Under its new Village Grocer brand, Senwes — whose core business is grain silos and farming supplies — has opened stores in Jan Kempdorp in the Northern Cape and Heilbron in the Free State. Two more are planned for this year, but Senwes MD Johan Dique will not say where or put a figure on the investment, “for strategic reasons”.
Senwes, which reported turnover of R5,9bn for the year to end-April, began as a co-operative in 1909. It became a public entity in 1997, and in 2006 concluded a 32,5% black economic empowerment equity deal with the Bafokeng Consortium. Senwes also provides financing to producers and grain buyers, and has smaller wine production, seed processing and insurance brokerage enterprises in its portfolio.
Dique insists Senwes has no intention of competing with established supermarket chains and says “the operation is a very small one for us”. He plays down suggestions of a competitive advantage in the group's century-old links to the agricultural community but concedes the retail side is “quite profitable” and will “definitely” grow.
“We will not be wasting corporate resources on the venture but if and when it warrants a strategy for future growth, we will be ready to deal with it as a separate brand,” he says. He puts the cost of setting up a new store at R3m and stocking it at R5m-R10m.
Absa agribusiness head Ernst Janovsky says competing against the supply chains and infrastructure of the leading supermarkets will be tough, but adds: “It's about time there were farm supermarkets. Past ventures have always been aimed at the middle class and farmers.
“Because of a lack of competition in rural areas, prices are quite exploitative. Competition will create efficiency.”
Source: Financial Mail
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