Following a “tumultuous and challenging” period, agricultural services company AFGRI Group has entered its centennial year “restructured, refocused and re-aligned”, it says in a statement.
Over the last 24 months, a far-reaching and extensive turnaround programme has been successfully implemented to realign the group around its core focus of partnering meaningfully with those involved in the South African agribusiness industry by delivering tangible value to its clients, the company highlights.
Spearheaded by Norman Celliers, who was appointed group CEO on March 1, 2021, to assist the shareholders and lenders through a specific mandate of turning the business around, and then leading the group on a sustainable growth path, AFGRI highlights that it is now beginning to reap the rewards of the intensive restructure.
This involved the group having to redefine and refocus its core business, with a focus on formulating strategy and implementing organisational re-alignment, including the disposal of noncore assets and restructuring the balance sheet, among other measures.
Celliers was tasked with moving AFGRI, one of the oldest agribusinesses in sub-Saharan Africa that this year celebrates 100 years of being in business, in a sustainable direction to support the important agribusiness industry.
This meant reverting back to the basics that have supported AFGRI for a century – farmers and their farming businesses, the company outlines.
“To say the group has faced tremendous challenges in the past two years, as we navigated through this non-negotiable restructuring in addition to battling those presented by Covid-19, is an understatement, but we are grateful to report that we have made it with the group now well positioned,” says Celliers.
“Going back to basics is incredibly important – farming enterprises need to be supported by a multitude of services and products, the scale of which AFGRI has diligently supplied for the past century.
“This ranges in complexity from grain management and storage facilities, equipment sales and services, retail products, animal feeds and milling, to agricultural financial services and insurance. These core areas of expertise are what we have returned to,” Celliers explains.
This includes, among others, being operationally responsible for handling and servicing about five-million tons of the grain value chain in South Africa. AFGRI is also the largest independent John Deere dealer outside of North America, with operations in Africa and Australia.
The 24-month turnaround project included exiting or selling numerous noncore businesses in South Africa and select African markets.
Celliers explains that the proceeds of the sales, restructuring parts of the business, and new strategic lending and banking relationships have assisted in reducing and restructuring debt across the group.
“Every part of AFGRI was analysed and assessed in the context of our new strategy and focus. What remains today are operations in South Africa, Australia and select African markets,’’ he says.
Celliers adds that, with the extensive restructuring project now completed, AFGRI is poised to benefit going forward.
“Notwithstanding the challenges, the aggressive refocus on the core business has ensured a group turnover that has grown to approximately R20-billion annually with attractive normalised operational profits,” he notes.
That is despite its longstanding agri-lending business, UNIGRO, losing the Landbank debtors’ book two years ago because of the Landbank taking the book back to manage internally.
‘’We have worked tirelessly to find a solution and are making progress. We are confident that AFGRI will soon be in a position to once again advance credit and reintroduce financial solutions to our core customers,’’ Celliers emphasises.