www.jse.co.za www.jse.co.za he key to business success includes consistency, consolidation and durability. These are traits that Grindrod appears to have in abun- dance, given its more than 100-year history. Sure it weathered financial storms like the devastating Asian crisis in the late 1990s, which led to the company reporting a loss of R66 million in 1999, but it grasped the lesson quickly. A decade later when the far worse and unanticipated financial crisis almost crippled the international shipping market, the group was not only prepared, but focused. Diversification has played an integral role in Grindrod’s success. A large part of its business is no longer confined to SA as the company has expanded into Africa, particularly the southern region. It also has a global presence as an integrated logistics service provider. ILLUSTRATION ISTOCKPHOTO CEO PROFILE 4 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 development of the Mozambican port, of which we have a 25% shareholding. ‘The long-term plan is to take Maputo Port from last year’s delivery of 15 million tons to 50 million tons by 2020. We’re also committed, through our involvement in the Zimbabwean rail concession, to grow volumes on the north/south corridor.’ Grindrod does not have a ‘wait-and-see’ attitude when it comes to its expansion into Africa. ‘We’re there already because we can see the traffic and demand for the movement of goods,’ says Olivier. ‘We know the cost of transportation is high because the vast majority of containerised commod- ities are moved by road, which is actually the most inefficient method. They should, as far as possible, be transported via rail so we are motivating the rehabilitation of the rail networks throughout the region, which in turn improves our competitiveness in the market. ‘When you look at investing in infrastructure in Africa, there are many private equity funds focused on winning concessions. It may be that they are well placed in terms of funds, but less so when it comes to execution combined with the right operating experience and a proven track record. The same is true when it comes to choosing partners and contractors, you have to ensure they are credible and of course to manage your risk accordingly. ‘I accept there may be risks when expanding into Africa, but generally if you are able to perform, the rewards are good with the right level of returns.’ Level of returns is something Olivier can relate to, given his uninterrupted 27-year tenure with Grindrod. With BComm, BCompt Honours and CA(SA) qualifi- cations, he managed various divisions before officially being appointed CEO of the group in January 2007. He remains excited and motivated. ‘Opportunities are self-motivating, and from where I sit, be that from a balance sheet perspective or otherwise, a good and efficient base in terms of enabling group service support requires a good executive team that works together to deliver.’ T ‘I ACCEPT THERE MAY BE RISKS WHEN EXPANDING INTO AFRICA, BUT GENERALLY IF YOU ARE ABLE TO PERFORM, THE REWARDS ARE GOOD For Grindrod CEO Alan Olivier the benefits of diversification and increased service with Africa are providing the right returns BY KERRY DIMMER MAKING A MOVE Grindrod’s four divisions – freight, trading, shipping and financial services – are structured to be self-sufficient, yet are integrated to provide supply chain solutions, all under the helm of CEO Alan Olivier. Olivier says Grindrod’s growth in recent years is highlighted by the reach of its freight service arm, ‘particularly the growth in ports, terminals and rail operations. We’ve been investing in this for the past decade and are now starting to grow into the capacity we’ve added’. Compared to the previous six months, freight services has shown a 75% growth in the first half of the year. ‘Logistics, although starting off a low base, is beginning to develop nicely and our banking sector has also experienced good growth.’ Olivier says Grindrod’s success is driven by events outside its home borders with regard to transportation and supporting infrastructure, although this is not exclusively so. Its future plans, for example, include a joint venture with RBT Resources in Richards Bay to expand the capacity of the Grindrod Navidtrade coal terminal. He says the company has also been working with its empowerment partner, Oiltanking Grindrod Calulo, to create an oil tank terminal at Coega. More recently they concluded an agreement with these partners as well as Mining Oil & Gas Services to develop a crude oil storage and blending terminal in Saldanha Bay. ‘Furthermore we’ve been building quite a nice rail business and now have the capability to produce 100 mainline locomotives a year. We continue to develop our rail offering into a much bigger operation.’ Olivier credits Transnet’s expansion into Southern Africa providing rail capacity to support the region. ‘Transnet is in a position to deliver support, as we have experienced with the development of the Maputo Corridor, which is critical to Grindrod’s
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www.jse.co.za www.jse.co.za
he key to business success includes consistency, consolidation and durability. These are traits that Grindrod appears to have in abun- dance, given its more than 100-year history. Sure it weathered financial storms like the devastating Asian
crisis in the late 1990s, which led to the company reporting a loss of R66 million in 1999, but it grasped the lesson quickly.
A decade later when the far worse and unanticipated financial crisis almost crippled the international shipping market, the group was not only prepared, but focused.
Diversification has played an integral role in Grindrod’s success. A large part of its business is no longer confined to SA as the company has expanded into Africa, particularly the southern region. It also has a global presence as an integrated logistics service provider. il
lust
rati
on IS
Tock
phoT
o
CEO prOfilE
93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 01 02 03 04 05 06 07 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75
development of the Mozambican port, of which we have a 25% shareholding.
‘The long-term plan is to take Maputo port from last year’s delivery of 15 million tons to 50 million tons by 2020. We’re also committed, through our involvement in the Zimbabwean rail concession, to grow volumes on the north/south corridor.’
Grindrod does not have a ‘wait-and-see’ attitude when it comes to its expansion into Africa. ‘We’re there already because we can see the traffic and demand for the movement of goods,’ says olivier.
‘We know the cost of transportation is high because the vast majority of containerised commod- ities are moved by road, which is actually the most inefficient method. They should, as far as possible, be transported via rail so we are motivating the rehabilitation of the rail networks throughout the region, which in turn improves our competitiveness in the market.
‘When you look at investing in infrastructure in Africa, there are many private equity funds focused on winning concessions. It may be that they are well placed in terms of funds, but less so when it comes to execution combined with the right operating experience and a proven track record. The same is true when it comes to choosing partners and contractors, you have to ensure they are credible and of course to manage your risk accordingly.
‘I accept there may be risks when expanding into Africa, but generally if you are able to perform, the rewards are good with the right level of returns.’ Level of returns is something olivier can relate to, given his uninterrupted 27-year tenure with Grindrod. With Bcomm, Bcompt honours and cA(SA) qualifi- cations, he managed various divisions before officially being appointed cEo of the group in January 2007.
he remains excited and motivated. ‘opportunities are self-motivating, and from where I sit, be that from a balance sheet perspective or otherwise, a good and efficient base in terms of enabling group service support requires a good executive team that works together to deliver.’
t‘I AccEpT ThERE MAy BE RISkS WhEn ExpAnDInG InTo AfRIcA, BuT GEnERALLy If you ARE ABLE To pERfoRM, ThE REWARDS ARE GooD
For Grindrod CEO Alan Olivier the benefits of
diversification and increased service with Africa are
providing the right returns
By k E r ry
d i m m E r
m akinga mOvE
Grindrod’s four divisions – freight, trading, shipping and financial services – are structured to be self-sufficient, yet are integrated to provide supply chain solutions, all under the helm of cEo Alan olivier.
olivier says Grindrod’s growth in recent years is highlighted by the reach of its freight service arm, ‘particularly the growth in ports, terminals and rail operations. We’ve been investing in this for the past decade and are now starting to grow into the capacity we’ve added’.
compared to the previous six months, freight services has shown a 75% growth in the first half of the year. ‘Logistics, although starting off a low base, is beginning to develop nicely and our banking sector has also experienced good growth.’
olivier says Grindrod’s success is driven by events outside its home borders with regard to transportation and supporting infrastructure, although this is not exclusively so.
Its future plans, for example, include a joint venture with RBT Resources in Richards Bay to expand the capacity of the Grindrod navidtrade coal terminal.
he says the company has also been working with its empowerment partner, oiltanking Grindrod calulo, to create an oil tank terminal at coega. More recently they concluded an agreement with these partners as well as Mining oil & Gas Services to develop a crude oil storage and blending terminal in Saldanha Bay.
‘furthermore we’ve been building quite a nice rail business and now have the capability to produce 100 mainline locomotives a year. We continue to develop our rail offering into a much bigger operation.’ olivier credits Transnet’s expansion into Southern Africa providing rail capacity to support the region.
‘Transnet is in a position to deliver support, as we have experienced with the development of the Maputo corridor, which is critical to Grindrod’s
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