Bidfood Emerging Markets

Chief executives

Johnny Kang   Antonio Celso Dias Avelio   Gabriel Abramovicz
Nedim Makzume   Hisham al Jamil   Klaas Havenga
Brent Varcoe   John Morris   Nigel Phillips


2016: R18,2bn*
* Pro forma revenue


Trading profit
2016: R0,9bn*
* Pro forma trading profit.

Product segmentation


Market segmentation

  2017   2016
Frozen 39%   42%
Chilled 25%   24%
Ambient 32%   30%
Non-food 4%   4%
  2017   2016
Logistics 0%   0%
Chain 28%   28%
Independent 59%   58%
Retail/other 13%   14%

These businesses continue to deliver commendable results. Revenue moved 5,9% to R19,3 billion (PF2016: 18,2 billion), with trading profit up 18,1% at R1,1 billion (PF2016: R0,9 billion). Excluding currency effects, profitability is up 20,8%.

Bidcorp Food Africa (BFA) recorded excellent results, despite low South African growth and pressure on consumers.

Net revenue growth of 10% was driven by strong penetration of the independent channel by Bidfood SA (BF) and Crown Food Group (CFG). Trading profit was up by 23,8%, reflecting improved trading margin.

With effect from April 1st, 50% of Bidvest Bakery Solutions was sold to Puratos NV, a European supplier of bakery and confectionary ingredients. The company, renamed Chipkins Puratos (CP), was equity accounted post the sale.

BFA's focus on its own manufactured products yielded positive results. Return on average funds employed increased and net working capital days improved. Cash flow from operations improved substantially.

Investment continued into delivery vehicles, manufacturing facilities and new distribution centres. Investment in IT system development tools and business collaboration systems is ongoing.

BF recorded excellent results, achieving the target of double-digit independent channel growth following the deployment of additional sales staff. BF's online ordering platform, BFS247, continues to grow. Channel growth was assisted by increased private label product sales. National accounts growth was also achieved. However, challenges persisted in the industrial caterers' channel.

CFG's sales dipped marginally in a challenging trading environment. However, the trading margin showed some improvement, procurement savings were secured and a change in the customer mix proved beneficial. Pressure was significant in the additives and spices category, but good growth was seen in condiments, while volumes increased significantly in the natural casings category.

At year-end, a joint venture agreement was finalised between CFG and Griffith Foods, a US-based supplier of ingredients solutions, to focus on a niche segment.

CP put in a strong performance, driven by innovation and successful initiatives with own-manufactured products. Strong growth was achieved in the retail and supermarket sector. The wholesale bakery category also grew.

Angliss Asia delivered a strong finish. Substantial contributions from mainland operations underpinned a highly satisfactory performance, with trading profit well above prior year. Double-digit revenue growth was broadly in line with expectation. Operational expenses remained high. Working capital was impacted by much tighter supplier terms on imported products, longer lead times and revenue growth.

Continued growth is forecast, driven by innovation and new product introductions.

Hong Kong revenue was well up on 2016. However, trading profits failed to meet expectation.

Results at the core Angliss Hong Kong foodservice business were impacted by rising costs and the need for further investment in warehousing capacity. The Him Kee dry goods business delivered solid growth. Sales at the PastryGlobal bakery and confectionary business were constrained by delayed shipments from European suppliers, but the strong profit-line was maintained.

Trading profit also exceeded budget at Gourmet Cuisine. Miumi, our Japanese foods business, witnessed continued strong growth of its Sabu Sabu line and frozen meat, frozen sashimi, meat and seafood. Nature and Organic Global gained further momentum, driven by growing sales of frozen foods.

Good sales of Ready-To-Eat processed products drove continued growth at the Macau operation.

Mainland China achieved good volume growth in Shanghai driven by robust demand from hotel and restaurant customers. Sales were strong in second tier cities in Jiangsu and Zhejiang provinces. Beijing's pastry volumes showed good growth. Beijing results were also assisted by pleasing contributions from second-tier regions such as Shenyang, Shijiazhuang and Shanxi province.

Guangzhou put in another strong performance, bolstered by buoyant bakery and retail demand. Its Chengdu operation also achieved strong growth. Shenzhen enjoyed continued year-on-year growth on the back of firm demand in the restaurant and foodservice channels. Sales of President products assisted overall performance.

Singapore's trading profit and revenue growth continued as the company gained further traction following its transition from a business largely engaged in trading activities to one with a core foodservice focus.

The Foodservice division was the standout performer, registering good growth in key customer categories. Pleasing growth was seen across beef, poultry and butchery lines.

Sales remain under pressure at the Consumer, Marine and International Trading divisions. Working capital slipped. This will require focus in the period ahead. Post year-end, a further investment has been made into Malaysia through the acquisition of a majority stake in Aeroshield, a distributor of quality chocolate, pastry and bakery products.

Brazil achieved excellent revenue and trading profit growth, despite the challenges of low consumer spending and deflation, assisted by the acquisition of Mariusso, a foodservice distributor based in the greater São Paulo area.

The core business, Irmãos Avelino, continued to strengthen the sales function, while modernisation of the vehicle fleet drove distribution efficiency.

Continued growth is projected as the national economy is expected to recover somewhat and we see growth potential in the frozen and chilled segments. In addition, opportunities exist to grow volumes across our existing retail customer base.

Further growth on the back of the Mariusso acquisition is also expected. In the coming year, Mariusso will launch telesales off the back of the Irmãos Avelino model.

Chilean business registered pleasing trading profit and revenue growth, despite continued deterioration of the national economy. Overall margins were well managed.

Santiago foodservice branch sales were especially strong. Processed meat volumes were significantly higher, with solid sales success recorded in the fast-food channel. The new seafood category presents an exciting opportunity.

Puerto Montt branch volumes were up, but below expectation. Margin improvement was evident as a result of the growing free trade focus.

Concepción branch volumes doubled from a low base, following the establishment of a local branch and our acquisition of a small foodservice distributor.

Continued growth is forecast, though tough trading conditions will persist. Debtors management has become a key focus area. However, good momentum has been built. A new branch at Vińa del Mar became operational post year-end.

Middle East division performed well, improving both revenue and trading profit significantly. Sales were up, gross margins improved and expense control was rigorous across the value chain.

Revenue ticked higher at Horeca UAE, but failed to reach anticipated levels following a slowdown in hotel occupancy combined with the muted trading effects of the holy month of Ramadan late in the fourth quarter. Retail operations have been significantly downscaled.

In Saudi Arabia, Al Difaya's revenue was below expectation, but up on prior year. Margins were well managed and trading profit improved. Further expansion of the distribution footprint will open up more of the remote areas of the country, with significant growth in hotel occupancies in major cities anticipated through to 2020.

Horeca Oman recorded excellent sales, despite a slowdown in the economy. Performance was driven by a new brand introduction and continuing growth of the customer base. Horeca Bahrain grew on the back of aggressive promotional activity. Beverage marketing benefited from collaboration with Al Difaya.

Aktaes Turkey achieved revenue growth, but trading losses persisted. Operating expenses moved higher, but were broadly in line with management forecasts.

The Turkish economy rebounded in 2017, but uncertainty remains and hotel occupancy rates for most of the year remained low. However, in our fourth quarter, Istanbul occupancy rates moved up strongly and there were signs of a recovery in the hotel, restaurant and catering sector.

An exclusive agreement was signed with Campari for distribution of the group's products across Turkey.


With operations in four continents (Africa, Middle East, Asia and South America), managing sustainability in our emerging markets is as diverse as the regions in which we operate. From the sustainable sourcing of product to the social projects we invest in, each region faces unique challenges.


Number of employees
6 046
2016: 5 315


2016: 0


Payroll spend
2016: R1,1bn


CSI spend
2016: R1,1m
2 110 3 936
2016: 1 730 2016: 3 585
Lost-time injury
frequency rate
2016: 38
training spend
2016: R10,0m


Diesel (litres) Petrol (litres) LPG (kg) LNG (kg) Biodiesel (litres)
7 685 117 1 750 958 58 546 022 42 967
2016: 7 328 200 2016: 1 780 038 2016: 0 2016: 554 410 2016: 38 256

Electricity (kWh)
Non-renewable Renewable
55 183 915 0
2016: 51 962 905 2016: 0
317 727
2016: 234 361
Scope 1 emissions
(tCO2e) (excl refrigerants
and aircon gases)
Scope 2 emissions
26 100 43 256
2016: 21 806 2016: NR

NR = not reported.

Responsible product sourcing

With strong consumer awareness in South Africa, the sustainable sourcing of product is a top priority. BF has upheld a sustainable seafood policy that ensures all seafood products on offer are properly labelled with information relating to species, origin and method of production.

Similarly, CFG (a manufacturer and distributor of meat, poultry, dairy and general food ingredients) requests all its suppliers to be accredited by Fairtrade or UTZ sustainable farming certifications.

Environmental commitment

In many respects, environmental challenges facing our operations in emerging markets require greater managerial response than those in more developed markets. In some instances the management of water, electricity and fuel is built into company management incentive programmes, and monitored frequently.

Due to volatility in availability and price, fuel conservation is critical to the successful functioning of our fleets. Despite the significant increase in our revenue and profit, our diesel and petrol consumption increased only marginally, indicating improved efficiencies in distribution of our product. In many regions, we implement driver-training programmes aimed at improved driving behaviour, and in our Turkish operation route optimisation is scrutinised to ensure fuel consumption is kept to a minimum.

Energy, and particularly electricity, is similarly managed. Although our overall electricity consumption has increased during 2017 (a result of larger warehousing in our UAE and South African operations), technologies such as thermostats in our Brazilian freezers; installation of LED lighting and sensor control in the BF operations; and timers on geysers at CP operations in South Africa, are just some of the energy efficiency initiatives being adopted.

Water consumption has also increased as a result of larger premises and increased production. As many of our operations are located in water stressed and vulnerable areas, there is an obvious need to focus on our water usage patterns. Rainwater is harvested and used in Brazil for bathrooms and vehicle wash bays; boreholes supply our evaporative coolers, gardens and wash bays in South Africa; and, high-pressure steam is being used instead of cold water for the cleaning of equipment.

Waste generation is an area of growing concern, with many regions implementing waste management and recycling programmes. Turkey is obliged to report, by legislation, all potential waste entered into the market as a result of our activities. Consequently, an arrangement with the ÇEVKO Foundation ensures that 54% of the operation's packing waste is recycled.

Employee development

Due to the nature of the markets in which we operate, and the need for specialist commercial expertise, much of our employee development focuses on skills and career training. This includes both current and potential employees.

Programmes for disabled and unemployed initiated by BF and mentored through a Management Development Programme at the University of Witwatersrand's Business School (WBS). Following the academic training, all were offered internships and have ultimately been employed fulltime in the company.

Individuals, living with disabilities, are currently enrolled in a New Managers Programme at WBS, and will be offered future internships.

Community and social support

Outside of our internal employee investment activities, there has been a marked increase in expenditure towards external social programmes. Some of this has been in the form of direct support to charities, schools, and old age homes, such as with our Brazilian operations, whilst our UAE operations are increasing their investment in alignment with government directives and supporting autism, foodbanks and reading projects.

Community projects

South Africa

South Africa Community projects The South African business fosters job creation, enterprise development and personal growth. Its Certificate Programme in Professional Cookery has become a springboard into the foodservice industry for previously unemployed young people. Support for job-creating micro-business includes provision of premises and equipment for a truck-wash start-up, called Twin Cities, now successfully supplying all BF's largest depot's truck-washing needs. A black female-owned farming and food processing business, Urban Grown, has also migrated to BF's supply chain following targeted support. BF has assisted them in positioning themselves as a larger scale commercial farming supplier to the broader fresh food market. Another beneficiary of the enterprise development initiative is a black-owned retail food product supplier, Athi Foods, now a successful entrant supplying the smaller retail food market.

Development programmes assist drivers through training in defensive driving while unemployed black graduates living with disabilities receive business school training in management skills, often a gateway into the business's internship programme. Selected black employees also benefit from management development programmes. One focus area here is talented black females. Additional training, mentoring and coaching programmes are designed to fast-track black staff into management and senior management roles.

Angliss Hong Kong

Our core China business has a longstanding reputation for community support and leverages enduring partnerships to help those in need. For instance, Angliss is a long-term supporter of SAHK, an association that assists 15 000 families with physically and mentally challenged family members.

This NGO provides world-class rehabilitation services with the aim of building self-reliance. It assists those with cerebral palsy, autism and Parkinson's disease, those experiencing developmental delay, those recovering from stroke and those with learning disorders.