The Imperial group saw an 8% increase in operating profit to R6-billion for the year ended June 30, with revenue up 14% to R92.4-billion. One of the shining stars in yet another year of growth for the JSE-listed industrial services group was its rest-of-Africa logistics business.

CEO Hubert Brody says the Africa logistics business, which includes South Africa, saw operating profit increase by 1% to R920-million. Revenue was up 9.5% to R18-billion.

However, revenue in Africa, excluding South Africa, was up 23% to R4.6-billion, with operating profit up 45% to R224-million, compared with R525-million revenue and R61-million operating profit in the 2010 financial year.

Trading conditions in the South African logistics market were challenging in the past financial year, notes Brody. The local logistics business was affected by the national transport workers strike, as well as a lack of momentum in the local manufacturing industry.

Brody says the South African logistics business is being “streamlined” to ensure it remains competitive on the cost front. This includes merging business-unit look- alikes.

In contrast to the performance in the local market, the acquisitions and expan- sions made in the rest of Africa paid off handsomely for the group in the 2013 financial year, with the logistics business also finding general market conditions more favourable than in South Africa.

Key acquisitions over the last five years in the African market included CIC, which expanded Imperial’s distribution network; RTT Health Sciences, which provided pharmaceuticals distribution and logistics in South Africa and the rest of Africa; and 49% of MDS Logistics, a large Nigerian logistics company.

Brody says Imperial has a “consumer logistics strategy” when it comes to Africa.

Large fast-moving-consumer-goods companies and brand owners want to be in Africa with its rapidly growing middle class, but want more of the work done for them than what has traditionally been demanded from logistics companies, says Brody.

He says Imperial Logistics will do the “basics” for its customers in the African markets where it operates, as well as sell and market their products.

“We’ll take ownership of the product on their behalf. We’ll take it right to market.

“‘Get me there, sell my product, grow my brand’ – that is the value proposition we offer and it is very attractive to our clients.”

Following the recent acquisitions, Imperial Logistics now owns facilities in more than ten countries, including Ghana, Nigeria, Botswana, Tanzania and Kenya.

“Africa holds good potential going forward. It is a distinctive vision of our logistics business,” notes Brody.

The Imperial group will focus on further expanding its footprint in the logistics industry in Africa, which is expected to show stronger growth than the South African market, he adds.
“The footprint is strong, but there is a lot more we can do. Many parts of the continent have a demand for advanced logistics services.”