South African carrot juice producer Rugani steals the Agoa show
As the Agoa Forum got under way in Johannesburg, a local veggie juice company got some unexpected free advertising from a senior US official.
A Gauteng vegetable juice company has been hailed as a model of how America’s African Growth and Opportunity Act (Agoa) can help small South African and other African producers scale up their businesses by busting into the US and wider markets – and also create jobs and boost local suppliers in the value chain.
British Robinson, coordinator of Prosper Africa, a US presidential/national security initiative to scale trade and investment between the United States and Africa, punted the example of Rugani Juice at the opening of the Agoa Forum in Johannesburg on Thursday.
“Agoa is not just a piece of legislation. Let’s take a step back and talk about what Agoa implementation really means,” she said.
“Just yesterday, I had the privilege of touring our Prosper Africa partner, Rugani Juice factory, a South African company that is fast becoming a household name in the US for carrot juice.
“There, I witnessed firsthand catalytic, two-way trade and investment. Our support gave Rugani Juice the opportunity to prepare for entry into the US market, to attend the fancy food trade show in the US, then to meet a vetted US distributor and sign a supply agreement worth half-a-million dollars.
“I asked Wesley Browne, the General Manager of Rugani, ‘what was the reason for their success’, and his exact response was: ‘Agoa and trade promotion. Trade promotion without Agoa doesn’t work, and Agoa without trade promotion doesn’t work.’
“But it doesn’t stop there. This single Agoa-supported project created an entire trade ecosystem in Gauteng province.”
Holding up the product, Robinson said: “This box of carrot juice represents an entire Agoa value chain, ecosystem and supply chain.
“Each juice box represents a supply of locally grown vegetables from neighbouring farms, 250 processing jobs – mostly women – that pay twice the minimum wage… and access initially to regional markets in neighbouring countries that then led to their entry into a lucrative US market.
“As a result, this demonstrated to the world that Rugani Juice could export anywhere. In Rugani’s case, they were able to access markets in Hong Kong, South Korea and Japan… and as it turns out, the buyer in Japan is Costco (the giant US retailer). It’s actually a US export with African supply … let’s let that sink in for a minute.
“Today, with Prosper Africa, Rugani trains other African companies how to utilise Agoa and, through Prosper Africa, is investing in new packaging equipment that will now launch them from paper to glass bottle exports … meeting the US market demand.
“The success story of Rugani is why Agoa exists … it’s one example of how Agoa can and should work. Prosper Africa exists to replicate and scale this two-way trade and investment approach throughout the continent.
“Agoa is essential to two-way trade, two-way growth, two-way prosperity. It is a critical tool to link our markets in ways that advance mutual strategic goals – diversifying global supply chains, increasing Africa’s local capacity and advancing shared objectives.
“Agoa remains a critical job creator both in the US and in Africa.
“In order to support the success of Agoa, we focus on both supply and demand. On the supply side, we grow and capacitate African suppliers that are matched with qualified US buyers – ensuring off-take of duty-free goods – through grants, investment facilitation, aggregation and other trade services.
“On the demand side, we grow the number and market share of US buyers looking to source competitive products in Africa. This is increasingly important as the world faces supply shortages from conflict, pandemics and capacity gaps.
“This means creating greater awareness of Agoa.
“Currently, we have 819 deals in the Prosper Africa supply pipeline, valued at $1.2-billion, of which the majority are in the agriculture and apparel sectors, as well as the critical minerals sector representing 8% of this pipeline and growing…
“We know that Africa is poised for exponential growth and Agoa is part of that story. And America wants to be a part of that story and that’s why Prosper Africa exists.”
President Cyril Ramaphosa will address the official opening of the Agoa Forum on Friday, along with trade and industry minister Ebrahim Patel; his counterpart, US Trade Representative Katherine Tai, who administers Agoa, and US Secretary of State Antony Blinken, who will talk via video link.
The forum is also being attended by many trade ministers from the 35 sub-Saharan African countries which currently participate in Agoa.
The US has sent a large and senior delegation for “constructive dialogue with African partners in government, the private sector, trade unions, and civil society about Agoa’s strategic value and impact”.
“Timely reauthorisation and modernisation of Agoa is a priority of the Biden-Harris administration”, the delegation added, referring to the fact that Agoa expires in 2025 and has to be reauthorised by the US Congress if it is to continue.
This week, President Joe Biden ejected Niger and Gabon from Agoa because of military coups, and Uganda and Central African Republic because of human rights abuses.
Despite some concerns about SA’s continued participation because of US unhappiness with Pretoria’s stance on the Russia-Ukraine war, Biden kept SA in the programme, though ultimately that decision will have to be ratified by Congress. DM