CORPORATE GOVERNANCE FINANCIAL REVIEW
49 / 104 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 national expansion .
TOP-OF-MIND RISKS
OBJECTIVES
Diversification , expansion and / or consolidation by means of product and services offering , operational activities , commodities , client base , infrastructure , market segment , geography and / or mergers and acquisitions .
• Political and economic risk .
• Credit , liquidity and market risk .
• Market size and market share risk .
• Weather and climate risk .
• Urbanisation , scarcity and retention of skills risk .
• Transition and customer risk .
• Unique competitor risk .
• Diversification and agricultural industry risk .
For more detail on top-of-mind risks , see p . 87 .
LOOKING AHEAD
• Further upscaling , through consolidation and new market expansion , will bring about critical mass and value synergies , which will position the business for growth and long-term sustainability .
• Expansion of Senwes ’ integrated platform to reach a broader geographic area .
• Expansion and / or optimisation of current product and service offering .
• Continued market share drive .
• De-risking into other commodities .
• Continued capital investment in the optimisation and / or upgrading of current infrastructure .
REFLECTING ON THE PROGRESS TO DATE
• ESC , a joint venture with AFGRI , ensured an efficient and secure electronic silo certificate management system .
• Certisure / UBS was originally established as an insurance brokerage and administration joint venture with NWK . NWK exited the joint venture business , effective from 1 May 2021 , allowing for greater strategic integration within the Senwes Group . The consolidation of Raddix and NRS , which were acquired as part of the Senwes / Suidwes Holdings merger , and Certisure / UBS was finalised during the year , and will realise significant synergies .
• JDI ( a subsidiary with the Tomlison family as shareholder ) expanded the group ’ s John Deere agency into the Eastern and Western Cape .
• Hinterland was established nine years ago as a joint venture with AFGRI , resulting in the establishment of an agricultural retail leader . Effective from 1 October 2020 , the joint venture business was terminated and unbundled , with the assets and businesses initially contributed by AFGRI , being returned to it . Senwes remained the sole owner of the Hinterland Holdings Group .
• Bastion Lime ( a joint venture with NWK as partner ) aims for the expansion of capacity in the lime industry .
• Established Molemi Sele Management ( a joint venture with AFGRI and NWK ), which is the owner of a cell captive within Guardrisk Life . The arrangement enables Guardrisk , a registered and licensed cell captive insurer , to provide long-term insurance and to offer third party insurance policies to clients of Molemi Sele Management ’ s shareholders .
• The group expanded its equipment business in 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 .
• During the 2021 financial year , Senwes Equipment and JDI added the John Deere Construction and Forestry equipment range to their product offering in the traditional Senwes area and in the Western , Northern and Eastern Cape as well as Namibia , effectively expanding their reach .
SENWES INTEGRATED REPORT 2022
49