Bidvest and empowerment

Bidvest’s position on BBBEEE is unequivical. Black economic empowerment is crucial to the sustainable development of the South African economy. Without the full participation of all racial groups – especially the black majority – this country cannot realise its potential. Peace and prosperity depend on transformation.

Jobs and rates

President Zuma’s plan to create 500 000 new jobs by the end of the year indicates that jobs growth is a priority with our new government. This is commendable. In South Africa, pushing back poverty implies pulling out all the stops to create jobs.

Infrastructure spending and public works can contribute, but additional tools may be needed – including lower interest rates. Rates have eased considerably, coming down by 4,5% between December 2008 and May 2009, but at 7,5% in mid-2009 and 7,0% in August, our rates are still high in relation to some economies.

Inflation, which has a disproportionate impact on the poor, tends to be the Reserve inflation-targeting has been SARB policy since February 2000. Reserve Bank independence is entrenched in our Constitution, but it would be unusual if policy options were not subject to comprehensive review in the near future given the much-changed financial landscape since 2000.

With interest rates at their lowest in decades in some developed nations, it is obvious that getting economies ticking over again is the policy priority of many central banks, even those that maintain commendable independence from political interference. Hopefully, our Reserve Bank will follow the international lead and show greater flexibility in future.

Jobs at Bidvest

Bidvest has an unparalleled record as a jobs creator, but we were not immune to the unprecedented pressures of the last 12 months particularly in services and automotive divisions. Major cost-cutting programmes were announced in our businesses, but management refused to resort to wholesale retrenchments.

In an economic environment which went into recession, strong job creation came to a halt. Our workforce decreased slightly to 103 449.

International experience

Regrettably, retrenchments occurred in our UK operations, but other international businesses were not impacted by adverse economic conditions to the same degree. Recovery will take time and unstinting effort. No one should expect a rapid return to the buoyant conditions of two years ago, either in our international or domestic South African markets.

Resilience

Even in the face of challenging business conditions, Bidvest people and businesses continued to innovate and raise their standards.

In South Africa, we maintained our commitment to transformation, diversity, representation of black people in strategic roles and continued improvement in our empowerment status and scores.

Employee skills and community development continue to gain momentum. Investment in small black enterprises increased. Supplier alignment with our transformation objectives remain strong.

We continue to drive HIV/Aids awareness and education. Know-your-status campaigns and active interventions increasingly characterise our efforts to combat the spread of HIV and assist those living with Aids.

Green is Gold

Environmental management and energy efficiency are focus areas and are viewed as potential sources of competitive advantage rather than compliance “chores”. The positive mindset is important. More is achieved by pushing ahead rather than being pulled along. Teams in all geographies are alive to the challenge of global warming and the need to reduce carbon emissions.

Bidvest’s "Green is Gold'" initiative has alerted all employees to the possibility of using sustainability as a springboard to new entrepreneurial opportunities and new methods of creating business value.

At Bidvest the enviromentalist's mantra of Reduce – Reuse – Recyle has been extended. Our managers and workers increasingly Rethink attitudes, processes and behaviour to achieve better operational results through better environmental practice.

Environmental challenges, specifically climate change, demand continued focus. Mitigating emissions is becoming crucial. As a society we also have to adapt more quickly to climate changes that are already taking hold, particularly in South Africa where future food security is cause for concern.

Recognition

Bidvest is honoured as a pace-setter and standard-bearer in numerous spheres. For example, in the JSE Socially Responsible Investment Index Bidvest is one of the 21 top performers (out of 103 companies in the index). In the Carbon Disclosure Project we are one of the top 10 in our category.

In the Forbes list of the world’s position 1 102. In the Campbell Belman survey of 166 fund managers and analysts Bidvest is ranked seventh in its list of the JSE Top 100.

We took second place in the 2008 interim results category of the Business Day Awards and came third in the best corporate website category.

The “Ask Africa Trust Barometer” put Bidvest seventh in its overall classification while we took top spot in the industrial category. My colleague, Brian Joffe, was runner-up in its chief executive rankings. Congratulations, Brian!

Future

A hesitant recovery appears to be in its early stages in many of the international markets in which Bidvest is active. Energetic steps have been taken to refocus activities and I am hopeful that improved performance in the UK can be achieved.

I am also quietly confident that the corner is being turned in South Africa. Though I think it delusional to regard the 2010 FIFA World Cup South Africa™ as a magic wand that will wave away all economic challenges for the next 12 months, it should be acknowledged that this event will be helpful as a catalyst as we move out of recession.

In the immediate term, South Africa faces a considerable challenge. Business confidence is low. Hopes of sustained growth above 5% have been dashed and the sights set by policymakers may have to be recalibrated. That said, there are some “green shoots” to celebrate.

The country recently recorded its first monthly trade surplus since December 2006. Some commodity prices have recovered from their lows earlier in the year and national morale received a boost when we proved during the FIFA Confederations Cup that our organisational skills are comparable with the best in the world.

As we move closer to the 2010 kick-off, I expect the national mood to revive still further. We live in a much-changed world.
But some things don’t and determination of Bidvest people. In World Cup year, I believe they will put in another winning performance.

Cyril Ramaphosa
Non-executive chairman