omnia holdings annual report 2010 omnia holdings annu

There has been a marked improvement in the fortunes of
Unobhala High School since Zetachem stepped in with practical
support in 2003.
Zetachem, together with Protea Chemicals KZN and African
Amines, have supported the school well beyond their original
pledge, as we believe a properly functioning school is critical to
this community. Our hope is to see the learners and community
of Nkanyezini continue to benefit from the project and that the
community and the learners use the opportunity to succeed.
Education and infrastructure development support in Zambia
During the period under review, BME Zambia built a school,
which also functions as an orphanage, for about 60 children in
the Chingola area of Zambia, close to the company’s offices. The
project is of enormous value to the company and the
community, as the intention is a genuine attempt to uplift people
of the surrounding area where the company operates, and to
OMNIA ANNUAL REPORT 2010 53
make a significant difference in the lives of generations to come,
as true freedom and better livelihood choices are only introduced
through access to improved education.
Two full-time teachers ensure the learners receive relevant
tuition, while BME funds the building maintenance and part
of the running costs. The project is also important for BME
employees’ morale, and both the country manager and financial
manager are involved in looking after the project’s finances
and infrastructure.
Importantly, within each stage of building the school, various
partnerships were established to ensure those community
members involved in the project had certain responsibilities to
undertake and achieve. Given that the people of the area are
also involved in feeding schemes and brick-making, we believe
this partnership will be long-lasting and sustainable. Founded on
the principle of continued support, our integrated approach
ensures the viability and success of the project.
The table below reflects the Omnia Group’s socio-economic development spend for the year under review, compared to the previous
two reporting periods.
2010 (R) 2009 (R) 2008 (R)
Omnia Group 198 000 168 000 105 513
Agriculture 493 604 525 972 746 592
Mining 342 249 137 421 –
Chemicals 1 083 600 1 285 574 446 000
Total annual spend 2 117 453 2 116 967 1 298 105
Economic performance
The Group’s sound financial performance contributes to creating
employment opportunities and to the socio-economic aspirations
of South Africans through payments to governments, suppliers
and employees, as well as investor returns (these contributions
are enumerated in the value added statement on page 1).
In the year under review, total economic value added by
the Group was R1,2 billion, compared to R1,8 billion in the
previous year.
However, the unprecedented market conditions which prevailed
in the 2009 financial year, together with a 23% stronger rand,
led to depressed earnings in the year ended 31 March 2010.
Commodity prices continued their downward spiral into the
second half of 2009. This, combined with lower levels of
economic activity, led to all three divisions facing challenges from
a combination of softer volumes, pricing pressures and weaker
export prices. The subsequent reduction in earnings is amplified
by the comparison with the unprecedented buoyant market
conditions that had prevailed in the previous financial year.
Although prices were significantly lower, volumes were
maintained and cash generation was strong, giving us a robust
balance sheet going forward.
The commentary on the Group’s growth prospects included
elsewhere in this report, specifically in the chairman’s statement
and Group managing director’s review, provides a detailed view
of how Omnia contributes to the growth of the sectors and
geographies in which we operate. Our contribution to growth
and development is made by providing specialised expertise and
value added products to our customers, and also through our
support of focused socio-economic initiatives.
Promoting a vibrant agricultural sector in Africa is important not
only in terms of food security and global competitiveness, but
also in assisting small farmers to practice agriculture on a viable,
commercial scale. The Agriculture division’s specific initiatives in
this regard have been described in further detail from page 50.
Mining is a crucial industry in Africa, given the continent’s
substantial and as yet largely untapped store of mineral
resources. In South Africa, precious metals account for about
20% of total goods exports. The industry is also the country’s
largest employer, with around 460 000 employees and another
400 000 employed by the suppliers of goods and services to
mining companies.
South Africa’s chemical industry, which includes fuel, plastics
fabrication and pharmaceuticals, is the largest of its kind in Africa
and has been identified by the government as a key driver of
economic growth. The industry dominates manufacturing in
South Africa, adding more value to the economy than any other
sector and accounting for over half of the jobs created by
manufacturing as a whole. The development of the chemical
industry in other African countries offers opportunities for further
growth and diversification of their economies.