Hans Merensky CFO Rian du Toit on managing the demands of a multi-continental role
Rian moved his family to the UK after the necessary travel became increasingly taxing on his family life.
Rian du Toit is the CFO of Hans Merensky Holdings, the “renewable bio-resource company” based in Parktown. The company wholly owns its subsidiaries Merensky Timber and Westfalia Fruit, one of the leading suppliers of avocados and other fresh fruit (but mostly avocados) around the world.
While the head office is based in South Africa, HMH’s offshore operations have grown to such an extent that 90 percent of its business now takes place outside of the country. This meant that, in his role as CFO, Rian was having to travel frequently on long-haul flights to international destinations like London and Santiago. The travel situation was, he says, becoming “impossible”.
“We have operations on four continents – Africa, Europe, South America and North America. To get to LA can take over 36 hours from Johannesburg,” he says.
There were times Rian’s primary-school-age children didn’t see him for two weeks out of every month. It soon became obvious that a relocation to the United Kingdom was necessary. “My family was the key reason for the move; I wanted to have a proper family life with my wife and children. So I needed to be in a place where I could fly anywhere on one of four continents within 12 hours.”
The company has its UK offices in Kent, so it was easy enough to continue running the finances from this location. HMH CEO Claus Lippert remained in Johannesburg but had a second office in Kent.
While the move was made for the right reasons, Rian says that it was challenging for the family initially, but after a few months they all found their groove.
“Now everyone’s adapted. I’ve learnt throughout my life that when you move between communities, it’s best to integrate very quickly into that local community. So we have lots of English friends – even though the second most commonly spoken language in our Sevenoaks neighbourhood is Afrikaans!”
While Rian still travels for one or two weeks in every month, the significant difference is the travelling time. “In South Africa, the travelling time has to include weekends. If I needed to be in South America, I had to leave on Saturday morning in order to be in time for a Monday morning meeting, but from London, I can get on a plane on Sunday night and still make a Monday morning meeting.”
Regardless of the point of origin for travel, he says that this kind of multi-continental work requires a very strong team. “They need to understand all the regulations and be able to deal with the complexities in different environments.”
While too much travel can be a bad thing, Rian says that he genuinely enjoys the opportunities it affords him to interact with different people and different nationalities.
“I enjoy other cultures and am open to cultural differences. You have to be constantly aware of these differences when doing business. While the UK may be similar to South Africa, the USA is quite different and South America even more so. You have to actively sell yourself or you’ll fade into obscurity. In South Africa and Europe, you prove who you are through your results. In America, it’s how well you sell yourself upfront.”
A global demand for avocados
The need for all this international travel is premised on Westfalia’s global expansion on the back of the international avo boom. The organisation is 70 years old this year. Its founder Dr Hans Merensky was the geologist who discovered the largest platinum reef in the world right here in South Africa, known as the Merensky Reef.
His other discoveries included South Africa’s deep gold deposits, and diamonds on the West Coast, as well as phosphate in the Phalaborwa region. Towards the end of his life, as he was in semi-retirement, he purchased a farm near Tzaneen and called it Westfalia. His intention was to experiment there with timber sustainability, because the timber going into the South African mines was coming from rainforests. He also experimented with avocado growing, planting the seed for the massive agricultural industry in which HMH subsidiary Westfalia Fruit operates today.
Shortly before his death, Dr Merensky created the Hans Merensky Trust, which was supposed to run for 25 years, mainly to oversee the production of eucalyptus poles for the mining industry. As the trust approached its end, there were still too many activities taking place in its business interests, so the trustees decided to convert it into a foundation, which is still the largest shareholder of the HMH Group today.
In 1999 – a time when the SA government was privatising its forestry assets – the IDC offered HMH its support, with the organisation benefitting not only from the IDC’s shareholding but also from the new assets it was able to acquire.
“That’s when the company really started growing,” says Rian. “The current CEO joined in 2003. He was put in charge of the Westfalia division. Looking at it strategically at that stage, he saw a gap for us to become our own agents for the sale of avocados directly to supermarkets.”
Westfalia created a company in the Netherlands in 2004 and, three years later, bought a company in France. Then in 2009, a company in the UK was acquired. “With these three operations, we started building our avocado-marketing experience in Europe, so that we are now responsible for the entire value chain, all the way from the research and development to the supermarket shelf.”
Westfalia runs the largest privately-funded avocado research institute in the world. “We sell a variety of IP-protected plant materials all over the world, from rootstocks and nursery trees to many fruit cultivars that grow on these trees.”
The company has developed rootstocks that are resistant to phytophthora, a disease that tends to attack the roots of avocado trees. Other varieties can be grafted onto these rootstocks, making it possible to grow different types of avocados on the disease-resistant base.
“We produce around half a million trees a year in South Africa, and interestingly, we estimate that around 60 percent of the avocado trees in California now grow on our rootstock,” says Rian.
Another innovation presented by the Westfalia Fruit Group is the GEM® avocado, a dark-skinned cultivar like Hass which features distinctive golden lenticels on its skin when ripe. GEM® avocados grow more on the inside of the tree, behind a shielding wall of leaves, than on the outside like other avo varietals. This provides better yields and product quality as the fruit is more protected from sun and hail damage. What’s more, because GEM® avocados can be harvested later in the season, they extend the avocado season in the markets in which they are sold.
“Last year we supplied Woolworths with avocados for 12 months of the year without having to import a single fruit from Spain, thanks to GEM®,” says Rian.
And that’s just in South Africa. Most of the major retailers in the UK and Europe are supplied by Westfalia Fruit operations, including Tesco, Waitrose, Aldi and Carrefour.
“Because we managed to be so successful in Europe, it provided us with the base to invest elsewhere in the world, so we started investing in orchards in South America. We were the first people to commercially export fruit from Colombia into North America and Europe. We also own orchards in Chile, but not yet in Peru, which is the second largest avo-growing country in the world – although we do have procurement offices there. At some stage we will invest in orchards there.”
Mexico is another key supply area, and Westfalia owns the second biggest packhouse in that country. Mexico provides almost 85 percent of the avocados consumed in the United States.
“That’s how we’ve grown,” says Rian. “From one farm in the middle of rural Limpopo to being one of the world’s leading avocado companies.”
HMH has been a pioneer in the field of sustainability. According to Rian, over seven decades ago Dr Hans Merensky was already talking about what most companies today are still trying to achieve. He wanted to work with communities and to treat people fairly. “It’s nice to work in a company where these principles are fundamentally a part of our DNA,” says Rian. “And our largest shareholder, the Hans Merensky Foundation, is actively involved in making sure these values are embedded in all we do.”
The company website states:
“As an ardent conservationist, humanitarian and visionary he [Merensky] was passionate about sustainability long before it became fashionable, and to this date the Foundation he made possible has continued to promote and assist in the sustainable development of the natural resources of South Africa and to promote research into sustainable agricultural practices.
“As the current custodian of these and other assets, HMH works tirelessly to make the founder’s dream a reality, developing innovations ranging from disease-resistant rootstocks and micro-irrigation systems to food-wastage solutions and eco-friendly alternatives to plastic packaging.”
Rian has been with the company for 17 years, having moved there from PwC where he completed his articles and then spent more seven years. One of the reasons behind his long, committed tenure at HMH is his belief in the culture of sustainability at the business.
“It’s not as if we have to try to convince our stakeholders that we need to change because the world is demanding it of us. We are already there.”