Damco set to double Africa business in next 3-5 years

FTW: What is your formula for survival in the current recessive climate? RHJ: We have been very aggressive in taking out costs early on. We looked at where the market was going and how we would be hit and decided to cut more deeply than others. Essentially it is all about streamlining. We have cut management layers, taking out middle management, but have not cut back on the commercial side – if anything we have added sales people. Globally, compared to 12 months ago, we’ve scaled back our staff by 12%. FTW: Are the ‘green shoots’ that everyone is talking about for real? RHJ:I have been saying since the beginning of this year that we will start seeing something of a technical recovery from the end of the second quarter. We have seen some of the consumer confidence indexes starting to rise and the banks are starting to lend again but we wont see a massive uptick. We won’t be completely out of the woods next year but we will see very slow recovery from now on. FTW: How important is southern Africa to Damco? RHJ: If you look at the global picture, the emerging markets are very important – and our focus is very much skewed to these emerging markets and Asia. Of the 100 countries where we are active globally, more than 20 are in Africa while 10% of our staff globally are in Africa. FTW: What are the major challenges in this market? RHJ: The biggest one is finding sufficient local talent. If we want to double or treble our business in the next five years then we will need to identify a lot of talent. FTW: What about the infrastructure shortfalls? RHJ:We know that the infrastructure is not perfect and we can work around that. We also know it’s probably going to get better with time and that will allow us to work more efficiently. Despite the recession we are still growing our business and have added 200 people in Africa over the past year. FTW: What are the global logistics trends and how does South Africa measure up? RHJ: In Europe and the US importers are calling for endto- end solutions – the challenge here is to convince shippers not to operate in silos but to optimise the full supply chain. FTW: How important is the perishable sector to Damco? RHJ: We are investing significantly in growing this segment. We have put together a perishables team focused on some of the south north trades out of Africa and Latin America into Europe and North America and are hiring a lot of people across the globe to push it. Our capabilities will be attractive particularly to people doing direct sourcing because that’s where you see a lot of change today. FTW: Your advice to manufacturers on how to gain market share through improved supply chain management. RHJ: Manufacturers have a lot of potential to optimise their inbound costs in particular by applying the same concepts as we do with retail customers. There is a lot of untapped potential. FTW: Is Maersk Line your carrier of choice? RHJ: Five years back our predominant line was Maersk, but now we use a variety of carriers globally with whom we ship substantial volumes. We are essentially offering a carrierneutral solution. We don’t get any better rates from Maersk Line than any other line – our rates are based on volume. FTW: You mentioned a slow recovery – what’s your outlook for the next few years? RHJ: Looking ahead I would be disappointed if we didn’t more than double our business in Africa in the next 3-5 years