Lead by example, says AFGRI's Johan Geel
AFGRI CFO Johan Geel sees massive potential on the continent for the food industry, as long as the approach is correct. He says: “Find trustworthy people, work with the correct information, do proper research, go there and make sure of things yourself – don’t stay away. Johan has been nominated for the CFO Awards in both 2016 and 2017, an impressive double-whammy that less than a handful other CFOs can boast about. We chatted to him about the past, present and future for AFGRI.
What is new in your finance team of late?
"AFGRI is a very challenging and eventful company to work for and that makes it incredibly exciting to come to work every day. Towards the end of the financial year we embarked on a group optimisation process. This is an exciting time for the AFGRI finance team as it provides an opportunity for the team to, yet again, demonstrate their ability to assist business in optimal value creation."
What plans do you have in place for your team for 2017?
"In addition to finalising and implementing the optimisation process, the focus for 2017 will be on transformation, bringing more diversity into the team on various levels. Following the conclusion of the optimisation process, a bigger focus will be on our expansion plans into other parts of Africa and more contribution by the finance team in assisting business create more value from a financial and social impact perspective."
What external factors have the greatest impact on the financial performance?
"Weather, commodity prices of soybeans, maize and wheat, and exchange rates have the biggest impact. On the weather side, you cannot do much. Regarding commodity prices, we have a grain specialist who started last year advising on procurement. Our MDs are immersed in the markets and also know what's going on."
How would your internal stakeholders describe your finance team?
"We have a great number of business units to consolidate as finance. Overall the relationship is good and fair, but around budget time people get itchy as we get tough around year-end. We do assist people where it is possible. We are now putting a finance template in place with all important things per business unit on two or three pages. There used to be more differences between finance and the business, but that noise is now dead."
How do you deal with ever-increasing and changing rules and regulations?
"I have used a company to do an exercise around all acts and regulations and paint the regulatory universe for each of the business units. LexisNexis gives us updates too. In each business unit, we have a person responsible for governance, so it is slightly decentralised. You have to find the balance, but you cannot be outside the law, so as a business you need to make the best of it."
What does your compliance programme look like?
"It is a detailed process. We have a risk and compliance department and our risk register gets checked at least every year. We are using Aon for insurance and Alexander Forbes for operational risk. Through the committees, we identify what we are concerned about. The audit and risk committee meetings are very detailed, taking about five to six hours, and are held three times a year. These days we focus quite a bit on cybercrime and IT security in general."
What are the opportunities for your business in the rest of Africa now and in the future?
"The big dream of the CEO Chris [Venter] and myself is to ensure people have proper work in Africa and everybody has at least a plate of food daily. That won't happen overnight, but we want to play a role in this with AFGRI. There are lots of opportunities. We are involved since the early days of 2000 and are active in countries like Zambia, Zimbabwe, Uganda, Ghana and Congo."
"AFGRI consists of grain management, equipment (John Deere tractors), food and retail. Our biggest success is in Zambia, where we have opened a small AFGRI, which includes equipment, grain management and finance. Unfortunately, it hasn't rained properly there in the last three years and the power failures have increased to 12 hours a day, but we have already had fair profits in Zambia before the drought and employ between about 200 people. The rest of the world is developed, so if you look at 2050, Africa is the continent that can help the world meet its need for food."
How is the finance function organised to manage the operations in Africa effectively?
"We use our team in South Africa. We have an SA-based MD and FD per business unit, who look across the continent. We do use consultants, but we are trying to limit their involvement as much as possible. Most of the countries have a full-time team on the ground as well. Over time the need to fly people over will decrease."
"The MD of Equipment (John Deere tractors) can see on the system what happens outside South Africa. In countries, we have a country manager who takes responsibility to meet with government and work across the business units. That is not an easy role, because people like to report to one manager and in that case, there are sometimes more."
What advice would you give other CFOs whose companies are looking to expand into the rest of Africa?
"Find trustworthy people, work with the correct information, do proper research, go there and make sure of things yourself - don't stay away. Before you start spending any money, make sure your information is correct and confirm this with external parties. Understand your market: some information you get can be old. Understand the infrastructure locally and make sure off-takers will be there. It will help if you can create your own value chain. Keep the right staff and skills and realise that people think differently."
Two CFO Awards nominations in two years
Johan has been nominated for the CFO Awards two years in a row. We asked him what the nomination means to him, and why he thinks he has been nominated two years running. "I am pleasantly surprised and incredibly honoured to be included in awards of such high stature for the second time in a row. It has been a humbling experience since the first nomination and I am incredibly happy to, once again, be counted among such outstanding talent."
"I personally believe that one of the qualities that differentiates a good CFO from a great CFO is having that instinct that wants to create value. As a CFO, you have to instantaneously want to find out where value is created and assist business in that regard. I also would like to believe that honesty and credibility have been one of my greatest assets. Equally important, my passion for people development and transfer of skills through mentorship have assisted some of the best young talent to grow both in AFGRI and in the profession."
Up close and personal: 3 questions
1. What is your personal recipe for success?
"One word: work. If you don't do something with passion, you can never be successful. I give people around me breathing space. They tell me I am tough but fair. I involve my team in my decisions."
2. Tell us about your leadership style: how do you get the best out of your team?
"I am family-orientated. Integrity is not negotiable and good values are important for me. I think I am a visionary who leads by example. I am an extremely hard worker, tough and fair. Sometimes I push too hard, but I make time to listen to people; what is their passion, where do they see problems? Sharing information is also very important. Most of the time you can unearth the information or insight you need by talking to your team, which means you don't need a consultant who tells you what you already know."
3. What role does mentoring and coaching play in your working week?
"Several people have asked me to be their mentor. I ask them what their goals are, what they see as their shortfalls, what was difficult in the last two weeks. I always try to find time late in the afternoon or early in the morning."
This article first appeared in CFO Magazine.