Planning for success
Tongaat Hulett believes in planning for success at every phase of the land usage cycle. David Jollands, director of Tongaat Hulett Developments, talks to Jayne Flannery about the contribution that land development makes to the value chain.
Tongaat Hulett has become one of South AfricaÔÇÖs leading agri-processing businesses through its ability to maximise value and returns to shareholders throughout every stage of the land usage cycle. Three commercial divisions operate within the framework of a highly integrated business model that aims to identify and release synergies between land management, agriculture and agri-processing and the eventual transition to property developmentÔÇöif and where appropriate and sustainable opportunities exist.
David Jollands, director of Tongaat Hulett Developments (THD), comments: ÔÇ£What makes this business special is the high level of integration and the synergies between the different elements of Tongaat Hulett, particularly between the sugar operation and the land development division. Our contribution to the overall performance of Tongaat Hulett is derived principally from sugar cane land that we convert for land development.
ÔÇ£The integrated manner in which the business operates means that future development potential is always evaluated when agricultural land is purchased,ÔÇØ he continues. ÔÇ£Meanwhile, the profitability of agricultural commodities plays a big role in influencing our development decisions. As a business, we always try to balance the operational requirements of our agricultural interests with the opportunities inherent in making the transition to property development.ÔÇØ
However, Jollands is keen to stress that THD does not actually build buildings. ÔÇ£We are land developers who provide a platform for development, but do not get involved in the actual bricks and mortar ourselves. We sell individual parcels to developers (or partner with investors) who are prepared to buy into our vision for the development and who are willing to build to our strict specifications. Our core competence lies in land development, not in the actual building and construction.ÔÇØ
To date, THD has achieved a formidable track record with some of the countryÔÇÖs most high profile developments. ÔÇ£All of these projects involve very large tracts of land that were originally farmed under the Tongaat Hulett sugar banner before being subsequently sold on to THD at armÔÇÖs length,ÔÇØ he explains.
THD has been the driving force behind a series of luxury residential developments in the Durban area, such as Zimbali, Mount Edgecombe, Ilala Ridge and Kindlewood. Most recently, there is involvement in two high profile, mixed-use urban developments at Umhlanga Ridge Town Centre and Bridge City.
Bridge City, for example, has been heralded as changing the face of KwaZulu-Natal. The project includes more than 150,000 square metres of retail space, including a 40,000 square metre regional shopping centre. Then there are some 400,000 square metres of commercial space and 4,500 residential apartments in a range of sizes and specifications.
Umhlanga Ridgeside is a similar flagship project which will transform Umhlanga, with a mix of residential, commercial and leisure developments. The complex is expected to attract a total of R8 billion to R10 billion in investment to the area and will generate 65,000 construction-related jobs at its height, in addition to permanent employment for some 16,000 people. 
THD is also the driving force behind the massive proposed Sibaya complex. This extends over 855 hectares of coastal land comprising pristine beach and forest conservation and recreation areas as well as resort and eco-tourism activities, with at least five boutique hotels.
Jollands points out that THD has been involved in many commercial and industrial projects. Although the Tongaat Hulett business has a high profile in the Durban area, it also has a presence in the wider South African Development Community. Tongaat Hulett has interests in Swaziland and Zimbabwe and also in Mozambique, where it has been a major force in developing the countryÔÇÖs sugar industry in partnership with the Government.
As a listed company on the Johannesburg Stock Exchange with a long and successful track record, Jollands believes that the quality of Tongaat HulettÔÇÖs financial credentials is a major attraction to potential partners. Some initiatives are developed on an independent basis, but increasingly the emphasis is on partnership working, particularly in association with local and regional government.
South Africa is attempting to offset the impact of the global financial downturn with a host of infrastructure improvement programmes; and Jollands believes that THD has much to offer as a partner. ÔÇ£We have the in-house competence to deliver projects to internationally benchmarked standards and our expertise takes in a very wide range of land uses,ÔÇØ he says.
Development only ever goes ahead after many complex assessments have been made. These extend far beyond a calculation of the financial return. ÔÇ£There are many major issues to assess in evaluating the socio-economic impact of taking the land out of food production for example,ÔÇØ Jollands explains.
Achieving long-term environmental sustainability is fundamental to all development projects, and as such, THD has adopted the 10 principles of One Planet Living, put forward by the BioRegional Development Group, an international think-tank. These principles stress devising local solutions to meet local requirements from renewable or waste sources. ÔÇ£We have been very involved with their resources in the UK and we are impressed by their work,ÔÇØ says Jollands. ÔÇ£It is often not possible to address all 10 principles at the same time, but we are very clear about the issues that matter to us and the strategies we can put in place to address them,ÔÇØ he comments.
Looking to the future, Jollands is keen to see Tongaat Hulett expand its agri-footprint in low cost regions. ÔÇ£That enhances the business case for everything else that we do,ÔÇØ he states.
One way of maximising synergies within the business, as well as meeting a host of environmental criteria, is the proposed plan to convert organic waste from downstream products like sugar cane by-products into bio-fuels and energy. The initiative is led by the sugar operation, but Jollands believes that a logical move for THD is to promote consumption from this clean and wholly renewable energy source. 
Meanwhile, he is prioritising local initiatives, such as the infrastructure improvements that will transform King Shaka International Airport into a major international transit point. ÔÇ£The Government has made a commitment to dramatically improve the infrastructure and we currently have 6,000 hectares of potentially developable land in this Durban growth corridor,ÔÇØ he explains. ÔÇ£We want to optimise the value of those land holdings in readiness for the ancillary services and industries that will be vital to the development of a successful airport.ÔÇØ
