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South Africa’s Precious Metal Mining Industry Is On Shaky Ground

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The 1970s are known for political scandal while the 1980s are known for pop culture. They are also known for South Africa’s boom in the mining economy. I write this article from Johannesburg dubbed eGoli (the city of gold) for its once rich gold mines.


At the peak of those glory days, for every R100 the economy produced in 1980, R21 was from mining. In fact, during this boom, in 1987, the industry employed 760,000 people.  

 Today, the story of South Africa’s mining sector makes for grim reading. The once mighty sector is a shadow of its former self as precious metals continue to struggle. Statistics South Africa (Stats SA) reports that gold has lost ground over the last three decades. The annual production index for gold is now 46% lower than it was in 2007.

In 2016, the industry contributed only 8% to the economy. That is R8 for each R100, which is R13 less compared to the 1980s. The problem is in 2019; the mines are old, deep and lack investors.

According to Stats SA, “mining production decreased by 5.6% year-on-year in November 2018”.

The largest let-downs were the once flourishing gold and diamonds. 

“The bulk commodities and base metals have performed in line with the global industry. Metals like coal, manganese and chrome have performed very well for South Africa. Unfortunately precious metals haven’t performed that well,” says Andries Rossouw, partner at PwC South Africa.

In its 2017 report, PwC revealed that gold and platinum had witnessed devastating dips in market capitalization. Gold, for instance, saw a dip of a shocking 52%, which translates to R114 billion ($8 billion), while platinum’s market capitalization dropped by 21%. Last year, the market capitalization for gold dropped by 4% from 25% while platinum dropped 5% to 29%.

Rossouw, however, stresses that it is important to note that other commodities are performing well.

Coal is among them.

“The coal industry has been performing well in the last year at the back of higher coal prices. Eskom still demands a large number of coals for their coal-powered plants. So, it is important that our coal industry delivers that demand from Eskom. We are also exporting big quantities of coal mainly to India because they also need quality coal for their power generation,” Rossouw says.

The good performers helped “mineral sales increase by 8% year-on-year in November”. It’s not enough. Even so, most companies are facing a painful drop in rankings and profits.

For instance, “Impala Platinum and Sibanye-Stillwater dropped by two and four positions respectively in the top 10 companies in the country,” according to the PwC report.  

In fact, Impala Platinum dropped from R27 billion ($1.9 billion) in June 2017 to R15 billion ($1.06 billion) in June last year. It is forcing the company to restructure and cut jobs.

“The only option for conventional producers today is to fundamentally restructure loss-making operations to address cash-burn and create lower-cost, profitable businesses that are able to sustain operations and employment in a lower metal price environment,” says Impala Platinum CEO, Nico Muller.

Over the next two years, the company will downgrade from 11 to six operating shafts, reduce future production from 750,000 platinum ounces per year to 520,000 and cut jobs from 40,000 to 27,000.

Gold Fields is another company facing challenges.

Its South Deep mine, one of the biggest gold mines in the world, continues to make losses. It lost R4 billion ($283 million) over the past five years. Last year, it retrenched 1,082 employees at its South Deep mine.

“South Deep is a complex and unique mine, that has faced persistent issues that need to be addressed in a holistic manner which include, rising operating and overhead costs, consistent failure to meet mining and production targets; poor equipment reliability and productivity impacted by poor maintenance practices and operational conditions,” said the company in a statement released last year.

The problem is so big that according to a report by the Department of Mineral Resources, there are about 6,000 abandoned mines in the country and massive job cuts.

“We have about 454,000 people now employed in the industry compared to 532,000 employees when the industry was performing well. In the 2018 calendar year, it dropped about 3,000 employees and that is despite shaft closures,” Rossouw says.

This is a far cry from the industry’s heyday.

Due to global conditions, mining production reached a record low in 2016 in South Africa, but since then, other countries have enjoyed growth, while the domestic mining industry shrinks. It seems the bigger problem might be the relationship between industry and government.

Regulation is one of the major hold backs for the sector.   

Until recently, the Mining Charter, which addresses the distribution of mineral wealth more equally to redress the racial injustices of apartheid, has caused courtroom battles between government and industry. 

First issued in 2004 and amended in 2010, many agree the Mining Charter was a hastily and poorly written document, full of oversight, compiled without consultation with the industry. Industry heavyweights and unions disputed it, lawyers and economists argued over it and investors stayed away as a result.

“For investors to invest in the country, they would want to see a track record… We have had about 10 years of under investment, especially in our platinum sector and that will show in our lack of supply coming out of that sector in the future. Given the long-term nature of the mining investment cycle, it will impact our ability to supply in the future,” Rossouw says.

Last year, in fact, in terms of its overall investment attractiveness for mining companies, the Fraser Institute, a Canadian public policy think-tank, ranked South Africa 48 out of 91. It ranked 74 out of 104 destinations in 2016, yet in 1980, mining accounted for almost 50% of the world mining market capitalization.

“What has dropped us down the rankings in the last couple of years is the uncertainty and regulation environment largely due to the Mining Charter. Investors are cautious. They judge the government on past performance so there is still a bit of caution out there,” says Andrew Lane, Africa Energy & Resources Leader at Deloitte.

In February last year, President Cyril Ramaphosa appointed Gwede Mantashe — a former leader of the biggest union in Africa, the National Union of Mineworkers, as Mineral Resources Minister. With vast experience and trust from industry, Mantashe swooped in at the 11th  hour to save the day and negotiated a new Mining Charter acceptable to industry and government.

“It was bad in 2017 and then we got a much positive outlook in 2018 when there was good interaction between industry, labor and all the stakeholders including government which culminated in the publication of the new Mining Charter which has gone a long way to address some of the concerns raised in the previous versions of the charter.

“It doesn’t mean that it has been completely resolved but there is good engagement between the various stakeholders that only means positives for the future in terms of the regulatory environment,” Rossouw says.

Lane believes the industry has welcomed Mantashe and it has a more positive outlook.

“The issue we have here is that most of the mines are deep and quite old. A lot of our remaining resources and reserves which are left are not safely or profitably minable with current technology. We are looking to technological advances to bring a lot of what remains in those commodities into a decently profitable environment,” Lane says.

At February’s Mining Indaba in Cape Town, President Ramaphosa, a mining man to the core, said significant work still had to be been done to remove the uncertainty that held back the development of the industry.

“As part of the package, government is reprioritizing spending, within the existing fiscal framework, towards initiatives that are aimed at driving economic activity, including financial and non-financial measures to turn around the economy,” Ramaphosa said.

Lane says there is a trust deficit which makes the investors adopt a wait-and-see attitude. 

“We have further recognized the challenges raised with us by investors, among other things, administered prices for ports, rail and electricity, as well as infrastructure bottlenecks…We are working in earnest to address the constraints that were raised with us as we implement the Stimulus and Economic Recovery Plan.

“We are addressing issues that are of concern to companies such as visa regulations, reducing the cost of doing business, eliminating many bureaucratic constraints and making it a lot easier to conduct business,” Ramaphosa said.

There has been positive movement in the regulatory environment but, for companies, the cost structure is, by far, the biggest challenge especially with labor and electricity prices and shortage. In February, investors and credit rating agencies flagged Eskom’s rolling power cuts which weakened the rand. The power cuts also cost the mining industry productivity.

“We have the deepest mines in the world here. Certainly, the energy costs going up over the years have impacted productivity. Our mines are quite expensive to operate. We are not the most attractive destination for mining investment right now,” Lane says.

Ramaphosa said the government would announce its plans to stabilize and improve Eskom’s financial, operational and structural position and to ensure security of energy reserves in the country.

“Eskom’s contribution to the health of our economy is too great for it to be allowed to fail. It is too important and is too big to fail; and we will not allow it to fail. Restoring and securing energy security for the country is an absolute imperative,” he said.

Lane says government needs to continue to send a message of regulatory stability, act on Eskom and reliability of energy to start shifting the sector towards a more investor-friendly option.

There is also inadequate transportation in the industry. Some economists have said improving the costs related to exports such as port tariffs and railway costs would make the sector more profitable.

“Last year for example, we had to truck manganese to Durban which is inefficient. We should have freight rail in place to take care of those commodities,” Rossouw says.

Another concern is the socioeconomic conditions around mining companies.

“Mining companies are quite often the main providers of employment in rural areas and that means it creates expectations by community and when our economy is struggling as it is at the moment, it means the pressure of the communities around that mine provides pressure on the mine environment. We have seen mines being closed down by communities and not by employees in the last couple of years,” Rossouw says.

Minerals Council CEO Roger Baxter says the council has engaged extensively with government and other stakeholders on the challenges that have prevented mining from reaching its true potential.

“A collaborative approach is needed to develop and implement solutions that will see our industry grow and thrive in the future for the benefit of all. We need to get investment back in mining. We, as the industry, are fully committed to play our part,” he says.

There is also a push for green coal to boost the industry and according to Rossouw, however, the green economy won’t replace coal in developing regions like Africa, Southeast Asia and India.

“There is still a big increase in coal-fired power plants and generation capacity… The challenge the coal industry is facing, as a result of the green economy, has to do with the holding of new projects. A number of banks said they won’t fund any new coal projects and therefore some of these projects,” says Rossouw.

“There is potential for clean coal going forward and we need to invest in research and development to make coal work for us to provide cleaner energy from the vast coal resorts we have.”

Just over two in every three gold mining jobs in 1995 no longer exist. However, mining remains an important earner of foreign exchange for the country and employs one in every 40 working people according to Statistics SA. Love it or loathe it, if government and industry play the ball right, South Africa may reclaim a large slice of one of the world’s richest cakes.

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Arts

The Baskets Holding Them Together

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The female basket-weavers of Rwanda. When destiny failed them, they saw hope, in gentle strands of sisal and grass. The art helped them heal, reconcile and live again.

‘Art As A Reconciliatory Tool’

As dusk descends on the verdant valleys of Kigali, the green of the city’s rolling hills and its red terraced homes relinquish their arresting appeal to the most sparkling jewel of the night – the landmark Kigali Convention Centre (KCC), easily one of Africa’s brightest spots, with its multi-tiered colors and unique architectural aesthetic.

The Kigali Convention Centre’s design inspired by the traditional Rwandan baskets

It is striking in contrast to the landscape around and occupies center-stage, both in the city as well as the psyche of the proud Rwandan. Resembling the traditional, intricate, hand-woven Agaseke basket, the KCC stands atop the hills as a symbol of hope in Rwanda, and as a beacon of a new Africa.

It’s a sight most reassuring for the plethora of female artisans and entrepreneurs in the country. In villages and districts far from this dome in the city center, women sit huddled together in tiny cooperatives weaving with nimble fingers beautiful Agaseke baskets, in all forms, shapes and sizes, oblivious to the impact their creations have on the tourism economy – and more so, in their own lives.

Bella Rukwavu of the Agaseke Project

Bella Rukwavu, Project Coordinator of the Agaseke Project, which was initiated by the City of Kigali in 2007, recounts the beginnings of some of these cooperatives, after the new government took over, post the horrific genocide against the Tutsi that left a million dead across the country.

“When the city was trying to reorganize itself, part of the problem was the streets were filled with women hawkers, prostitutes, the disabled and the sexually-abused,” says Rukwavu.

There had to be a sustainable, lasting solution that gave the destitute women, most of them widows and survivors of the genocide, a viable alternative, and the idea for cooperatives training them with the art of basket-weaving was born.

The women had a natural flair for it, as basket-weaving was an inherent part of their upbringing and culture, so they could be easily skilled. The women were a mix of both ethnic groups, Tutsis and Hutus, and slowly, surely, through their collective efforts sewing sisal fiber and grass to make and sell objects of beauty, put their ugly past behind them.

The City of Kigali now oversees the Agaseke Project with 2,000 women, distributed among 50 cooperatives in three districts across Kigali.

 “The project acted as a reconciliatory tool and promoted peace,” says Rukwavu, in the car as we drive from the City Council to Gatsata sector in Gasabo district to meet with some of the artisans at the cooperative located there. “In some cases, both the victims of the genocide and the wives of the perpetrators worked together, and the art unified them. They have forgotten their differences. Today, they all live as Rwandans.”

Past the thatched homes on the hillside, and up a muddy road, the red earth leads to a one-storied edifice with yellowing walls and blue windows. Here, a group of 25 women sit on the hard cement floor, indulging in light banter and expertly weaving dyed sisal, grass and papyrus reeds to create a raft of colorful basket containers. These are arranged on a wooden shelf and on frayed floor mats.

On the shelf are two wooden boxes with locks. This is where the women store their money as part of their self-styled loan-and-savings scheme; the boxes a repository of their collective earnings – and trust.

The cooperative receives orders from clients in the United States (US), Europe and Japan. The baskets have given the women economic security and a social network. Says Rukwavu: “Some of these women are doing so well and have become so successful they have come out of these cooperatives to start businesses of their own, making diversified products and selling them elsewhere.”

The Agaseke Project is but one snapshot of the larger community of female basket-weavers in Rwanda. In the pages that follow, FORBES AFRICA visits more social enterprises, profiling the artists, artisans and entrepreneurs this industry has spawned. In a country where drones are delivering medical supplies and innovation is a daily buzzword, these women are keeping alive a traditional art form that has found its way into the snazzy department stores and boutiques of the world. To them, fortune is not dollar figures, but mere survival. Their future is in their own hands.

The Single Survivor

Catherine Uwimana, 48

In Gikondo, about a 30-minute drive from the city, a dirt road with a morass of overhead power and telephone cables leads to an unassuming grey gate with colors bursting within. These are the premises of Talking Through Art, a not-for-profit focused on art-related employment opportunities for people with physical disabilities. It was started by Petr Kočnar, from the Czech Republic, who initially came to Rwanda from Kenya to learn French. He encountered destitute people with disabilities on the street and decided to start the center in 2015 with his own savings, to rehabilitate them with art therapy and traditional basket-weaving.

Each of the 25 women, young and old, at this center make about $5 for each of the medium baskets they craft. Placide Ndacyayisenga, the manager, offers a cup of steaming Rwandan coffee, and pointing to the dainty handcrafted bowls on the walls, says: “The baskets we make are inspired by nature, such as the sun, the birds and the baobab trees. Foreign tourists buy from here and our products are also available in premium boutiques and gift shops in Kigali. The artisans here were wandering the streets before, now they can sustain their families, and even have bank accounts.”

One such is Catherine Uwimana. She lost her right leg during the genocide, hit by a grenade when in hiding at her home in Kacyiru.

Save for her older sister, all her family died around her. Having never married, Uwimana lives alone and is grateful she makes enough money weaving baskets to feed herself and pay her rent. “I have been here four years now and this is my family,” she says in Kinyarwanda, her eyes not concealing the pain of her past. “These baskets give me hope for the future.”

Baskets To Theater

Emilienne Muhawenimana, 35

Muhawenimana arrives at the Talking Through Art center in Gikondo riding a scooter. It’s hard to tell she is polio-afflicted and needs crutches to walk. Muhawenimana’s nature-inspired paintings light up the walls here just as she does. She leans against one of them, posing genially for pictures. One of the most prolific basket-weavers at the center, she is today into stage plays, and even traveling outside of Rwanda as part of theater groups. “She was one of our best basket-weavers and is a good actress today,” beams Placide Ndacyayisenga, the center’s manager. The multi-talented Muhawenimana also recites poems and mentions her work with the British Council; one of the many empowered at the center to make a living through art.    

The 8-To-5 Weaver

Vestine Nyiravesabimana, 49

A mother of nine children, Nyiravesabimana has been weaving baskets at the Agaseke Project cooperative in Gazabo district for the last 12 years. Making an average of $5 per fruit bowl that she handcrafts, over time, she has been able to send her children to school. She makes a minimum of $100 a month, working 8AM to 5PM through the week.

She is vaguely aware her creations sell well locally, to NGOs and at retail shops, but also “far, far away”, in America and Japan, lands she will perhaps never see.

Some of the women working with her face immense hurdles to come to work. But the project has helped Nyiravesabimana attain economic independence. Her husband, who works as a plumber, respects her more now, she says; they have fewer quarrels.      

“She also knows how to bank,” says Agaseke’s project coordinator Rukwavu. “She has an independent bank account.” Nyiravesabimana is also a part of the loan-and-savings scheme at the cooperative with her fellow female weavers. Working collaboratively in a group with the other women has helped her speed on the time-intensive art, as the more baskets she crafts, the more money she makes.

Dressed in a cheerful red chitenge outfit, her megawatt smile fills the small room she is in, as she gives the finishing touches to yet another signature fiber container that will make its way out of Africa to the world beyond.

The peace-maker

Farida Umuhoza, 43

A bored housewife for a long time until she discovered her skill crafting baskets, Umuhoza was with the Agaseke Project cooperative in Nyarugenge district for seven fruitful years from 2010.

A self-made entrepreneur today retailing her own range of handmade products, she is thankful for that epiphany, as today, she is the sole bread-winner for her family, supporting a sick husband and two children – a son aged 23 and a daughter aged 21.

We meet Umuhoza at her make-shift shop at the far-end of the car-free exhibition zone, by the towering citadels of capitalism in the heart of Kigali.         

At the Agaseke cooperative, she shone with her expertise weaving baskets, quickly moving on to open her own permanent shop, named Chic, in a shopping mall in downtown Kigali. Umuhoza has been expanding her business since.     

She also designs chitenge clothing, but her specialty is “the peace-maker, a sort of an oven made of fabric, sponge and cotton wool that saves energy and time and keeps food warm”. She sells it from $20 to $40 a piece, depending on the size.

As we speak, she pauses to “hello and welcome” curious shoppers, mainly international tourists, who walk in to look at her collection of baskets, clothes, and African bric-à-brac. Her attentive son hovers around her, as she settles the deal with a woman bargaining for a wooden stool.

Her finances have been stable, she says, as she has been able to meet her husband’s medical expenses, educate her children and re-stock her shop. She has traveled across East Africa, invited to showcase her baskets, and even once to the Netherlands for further training.

She has come a long way from her 18-year-old self when she lost her entire family in 1994, during the genocide against the Tutsi. 

As the sun dips on this August evening, her shop gets busier with office commuters and government workers, her largest clientele.

She is grateful for every sunrise and sunset. “Back then, sitting under the hot sun, weaving them, the baskets taught me about life. I knew they would take me out of poverty. Dare to start, don’t ever quit!” she says, before attending to yet another paying client.

The community builder

Mukeshimana Grace, 52 

Mukeshimana Grace

The Nyamirambo Women’s Center, an NGO on a bustling street in Nyamirambo, is a hive of activity the afternoon we visit. The cooperative doubles as a charming shop retailing all kinds of delectable African print clothing, accessories, home decor and trinkets, and buzzes with dollar-waving foreign tourists. Grace is about to give a presentation on the art of basket-weaving to them when we meet her. She has been mastering the craft for over six years now and says she has had a life-long connection with weaving, having learned it at her mother’s knee.

In an ante-room at the center, women are hard at work at their sewing machines. There are 55 seamstresses here turning cloth into craft.

“I enjoy being a part of a community, and building it.

– Mukeshimana Grace

The shop offers a sense of community and camaraderie as visitors stop by to chat to the staff. Launched in 2007 by 18 Rwandese women to address gender-based violence and inequality, today, the center provides skills and training to women so they can better their chances for employment. It’s a self-sustaining model, also offering tours into the neighborhood. The profits from the tours go back into paying the seamstresses and funding more community engagement initiatives.

Mary Nyangoma

Mary Nyangoma, Project Manager at the center, who has been a part of it from inception, finds time to break away from the unending stream of clients. She says: “Sewing is very popular in this neighborhood. Some of the women with us never got a chance to go to school, so we also taught them to read and write. And we came up with the idea of the neighborhood tours. Six years ago, we also started selling the in-house products we make.”

Nyangoma is effusive in her praise for Grace, who is too shy to speak. She was the first basket-weaver that joined the center and is now working full-time with them, making the baskets at home, and earning about RWF300,000 ($330) a month. A widow, she has four children to feed. Yet, there is no where she would rather be.

“I prefer working here, in a group,” Grace opens up, “as when I am alone, I tend to think of my worries. I enjoy being a part of a community, and building it.”

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Economy

What’s Brewing In Tokyo?

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Japan, a tea-drinking nation, is one of South Africa’s biggest importers of rooibos tea. In 2018, a record high of 2,000 tonnes of the homegrown blend was shipped off to the land of the rising sun.


A tea room filled with reverence for the traditional Japanese tea ceremony.

But first, the facts. To understand tea-drinking in Japan, it is important to go through the following motions, starting with the communal practice known as chadō (the way of tea) that is older than 800 years, in which, in a hand-decorated cast iron bowl, green powder, known as matcha, is whisked to make a dark green tea to be offered to guests.

Tea was first brought to Japan from China in the seventh century for medicinal purposes, and was regarded as a commodity that was exclusively accessible to the noble and elite.

According to Japanese historical beliefs, Myōan Eisai, a Buddhist priest who introduced the school of Zen Buddhism to Japan, was one of the first to inculcate the culture of tea in Japan.

He wrote a book on the health benefits of drinking tea, as well as the cultivation and preparation of green tea.

By the thirteenth century, the tea drinking culture grew in popularity among warriors and the elite, and by the sixteenth century, tea had become a favorite for all social classes.

Tea schools opened and the art of making tea gradually evolved to more than just being a spiritual practice in Japan.

It became one of respect with shared peace and friendship.

The tea room is traditionally surrounded by a garden with a tranquil atmosphere, emphasized by dull flowers without strong scents, to avoid distraction.

A low entrance into the tea room suggests that guests are to bow as a gesture of respect for the ceremony.

Every movement, gesture and aesthetic, from the preparation to the enjoyment of the tea, is designed to express friendship and harmony.  Guests watch on as the host shares the moment and finally presents it to them, kneeling on cushions.

Once the bowl has circulated among the guests, it is handed back to the host.The tools are cleaned and the ceremony is closed.

The Red Bush

Over 14,000kms away, across the Indian Ocean, a South African enjoys a hot cup of ‘red tea.’

Its preparation may not be as dramatic as it is in Japan, but it evokes the same sense of calm and serenity. It’s simply made by adding tealeaves or a tea bag into a cup of boiling water, a few teaspoons of sugar and having “a date with time”, as Swaady Martin, the founder of Yswara, an African tea and teatime company, puts it.

Martin, who has been in the tea industry for seven years, with a focus on gourmet African teas, has tasted and sourced blends from Malawi, Kenya and Rwanda but the South African rooibos is her favorite.

“Rooibos is not a tea, it is a plant. I find it a miraculous and wonderous plant. The fact that it only grows in one region of South Africa, and that it has all these incredible properties, makes it a plant I love dearly. I drink rooibos almost every day,” she says. 

Located in the heart of Johannesburg’s central business district (CBD), Martin’s tea room, which is currently being refurbished, embodies what she calls a meditative appeal that coincides with the tranquil properties of tea.

Tea lovers step into a room filled with silence and walls done up in light pink hues representing a sunset in the desert. 

This is to encourage focus on the tea, as it represents the removal of  barriers between the different social classes.

“We have suffered in South Africa and also around the world, with so much exclusion, the one thing that was important for Yswara was to give inclusive luxury. For me, inclusiveness means being in a place where everyone could have access.

“Being in town (CBD) was just that expression of being in the midst of everything and everyone; and at the junction of what represents the new South Africa,” Martin says.

A South African Rooibos Council (SARC) industry fact sheet published in 2018 states that the country’s geographical areas provide the perfect environmental conditions for rooibos cultivation.

The plant can be found in the Cederberg and Sandveld regions of the Western Cape and the Bokkeveld area of the Northern Cape.

“The vital characteristics of this environment are the Mediterranean climate with a winter rainfall between 200mm and 450mm per year; deep, coarse and acidic sandy soils; and temperatures that can range from zero degrees Celsius in winter months, to up to forty-five degrees Celsius in summer,” the report says.

Due to the indigenous properties of the Rooibos bush, industry regulations stipulate that the term ‘rooibos’ be used responsibly.

“The terms ‘Rooibos’, ‘red bush’, ‘Rooibostee’, ‘Rooibos tea’, ‘rooitee’ and ‘Rooibosch’ may only be used when the dry product, infusion or extract is 100% pure rooibos. Furthermore, the notice stipulates that the above terms (referring to rooibos) can only be used when the product was grown in the geographic area as described in the application, i.e., the winter rainfall area of South Africa,” the SARC report states.

This uniquely-grown product is becoming  a big deal across the globe, and the tea-drinking nation, Japan, has fallen in love with the health benefits that the South African tea provides.

In 2016, rooibos exports increased to over 30 countries across the globe; with Germany, Netherlands, Japan, the United Kingdom and the United States (US) being the biggest importers.

In 2018, one of the largest tea-drinking nations recorded over 2,000 tonnes that were shipped into the Japanese shores, making it the largest export since rooibos was first introduced to the Japanese 39 years ago.

For Martin Bergh, the Managing Director of Rooibos Limited and the Chairperson of the SARC, the tea has been up against competition in the Japanese tea market, which has over 26 different types of teas to consume, ranging from the traditional green tea varieties to Jasmine and Barley, or the sacred Mugicha.

“The general trend toward natural health and wellness products continue to exert a growing influence on purchasing patterns in the region and as more of Rooibos’ health benefits become known in the East, we anticipate the demand for the product to grow,” says Bergh.

Bergh points out that the Japanese are purists and therefore prefer to drink rooibos tea unflavored, without milk or sugar.

“In the past, rooibos was consumed more in summer for hydration, but has now become an all-year-round tea product consumed by all age groups. A market as big as Japan’s 126 million-strong tea-loving population, is always eager to experiment with new products.

“Local retailers like Peacock Coffee & Tea Traders have adapted to the experimental flavors to quench the insatiable thirst of the local and international market.”

Kelebogile Monyaysi, the manager at Peacock Coffee & Tea Traders in Rosebank, Johannesburg, attentively prepares a cup of tea when we visit.

The loose tea leaves are cautiously stirred in a tea pot and served at a small coffee table.  

One half of the store is dedicated to coffee and the other for tea.

The smell of freshly-brewed coffee overpowers the aromatic smell of tea.

Tea sets range from vintage English style ceramics to Japanese cast iron teapots.

A selection of rooibos tea blends with various flavored options, ranging from organic rooibos to creamy caramel, as well as herbal blends.

This includes a Nelson Mandela range.

The caffeine-free tea, according to Monyaysi, is popular in the Japanese markets because of its natural healing qualities.

Despite coffee being a popular beverage for sit-in customers, rooibos tea is the most sought after locally too.

“It (rooibos) is the center of attraction. This is a word that they (tourists) can grab and not forget, so when they walk in here, it is all they ask for,” she says.

It took some time for Monyaysi to be stirred by tea. 

“I was not much of a tea-drinker. I only started to enjoy tea when I began working here. Now, the first thing in the morning, I have to drink a cup of tea and in the evening, before I go to bed. It is a habit – if I don’t drink tea, I get a headache,” Monyaysi says, preferring the original rooibos blend.

Jessica Bonin, the founder of Lady Bonin’s Tea, a Cape Town-based company that sources, blends, packages and distributes full leaf teas, either loose or in biodegradable tea bags, offers more on the world’s fetish for rooibos.

Lady Bonins’ teas and herbals are sourced locally and internationally from farms that are organic without adding additives or products that harm the environment.

The rooibos is sourced by using a method known as “wild pickings” – the process of collecting the rooibos that grows naturally in the mountains. Due to the increase in demand for rooibos and rooibos products globally, commercial farmers have scaled production unsustainably, leaving environmental and societal damage in their wake.

Bonin says that in countries like Japan and Thailand, black tea is preferred, and it is predominantly used for the health benefits – making it a herbal infusion.

“They are buying it solely on the principle that it is a caffeine-free, non-tea beverage. People are buying it as an alternative and they are transfixed by its health properties.

“It is enabling people who naturally use plants as medicine for many years. In any Western country, you will need to justify the health benefits, but in the Asian countries, it is the medicine they are interested in. People are very healthy in Japan,” she says.

 Although Bonin is facing difficulties  entering the export market in Japan due to the high number of monopolies and conglomerates in the industry, small amounts of exports also go to Germany and the US.

Rooibos is a unique product that has infused the signature South African taste and its ambience with the rest of the world.

The Japanese may have their unique tea-drinking ceremonies and traditions but in Germany and the other countries that import the plant in millions, rooibos offers a cupful of experience that is incomparable and uniquely South African. 

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Sanlam & NASASA Launch NASASA Financial Services For Stokvels

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Sanlam and the National Stokvel Association of South Africa (NASASA) have launched NASASA Financial Services (Pty) Ltd; a brokerage catering to the financial services needs of the South African stokvel market. NASASA is a self-regulatory organisation with a database of 125 000 stokvel groups, reaching about 2.5 million individuals. The new entity will foster greater financial inclusion for all members.


Jacqui Rickson, Chief Executive: Group Benefits at Sanlam Developing Markets Limited and Board member of NASASA Financial Services says, “For South African stokvels this is an opportunity to formalise their existence without having to forego their traditions. The peace-of-mind that each member of a stokvel will be protected in their time of need is invaluable.”

“Stokvels are powerful financial services providers in their own right,” says NASASA Financial Services CEO, Mizi Mtshali “and have the potential to help grow South Africa’s economy once they enter the more formalised sector through appropriate product offerings”. Currently, there are over 800 000 stokvels in the country, aggregating an estimated R50-billion pa. They are, however, quite exposed, especially to liquidity issues that may render them unable to discharge benefits to their members, as well as scams that promise to resolve such issues. This results from a lack of accessible, relevant products that meet the needs of a more informal savings sector. 

As a result, some burial stokvels may not pay enough to cover funeral expenses in their entirety. By offering broad-based financial services to members, NASASA Financial Services will empower stokvels through greater socio-economic inclusion and security.

Jacqui Rickson says, “This venture supports our client-centric focus by allowing financial inclusion to be extended to South Africans who are on the edge of the formalised insurance structures.  Through this, we can help families recover financially following difficult, unexpected events.”

NASASA Financial Services is currently licensed as a Juristic Representative of Sanlam Developing Markets, with a long-term plan to become a Financial Services Provider (FSP).  NASASA Financial Services will distribute tailor-made products nationally via its distribution force. Sanlam as underwriter, through NASASA Financial Services, will initially offer group-based funeral benefits, tailored to each individual type of stokvel.

Products are competitively priced and start at R15 per person. Once the stokvel has selected its option, the stokvel will pay one premium for the whole group. For burial stokvels, Sanlam has designed a full product, covering up to nine family members and all products have been created in partnership with NASASA.

Currently, the product offering includes:

  • A Principal Member Only Funeral Benefit
  • An Immediate Family Funeral Benefit
  • A Principal Member Plus Up To 9 Dependents Funeral Benefit
  • Grocery and Airtime Cash Benefits

NASASA is about educating their members about wealth and more appropriately, financial health, which includes saving on the expense of premiums through aggregation and paying group rates rather than more expensive individualised rates. We’ve designed products as an extension of this; as a tangible, affordable, non-intrusive offering that seamlessly blends the required formal structures with community-based traditional structures.

Mizi Mtshali, NASASA CEO, adds, “The research conducted during the build-up of our product launch saw the solution being entirely built by participating stovels. As a result, we deliver unmatched value by buiding a solution briefed in by our constituency. Amongst the majority of South Africans, funeral insurance fulfils an unmistakable need. While many are excluded from the formal financial system, those who do interface with the sector largely feel inadequately serviced. Burial Societies are formed as providers of such services and have developed systems around the real needs of their members. There are roughly 200 000 active Burial Societies in South Africa, with the majority being self-underwritten.

Because such groups rely on their collective savings to discharge their benefit to members, they often face liquidity problems that may lead to their disbandment. This brings about the need for an underwriter who will take on the risk on behalf of the group, as well as offer a set of products and services built around the group’s needs. NASASA is tasked by its members to solve this problem, and we have identified Sanlam as the most suitable partner in this regard.”

Mtshali says this venture will also facilitate job creation, which is key to socioeconomic inclusion, “For South Africans, this opportunity provides meaningful employment particularly in the township economy. Not only is this a step towards financial inclusion, but a giant leap towards societal transformation”

Down the line, NASASA Financial Services is aiming to extend its offering to include life cover as well as short-term products like household insurance and is investigating the potential of integrating other banking products.

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