Grindrod’s strong performance during 2021 is proof that a clear purpose and a robust strategy are arguably the two most effective defences against external pressures and influences. Our recently revised and enhanced strategies implemented across our freight services and banking businesses were critical in ensuring that the Group could deliver attractive solutions over the past two years.
We welcomed the appointment of Cheryl Carolus and Deepak Malik to the Grindrod board in 2021 and look forward to their contributions in the coming years. Cheryl will be appointed as chair of the board on the retirement of the current chair Mike Hankinson in May this year.
The strong mineral and agricultural cycle supported Grindrod and South Africa to get through the impact of COVID-19. Grindrod assisted in the logistics chain exporting fruit to Europe and minerals to India and China. It is vital as a continent that we remain competitive in the global market and we, therefore, collaborate with other African countries to ensure cost-effective and efficient solutions. Global demand for commodities has remained strong in the first quarter of 2022.
Xolani Mbambo, CEO of Grindrod Freight Services, has set out a clear path. The teams are pulling together to provide cost-effective and efficient solutions for our customers to move cargo from origin to destination.
The Freight Services division reported stellar results for 2021. Port and Terminals’ earnings increased by 70 percent on the prior year, and Grindrod Intermodal increased its earnings by 33% on 2020.
There were significant wins in 2021 and exciting projects are on the horizon for 2022.
- Record-breaking volumes were handled at the Matola drybulk terminal and in Maputo port.
- The Rail business redeployed eight of its ten locomotives at Sierra Leone’s Tonkolili iron ore mine and reached their delivery milestones in record time.
- We recommenced the graphite logistics solution in Nacala and overcame complex challenges.
- We are in the process of increasing throughput capacity at our drybulk facilities in Maputo.
- At the end of last year, we announced our intention to merge our South African container logistics businesses with Maersk’s inland container terminals. This is an enormous opportunity to grow the container business.
- We have partnered with InfraCo Africa to build and operate a freight ferry across Lake Victoria between Uganda and Tanzania, creating an efficient trade corridor.
- Transnet has announced its intention of providing private companies access to the state-owned railway network. We have a fleet of modern locomotives that could potentially operate on these lines.
- There are other PSP opportunities in which we are well-positioned for possible participation.
David Polkinghorne, CEO of Grindrod Bank, continues to lead his team to maintain the Bank’s strengths while positioning it for sustainable long-term growth. This strategy requires preserving the existing core business while repositioning the Bank to grow the SME customer base and expand platform banking. Despite 2021 being challenging for the Bank, they increased the deposit base by 20 percent - a reflection of the Bank’s good reputation - and reported earnings of R96 million, an improvement of 157 percent from the prior year. The Bank retained surplus liquidity above R5 billion as of 31 December 2021. Introducing capital partners would enable growth in lending and enhance returns. The Bank concluded an agreement with Shoprite Checkers as a key new platform partner.
An excellent year for Grindrod, but more importantly, our people remained safe. There were no work-related fatalities - all our people returned home to their families every day. Safety is key, and I am very pleased that 81% of Grindrod staff have been vaccinated against COVID-19.
Another recent win for Grindrod was attaining level 1 B-BBEE status. A great effort across the Group.
Our strong performance validates our strategic decision to move forward with divesting from identified non-core assets and focusing on realigning our key freight services and bank operations.
While clarity of purpose and a robust and comprehensive strategy are invaluable ingredients of Grindrod’s long-term success as a business, neither of these is capable of taking our business forward. That requires the efforts of innovative, talented and passionate people, which our Group is privileged to have in abundance.
My heartfelt thanks to my executive teams, managers, and Grindrod employees for your unwavering commitment to our Group. Thank you to our customers for your continued support.
Finally, thank you to our outgoing chairman, Mike Hankinson, whose vast experience and knowledge have added immense value to our business over the past years. Mike has been the embodiment of a hands-on, always informed and available Chair. Your passion for our businesses, dedication and commitment will be sorely missed. We wish you well in whatever endeavours your next chapter brings.
Andrew Waller
Chief Executive Officer