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
49