The establishment of the two projects resulted from Grainlink�s growth strategy. According to Gerard van Zyl, Manager of the Business Development department, the department�s vision is to identify opportunities that enforce Grainlink�s strategic vision. As enablers to identify opportunities, the necessary information is usually gathered from literature, seminars, established networks and national and international field trips.
Where identified opportunities lead to the establishment of new ventures, the Business Development department also facilitates the transition from the developmental stage to the operational stage.
At the helm
Gerard van Zyl has been a part of the Senwes team for the past 36 years. He has a financial background, but spent the majority of his career managing business enterprises. Some of his career highlights was as General Manager of a joint venture between Senwes and HJ Heinz Company, as well as being Managing Director of Senwesko Feeds. Apart from his experience in the frozen potato and stock feed industry, he was also actively involved in the edible oil, maize milling, pet food and peanut butter industries.
Chris Motengwe is the Assistant Manager of the Business Development department. He previously worked for the Grain Marketing Board of Zimbabwe, where he started as Business Analyst and was promoted to Business Development Manager. He then accepted a position as Production Manager at AgriFoods Ltd and Operational Manager at Atrax Commodities Ltd, before moving on to South Africa and Senwes.
What Chris enjoys most about Business Development, is to be able to work on new projects. Every project is filled with new challenges, which gives a new dimension to the project. They also have the opportunity to explore Africa, where you see different business models at work and visit different places, that gives a depth to your knowledge and understanding of what is happening in Africa.
The establishment of Senwes Malawi
The Senwes Malawi project was researched as first entry into the grain market of the SADC region. Growth in the South African grain market is limited, while there is great potential within the SADC region. As Grainlink�s core business is to be involved in the movement of grain, this region is filled with opportunities that result from the continuous movement of supply and demand within the region. The sub-Sahara region is also the last area to substantially increase the production of grain in the world without harm to the natural environment, like the South American rain forests.
According to Gerard, the SADC region and Kenya (excluding South Africa) produces almost 15 million tons of maize annually, at an average yield of one ton per hectare. With worldwide interest now focusing on food production in Africa, this average yield can easily increase to two tons per hectare, which means that this region has the potential to produce 30 million tons per year, in addition to the approximately twelve million tons that South Africa produces annually.
�It therefore makes sense for Senwes to expand its footprint further into Africa,� Gerard said.
Why Malawi?
Malawi was chosen as first entry for several reasons. Among these is the fact that the country currently produces around
3 million tons of white maize per annum, which, apart from South Africa, is the highest in Africa. Almost 90% of the countries� citizens are also involved with agriculture, which ensures greater involvement from the Malawian government. Malawi�s maize yield is close to two tons per hectare and, together with the seed and fertiliser subsidy programme the goverment offers, the Malawian producers are well on their way to achieve a three tons per hectare yield. The country is also centrally located within the region which Senwes aims to service, and it offers very good export possibilities. It also boasts a relatively well-engineered infrastructure.
The Business Development department investigated the project for well over two years, which included the presentation of a paper, sponsored by the World Bank, for the Malawian government on licensed warehouses, desk top researches, field trips and the eventual placing of a development official in Malawi for six months.
The end result was a well thought through business plan, which led to approval by the Senwes Board to establish operations in Malawi.
Running the unit
�The success of the venture depends greatly on the quality of management within Malawi,� Gerard said. So, from 1 March 2010, Eran Wilson will relocate to Malawi, where he will function as Managing Director of the newly established company.
Eran has been with Senwes since January this year and has a National Diploma in Purchasing Management, a Marketing Diploma from Unisa and an MBA (specialising in Marketing) from Wits, as well as a variety of other business courses to his name. He obtained experience of the African business environment while working for National Milling, Zambia. He also spent seven years as Operational Manager with Masstock Africa. In 2003, he returned to South Africa and joined Starke Ayres, where he was International Sales Manager for four years, before being promoted to International Sales Director. This position meant that he was accountable and responsible for sales and marketing of 22 countries outside South African borders.
�To me, it is an enormous challenge to initiate a new business. I have a passion for establishing new business units and to start something from nothing,� Eran said. According to him, his future plans include the establishment of a fully-fledged Senwes business unit in Malawi, which will function in a dynamic and innovative manner to create value for all stakeholders.
On 1 March, Eran will start with phase one of the project in Malawi, which includes the establishment of the business, contracting networks, creating relationships and setting up the trading business.
�Senwes will be exercising caution with its entry into Malawi, but future plans also include grain storage and warehouse receipt services,� Gerard said.
With the Malawi project proving viable, Senwes is also looking into the establishment of similar ventures in Zambia, Mozambique, Zimbabwe and Kenya. According to Gerard, investigations into these ventures are at an advanced stage.
The innovation of Grainovation
One of the inhibiting factors for growth in the Grainlink Marke�ting division was the lack of continuous availability of transport. The Business Development division was subsequently asked to research possible solutions. As logistics management is a specialised field, which is not the core business of Grainlink, it was eventually decided to seek a specialist in this field and rather form a joint venture than doing it alone. Imperial Logistics, which is the biggest logistics company in South Africa, was identified as the ideal partner.
Goal of joint venture
The first goal of the newly-formed company, with a 50/50 shareholding distribution, is to provide for Senwes�s needs for logistical support. Only when the needs of the company have been met, will secondary goals and possibilities come into play.
�The joint venture will enable Senwes to increase its effectiveness in the supply chain � from the farm gate to the consumer. This increase in effectiveness will offer indirect benefits to the clients of Senwes Grainlink. For example: years ago people did their shopping in a very different way. They would walk up to a counter and ask the person servicing the counter for the products they needed. The person would then look for the products and give it to the consumer, who would pay for it and be on their way. Then big retail companies, like Pick n Pay and Spar, decided that it would be more effective for consumers to pick their own products from the shelf and to have more than one person servicing clients. This increased the effectiveness of their business and indirectly benefited their clients,� Gerard explained.
Grainovation was formally established on 1 February of this year. The company was launched with a fleet of ten special trucks. �We decided to start small and reduce our risk,� Gerard said. Pieter Olivier has been appointed General Manager of Grainovation. Having previously held the position of Logistics Manager at Grainlink, his appointment will prove to be a valuable contribution to the company.
The company will have three focus areas, which includes transport from the producer to the silo, from silo to silo and from the silo to the market.
For Grainlink�s Business Development department, the way ahead is clear. Having met their objectives of facilitating the processes for a logistic entity from the conceptual to the operational stage and carrying out all preliminary work to enable the establishment of a foreign-owned company in Malawi, the division will start looking into new projects to add value for Senwes. For them, innovation and success go hand in hand.
Elmarie Cronje is the Editor of Senwester. Send her an email at [email protected] or phone her at (018) 468-2716.
Photos
Photo 1: Eran Wilson (left) is the newly appointed Managing Director of Senwes�s new business unit in Malawi, that is operating under the name, Senwes Malawi. With him is Chris Motengwe and Gerard van Zyl (right), who both played an important role in the establishment of Senwes Malawi.