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Taking Millions By The Horns

Published 6 years ago
By Forbes Africa

It was like a scene from a Hollywood movie in the African bush. A helicopter hovered in the bright morning sun before swooping on a patch of long grass. A stocky man in a khaki cap, short-sleeve shirt and shorts, with a cigarette dangling from the corner of his mouth, emerged with a walk to equal the power of his arrival. This is the game auction business. The man was Waltie van der Walt, a game farmer and wildlife breeder in the Limpopo province, in the north of South Africa. In this business, Van der Walt is the lion of the jungle. He strides to the auction through a fleet of Land Rovers, 4×4 double-cabs; the trappings of a multi-million-dollar business.

In Limpopo wildlife auctions, Van der Walt is a kingpin with a large wallet. He is the founder and owner of Superior Game Breeders (SGB) on the Oorlogsfontein Game Ranch in Mokopane, Limpopo. You could argue he commands auctions as much as bids. Such is his standing that he doesn’t even deign to enter the auction. For the duration of his bidding, Van der Walt merely leans through the doorway.

Chere du Toit, a manager at Aucor Wildlife Auctions, likens him to fellow game buyers Johann Rupert, one of the richest men in Africa, and Cyril Ramaphosa, South Africa’s deputy president. Ramaphosa put game auctions in the news with his attempt to buy a buffalo cow and its calf in Rustenburg, in the North West province of South Africa, in 2012. He lost to farmer, Boet Troskie, who paid around R20 million ($1.6 million). Ramaphosa later apologized to the nation for this attempt at conspicuous cow consumption.

Like Ramaphosa, Van der Walt, found this Saturday, in late March, was not his day. To his chagrin, a young man, bidding on behalf of somebody else, bought the kudu bull he was after. The most expensive kudu bull on the day went for R510,000 (around $40,000). An exasperated Van der Walt hovered off to another auction 30 kilometers away.

“I plan my bidding before I go to auctions. The animals are advertized on the auction’s website, so when you go there you already know precisely what you are after. Needless to say, I went to the auction knowing exactly what I wanted and what I am willing to pay for the animal. It must be within my budget. This was ridiculously expensive,” says Van der Walt later.

Van der Walt also owns Superior African Hunting Safaris, a hunting farm that his son Eli van der Walt manages. They have been in the business since 2001.

Among the 110 bidders who spent millions on the day, was Arie Kuhn, a game farmer in Limpopo, who is also a chartered accountant in Johannesburg. He says the game farmers were stocking up for the hunting season between May and September.

“We know what the hunters want, so we stock on those animals that are trending. On my farm, we host trophy hunters who are mainly from abroad. Normally they like blue wildebeest because it’s a cheaper animal to shoot. You can shoot it for R6,000 (around $500) and take your animal home. I purchased a lot of them. We also do exotic game breeding in other camps but these are not for hunting,” says Kuhn.

He says his auction budget is determined by his bookings.

Kuhn has been in the game farming business for nine years and grew up on the farms of Limpopo. He brought his two children, Kaylen and Jayden, with him. Jayden, his eight-year-old son, has taken to his father’s passion of hunting impala.

As the auction wore on, the mood was festive at Aucor Wildlife Auctions. Du Toit says that this may not be one of their best days, without saying how much, but seemed satisfied.

In the near distance, in a thatched-roof building, rapped the voice of auctioneer Mike Killassy. He’s in his element and in high spirits. This auction lasted four hours.

“Hammer is up. Can you make it R10,000 ($800) now, sir? Are you happy, can we sell it?” asks the auctioneer.

Killassy, owner of Killassy Auctioneering, has spent more than three decades auctioneering and worked in the United States, Australia and Europe. He says his career’s highlight was being featured in TIME. Killassy was born in Aberdeen, a farming town in the Eastern Cape, to a family with more than 100 years in agriculture. He started as a stock farming auctioneer; these days he is inundated with wildlife auctions. They come up every week in South Africa.

The business has grown enough to attract analysis. Academics in North West University, South Africa, carried out a study. They found game ranching to be a better bet than banking and the stock exchange.

Flippie Cloete, an academic from North West University, says the economic contribution of game farming was close to at least R20 billion ($1.6 billion) in 2014.

Around 29,000 animals were sold at auctions in 2014, making R1.88 billion ($151 million). In total, around 130,000 game animals were traded during the 2014 season. This means a mere 22% of animals were sold at auctions.

“If we assume that the trade composition of official auctions and private trade are analogous, then the economic contribution from live wildlife trade alone was close if not in excess of R10 billion ($800 million). This is not even considering the economic contribution for services such as capture and translocation, pharmaceuticals, veterinary expense. In addition, the contribution of hunting is estimated to be in excess of R8 billion ($642 million),” says Cloete.

“Game yields higher returns because of the cumulative effect. You have an asset with a reproductive ability. The returns of your investment are not only determined by the change in value of the original animals that were bought, but also from the progeny. If I put my money on stock exchange, or buy a house as an investment, then the returns will to a degree depend on what happened to the value of the shares or the house. However, the big difference is that one share can’t become two or a house can’t become two. But one animal becomes two and so forth. There’s a cumulative effect,” says Cloete.

Van der Walt concurs.

“There’s no comparison between investing in property and wildlife. The animals multiply themselves but property doesn’t. In animals you are guaranteed a 30 percent profit the next year,” he says.

Meanwhile, Andrew Lianos, a chartered accountant at River Group, wants to list wildlife animals on the Johannesburg Stock Exchange (JSE). This has never been done before but he’s convinced he will have his way.

“The JSE does not comment on potential listings in the pipeline. It will only comment once a listing has been confirmed and this confirmation occurs via a SENS announcement as per JSE listing rules,” says Andre Visser, the General Manager for Issuer Regulation at the JSE.

On that sunny day in the bushes of Limpopo, Van der Walt may not have got his way in buying the kudu, but you could argue he has taken the game business by the horns.

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Related Topics: #Aucor, #Auction, #August 2015, #Bush, #Chere du Toit, #Cyril Ramaphosa, #Game Ranch, #Hunting Safaris, #Limpopo province, #wildlife.