OL chases billions beyond Namibia
The OL Group is looking across the Orange River for expansion as it strives to hit an operating profit in excess of N$2.5 billion, its executive chairman Sven Thieme said, signalling the company's intention to grow beyond Namibia.
To help drive this growth, the group was setting its sights on expanding the footprint of its Hartlief offering in the Western Cape, South Africa, where it has found traction with consumers, as well as Model (formerly Pick 'n Pay Namibia), Thieme said.
The company had also begun importing raw materials for use in its production process through its subsidiary Hangana Seafood, while the establishment of a sales office in the European Union (EU) was also seen as key to driving growth toward the operating profit target. Thieme said so at a stakeholder event held this week.
"In the olden days, we had our beer and our market, significant market share in Namibia, and what we did is we tackled it in the Western Cape, so we went through Hartlief, and there is no other company that can do the same. We have a strong sales force in Western Cape, we are very excited and we have done quite a bit of investment," Thieme said of initiatives underway.
"By the end of this July, we will almost have doubled the capacity of Hartlief to be able to focus on being able to do export, but export for Namibia, for any company, is the only way," he added.
Hangana turns to imports, processing
Further driving OL toward its target was the importation of fishing products through Hangana, to which it was able to add value and generate increased revenue, Thieme said.
"We have started to actually import raw material from other countries, from the United Kingdom or the United States or South America, and we thaw the product during the thawing process, and then we form a product, so that it is less dependent on the local fish resources or biomass. So, I think it's a really exciting task, you know, with the capability. Maybe think to yourself, maybe sometimes you have to think like the Chinese," Thieme said.
Also underpinning OL's push toward its target was the launch of a Hangana Seafood brand in Argentina.
"We are very proud that we have launched our brand into Argentina which is very exciting," he said of efforts to expand OL's bottomline.
The Namibian market, Thieme said, had its limitations for a company targeting expansion.
"The market is just too small, and it is too easy for somebody else just to drop a few products into this market and very quickly do some damage to the local company. So we need to get out there and conquer the market on the other side of the border," he said.
To help drive revenue gains, OL was also in the process of setting up its EU office to gain better returns, Thieme said.
"We are actually about to open our own office in Europe, and we need to develop our own sales process. What happens right now, we sell our product, as it begins, mostly, to middlemen. And the middlemen take 5% or 10% or 11% off," Thieme said.
"Eventually, we do not get the full benefit, and that is something we need to overcome, which is exciting to see how that's going to look like," he added.
Model targets the Western Cape
On the Model brand's expansion into South Africa, Thieme said:
"I am quite excited that we have launched something because there was a property owner saying, when you come to South Africa, we will have a Model for our shopping centre. Can you mention that?
"It could be one where we do not have one on every corner, but maybe five, six, seven in Western Cape, and that is it, just a special store, a special destination, with our accessible premium. Who knows? So, I think we're clearly differentiating with our accessible premium that we want to achieve, and we are, of course, elevating the everyday," Thieme said.
The relaunch of the Model brand was also occurring at an opportune moment, Thieme said.
"We are on our own, which is... it is easier than I thought, than everybody thought it is, to have your own brand. And somebody said to me, the timing of you is just... South Africa also needs something fresh, something big and bold of what they have, and unfortunately, Pick 'n Pay is not in the best shape in South Africa either."
