Contractual Logistics (Africa)

A diversified supply chain solution company serving selected sub-Saharan African markets

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As a diversified contractual logistics company serving the needs of selected sub-Saharan African markets, the division’s successful business model incorporates the design, implementation and ongoing provision of supply chain solutions for its customers.

logistics-africa-icons-blue-01
logistics-africa-icons-blue-01

As a diversified contractual logistics company serving the needs of selected sub-Saharan African markets, the division’s successful business model incorporates the design, implementation and ongoing provision of supply chain solutions for its customers.

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4 040
EMPLOYEES
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27
DEPOTS
52 million
KILOMETRES PER ANNUM

“Our aim is to be the leading supply chain partner in
our chosen markets by adding value to our clients
through the provision of specialist services.”

– Gert Brits

“Our aim is to be the leading supply chain partner in our chosen markets by adding value to our clients through the provision of specialist services.”

– Gert Brits

gert-text-01

Business environment

The Contractual Logistics (Africa) division comprises Unitrans’s non-South African operations. The division was created following the sale of 45% of Unitrans South African Operations (‘USCS’) in a B-BBEE transaction. A new executive management structure was implemented on 1 December 2018, providing focused attention to the African businesses with growth being the dominant strategic objective.

The division is diversified and operates in nine African countries, namely Botswana, Lesotho, Namibia, eSwatini, Mozambique, Malawi, Tanzania, Zambia and Madagascar. It currently operates in two major sectors, being petroleum and agriculture, with smaller operations in the mining, cement, salt and food sectors.

In the agricultural sector, the division operates in the sugar industry. Operations are situated on clients’ premises, utilising dedicated farming equipment and delivering services that range from land preparation to loading and hauling of sugar cane. The specialisation of services provides an ideal platform to continually invest in innovative solutions that deliver both cost and yield benefits to clients and the division. Operating on the client’s premises also creates the ability to rapidly up- or downscale operations to optimise cost structures and adjust in line with volume fluctuations.

In the petroleum sector, the division operates with a large fuel tanker fleet. Although the business is mostly contractual, the division can redeploy vehicles with relative ease across borders to other operations as and when required.

The division remains focused on the renewal of existing agreements and the growth of medium- to long-term contractual logistics services. Nevertheless, it has the skills and experience to expand its services into other sectors within those countries in which it operates. The geographic and sectoral diversification provides some protection to cyclical fluctuations within countries or sectors. Currency volatility is closely managed by KAP’s treasury team to mitigate foreign exchange risk and to continuously repatriate funds.

Commentary

The division performed well for the year, supported by stable volumes and good operational execution. Revenue increased by 10% to R2 011 million from R1 820 million. Operating profit increased by 6% to R283 million from R268 million. The division experienced growth in both the agricultural and cement operations. Volumes in the petroleum operations were negatively affected by delayed border crossings. The devastation caused by Cyclone Idai in northern Mozambique was mitigated by management intervention and insurance. Cost escalations were effectively recovered from clients.

Outlook

With a significant number of contracts at or nearing renewal stage, the division is focused on contract retention, volume growth, technology investments and efficiency improvement in an increasingly competitive environment. Management continues to focus on growth opportunities in its existing territories.

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