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The Sea Snail Business That’s Worth $35 Million

Most people would have said it was crazy. Take a sea snail, farm it and sell it to Asia. Now abalone is a $35-million business, thriving along the coast of Africa.

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It started 20 years ago, when farmers from a small seaside town in Africa took a sea snail slithering through the swaying kelp forests under the ocean and tried to farm it inland. They grew this small-town idea into a thriving $35.3-million aquaculture business. This is the story of abalone in Africa, reared on the shores of Hermanus, 120 kilometers southeast of Cape Town, which ends up on dinner plates in Hong Kong.

“We are lucky our species has got a very good taste, a very good texture. Our processing techniques are of a very high standard and we are able to compete with the best.”

So says Werner Piek, Executive Marketing Manager of Abagold, a man who grew up eating abalone long before it was farmed in Africa.

“I knew abalone since I was very small. We had a holiday house in Franskraal, just past Gansbaai. In those days there were no wetsuits, or flippers or anything like that. You had your pair of old tekkies (trainers), goggles and a screwdriver and you would go diving. In those days we were allowed to take five abalone per day. Nice big ones. On Saturdays we would go diving and bring back the abalone and cook it in a poitjie [slow cooked stew]. That was our weekend.”

In years of jet-setting between Hong Kong and South Africa, the 50-year-old Piek has adjusted his palate. Nowadays the man who started working as a factory manager in 2006, when abalone began to boom, prefers dried abalone, cooked with Asian flair.

“That’s a South African style of doing [abalone]. Asians have a very different way of eating it. It has to be whole abalone. They don’t like it minced. It’s cooked with a Chinese-style sauce, served with a piece of broccoli. They are looking for the toughness and the chewiness. South Africans want seafood with garlic butter.”

Like a good wine, abalone is as a varied as the grape. With over 100 species, of which 15 are commercial, abalone has different characteristics.

“What is the price of red wine? It depends, you have the pairing; where it comes from; what the taste and texture was; and the method it was made. From a world perspective French wine is considered the best, with abalone – its Japanese. It has the longest history of export to our main market. South Africa has been in the business for 50 years, but we have only been farming abalone for the last 15 to 20 years,” says Piek.

Abalone is eaten during Chinese New Year or during the Dragon Boat Festival. It is a high-end product, used as a symbol of wealth. It isn’t, despite what people believe, an aphrodisiac.

“It is a famous gift is to give your potential mother-in-law, as a gift on Mother’s Day, to show respect. So it’s definitely not an aphrodisiac, no one wants to give their mother-in-law that kind of a present,” says Piek.

There is plenty of room to grow. The South African abalone farms account for 1% of the 120,000 tons of abalone produced in the world.

“You can’t go to Hong Kong and miss it. The branding is everywhere, on taxis, on billboards and on buildings. With all my experience I prefer the very high-end dried abalone. It produces all the flavor of the abalone. It’s not easy to prepare, it takes three to four days to cook it,” says Piek.

From the 1950s, the abalone industry went global and Hermanus was right in there; all because of canning technology making export into Asia easier.

At the time, South African commercial divers were hauling 2,000 tons per year from the seabed. Authorities realized this wasn’t going to last and introduced something called total allowable catches (TAC), restricting catches to 600 tons by 1970.

“1994 was at that stage that poaching started to pick up in South Africa. The policing around the coast became a lot more lax. People felt more freedom and felt they could take out of the sea, whereas before the police would do horrible things to them if they were caught. Also around that period, South Africa became a lot more international and the Chinese who came saw that there was abalone.”

The doors to China were open and the small-time abalone pickers tried their hands at farming. The latest data released in the Aquaculture Yearbook 2014, by the Department of Agriculture, Forestry and Fisheries, showed businesses in the seas were on the rise. In 2013, the value of the aquaculture sector, based on sales of products, grew by 38.1% to $46.5 million. Abalone accounted for $35.3 million.

A drop in the ocean when compared with South Africa’s gross value of agricultural production which was almost $12.5 billion in 2013.

Gavin Johnston, head of Aquaculture Consulting and Management Services, who has built aquafarms over the last 20 years, says that abalone is one of Africa’s great success stories.

“Abalone is a niche within a niche. It’s the high-end of society that wants our species. There is lots of different species. The market is complex. The price can fluctuate by as much as 200 percent depending on how it was dried and its slight color differences. Guys are paying $400 a kilogram.”

“It’s an interesting market, with a capacity of 80,000 tons a year. [South Africa is] currently producing 1,200 tons. We are a small fry that supplies a small portion, but it’s got a high value on the market. It’s going to be interesting to see when we there are more farms on the market,” says Johnston.

The small crustacean in the kelp forest is going to become an even bigger money maker as the years go on. Piek expects that by 2020 South Africa will produce 3,000 tons a year. It seems the dinner plates of Hong Kong can’t get enough.

Entrepreneurs

From The Arab World To Africa

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Sheikha Hend Faisal Al Qassimi; image supplied

In this exclusive interview with FORBES AFRICA, successful Dubai-based Emirati businesswoman, author and artist, Sheikha Hend Faisal Al Qassimi, shares some interesting insights on fashion, the future, and feminism in a shared world.

Sheikha Hend Faisal Al Qassimi wears many hats, as an artist, architect, author, entrepreneur and philanthropist based in the United Arab Emirates (UAE). She currently serves as the CEO of Paris London New York Events & Publishing (PLNY), that includes a magazine and a fashion house.

She runs Velvet Magazine, a luxury lifestyle publication in the Gulf founded in 2010 that showcases the diversity of the region home to several nationalities from around the world.

In this recent FORBES AFRICA interview, Hend, as she would want us to call her, speaks about the future of publishing, investing in intelligent content, and learning to be a part of the disruption around you.

As an entrepreneur too and the designer behind House of Hend, a luxury ready-to-wear line that showcases exquisite abayas, evening gowns and contemporary wear, her designs have been showcased in fashion shows across the world.

The Middle East is known for retail, but not typically, as a fashion hub in the same league as Paris, New York or Milan. Yet, she has changed the narrative of fashion in the region. “I have approached the world of fashion with what the customer wants,” says Hend. In this interview, she also extols African fashion talent and dwells on her own sartorial plans for the African continent.

In September, in Downtown Dubai, she is scheduled to open The Flower Café. Also an artist using creative expression meaningfully, she says it’s important to be “a role model of realism”.

She is also the author of The Black Book of Arabia, described as a collection of true stories from the Arab community offering a real glimpse into the lives of men and women across the Gulf Cooperation Council region.

In this interview, she also expounds on her home, Sharjah, one of the seven emirates in the UAE and the region’s educational hub. “A number of successful entrepreneurs have started in this culturally-rich emirate that’s home to 30 museums,” she concludes. 

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Kim Kardashian West Is Worth $900 Million After Agreeing To Sell A Stake In Her Cosmetics Firm To Coty

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In what will be the second major Kardashian cashout in a year, Kim Kardashian West is selling a 20% stake in her cosmetics company KKW Beauty to beauty giant Coty COTY for $200 million. The deal—announced today—values KKW Beauty at $1 billion, making Kardashian West worth about $900 million, according to Forbes’estimates.

The acquisition, which is set to close in early 2021, will leave Kardashian West the majority owner of KKW Beauty, with an estimated 72% stake in the company, which is known for its color cosmetics like contouring creams and highlighters. Forbes estimates that her mother, Kris Jenner, owns 8% of the business. (Neither Kardashian West nor Kris Jenner have responded to a request for comment about their stakes.) According to Coty, she’ll remain responsible for creative efforts while Coty will focus on expanding product development outside the realm of color cosmetics.

Earlier this year, Kardashian West’s half-sister, Kylie Jenner, also inked a big deal with Coty, when she sold it 51% of her Kylie Cosmetics at a valuation of $1.2 billion. The deal left Jenner with a net worth of just under $900 million. Both Kylie Cosmetics and KKW Beauty are among a number of brands, including Anastasia Beverly Hills, Huda Beauty and Glossier, that have received sky-high valuations thanks to their social-media-friendly marketing. 

“Kim is a true modern-day global icon,” said Coty chairman and CEO Peter Harf in a statement. “This influence, combined with Coty’s leadership and deep expertise in prestige beauty will allow us to achieve the full potential of her brands.”

The deal comes just days after Seed Beauty, which develops, manufactures and ships both KKW Beauty and Kylie Cosmetics, won a temporary injunction against KKW Beauty, hoping to prevent it from sharing trade secrets with Coty, which also owns brands like CoverGirl, Sally Hansen and Rimmel. On June 19, Seed filed a lawsuit against KKW Beauty seeking protection of its trade secrets ahead of an expected deal between Coty and KKW Beauty. The temporary order, granted on June 26, lasts until August 21 and forbids KKW Beauty from disclosing details related to the Seed-KKW relationship, including “the terms of those agreements, information about license use, marketing obligations, product launch and distribution, revenue sharing, intellectual property ownership, specifications, ingredients, formulas, plans and other information about Seed products.”

Coty has struggled in recent years, with Wall Street insisting it routinely overpays for acquisitions and has failed to keep up with contemporary beauty trends. The coronavirus pandemic has also hit the 116-year-old company hard. Since the beginning of the year, Coty’s stock price has fallen nearly 60%. The company, which had $8.6 billion in revenues in the year through June 2019, now sports a $3.3 billion market capitalization. By striking deals with companies like KKW Beauty and Kylie Cosmetics, Coty is hoping to refresh its image and appeal to younger consumers.

Kardashian West founded KKW Beauty in 2017, after successfully collaborating with Kylie Cosmetics on a set of lip kits. Like her half-sister, Kardashian West first launched online only, but later moved into Ulta stores in October 2019, helping her generate estimated revenues of $100 million last year. KKW Beauty is one of several business ventures for Kardashian West: She continues to appear on her family’s reality show, Keeping Up with the Kardashians, sells her own line of shapewear called Skims and promotes her mobile game, Kim Kardashian Hollywood. Her husband, Kanye West, recently announced a deal to sell a line of his Yeezy apparel in Gap stores.

“This is fun for me. Now I’m coming up with Kimojis and the app and all these other ideas,” Kardashian West told Forbesof her various business ventures in 2016. “I don’t see myself stopping.”

Madeline Berg, Forbes Staff, Hollywood & Entertainment

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Entrepreneurs

Covid-19: Restaurants, Beauty Salons, Cinemas Among Businesses That Will Operate Again In South Africa As Ramaphosa Announces Eased Lockdown Restrictions

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South Africa’s President Cyril Ramaphosa addressed the nation announcing that the government will further ease the country’s lockdown restrictions.

Restaurants, beauty salons, cinemas are among the businesses that will be allowed to operate again in South Africa.

The country is still on lockdown ‘Level 3’ of the government’s “risk adjusted strategy”.

President Ramaphosa also spoke on the gender based violence in the country.

“It is with the heaviest of hearts that I stand before the women and the girls of South Africa this evening to talk about another pandemic that is raging in our country. The killing of women and children by the men of our country. As a man, as a husband, and as a father to daughters, I am appalled at what is no less than a war that is being waged against the women and the children of our country,” says Ramaphosa.

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