HOW SENWES CREATES VALUE USING THE SIX CAPITALS – continued
MANUFACTURING CAPITAL
Senwes believes that investment in property , plant and equipment as well as main taining its upgrading programme , retail networks and silo infrastructure will ensure efficiency to improve customer service and buying experience . Senwes uses its manufacturing 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
� The Property & Engineering Assets Department consists of a specialised engineering , project management and maintenance team driving maintenance and projects throughout the asset portfolio , thereby ensuring performance , condition and compliance in respect of assets ;
� Property , plant and equipment with a carrying value of R747,8m , which include additional capex spending of R139,3m for the year for the Senwes Grainlink department ;
� Silo aeration upgrades were done to the amount of R10m to improve the efficiency of receiving grain at higher moisture levels ;
� Electrical bulk connections and standby generators were refurbished , and changeover connections were also installed at a cost of R17,7m ;
� A bin at Allanridge silo which was damaged due to spontaneous combustion , was replaced at a cost of R10,4m ;
� Various other maintenance , civil , mechanical and electrical projects were undertaken during the year to improve client service and grain handling processes amounting to R29,9m ;
� Grainlink obtained 16 additional silos as part of Senwes ’ acquisition of Suidwes ;
� The refurbishment of electricity supply to the Senwes head office building at a cost of R6m was approved to ensure reliability of supply ;
� Senwes Equipment and Hinterland completed the upgrading of the Wolmaransstad branch and the construction of the new workshop at a cost of R75,7m ;
� Hinterland Fuels bought property in Klerksdorp to erect a fuel station . Rezoning and repairs to the open stormwater channel are being awaited , and discussions are underway with potential partners with regards to the development of the property ;
� Hinterland Retail obtained 14 branches from Suidwes . The Suidwes branches in Hoopstad and Wesselsbron were closed , while the Senwes branches in Botha ville and Wolmaransstad were closed ;
� The Bastion plant at Buhrmansdrif was upgraded in response to higher demand ;
� Bastion procured and constructed a modular plant at Marico to permanently increase the production capacity ;
� Bastion ’ s gypsum plant in Britten was upgraded and the production capacity was improved ; and
� The KLK Group completed various upgrade and capacity expansion projects at Carpe Diem Raisins , SA Dorper , selected retail and fuel sites as well as the head office . The projects amounted to R19,2m at Carpe Diem Raisins , R2,8m at SA Dorper , R1,5m in respect of retail and fuel sites , and R0,4m at the KLK ’ s head office .
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 , but the focus is to unlock value to the benefit of human , social and relationship , natural and financial capi tal . It includes the establish ment of new business units that will result in long-term job creation and long-term financial return . It also includes the Graintech and the accelerated grain handling project , that improved the utilisation of assets and resulted in meeting customers ’ needs to a larger extent .
ACTIONS TO IMPROVE OUTCOMES
� Currently investigating Kroonstad ( fuel station and branch ) and Kirkwood ( Senwes Equipment workshop ) branches . Once rezoning has been approved , the conceptual design phase will commence ;
� Senwes Equipment is considering the upgrade of the Kroonstad workshop and is investigating the feasibility of upgrades at the Bothaville and Parys workshops ;
� An investigation into the acquisition of a property in Howick for the Falcon business is in process ;
� Improved customer service by means of an accelerated intake rate and efficiency projects ; and
� Additional alternative storage facilities to be established to offer continuous storage solutions to producers .
FUTURE CHALLENGES
� The establishment of alternative storage structures ;
� Skills of industrial engineers and workshop technicians ;
� Allocation / application of capital at the appropriate business units in order to ensure optimal return and to mitigate risk ; and
� SHEQ-regulations .
REASSURANCE IN RESPECT OF MANUFACTURING CAPITAL
� Asset verification by external auditors ;
� Approval of projects by the Senwes board . Overview and reporting are done thereafter by the Audit Committee ;
� SHEQ-safety audits ;
� Joint compliance model ;
� JSE-compliance audit on Grainlink Silo Operations ;
� Code of conduct audits ;
� SAGIS ( South African Grain Information Services ) audits ;
� Internal audit investigations ;
� HACCP-accreditation ;
� Compliance Committee ; and
� Property Committee .
32 SENWES INTEGRATED REPORT 2021 RESILIENCE