Business conditions

Falling business confidence, increasing inflation, lower consumer spending and higher interest rates affected all Bidvest markets to some extent, though our businesses in Australia and East Asia still put in robust performances.

African model

Many African jurisdictions continue to benefit from strong commodity prices; though this adds urgency to Africa’s quest for greater economic balance, stronger emphasis on service industry growth and wider development of capital markets.

Whenever we can, Bidvest will contribute to the achievement of these strategic goals. A key step was the consolidation of our Namibian business interests ahead of a planned listing on the Namibian stock exchange.

Bidvest Namibia plans to go public in 2009. Critical mass has been achieved with our fishing interests and a wide range of business activities in this fellow-SADC member state. Further growth can be fostered by incentivising local partners and managers while responding to local economic empowerment aspirations.

We regard the Namibian listing as a model for future developments in all African states in which we have commercial interests. In this way, we can contribute to capital market development while encouraging entrepreneurship – in our view the keys to economic growth in reform-minded jurisdictions.

African challenges

Most neighbouring states, with the exception of Zimbabwe, are gearing up for prosperity and political and economic reform. The Zimbabwean tragedy, a consequence of inept political and economic leadership, saddens every African who hoped to make this the African Century. Violence, hunger, poverty and economic chaos in that unhappy land have ignited both an implosion and explosion.

The implosion has brought about internal collapse while the explosion has impacted every state in southern Africa, adding to social and political pressures, souring international perceptions and providing the catalyst for further violence. Xenophobic attacks in South Africa in May were the most glaring, and shameful, example.

South Africa began life as a democratic nation by turning its back on oppression of one group by another. Violence is an abomination, not a solution. We have to reaffirm our commitment to democracy, the respect for human rights and peaceful progress as a nation and region.

To sustain this will not only take hard work and goodwill, but considerable leadership. Drifting from crisis to crisis is not an option. Strong, principled leadership is called for – not only in South Africa, but in every SADC state.

Legitimacy, sustainability and prosperity can only be achieved through democracy. Any drift away from this basic principle will lead to periodic dislocation and recurring instability.

South Africa

World attention on Zimbabwe today will be accompanied by intense focus on South Africa in 2009, an election year. Again, strong and principled leadership is a key issue.

Leaders in all spheres have a responsibility to contribute to reasoned debate and calm decision-making if we are to demonstrate that democracy has taken root in our land and that our institutions are sufficiently robust to ensure successful elections that will further consolidate the gains we have made as a nation since the dawn of democracy in 1994.

I believe our people will again set a democratic example for the continent and that the incoming government will receive a clear mandate from the people for another five years of endeavour as our national leaders renew their pledge to push back poverty and secure further economic growth. A successful election process in 2009 will reassure the international community, major investors and our trading partners. At the same time, we will begin to witness increasing progress on major infrastructure projects, boosting national morale and setting the scene for what I believe will be a hugely successful 2010 FIFA World Cup.

World Cup 2010

Bidvest has set up structures to optimise commercial opportunities flowing from South Africa’s status as World Cup host. However, we do not see this as a once-off opportunity. International sporting events create ongoing commercial spin-off.

To explore future opportunities, Bidvest has acquired a minority interest in MATCH Hospitality AG, a FIFA-appointed hospitality services company, as we see a natural fit with our foodservice and hospitality businesses. One immediate benefit will be to secure business in support of MATCH Event Services during the 2009 Confederation Cup (also hosted by South Africa).

National 2010 investment

Our government is investing R40 billion in the 2010 World Cup as part of a much broader vision that entails an investment of more than R500 billion in national infrastructure, covering everything from ports to power generation. This investment will cushion many economic pressures.

Government should be saluted for this commitment to fixed investment and its effort to link this spending to jobs growth. Across six stadium construction projects alone, it is projected that 170 000 jobs (direct, indirect and induced) will be created annually.

Bidvest Foundation

Jobs are vital, but so is business formation to maintain momentum. Another key Group initiative will be the establishment of the Bidvest Foundation to promote enterprise development and foster business skills among a new generation of South African entrepreneurs.

Bidvest divisions already contribute to enterprise development through joint-ventures and outsourcing. The Bidvest Foundation, however, will have a wider mandate and will help black managers become owners in spheres that may or may not coincide with divisional focus areas.

We see sport as an exciting area of growth in a country with a superb climate and a young demographic profile. One early priority for the foundation will be to explore how black ownership of soccer clubs might be developed further.

Recognition

Bidvest retains its place in the JSE’s Socially Responsible Investment Index, a position we have held since the index’s inception. We were one of a select few South African companies to warrant a place on the Dow Jones Sustainability Index 2007 (a form of recognition for major international businesses that measure up to world sustainability standards) but regrettably marginally lost our place in 2008. Bidvest has participated in the Carbon Disclosure Project in South Africa, a worldwide project under the auspices of the United Nations to determine and report carbon emissions.

The future

Economic conditions may remain testing for some time, but we maintain our commitment to sustained shareholder value creation and judicious growth, both organic and, where appropriate, acquisitive.

We will unlock growth opportunities wherever they occur; in South Africa, Africa, Europe, Australasia and East Asia.

Sustainable business practice will remain a key area of focus and will increasingly influence our long-term planning. Sustainability has ceased to be a “soft” issue. It is a necessary, and urgent, response to hard business realities in an uncertain world. Bidvest people are resourceful, flexible and highly motivated. They have a record of sustained success in tough times. I am confident they will rise to the challenges of 2009 and deliver further growth.