Western Cape Business News

Send  Share  RSS  Twitter  28 Jun 2009

VENTURES: Mission Impossible It's Not


Recent Western Cape Business News

WHO could have foreseen that, when Paul Andrag arrived in Cape Town in 1896 he would have sown the seeds for a venture that today generates revenues of more than R1 billion annually?

But so it is. Not good fortune and good luck can explain it, such as accidentally striking it rich with diamonds in Kimberley, on gold on the Reef. Rather, perhaps, the trusted workhorses of successful business – ingenuity, sensible hard work, perseverance and so on – were employed to good effect from when he started throughout the several Andrag generations until today.

When Paul Andrag started work at the mission his task was to manage the trading store at Genadendal. During 1904 he transferred to Saron, situated between Gouda and Tulbagh and continued with a trading store.

There he soon noticed that the local farmers faced many problems due to the lack of proper equipment. He knew that European agricultural machinery could solve some of the difficulties and began to import equipment to sell locally.

Well-known agencies were acquired, including Lanz Tractors, Perrot Irrigation, Deutz Engines, John Deere Tractors, Fahr Combines and others.

In time his sons joined him in the business and many pioneering ideas were introduced to South Africa by them. Some of these included the first rubber-tyred tractor, the first sprinkler irrigation system, useful varieties of plants (Lupins, Serradella and so on), some of the first locally manufactured ploughs, the first locally made irrigation tubing and many more.

By the time the Second World War had ended, all five sons of the founder of P Andrag & Sons, as it was then called, were active in the business.

In 1950 Agrico Machinery (Pty Ltd was founded by the Andrags to resume importation of Lanz Tractors. The branch network of Agrico grew steadily to follow the demand for its products. During 2000 Andrag and Agrico were merged into one large group – Andrag Agrico. This was done to make better use of synergies in manufacturing, marketing and distribution. Today there are 29 branches with a total staff of some 800 people spread over South Africa, from Nelspruit in the north to, yes, Caledon in the south. The group’s headquarters is now in Bellville, Cape Town.

Some 30% of the group’s turnover is generated by its three South African factories, which produce implements, agricultural and industrial tractors, centre pivots, quick coupling pipes, PVC pipes, drippers, micro jets, aluminium and iron castings, electric valves and crop sprayers. The 4+ Series of tractors was developed, with sales to farmers commencing in 1986. So far more than 700 of the tractors have been produced and sold. The manufacture of centre pivots was started in 1988 and is undertaken in an integrated factory that feature on-site galvanising.

The present management are third and fourth generation family members, therefore three generation successions have taken place, often a critical stage for a family business. Four shareholders of the fourth generation of the family, who are all university graduates, are already active in the company.

Management style can be characterised as conservative, which mirrors that of Andrag Agrico’s main customers, the farming community, construction and industrial companies who tend to favour long-term business relationships, based on mutual trust.

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