere) together. Our products are standard but each project is unique, with its own requirements. Examples of the diversity of the projects are Greenhouses for Botanical Gardens at Kirstenbosch, Crocodiles, Flowers, Vegetables, Nurseries, Aquaculture, Clonal facilities for Forestry and Potatoes and even Fruit trees. Each has its own demands and the integration incorporates not only a single system, but takes into account the crop required and the desired climate – all of which must integrate with our system.” Vegtech takes the Project through all its phases planning, procurement, construction and finally commissioning and mentorship if required.

Isralls says that the economic climate has also negated the effects of seasonality, something he was very used to as a farmer: “Earlier this year we were looking for trends in our income patterns since 2004. We looked closely but there was a mish-mash with no discerning patterns and we felt that this was because most projects rely on financing and begin whenever the money is there.

Our market share in South Africa is between 50 and 70 per cent, depending on who you talk to and competition is stiff, with no market out of bounds given the current climate. The playing field is not always level with high prices for local steel and no protection for local industry. Our strength lies in supplying the best value per rand or dollar and clients will often pay that little more based on our knowledge and superior products”.

Another contributory factor is quality and track record of course, and the company operates to ISO standards, with its oldest structure over 20 years old now and still providing the grower with roses each year. That does not mean that maintenance is not a necessity however and Isralls says that after sales service plays a big role in Vegtech’s business, with plastic or net covers needing to be replaced every 3 or 4 years and upgrading or renovating older facilities.

Vegtech01The environmental movement has had a huge impact on agriculture around the globe. This has very much played into Vegtech’s hands, as its sophisticated systems allow grower to produce higher yields for less: less land, less water and less energy.

We work closely with all our suppliers like the Swedish company Munters, to design systems that operate with lower energy requirements and at less cost and our systems will also collect run-off water and reduce groundwater pollution,” Isralls remarks.

Greenhouse sizes range typically from 2000 square metres to 3-4 hectares and the bespoke nature of each project necessitates site visits in order to understand climate control requirements, quality of soil and topography. Vegtech employs irrigation and structural engineers as well as agriculture specialists who will work with the client to understand their needs, before putting together a proposal.

Once an agreement is in place the construction crew moves in and can implement the project in as little as 3 months, depending on the size. The company on average will complete 12 major projects a year. Education plays an important role in Vegtech’s approach and the company will often mentor a project for up to 12 months.

However, as Isralls explains, education extends beyond clients; “We believe we have a fantastic solution to agricultural development in Africa. One of our big commitments is to educate because in rural Africa there is a serious lack of knowledge – and you need technology increasingly to offset the effects of global warming and less available land and water.

As part of our social responsibility drive we provide greenhouses and tunnels to schools and educational facilities, to encourage learning and to have a positive impact on the entire industry. We also make a huge effort to procure from South African companies whenever possible.”

Under Isralls, Vegtech has nurtured steady growth and attracted significant investment. The next stage is geographical expansion: “We do see our growth outside South Africa, but will not erode our local base. We have targeted the SADC countries and Central Africa, where we are already working on a project in the DRC, due for completion next year. Having completed a successful project in Abu Dhabi we believe that our technology has much to offer to the Gulf States and Saudi Arabia, which have similar hot, dry conditions to those that prevail in certain areas here,” he concludes.