IMPERIAL Logistics Southern Africa
IMPERIAL Logistics Southern Africa
IMPERIAL Logistics Southern Africa
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<strong>IMPERIAL</strong> <strong>Logistics</strong> <strong>Southern</strong> <strong>Africa</strong><br />
19 MARCH 2010<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
1
Agenda<br />
• <strong>IMPERIAL</strong> <strong>Logistics</strong> <strong>Southern</strong> <strong>Africa</strong> in Perspective<br />
• Introduction<br />
• Fast Facts<br />
• Structure and <strong>Africa</strong>n Involvement<br />
• The Total Cost of <strong>Logistics</strong> in South <strong>Africa</strong><br />
• Business Model<br />
• Customer Base<br />
• <strong>IMPERIAL</strong> <strong>Logistics</strong> – FMCG Involvement<br />
• Interim Results and Strategic Vision<br />
• TFD Network <strong>Africa</strong> and Broco Overview<br />
• TFD Network <strong>Africa</strong><br />
• Broco Transport Consultants<br />
• Tiger Brands Case Study<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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The World of an LSP in the World of the Big R<br />
• The economic downturn has challenged LSPs to contend with factors such<br />
as unpredictable demand, volatility in fuel costs and currency valuation,<br />
and excess inventory<br />
• Overcoming these obstacles in the near-term, shippers are employing two<br />
key tactics:<br />
– Cutting operating costs<br />
– Improving forecasting and inventory management<br />
• But they’re also using the downturn as an opportunity to assess their<br />
supply chains’ strengths and weaknesses and make changes designed to<br />
increase agility, be more responsive and reduce costs<br />
– Strategies here include network redesign and creative collaboration with LSPs<br />
and even competitors<br />
– LSPs weather the storm using steps such as sharing assets across multiple<br />
customers to reduce risk<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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<strong>IMPERIAL</strong> <strong>Logistics</strong> <strong>Southern</strong> <strong>Africa</strong> – Fast Facts<br />
• <strong>IMPERIAL</strong> <strong>Logistics</strong> is the leading logistics and supply chain management company<br />
in southern <strong>Africa</strong><br />
• <strong>IMPERIAL</strong> <strong>Logistics</strong> <strong>Southern</strong> <strong>Africa</strong> Fast Facts<br />
– 70+ operating companies in southern <strong>Africa</strong><br />
– Revenue > R10bn p.a. & aim for ROIC > WACC + 4%<br />
– 17,000+ employees<br />
– Warehouse capacity > 740,000 m<br />
– 5,500+ owned vehicles<br />
– Access to approx 2,000 sub-contractor vehicles (annual spend of > R2,6 bn)<br />
• <strong>IMPERIAL</strong> <strong>Logistics</strong> <strong>Southern</strong> <strong>Africa</strong> provides customised value-added logistics<br />
services and supply chain solutions to blue chip customers in almost every<br />
industry<br />
• Leveraging processes, people, technology and infrastructure<br />
• Track record of determining the correct operating model, building the business<br />
case and implementing the agreed solutions cost-effectively and timeously<br />
– Warehouse capacity > 740,000 m 2 4<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010
<strong>IMPERIAL</strong> <strong>Logistics</strong> <strong>Southern</strong> <strong>Africa</strong> in<br />
Perspective<br />
INTEGRATION<br />
SERVICES<br />
CONSUMER<br />
PRODUCTS<br />
TRANSPORT &<br />
WAREHOUSING<br />
SPECIALISED<br />
FREIGHT<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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<strong>IMPERIAL</strong> <strong>Logistics</strong>’ <strong>Africa</strong>n Involvement<br />
• WP Transport<br />
• Etosha Transport<br />
• Namibië Multi Loads<br />
• Interchain <strong>Logistics</strong><br />
• Cargo <strong>Africa</strong> Over-Border<br />
• <strong>IMPERIAL</strong> Cargo Namibia<br />
• Truck <strong>Africa</strong><br />
• Procon (Colbro & Fourway)<br />
• Zimbulk Tankers<br />
DR Congo<br />
Tanzania<br />
Malawi<br />
Angola<br />
Zambia<br />
Zimbabwe<br />
Namibia<br />
Botswana Mozambique<br />
South<br />
<strong>Africa</strong><br />
Swaziland<br />
Lesotho<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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<strong>Logistics</strong> costs as a percentage of GDP declined<br />
to its lowest level since measurement<br />
• Total <strong>Logistics</strong> Costs<br />
amounted to R339bn<br />
in 2008; 14,7% of GDP<br />
• Further refinement of<br />
comprehensive model<br />
• Understanding the<br />
“Value of <strong>Logistics</strong>”<br />
• Understanding<br />
green logistics opportunities<br />
16%<br />
15%<br />
15.2%<br />
R235bn<br />
15.9%<br />
R317bn<br />
14.9%<br />
R259bn<br />
R339bn<br />
14.7%<br />
350<br />
330<br />
310<br />
290<br />
270<br />
250<br />
230<br />
Rand billion<br />
R213bn<br />
210<br />
14%<br />
2003 2004 2005 2006 2007 2008<br />
<strong>Logistics</strong> cost Percentage of GDP<br />
<strong>Logistics</strong> Costs for South <strong>Africa</strong><br />
190<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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The Total Cost of <strong>Logistics</strong> in South <strong>Africa</strong><br />
• In addition, South <strong>Africa</strong>’s freight transport as a percentage of logistics costs is the<br />
highest known (measured) figure in the world and is rising<br />
Transport as a % of GDP and <strong>Logistics</strong> Cost<br />
Contribution to total logistics cost<br />
55%<br />
50%<br />
45%<br />
40%<br />
35%<br />
30%<br />
2003 2004 2005 2006 2007 2008<br />
9.00%<br />
8.00%<br />
7.00%<br />
6.00%<br />
5.00%<br />
4.00%<br />
3.00%<br />
2.00%<br />
1.00%<br />
0.00%<br />
Percentage of GDP<br />
Transport cost as percentage of GDP<br />
Transport cost contribution to total logistics costs<br />
World average transport cost contribution to total logistics cost<br />
This negatively affects South <strong>Africa</strong>’s competitiveness<br />
– which will continue to worsen if no action is taken<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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The Total Cost of <strong>Logistics</strong> in South <strong>Africa</strong><br />
• Transportation key to supply chain and therefore the continent’s success<br />
• <strong>Logistics</strong> costs in South <strong>Africa</strong> and the rest of <strong>Africa</strong> are too high<br />
– Transport cost is the biggest contributor and remains an issue, caused by …<br />
• High demand, inefficient and inadequate rail system, high fuel costs due to mode<br />
inefficiencies, inadequate collaboration, process inefficiencies and skills shortages<br />
– The high demand for transport is more and more supplied by road – an expensive<br />
solution for certain products and geographic areas<br />
• Infrastructure investment is a business imperative<br />
– Head of KPMG’s Global Infrastructure practice Nick Chism suggests that as<br />
governments around the globe grappled with the current economic crisis, they<br />
needed to recognise that infrastructure investments were still desperately needed<br />
to support critical business activities<br />
– “Not only does improved infrastructure attract businesses and the employment and<br />
the tax revenue that is derived, but it’s recognised that infrastructure work can be<br />
an economic stimulus if managed correctly” (Chism)<br />
• Public and private collaboration (incl. role of outsourcing) – finance and<br />
administer major infrastructure projects – is a key future success factor<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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World-class Transport Systems Critical to the<br />
Continent’s Growth & Competitiveness<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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<strong>IMPERIAL</strong> <strong>Logistics</strong> Business Model<br />
No<br />
Outsourcing<br />
Individual<br />
<strong>Logistics</strong><br />
Services<br />
(Non-<br />
Integrated)<br />
Multiple<br />
Activities<br />
(Integrated)<br />
Single Source<br />
3PL Contract<br />
<strong>Logistics</strong><br />
Lead<br />
<strong>Logistics</strong>/4PL<br />
Services<br />
Advanced<br />
Services<br />
Important to note: “Using an LSP is not an ‘all-or-nothing’ proposition”<br />
<strong>Logistics</strong>/supply chain management not always<br />
an area of core competency, even for capable<br />
organisations<br />
Expertise<br />
Strategic<br />
Fit<br />
Ability to<br />
Invest<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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<strong>IMPERIAL</strong> <strong>Logistics</strong> Business Model<br />
No<br />
Outsourcing<br />
Individual<br />
<strong>Logistics</strong><br />
Services<br />
(Non-<br />
Integrated)<br />
Multiple<br />
Activities<br />
(Integrated)<br />
Single Source<br />
3PL Contract<br />
<strong>Logistics</strong><br />
Lead<br />
<strong>Logistics</strong>/4PL<br />
Services<br />
Advanced<br />
Services<br />
Operating Company Customer Services<br />
Fast ‘n Fresh Woolworths Primary Transport, Secondary Transport<br />
Freightmax Shell Warehousing, Secondary Transport, Reverse <strong>Logistics</strong><br />
<strong>IMPERIAL</strong> Distribution, <strong>IMPERIAL</strong> Cargo, Cargo<br />
<strong>Africa</strong>, imperiLog<br />
<strong>IMPERIAL</strong> Cargo & Cargo Solutions, Tanker<br />
Services Food & Chemicals<br />
PG Group<br />
Distell<br />
Primary Transport, Secondary Transport, Warehousing,<br />
Labour, Packaging<br />
Inbound <strong>Logistics</strong>, Primary Transport, Secondary Transport,<br />
Warehousing<br />
Freightmax Toyota Consolidation, Cross docking, Primary Transport<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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<strong>IMPERIAL</strong> <strong>Logistics</strong> Business Model<br />
No<br />
Outsourcing<br />
Individual<br />
<strong>Logistics</strong><br />
Services<br />
(Non-<br />
Integrated)<br />
Multiple<br />
Activities<br />
(Integrated)<br />
Single Source<br />
3PL Contract<br />
<strong>Logistics</strong><br />
Lead<br />
<strong>Logistics</strong>/4PL<br />
Services<br />
Advanced<br />
Services<br />
Operating Company Customer Services<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> (<strong>IMPERIAL</strong> Cargo,<br />
<strong>IMPERIAL</strong> Cargo Solutions, <strong>IMPERIAL</strong><br />
Dedicated Contracts, Tanker Services)<br />
<strong>IMPERIAL</strong> Distribution, Etosha Transport,<br />
Cargo <strong>Africa</strong><br />
The Cold Chain<br />
Goldfields <strong>Logistics</strong><br />
<strong>IMPERIAL</strong> Cargo Solutions<br />
Consol<br />
brandhouse, incl.<br />
Namibian Breweries<br />
Tiger Brands<br />
(Enterprise), Heinz<br />
Sappi Fine Paper<br />
Safripol<br />
Inbound <strong>Logistics</strong>, Warehousing, Primary Transport,<br />
Secondary Transport, Reverse <strong>Logistics</strong><br />
Inbound <strong>Logistics</strong>, Destuffing of containers, Primary<br />
Transport, Secondary Transport, Warehousing, Invoicing<br />
Warehousing, Primary Transport, Secondary Transport,<br />
Merchandising, Invoicing, After Sales, Reverse <strong>Logistics</strong><br />
Inbound <strong>Logistics</strong>, Warehousing, Primary Transport,<br />
Secondary Transport, Reverse <strong>Logistics</strong>, Invoicing<br />
Inbound <strong>Logistics</strong>, Primary Transport, Warehousing,<br />
Secondary Transport<br />
<strong>IMPERIAL</strong> <strong>Logistics</strong> ©<br />
File name: Analyst Presentation Date: 19/03/2010<br />
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