COMPANY NEWS IN BRIEF

Gold Fields emulates Toyota to boost profit

Gold Fields was burning cash almost every year at their only facility in South Africa, until the continent’s third-largest miner of the metal started looking at Toyota Motor Corp for inspiration.

The South Deep mine, about 70 kilometers southwest of Johannesburg, began adopting some of the Japanese carmaker’s concepts to improve efficiency in 2018, after cutting thousands of jobs to end a decade of losses.

Gold Fields, which gets the bulk of its revenue from Australia, looked at Toyota’s processes in a bid to turn South Deep into a so-called tier 1 mine - producing at least 500 000 ounces of gold annually. Reaching that target would mean boosting output 66%.

"Are we building a tunnel like somebody builds a Toyota? That’s the whole concept," Gerrit Lotz, the mine’s head of human resources, said in an interview. A lot of people say that the process followed by Toyota won’t work in mining but "there is no reason why you can’t repeat these processes" if you plan correctly, he said.

Toyota was a pioneer of the so-called just-in-time system, a manufacturing workflow methodology aimed at reducing flow times and costs by keeping inventories super lean. It helped the company produce cars in a fast and efficient manner.

Still, a single Covid-19 case in Vietnam upended Toyota’s process last year, prompting it to slash output in September 2021 by 40%.

Lotz said the mine has managed to cut supply-chain delays, which would have resulted in workers - almost 3 kilometers underground - waiting for lengthy periods for key equipment and materials to be delivered.

Meanwhile South Deep, which in 2018 reduced the number of underground drill rigs, loaders and trucks by a third, is stepping up deployment of new technology, including a drilling machine that Gold Fields expects will increase gold extraction and create a safer working environment for workers.

"Where Gold Fields have been successful, in my opinion, is to upskill their workforce to adapt to a mechanized approach," said Bloomberg Intelligence’s Grant Sporre.-Fin24

Walmart doubles down on South Africa

In 2011, US retail giant Walmart Inc made a bet on Africa, buying a majority stake in South African retailer Massmart in what many investors saw as a step toward dominating the continent's vast untapped market.

It didn't go according to plan.

More than a decade later, Massmart's balance sheet is burdened with debt, its books are deep in losses and it's drowning in lease obligations on commercial properties.

From its late entry into e-commerce to an ill-fated foray into fresh foods, Walmart's African journey over the last decade has been a string of missteps, compounded by economic headwinds and the Covid-19 pandemic.

But instead of walking away, as it has from failures in Britain and Germany, Walmart is doubling down with a plan to take full control of its African problem child, which it unveiled in August.

The strategy - according to nine analysts, investors and sources with direct knowledge of Walmart's plans - is firstly to build Massmart into a force able to see off its brick and mortar rivals and then win a looming battle against Amazon for the future of African e-commerce.

"Walmart plans to bring its entire e-commerce enterprise and expertise into Massmart," said a source close to the buyout plan. "Big investment is required to keep it relevant."

De-listing, the source told Reuters, will allow Walmart to make direct capital injections and swallow more losses without pressure from impatient Massmart shareholders, who have not received dividends in three years.

The prize: the world's last, largely untapped retail market, boasting a billion consumers and growing household spending.-Fin24