Broker boss upbeat about farming

Wool broker BKB has released its best financial results ever. Managing director, Wolf Edmayr, talks to Roelof Bezuidenhout about how they achieved this, and how they plan to build on it.

Issue date: 11 April 2008

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What gives you the most satisfaction about last year’s outstanding financial results?
BKB as a business has proven that with the right attitude and approach a team can achieve sound results, and our team attained the results in a relatively short space of time. (See box: BKB smashes records).

The share price rise has been astronomical – from a few rand per share to R80 at one stage. How did this happen?
BKB had good assets but did not show financial results. We were able to use these assets more efficiently and improve the financial results. The outcome is a share price that matches our net asset value.

Which branch of BKB is showing the best growth, which is shrinking the most and which has the best potential for growth?
This is a difficult question. There are components of the business (such as wool-brokering) which are very mature and in which we command a good share of the market. Growth is difficult and improved results are achieved through efficiency and effectivity. Growth in the livestock and auctioneering divisions and in BKB shops has been very good. Our grain business, Grainco, is also growing but in an extremely competitive environment. Although all our divisions are showing improvements on prior years, we believe there are growth opportunities through effective leveraging and areas in which we may not be as well known as in others.

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How will land distribution impact on your business?
This is a very topical point and the final outcome is unknown. We do, however, participate and assist in various initiatives. As issues become clearer, we’ll increase our level of participation. It’s important for the country and BKB that levels of production are at least sustained.

How are you progressing with BEE and the development of small farmers?
We’ve actively initiated a BEE strategy based on the scorecard and are actively involved in various regions including old Transkei, Ciskei and Lesotho. We have BEE shareholding, some board representation and various members of staff representing previously disadvantaged people. We have strict employment equity guidelines, preferential procurement and various enterprise development initiatives.

Is there any chance of takeovers in the broker business?
I don’t know, you tell me. But I personally believe more rationalisation is inevitable. When and where is another question.

BKB shops are very important to farmers in smaller towns and they often worry that some might have to close. Is there any danger there?
Our shops are performing well and we are expanding our footprint, although cautiously. We have no plans to close any branches.

There have also been rumours about downsizing field agents?
Field personnel are an important part of our business. We’re always investigating ways to improve, manage, and promote them.

We know you have a farm at Frankfort in the Free State, but what have you learned about farming and farmers since you started at BKB nearly four years ago?
There have been fantastic experiences and bad experiences. Fortunately, the good far outweigh the bad. Generally, farming is a difficult business and needs careful planning and financial management. Agribusinesspeople (farmers) who are passionate about their business and apply the correct disciplines and controls are very successful, and are great people to deal with. As an eternal optimist I believe the next few years will be good. There seems to be renewed optimism in agriculture all over the world.

What do you enjoy most about your job?
I relish the fact that nothing motivates like success. |fwGedore