8
senwes integrated report 2017
CHAIRMAN’S REPORT
Dear Stakeholder
T
he year under review was characterised by excessive
volatility in all world economies, with developing mar
kets being influenced by a weak demand for hard and
soft commodities. Add to this the catastrophic drought cycle
in Southern Africa, and South Africa in particular, since 2015,
and the resultant uncorrelated increase in local soft commo
dity prices against international price decreases and it becomes
clear that the South African producer is poorly positioned to
compete with the world market.
Although Senwes has launched a number of drought mitiga
ting action plans and projects, we did not manage to escape
this catastrophe as a whole and the results still reflect the
realities of a suppressed market. Headline earnings increased
by 36,6%. However, this followed on a low base in 2016.
The decline of the macro-economic environment will have a
negative impact on the role players in the agricultural indus
try. The impact will be experienced by the producer first, after
which it will move to the total value chain and into the pocket
of the end consumer.
“
It is satisfying to see that,
despite a number of
challenges over the past
year, management is still
focusing on the deploy-
ment of the strategy. I am
particularly satisfied with
the customer-centred
approach being followed
and a number of projects
are focused thereupon.
”
The decision of grading agencies to downgrade South Africa’s
credit rating to junk status, is a huge setback for an already
struggling South African economy. The downgrading had a
negative effect on the business confidence of foreign investors
and focused attention by the government is necessary to en
sure that business confidence will return to normalised levels
again. A sound monetary policy, which can manage risk effec
tively, is of the utmost importance.
Relevant and significant aspects
focused on by the board
It remains our responsibility to scrupulously fulfil our fiduciary
and statutory duties and we take responsibility for the strategy
and business plan, business model, risk aspects and the moni
toring of matters which are of importance to the company.
Our focus this year was mainly to position and maintain the
organisation in such a manner to ensure focus on the cus
tomer and the challenges faced by the customer, which have
increased significantly due to the drought. In order to do this,
the company had to be in top condition, have its own risks
under control and have plans in place before being able to
attend to the challenges of its customer and the environment.