RISK TREND
MARKET SIZE AND MARKET SHARE RISK
Risk Events
� Longest decline in equipment market size – black swan event .
� Record April 2019 rainfall leading to significant crop quality issues – black swan event .
� Loss in input sales due to surplus on-farm stock from smaller areas planted the previous year .
� Aggressive and unsustainable market penetration strategies by competitors .
Description The agricultural industry is highly competitive with regards to inputs , commodity production , equipment and retail business . The limited local diversification opportunities increase the exposure to strong competition .
Mitigation and Control Senwes Grainlink ’ s continued investment in technology and infrastructure at its silos remains a focus area in order to increase market share by means of offering a more attractive value proposition to clients . Similar investments are made throughout the group in order to grow market share .
Opportunities
� Consolidation and / or expansion to achieve critical mass and market share growth .
� Continuous research , innovation , evaluation and , where necessary , improvement of the group ’ s core activities and solutions , in order to maintain a competitive advantage and grow market share .
Strategic focus areas triggered
� Diversification , horizontal integration and consolidation .
� Internal integration of the customer .
� Increased investment in efficiencies within the value chain .
� Externalisation .
For more info on the group strategy see p . 44
The retail and equipment service offering remains under pressure due to a smaller market size . Senwes Equipment is , however , offering competitive financing solutions in order to maintain and grow its market share .
86 ROOTED IN AGRICULTURE