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Livestock Wealth cracks R4bn macadamia nut industry

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 18 Feb 2022
Ntuthuko Shezi, CEO of Livestock Wealth.
Ntuthuko Shezi, CEO of Livestock Wealth.

Web and mobile crowd farming platform Livestock Wealth is tapping into SA’s R4 billion macadamia nut industry, expanding its offerings to officially launch the Macadamia Nut Tree Investment business.

The fintech platform has over the last year been trialling its latest venture, which allows investors to put their money into macadamia trees, billed as the most lucrative crop in SA, with one hectare of macadamia nuts yielding up to R400 000.

Founded and developed by KwaZulu-Natal-born electro-mechanical engineer Ntuthuko Shezi in 2015, Livestock Wealth initially started as a platform that offers people with no access to land, time or skills the opportunity to own livestock within a professionally-managed farming operation.

Through connecting its network of small-scale partner farmers to online investors, the business model allows farmers who cannot afford to scale their business to access capital, while offering the investor an opportunity to invest in assets which are not influenced by financial market trends.

Over the years, the business has evolved to allow investors to buy an array of assets, including a connected garden system, cattle, organic vegetables, maize and now the macadamia nut trees.

Speaking this week during a media tour of one of Livestock Wealth’s partner farms in Limpopo, Madimbo Farming Group, Shezi pointed out the local macadamia industry is currently worth an estimated R3.7 billion.

Since the inception of the macadamia pilot phase, investors of the new business have already channelled over R20 million worth of funds into the macadamia assets, he noted.

“When we were first exposed to the lucrative macadamia nut industry a while back, we got to understand that it is one of the highest grossing crops in the world that a farmer can plant. For example, in one hectare of macadamia, which is just about 300 trees, a farmer stands to earn about between R350 000 to R400 000 per hectare. If you contrast that with a hectare of maize, you are probably going to get about R30 000 per hectare from the maize plant,” said Shezi, CEO of Livestock Wealth.

“The vision behind introducing the macadamia business is still very much in line with Livestock Wealth’s business strategy as a crowdfunding platform where we are saying: if you can’t be a farmer of cattle, you can be a farmer of macadamia nuts, and earn interest without having to do the hard work that entails growing macadamia trees.”

An authorised financial service provider approved by the Financial Sector Conduct Authority, Livestock Wealth’s innovative business model allows investors to purchase macadamia trees online, starting from R2 000 per tree.

The fintech firm is currently working on a system that will be connected to an internet of things monitoring tool, which will allow the farmer to track the environmental condition of the trees, while the investor can view and track their tree and investment in real-time via the app – an already existing feature for the cattle investment business.

The Madimbo Group Macadamia Farms has planted over 25 000 macadamia trees.
The Madimbo Group Macadamia Farms has planted over 25 000 macadamia trees.

SA is the largest macadamia nut producer in the world, with production increasing by 4 000 hectares a year. Seen by some as a delicacy due to its high costs, the trees are mostly grown in Limpopo, Kwazulu-Natal and  Mpumalanga , as they harvest well in more tropical areas where bananas, avocados, mangoes and papayas are grown.

According to Madimbo Farms,Group Macadamia  which has been growing the trees for over 15 years, SA’s biggest export markets for macadamia nuts include China, Europe and the US.

Livestock Wealth currently has three partner farms in its macadamia business and has set its target on having at least 20 farms active on the app by the end of this year.

According to Shezi, several factors may deter farmers from producing the highly-lucrative tree, including the high costs associated with growing a good quality plant over a six-year period.

“Firstly, there is a huge shortage of seedlings available to plant the trees, and secondly, the length of time it takes to grow the tree to full productivity is six years, before it brings in a single cent for the farmer.

“This means six years’ worth of resources – staff wages, fertilisers, irrigation and care. That is where we come in and tell the farmer: we can assist by bringing in investors, who have capital, who will buy this tree and own it for the six years it takes to grow.”

Once the six-year duration is up, the farmer buys back the tree from the investor and continues farming it for the rest of its lifespan.

Speaking to ITWeb on the sidelines of the media tour, Gene Likhanya, director of Madimbo Farming Group, said the trees on his farm have been bought by roughly 6 000 Livestock Wealth investors, who have invested about a total of R12 million in the assets. Each investor has made a minimum investment of R2 000 per tree, which brings in an average of 17% return-on-investment over six years.

“We approached Livestock Wealth to partner and support us in making sure we are able to produce high-quality trees in record time. Before we partnered with Livestock Wealth, we had roughly about 30 hectares of macadamia trees planted, and now we are sitting at around 80 hectares across all our farms and around 25 000 trees planted.

“Macadamia farming is very a technical business; it feels like a university and you are always learning and trying to improve your yield quality to better compete in the market. In order for us to realise the ‘African farming dream’, we need to farm competitively at scale because scale allows you to buy things at affordable prices and the profits are bigger.”

According to Likhanya, SA’s agricultural industry has not moved forward, with farmers grappling with the same challenges they faced over 15 years ago, such as barriers to accessing finance, regulatory red tape and limited resources, which all hinder their access to new markets.

Last year, Livestock Wealth was valued at R100 million across all its portfolios and the company says it continues adding new farmers and investors every day.

Gene Likhanya, director of Madimbo Group Macadamia Farms, and Ntuthuko Shezi, CEO of Livestock Wealth.
Gene Likhanya, director of Madimbo Group Macadamia Farms, and Ntuthuko Shezi, CEO of Livestock Wealth.