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You join Pioneer with significant industry experience. What are your impressions of Pioneer so far?

Pioneer is a formidable FMCG company with great brands, highly qualified people and good depth of talent. The business is complex at a corporate portfolio level, which must be reviewed. Multiple joint ventures, partnerships and category groupings clutter the business. It is highly decentralised and hasn’t capitalised on the cost-synergy benefits associated with ‘parenting advantage’.

 

At an operational level, what does Pioneer do well, and what could it improve on?

The manufacturing assets and disciplines are good, and the soft commodity systems and processes are excellent. The company can, however, enhance its capabilities in corporate strategy, resetting its cost base and gaining a more intimate understanding of the consumer-need state and the consequent implication for brand strategy. I would like to see a transition from simple selling to more a strategic customer-management system.

 

Pioneer has traditionally achieved lower margins in many of its core businesses and products relative to competitors. Why do you think Pioneer’s brands have not always commanded the desired margins, and does Pioneer have plans to address this?

This is a complex topic and can only be dealt with category by category. In general, brand strength value is not fully optimised; the operating business model is sub-optimal and costly; and the price/volume/margin management needs work. In some categories, we lack pricing power, being the challenger brand, and here we must adopt cost leadership. As regards our Power Brands, we must invest appropriately and differentiate clearly.

 

The Quantum Foods division is essentially a poultry business, which is suffering in line with the cyclical nature of the industry. Is Pioneer in poultry for the long run?

Since the financial crisis in 2008 the Federal Reserve Bank has implemented three quantitative easing programmes. The last announcement was on 12 December 2012 when the Federal Open Market Committee (FOMC) announced an increase in the amount of open-ended purchases from $40 billion to $85 billion per month. The strong performance of US equities year to date is now history.

 

The African theme is increasingly popular with investors. To what extent is Pioneer exposed to the African growth story and what is the company’s strategy?

We have a strong export-led business with small assets in Botswana, Namibia, Uganda and Zambia. We want to ramp up these sales across the group. We are attentive to acquisition opportunities on the continent but have a few caveats: there must be a strategic fit; we must have exportable competence; and we must have solid local partners with consumer branded companies – and avoid overpaying!

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