Reflections
FROM THE CHAIRMAN
DANIE MINNAAR
Senwes Chairman
KEY TOPICS
This report was written during the Covid-19 lockdown period,
which was implemented towards the end of March 2020. It was
written at a time during which speculation about the future was
very difficult, if not impossible.
� Covid-19 impact on
commodity prices
� Quality and stock levels of
white maize
� Consolidation strategy
� Acquisitions and negotiations
� Changes in the board of
directors
� Solutions for customers
� Challenges ahead
At this stage we simply do not know how long it will take for
our world to return to normal. However, what we do know,
is that we will have to make adjustments and those who do it
best, will have an edge over the rest.
We have seen a decrease in the prices of all commodities. Who would
ever have thought that Brent crude oil would decrease to $20 per barrel
- a decrease of 68% over the past year? The lower oil price will have
a significant impact on the price of maize in the USA, since an average
of 42% of the domestic maize demand in the US is used for ethanol.
An increasing number of ethanol plants are closing down in the USA
during this difficult time, which means that the consumption of maize
will decrease dramatically.
When you read this report, we will know a lot more about the impact
of the virus on humanity.
Senwes delivered a good performance in a very challenging year, with
significantly lower summer grain planting levels as a result of the late
rain. Plantings were 200 000 hectares lower in the western area of
the traditional Senwes area of operation. Due to the late planting, the
quality of maize was, for the second successive year, not nearly as good
as the long-term average quality of maize. The quality issue, together
with the demand from African countries, placed tremendous pressure
on white maize stock levels.
Grain levels in Senwes’ silos were extremely low towards the end of
April 2020. However, we are looking forward to a promising harvest
in 2020/2021.
STRATEGY
Senwes’ long-term strategy of consolidation is starting to pay off. I
mentioned in last year’s report that agriculture is experiencing a crisis
and that Senwes is well positioned to exploit the opportunities which
may arise from this situation.
12 ROOTED IN AGRICULTURE