GENERAL
grain intake speed and the ability
to aerate grain. We will also continue with the rolling out of the
Graintech programme, which will
require a capital outlay of more
than R100 million. Any decision
to discontinue such programmes
during difficult times should be
questioned.
Over the past 18 months we
launched two new mega-branches
at Wesselsbron and Hoopstad.
This will put us under pressure
over the short term. However,
should we fail to invest now it will
be to our disadvantage in more
prosperous times. We have also decided to replace the Grainovation
fleet, which has been in use for a
number of years.
Senwes further managed to
successfully negotiate the largest
single maize contract in the country. It competed with 12 other
bidders and all the multi-national
companies which participated in
the process. The maize contract
had been awarded to one of these
multi-national companies for the
past 15 years.
The highest tractor market
share in history was maintained by
Senwes Equipment.
A positive cash inflow of
R500 000 was reflected for the
first six months of the financial
year. Operational activities alone
reflected a positive cash flow situation of R187 million after costs
and tax.
A good dividend flow is being
maintained, which means access
to a positive cash flow situation for
farmers. Share prices were maintained, which left producers with
an improved ability to support
themselves.
ACTIONS LAUNCHED TO
ADDRESS THE IMPACT OF
THE DROUGHT
We launched five actions. The
Drought Disaster Fund was
launched, to which Senwes donated R1 million. Large contributions
were also received from other
businesses. The Senwes Pensioners
Club also made a donation and
Corporate Marketing issued a
challenge to all personnel in this
regard.
Hinterland assisted with the
immediate need for animal feed
and water by selling equipment
and other products at minimal
margins (margins totalling R4,5
million).
Grainovation rendered assistance in the form of subsidised transport of fodder and Agricultural
Services rendered drought management assistance to farmers to
ensure proper management of animals and crops. Senwes Credit met
with a large number of clients to
evaluate their individual situations.
WHAT DOES THIS MEAN?
“It means that we are intervening
on a humanitarian level. Not only
as far as Senwes producers and
their farm workers are concerned,
but on all levels. The manner in
which we deal with every individual client speaks of understanding,
patience and the retention of
business.”
CURRENT REALITY IN
AGRICULTURE
The ability of the government to
support commercial agriculture is
limited. This is an economic and
political reality. Assistance is being
rendered to emerging farmers in
an attempt to canvass for votes.
The commercial agricultural sector
is, however, self-reliant. It creates
a vacuum, but we will continually
ask for assistance.
“In my daily liaison with similar large companies in the sector,
input and service providers, I only
receive feedback relating to positive support.”
“I don’t think the same measure
•••
••
•••
of support exists in any other sector.
The reality is, however, that you also
have to protect your business in a
time like this. This means that business disciplines can not simply be
cast to the wind and doors can not
merely be thrown open.”
ON A SPIRITUAL LEVEL
Senwes publicly acknowledged its
dependence upon the Creator and
participated in various prayer actions. We unequivocally declare that
we are totally dependent upon the
mercy of our Heavenly Father.
IN CONCLUSION
It is a reality that the situation will
probably worsen before it gets better. The effect of the drought will be
felt for the next three years. In Senwes’ case the impact on the current
year will probably be between R40
million and R80 million and approximately R120 million to R180
million on the next year, based on
the assumption that 2016 will be
a normal year. Another drought
would have catastrophic results.
“I think we have dealt with the
situation in the best possible manner, given the measures we put in
place. We hope that it will protect
the company and ensure its sustainability.”
The end result of the next 18
months will depend on the management of the group. \