As the world is moving beyond the Covid-19 pandemic and lockdowns, a resurgence is occurring, with higher levels of consumption and trade in most sectors.

This presents opportunities, but also challenges, for various industries.

This was noted by domestic and international trade credit insurance firm Credit Guarantee Insurance Corporation (CGIC) Africa CEO Charles Nortje, during the company’s ‘Resurgence’ Spring Conference on September 22.

Vodacom South Africa MD Sitho Mdlalose spoke to the future of the mobile industry, noting that this presented both challenges and opportunities for industry players to mitigate and capitalise on.

He outlined that there were many players in the industry, across many verticals and geographies.

Owing to this complexity, Mdlalose said the future would see an increasingly competitive environment, in several different ways.

He elaborated that vertical integration would be a key topic for the industry, with this already starting to happen, both in Africa and globally.

Mdlalose pointed out that, because the market was very capital intensive, industry players would carefully consider their return profiles.  

He also indicated that in-market consolidation would be important, with this also being experienced already in Africa. He noted that industry players would be exploring where they could integrate and create a better return profile for the industry as a whole.

However, he said this would pose a challenge for regulators.

Speaking to Vodacom’s strategy, Mdlalose expounded that as it moved forward, hyper-personalisation would be a major focus for the company, as it provided a means for it to compete in the market without diluting it.

He said the company was aware that it would need to continue to innovate, and that it must be prepared to be both the disruptor and the disrupted.

Mdlalose also emphasised that the company was focusing keenly on bridging the digital access gap, such as through wider coverage in rural areas.

“We have seen the impact digitalisation can have. For example, in Tanzania, we recently signed an agreement with Tanzanian Breweries for blockchain, to capture how they deal with farmers, thereby resulting in a financial inclusion environment,” Mdlalose said.

He said that, while the industry still had a long way to go in terms of digitalisation, there was considerable potential for this; for example, in education where challenges such as access to textbooks can be addressed in South Africa.

Mdlalose mentioned anther challenge for Africa as being the transition from second-generation to fourth- and fifth-generation technologies, from a device penetration perspective, given that the majority of users access the Internet through their mobile devices, as well as how the network will operate.

Mdlalose expounded on another particular challenge for South Africa as being load-shedding. He pointed out that with the industry being hugely energy dependent, and this power consumption increasing as new technology was deployed, this was a concern for the industry and how it approached this moving forward.

He said the company had spent billions of rands over the past two to three years on battery backups and site hardening alone, to mitigate the impacts of load-shedding and crime.

Therefore, he said, tackling this required solving bigger issues, such as renewable energy. One of the large interventions that Vodacom is progressing is a power purchase agreement with Eskom.

Meanwhile, speaking from the steel industry perspective, Macsteel International Trading CEO Tom Keller outlined that, for the resurgence of the global steel trade, a number of challenges and opportunities abounded.

He expanded that those that were outside the ambit of control include trade restrictions, with a ‘domestic market first’ mentality.

Other factors include upstream-downstream movement of customers and suppliers and more efficient capacity coming onstream.

Also, there are elements such as natural disasters like floods, pandemics and climate volatility; price volatility; as well as the industry being susceptible to knock-on affects, given that steel is related to ore, scrap, wheat, palm oil, and shipping rates, for example.

Challenges and opportunities that could be controlled included picking the right counter parties, listening to them, and following through, Keller said.

Players can also understand barriers of industry; strengthen the company culture; undertake continuous rightsizing of the business; and educate the new people in the organisation, he indicated.  

NAVIGATING CHALLENGES

Meanwhile, Massmart Group treasury VP Miani Verhoef outlined how the company was able to mitigate the considerable impacts of the pandemic, riots, floods and more, and still deliver positives and milestones on its strategic plan.

She expanded that headwinds as a result of the pandemic impacted on the company’s margins and trading profit.

For example, restrictions that impacted about 565 categories of products contributed to lost sales of R4.6-billion.

However, the company’s balance sheet held steady despite lockdowns, with a R4-billion Walmart loan, as well as support from local and international banks.

Verhoef enthused that the company still paid all of its suppliers and associates on time, in full.

However, the company came out of the difficult lockdowns and was then hit by the impacts of civil unrest and looting, which considerably impacted on many of the company’s operations, with R13-million in inventory lost or damaged, for example.

However, the company decided to respond to this through ‘recover, rebuild and reopen,’ which included, among others, distribution of care packages to associates, opening stores early and reallocating associates, besides other measures.

Thirty-four stores were reopened by the end of December 2021.

This year, however, has once again brought challenges, Verhoef outlined, with high inflation and interest rates driving lower non-discretionary spend, thereby impacting Massmart’s margins negatively.

Also, there were the recent floods in KwaZulu-Natal; however, the company was only minimally impacted by this. Verhoef acclaimed that it, once again, assisted with care packages and the like.

Some strategic plan milestones for the company included progress in the Game stores turnaround, with 118 stores revamped, new and extended ranges introduced, new value added services introduced, and an entrenched value proposition through various campaigns, Verhoef outlined.

The company’s focus is now on capturing market share, cleaning up noncore assets and growing its footprint to capture whitespace opportunities.