“We will all be stronger after this!” -
www.turftalk.co.za/newsletters/ttnews20180420a.pdf
VAN NIEKERK CALLS FOR INDUSTRY PERSEVERANCE
IT’s been a turbulent year for thoroughbred bloodstock vendors in South Africa. That ours is
presently a true buyers’ market was distinctly shown in the results posted by the Cape
Thoroughbred Sales Company (CTS) at their April Yearling Sale last week. As things happen in the world of instant social interaction, the sales results have been interpreted
in a number of ways, ranging from a general satisfaction
among buyers to mild shock and worry from
vendors to reality checks to predictions of doom
and gloom, especially concerning the future of CTS
as an independent bloodstock sales company.
In this exclusive eye-to-eye with Turf Talk’s Charl
Pretorius, CTS Chairman Chris van Niekerk asks the
racing community to look objectively at all the facts
before reaching their conclusions. He predicts that
the market will continue to favour buyers for just a
while, but that business may well swing back in
favour of vendors as soon as January 2019.
Van Niekerk, in his familiar calm, measured manner,
urges the South African racing and breeding industry
- bloodstock vendors in particular – to bite the
bullet with something akin to staunch perseverance.
It’s time for “Vasbyt”, he suggests. Let’s keep our
collective eye on the ball because things will
improve markedly, sooner than later.
***
As a founder member, Van Niekerk speaks with
great pride of CTS and firmly denies that the
company is “on its last legs”.
“We heard these rumours before the Cape Premier
Sale in January but they were not based on
anything but nasty sentiments after the Steinhoff
debacle. The sale went well, all our vendors were
paid.”
He points out that CTS had achieved a great deal in
its seven years of trading and serving the industry
and says: “You must remember that CTS was
established in 2011 because of theunhappiness with BloodStock SA, the way their
sales were conducted, the quality of their events
and their management problems.
“At the time there was a need for someone to step
in, it happened naturally because competition was
needed in the market. If there was no room for a
competitor CTS would not have started. From the
side of vendors, there was a call for something
new. That is how the first big Premier Yearling Sale
in the city centre at the Cape Convention Centre
came about.
“The sale, back then, was unique in the world. It
was staged in an unbelievable place. Prices were
very good, especially beneficial for the vendors who
sold their stock and survived, they made good
profits.”
Most importantly, Van Niekerk argues, the fact that
CTS entered the market as an innovative rival sales
company to Bloodstock SA made the TBA sit up and
take notice. “BSA needed to improve their own
operation as a result of pressure from CTS and
they’ve done that admirably. The most important
result of our rivalry is that they have raised their
game. Their improvement has been good for the
industry.”
We’re probably nowhere nearer the merging of the
two companies (or the forming of a new entity)
today than we were a year, or two, or five ago, but
Van Niekerk believes this is still a future possibility
and says: “Let’s face it, the South African
horseracing market is small market. If one looks at
it in depth, there is probably only room for one
racing operator. Similarly, we could have one bloodstock
sales company, though both can do good
business with continued, focused cooperation.
“We’ve structured our sales program at CTS for only
three sales a year – the Premier Yearling Sale, the
BLOODSTOCK SA: “Admirable improvements all round!”
April Sale and the Ready to Run Sale in November,
all with the kind of turnovers many businesses
would love to have. And remember that CTS own
50% of Kuda Insurance, a very good company in its
own right. We’ll welcome additional new
shareholders.”
Van Niekerk notes that he personally tried for a
period of time to get CTS and BSA together. “People
may not know this, but a single company is not new
from my point of view. I’ve always been in favour of
one sales company and I tried to achieve this but
for a variety of reasons it never happened. We
negotiated the issue for over 18 months but we
couldn’t pull it through.”
Have recent sales results brought CTS closer to
thinking about a merger again?
“No,” Van Niekerk says. “My sentiments
have not changed and let me be clear,
whether the bloodstock market is
buoyant or depressed like it is now,
nothing has changed for me. I remain in
favour of one sales company.
“If analysts are now saying that we are being forced
to combine with BSA as a result of a few below-par
sales results, they are wrong. I don’t see it that way
at all. A combining of forces should happen
regardless of what we’ve seen in recent market
results. At the least, we should have greater
cooperation between our two companies.”
CTS took the first steps to be co-operative in
everyone’s interest, Van Niekerk asserts. They
dropped the CTS April Premium Sale in
Johannesburg as well as the Ready To Run Sale last
held at Randjesfontein at the end of 2016. They
then combined the old CTS March sale with the old
April sale into a new April Yearling Sale, the one
staged last week.
“We took this initiative long before the Steinhoff issues came to light, not as a result of
those issues. We streamlined our operation in the
interest of the industry and moved out of
competition with BSA on the Highveld.
“Purely from a CTS perspective we eliminated the
additional costs of selling horses in Johannesburg.
At the last April sale, for example, we drained the
big swimming pool at Emperors Palace and we put
a deck over it, then a big marquee tent. This was
done at a huge expense to us.
“We cancelled our Johannesburg Ready To Run Sale
for cost issues, and because Mick Goss had scaled
down his operation at Summerhill Stud. He took the
breeze-up gallops back to his farm at Mooi River
and we supported him there.”
***
The racing community in South Africa
should take note of one vital aspect,
Van Niekerk contends. This year,
2018, is an “abnormal” year in the
history of South African bloodstock
sales.
He offers: “Let’s look at the hard facts. Over the last
year racing unexpectedly lost its two biggest
buyers, Markus Jooste of Mayfair Speculators and
the late Adriaan van Vuuren. Between them, they
were responsible for nearly R50-million worth of
horse sales in a single year, every year for a long
time. They are now gone.
“First, horses owned by Van Vuuren were added to
the market and shares were sold off. The Mayfair
horses followed and deals were being struck and
runners are still being sold, on a daily basis.
“For several months we’ve seen cash being spent
away from the big company sales and it is still
happening. Mayfair on its own released well over
200 horses into the market recently, maybe over
300, I am not sure. That’s the equivalent of an
extra sale altogether. We’ve never had as many
horses for sale at once, in the last 10 years!
“I chat to the buyers, the big ones and the smaller
THE CTS Cape Premier Yearling Sale set new standards in 2012. (Brent Abrahams).
ones, and I look at my own situation. Many of us
were involved in various partnerships with Mayfair
and we’ve had to buy back and sell off on a big
scale, which have impacted significantly on our
budgets available to support the official sales.
Everyone has had to cut back.
“We saw the first ramifications of this scenario at
the Premier Sale in January and further evidence of
budget constraints at the BSA Sale in March and
our own April Sale. I said after the CTS sale in
January and will say it again now, ‘We will only
know how good the CTS January sale was after
we’ve seen the results of next week’s National
Yearling Sale.
“My personal belief is that BSA will have a good
Select Session on Tuesday, but that the next two
days will be very tough for vendors, it will be a
buyers’ environment too.
“Look on the positive side. If you’re a small buyer
or a small trainer with just a few horses, now is the
time to buy. You won’t find a better time again.
Trainers who complain that they can’t get horses,
surely can acquire them now, there can’t be any
excuses.”
***
However tough things seem to be right now, the SA
breeding and racing industries can look forward to
brighter times, and they may not be too far off.
Van Niekerk believes that we are
closer to import and export protocol
agreements than we’ve ever been.
“Getting back into the European Union (EU)
depends on an audit to be performed here later this
year, probably in September, but South Africa could
be back in business by December, exporting horses
directly to Europe.
“In the meantime, we are having direct talks with
the likes of Hong Kong, Australia and Korea. Hong
Kong buyers are particularly keen to do business
with us. The Hong Kong Jockey Club attended our
Premier Sale in January for the first time ever and
they are coming to the National Sale too.” “Just imagine what will happen to the 2019 January
Sale if we get our protocol issues in order by
December. We will have a big breakthrough, we’ll
have an influx of international buyers and our
vendors will be smiling again.
“We will also see some of our smaller
vendors enjoy a change of fortune
because places like Korea and China
have a big demand for horses at the
lower scale, like the ones not sold at
last week’ April Yearling Sale. Sales
are bound to increase across the
board.”
Van Niekerk, Lee Scribante, Mike de Kock and
Adrian Todd last year established SA Equine Health
& Protocols (SAEHP), a non-profit company formed
as the implementation arm of the Import/Export
task team with the sole focus on enabling long-term
sustainable equine exports, on driving the many
years of negotiations and efforts over the line.
“We have used the profits of CTS to fund SAEHP
and we’ve had generous donations to help us,
people have stepped up to the plate to pay for preaudits
and also for risk assessments which was done
by Aushorse.
“We’ve employed dedicated staff consisting of
veterinarians and administrators to ensure we reach
our ultimate goal of resumption of direct trade with
the EU. Funds will also be needed when that goal
has been reached so that we can take care of what
will be the all-important function of ongoing
maintenance in regards to surveillance zones,
movement of horses and so on.”
***
That he’s been left to bear the public profile of
racing and shouldered with steadying the boat
following the departure of Markus Jooste is not
something Chris Van Niekerk will lay claim to. But
he’s the one person in racing even fierce opponents
of the so-called Jooste regime have respected
because he demands it. He’s the industry’s
gentleman, a man that’s easy to like, and one who
listens attentively before he responds.
He tells: “The hardest thing to deal with for me has
been the prevailing negativity. I look at the positive
in everything and working in this negative
atmosphere alongside my business interests outside
of racing has been frustrating.”
Personally, Van Niekerk remains fully committed to
the industry and he’s excited about his own racing
prospects. “There’s a thrill in going to a sale and
buying horses, especially when Sean (Tarry,
trainer), finds us the bargain buys.”
He is also over the moon with the good early start of
his former Durban July winner Pomodoro at stud.
“He upgrades his mares and his foals are racing
early, which we didn’t expect.”
A seasoned and hugely successful business
veteran, he notes: “What we’re seeing in racing
now is absolutely typical of what I’ve seen a dozen
times or more in my business career. We have
dealt with issues like these in the past, we’ve
helped businesses through bad cycles. It’s not new
to me, and it will be done successfully again.
“The good thing about scenarios like these is that
they make you look at your business with a critical
eye, how you do things. You come out stronger on
the other side.”
“It’s a time for Vasbyt!”
Van Niekerk has a few thoughts in closing. He asks
for a positive approach from the industry, joint
efforts and says: “Now is not the time for panic.
It’s a time for Vasbyt!”
