Imperial Logistics will, in future, look at how better to align its European business with its African business, says CEO Mohammed Akoojee.

“Africa will be a strong focus for Imperial going forward. We want to leverage our competitive advantages through growing and expanding in Africa.”

Speaking in Johannesburg on Tuesday at the company’s results presentation for the year ended June 30, Akoojee noted that none of Imperial’s peers “had what Imperial had in Africa and South Africa. We need to align our international business with this.”

He said many of the company’s European clients asked what Imperial “could do for them in Africa”.

“So we are looking at a vertical approach, rather than regional approach. We have never leveraged our capabilities across regions.”

Target ‘verticals’ would include healthcare, consumer, chemicals, industrial and automotive.

This move meant that Imperial would be “getting out of stuff that did not add to the Africa business”.

Imperial Logistics is a distributor of pharmaceuticals and consumer goods in Southern, East and West Africa, and is looking at expanding its footprint on the continent, especially to Francophone Africa.

Internationally, the company specialised in transportation management (shipping and road), with capabilities in chemicals and the automotive industries.

Akoojee said while Imperial Logistics had “great competency” in the the automotive and chemical sectors, especially in Germany, the company needed to expand into new markets.

He said the company’s clients were expanding into Eastern Europe and Asia and that Imperial would have to follow.

He also believed that the chemicals, automotive and steel markets were in long-term decline in Germany, which was currently facing “huge economic pressure”.

“Our core competence is in Africa, and we need to reshape our international business to talk to that.”

Part of this reshaping is to potentially dispose of the shipping business in Europe and South America.

The Imperial group unbundled last year into Motus and Imperial Logistics.

Imperial Logistics reported a 6% increase in continuing revenue for the year ended June 30, compared with the previous financial year, to R49.7-billion.

Continuing operating profit declined by 9%, to R2.5-billion.

Akoojee described the numbers as unsatisfactory, noting that volumes in Europe and South Africa were under pressure.

The South African business reported flat revenue of R13.4-billion, with operating profit down 4%, to R950-million.

The African business saw a 16% increase in revenue, to R12.1-billion, with operating profit up 8%, to R787-million.

The International business reported flat revenue, at E1.5-billion, with operating profit dropping by 32%, to E48-million.

Around two-thirds of the Imperial Logistics business now resided outside South Africa, which might prompt a rethink in future on where the business’ centre should be based, admitted Akoojee.

Looking ahead, he noted that Imperial Logistics expected to deliver high single-digit revenue growth in the 2020 financial year, as well as low double-digit operating profit growth.