Business context and trading conditions

Across such a vast geographical area, trading conditions can differ markedly. In the core Australian territory, confidence and growth are strong in those areas in which mining is a major employer. Other areas often see no or low growth.

The tourism industry remains under pressure in Australia, but enjoys robust growth in Singapore thanks to successful promotion of its new casino resort hotels. Continued expansion of the resorts business in Macau also proved beneficial.

Fragile consumer confidence for much of the year in Australia was negative, but the restaurant sector showed continued resilience.

In New Zealand, economic recovery gathered traction on the back of strong demand for agricultural commodities from Asian customers. Unemployment decreased to 6,6%. Overall inflation and food inflation are again on the rise, with generally positive effects for a trading business.

The Singaporean economy maintained exceptionally strong growth for the first three quarters, only for growth to cool rapidly in the final quarter, largely a result of a big slowdown in demand for manufactured goods.

Economic growth remained robust in Greater China until the closing months of the year. Again, inflation is becoming a concern for the authorities.

E-commerce emerged as a major growth area. Both the Australian and New Zealand businesses made increasing use of this route to market. We have established our own software development team, based in New Zealand, to ensure continued industry leadership in this area.

Bidvest Australia and Bidvest New Zealand continued their permanent loyalty programme for foodservice customers, offering customers the chance to earn and redeem loyalty programme dollars.

Our Asian businesses optimised the growth of tourism and the trend to western-style eating through constant expansion and amendment of their product ranges.

Expansion and modernisation of the branch network is constant at all operations. Capital expenditure topped R300 million.

Tight labour markets are likely to affect all our operations. Training and our leading reputation help manage ‘people risk’ as we strive to retain and develop talent.

The Christchurch earthquake in February was New Zealand’s largest ever natural disaster and showcased how our people and Bidvest team spirit can be risk management tools. Cooperation between teams and willingness to put in extra effort to help others enabled the New Zealand business to recover at a surprisingly rapid rate.

Food and foodservices are highly regulated. As a well-capitalised and well-resourced business we try to anticipate regulatory and quality requirements. Our high level of certification has become a source of competitive advantage.

Performance

Divisional performance was satisfactory overall, trading margins were in line with budget and expenses were well managed.

Growth was a function of market-share gains, acquisition, innovation and e-commerce expansion.

Bidvest Australia maintained its strong run, reflecting exceptional effort in challenging conditions. Bidvest New Zealand performed strongly despite the impact on trading of the Christchurch earthquake. New distribution centres were built at Tauranga and Dunedin while Plymouth facilities were expanded. Angliss Singapore exceeded trading profit targets. Angliss Greater China put in a pleasingly strong performance, with good contributions from the core Hong Kong business.

Sustainability

At Bidvest Australia, ISO AS/NZS 14001 certification is being processed.

Bidvest continues to investigate ways of reducing electricity and power usage. Our ongoing growth means that our electricity usage continues to increase, but energy-efficient installations have reduced overall impact.

Bidvest Australia used approximately 367 terajoules of energy, establishing a baseline to measure our progress in the control of carbon emissions.

In late 2010, Bidvest Australia embarked on a joint investigation with the NSW government to find ways of reducing electricity usage. A number of initiatives have been identified for our freezers and cold rooms, which we will implement starting this year.

Our Melbourne distribution centre has reduced its energy consumption by 17% (from 350 800kWh (2010) to 292 000kWh (2011)) by installing energy-efficient lighting. Similar replacements are being rolled out to other centres in Australia and New Zealand.

Bidvest Australia has introduced management plans to improve water efficiency, as well as new truck washing facilities that use collected rainwater and/or filter water before disposal.

Across Bidvest Asia-Pacific, companies are working to reduce fuel use by purchasing more efficient delivery vehicles and developing more effective routing.

Bidvest Australia’s recycling programmes continue to increase. Our Hervey Bay centre reports that they have halved general waste by recycling.

Ice cream trucks at both Bidvest New Zealand and Bidvest Australia use eutectic refrigeration which, after charging at night, requires no energy use during the day despite constant access to product as deliveries are made.

Angliss Hong Kong is drafting an environmental policy, including targets and performance indicators.

Each year, part of the profit from Bidvest New Zealand’s own-brand products is donated to Project K, part of the Foundation for Youth Development. The project mentors young people, boosting confidence. This year we contributed NZ$46 000. The company also sponsors local schools and sports teams.

Bidvest and its employees donated over NZ$100 000 to support employees and their relatives affected by the past year’s earthquakes in Christchurch.