Thursday 7 October 2004

This site will be updated on 14 October  2004 at 17:30

Business - Sakenuus

• De Poort kry Lotto-miljoene
• New vine venture establishes international presence
• Spice Route returns
• Black economic empowerment for Paarl's urban renewal

NEWLY formed wine exporting company, Cape Coastal Wines, has firmly established its presence in the international market with the appointment of a seasoned head of international sales.

Active in Europe and the United States since 1995, Francois du Toit has among others, represented the KWV and Western Wines in Europe and the UK.

 "My first priority is going to be moving the focus for South African wines from the value-for-money segment to the medium-priced segment," du Toit said.

Initially based in the United Kingdom, he will be responsible for the marketing of all Cape Coastal Wines' products in the United States, Canada, Europe and the United Kingdom.

He said although the quality of South African export wines had improved substantially over the past five years, much more needed to be done to establish the local product in the medium-priced market.

"Despite the fact that most international markets are well supplied, there is definitely a niche market for South African wines," du Toit said. Born and bred in Paarl, du Toit got his first taste of the wine business while working for KWV - whom he also later represented in Europe from a base in the Netherlands.

"I was mainly responsible for European and Scandinavian markets. One of the very interesting discoveries that I made during this period was the fact that the Scandinavians and the North Americans preferred a full-bodied red wine to the lighter blends that are so popular in South Africa and Europe."

Du Toit was largely responsible for establishing the Western Wines Kumala brand which has become one of the favoured South African brands internationally.

"We are in the very fortunate position that the sister company of Cape Coastal Wines - Cape Coastal Vineyards - is in the position to produce any blend  to suit a particular region or country. They are also able to produce in the volumes required to thoroughly penetrate these markets," he said. Cape Coastal Wines and its sister production company Cape Coastal Vineyards, were formed in Cape Town in June of this year with the specific purpose of entering the international market. Du Toit said his marketing strategy would be entirely consumer-driven.

"We are going to tailor our brands very specifically to each region in which we are going to sell our product. We are going to give consumers what they want - not what we think they should drink."

Du Toit said the time was right for South African wines to shed their image of being cheap.

"It is going to be my number one priority to grow the segment of wines selling at retail for between five and eight pounds sterling in the United Kingdom and between US$9 and US$15 in the United States."

Premium South African estate wines continued to sell well internationally and he would also help to build this segment as several growers within the Cape Coastal Vineyards group produced their own premium brands.

Du Toit said market research that was currently underway in the European, British and US markets would determine the volumes and blends that would be sold into individual markets.

"One mistake that we are not going to make is to try and set up our own distribution channels. We will be making use of well-established importers and distributors in all of the markets we plan to penetrate because they know their markets well and will be able to do full justice to our product. For us it is all about long-term relationships."

Centered on the Paarl Wellington districts, Cape Coastal Vineyards groups together five of the best known cellars in the Western Cape.

The five cellars that will control the production company include Wellington, Wamakersvlei, Bovlei, Riebeek and Boland.

Once the Cape Coastal Wines brand has been established in Europe, the United Kingdom, the United States and Canada, plans are afoot to enter markets in the Far East.ih

IN a sentimental homage to the spice traders who were so influential in the history and culture of the Cape of Good Hope, the Spice Route Wine Company has created an exclusive range of handcrafted wines. 

During the development of the range, owner Charles Back decided that meticulous attention to detail should be the hallmark of the Spice Route Flagship range, which should also express the unique terroir of the Swartland.

The Spice Route Flagship range was first harvested in 1998 and consisted of a Merlot, Syrah and Pinotage. 

The latest addition to the range is the top blended 2002 Malabar. 

All the grapes for the range are harvested from vines growing within a 10km radius around the Swartland town of Malmesbury.

For the signature Malabar, top blocks were identified and given special attention by the viticulturist.  

Grapes from these blocks of predominantly bushvine vineyards are harvested early in the morning then kept at 1-2ºC for 72 hours before being hand-sorted by a team of twelve women. 

The grapes are placed by hand in a crusher-destalker, then lifted by elevator into 2-ton wooden fermentation vats, where they were manually pressed and allowed to cold macerate before spontaneous fermentation started. 

At a later stage cultured yeast was inoculated to complete the fermentation. 

After being pressed in a small basket press, all the components were kept separately in French oak barrels.

After 14 months, a panel of tasters took up to two weeks to select the best blend, irrespective of the cultivar or quantity. 

This blend was then left in wood for another eight months before only 10000 cases of Malabar were bottled.

"We knew the potential of this area and were convinced that it was capable of producing exceptional wines.

"Although the creation of the Spice Route range is laborious and costly, we strived to put the effort into the winemaking process to do it properly. 

"The wide acclaim the range is receiving bears testament to the fact that these subtle nuances are important," says winemaker Charl du Plessis.

THE consultative committee of Paarl's Central Business District (CBD) is in the process of finding Black Economic Empowerment (BEE) partners for the urban renewal project.

The committee will drive the process that will see the core CBD transformed into a new and vibrant shopping and recreational area.

The committee was formed in April and is a partnership between a group of property owners and the Drakenstein town council.

The members have agreed on procedures to follow to ensure that the BEE component is given the maximum possible exposure to potential subscribers in Drakenstein.

They have to ensure that its selection of BEE partners is done in accordance with the regulations established by National Treasury.

According to these all municipalities must adopt a Code of Good Practice with regard to Broad Based Black Economic Empowerment (BBBEE) when they jointly undertake projects with the private sector.

The main purpose of BBBEE is to ensure that historically disadvantaged groups are included in every aspect of the project so that the benefits extend to a wide range of people and not just a few select individuals or businesses.

The BEE partners will acquire their shares in a company that will be formed by the property owners.

It is the company that will ultimately take charge of this phase of Paarl's urban renewal, after all the major legal and technical tasks have been successfully completed.

That is not where BEE stops, though. The company is also bound by the legislation on PPP's to set targets for involving BEE partners at the management and operations level of the project.

The search for BEE partners will therefore include companies that can supply a range of goods and services during and after the construction phase of the project.

Council's representatives on the committee are of the view that there is enormous scope for Drakenstein companies to play a role in this important project, especially if they have adopted BEE practices.

The process of finding BEE partners

The finding of BEE partners is technically the task of the property owners, but council's representatives on the committee will have input into the process.

The committee feels it is important that the final decision is seen as having been made in the best interest of the project and the development objectives of Drakenstein's IDP, specifically job creation and economic development.

The procedures developed by the Committee are therefore aimed at facilitating the process of selecting BEE partners and finding an effective method of satisfying Council's criteria as well as Treasury's regulations.

In summary, the procedures for selecting BEE partners will be as follows:

* Identify potential partners in a number of sectors in Drakenstein through research and notices on radio and in the press. The sectors should represent the diverse groups of Paarl and Drakenstein.

* The property owners meet with the prospective BEE partners to discuss the offer to acquire equity and to participate in the management and operations side of the project.

* On the basis of the information obtained on companies, consortiums and individuals an evaluation sheet will be prepared and each assigned a score of rank.

* The property owners present their findings and shortlist to the consultative committee with a brief report on the reasons why they are nominating particular companies and individuals for partnership.

* The consultative committee discusses the nominations and, through consensus and negotiation, reaches a decision about the final selection of the partners.

* The property owners will present a formal offer to those partners who have been selected and discuss financing arrangements with them in the case of acquiring equity and their role in the case of management and operational positions.

* Once all the necessary legal provisions are compiled with, the names of the partners are announced in the local and provincial media.

Criteria to guide property owners

The Council's representatives on the Committee have also proposed that a set of criteria be adopted to guide the property owners in the selection process.

The criteria should be applied to all prospective partners to develop a preference scale from most favoured to least favoured candidates for BEE.

Among the criteria that will be used for selection are:

* That they be drawn from the widest possible spectrum of society in Paarl and Drakenstein. This means the established business community (including large, medium and small enterprises), traders' organisations, trade unions, transport operators, farm worker associations, non-governmental organisations, religious institutions, civic associations, youth groups, bodies representing the disabled, sport bodies, women's organizations and community trusts;

* That the companies or individuals selected have a track record of involvement in social /economic upliftment of the local community;

* That they have a history of participation in local activities

* That they demonstrate their capability to add value to the project through either knowledge of local issues, the local economy, skill, expertise, social networks or the manufacture of products;

* That they are familiar with the development plans of DM including its IDP;

* That they have no criminal record and are free of any charges of bribery and corruption. An exception here would be those persons who, prior to 1994, were convicted of political offences;

* That they have not been prohibited from doing business with the public sector presently or in the recent past;

* That they agree to appear before Council or the general public to answer any questions about their business affairs or their personal backgrounds;

* In the case of established or formal business or non-profit organisations, that they are able to provide proof of good standing with respect to their tax status with SARS.

The procurement manager's office in Drakenstein will support the committee in its effort to verify the information provided by the prospective partners (companies and individuals).

As far as it is feasible, the scorecard developed in the Code of Good Practice for PPP's will be used in conjunction with the criteria to assess the BEE levels of engagement in the projects that are proposed by the property owners.

Interested persons and companies should contact the Municipal Manager at 807-4500.

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