O&L: Solid foundation for the future

In the annual report of O&L group of companies, die chief executive chairman of the board, Mr Sven Thieme, gives an insightful overview of the group’s achievements. “The Group is preparing itself for the stretched and necessary targets set for 2011 by the ‘Growth Through Change’ plan. A steady focus is required to maintain the balance between achieving those targets and the ones set for the interim period of 2009–2010.

“Thus, this year’s results should be seen in the context of the road map to 2011, by which date the positive financial benefits of the heavy investments made in process improvement, capacity enhancement and human capital should be more tangible.

“The fairly unstable global, regional and local economy that prevailed in the 2009 reporting year was impacted even further by one of the worst international financial crises in the last century. Despite the various macro- and microeconomic aftershocks resulting from this, the Group achieved a healthy financial result in net earnings before taxation – which bears testimony to the success of restructuring and rightsizing in the Group over the past few years, making the Group far more able to weather the global storm.

“The dramatic fluctuations in oil prices, the local currency, inflation rates and interest rates had various positive and negative impacts on the Group’s operating companies. These global competitive forces will continue to impact the Group going forward and require that our strong portfolio of businesses is further enhanced by continuing our heavy investment programme and by exploring further synergies to ensure we remain resilient and competitive in the global arena.

“Despite the hard road, considerable progress has been made on it and we can be proud of our various achievements. This augurs well for the future and builds further confidence in the Group.
Strategic Review and future challenges The reporting period saw the implementation of the new exciting plan, known as “Growth Through Change 2011”.

The plan was devised to create a platform for growth that is executed through the following identified critical success factors:

• Operational excellence: A new operational excellence team was established to drive a number of commonly identified initiatives.

This was supported by a watershed meeting facilitated by our business partners from GAP International. Some key initiatives that have already commenced are the TOP 50 controls initiative, the implementation of a time and attendance system and other process and systems alignments.

The implementation of the International Organisation for Standardisation (ISO) and other standards is progressing very well. The British Retail Consortium (BRC) a rating accreditation for Hangana Seafood and the achievement of the ISO 22000 standard accreditation deserves mention here.

Exceptional highlights for the Group were the commissioning of the !Aimab Superfarm, the commissioning of the new fuel-blending station at Hangana Seafood and capacity expansion at Namibia Breweries, which will dramatically reduce costs going forward.

Continued focus will be on improving reporting deadlines and financial reports through optimising SAP processes and further strengthening financial controls.

•Employer of choice: Having set a goal to be amongst the Top 10 “Best companies to work for” in the large category in Southern Africa in terms of a survey being conducted by Deloitte, the Group showed satisfactory results for the first virtual participation, with some operating companies doing better than others.

Various actions were embarked upon to improve the working environment and conditions for employees and the positive response by employees so far has been overwhelming. Furthermore, the world-class leadership programme introduced in the previous financial year to uplift the quality of leadership throughout the Group successfully entered its second year. In the coming year, focus on leadership performance throughout the Group will be sharpened, as will the focus on business communication skills, performance management skills and sales execution standards.

• Create an exceptional trust relationship with the customer and consumer: A new central marketing function was established to pay more attention to marketing excellence and innovation and to provide support for smaller companies in the Group.

Various initiatives have already been undertaken by our companies to measure brand health, customer/consumer satisfaction and product- and service-related innovations. We aim to standardise and rationalise a number of these initiatives to ensure that we improve our knowledge of our customer/consumer, improve innovations and further reduce costs.

•Stretched financial target: The stretched financial target of N$760 million EBIT for 2011 is beginning to take shape. The heavy expenditure programme undertaken during the period under review will continue next year.

This means increasing our efforts to improve funding structures, working capital management and margin management.

“Hard work remains ahead in the next few years, but overall, we believe that the foundations have been laid for the attainment of our ambitious operational and financial goals,” Mr. Thieme believes.