STRATEGIC AND OPERATING CONTEXT
Reflecting on the progress to date
STRATEGIC FOCUS AREA
INCREASED INVESTMENT IN EFFICIENCIES IN THE VALUE CHAIN
Vertical integration of the business by means of a specialised focus on the parts of the value chain where Senwes operates , in order to identify further areas of opportunity .
Objectives
� Maintain a specialised focus on the parts of the value chain where Senwes operates .
� Identify and evaluate areas of further opportunity .
� Vertically integrate the group in line with the areas of opportunity identified .
Top-of-mind risks
� Political and economic climate risk .
� Market size and market share risk .
� Weather and climate risk .
� Urbanisation , scarcity and retention of skills risk .
� Transition and customer risk .
� Diversification and agricultural industry risk .
� Unique competitor risk .
For more detail on top-of-mind risks , see p . 84
Looking ahead
� Some areas of the grain value chain have been yielding good long-term returns and Senwes will continue its attempts to increase involvement and / or expansion into these areas .
� Continued capital investment focused on the upgrading and / or optimisation of the silo network , infrastructure and processes .
� More extensive participation in the logistics network is foreseen .
Grainovation was originally established as a joint venture in partnership with Imperial Logistics for the creation of a specialised and focused logistics company . Effective as from 1 November 2019 , Senwes increased its shareholding in Grainovation to 100 %, in order to seamlessly integrate the business with the group ’ s grain marketing solution . Grindrod acquired a 20,4 % shareholding in Senwes during the alignment with and integration into the logistics value chain . The Senwes Group gained access to the wholesale and distribution market through the distribution centre activities of Prodist . Initially Prodist was acquired via Hinterland with AFGRI and LRB ( Mica , DIY and House of Paint & Decor ) as partners . Hinterland held a 75 % share in Prodist and LRB 25 %. Hinterland acquired LRB ’ s 25 % stake as part of a restructuring programme in August 2018 . Also , effective from 1 December 2018 , Hinterland Retail ( which is held as a joint venture by Senwes and AFGRI ) was merged with Prodist and is now known as Hinterland SA ( Pty ) Ltd . Astral contract – the largest single maize contract in South Africa for the supply of 800 000 tonnes of maize , was concluded between Astral ( Meadows ), Senwes and Tradevantage . After a risk analysis for the next two years , we decided not to participate in the renewal of the Astral contract . Senwes Grainlink ’ s significant investments to enable the intake of grain with a higher moisture content , are rendering results . Capital investment programmes have been put in place by Senwes Grainlink , focusing on the upgrading and / or optimisation of the silo network , technology , infrastructure and processes .
� The mechanisation and retail network will also be subject to upgrades , as time progresses .
SENWES INTEGRATED REPORT 2020
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