 Those that don't know what CHIP does, please, could you maybe just explain to us what the company CHIP does? Yeah, thanks, Mbali. I can make it quite a long but I'll keep it short. CHIP is a global supply chain logistics company. Good evening, welcome to the Private Property Farming podcast. My name is Mbali Nwokor and thank you so much for joining us on today's episode 119, a 119th episode of the Farming podcast. Soon approaching 120 and hopefully in a few months we would be approaching episode 200. So it's been quite an incredible journey speaking to all the guests onto the show and having you at home ask questions around various topics that we've been having each week for the past couple of months. Today we're going to be speaking around trends in agriculture, sustainability, technology, artificial intelligence and we have Kharat Stander, who is the director of CHIP that's going to be in conversation with us this evening. So if you have any questions around trends in agriculture, any terminologies or methodologies that you're not quite sure of and that maybe you want to hear us talking about this evening, please feel free to comment on the chat or comment section wherever you may be watching us whether it's Facebook, Instagram Live or YouTube Live and we'll be happy to respond to some of your questions. But yeah, I think also continue to like, share and comment in each of our podcast episodes and if there's any topics that you would like us to explore and have a conversation around on the podcast please feel free to do so and send us a direct message on our social media channels whether it's Instagram, Facebook or YouTube. So let's get straight into it and also not forgetting Twitter. So let's get it straight into it and introduce our guest for this evening. His name is Kharat Stander from CHIP and he's the director at CHIP. Kharat, thank you so much for joining us. How are you doing? Hi there, I'm Bali and thanks and thanks for having me today and doing well. Thanks. Awesome. I was just saying off air that, you know, I know CHIP in a different light where, you know, as a farmer I use CHIP products. So this evening our topic is around trends in agriculture. But for those that don't know what CHIP does, please could you maybe just explain to us what the company CHIP does? Yeah, thanks and Bali, I can make it quite a long but I'll keep it short. CHIP is a global supply chain logistics company and in short we actually supplying a lot of supply chain logistics platforms to our customer base, mainly pallets. Pallets is our big product out there. And then there's also in the agriculture industry small crates and then also what we call bulk bins. We've been in South Africa for almost 40 years and we actually operate in a few countries in sub-Sahara Africa. Awesome. So now moving straight into our topic this evening, you know, technology is a huge player in the agricultural space and obviously agriculture or farming is quite an age old industry. And as the years have progressed we've obviously had to adapt whereas whether we're farmers or industry stakeholders like CHIP. So how has, based on your view, how has artificial intelligence, machine learning and technology shaped the way we see agriculture today? Yeah, thanks and Bali. In the farming and agriculture sector, artificial intelligence technology allows businesses to automate a variety of processes, free up employees' time and help improve productivity. AI can help farmers locate irrigation leaks, can't believe it actually, but optimize irrigation systems and measure the effectiveness of crop irrigation approaches. AI systems are helping to improve the overall harvest quality and also accuracy. Pre-arvesting machine learning is used to capture the parameters of soil, seed quality, pruning, genetic and environmental conditions and irrigation. Focusing on each component, it's important to minimize the overall losses in production as well. The agriculture industry is generating more data than ever at the moment on everything from the weather to logistics to market price volatility. Yeah, that's very true because with data that's where we make the insights right. And, you know, there's also another term called digital twinning. How does this allow producers to create value within the agri-sector? Yeah, a digital twin is a digital representation of a physical object, process or service. I know it sounds rather complicated, but digital twinning allows producers to create value by applying digital and analytical technologies to new business models and product offerings before launching them in the physical world. Using the data that they capture, agriculture players can build digital twins of their physical supply chains, virtual replicas that allow them to run simulations and find the most efficient ways of moving crops through the system. Digital twinning can also process this data to determine the most effective strategy for procurement, production, inventory, transportation and as well as point of sales. Businesses can model functions to optimize their operations and their profits. Logistics organizations such as ours are supporting this industry evolution through sophisticated tracking trace technology that also generates data and can further optimize supply chains for both efficiency as well as for sustainability. Yeah, you know, Gerard, I can't think of a competitor in this space. That is really competing with CHIP and I'm thinking as you explain this digital twinning model, my follow-up question was to say does CHIP currently make use of this model or this practice and how do you keep abreast of the various products that you're selling to the market because a lot of farmers consume your product, a lot of processes and retailers consume your product. How do you track where your product goes across all the different provinces? Yes, I mean, as I mentioned before, we're part of a global company so we try and make sure that we keep abreast of what's happening across the globe. So we are in the process at the moment to actually trial this through different projects, through our customer base, to make sure that we keep abreast and make sure that we are assets all. In the agriculture space we are actually busy with a very exciting tracking trace model to make sure, especially within certain provinces because mostly in the agriculture industry our asset stays within the different areas, mostly in the north as well as in the south, in the western Cape and the eastern Cape. So far it's very exciting at the moment that the whole space. You mentioned that you're a global company, obviously various sites across the world and having been in South Africa for quite some time as well and also just being dominating in the space. What's CHIP's secret to staying abreast of the supply chain and being a sustainable business year in year out? Yes, with organisations and individuals across the planet looking to embrace sustainability wherever they can, it has now become really almost non-negotiable that supply chains be built on sustainable principles. At CHIP we have been sustainably developing platforms for agriculture supply chains for decades throughout our share and reuse system of pallets, crates and been pooling. The next frontier for sustainability is to both regenerative back more into the environment that we take out. In our business we are making progress to achieve this vision through initiatives such as our vertical integration strategy whereby we plant two trees for every tree we use in the manufacture and repair of our pallets. We are actually very proud of that. The goal is to restore replenish and to create more value for society and the environment then the business takes out. This vision is articulated in our 2025 sustainability targets. Your product is mostly consumed in the first project space, let's say horticulture. From your experience, how have your customers, the customers, the people that you deal with within the first project space, how have they adapted to new consumer trends and requirements given the speed and rate in which we have to consume technology, adapt our businesses towards technology and be in this e-commerce space? So how has the fresh produce industry from your experience kept abreast of all the consumer trends and demands and also infusing e-commerce into their operations as well? Yeah, very good question. In the agriculture sector, fresh produce logistics require speed, like you've mentioned, reliability and availability of platforms that meet the specific needs of the product. We provide solutions based on our customers' needs. One such is the need to have visibility of their produce from farm to farm. Keeps track and trace solution allows for this whereby our customers are able to carefully monitor their products from the time it leaves the orchards to the backyards until they get into the fresh produce supply chain. Yeah, and CHEPS model also, obviously it's two ways, right? Your customers can own your product or rent the product. Where have you seen the demand from a CHEPS perspective? Yeah, sorry, Malia, I just need to mention that we're actually renting out on our products, so they never earn it. It's always the property of CHEPS. Oh, okay, because I think I've seen some bins that can be sold, but basically, so basically on the rental aspect, why was the rental option much better as opposed to ownership? Yes, increasingly producers are coming to accept that platform statistics is really a specialist competence and that there are real efficiencies and sustainability benefits to be gained from engaging organisations with the right equipment for their needs and the business model to manage it efficiently. A rental palette and container pooling model for instance offers lower, more transparent costs than having to purchase pallets or containers. CHEPS share and reuse model, like I've mentioned, means that pallets and containers are rented to customers and are returned to our service center across the country to be washed and reconditioned and there after put out into the supply chain again to be reused. The trend is increasing for growers, farmers and agri-processors alike to engage with specialist platforms, suppliers for their logistics needs so that they can focus on their own area of expertise producing the fruit that really feeds the world. Yeah, it seems like you've perfected this model around logistics and supply chain and especially being in fresh projects, we do deal with delicate products, short shelf lifespan, for example, I can also think of products like strawberries for example that are quite delicate, blueberries, how does CHEPS ensure that throughout the logistics and transportation or supply chain process, how does CHEPS ensure that with your product, how do you give that 100% guarantee to customers to ensure that by using CHEPS, the delicate produce or the delicate fresh produce could still be intact, especially transporting goods across various provinces, etc. Yeah, absolutely. Being a farmer yourself, you have realized that the importance of CHEPS. Increasingly resourceful logistics firms are producing platforms that can accommodate and protect delicate produce, you've mentioned blueberries, strawberries, I can add apples, bananas, peaches for example, which require reusable plastic containers, we call them RPCs that are robust but also flexible lightweight and well ventilated, which is so important. For the highest produce grades, sensors might also be installed to measure and report on the temperature, humidity and integrity of the produce throughout the journey from farm to farm. At CHEPS, we really proud ourselves on being able to cater to these kinds of requirements for our agriculture customers. We do this by of the unique requirements of each produce category, which can also be customized to cater to our customers' needs as required. Yeah, and in this industry, we always talk about sustainability. It's the buzzword sustainability at farm level, sustainability at processing level, sustainability at retail and distribution level, etc. How does CHEPS ensure their own sustainability levels within the agricultural sector? And what impact have you guys made for the number of years that you've been operating within South Africa? What impact have you made in the sector around sustainability? Yeah, and absolutely sustainability is definitely a buzzword at the moment. And CHEPS business model, which is a circular reuse model that I've mentioned, is inherently sustainable. Our large network involving 7 million pallets, 4 million crates, and about 500,000 bins available at 85 service centers across Sub-Saharan Africa makes a just-in-time system possible for optimal efficiency and the precise number of platforms required as and when they are required. I mean, using CHEPS platform means that our customers do not have to outlay capital to use their products. Pallets and containers are entered from us and returned to us. We then wash them, reconditioning the platforms and they are ready to be sent back into the supply chain again. This proves operationally feasible to many customers as they do not have to keep equipment which frees up the space in their backyards as well. Wow, you definitely sound like an expert in your industry and you've got quite vast knowledge around the agricultural industry and fresh produce and I think it speaks to the work that CHEPS has done throughout South Africa, especially in our agri-space. One last question, Gerard, that I just want to find out. There's a lot of concerns regarding to high prices around fuel fertilizers, farming is becoming more and more expensive. What's the discussions that you are having with a number of stakeholders that you interact with on a daily basis because I can only presume the more farmers grow, the more the need to have a business like CHEPS. What is your view on the South African outlook around agriculture? Are we going to be growing in the next couple of years to justify CHEPS existence or are you guys also just becoming concerned maybe with maybe a lot of imports that we're having now? There's farmers producing. What in your case or in your view do you see the outlook looking like for the next couple of years? Yeah, absolutely. I think we're all concerned. But I must be honest, the agricultural space is so exciting. If you just go out and you drive around and you just see the amount of trees that our growers are planting every day, every year, it's unbelievable. For me, that's very exciting. So I personally see a fantastic future for agriculture and we as CHEPS like to grow with the farmers out there. That's why we've made sure every year we spend an enormous kind of money in order to make sure that all those unplanted trees that they plant out there, that we have the equipment available to our growers and customers out there to actually move them throughout the supply chain. I think we've proved over the years that inside Africa we will overcome everything and we are concerned about the pricing. I mean, CHEPS will be there. We will try and make sure to absorb most of the cost that we do get. But in order to make sure that we have the equipment ready for our customers whenever they need them. Yeah, I must agree with that comment that we are South Africans, we overcome everything, we are a resilient nation. So it's quite positive to hear you being positive as well about the industry. But thank you so much, Gerard, for your time this evening. I thoroughly enjoyed our conversation and how you unpacked very difficult terminologies and jargon, which sometimes we don't ask ourselves, what exactly does that mean or how can I become sustainable? How can I ensure that my business exists tomorrow over and above all these challenges that we're faced with? But I think you were able to unpack that quite simply for us to understand. And yeah, all the best with your business is CHEPS. And let's hope more farmers can keep growing so that we could obviously have CHEPS in our operations. But thank you for your time this evening. Thanks a lot, Nbadi. It was really a pleasure and it was nice meeting you. Thanks. It's a pleasure. That was Gerard Standard, Director of CHEPS South Africa. And we were speaking about trends in agriculture. We spoke about AI, artificial intelligence, technology, e-commerce, supply chains and logistics and how the organization CHEPS as a company goes above and beyond just assisting other companies with their logistics and supply chain. Over and above the product that they're selling within the industry. And I think it was such a nice note to close off this conversation this evening where he expressed his positive outlook in terms of what he sees on the ground in the agri industry, farmers planting more trees, over and above the challenges that we're currently facing as farmers. And so I hope you enjoyed our chat this evening. And if you missed it, please go onto our YouTube channel. That's where you could catch this conversation. And keep supporting the farming podcast. And I'll see you next week with another interesting episode. Take care.