STRATEGIC AND OPERATING CONTEXT
Reflecting on the progress to date
STRATEGIC FOCUS AREA
DIVERSIFICATION, HORIZONTAL
INTEGRATION AND CONSOLIDATION
Diversification of the business to mitigate concentration risk, coupled
with effective horizontal integration and consolidation of the agri-business
sector to facilitate expansion into a national footprint.
Objectives
� Diversification and/or expansion by means of one, or a combination
of the following:
– products and services (solution/s);
– operational activities;
– resources/commodities;
– client base;
– infrastructure; and/or
– market segment.
� Geographic diversification and/or expansion within the borders of
South Africa.
� Diversification and/or consolidation by means of mergers and/or
acquisitions, as well as generic local expansion.
Top-of-mind risks
� Political and economic climate risk.
� Market size and market share risk.
� Credit, liquidity and market 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
� Further upscaling, through consolidation and new market expansion,
will bring about critical mass as well as value synergies which
will position the business for growth and long-term sustainability.
� Expansion of Senwes’ geographic footprint.
� Expansion and/or optimisation of current product and service
(solution) offering.
� Continued market share drive.
� Derisking into other commodity markets.
� Continued capital investment in the optimisation and/or upgrading
of current infrastructure.
ESC (Electronic Silo Certificates), with AFGRI as partner,
ensured an efficient and secure electronic silo certificate
management system.
Certisure (with NWK as partner) was the result of
consoli dation of the financial services group in order to
create a more sustainable platform for expansion into
other markets.
JD Implemente (with the Tomlinson family as partner) resulted
in the expansion of the group’s John Deere agency
into the Eastern and Western Cape.
Hinterland (with AFGRI as partner) led to the establishment
of an agricultural retail leader.
Bastion Lime (with NWK as partner) aimed for the expansion
of capacity in the lime industry.
Expansion into new geographic areas by Senwes Credit.
Established Molemi Sele (a joint venture with AFGRI and
NWK), which is the owner of a cell within Guardrisk Life.
The arrangement enables Guardrisk, a registered licensed
cell captive insurer, to provide long-term insurance and
to offer third party insurance policies to customers of the
shareholders.
The group expanded its equipment business into the
Eastern and Western Cape with the acquisition of
Agrico’s John Deere agencies in Aliwal North, Ugie and
George as well as the establishment of an equipment
branch in East London.
Senwes Equipment became an official distributor of the
JCB product range.
Market Access achieved success with its green tonnage
transactions. In terms of the green tonnage transactions,
tonnes are procured from regions outside Senwes’
traditional service area by means of a logistics solution
offered to the customer.
Senwes Credit expanded its product and service offering
with the addition of structured finance.
Senwes expanded its agricultural equipment product
range with the acquisition of a 75% stake in Staalmeester
Agricultural Equipment (effective from 1
October 2018) as well as the acquisition of a 100%
stake in Falcon Agricultural Equipment (effective from 1
November 2019).
Senwes successfully acquired a 57,7% stake in KLK
Landbou during the 2020 reporting period. The KLK
transaction has been effective since 1 July 2019.
Effective from 1 November 2019, Senwes increased its
shareholding in Grainovation to 100%, in order to seamlessly
integrate the logistics business with the group’s
grain marketing solution. Grainovation was originally
established as a joint venture in partnership with Imperial
Logistics.
SENWES INTEGRATED REPORT 2020
45