Imperial Logistics seeking expansion in African freight growth through partners

August 28, 2019: Imperial Logistics has officially announced that it will be looking to expand into air and sea transportation as the Africa-focused logistics group offers more services to multinationals with sales on the continent. The news was earlier reported by Logistics Update Africa in interaction with Johan Truter, CEO, Africa Regions in July 2019. 

The Johannesburg-based company delivers goods for the likes of UK drugmaker GlaxoSmithKline Plc and Dutch brewer Heineken NV mainly via land routes to countries in sub-Saharan Africa. Now, it wants to add the ability to pick up products from manufacturing sites in Asia to complete the supply chain.

"The lack of freight operations is leaving that margin on the table," Mohammed Akoojee, CEO stated. Options include an acquisition, a joint venture or integrating with a third party, he said. 

The CEO was speaking after Imperial Logistics reported its first full-year earnings since spinning off an automotive business, now known as Motus Holdings in November last year. The company has been cutting costs in Europe and South Africa to position itself as a %u2018gateway to Africa' for consumer-goods and pharmaceuticals firms.

"Africa is a young, vibrant, growing consumer market. We give the likes of GSK and Heineken access to points of sale," said Akoojee, who took the position at the start of February."

Nigeria, Africa's most populous nation with about 200 million people, is a particularly attractive country, he added.

Imperial also announced new growth targets for the year through June 2020, including a low-double-digit rise in operating profit.

At the same time, Imperial Logistics Ltd expects to wind up its loss-making consumer-packaged-goods (CPG) business in South Africa by the end of September and is also considering disposing of its shipping unit in Europe as it overhauls its operations.

The ground freight firm is battling weak economic conditions in South Africa, fuel price volatility and rolling power cuts. On August 28, it reported a 7 percent fall in earnings and incurred writedown costs from exiting the CPG business.

Akoojee has drawn up a further restructuring and rationalisation plan for the group that includes exiting unprofitable contracts, consolidating operations and properties and reducing fleet and overheads.

The revamp would lead to an impairment of 1.44 billion rand ($94.51 million), including provisions for closure costs.

The rest of the consumer business, which caters for the likes of food and fashion retailer Woolworths and British American Tobacco South Africa will remain, he added.