Import/export: A new level of confidence is budding
Although use of trade facilities has dropped, certain industries have been very active, says Investec Import Solutions CEO
Due to the recession, trading conditions in SA are difficult, says Antony Meltzer, CEO at Investec Import Solutions.
"We have found that the utilisation of existing trade facilities has reduced in line with economic activity.
"However, we have still seen a lot of activity in certain industries, so where we have seen a fallback in sectors such as imports of capital equipment, there has been a rise in other sectors.
"While the retail markets are under pressure, we have seen sprouts of positivity, and with the strengthening in the rand over the last few months there is a new level of confidence budding. But the business mindset changes within a heartbeat, such is the fickle nature of sentiment.
"Nevertheless, we see that there are areas of opportunity. There will always be activity in the imports market, because our manufacturing sector has contracted significantly over the past 20 years in line with the growth of manufacturing in the Far East."
Meltzer says Investec Import Solutions has addressed the lower utilisation of import facilities with client acquisitions and additional complementary products, such as asset finance and confidential invoice discounting.
"There are many clients who need an end-to-end solution whereby they have a close relationship with a financier that enables them to realise increased efficiency and cost-effectiveness in their operations.
"Our model, whereby we manage all aspects of clients’ import programmes, allows us to overcome the inefficiencies that have crept into their supply chain, enabling clients to focus on their core business, better control their costs and manage their client and supplier relationships. We are having success, because businesses are looking for alternative solutions in terms of managing their back offices, converting their fixed costs to a variable cost, and outsourcing certain functions allowing them to focus on their core business.
"The fact that we provide an end-to-end solution and control all aspects of our clients’ imports, from funding the supplier payment to foreign exchange management, clearances, freight movement and logistics, enables us to eliminate inefficiencies.
"When you are managing the entire process and eliminating the mark-up of all the separate components, you are able to manage both cost creep and the performance of service providers to ensure they are both cost effective and efficient.
"The client wants to know their rand price per unit when placing an order, and we eliminate uncertainty by giving them that.
"For example, we see that where we are able to cut up to three weeks off clients’ working capital cycle, and money that is released into their systems can be reallocated to more productive areas of their businesses."
Taking full responsibility of the physical and the financial supply chain allows for more proactive management, Meltzer says.
"We find there is often a lack of accountability within supply chain management structures. If something goes wrong everybody points fingers at everybody else because no one is wholly responsible for all aspects, whereas we take full responsibility.
"Furthermore, it is a massive advantage for the client to have a single point of contact, yet have multiple ways of interacting with us rather than only by telephone or e-mail. Clients can log onto our website and track their goods anywhere in the world.
"They can see their container on the ship, what is in the container, how it is priced and what the cost per unit will be in the future.
"We provide complete functionality via an app that enables our clients to see where their goods are, when they are going to land and if there are any issues. We put a lot of time, money and effort into the development of systems that keep us at the cutting edge of the market.
"We see technology as an imperative. It enables us to be in our clients’ pockets at all times and enables our clients to not only communicate with us but have access to information that is systematised to their requirements," says Meltzer.
The company is cautiously optimistic looking ahead to 2019, he says.
"We are seeing a level of renewed positivity and sentiment in the market, with many clients budgeting for growth. Expansion has not been in the business vocabulary for the past two to three years with everything being about consolidation, so we are positive about 2019 and are budgeting to grow quite significantly over the next financial year.
"We are confident we can achieve our growth goals as long as there is certainty in the market. We are aware that the country is going into an election year that will bring its own set of complexities and rhetoric, but we believe that we will be in a strong position post elections, both as a country and as an economy," says Meltzer.
This article was paid for by Investec.