Sefalana expands manufacturing to support retail business

Osman
Osman

While pushing its weight in retail space, the Botswana Stock Exchange (BSE) listed diversified company, Sefalana Holdings Limited seems to be shifting its focus towards the manufacturing sector. BusinessWeek Staff Writer ISAAC PINIELO interviewed the group’s finance director, Mohamed Osman on the new developments.

BusinessWeek: You recently purchased the milk producing company, Delta Dairies, just a few months after acquiring a fruit juice plant from Golden Fruit. Does this mean you are taking a deliberate focus on manufacturing?

Osman: Sefalana already has a sizable manufacturing segment in Foods Botswana (Serowe) and Kgalagadi Soap Industries (KSI), which manufactures soap and soap-based products. This deal will help us grow this side of business, in support of our core business of fast moving consumer goods (FMCG).

BusinessWeek: Would you please elaborate  on the Delta Dairies deal?


Osman: This is the purchase of just the plant and equipment from Delta Dairies, but we will also look to provide employment to those who were previously employed by the business immediately prior to it going into liquidation, through an interview for reappointment process.

BusinessWeek: What is the purpose of Sefalana buying Delta Dairies?

Osman: We currently have our own ‘A Star’ brand UHT milk. This deal will enable us to manufacture in-house, rather than outsource to a third party.

This will provide us with an opportunity to enhance profitability along the supply chain and to sell this across our 52 stores in Botswana.

BusinessWeek: Are there any other businesses you intend to acquire in the near future?

Osman: We are constantly looking at opportunities and we evaluate them as they arise. We currently have a cautionary running, which we will provide updates to our shareholders as things develop.

BusinessWeek: Considering that most manufacturing companies have folded in the past, what opportunities are there for Sefalana?

Osman: We look at opportunities as they arise. If we feel they complement our business and that we have the required experience to make a success of the business, we will consider incorporating this into our group, as long as it is aligned to our overall group strategy.

BusinessWeek: With the pressure on the retail market due to depressed consumers’ disposable incomes, what are your prospects and opportunities?

Osman: The Botswana market has experienced some pressure in spending amongst consumers in recent months, but this is being felt across the various sectors.

We continue to be cautious, with new store openings only where we feel it is viable to operate them. We are however, confident that things will recover. We are also in the process of expanding our house brand range to offer our customers quality products at great prices.

BusinessWeek: What are your future plans?

Osman: To focus on our core business, and related initiatives. Ultimately, we want to grow value for our shareholders and be a leading name in the market. We are about to commence our rebranding initiative, which we are very excited about and which we feel will help reinforce the trusted Sefalana brand value in our people.

A number of initiatives are scheduled for later in the year, which we will notify our customers of in due course.

 Our customers will see a new, even fresher ‘look and feel’ in our stores.

BusinessWeek: Can you tell us about Sefalana’s capital raising?

Osman: Our balance sheet is strong and we currently have sufficient funding.

BusinessWeek: Can you tell us about your Namibian operations?

Osman: We are very pleased with this part of the business. Further details will be provided at our year-end presentation towards the end of July 2015.

Editor's Comment
What about employees in private sector?

How can this be achieved when there already is little care about the working conditions of those within the private sector employ?For a long time, private sector employees have been neglected by their employers, not because they cannot do better to care for them, but because they take advantage of government's laxity when it comes to protecting and advocating for public sector employees, giving the cue to employers within the private sector...

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