External operating environment
Economic growth
Although we expect the uncertain and fragile operating environment in South Africa to remain, we have a track record of outperforming and we are confident into the medium-term. Bidvest’s basic-need services and everyday essential product ranges should stand us in good stead, especially when coupled with an innovative, value-adding mindset.
Government policy and regulation
South Africa’s need for real GDP growth to create social and economic prosperity for all is undeniable. Bidvest is actively participating in national workstreams incorporating labour, government, civil society and business to achieve real and sustainable GDP growth. Enabling and aligned legislation that cuts across sectors is key.
Consumer spend
Consumer spend is expected to be under pressure, especially as inflation ticks up. Consumer healthcare spend on preventative measures is forecast to increase as health concerns and protecting families take priority. Automotive further reduced its dealer footprint in luxury cars and Adcock Ingram’s acquisitive focus on homecare, healthcare and personal care gathered momentum.
Technology
Technology brings opportunity to enhance efficiency, improve service and reduce environmental impact. It also drives changed behaviours and needs, to which we respond accordingly. Automotive implemented robotic process automation to efficiently handle high-volume transactions. Noonan introduced a scalable integrated smart building solution that comprises sensors, analytics and mobile user interfaces.
Out-of-home hygiene
The hygiene market is increasingly resilient and is supported by structural growth drivers such as urbanisation, a growing middle class, growing and aging population as well as hygiene and safety standards in the food, pharmaceutical and retail sectors. The global outbreak of the COVID-19 pandemic undoubtedly heightened the awareness of, and the need for, out-of-home hygiene. This is expected to accelerate the development and maturity of the industry globally. This is the focus for our offshore expansion strategy.
Increase in outsourcing and bundled spend
The market dynamics that influence customers to outsource and consolidate spend remains strong as efficiencies and value are being sought. Bidvest offers a variety of comprehensive and innovative solutions in Services, Branded Products, Commercial Products and Financial Services. To enhance this even further, alliances and synergies are being pursued between the South African, United Kingdom and Irish facilities management and hygiene businesses.
Infrastructure development and maintenance
Gross Fixed Capital Formation investment and maintenance have been limited. Government’s ability to credibly address the precarious financial position of several SOEs, initiation of development programs and ongoing maintenance of national infrastructure and key facilities remains critical to achieve sustainable growth in the South African economy. Private sector also needs to invest to establish and grow businesses and industries Bidvest, as a committed corporate citizen and investor in South Africa, is eager and well-positioned to augment initiated projects.