Sefalana seeks to grow FMCG business
Isaac Pinielo | Tuesday August 2, 2016 14:52
In its audited financial results for the year ended April 30, 2016, managing director, Chandra Chauhan said last year the group did well in its core segments, being the FMCG businesses in both countries. “We anticipate further growth and success in the FMCG business segment during the forthcoming years as we place greater emphasis on our core business,” he said.
He noted that they continue to seek additional suitable locations for further store openings as they move towards their long-term target of 70 stores across Botswana. He added that there are currently a number of stores that they are looking to open in the next 18 months.
At the KSI site, Chauhan said, they have built four warehouses of 1,000 square metres each and that they are in the process of building the fifth one. “We have seen a lot of interest in these units and have secured a number of tenants already,” he said. The group said it has also concluded on the purchase of the 40,000 square metres site at Setlhoa where they intend to carry out a significant development in the forthcoming year. Although details of this development are still being finalised, the MD indicated that it is likely to include the Sefalana Shopper supermarket and a petrol station.
In addition, the group said it has been looking at a number of other sites for purchase or development. According to Chauhan, rental streams remain strong and the property portfolio is now fully tenanted.
“We will continue to focus on growing our Botswana portfolio which is currently worth around P0.5 billion,” he said. He pointed out that the group’s Zambian property is fully let and that it continues to generate a very good rental stream, however, noting that in September 2015, the Zambian government discontinued the use of the US dollar as a second currency in the country and enforced the use of the kwacha.
“Rental leases will now have to be converted to kwacha and this exposes the group to additional foreign exchange risk. The value of the net investment in Zambia denominated in Zambian kwacha is now worth less than it was at April 2015 in pula terms due to poor copper earnings in the country leading to a depreciation of the local currency,” he explained.
Chauhan further stated that this had resulted in a significant foreign exchange loss of P10 million for the year. He said they expect the kwacha to stabilise over the next 12 to 18 months and that they expect the translation loss to reduce accordingly. Meanwhile, the group launched Botswana’s first FMCG online shopping site last year.
Chauhan said the initiative will provide an opportunity for customers to benefit from the in-store specials from the comfort of their homes.
He also indicated that they have partnered with BotswanaPost to offer delivery within 24 hours of placing an order, adding that they look forward to seeing this grow as their customer base becomes more sophisticated in their buying behaviour.
“We are also planning to introduce enhanced features of this offering in the coming months as transactions increase in value and frequency,” he said. He emphasised that the group remains positive about its future and expects to grow the business through continued focus on its core FMCG and related business segments.
“We have recently extended our relationship with BotswanaPost who will now operate a post office kiosk from four of our main stores in Gaborone. Further rollouts are expected over the forthcoming years,” said Chauhan.
The online shopping site, which is currently only available in Gaborone, will be rolled out to other areas of the country as a number of requests for this have been received following the launch in Gaborone.