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B r i n g i n g t h e f u t u r e closer
INFRASTRUCTURE
Presented by: Mr Hilton Mer
CEO: Metcash Trading Africa, Limited
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FACILITATING A BUSINESS FACILITATING A BUSINESS APPROACH IN AFRICAAPPROACH IN AFRICA
HISTORIC EVENT FOR SOUTH AFRICAGOVERNMENT AND PRIVATE SECTOR DIALOGUE ACROSS THE CONTINENT ESSENTIAL TO FACILITATING SUCCESSPRIVATE SECTOR INVOLVEMENT REQUIRED TO HELP UPLIFT COMMUNITIES AND DEVELOP / GROW ECONOMIESCLEARLY THOUGHT OUT MESSAGES BY PRIVATE SECTOR MUST BE COMMUNICATEDGOVERNMENT FACILITATES BUSINESS PROCESSES, FRAMEWORKS AND APPROPRIATE ENVIRONMENT
Legal compliance necessaryRemove unnecessary red tapeImport duties/customs control
Level playing field requiredFacilitation of controlled cross border trade
Quo Vadis SADC and COMESARepatriation of uninvested dividends
PROSPERITY IN EUROPE AND NORTH AMERICA BUILT ON RECIPROCAL TRADING AND ACCOMMODATING BEST PRACTICE
Africa needs to do likewise
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GROWTH OF 4.2% PREDICTED IN 2004 (U.N.E.C.A)Dependent on weather and current international trendsAll 5 regions of the continent (S, C, E, W and N) set to demonstrate stronger growth (only Southern Africa in 2003)
REASONS INCLUDEA reduction in armed conflicts and resumptions of certain internal peace talksIncrease in countries eligible for debt relief
Frees-up resources for social expenditure and investmentImproved world economic growth
Will stimulate increased aid, trade and foreign investment in AfricaNEED FOR AND MOVEMENT TOWARDS THE FOLLOWING FACTORS WILL ASSIST COUNTRIES’ GROWTH AND BUSINESS
Poverty alleviation and promotion of social equityStrengthening legal and judicial systems, property rights, contract enforcementPromotion of consensus by all stakeholdersImprovement in the quality of public regulation of liberalized economiesAppropriate policies for developing individual economic sectors
ALL OF THE ABOVE ARE RELEVANT AND IMPORTANT TO BUSINESS OPPORTUNITIES AND GROWTH IN THE FMCG INDUSTRY
GROWTH IN AFRICA
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THE UNDERMENTIONED ISSUES STATE THE OBVIOUS BUT ARE WORTHY OF REPETITION:
ELECTRICITYLight up the wayTrading stores need lighting, computers, POS equipment and refrigerationReliability essential otherwise business systems fail/ineffectiveSouthern Africa Power Pool contributes to evolution of electricity market and integrated power expansion planningAcknowledge that several new country inter connections being considered
TELECOMMUNICATIONSMobile and fixed-line networks offer opportunitiesReliable fixed-line networks needed for:
Business communicationsReceiving and placing orders for goodsBusiness data transmission and hence business analysis and controlA cheaper alternative to Satellite phones
INFRASTRUCTURAL REQUIREMENTS FOR LOGISTICAL SUCCESS – THE
GOVERNMENT FACTOR
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INFRASTRUCTURAL REQUIREMENTS FOR LOGISTICAL SUCCESS – THE
GOVERNMENT FACTOR (continued)
RAIL/SEA TRANSPORTFacilitates importation and exportation of goods and productsGround transportation locally needs cohesive networks to dovetail on rail/sea transport
ROADSTransportation of customers, staff, goods and productsModernization and industrialization dependent on suitable road infrastructure
WATER AND SANITATIONPRIVITASATION
Can assist governments in facilitating improvements to these infrastructural elements
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CHALLENGES IN DISTRIBUTION AND LOGISTICS
INFRASTRUCTURAL INADEQUECIESEffective infrastructure required to facilitate the logistics of business
Inbound logisticsOutbound logisticsCustomer logistics
Otherwise cost of operations increased / returns reducedSOME RELATIVELY SMALL POPULATIONS SPREAD OVER WIDE AREAS
E.g. Mali, Sudan, Namibia, Botswana, AngolaUNFAVOURABLE CLIMATIC CONDITIONS
Snow in LesothoFlooding and swollen rivers in Central Africa
DIVISIONS BETWEEN SOME ETHNIC GROUPINGSPOLITICAL INSTABILITIES AND INSURRECTIONS
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GROUP AT A GLANCEGROUP AT A GLANCE
26.2
1,467m
51.7bn
03A
362m703m903m791m1,115mOperating Income (EBITDA)
16.2
33bn
01A
20.2
43bn
02A
31.5
29bn
00A
26.0
29bn
99A
20.8Headline EPS - cents
11bnTurnover
98A
Full Name: Metro Cash and Carry, Ltd.Market Capitalisation: ZAR4.25bnShares in Issue: 1.824bnCurrent Share Price: ZAR2.3012 month high/low: ZAR2.60 / ZAR1.75Free Float: 94%Offshore Shareholding: 8%CAG% Turnover 98-03: 36.2%CAG% Ops Income 98-03: 32.3%
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METCASH AFRICA – THE BUSINESS
LEADING WHOLESALE DISTRIBUTOR OF FAST MOVING CONSUMER GOODS IN AFRICA
Food and non-food groceriesLiquorGeneral merchandise
CHAMPTION OF THE INDEPENDENT TRADERHawkerSpazaC StoreSuperetteSupermarkets
FRANCHISE AND BANNER ALLEGIANCES OFFEREDBuying power passed downCollective corporate identity for independentsHarnessed promotional activity
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GEOGRAPHIC SPREAD GEOGRAPHIC SPREAD -- 20032003
Hong KongSouth East Asia
South AfricaSwazilandNamibiaLesotho
43 Liquor Stores5 Distribution Centres
Unitrade (UMS) Buying GroupHong Kong Trading
Rand Monetary Area (RMA)South Africa, Namibia, Lesotho, Swaziland
145 Metro C&C12 Trade Centres
AngolaZimbabwe
MadagascarMocambique
BotswanaMalawiKenya
Uganda
239 StoresCombination of wholesale (predominantly)
& retail
AFRICA (Outside RMA)
AFRICA OPERATIONS+/- R17 Billion Turnover
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STORE NUMBER ANALYSIS
4391842379TOTAL
1991242145RMASouth Africa, Namibia, Lesotho & Swaziland
14--14Angola213-19Zimbabwe22--22Uganda
152--152Malawi31-2Kenya
272-25Botswana
2003Trade Centre
Liquor stores
C&C
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BANNER STORES AFRICA
26632333551851921793268TOTAL
-
-
-
-
-
-
63
KENYA
----11-223Buy-Rite
--14-23-456Viva
------103Super Rainbow
---6124591253Rainbow
---471072Pop In
--151292018309Square Deal
262331909110792852Lucky 7
UGANDAZIMBABWEBOTSWANASWAZILANDNAMIBIALESOTHORSABANNER GROUP