CFOs discusses growth in uncertain times

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Finance Indaba panellists unpacked delivering growth in an operational environment with extreme headwinds.

Tiger Brands group CFO Deepa Sita teamed up with Kumba Iron Ore CFO Bothwell Mazarura and CFO of Liberty Africa Insurance Ravi Singh to discuss how brands can thrive during uncertain times.

Deepa said it has been a year of challenges for Tiger Brand from a supply chain point of view and this has affected the brand’s growth and also weighed heavily on the consumers in terms of pricing and affordability in the market. She added that this year, for them, has been more about trying to secure products than price negotiation.

Speaking about how the brand tried to keep its head above the water, Deepa said they looked at things that they are able to control like cost management and elimination of waste in production.

“We have looked at our supply chain in terms of logistics, route to market optimisation. It’s amazing: when the times are good and you are riding the wave, you don’t really notice the wastage in an organisation. We also looked at things like revenue growth management, which entails looking at rebates.

“We pay cash to retailers and independent rebates. We had to shift our thinking in terms of how we make sure that those rebates are actually earned and it’s a pay performance model,” she said, adding that in return, they had to look at SKU rationalisation and promo optimisation.

Deepa encouraged brands to be proactive and pay attention to competitive footprints and global markets. She added that multinationals are doing well in things like the adoption of revenue growth management and South Africa should also adopt these kinds of practices in order to deliver growth.

Ravi also shared a few factors that made it possible for Liberty Africa Insurance to deliver growth in recent years. He said for them it was all about the expansion of the product, creating more diverse and innovative products in Africa.

He added:

“Africa is quite junior in terms of insurance, so it’s quite a challenge to sell insurance in this continent. So we have used multiple platforms to teach people about financial literacy, we looked at how we can be innovative and change our cost structure, and we also spend a lot of time in acquisitions, so where there’s been an opportunity like in Uganda, we apply the short-term business along with our long-term business.”

Bothwell also weighed in on the discussion and spoke about three strategies that they implemented to make sure that the business could survive the lowest price point in the circle.

“The first one was operational efficiency, how efficiently you move waste is key in terms of containing costs. So you've got to do it as efficiently as possible. The second one is absolute costs. So this is about looking across the entire value chain, and seeing how you can optimise costs. Nothing is too small, nothing is too big. You have to look across the value chain and look for opportunities.”

He said lastly they compete in a global market, adding that their competitive advantage is the quality of the product that allows them to earn a premium on the market and also allows them to realise a higher price than most of their competitors. “So maximising the quality of our product was key, and that talks to our process,” he said.

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