Livestock Wealth generates R20m in profit for investors
Livestock Wealth, a livestock crowd farming platform, has expanded its offerings to include a shared farming project, after generating profit in excess of R20 million for its investors.
Developed by KwaZulu-Natal-born electro-mechanical engineer, Ntuthuko Shezi, in 2015, Livestock Wealth offers people with no access to land, time or skills the opportunity to own livestock within a professionally managed farming operation.
Through the Web and mobile application, investors are able to invest their money in cows rather than in unit trusts, shares or exchange-traded funds.
By connecting its network of small-scale partner farmers to 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.
After gaining almost 4 000 investors and 50 partner farmers, the crowd farming platform now owns its own land and has expanded its offerings to include GrassBeef by Livestock Wealth, a shared farming service that buys, cares for and sells free-range, grass-fed beef.
The business purchases young calves from communal farm lands and transports them to its own commercial farm, where the animals are cared for and nurtured. They are then re-sold, but remain at the GrassBeef farm, where they are looked after on behalf of their new owners for a small monthly fee.
“GrassBeef is a shorthand name for grass-fed beef. These cows are allowed to grow naturally without the use of artificial growth stimulants,” notes Shezi.
“This farming technique provides a reliable source of income to herdsmen, who are responsible for the cattle’s care and communal farmers, from which the cattle are sourced, while allowing those who don’t have access to land to own their own cattle and produce healthy, organic, hormone-free beef.”
Cattle farming in SA is estimated to be worth around R142 billion, with the local beef industry generating an estimated $144 million in exports in 2017, according to data from Trade Map.
The idea behind GrassBeef by Livestock Wealth is not only to move cattle from A to B, but also to increase their value along the way, before their retail destination. By creating GrassBeef by Livestock Wealth, Shezi says the company set up a system that also raised the value of the livestock, using an innovative funding model so that rural farmers could ultimately earn more than they would have, by selling the cattle directly.
“It starts with the oxen in rural areas being collected by the company. This already crosses an initial barrier to entry. The oxen are then brought to fully equipped farms where they are fed and nurtured to grow for six months, using collective funding. This shared farming service creates healthy livestock, which leads to healthy beef. Upon being sold by the owner, the beef is stocked by Livestock Wealth’s retail partners, including Woolworths.”
The farmers that have been part of Livestock Wealth have gone on to expand their income bases, with some having bought tractors, while others have diversified their farms into other areas of produce, such as short-term crops, according to Shezi.
Last year, the investment company expanded its offerings to include an array of agricultural assets that can also be owned by potential investors, including sugar cane plants, macadamia trees and maize plants, as a separate investment option.
“I estimate approximately R12 million has already been channelled to rural farmers, from whom we have bought cattle so far. This has benefitted almost 200 farmers and 50 partner farms. Our next venture will be to expand this scheme beyond retail chains to direct home delivery for people who want premium healthy beef,” concludes Shezi.