Business turnaround plan
In developing Omnia’s strategy, both opportunities and risks were considered, informed by developments in the environment in which Omnia operates. The business has a strong foundation which will enable the Group to grow and deliver value based on our existing assets.
The Group experienced a challenging few years with adverse market conditions, marked by droughts and late rains in key markets, a volatile Rand, the local and international mining industry going through restructuring and overall difficult global trading conditions. Notwithstanding the impact of these on the Group’s financial performance, Omnia’s core purpose and strategy remain sound. The Group’s execution model, however, requires further refinement.
In response to the rapidly changing operating environment and needs and expectations of our stakeholders, the Group strategy comprises three strategic pillars that aim for Omnia to: become more operationally effective; innovate and develop integrated solutions beyond our existing commodities; and seek growth in new markets through geographic expansion and acquisitions. The Group’s strategy is underpinned by ensuring a safe and sustainable environment for its employees, the communities in which it operates and its customers. Safety is embedded in all aspects of the strategy, a core principle to the strategy of contributing towards a Better World.
Historically, the business has pursued a strategy based on growth from the core ammonia value chain built around Omnia’s primary manufacturing asset at Sasolburg. A portfolio of businesses in Agriculture (granular fertilizers, farmer support to AgriBio), Mining (emulsions, detonators, logistics to full blasting services) and Chemicals (chlorine, water treatment, other chemicals and the distribution of bulk specialities) subsequently developed out of the initial core offering. Expansions were also mainly executed based on strategic imperatives.
Due to the commodity nature of Omnia’s business, current profitability is tied to economic growth and sector dynamics. To remain relevant, Omnia needs to be responsive to global trends as business and consumer demands keep evolving and environmental pressures are increasing. To stay competitive and meet the demands of stakeholders, Omnia is seeking to adopt a more value-add, agile and digital-orientated solutions approach to the business.
Progress on key strategic priorities in FY2020
A key focus area in the year was to lower the operating leverage of the Group. Progress is summarised in the table below.