STRATEGIC AND OPERATING CONTEXT
GROUP STRATEGY | continued
Strategic focus area
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Strategic focus area
UNLOCKING VALUE SYNERGIES
Unlocking value synergies focuses primarily on reaping the bene
fits of shared corporate functions and operational efficiencies
across the group.
Objectives
Identify the untapped benefits of shared corporate functions and
operational efficiencies, by means of co-ordination between busi-
ness units, joint ventures and corporate support divisions across
the group;
Unlock the benefits of shared corporate functions and operational
efficiencies to the advantage of the Senwes group.
Top of mind risks
Urbanisation, scarcity and retention of skills risk;
Transition and customer risk;
Diversification and agricultural industry risk;
Unique competitor risk; and
Systems risk.
For more detail on top of mind risks, see p. 53
Looking ahead
There is a significant advantage in unlocking value synergies and
therefore it makes sense to maintain the constant driving force to
achieve this. The focus is to ensure that the synergies of the shared
corporate functions and operational efficiencies are tapped into, and
fully utilised across the Senwes group.
Reflecting on progress to date
• Established the Innovation and Integrated Solutions Division
to drive improved co-ordination and integrated operation be-
tween business units, joint ventures and corporate support
divisions.
• Established a Business Engineering Division.
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Strategic focus area
INCREASED INVESTMENT IN EFFICIENCIES
IN THE VALUE CHAIN
Vertical integration of the business by means of a specialised
focus in the parts of the value chain where Senwes operates,
in order to identify further areas of opportunity.
Objectives
Maintain a specialised focus in the parts of the value chain
where Senwes operates;
Identify and evaluate areas of further opportunity; and
Vertically integrate the group in line with areas of opportunity
identified.
Top of mind risks
Weather and climate risk;
Political and economic climate risk - land expropriation without
compensation;
Market size and market share risk;
Urbanisation, scarcity and retention of skills;
Transition and customer risk;
Diversification and agricultural industry risk; and
Unique competitor risk.
For more detail on top of mind risks, see p. 53
Looking ahead
Some areas of the grain value chain have been yielding good
long-term returns and Senwes will continue its attempts to in-
crease involvement and/or expansion into these areas;
Continued capital investment focused on the upgrading and/or
optimisation of the silo network, infrastructure and processes;
More extensive participation in the logistics network is foreseen
(including import/export programmes);
The mechanisation and retail network will also be subject to up-
grades as time progresses.
SENWES INTEGRATED REPORT 2019
6
EXTERNALISATION
Focus on the investigation of beneficial opportunities globally (outside the
borders of South Africa) and expansion into these new, lower risk juris
dictions.
Reflecting on progress to date
• Grainovation was established as a joint ven-
ture, in partnership with Imperial Logistics, for
the creation of a specialised and focused lo-
gistics company.
• A 20,68% shareholding in Senwes was ac-
quired by Grindrod as part of the alignment
with and integration into the logistics value
chain.
• The Senwes group gained access to the
wholesale and distribution market by means
of the distribution centre activities of Prodist.
Initially Prodist was acquired via Hinterland
with AFGRI and LRB (Mica, DIY and House of
Paints) as partners, but during the year under
review (effective 1 December 2018), Hinter-
land Retail (which is held 50%/50% by Sen-
wes/AFGRI) was merged with Prodist.
• Astral contract – the largest single maize con
tract in South Africa for the supply of maize
was concluded between Astral (Meadows),
Senwes and Tradevantage.
• Grainlink’s significant investments to enable
the intake of grain with a higher moisture con-
tent, is rendering results.
• Capital investment programmes have been
put in place by Grainlink, focusing on the up-
grading and/or optimisation of the silo network,
technology, infrastructure and processes.
Objectives
Diversify shareholders’ income streams;
De-risk to lower-risk countries;
Given the uncertain economic and political conditions in South Africa, the
focus is currently on international acquisitions.
Top of mind risks
Weather and climate risk;
Political and economic climate risk - land expropriation without compensa-
tion;
Market size and share risk;
Credit, liquidity and market risk;
Urbanisation, scarcity and retention of skills risk;
Transition and customer risk;
Diversification and agricultural industry risk; and
Unique competitor risk.
For more detail on top of mind risks, see p. 53
Looking ahead
It remains part of Senwes’ strategy to continue to simultaneously externalise
and diversify through expansion into new, lower risk, markets (outside South
Africa). Possible targets are actively monitored in order to identify the most
beneficial opportunities and the optimal times to pursue them.
Reflecting on progress to date
• Various beneficial international opportunities have been identified and are
being evaluated.
SENWES INTEGRATED REPORT 2019
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