Integrated Annual Report
2019

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Supply Chain: Importers
OVERVIEW AND PERFORMANCE MATRIX

Nature of business

Importer and distributor of brassware and accessories.

Strategic positioning Target market
Experience water's inspiration. Italtile Retail, CTM and TopT store networks.
Key performance indicators Trends 2019 Trends 2018
Sales
Average selling price
Margins
Net profit
Stock turn
Closing inventory
Key differentiators
  • Integral component of the Group's supply chain.
  • Longstanding relationships with international suppliers and extensive import experience.
  • State-of-the-art robotic warehouse facility.
  • ITD's Tivoli range is the only major Italian brassware brand available in South Africa.
2018/19 priorities Scorecard
  • Leverage BOP to improve the in-stock position and stock turn while simultaneously reducing overall stockholding across the integrated supply chain.
  • Complete alternative certification for products given the dysfunctionality of the SABS.
  • Grow market share through increased contribution to TopT total sales and through supplying product to the open market.
2018/19 major achievements
  • Continued improvement of business-critical and overall in-stock position, as well as the ratio of business-critical items to total stock mix, and a significant reduction in slow-moving stock.
  • Further improved efficiencies in the robotic warehouse, which achieved a new record for single-day pickings and reduced downtime during the year.
  • Achieved certification equivalent to SABS on related brassware products. The new standard, South African Product Certification Services ("SAPCS"), is accredited by South African National Accreditation System.
  • Achieved increased contribution to TopT total sales.
2019/20 priorities 2019/20 prospects
  • Leverage BOP to improve stock turn and in-stocks, while simultaneously reducing overall stockholding across the integrated supply chain in line with targets.
  • In the current economic climate and competitive landscape, sales are expected to remain constrained in the short term, but enhancements made to the range (latest fashion, technology and value), should improve opportunities to capture disposable income.
  • Enhance buying to ensure a more competitive, higher margin offering.
  • Margins will remain under pressure in the price sensitive, weak sales environment, adversely affected by currency volatility and aggressive competitor pricing.
  • Grow market share through increased sales to existing retail customers.
  • Some opportunity exists for improved pricing from Chinese and Italian suppliers in light of the continued global slowdown and reduction in manufacturing volumes.
 
  • Implementation of stringent cost-containment measures will be imperative to achieve profit growth targets.

Nature of business

Importer and distributor of laminate and vinyl floor boards, bathroom furniture, shower enclosures, accessories, sanitaryware, dècor and other home finishing products.

Strategic positioning Target market
Where service is the point. Italtile Retail, CTM and TopT store networks.
Key performance indicators Trends 2019 Trends 2018
Sales
Average selling price
Margins
Net profit
Stock turn
Closing inventory
Key differentiators
  • Integral component of the supply chain across merchandise categories.
  • Strong relationships with international stakeholders.
  • Leading South African importer and distributor of high-quality European laminates and bathroom furniture, vinyl floor boards, shower enclosures and dècor.
2018/19 priorities Scorecard
  • Outsource management of the Vereeniging warehouse to a third-party specialist and converted the DC in Cape Town.
  • Establish operations in the newly acquired KwaZulu-Natal warehouse. The project set-up phase took longer than anticipated, but operations were underway by October 2019.
  • Improve our product offering through continued rationalisation, intensified focus on fashion and greater awareness of market trends.
2018/19 major achievements
  • Achieved a substantial reduction in total stockholding.
  • Improved consistent in-stocks on business-critical products.
  • Enhanced the service offering to our integrated retail partners.
  • Expanded our shower enclosure offering to Italtile Retail.
2019/20 priorities 2019/20 prospects
  • Explore opportunities to launch a selected shower range for the open market.
  • Expand our product offering to all retail partners.
  • Rationalise product ranges according to market trends and customer expectations.
  • Explore opportunities to partner with a local shower manufacturer.
  • Increase efficiencies through our supply chain partners.
  • Optimise the sales and service efficiency of our agents.

Nature of business

Procures stock for the Group and is one of the largest importers of porcelain tiles in South Africa. Provides warehousing, distribution and logistics services to the Group.

Target market Footprint
The Group's retail store networks and integrated suppliers. Durban and Cape Town
Key performance indicators Trends 2019 Trends 2018
Sales
Average selling price
Margins
Net profit
Stock turn
Closing inventory
Key differentiators
  • Longstanding relationships with international suppliers and transport agents.
  • Extensive multi-decade import experience.
  • Strong financial position which facilitates optimal investment in inventory.
2018/19 priorities Scorecard
  • Achieve all agreed targets set for the new financial year.
  • Relocate to the newly acquired KwaZulu-Natal warehouse facility. The project set-up phase took longer than anticipated, but operations were underway by October 2019.
2018/19 major achievements
  • Achieved increased sales volumes to the TopT network.
  • Improved operating margins and net profit for the review period.
  • Reduced the average stockholding to more optimal levels.
2019/20 priorities 2019/20 prospects
  • Rationalise the tile ranges for CTM and TopT.
  • Optimise the procurement process for imported tiles and investigate opportunities to source more competitively priced product from new markets.
  • Explore and implement initiatives to reduce distribution/freight costs.
  • Achieve cost savings with the relocation to the new owned warehouse property.
  • Continue to improve stockholding levels and stock turn.
  • Investigate a logistics control tower solution which will integrate planning with real-time execution of logistics activities, resulting in improved efficiencies and service levels and reduced costs.