omnia holdings annual report 2010 omnia holdings annu

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50 OMNIA ANNUAL REPORT 2010 SUSTAINABILITY REPORT continued evaluates progress against set objectives and targets in each business on a quarterly basis. All committees have received training as to their roles, and produce annual reports on their progress. The introduction of plant-level committees has proven highly effective. Beyond setting and driving compliance with targets, Description Male Female Total African Coloured Indian White African Coloured Indian White Top management – – – 8 – 1 – – 9 Senior management – 2 2 16 1 – – 1 22 Professional 15 3 17 133 3 4 4 40 219 Skilled 115 33 27 277 37 18 29 105 641 Semi-skilled 571 39 29 67 128 42 28 179 1 083 Unskilled 237 5 1 5 32 1 1 3 285 Total permanent 938 82 76 506 201 66 62 328 2 259* * RSA employees only. During the year, the representation of black men and women in management, professional and skilled positions moved from 33,6% to 34,9%, and overall black representation in the Group was 63,1%. Procurement Where possible, the Group seeks opportunities to increase its procurement of products and services from accredited BBBEE suppliers. In 2009, 49,2% of total procurement spend was with such suppliers, an increase of 14% over the previous year. At the same time, spend with enterprises that have a 50% black ownership increased from less than 1% to 8,95%. Enterprise development We believe entrepreneurs form the backbone of a vibrant economy. To this end, Protea Chemicals has developed strong business relationships with several black-owned businesses, providing assistance in the form of shared infrastructure, extended payment terms and by imparting business knowledge and expertise. Omnia’s Agriculture division contributes to the vitally important agricultural sector of the economy with practical assistance on agricultural best practices in a wide range of agronomic applications. Government is planning to redistribute 20 million hectares to emerging farmers by 2014. If this land were to be divided into plots averaging 200 hectares in size, 100 000 new farms would be created. Agronomic assistance is a critical success factor in the economic viability and sustainability of these new farmers, and Omnia is committed to helping emerging farmers establish their own farming businesses. Moreover, with agriculture as one of Omnia’s primary areas of focus, we have long been aware of the disparity that exists within the South African agricultural economy, which is characterised by a well-developed commercial sector and poorer, subsistence farming operations. To address this disparity, Omnia actively provides development and emerging farmers with assistance and advice by making available the expertise of our trained agronomists. We offer the committees have empowered employees at plant-level to take ownership of the employment equity process, and serve as a platform for employees to voice a broad range of concerns which are then escalated within the division and Group. Omnia’s employment equity status for the year under review is reflected in the table below. assistance and support to new entrepreneurs to set up their own businesses wherever possible, contributing to the sustainability of enterprise development in the sector by offering input and practical assistance through agricultural best practices, not only in plant nutrition but also in other agronomic practices, for example soil cultivation, tillage systems and environmental programmes. Reduced tillage systems not only increase farmers’ profitability and reduce their production risk, but are also more environmentally friendly. Through the use of Omnia’s in-house developed technology, including OmniSap ® , OmniBio and OmniPrecise, our agriculturalists are able to further increase farmers’ margins and reduce their financial risk. A dedicated agricultural unit, established specifically to assist emerging farmers, spent R9,9 million during the year under review on helping farmers establish their enterprises. Selection is made on the basis of farmer ability and agronomic due diligence – the potential of the farmer and the farm to be economically viable and sustainable in the long term. Dryden Project In 2006, Omnia, ABSA and Monsanto initiated a collaborative approach to support individual black farmers become sustainable commercial farmers. Implemented in the Delmas area, the Dryden project is now in its fourth year, and is fast becoming one of our most successful projects. Initially in 2006, two farmers planting on 260 hectares were supported to ensure a successful and sustainable implementation process. Unfortunately, extreme drought resulted in poor yields and a subsequent loss made by the two farmers. As we took a long-term approach to this project, the partners agreed to write off the bad debt and continue the initiative. In 2007, the intervention grew to five farmers planting on 1 000 hectares, with a total finance requirement of R6 million. This second year resulted in much better yields and small profits. 2008 saw seven participating farmers planting maize and sunflower on 1 600 hectares, with a total finance requirement of R8 million. During this year, farmers increasingly began to use their own equipment, reducing their reliance on contractors. A basic form of precision farming was also
implemented to introduce a technological approach to farming, and the principle of investing 50% of profits back into inputs for the next season has been agreed with the farmers. Yields of up to eight ton per hectare of maize have been recorded and all of the 14 farmers currently participating in the initiative are profitable. This project has grown to more than 3 700 hectares in 2009, with a finance requirement of R20 million as these farmers expanded their farming operations. Crop rotation practices have been introduced, as well as further investment in equipment. One of the challenges going forward will be to increase the farmers’ footprint so they can operate on a more commercial scale and leverage the benefits of economies of scale. Omnia is a full-time partner in the initiative, providing project management, dedicated agronomical support, products, services and training support. In 2010, Omnia obtained finance from the Land Bank to assist participating farmers in the Dryden project, as well as 10 farmers from the Free State. The project was subsequently renamed the Land Bank project, and a section 21 company, the Grain Farmer Development Agency (GFADA), was established through the Value Chain Network. Two of Omnia’s personnel function as project managers in the Dryden and the Free State areas where the project is being implemented, and are also involved in marketing the grain produced. They successfully negotiated and established a partnership with NU-Pro commodities in Bethlehem to assist with the forward contracting of grain, which means that about 50% of farmers’ grain was contracted at a price almost R250 per ton higher than the current SAFEX price – a big step in making these farmers more profitable. Discussions with the Land Bank are also under way to increase the number of farmers in this project for the next season, while discussions have been initiated with the Bank to assist the VKB, OVK and NWK co-operatives, with whom Omnia has established further agricultural development projects. If Omnia’s negotiations with the Land Bank to assist these co-operatives and share their risk are successful, these initiatives will be in a position to expand much more rapidly. Lowveld emerging farmers Omnia’s involvement with emerging farmers in the Lowveld commenced in 1998, with the South African Sugar Association’s launch of the first sugar cane projects in the area. Omnia disseminates knowledge of plant nutrition management and the principles of sugar cane fertilization during numerous farmers’ days held at the different projects. This assists emerging farmers to build successful businesses, as they are able to gain an understanding of all aspects of sugar cane production. More recently, finding solutions for finance availability for these farmers has become an additional focal point. The Bethlehem Farmers’ Trust The Bethlehem Farmers’ Trust (BFT) was established in Bethlehem in 1998, with the intent of progressing land reform in South Africa by establishing emerging farmers in local communities to produce apples in the eastern Free State as a sustainable agriculture project. The project is financed by the Industrial Development Corporation (IDC), and Omnia OMNIA ANNUAL REPORT 2010 51 contributes agronomic advice, farming skills and fertilizer products. This 110-hectare apple project has been very successful and the majority of the produce is destined for the export market. Batswa ko Pele A collaborative project with the NWK co-operative to support 20 black farmers growing maize and sunflower on about 3 000 hectares in the North West, this project is now in its third year. Although implementation during the first year proved problematic, mainly due to difficulties in sourcing adequate finance, “teething” problems have been overcome and the farmers are going from strength to strength. In the last two years of the intervention, all the farmers were profitable. Omnia is a full-time partner in this project, providing dedicated agronomic support, products, services and training. Agristart Although the Agristart initiative has been in existence for a few years, it has experienced difficulties due to a lack of finance and the non-continuity of financiers. Based in the previous Bophuthatswana homeland, it also holds a unique challenge in that farmers rarely own more than 15 hectares each – really too small to establish viable commercial enterprises. This requires that progressive farmers need to rent substantial tracts of additional land. In 2008, the project saw the introduction of the NWK co-operative as a long-term financier, with support from the Northwest Department of Agriculture, and has become very successful. It now consists of about 90 participating farmers planting maize and sunflower on close to 1 100 hectares. Omnia is a full-time partner in this intervention, providing dedicated agronomic support, products, services and training. In 2010, the Agristart and Batswa ko Pele projects were combined to create a system where individual farmers can grow their businesses as viable, sustainable agricultural enterprises, and is now known as the NWK project. To further assist these farmers, NWK has embarked on a training programme which includes a broad spectrum of subjects – from financial management to cattle and crop farming – with the latter module presented by Omnia personnel. OVK Project A collaborative project in the South-eastern Free State with OVK, Grain SA and other role-players, this initiative has grown from humble beginnings to deliver very positive results. Now in its third year of implementation, the project is poised to grow significantly to 12 farmers planting 3 000 hectares in 2010. VKB Project Omnia’s expertise in Agri-BEE projects has seen a new collaborative partnership established in 2008 with VKB in the eastern Free State. Starting out with six commercial farmers planting maize on 700 hectares but lacking proper support, the project already achieved significant positive results in its first year of operation, and grew to more than 8 500 hectares in 2009. Omnia is a full-time partner in this initiative, providing project management, dedicated agronomic support, and products, services and training. Brooksby Project The Brooksby project is a unique initiative conceived by a white commercial farmer to uplift his neighbouring community by
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OMNIA HOLDINGS ANNUAL REPORT 2010
Page 3 and 4: OMNIA’S MILESTONES 1976 1974 1972
Page 5 and 6: FINANCIAL HIGHLIGHTS Audited 31 Mar
Page 7 and 8: OUR VISION CREATING CUSTOMER WEALTH
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Page 13 and 14: Statistical information 31 March 20
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Page 17 and 18: OMNIA ANNUAL REPORT 2010 13 Omnia
Page 19 and 20: Rod Humphris (53) Executive directo
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Page 23 and 24: (2009: 1 107,4 cents), and headline
Page 25 and 26: the best agronomic advice in all as
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Page 31 and 32: Overview of Chemicals Protea Chemic
Page 33 and 34: MINING DIVISION - REVIEW OPERATIONA
Page 35 and 36: of ore. The risks normally associat
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Page 39 and 40: About this report This sustainabili
Page 41 and 42: highly productive lands are also mo
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Page 45 and 46: Challenges and opportunities Our re
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Page 51 and 52: The Group has made great strides in
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Page 69 and 70: FINANCIAL STATEMENTS A responsible
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ADMINISTRATION GROUP COMPANY SECRET
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