Logistics and supply chain management firm Imperial Logistics experienced record months in October and November, and was confident that it would meet targets set out by the group for the financial year.

One of the factors that would ensure a boost in volumes transported, as well as profits, stated Imperial Logistics CEO Marius Swanepoel, was the company’s aggressive acquisition strategy.

“And, going forward, we will definitely acquire more businesses, definitely,” affirmed Swanepoel.

The company made five acquisitions in the last five months.

“That, we also believe, will help us get to our targets till the end of June 2009, because with most of these deals, the effective date will be January, so we will get those volumes coming through from January, and those additional profits,” reiterated Swanepoel.

Two of the acquisitions have been finalised and have Competition Commission authority approval, namely Volition and Tip Trans, and the other three acquisitions were complete and awaiting the necessary approvals.

Swanepoel said that October and November were record months for the Imperial Logistics, and the company expected a good December, as this was usually the peak period. Business was expected to slowdown somewhat in January, and pick-up again in February.

From 1996 to 2008, the company achieved compounded yearly growth of 19%. “Now that [19%], we are not going to achieve going forward, we would like to grow our business by 15%, we don’t know, with the economic environment next year, if we will achieve that, we are still quite confident until June, after that we are not 100% sure,” said Swanepoel.

Imperial Logistics is made up of over 70 operating entities, which each have their own brand name, and serve specific markets. Companies such as Goldfields, Liebentrans, TFD, the Cold Chain, Imperial Truck Rental, Fuelogic, Tanker Services, Freightmax, and Wilco transport among others, make up Imperial Logistics.

“We like the decentralised model, as it allows us to serve niche markets. With bolt-on acquisitions it allows a customer to maintain the relationship with management,” said Swanepoel.

FUEL
Imperial Logistics was the second largest user of fuel in South Africa, after Transnet, and used some 220-million litres of diesel a year.

With the decrease in the fuel price, and if the price of oil stayed below the $70/barrel range, Imperial Logistics expected to see improved margins going forward. When the price of fuel hit record highs earlier in the year, the company was forced to pass those costs on to customers immediately, however, never benefited from margin increases.

Should the price drop even more, the company would have to start adjusting its prices downwards.

Imperial Logistics transported over 32-millions tons a year, and owned almost 6 000 vehicles, as well as subcontracting another 2 000 vehicles. The company travelled over 660-million kilometres a year, which equated to more than 16 times around the world.

One of the company’s strengths was that it operated in numerous sectors and markets, so while one sector, such as the steel industry, may be slowing down, another sector, such as the packaging sector, or cross-border transport, was growing.

The company was present in the agriculture, technology, food, petrochemicals, construction, chemicals, automotive, mining and minerals, packaging, and forestry and paper industries.

The logistics firm also owned some 711 000 m2 of warehouse space.

Some of the company’s clients included ArcelorMittal South Africa, Mondi, Tiger Brands, Woolworths, Lafarge, Shoprite, Shell, BP, Ceres fruit juice, and Nampak tissue.

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