TWK Investments, which was founded in SA 80 years ago and provides a suite of services in agriculture, ranging from timber products to the sale of farming inputs such as fertilisers, has added its voice to the raging debate on the Expropriation Bill, which is going through a public participation process.
The bill, introduced by the department of public works and infrastructure five months ago, seeks to provide clear guidelines on when it is appropriate for the state to expropriate land with or without compensation.
CEO Andre Myburgh told Business Day in an interview on Thursday that he was opposed to land being forfeited to the state without compensation, arguing that the outcome will undermine property rights.
“The biggest issue for us is the security of property rights. We use property as a surety to secure finance. We prefer a blended finance model, where government, finance institutions and other stakeholders play a role in supporting the land reform,” Myburgh said.
The bill seeks to address skewed landownership patterns of apartheid and colonial times.
In February, the Banking Association SA, a national association of domestic and international banks operating in SA, said property owners with mortgages and other bonds on property that may be expropriated at below market value or without compensation face severe liabilities.
Banks have extended R1.6-trillion in residential, commercial and agricultural mortgages to borrowers, according to the association.
For TWK Investments, which been listed on ZARX exchange since June 2017, the timber business is the biggest in the overall portfolio and has been identified by the company as the growth area. Timber products are used in the DIY market and are supplied to pulp producers such as Sappi, which are then converted into packaging products. Timber is also used in mining.
Myburgh said China was expected to drive demand for woodchips in the second half of its financial year due to strong demand for international pulp, which has also supported selling prices. Japan and India are the other big export markets.
The company also has a retail and mechanisation segment, which supplies an assortment of agricultural products to producers and the public.
The grain segment deals in the storage, processing and marketing of maize, which is used as an input in food products. In addition, it owns a network of vehicle dealerships and provide insurance products to farmers.
For the six months to end-February, TWK Investments reported a 42% rise in net profit, as farmer demand for products such as fertiliser and animal feed rose. Demand for timber in DIY markets, mining timber and national pulp timber also boosted the financial performance, the company said. But motors and tyres, as well as fuel sales were hard hit during the review period.
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