CHAIRMAN’S REPORT
I
am pleased to report that Senwes has performed according to
expectation and operationally we have exceeded the previous
year’s results with relatively good growth. The second biggest
grain harvest in recorded history contributed towards a good
performance, with our silos handling in excess of 3 million tonnes
of grain and oilseeds. The 2015 financial year started with low
carry-over stock levels. We also ended the year on a difficult note
as a result of severe drought conditions.
Due to Senwes’ focus on innovation and consolidation and our
dedicated management team, we increased our market share
which resulted in additional grain flowing through the silo network.
This resulted in good silo revenue.
Given the cyclical nature of agriculture, our business model is
designed to maintain stability and sustainability. The previous
cycle started with a record grain intake, which exerted downward
pressure on prices. Towards the end of the year we entered a period
underlined by a harvest which could be 40% to 50% lower than the
previous year. This had an impact on several aspects of the agri-
industry all the way down the value chain. During such times one’s
debtor book needs to be performing well in order to manage the
effects of the drought. Senwes’ debtor book is in a sound position
to provide the needed support for our clients during the challenges
brought on by harsh conditions.
INNOVATIVE SOLUTIONS
Our upgraded silos, which will allow farmers to deliver grain with a
higher moisture content and enable them to harvest earlier, are a
good example of our drive to develop innovative and sustainable
solutions. This upgrade also allows for faster intake and off-loading
of grain which, in turn, will put money in the producer’s pocket
faster.
Our IT-platform continues to set the trend and the latest innovations
will allow the producer to monitor and trade his grain supplies
on a real-time basis and to capitalise on the most advantageous
premiums. We’ve also established a specialised division which will
focus on new innovations and integrated solutions.
CONSOLIDATION IS STILL THE
WAY TO GO
Food security is what drives our industry and our strategy of
consolidation has been validated by the impressive performance
of our joint ventures and partnerships. JDI (John Deere
10
Senwes INTEGRATED
INTERGRATED REPORT
REPORT 2015
2015
Implements), Grainovation, Hinterland and Certisure have
once again delivered very good results.
We will continue to explore and evaluate new ventures and
markets in our quest to create more value for our stakeholders.
Unfortunately I have to announce that we have ended our
partnerships with Bunge due to failure of the business model to
deliver on our strategic and financial objectives. We take away
from the experience a good business relationship with them,
as well as a better vantage point from which to assess future
opportunities, should they arise.
INVESTORS SHOW
CONFIDENCE
Our two biggest shareholders,
Senwesbel and Grindrod, have
increased their shareholding in
the company. This reflects their
support of and confidence in
the business and I would like to
add that our relationship with
our investors is on a very good
level, making it a pleasure to do
business with them. Together
Grindrod and Senwesbel now
own 72% of Senwes’ shares
and it is fair to say that this
adds to greater stability and
strength for the company
moving forward.
SOCIO-
ECONOMIC
TRENDS
The ongoing debate in the industry
about land reform challenges is an
important issue and Senwes is optimistic
that sustainable solutions will be found.
To this end we have contributed to
recommendations made to organised
agriculture and the Minister via Agbiz.
We have also indicated our willingness to
contribute towards projects together with
financial institutions in order