THE 2025 STRATEGY
MORE INTEGRATION IN RESPECT
OF THE HANDLING OF SOFT
COMMODITIES
Senwes foresees more extensive participation in the
logistics networks, particularly in view of inbound and outbound
transport. The South African farmer is competing with prices
in world markets and inefficiencies relating to road transport
require a new, appropriate solution. Various role players in the
value chain are already placing more focus on this aspect.
TECHNOLOGICAL QUANTUM
LEAP
Senwes believes that agriculture is ready for a technological
quantum leap in all facets of the producer’s business. Development
projects are being launched in order to ensure that the Company
is strategically geared for this, which will improve the client’s
efficiency, productivity and decision-making ability.
JOINT VENTURES
Joint ventures are one of the success stories of the 2020 strategy
and the 2025 strategy will continue building on this platform.
Further consolidation via joint investments will bring about critical
mass due to strategic positioning, as well as synergies in order to
improve the sustainability of the business. As soon as platforms
with adequate critical mass have been established, reorganisation
and resultant specialisation will follow, which will reposition the
business for growth.
NEW MARKETS
It is becoming clear that business SA is in the process of
externalising to lower risk jurisdictions. Our objectives remain
externalisation and diversification. Expansion to new markets can
address both aspects at the same time.
MORE EXTENSIVE PARTICIPATION
IN THE GRAIN VALUE CHAIN
Certain areas in the food production value chain have been yielding
good returns over a long period of time. Senwes is attempting to
increase its involvement in such areas.
INTERNATIONAL AND
LOCAL TRENDS
The over-supply of soft commodities and the sharp decline in
crude-oil prices have seen the international repricing of the whole
soft commodity market, and it looks like this will most probably be
the trend for the next two to three years. This means that both our
input and market access channels may be under pressure. From
the producer’s point of view it will require greater influence from
other business flows besides grain. The trend will also stimulate
a response to the impact on our input supply chain to provide
innovative and sustainable solutions, products and services.
NATIONAL TRENDS
Agriculture is likely to remain at a 3% GDP contribution level.
However, agriculture’s contribution to the whole value chain of the
rest of the economy exceeds 20%.
One of the lessons learnt from the developed and successful
economies in the world is that a common denominator is a well-
developed and thriving agri-sector. In this regard we face several
challenges given the current socio-economic situation, vis-à-vis
high unemployment, infrastructure challenges, energy demands,
food security issues, political dynamics and a shortage of skills in
our sector.
It is also important to note that 62% of Sub-Saharan Africans are
below the age of 25, and over 70% of the total labour force in the
region is employed in agriculture. This alone contributes to more
than 30% of the annual GDP. More than 60% of the population of
Sub-Saharan Africa lives in the rural areas, which highlights the
importance of the multiplying factor and impact that agriculture
has on society.
These trends show an increase in urbanisation and higher income
streams, which in turn leads to an increase in protein diets and
which impacts on maize production and ultimately increases the
pressure on agriculture globally.
Against this scenario, the consolidation and optimisation of the
agri-sector is hugely important and will remain on our radar. In
this regard geographical de-risking of our commodity and client
profile remains important. International diversification to areas
that provide the possibility of a rand hedge as well as shareholder
income externalisation will be some of our primary focus areas
going forward.
As part of our strategic vision we will explore exposure to other
commodities in mitigation of risk while growing the investment
portfolio of the business.
Senwes INTEGRATED REPORT 2015
21