+27 41 503 3111 | http://www.bkb.co.za
Triumph of farming and co-operating Editorial: Colin Chinery Production: Hal Hutchison
Heir to a century old tradition of farming co-operation, BKB is the dominant player in the South African woollen and livestock industries, and twice voted the best company to work for in the agriculture sector by Deloitte‘s survey of South African employers. “We have clear values, and do everything on behalf of our clients,” says Jacobus le Roux – GM, Public Relations and Corporate Marketing.
As a major brand and player in agriculture, BKB is the outcrop of one of South Africa’s great farming traditions – the co-operate organisation. Formed almost 40 years ago following the amalgamation of three farmers’ organisations, and now unrivalled in its reach, the Port Elizabethheadquartered business manages and markets wool, mohair and livestock on behalf of its shareholders and clients. The leading livestock and auctioneering organisation in South Africa, BKB also supplies agro-equipment, products and services, and markets over 62 per cent of wool clip and 35 per cent of mohair produced. “Our profitability has grown every year for the last ten - and I don’t think a lot of companies can say
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that in first world economies,” says Jacobus le Roux – GM, Public Relations and Corporate Marketing. Last fiscal year saw a turnover of R4538m, a striking counterpoint to the 100 year stirrings of the early farm co-operatives, as Mr le Roux recalls. “I imagine it’s the same world-wide where agriculture wasn’t much organised from production right through to the end of the supply chain.
FARM TO FARM “For wool marketing there were over 100 small brokers going from farm to farm in those days before modern transport; buying the wool and then exporting it. And I guess it happened with many other commodities as well. “But the farmers were unhappy. They were not getting a good price because the people buying were
selling on at a higher price. So they came together and formed their own co-ops with the aim of securing better prices.” As a result new brokering houses were formed. But driven by economies of scale the numbers shrank to three and finally one - BKB. “Forty years ago we were in a one channel marketing system in South Africa. All wool and mohair had to come through that single broker who did all the handling of the commodity on behalf of the South African Wool Board and the South African Mohair Board. It was in those days, a strictly regulated industry. “But with the democratic dispensation in South Africa came de-regulation, and in 1997 the abolition of commodity boards - wool, wheat, potato and so on. Non-profit companies were formed to look
after the research and statistics in the different production spheres.” The following year BKB was converted into a public company, profit-driven, with the stakeholders primarily producers and farmers. “You’ve still got to look after the interest of the farmers because the higher the price secured by the farmer for his commodities the better for the company. It’s a fundamental principal of business which I don’t think a lot of people understand. “We never take ownership of the commodity; we only sell it on behalf of the primary producer. In other words we earn a commission. The higher the price for the producer, the better we do, and we stand by that fundamental business principal. “Our company culture and style are built on a set of values; People are our biggest asset, the
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Specialised Petroleum Products (Pty) Ltd
Leading distributors of BP lubricants and fuels including CASTROL AGRI It’s more than just oil, it’s liquid engineered
10 Portland Road, Woodbrook, East London 043 7361316 3 Aston Martin Road, Markman, Port Elizabeth 041 461 1241 entrepreneurial spirit is encouraged, we are profitdriven, we believe in an environment-friendly work ethic, and our service excellence is non-negotiable.
ALL FOR THE CLIENT “Whether it’s wool marketing or livestock trading or mohair brokering, we do everything on behalf of the client.” Crop spread and diversity is a core strategy for both stability and growth. “We are well spread right across the agricultural spectrum and so in a sense spread the risk. Some years you will do fantastically in wool or mohair at a time when it’s not so good for livestock. “And this is the space we are currently in. We’ve had an excellent year for wool and mohair - so far a record - but for several reasons the average price for livestock in South Africa is under pressure. “And this is an example of why we diversify the business. BKB is also involved in the grain industry and sugar, and has over 60 shops and country-wide trading branches. “Our warehouses are equipped to collect samples of wool and mohair for objective measurement by the South African Wool Testing Bureau, and we’ve
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got the biggest single shearing service in the world for sheep and goats and employing around 2,000 people.”
“People are our biggest asset, the entrepreneurial spirit is encouraged, we are profit-driven, we believe in an environment-friendly work ethic, and our service excellence is nonnegotiable” Born and raised on a farm and a lifelong agriculturalist – he is a former merino breeder - Mr le Roux has been with BKB for nearly ten years. “I think we have changed a lot in terms of our business culture. It has become faster, more efficient, and also more sensitive in terms of acknowledging that while we are a public company and profitdriven, we must also make a positive contribution
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company profile in terms of care for the environment and social investment. Without that there’s no place for you.” For Jacobus le Roux, environmental responsibility is a “very, very big issue. “Across the world there are many very good stories and developments but also a lot of hot air as well. But as a company we began addressing the Green issue some nine years ago. Agriculture depends on Mother Earth; everything we trade comes from the soil. “We feel so strongly about this that we included environmentally friendly business practices as one of our five core values. We have two programmes; one to train staff in this aspect in terms of living more responsibly with regard to the environment, and the other a programme for our clients. “For example we have come together with the South African wool and mohair industry and developed a code of best practice. Basically it stands on three legs because we believe you cannot see environment on its own. “These three legs are; care for the environment,
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no harm to animals - in other words animal welfare and number three, principled employment; no child labour, adhering to minimum wage regulations and good labour practices.
“We are the only agricultural company with a truly country-wide footprint” “All this is a pretty basic requirement. If you don’t adhere to these standards you are not going to sell your products and you will become irrelevant.”
MOST DANGEROUS PLACE With strong competition in the South African agricultural sector across all its diversified parts, how does BKB differentiate itself?
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company profile “The one factor that makes us the biggest is our footprint. We are the only agricultural company with a truly country-wide footprint. All the others are based in regions. This is our biggest asset and also our biggest challenge since you have to keep your eyes wide open right across the whole country not just a region.
“When people think about wool and livestock they think BKB; absolutely so” “We are the dominant player by far in the woollen and livestock industry in South Africa. When people think about wool and livestock they think BKB; absolutely so.” But competition is not something that BKB fears; in fact quite the opposite. “Competition is always a good thing because it keeps you on your toes. The most dangerous place is the comfort zone,” concludes le Roux.
“Petroleum Marketing in South Africa is changing … and East Cape Fuels together with Engen Petroleum are at the forefront of this change in the Eastern Cape” The Petroleum Market across South Africa is a highly competitive, capital intensive industry coupled with high operating costs and subject to tight fuel margins. The future for the industry is a constant evolution of marketing options to better meet the needs of customers. Increasingly, all customers will seek out suppliers that provide a comprehensive range of products and services, delivered through high quality facilities providing convenience and speed.
Management Team: The Engen ‘Sales and Distribution Company’ concept was introduced by Engen Petroleum in the wholesale sector in 1996. This concept, based on location strengths enabled the Sales and Distribution Company; in partnership with Engen; to build a powerful sales and distribution network. This concept remains unique in Southern Africa and has proved very successful to date. East Cape Fuels is a BBBEE company which has operated as the Sales and Distribution Company in the North Eastern Cape for the past 17 years. Operating from two depots, namely Queenstown and Elliot; they successfully distribute wholesale diesel, paraffin and bulk lubricants to farmers, stores and contractors in the area. They operate competitively within economical, geographic boundaries. East Cape Fuels has maximised the market area providing strong commercial terms and business support systems in the area. East Cape Fuels has a VERY successful, longstanding business relationship with the BKB who is their largest customer. The working relationship whereby the product is delivered by East Cape Fuels to the ‘BKB’ customer has resulted in a very well serviced community who can continue their farming operations in rural areas without any delay in fuel delivery. We believe; together with the BKB we have become the “face of Engen” in the community of the Eastern Cape, South Africa.
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