An African success story in the making Ivan Clark, MD of Grindrod Group and Tim McClure, MD of IVS who together have contributed greatly to the success of the group. TERRY HUTSON IF THERE is one thing that Grindrod has achieved within the space of just a few years it is that it should be regarded without question as South Africa’s premier shipping and logistics group. “Yes, we’ve had a good run,” acknowledges Ivan Clark, and it comes from not only a profit angle. “We also have a really wonderful set of assets in the form of ships and logistical businesses. So much so that when you look at Grindrod today you’ll see we have about R2 billion of capital in our balance sheet, but if you re-evaluate assets like our ships you’ll get a true valuation of about R5bn. Add to that the fact that we’ve no debt, with R5bn of equity and no debt I think that’s an important base for the company.” Clark says that Grindrod is currently trading with good cash flows and that these will extend into 2006/07 and even 2008. “The reason for this is that our fleet is low cost, with ships bought at reasonable prices and a substantial number on charter all at good rates. We were fortunate to have purchased or taken them on long term at market lows and naturally when the market increased we have enjoyed the benefits.” He is confident that commodities will remain a good bet due to growth in China and India proving bigger than people expected. He says he wants Grindrod to make a third of its profits from logistics – at present it is 10%. “It’s hard to get to that third when the shipping guys keep going away with bigger profits so it’ll take a bit longer than I originally forecast, maybe another three years, but that’s still our aim.” “It’s also why we went into commodity trading, into railways and into road transport, why we want to become even bigger in terminals - because our focus is on moving goods. South Africa is experiencing huge growth, Africa is being released from the burden of debt and is receiving certain food aid, plus Africa has always been an exporter of heavy goods, minerals and agricultural products. We therefore see our growth in African logistics, where we bring the goods in, with our ships if possible, trade them through our commodity businesses, do the landside terminally, deliver to the hinterland, again if possible with our own transport companies, and then do the storage at the other end in our warehouses. And similarly the other way back down the chain.” “So you see, it’s not a case of Grindrod having gone on a buying spree looking for just about anything – it all has to fit very much into our strategy of supplying our logistics chain by moving goods in and out of Africa.”
