Agro Mohair
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Mohair Description of the Industry
Mohair growing or farming involves the farming of Angora goats that are sheared on a biannual basis. Angora goats produce a fibre that combines the warmth of wool but has the durability to be coloured similar to synthetic material. Colouring of the fibre results in a high reflectance value and clarity of colour. With the advent of synthetic fibres, adult mohair is not as widely used in the manufacturing of upholstery fabrics. Kid mohair due to its exceptional quality continues to be in high demand worldwide and used in the manufacturing of fashion garments.
There are various factors that influence the quality of mohair, including climatic conditions, and breeding however the industry saying applies that ‘the younger the goat the finer the hair’.
The Eastern Cape Province is the largest producer of mohair in South Africa, contributing approximately three quarters of the nation’s current production. Cacadu is the Province’s and therefore the country’s largest district producer of mohair with approximately 52% of South Africa’s market share. The region, together with the Nelson Mandela Bay area, is considered the centre of the South African mohair industry. Table 1 shows the national output contributions of the various mohair producing areas in Cacadu District.
Table 1: Spatial Distribution of Cacadu’s Contribution to National Mohair Production (2008)
Source: Mohair SA Annual Report, 2008
National and Global Mohair Trends
South Africa is the world leader in mohair production both in terms of quality of product as well as production output, contributing 55% (2.9 million kilograms) of the world’s mohair output in 2008. More than 90 percent of South Africa’s total mohair clip is exported in the grease or semi-processed form both washed and combed.
South African mohair is predominately exported to Asia (China) and the European Union (Italy). In 2008 exports stood at 4.3 million kilograms. The South African mohair industry is highly dependent on the international market; largely because the domestic market is not large enough to support the industry (i.e. mohair products are not affordable to the majority of the South African population).
The mohair price has traditionally been susceptible to changes in fashion trends and the subsequent law of supply and demand. Since 1998 the average price of mohair per kilogram has fluctuated significantly between R28 and R89. Table 2 reveals industry trends over the past 10 years.
Table 2: South African Mohair Production
Mohair SA Annual Report, 2008
It is evident that production and output has been decreasing, but the price of wool and total value has fluctuated over the same period. This is evidence of the sensitivity of the mohair (and wool) industry to global fashion trends.
 Area Identified and Land Availability Figure 1 below indicates the spatial distribution of potential for mohair growth in the Cacadu district. This links up directly with the current spatial distribution of Angora goat farming and production within the district as shown in table 1.
What is evident from Figure 1 is that the climate and vegetation specific to the majority of Cacadu (bar the coastal zones belt of approximately 75 km) is extremely suitable for the practise of farming angora goats. This is in comparison to other livestock farming as well as crop farming where the potential is confined only to specific areas of the district.
It should be noted that the carrying capacity of the land varies from one area to another. Areas such as Grahamstown which experience higher annual rainfall compared to areas such as Steytlerville and Jansenville can sustain a higher concentration of Angora. In lower rainfall areas in Cacadu, carrying capacity ranges between 1-1.5 heads per hectare.
Figure 1: Potential Mohair producing areas in Cacadu
Source: Cacadu District Municipality
The Cacadu district has a range of stock farms that are available for sale on the market at any given point in time. Within the past decade a number of stock farms particularly in the north eastern regions of the district have been converted into commercial game farms due to the profitability and return on investment associated with this farming type.
There are a number of real estate agencies that specialise in the sale of stock farms in various areas of the district. The price per hectare of a stock farm suitable for the mohair growing is dependent on a number of conditional factors. These include; availability of bulk infrastructure linkages to the farm, onsite buildings and houses, distance from main roads, condition of fencing (internal and perimeter), on site dams and irrigation, location of farm, size of the farm and type of vegetation.
Average stock farm prices per hectare in the Cacadu District range from between R2,000 to R7,000 per hectare, with prices being dependant on the factors indicated above. The majority of stock farms currently available on the market sell for approximately R4,000 per hectare and include suitable fencing, nearby ESKOM connection distribution points, and a reliable onsite water supply. Areas in Cacadu where suitable farms are currently available on the market include: Willowmore, Jansenville, Steytlerville and Graaff-Reinet.
Industry Associations
Figure 2 indicates the different associations that comprise the mohair industry in South Africa and Cacadu. Each of these associations has a clearly defined mandate and role to play in the industry. Their mandates are briefly described in Table 3.
Figure 2: Industry Associations
Table 3: Mohair Association Mandates
Source: Mohair SA Annual Report, 2008
The mohair industry is noted as being one of the most structured industries in South Africa with representative associations operating at each stage of the value chain. Overarching support by Mohair SA ensures that support to potential private and public sector investors is channeled efficiently to insure the necessary support is received. Contact details for the respective organisations will be found later in the report.
Land and Climatic Characteristics
Mohair producing goats and more specifically the popular Angora breed’s tolerance to extreme temperatures, hot or cold, is not as good as some other breeds making them susceptible to pneumonia. In terms of soil and land suitability, they are excellent foragers and can survive on land that may be unsuitable for other agricultural practices. This makes the majority of the Cacadu region extremely viable for the rearing of Angora goats as the region rarely experiences extreme weather conditions.
Infrastructure
Mohair growing is considered to be a low input farming practise with the most vital farming infrastructure being those of water and electricity. Although Angora goats are renowned for their ability to survive in relatively dry climates, they do require a constant source of water which makes boreholes and or dams to be imperative. Water is also required for dipping processes and initial washing of clips before transportation if required. Fencing and shelter are also key infrastructure requirements for mohair growers. Fencing insures the captivity of goats as well as security against vermin. Typically sized goat camps range in size from 1000 to 1500 hectares.
One shelter barn per camp ensures that stock having a place relief in times of severe weather. Each farm also requires a shed with a shearing facility that should provide for classing barrels and bins. In recent times, shearing is done by mohair broker teams and conducted twice per year in line with growing periods.
Road and/or rail linkages are also an important consideration for a mohair grower as the bulk of mohair in its unprocessed form is bought at auctions in Port Elizabeth.
Human Resources
In the Cacadu District the Mohair Trust is currently implementing a training initiative in Klipplaat with a proposed second to be established in Pearston. These seek to empower and build capacity of disadvantaged mohair farm managers and employees.
In and around the dominant mohair producing areas of Cacadu there is an abundance of labour available. Short training and mentoring programmes can ensure that local people are soon equipped with the basic skills necessary for the farming practises involved in mohair growing.
Mohair is regarded as a fairly labour intensive farming practise with approximately 6 full time workers required for an average sized mohair farm in Cacadu.
Expected Return on Investment
Since the potential exists within the industry for mohair production, the assumption made in 2005 for the expected rate of return is that a farm that holds 128 mature sheep can fetch R18 for each sheep that weighs approximately 4,8kg and 60 lambs that can yield R23 for each 1kg lamb. This amounts to R10, 828.80 and R1, 380.00 respectively.
21 old ewes generate R8, 505.00, 18 ewe lambs R5, 184.00; 43 hamels R14, 512.50; and 1 ram amounts to R360.00. This creates a total profit of R24, 785.30 once all costs have been taken care of. The outline for the capital costs is presented as Annexure 1, while a detailed breakdown of the enterprise budget can be seen in Annexure 2.
Key Constraints
§ Disease and high mortality rates, withthe expansion of game farming and game reserves in the Eastern Cape have resulted in the spread of diseases that affect goats. Goats must be dipped regularly to avoid catching diseases as angora goats are particularly sensitive to disease as well as weather conditions.
§ Stock theft is a particular challenge to small-scale farmers and has an impact on the profitability of farms.
§ Fluctuation in currency and situation in exports markets. The Eastern Cape mohair industry is highly dependent on international fashion trends and the fluctuations in the Rand exchange rate have a direct impact on the supply, demand and sales volumes of the domestic wool and mohair fibres.
§ The lack of skills in the area. This industry requires highly skilled farmers and workers and there is a lack of appropriate skills in the Eastern Cape.
§ The lack of beneficiation in the area. The majority of mohair exported out of the Province is greasy wool/mohair, which means that it has not been processed.
§ Intense international competition in wool production. Turkey, New Zealand and Australia pose strong competition to South Africa’s mohair production. The local focus should be on skills development in management, husbandry and wool production. Investment in research and development could pay off, as new technologies integrated in wool production will increase the yield and quality of produced fibres.
§ Influx of cheap imported goods. Rapidly increasing imports of cheap textile and clothing goods pose a serious competition for wool and mohair products, due to the fact that goods made of wool and mohair are more expensive.
Opportunities:
§ CapeWool has already initiated a number of projects to try and address this issue, which can largely be addressed by improved and increased training and skills development through mentoring, courses, etc.
§ There are limited processing facilities in the Eastern Cape and this could be an opportunity to capitalise on, through linkages between local producers, designers and manufacturers.
§ Mohair growing is considered to be a low capital investment.
Useful Contacts:
References:
Personal communication with Mohair SA, 2010
Personal communication with Growers Association, 2010
Angora Goat and Mohair Journal, 2009
EU, Value chain assessment of Mohair, 2006
Mohair SA Annual Report, 2008
Information Indemnity
§ All information contained within this profile was accurate at time of publishing.
§ The information contained within this report is intended only as an industry profile and does not assume to take the place of information contained within a business plan, pre-feasibility study or feasibility study.
§ The Cacadu District and service providers are not liable for any damages caused by the use of the information contained within this report.
§ The purpose of this profile is to both promote the area for investment and inform investors of relevant issues. It is advised that investors, who wish to pursue an investment within Cacadu DM, should use this profile as a basis to conduct further research.
Annexure 1
The following costs incurred and income received is based on a case example; which outlines the potential budget for a mohair enterprise. This functions to provide investors with broad categories of costs experienced, however further research in terms of feasibility studies and business plans will need to be carried out in order to determine the relevant costs and income according to the specific enterprise entered into.
Capital Costs
Capital expenditure required in setting up a farm includes:
§ Land (R2000 – R7000 per hectare)
§ Purchase of rams (R400- R600 each – 7 to 12 year life span)
§ Purchase of ewes (approximately R4000 each)
§ Water troughs
§ Fencing
§ Shearing barn
§ Equipment
§ Electricity supply
Annexure 2
Enterprise budget
Table 4 below outlines the 2005 enterprise budget for Mohair production.
Table 4: Mohair Enterprise Budget
Source: State of the Environment for Cacadu District Municipality, 2005
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