Alwyn Smith is an Excel man through and through. No fancy informatics programmes for him; this CA prefers to do things manually. “I love Excel so I try to automate as much as possible to pull numbers from other sources. I’ve done courses in Visual Basic (the back end of Excel) and in writing macros, and so have extensive training of Excel.” New Technology This does not mean Alwyn is not interested in new technology. On the contrary, the Group Financial Manager looks forward to how innovations can impact at the coalface. “Driving technology forward and evolving business, especially through mobile technology is also part of the Group Financial Manager’s role. For example, salesmen can go to customers and do sales orders at premises and upload to ERP. Using tablets, they could get sign-off right there with the customer.”
Alwyn has been Group Financial Manager of FPT, the port logistics company that operates four multipurpose terminals in Southern Africa [turnover: R300-million], for a year. Previous to this, he was at Engen for over five years, as an MIS Analyst for two years, acting Accounting Bureau Manager and Corporate Accountant.
Adapting to Change
The move from resources to fruit was not very challenging, according to Alwyn. “It depends on how easily one adapts to change. Life-long learning is part of one’s career – something picked up in one industry could be used in this industry and adds to one’s knowledge base and integrating knowledge. For me, it was not that difficult moving over. Sure, the jargon is different, but the petroleum business is all volume and margins driven and our business is the same. However, this industry is more technical with food and health safety protocols to be followed.”
Forecasting Challenges
That said, the nature of the business makes accurate forecasting and budgeting very difficult. This is due to two factors: shipping line availability and the crop quality. “FTP relies on shipping lines that plan how many vessels per month. Last year, three ships were cancelled due to low demand in Europe and this has a huge impact on our profitability. If fruit volumes fall, we don’t generate revenue from cold storage or sterilization process which is a big income driver.
We are very dependent on the crop quality, – temperature, drought and timing of the crops– so this industry is very volatile.” Alwyn says that although difficult, forecasting is an important aspect of the business. “Our shareholder looks at the forecasts critically. We didn’t perform very well last year – it fell about R20-million from one month to another!”
Lack of Automation
The move from a huge, multinational a far smaller, regional company was also far from easy from a technical perspective. “Coming from Engen (which was SAP automated) to here was quite a challenge. Our consultants picked up that we are too manual but these systems usually cost millions – huge corporates can afford to sustain implementation and consultants to maintain them. With my help, I have improved our consolidation model used on monthly basis for reporting. It works well, takes much less time and improves accuracy. The new model also eliminates finger trouble and links to all other databases.”
Attention to detail
Alwyn, who qualified as a CA in 2005 after completing articles at Mazars, is very clear about the importance of accuracy. The father of triplet says that a finance professional has to be both specific and flexible. “A CFO needs to pay attention to detail, especially when working with numbers. People are relying on the information for reporting. But he or she also needs to be flexible – things are changing all the time so you need to adjust. Reporting can change from month to month if Board or Exco has new requirements, too.”
Reporting Challenges
Alwyn says that it is in fact the reporting aspect of his position that is the most challenging. “I do quite a bit of reporting and try to make things easier to understand and to work smarter; for example, increasing the automation of monthly tasks. Currently, the reporting at FTP is quite manual, using many Excel templates. These are quite large and there is the risk that the files can become corrupted.”
Decision Making
Alwyn, who has completed the Argus cycle race five times, enjoys the decision-making challenges of the job. He cites doing business plans to make decisions to procure an asset or looking at return on assets as examples. “These are not your everyday tasks.”
Evolution of role of CFO
Unsurprisingly, and echoing other FDs interviewed here (Michael van Straaten, FD Servest Marine), Alwyn notes that the role of the CFO becomes critical when the MD or CEO does not have the necessary financial acumen to make financial decisions. “Our MD is a non financial person so needs more guidance on financial aspects of the business.”
Going Forward
And FTP will need all that assistance: the industry faces many challenges in the near future. The threat of containerization (i.e. small farmers bypass cold storage) is the biggest worry to the industry. Alwyn believes that the economic downturn is still affecting global demand. He notes that while port rental is very expensive, there is not much growth in general cargo volumes as the market is quite saturated. Electricity costs (a key input) have risen by 16-20%.
FTP’s current plans are to stabilize the business. “Our growth strategy is on hold, with a focus on CRM to maintain and grow volumes.”
Stay Focused
Alwyn’s mentor helped him at a crucial time - when he was doing articles. “He could relate to my failing the Board exams and told me to change my strategy and focus on technique. I followed his strategy and made it through.”
Perhaps because of his experience in “if at first you don’t succeed, try again”, Alwyn’s advice to young professionals is to stay focused on their goals, and to follow through on what they want to achieve. “Never give up and know that the end will be worth it.” He also cautions the next generation from expecting that the world owes them something. “Realise that you need to work and build up experience. Do not expect to receive – what you want to achieve will come in time.”
Apt words from the Excel man…
About FPT
FPT www.fpt.co.za offers a broad range of landside and port logistic services for all cargo types. The company leases and operates four multipurpose terminals in Southern Africa, in the ports of Cape Town, Port Elizabeth, Durban and Maputo. These terminals handle close to a million pallets of fruit and a million tons of general cargo every year. In recent years FPT has diversified its activities and now perform terminal services for dry bulk, various break bulk commodities as well as containers.
If you also would like to share your ideas with the CFO community, please get in touch with us to arrange an interview with you.Please contact Jurriën Morsch on [email protected].
Stay connected, up to date and in the loop on what is happening in the world of finance by subscribing to our newsletter and following us on Twitter. Also to keep track of newly published interviews with CFOs and CEOs.
