Bidvest Asia Pacific

New initiatives

No major capital expenditure programmes were launched, though a new distribution centre in Hobart, Tasmania, was nearing completion at year-end. The AUD5 million centre should be operational by September.

An expansion project has also been launched at our Perth distribution centre as significant growth is being achieved by our teams in Western Australia.

A key focus area was investment to foster efficiency throughout our supply chain.

Our paperless warehouse management system went live in Sydney (Logistics), Brisbane (Meat Services) and Melbourne (QSR) and will roll-out in other centres in the coming year. The efficiency quest is moving from the warehouse to the road. A pilot project is about to be launched to investigate the benefits of truck routing software. The smart system maps drops, sequences and schedules. Ours is a dynamic business. Optimal truck routing is difficult on a manual basis when the customer-base requires flexibility and adaptability.

Risks to the business

These are little changed. Macro-factors such as lower consumer spending are the same for all business and are ameliorated in our case as food is an essential purchase.

Our broad range reduces the risk of a change in consumer preferences or movement from out-of-home to in-home eating. We serve the restaurant trade and hospitality industry, but our institutional business is not subject to the risk of a sharp downturn.

The risk of bad debt rises as the economy slows, but care is taken to manage our exposure. Our provisioning for doubtful debtors rose substantially in the year.

Organisational culture

The decentralised Bidvest model and our culture of accountability encourage the development of teams that are quick to spot opportunities and identify potential problems. Pride in performance was evident in a year that might have proved difficult. Instead, continued growth was achieved, a notable achievement in trying times.

Future

By year-end, there was a growing sense that a bottom had been reached and that Australia would return to growth, driven by rising commodity prices and orders. For the year ahead, revenue growth of 5% is forecast for the region while trading profit of around 10% is projected.

Long-term growth will be driven by our strategy of broadening our “centre-of-the-plate offering”. The intention is to significantly increase our penetration of the market for high value seafood, meat and other produce. Some early successes have already been registered. Our meat business is growing and we are confident that momentum will be maintained.