/ 4 November 2003

Banking on maritime muscle

There may not be mussels on the dinner table at Elizabeth January’s home, but the sea’s muscle nevertheless put food on the table.

She is one of the 18 shareholders in the Saldanha Mussel Growers’ Company, a commercial enterprise formed last year after a five-year pilot project proved small-scale commercial mussel harvesting was economically sustainable.

January was part of the project from the start. There was little else to do. ‘I was unemployed at that stage. Which bank would give me a loan?” she says.

Twice a day a little converted fishing boat steers into Pepper Bay in the Saldanha harbour to its destination — 18 floating rafts, simple wooden structures mounted on drums. Every day 1,5 tonnes of mussels are harvested from hundreds of metres of rope suspended from these rafts in the seawaters nourished by the Benguela current.

Each of the 18 shareholders owns a raft. Their Saldanha Mussel Growers’ Company employs 12 workers — the boat’s five-man crew and seven women who clean and sort the mussels for R10 an hour in shifts every day.

And that is no mean feat in the small West Coast town of Saldanha, where communities have been squeezed by pressures on commercial fishing, a key industry alongside the economic activities centred on the port.

Saldanha, the largest natural bay in South Africa, was discovered more than 500 years ago. But the lack of fresh water and its geographic isolation prevented large-scale settlement until World War II, when commercial fishing began along the West Coast.

In the 1970s iron ore and harbour-related industry sprang up after a rail link was established to the mines in the Northern Cape. The harbour is also a key stop for many ocean-going vessels — in 2001 the port handled 409 ships. The South African National Defence Force maintains a base and training academy there.

The seeds of the Saldanha Mussel Growers’ Company were sown in 1995 and by 1997 the project started to gain momentum.

Absa Foundation and the Centre for Integrated Rural Development (Cird) joined hands — providing business finance and project management skills — to explore sustainable economic opportunities for local disadvantaged communities.

The aim was to assist survivalist fishers and the seasonal workers to obtain a regular, sustainable income. ‘It is important to provide opportunities to enter mainstream economic activities,” says Wilfred Williams, Cird’s local economic development manager.

Mariculture was the natural choice: there is the ocean, local knowledge about the sea, mussels and fishing, as well as the ability to process sea products and a dire need for economic opportunities.

The pilot project proved the idea was commercially viable. In addition, the small-scale, labour-intensive approach yielded 42% more productivity than the commercial mussel farming by Sea Harvest, one of South Africa’s top five commercial fishing giants.

And Saldanha proved to be just the right spot. Mussel growth rates have from seed to harvest are six to eight months, compared to 24 months in Spain, 30 months in The Netherlands and 12 to 18 months in New Zealand.

With global consumption of approximately 2,5-million tonnes of mussels a year and a supply shortfall of 35%, there is a guaranteed market.

‘The first two years were difficult, but there has been progress and good potential,” says January. But the cherry on the cake is her skipper’s ticket, making her one of the very few fully certified small boat skippers.

Two years ago she and five other women linked to the mussel farming were trained by the South African Maritime Authority. All passed and now are officially certified ‘to drive a boat”, as the locals put it.

Such training has been integral to the project. All 18 shareholders were educated in business skills, business administration, marketing and conflict resolution, among others. As part of the ongoing training programme, this October they spent a weekend workshop focusing on strategic planning and shareholder responsibilities.

In September 2001 the company was launched. The Land Bank provided the loan, Absa the financial backup and facilities, and the 18 breadwinners their sweat, enthusiasm and unique knack for finding a factory space and distributors for their mussels.

‘I’d like the project to become really successful,” says Allister Brown, the factory manager. Each day he is up at 3am to make sure everything is set and takes pride in the fact that ‘as the mussels come in they go out” — at between R7 and R9 a kilogram, to Cape Town, Johannesburg and elsewhere.

The aim now is for the company to expand production to two tonnes a day and to enter the export market directly, rather than though distributors.

Plans to upgrade the company’s operation are also being prepared. This includes a cooler section in the old Lusitanian workspace, which the mussel farmers have acquired, a new boat to boost harvesting capacity and expansion of the mussel harvesting area.

Talks are under way with Portnet to renegotiate the lease cost of the 50ha of sea where the Saldanha Mussel Growers’ Company operates. It costs R10 000 a month at present, the same price charged Sea Harvest.

The company recently received a major confidence boost. Its mussels may soon carry the official stamp of quality from the South African Bureau of Standards after the Marine and Coastal Management division of the Department of Environmental Affairs and Tourism took some mussels for testing.

Research during the pilot phase has already shown their mussels grow bigger and are of a better quality than others.

Being shareholders and from the local community, everyone pulls together, aware that the company’s commercial success depends on collective effort.

A year after its launch, the Saldanha Mussel Growers’ Company is breaking even. Again, this is no mean feat as the majority of small, medium and micro-sized businesses in South Africa fail within a short time. The country was ranked the lowest among developing countries for entrepreneurial activity, according to the 2002 Global Entrepreneurship Monitor.

The Absa Foundation, the corporate social investment arm of the banking group, continues to back the company. Absa corporate social investment consultant George Gibbs says the key reasons are that the project is community-driven and has proven economic sustainability.

The foundation not only supplies financial assistance, but helps with project management and mentorship. The aim is to assist the project until it is fully sustainable and can survive on its own.

The Investing in the Future Awards judges scored this project highly for its impact and sustainability. It is a good example of social investment by a foundation, considering particularly that mussel farming has nothing to do with banking.

‘This is a project of the heart,” they said. ‘It is making a big difference to the community.”

Venita Williams (32), who cleans and sorts mussels at the factory tables of the Saldanha Mussel Growers’ Company, agrees. She says the project has a simple but direct impact: ‘It puts food on the table.”