Vergenoegd Development Initiative

Thursday, December 15, 2005

The Vergenoegd Development Initiative

a draft proposal by

The Vergenoegd Development Initiative (Pty) Ltd

CONTENTS

PREAMBLE

THE PAST AND PRESENT

OUTLINE OF BUSINESS PLAN

· Vineyards and Wine Estate
· Protection of Agricultural Heritage
· Tourism and Hospitality Development Residential DevelopmentCommercial CentreIndustrial
· Nature Reserve

THE FARM AND LAND USE

THE SUSTAINABLE DEVELOPMENT INITIATIVE

§ The Nation's Trust

§ Habitat for Humanity

§ AIDS benefit organisation

§ Children's fund

CURRICULA VITAE OF EXECUTIVE DIRECTORS

CURRICULA VITAE OF NON EXECUTIVE DIRECTORS

DIAGRAM OF FARM AND POSSIBLE DEVELOPMENT FOOTPRINT







PREAMBLE

The Vergenoegd Development Initiative came about as a result of the combination of recognising a commercial opportunity to improve a poorly performing wine farm, and a need to respond to National and Provincial Government policy with respect to broad based black economic empowerment, job creation and the development of entry level housing.

This document envisions a development that will

o unlock the value in the currently undeveloped and unusable portion of the farmland
o to create over 4 000 jobs and more through our BBBEE partner, The Nation's Trust
o assist in meeting community needs for housing
o provide funding for amenities for local communities., e.g., an AIDS clinic and support for children's organisations.
o provide the necessary resources to refinance the wine farm
o deliver additional cash flow streams from tourism to the winemaking business
o construct housing for the employees of the wine farm

The delivery of the benefits will be by way of a Treasury Trust. The funding for the entire project is to be raised from the sale of residential properties and does not require any public funding.

THE PAST AND PRESENT

The historic wine farm Vergenoegd has been a landmark in the Helderberg region since 1696.

The wine farm has had notable success, and over the years, has produced many champion wines, winning prizes both here in South Africa and abroad. The well- known South African wine guide,” John Platter South African Wines” has rated the Vergenoegd wine at 4 1/2 stars in quality (ref. page 559 of the 2006 edition). At present the vineyard produces only red wines, but consideration is being given to the development of a new white wine range.

Wine farming is a notoriously cyclical activity, and for the past few years the present owners have been obliged to dispose of a substantial part of their land holdings, in order to maintain the business' viability. Clearly, the farm cannot go on selling land assets indefinitely to support the business.

This document serves as an outline business plan for the long-term sustainability of the farm. The plan conceived will stabilise the business by providing additional cash flow streams from tourism and thus ensure that the combined wine and tourism enterprise is subject to a less cyclical earning stream and a stable future.

Taking cognizance of National and Provincial Government policy, the proposal has been devised such that it unlocks the value in the currently undeveloped portion of the farmland. The benefits will flow not only to the business but will provide substantial job creation and socio-economic upliftment to the surrounding area and contribute to the economy of the Western Cape.

OUTLINE OF THE BUSINESS PLAN

The farm consists of several portions, the aggregate area of which is approximately 325 ha.

The Vergenoegd Development Initiative will provide funding for the following activities on this land.

VINEYARDS AND THE WINE ESTATE

The wine making activity uses approximately 80 ha of which only about 20 ha is required for the core business, the production of premium red wine. The remaining 60 ha produces bulk wine that is uneconomic.

Currently the farm is producing a range of red wine only. This range will be expanded to include white and rosé wines. Marketing resources will be applied to expanding the geographic distribution particularly in international markets.

The growth of the business will create jobs and add to the economic activity on the farm. The farm will retain about 220 ha of agricultural land and nature reserve.

PROTECTION OF AGRICULTURAL HERITAGE

The agricultural heritage of the farm will be protected in perpetuity. No development will be undertaken which is not required to protect the viability of the farm and meet the corporate social investment requirements of this project. It is fundamental that the wine farm enjoys protection from exploitation once the sustainable business plan has been implemented.

This will also provide security of the environment for the new property owners and preserve the amenity that they have bought into.

TOURISM AND HOSPITALITY DEVELOPMENT

A restaurant has been established. The restaurant’s income will be supplemented by the development of a business catering for meetings and events. This will enhance both food and wine sales particularly the home produced Vergenoegd wines. Restaurant trade will also enhance wine sales through consumption and retail sales. This will have the effect of making the current extent of vineyard plantings more economically viable and a platform for growth into the future.

A boutique hotel (approx. 60-80 rooms) located on the farm will add to tourism capacity and create employment in the region. The location of the estate near the junction of the N2 and the R310 is at the gateway to South Africa’s premier wine route and is thus well placed to offer a pleasant and convenient location to both local and particularly international tourists.

Both of the executive Directors have significant skills and experience in the local and international tourism business.

RESIDENTIAL DEVELOPMENT

In line with the latest thinking of residential development in the Winelands, the proposal is that three nodal villages be located on approximately 70 Ha of the farm, providing a range of quality housing in the commercial market.

It is envisaged that the housing architecture will be based on the Boland wine farm style. The concept will fit in comfortably with the architecture of the region.

It is this development that will be the funding “engine room” to meet the social and commercial benefits of the overall business plan.

COMMERCIAL AND RETAIL CENTRE

A small convenience retail centre will be required to provide facilities for the tourism market and the residential development.

INDUSTRIAL DEVELOPMENT

It is envisaged that a small site will be set aside on the south side of the N2 for much-needed industrial development and therefore job opportunities, adjacent to Khayelitsha.

NATURE RESERVE

There are areas on the farm which have been identified as having significant botanical importance. In addition to the plant life on the farm there are some areas of the farm which were formerly seasonal wetlands.

It is the intention of VDI that the areas of environmental significance will be protected.

Approximately 80 ha of the farm (about 25%) will be secured for nature reserve purposes.

THE FARM AND LAND USE

The farm soils at Vergenoegd are somewhat variable. The soil profile comprises the eastern edge of Cape flats sand and the more variable soils of the Helderberg mountain range.

At present the farm is growing vines on about 80 ha of land, a substantial portion of which, is uneconomic. The remaining 245 Ha of the land is unused.

The Vergenoegd Development Initiative requires the re-zoning of about 20% the farm area. The proposed development will provide funding for the tourism venture described above, re-invest and revitalise the wine farm business, and to make a major contribution to corporate social investment, in particular, job creation and housing development.

80% of the land will be retained for farming purposes and nature reserve.

THE SUSTAINABLE DEVELOPMENT INITIATIVE (SDI)

It is intended to create a Treasury Trust to administer the financial contributions made by the Vergenoegd Development Initiative for the purposes of corporate social investment.

Subject to the input of the various interested and affected parties, this project should contribute approximately 5% of the revenue received from the sale of residential land to the SDI.

It is also envisaged that a sustainable income flow will be set up from this development in order that the SDI may continue its work indefinitely. This is in line with current thinking on sustainable development initiatives set up for the public benefit. It is proposed that 1% of the proceeds of each subsequent sale of property will be gifted to the SDI.

The beneficiaries of the SDI shall, inter alia, be as follows:


THE NATION'S TRUST

The Nation’s Trust, who is our BBBEE partner in the Vergenoegd Development Initiative.

The Nation's Trust is an organisation which promotes the development of entrepreneurship in young people and to provide them, as far as possible, with the necessary skills, resources and facilities to create viable and sustainable businesses and employment opportunities for the future.

The principles of the Nation's Trust closely align with the views and principles of the developers, and this union of like-minded individuals, we believe, is a powerful asset which is necessary to bring this development to successful fulfilment.

This integrated development, if the zoning is granted, will make it possible to provide capital to assist the Nation's Trust in its good works.

This contribution will be the driver to create several thousand jobs.

The patrons of the Nation's Trust are Mr Nelson R Mandela, Mrs Zanele M Mbeki, her Majesty Queen Elizabeth II of Great Britain and His Royal Highness, Charles, Prince of Wales.

HABITAT FOR HUMANITY

It is a clear objective of VDI to contribute directly to the delivery of entry level housing for local communities. Habitat have committed to us that they will deliver housing on our behalf with the funding received from the Treasury Trust.

AMENITIES FOR LOCAL COMMUNITIES

The SDI will identify suitable organisations who will also benefit from VDI. For example a local AIDS clinic and a suitable children's fund.


CURRICULA VITAE OF THE EXECUTIVE DIRECTORS.

Roderick Campbell Simpson MacPhail

Academic and Professional qualifications:

BSc (Civil engineering) University of Strathclyde (1973)
Member of the South African Institution of Civil Engineers (1976)
registered as a Professional Engineer in terms Act 81 of 1968 (1976)
Diploma in Financial Management (1982)
Certificate in Labour Law UCT (2004)

Rod has design and construction experience, both in South Africa and in the UK. His experience extends to the design and construction of townships services including roads, sewerage systems, water supply systems and the like.

Having spent several years in consulting engineers' design offices, he gained extensive experience in the design of bridges and other structures, including dams and retaining walls.

In the mid-80s, Rod held the post of National Sales Manager (capital equipment) for a major packaging equipment supplier in Cape Town. During that period the principal customers were from the wine industry, who were supplied with packaging equipment and materials by the business. Rod developed his interest in wine at that stage, and he holds a certificate in wine tasting.

During the late 80's and early 90's he was managing director of a specialist concrete repair company in the UK.

During the past five years he has, together with his partner Andy Miles, been successful in developing residential property in Cape Town.

Rod was a founding shareholder and former director in the development of the Dreamworld Film City, a R400 million integrated film studio and residential development for Cape Town.

In 1993, he started a guest house in Tamboerskloof. This 12 bedroom luxury development has been very successful, and he has now opened a new luxury guesthouse in Langebaan. This business has afforded him the opportunity to make high level business connections within the international travel industry.

Andrew John Miles

Academic qualifications:

BSc (Hons) Mechanical Engineering
Master of Business Administration (UCT)

Andy has 30 years business experience in his own businesses and in major corporations in general management in South Africa. He has held both Managing Director and Marketing Director positions.

The positions he has held have included Marketing Director of the AA when he was principally responsible for the recognition of the economic value of the AA brand, and its subsequent commercial exploitation.

As Managing Director of Springbok Atlas, the largest inbound tour operator in South Africa, he was responsible for the turnaround of the business, and developed excellent connections within the international travel industry.

During the past five years, he has, together with his partner Rod MacPhail, been successful in developing residential property in Cape Town.

Andy was a founding shareholder and former director in the development of the Dreamworld Film City, a R400 million integrated film studio and residential development for Cape Town.

Contact details

Rod MacPhail 083 303 1133 fax 021 438 3486 email: rod@leeuwenvoet.co.za

Andy Miles 082 569 4708 fax 021 438 2697 e-mail: andymiles@mweb.co.za

Postal address 20 Ingleside Rd, Camps Bay, 8005


CURRICULA VITAE OF THE NON EXECUTIVE DIRECTORS (designate)

Ashley du Plooy (Chairman VDI) (BEE Director)

Born in Cape Town, he matriculated from this Spes Bona secondary school in 1981 and continued his studies at the University of Cape Town where he undertook two years work in the furtherance of a bachelor of arts degree in 1983 and 1984.

He set aside his studies in 1984 owing to the intense political upheavals in the Western Cape at that time. During this period he held various activist leadership roles in student, youth, civic and political structures.

His work in socio-economic development has included leadership roles in UCT's Southern Africa Labour and Development Research Unit, the Africa Research Centre and the Sashed Trust.

The scope of his work has been in socio-economic profiling in the townships, inquiring into poverty, wage and service conditions, key legislation on labour and Parliamentary debates thereon, early childhood learning, language policy, anti-racist and anti-sexist programs, development funding, sports transformation, children's rights, corporate development, sanctions, local government and political works.

During the scope of his work he has contributed to numerous publications in his fields of interest as well as in the production and distribution of pamphlets.

He has also consulted to a number of organisations which include, inter alia, the South African Institute for distance learning, the Apex Advisory Board, the Swiss Development Corporation, National Department of Education, USAID, adult learning, Basic education and development foundation, and the National Association of Distance Learning Organisations of Southern Africa.

He has held principal positions in a number of organisations but latterly as managing director of the Nation's Trust. The Nations Trust is a youth economic empowerment programme which he was CEO until March 2006 when the trust merged with The Umsobomvu Youth Fund. His appointment is as market linkages director for the new enlarged group.

Sandra Anne Benting (BEE Director)

A matriculant of the South Peninsula Senior Secondary School, Sandie started her career in banking where she gained experience with the Standard Bank, United Bank and Allied Bank. Her career in banking spans 11 years with the final period of a career in banking as a loans consultant for residential mortgages.

For a period of three years is she then pursued a career as a residential estate agent and became the top selling agent in her area.

For the last nine years Sandie has been self-employed with her own construction company and as a developer and project manager of residential houses in Paarl, Wellington, Klapmuts, the Blouberg area and Parklands.








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