Introduction

Despite increasingly difficult trading conditions in several markets, Bidvest maintained its record of uninterrupted growth. We continue to add value for our shareholders – distributions per share rose 10,9% to 495,0 cents – without neglecting our obligations to wider society.

Though efficiency and savings became focus areas for all Group business, it is with pride that I can report that we maintained our record of consistent job creation. The total staff complement rose from 104 184 to 106 225.

Continued expansion in adverse business conditions reflects our confidence in the future.

High interest rates and a return of double-digit inflation create particular challenges for South African consumers. Bidvest’s broad range of trading and service activities limits our direct exposure to the consumer economy. However, where we have a stake, our response has been to help the cash-strapped public cope, whether the focus area is fuel inflation or food inflation. For example, Bid Auto has added to consumer choice in the affordable segment of the car market while Bidfood has worked on nutritional yet affordable alternatives for the food industry.

It has long been a core belief at Bidvest that good business and being a good corporate citizen are much the same for any company with a long-term growth strategy. By being responsive and aware of the challenges faced by the population at large, a service business like Bidvest entrenches its position in the market.

We have always held the view that in a service and trading environment, continued profit is confirmation of continued relevance to the society you serve.

These beliefs explain why Bidvest is so focused on business sustainability and increasingly takes a broad, long-term view when weighing business risks.

Sustainability

We face a period of growing uncertainty in areas of common concern for all stakeholders – the economy, society and the environment. Irresponsible management of credit, coupled with a shortage of energy worldwide, has plunged markets into turmoil and undermined consumer as well as business confidence. On the African continent, food shortages and unemployment compound the underlying poverty crisis. The Earth’s finite resources continue to be depleted while we wait for a coordinated international approach to responsible stewardship.

Strong leadership, clear strategies and a long-term mindset are essential if we are to extract value in an uncertain world. The case for sustainable business practice has never been clearer.

Sustainability challenges vary across Bidvest, but three themes are common to all our businesses – people, profit and the environment.

People

For Bidvest to achieve sustained success, we have to attract, develop and retain smart, innovative people who find solutions, create value for the business and advance their own careers. People like these can and do thrive in our decentralised entrepreneurial environment. Key to this challenge is our performance against the seven elements of the DTI codes of good practice. By working hard on training programmes and people development (an investment of R216 million) we now have a much-improved employment equity profile while our highly regarded Bidvest academies accelerate the progress of a new team of leaders and managers.

Black economic empowerment improvements continue to be registered across the Group while close monitoring of preferential procurement and new initiatives to foster enterprise development cascade benefits to smaller businesses. Finally, we maintain a high level of investment in socioeconomic development (also known as CSI), with primary focus on education initiatives ranging from early childhood development such as Rally to Read to bursaries for promising students.

While we are driven by performance, we care deeply about our reputation as a good neighbour and good employer. Company benefits are competitive, representation of employee issues is formalised to achieve balance with management, and health and safety procedures are strictly enforced. We maintain an ongoing campaign to improve our management of HIV/Aids at all South African operations, though containment remains a challenge.

Despite strict adherence to regulations and high safety standards, we suffered a major incident involving a fire and subsequent explosion at Island View Storage’s Durban terminal in September, 2007. This incident claimed the life of a contractor. Two further lives were lost in accidents in Bidfreight’s warehousing and stevedoring operations. At Bidserv an on-duty security officer was shot and killed at a shopping centre. At Bid Industrial and Commercial Products a delivery driver died after a motor accident and an employee suffered a cardiac arrest while at work. Our deepest condolences go to their families. The loss of a life in the workplace is something that diminishes all of us. We will redouble our efforts to avoid similar incidents in the future.

Energy and the environment

Some 60% of the world’s crude oil production, accounting for about 14% of global greenhouse gas emissions, can be attributed to transport, one of the main drivers of our business. A doubling in the cost of fuel over the past two years and recent increases in electricity costs have spurred us on to find new ways to conserve energy even as we expand our services to customers. From recycled cooking oil to smart route optimisation programmes to demandside management, Bidvest is addressing the challenge of high-cost energy.

Innovation fuels creativity and inspires our people to seek opportunity in a new growth area – “green” entrepreneurship. Dialogue with employees across the organisation reveals great awareness of environmental issues. The company is being challenged by its own employees to measure and set targets, not only for energy consumption, but water use, waste management and recycling. We have recently undertaken a preliminary carbon footprint analysis across the Group. A data collation system, while still being refined, is focusing our attention on our performance and key sustainability indicators.

I am confident Bidvest has the people, the will and the skills to meet growing social and environmental challenges.

We have worked hard to empower our people, build relationships and improve lives. Sustainable business within a proudly Bidvest context has become a unifying goal for individual workers, project teams and management.

Sustainability at Bidvest offers employees a fresh way of thinking that inspires them and enables a new generation of entrepreneurs to create business value while addressing evolving financial, social and environmental needs and expectations.