MANUFACTURING CAPITAL
Senwes believes that investment in property, plant and equipment as well as maintaining
its upgrading programme, retail networks and silo infrastructure will ensure
improved customer service and an improved buying experience. Senwes uses its
manu facturing capital to generate cash from the storage and handling of grain, to
supply input products and mechanisation equipment to customers as well as for the
maintenance of mechanisation equipment.
KEY INPUTS
SPPD (Senwes Property Planning and Development department) with specialist employees
responsible for maximising the economic and financial value of the total
property portfolio in the group;
Property, plant and equipment with a carrying value of R605,7m, which includes
additional capex spending of R188,6m for the year for the Senwes Grainlink
department;
Hinterland Fuels approved the upgrading of filling stations with kiosk projects for
the Ogies and Bethal branches (R4,4m). They are still awaiting local municipality
approval;
Hinterland completed the renovation of the Bethlehem branch, in order to improve
service delivery, the product offering and the buying experience (R700k);
Hinterland renovated the Bloemfontein branch (R1,2m);
Senwes Equipment and Hinterland completed 98% of the upgrading of the Wolmaransstad
branch and the construction of the new workshop at a cost of R19,4m;
The project to seal the exterior of the head office building was approved, a contractor
has been appointed and the project will commence after the lockdown (R1,4m);
Concrete roadways and/or access roads at three silo complexes (Buckingham,
Koppies and Odendaalsrus) were upgraded to the amount of R2,4m.
Mirage (R15,8m) and Vierfontein (R15,2m) electrical automation projects have
been completed;
Aeration facilities were installed at 19 sites and 28 bins at a cost of R67m; and
Silo weighbridges at 13 sites were completed at a cost of R13,4m.
The KLK Group completed upgrades at various business units across their area of
operation amounting to R35,3m.
OUTCOMES 2020 2019
Net silo income (handling and storage) R‘m 489,9 557,9
Electricity costs * R‘m 85,9 45,9
Depreciation * R‘m 95,0 55,3
Maintenance costs * R‘m 78,0 58,0
Workshop hours Hours 74 336 74 475
*The increases in electricity costs, depreciation and maintenance costs are mainly due to the inclusion
of KLK Landbou, which was acquired during the period under review.
TRADE-OFFS IN OUR USE OF
MANUFACTURING CAPITAL
The continued growth of Senwes by means of
capital projects decreases financial capital over the
short term. However, the focus is to unlock value
to the benefit of human, social and relationship,
natural and financial capital, which includes the
new branch and store at Hartswater. It will result
in long-term job creation and long-term financial
return. The Graintech project and accelerated
grain handling project improved the utilisation
of assets and resulted in meeting the needs of
customers.
ACTIONS TO IMPROVE
OUTCOMES
Development of a new branch and store at
Harts water and Wolmaransstad (workshop
included) at a cost of R19,4m;
Currently in the investigation phase of Klerksdorp
(filling station only), Kroonstad (filling
station and branch) and Kirkwood (Senwes
Equipment workshop) branches. Once rezoning
has been approved, the conceptual
design phase will commence.
Improved customer service by means of
accelera ted intake rate and efficiency projects;
and
Additional alternative storage facilities will
be esta blished in order to offer continuous
storage solutions to producers.
FUTURE
CHALLENGES
The establishment of alternative storage
structures;
Skills of industrial engineers and workshop
technicians;
Application of capital at the right silo complexes
in order to ensure optimal return and
to mitigate risks; and
SHEQ-regulations.
REASSURANCE IN RESPECT OF MANUFACTURING CAPITAL
Approval of projects by the Senwes
board. Overview and reporting are done
afterwards by the Audit Committee;
SHEQ-safety audits;
Joint compliance model;
JSE-compliance audit on silo operations;
Code of conduct audits;
SAGIS (South African Grain Information
Services) audits;
Internal audit investigations;
HACCP-accreditation;
Compliance Committee; and
Property Committee.
26 ROOTED IN AGRICULTURE