export of goods, we make a vital
Bidvest Freight remains the biggest private sector freight services group in sub-Saharan Africa, providing world-class terminal and logistic services. The skills of our people and the resources we provide constitute a national asset.
We have long been a leader in bulk liquids handling and the shipment of bulk agricultural products. We are one of the top industry players in clearing and forwarding. We add value in many industries as a multi-purpose terminal operator.
We are a major employer with a reputation for developing skilled and self-reliant managers.
We are working to develop more senior black managers. Youthful black talent is also coming through. This gives us a balance of proven performers and energetic younger managers.
We continue to benefit from the management mix of highly skilled, extremely experienced managers as well as skilled young managers. All divisional businesses feel the benefit of continued emphasis on succession planning.
VISION AND INNOVATION
Our vision is to add value for customers and contribute to the development of South African trade as well as the promotion of a robust and prosperous economy.
By driving the efficient import and export of goods, we make a vital national contribution. We are a major investor in South Africa’s future and a trusted partner of some of South Africa’s biggest companies. We take a long-term view and participate in capital projects that help drive national growth, with particular focus on reducing the cost of imports and exports.
As the flow of world trade changes and commodity demands fluctuate we are constantly challenged to innovate and reposition our businesses.
In 2016, the focus was on innovation and flexibility as world trade volumes came under pressure and many of our teams were challenged to find replacement business at acceptable margins. The diversity of our operations was a great advantage.
Our industry has long suffered a skills shortage. Therefore, transformation is often a function of skills transfer and talent development, with the accent on young black entrants. Each business has the task of developing tomorrow’s leaders and R43 million (2015: R45 million) was invested in developing our people.
The accredited training academy at Bidvest Panalpina Logistics (BPL) now trains up to 200 trainees a year. BPL offers internships and graduate programmes while running skills development and management development courses.
Management development, graduate and learnership programmes are also key features of skills development and transfer initiatives at other freight businesses.
We continue to exceed our targeted level 4 contributor status and great progress has been made to align to increased targets of the amended Codes of Good Practice.
Our teams have always taken pride in their ability to get the job done to the highest industry standards. Pride in solution finding and in meeting operational objectives, closely aligned to customer expectations, remains a central feature of our culture.
Belief in our ability to add value meant that unbundling was reason for excitement and future expansion rather than cause for concern. Operationally there were no adverse impacts as autonomous teams are responsible for their own businesses and corporate change does not affect a team’s closeness to its industry and customers.
World trade stalled and commodity markets remained depressed. To save costs, mineral exporters transferred significant tonnages from the relatively expensive Durban corridor to Saldanha and Port Elizabeth. In the second half, drought effects drove maize and wheat imports higher and LPG volumes rose.
|Contribution to Group
- Freight, transport and commodity volumes fell. Teams did well to display resilience and flexibility. All businesses sought efficiency gains.
- Revenue generated was R6,0 billion (2015: R6,9 billion), while trading profit was 3,8% down at R1,0 billion (2015: R1,1 billion).
- Bidvest Tank Terminals (BTT) put in a pleasing performance. Volumes rose 3%.
- BTT is investing R330 million in new fuel storage facilities at Richards Bay and work has begun on this additional 45 872m3 tank capacity. This represents a significant response to growing demand for storage capacity and handling expertise in the liquids and gas sector.
- Liquefied petroleum gas capacity has also been upgraded – our first phase of increasing overall LPG storage capacity.
- South African Bulk Terminals (SABT) performed well as second-half maize imports rose to supplement the drought shortfall. SABT, Bulk Connections (BC) and Bidfreight Port Operations (BPO) were well placed to handle the increased demand for maize capacity. Wheat imports also rose.
- BPL also did well, benefiting from sustained investment in additional warehouse capacity. Good volumes were maintained across the automotive, chemicals and fast-moving consumer goods categories. Airfreight and seafreight volumes remain lower than previous years.
- In view of a much changed cargo mix, BC transformed itself from a handler of manganese and coal into a handler of agricultural, chrome and other mineral products.
- BPO accelerated its move into multi-purpose handling in response to a weak break-bulk market. Steel exports were significantly lower. Break-bulk warehousing continues to be converted into dry bulk storage in line with forecast future trends.
- BPO was restructured and exited some loss-making contracts. The business closed down its container stevedoring operations in Durban. Unfortunately some jobs were lost as a result.
- Bidvest South African Container Depots faced low demand as imports of consumer products slowed. Rates came under growing pressure from customers.
- Naval (Mozambique) was impacted by much reduced iron ore and magnetite volumes.
Post year-end, we sold the Manica business to an international buyer.
Low demand for minerals may persist for some time. However, Freight will look for a return to profit growth. We operate a diverse basket of freight businesses and have the ability to optimise opportunities as they occur in various areas of the national economy.
By December, new tankage will be commissioned in BTT Richards Bay, ensuring we are well placed to respond to growing demand in the fuel sector.
Government is looking for private sector participation to contribute to the development of transport infrastructure. Bidvest Freight is ideally placed to participate in plans for national growth and the development of new entrants to the industry.