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The Growing of Cereals and Other Crops in South Africa

Growing of Cereals and Other Crops in South Africa 2023

Gary Phillips | South Africa | 10 November 2023

Growing of Cereals and Other Crops in South Africa 2022

Pila Rulashe | South Africa | 20 December 2022

Growing of Cereals and Other Crops 2018

Yasmin Mahomedy | South Africa | 24 October 2018

Growing of Cereals and Other Crops 2017

Yasmin Mahomedy | South Africa | 06 February 2017

Growing of Cereals and Other Crops 2015

Yasmin Mahomedy | South Africa | 30 March 2015

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Report Coverage

This report on growing cereals and other related crops includes information on cereal grains such as maize, wheat, soya beans, dry beans, sorghum, oilseeds, barley, oats and hemp. It includes information on where crops are grown, the size of the industry in terms of revenue and production, state of the industry, notable players, trade, technology and innovation, input costs and the industry’s outlook. There are profiles of 20 companies including grower associations such as Grain South Africa and SA Canegrowers, agricultural companies such as AFGRI, BKB, Kaap Agri and Senwes, and hemp industry players such as Afrimat Hemp and Hemp Africa SA.

Introduction

• South Africa’s cereals and related crops industry has enjoyed three strong production years, underpinned by favourable weather conditions and high international producer prices. \r\n
• Several global crises caused sharp rises in grain and oilseed prices, driving the value of South African crops higher at a time of record production volumes. \r\n
• Oilseed production has been strengthened by processing investments, particularly in soya beans, leading to import substitution. \r\n
• Drier summers ahead will likely favour sunflower seeds and soya beans. \r\n
• As international prices decline and the weather becomes less favourable, grain producers face numerous challenges from the economic and political climate, particularly the electricity crisis and poorly-performing ports.

Trends

• Debt reduction and improved cashflow.
• Increased demand from the animal feed industry.
• New regulations for commercialisation of hemp led to uptake of hemp farming.
• Reducing consumer buying power is leading to increased demand for cereals.
• Significant investments in oilseed crushing, caking, and refining leading to rapid import substitution.
• Summer crops have attained record production levels over three wet seasons at a time of high international commodity prices, resulting in improved profitability.
• Winter grains have benefited from improved yields and higher producer prices.

Opportunities

•  Digital transformation can improve efficiencies and reduce operating costs.
• Development of a local industrial hemp value chain.
• Export markets, particularly Asia.
• Growth potential of canola, preferred by consumers for its health qualities.
• Improved profitability and liquidity can help improve resilience.
• Increased local production of oilseeds.
• Increased malt barley production to meet the demand of a new SA Breweries malt processing plant.
• Increased trade with the rest of continent through the African Continental Free Trade Area.

Challenges

• Drier summer seasons and possibly drought is anticipated, affecting the outlook for summer grains.
• Poor economy.

Outlook

• Cereal producers are in the throes of a fourth boom season after higher-than-average rains, the introduction of new seed varieties, and sustained high international commodity prices. \r\n
• Disruptions to grain and oilseed supply from the Black Sea region seem to have stabilised while improved weather conditions in the United States and Brazil have led to increased global stocks of summer and winter cereals, which will put downward pressure on producer prices. \r\n
• The impact of worsening growing conditions and reducing producer prices is expected to be exacerbated by sticky input costs. \r\n
• Grain and oilseed producers are well-capitalised and may invest in improved yield to mitigate against margin pressure. \r\n
• Drier summers will favour oilseed production.

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Growing of Cereals and Other Crops in South Africa
Growing of Cereals and Other Crops in South Africa 2023

Full Report

R 20 000.00(ZAR) estimated $1114.16 (USD)*

Industry Landscape

R 14 000.00(ZAR) estimated $ 779.91 (USD)*

Industry Organograms

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Growing of Cereals and Other Crops in South Africa 2022-12-20

R 9 500.00(ZAR) estimated $529.23 (USD)*

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Growing of Cereals and Other Crops 2018-10-24

R 1 900.00(ZAR) estimated $105.85 (USD)*

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Growing of Cereals and Other Crops 2017-02-06

R 1 900.00(ZAR) estimated $105.85 (USD)*

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Growing of Cereals and Other Crops 2015-03-30

R 1 900.00(ZAR) estimated $105.85 (USD)*

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Table of Contents

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PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 4
2.2. Geographic Position 6
2.3. Size of the Industry 9
3. LOCAL 12
3.1. State of the Industry 12
3.2. Key Trends 25
3.3. Key Issues 26
3.4. Notable Players 26
3.5. Trade 30
3.6. Regulations 34
3.7. Enterprise Development and Social Development 36
4. AFRICA 38
5. INTERNATIONAL 41
6. INFLUENCING FACTORS 44
6.1. Unforeseen Events 44
6.2. Economic Environment 45
6.3. Labour 46
6.4. Environmental Issues 49
6.5. Technology, R&D, Innovation 50
6.6. Government Support 51
6.7. Input Costs 52
7. COMPETITIVE ENVIRONMENT 55
7.1. Competition 55
7.2. Ownership Structure of the Industry 55
7.3. Barriers to Entry 56
8. INDUSTRY SUMMARY 57
9. OUTLOOK 58
10. INDUSTRY ASSOCIATIONS 58
11. REFERENCES 58
11.1. Publications 58
11.2. Websites 58
APPENDIX 1 59
Summary of Notable Players 59
COMPANY PROFILES 64
AFGRI Agri Services (Pty) Ltd 64
Afrimat Hemp (Pty) Ltd 68
BKB Ltd 69
Dry Bean Producers\' Organisation 74
Grain South Africa 76
Griekwaland Wes Korporatief Ltd 78
Hemp Africa SA (Pty) Ltd 83
Hemp Vest Africa (Pty) Ltd 85
Hemporium (Pty) Ltd 86
Kaap Agri Bedryf Ltd 88
NWK Ltd 91
Oos Vrystaat Kaap Bedryf Ltd 95
Overberg Agri Bedrywe (Pty) Ltd 100
Sentraal-Suid Kooperasie Beperk Primary Co-Operative Ltd 103
Senwes Ltd 107
Silostrat (Pty) Ltd 122
South African Breweries Maltings (Pty) Ltd (The) 124
South African Cane Growers Association NPC 125
TWK Agri (Pty) Ltd 127
VKB Beleggings (Pty) Ltd 132

Introduction

• Good rainfall and favourable conditions led to a near record maize crop in 2020, which moderated in 2021. \r\n
• Soyabean and sunflower crop volumes grew while groundnuts, sorghum and dry beans declined. \r\n
• Winter crops, including wheat, increased. \r\n
• Good production occurred at the same time as an increase in selected agricultural commodity prices, leading to a rise in gross income and an improvement in the country’s trade balance. \r\n
• Maize and wheat are especially important as they are staple foods and contribute to food security. \r\n
• Higher revenues from increases in producer prices may help absorb the impact of rising input costs of fuel, fertilisers and agrochemicals. \r\n
• The local agricultural sector faces challenges of inconsistent energy supply, increasing administered prices, upward inflationary pressures and interest rate hikes and decaying infrastructure including road and rail for transport as well as uncompetitive port operations.

Strengths

• Agriculture and Agro-Processing Master Plan signed in May 2022.
• Diversity of agricultural products and no dependence on any one agricultural product.
• Diversity of regional climates enabling year-round and wide variety of crops including all the major grains (except rice), oilseeds, fruit, sugar, wine, and most vegetables.
• Research and development through agricultural research institutions.
• Surplus maize production capacity provides food security.
• World class primary producers and agri processing and manufacturing sector.

Weaknesses

• Deteriorating rural infrastructure increases cost of production and threatens employment.
• Distance to export markets renders local producers uncompetitive.
• High barriers to entry and limited opportunities for black farmers.
• Opportunities
• Unreliability and limited capacity of Transnet rail network and port infrastructure.
• Unsuitable conditions to produce sufficient volumes of wheat is a risk to food security.

Opportunities

• Growing small and micro black farmers can add more productive capacity.
• Growth potential in Asia, although this requires trade agreements like Chile and Australia already have with these markets.
• Increased trade with rest of continent with the signing of the African Continental Free Trade Area.
• Opportunity to increase solar generated power on farmland.
• Threats

Threats

• Dependence on wheat imports increasing the vulnerability to food insecurity.
• Energy uncertainty.
• Increasing frequency of climate change induced extreme weather events such as floods and droughts increases risk to crop sustainability
• Land reform policy uncertainty.
• Poor road and rail infrastructure.
• Uneven competitive landscape due to government subsidies in other countries that make local products relatively expensive.

Outlook

• Rising fuel costs, the war and sanctions on Russia and ongoing port challenges will keep up significant pressure on agricultural inputs. \r\n
• The outlook will be shaped by global and local macroeconomic conditions, socio-political stability, climate change and poor infrastructure which poses challenges to supply chains and logistics. \r\n
• The gain from higher commodity prices is likely to be tempered by higher input costs, particularly fertiliser as Russia is the world’s leading exporter of fertiliser materials. \r\n
• The success of the cereals and other crops subsector depends on a supporting infrastructure of roads, water, energy, rail, ports and communications. \r\n
• Clarity around and effective implementation of land reform will add to certainty and enable investment.

Growing of Cereals and Other Crops in South Africa
Growing of Cereals and Other Crops in South Africa 2022

Full Report

R 9 500.00(ZAR) estimated $529.23 (USD)*

Historical Reports

Growing of Cereals and Other Crops in South Africa 2023-11-10

R 20 000.00(ZAR) estimated $1114.16 (USD)*

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Growing of Cereals and Other Crops 2018-10-24

R 1 900.00(ZAR) estimated $105.85 (USD)*

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Growing of Cereals and Other Crops 2017-02-06

R 1 900.00(ZAR) estimated $105.85 (USD)*

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Growing of Cereals and Other Crops 2015-03-30

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Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 2
2.1. Industry Value Chain 4
2.2. Geographic Position 7
2.3. Size of the Industry 12
2.4. Key Success Factors and Pain Points 15
3. LOCAL 16
3.1. State of the Industry 16
3.2. Key Trends 24
3.3. Notable Players 25
3.4. Trade 29
3.5. Corporate Actions 35
3.6. Regulations 36
3.7. Enterprise Development and Social Economic Development 37
4. AFRICA 39
5. INTERNATIONAL 42
6. INFLUENCING FACTORS 50
6.1. COVID-19 50
6.2. Economic Environment 51
6.3. Labour 52
6.4. Environmental Issues 54
6.5. Technology, Research and Development (R&D) and Innovation 55
6.6. Government Support 56
6.7. Input Costs 57
6.8. Access to finance 58
7. COMPETITIVE ENVIRONMENT 59
7.1. Competition 59
7.2. Ownership Structure of the Industry 59
7.3. Barriers to Entry 60
8. SWOT ANALYSIS 61
9. OUTLOOK 62
10. INDUSTRY ASSOCIATIONS 63
11. REFERENCES 63
11.1. Publications 63
11.2. Websites 65

Introduction

This report focuses on growing of cereals and other crops in South Africa. These include maize, wheat, sugar cane, sunflower seeds, cotton and tobacco. The country’s agricultural sector contributes about 2.5% to gross domestic product (GDP) and gross farming income obtained from all agricultural products increased by 10.2% and was estimated at about R267bn for the year ended 30 June 2017 compared to about R242bn the previous year. The number of commercial farmers in South Africa continues to decline mainly due to dwindling farming profitability and policy uncertainty regarding expropriation of land with compensation.

Strengths

• South Africa has a well-developed grain industry and its sugar cane industry is the largest in Africa.
• The country is normally an exporter of maize.

Weaknesses

• Many small-scale farmers lack the necessary skills to farm profitably and despite support programmes for black farmers, comprehensive effective support is lacking.
• Sector is unattractive to young people.
• South Africa is a net importer of wheat.
• There are high input costs.
• Uncertainty of production because of erratic climate.

Opportunities

• Growth in tobacco sector to provide biofuel.

Threats

• Changes in land reform legislation and the imposition of a sugar tax.
• Cheaper imports.
• Climate change.
• Fewer students studying agriculture.

Outlook

The outlook for South Africa’s grains and oilseeds sector is expected to be challenging. With the country in a recession, farmers struggling to remain profitable amidst rising input costs, and policy uncertainty with regard to land expropriation, the sector could see more farmers deciding to stop investing in their farms or abandoning farming altogether. In August 2018, deputy president David Mabuza appealed to farmers to continue farming and investing in their farms, as well as to increase production, “without fear of any disruption from land reform.” However, according to Theo Boshoff Agbiz’s manager of legal intelligence, “uncertainty around land reform is likely to lead to a decline in the productivity of the agricultural sector.”\r\n

Growing of Cereals and Other Crops
Growing of Cereals and Other Crops 2018

Full Report

R 1 900.00(ZAR) estimated $105.85 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 74.09 (USD)*

Historical Reports

Growing of Cereals and Other Crops in South Africa 2023-11-10

R 20 000.00(ZAR) estimated $1114.16 (USD)*

View Report Add to Cart

Growing of Cereals and Other Crops in South Africa 2022-12-20

R 9 500.00(ZAR) estimated $529.23 (USD)*

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Growing of Cereals and Other Crops 2017-02-06

R 1 900.00(ZAR) estimated $105.85 (USD)*

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Growing of Cereals and Other Crops 2015-03-30

R 1 900.00(ZAR) estimated $105.85 (USD)*

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Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 6
4. STATE OF THE INDUSTRY 8
4.1. Local 8
4.1.1. Trade 13
4.1.2. Regulations 15
4.1.3. Enterprise Development and Social Economic Development 17
4.2. Continental 19
4.3. International 21
5. INFLUENCING FACTORS 22
5.1. Government Intervention and Land Reform 22
5.2. Economic Environment 23
5.3. Rising Operating Costs 24
5.4. Technology, Research and Development (R&D) and Innovation 24
5.5. Labour 27
5.6. Environmental Concerns 29
6. COMPETITION 30
6.1. Barriers to Entry 30
7. SWOT ANALYSIS 31
8. OUTLOOK 31
9. INDUSTRY ASSOCIATIONS 32
10. REFERENCES 33
10.1. Publications 33
10.2. Websites 33

Report Coverage

The Growing of Cereals and Other Crops in South Africa describes current conditions, commercial production predicted for 2017 and legislative developments. Factors that influence the success of the sector are also covered, and include the current Fall Armyworm infestation that destroyed crops in Zambia, Malawi and Zimbabwe, and that has been identified as the cause of damage to yellow maize and maize planted for seed production in Limpopo and North West.

Introduction

This report focuses on the growing of cereals and other crops in South Africa. These include maize, wheat, sugar cane, sunflower seeds, cotton and tobacco. The country’s agricultural sector contributes about 2.5% to GDP and net farming income reached R73.414bn at the end of 2015. According to Agri SA there are approximately 35,000 commercial farmers, 250,000 small-scale farmers and 2.5 million subsistence farmers. The number of commercial farmers in South Africa continues to decline mainly due to dwindling farming profitability, water scarcity and uncertainty regarding land reform. The severe drought during 2016 resulted in tighter maize supplies and maize imports are expected to be more than 3 million tons in 2016/17, which is more than double the imports during 2015.

Strengths

• South Africa has a well-developed grain industry and its sugar cane industry is the largest in Africa.
• The country is normally an exporter of maize.

Weaknesses

• Many small-scale farmers lack the necessary skills to farm profitably and despite support programmes for Black farmers, comprehensive effective support is lacking.
• Sector is unattractive to young people.
• South Africa is a net importer of wheat.
• There are high input costs.
• Uncertainty of production because of erratic climate.

Opportunities

• Growth in tobacco sector to provide biofuel.

Threats

• Cheaper imports.
• Climate change.
• Destruction of crops due to the Fall Armyworm infestation.
• Fewer students studying agriculture.
• Possible changes in land reform legislation and the imposition of a sugar tax.

Outlook

Although the initial outlook for the grains and oilseeds sector for the year was promising, especially as the effects of the drought are receding, there are now fears that the Fall Armyworm infestation will prove disastrous and destroy crops before the pesticides necessary to kill the pests are registered. A DAFF spokesperson confirmed a plant pest action group initiated by the department consisting of “members from several producers’ associations and industries which may be affected by this pest. The group will meet regularly and progressively determine the way forward to manage this pest.” In the land reform sector, Agbiz CEO Dr John Purchase reiterated that the agribusiness environment during 2017 is also likely to be a challenging one as a number of key legislative acts are expected to be approved and passed into law.

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Growing of Cereals and Other Crops
Growing of Cereals and Other Crops 2017

Full Report

R 1 900.00(ZAR) estimated $105.85 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 74.09 (USD)*

Historical Reports

Growing of Cereals and Other Crops in South Africa 2023-11-10

R 20 000.00(ZAR) estimated $1114.16 (USD)*

View Report Add to Cart

Growing of Cereals and Other Crops in South Africa 2022-12-20

R 9 500.00(ZAR) estimated $529.23 (USD)*

View Report Add to Cart

Growing of Cereals and Other Crops 2018-10-24

R 1 900.00(ZAR) estimated $105.85 (USD)*

View Report Add to Cart

Growing of Cereals and Other Crops 2015-03-30

R 1 900.00(ZAR) estimated $105.85 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 3
2.2. Geographic Position 5
3. SIZE OF THE INDUSTRY 7
4. STATE OF THE INDUSTRY 9
4.1. Local 9
4.1.1. Corporate Actions 15
4.1.2. Regulations 15
4.1.3. Enterprise Development and Social Economic Development 17
4.2. Continental 19
4.3. International 21
5. INFLUENCING FACTORS 22
5.1. Government Intervention and Land Reform 22
5.2. Economic Environment 24
5.3. Rising Input Costs 24
5.4. Technology, Research and Development (R&D) and Innovation 25
5.5. Labour 28
5.6. Environmental Concerns 30
6. COMPETITION 31
6.1. Barriers to Entry 31
7. SWOT ANALYSIS 32
8. OUTLOOK 32
9. INDUSTRY ASSOCIATIONS 33
10. REFERENCES 34
10.1. Publications 34
10.2. Websites 34

Introduction

This report focuses on the farming of maize, wheat, sugar cane, sunflower seeds, cotton and tobacco. South Africa’s agricultural sector contributes about 2.5% to GDP, a figure that has decreased from an average of 10% in the 1960s. The number of commercial farmers in South Africa has declined from 66,000 in 1990 to about 37,000 in 2014, mainly due to dwindling farming profitability, water scarcity and uncertainty regarding land reform. The South African government has within the National Development Plan and New Growth Path identified agriculture as critical for employment and food security. Since April 2012, 200 farms have been recapitalised through government grants and 728 farmers have received training. Government aims to recapitalise a further 867 farms by 2016/17. \r\n\r\nClimate change has resulted in more than 65% of the country not receiving adequate rainfall for successful rain-fed crop production. As a result, agriculture in these areas is under irrigation, making the agriculture sector the single largest user of water within South Africa. Experts have warned that water availability is the most important factor limiting agricultural production and that South Africa could run out of water by 2025. This together with the electricity crisis is having a negative impact on the industry and threatening South Africa’s competitiveness.

Strengths

• Normally, an exporter of maize.
• South Africa has a well-developed grain industry and its sugar cane industry is the largest in Africa.
• The country is producing more maize on less land.

Weaknesses

• Many small scale farmers lack the necessary skills to farm profitably and despite support programmes for Black farmers, comprehensive effective support is lacking.
• Reliance on traditional markets, which have become more concentrated, for maize exports.
• Sector is unattractive to young people.
• South Africa is a net importer of wheat
• There are high input costs
• Uncertainty of production because of erratic climate.

Opportunities

• Growth in tobacco sector to provide biofuel.
• New export markets for maize in developing markets.
• Renewed interest in cotton.

Threats

• Cheap crop imports especially of wheat and sugar.
• Climate change.
• Electricity shortages and instability of the grid.
• Fewer students studying agriculture.
• Weak economic growth in traditional export markets.

Outlook

Insufficient water, power shortages, rising input costs, fluctuations in the exchange rate, limited access to improved and appropriate production technology and unfavourable weather conditions will continue to influence agricultural production in South Africa. In February 2015, Standard Bank\'s Head of Agribusiness, Nico Groenewald emphasised that South African farmers need to “prioritise improving efficiencies more this year” to take advantage of favourable factors such as the drop in fuel prices and constructive labour relations in agriculture. He also highlighted that urgent efficiency issues need to be addressed, especially with regard to water usage. The improvement of transport infrastructure, providing more support for small-scale Black famers and expanding South Africa’s export markets are all important focus areas. Government also needs to encourage more young people to study agriculture to ensure that the country’s agricultural sector grows and is globally competitive.

Growing of Cereals and Other Crops
Growing of Cereals and Other Crops 2015

Full Report

R 1 900.00(ZAR) estimated $105.85 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 74.09 (USD)*

Historical Reports

Growing of Cereals and Other Crops in South Africa 2023-11-10

R 20 000.00(ZAR) estimated $1114.16 (USD)*

View Report Add to Cart

Growing of Cereals and Other Crops in South Africa 2022-12-20

R 9 500.00(ZAR) estimated $529.23 (USD)*

View Report Add to Cart

Growing of Cereals and Other Crops 2018-10-24

R 1 900.00(ZAR) estimated $105.85 (USD)*

View Report Add to Cart

Growing of Cereals and Other Crops 2017-02-06

R 1 900.00(ZAR) estimated $105.85 (USD)*

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Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Supply Chain 2
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 7
4. STATE OF THE INDUSTRY 8
4.1. Local 8
4.1.1. Corporate Actions 18
4.1.2. Regulations and Government Programmes 18
4.1.3. Enterprise Development and Social Economic Development 20
4.2. Continental 22
4.3. International 23
5. INFLUENCING FACTORS 25
5.1. Government Intervention and Land Reform 25
5.2. Rising Input Costs 27
5.3. Electricity Shortages 27
5.4. Labour 27
5.5. Economic Environment 30
5.6. Technology 30
5.7. Environmental Concerns 32
6. COMPETITION 33
6.1. Barriers to Entry 33
6.2. Research and Development (R&D) and Innovation 33
7. SWOT ANALYSIS 35
8. OUTLOOK 35
9. INDUSTRY ASSOCIATIONS 36
10. REFERENCES 37
10.1. Publications 37
10.2. Websites 37