The drought will slow growth, warns Kaap Agri boss
Agriservices specialist Kaap Agri — which has a strong retail offering — expects prolonged drought conditions in certain farming areas of the Western Cape to slow earnings growth in the first half of the financial year to end September 2018. Speaking at Kaap Agri’s annual general meeting in Malmesbury on Thursday, CEO Sean Walsh expected growth to slow to single-digit gains in the first half. He noted the drought in the Western Cape — where Kaap Agri has its roots — was the most severe in the past 10 years. "Farmers are under pressure and cutting back on spending on their farms," said Walsh. He said that Kaap Agri’s businesses were feeling the most pressure in rural areas. "In the country areas, the entire business community is related to the health of the farmers." However, he pointed out that sales in Kaap Agri’s urban stores were growing at a sprightly 20% a year — mitigating the effect of the drought.