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PRESS RELEASE
Sanlam Emerging Markets well positioned to expand Sanlam footprint
The Group operates in South Africa, Botswana, Malawi, Nigeria, Ghana, Kenya, Swaziland, Tanzania, Uganda, Zambia, Namibia
JOHANNESBURG, South-Africa, April 2, 2013/ -- Sanlam Emerging Markets (SEM), the division within the Sanlam Group (http://www.sanlam.co.za)
tasked with international expansion, says it is well on track to
deliver on its mandate of supporting the Sanlam Group objective of
becoming a leading financial services player in selected emerging
markets.
This
is in line with the Sanlam Group strategy which defines emerging
markets as one of the key areas to be exploited for potential growth in
the business.
Sanlam
Group Chief Executive Dr Johan van Zyl has stated that: “In 2011
Sanlam’s international business contributed around 15% of operating
profit (pre-minorities). Our view is that this contribution can be
doubled over the next five years as these markets are seen as key growth
engines. Considerable work continues to be done to identify core
markets for expansion.”
Earlier
this month Sanlam Group announced financial results for the year ended
December 2012 and reported that SEM delivered gross operating profit of
R850 million, up 30% from R656 million in 2011. SEM is expected to
deliver a compounded annual growth rate of (CAGR) 17% between 2011 and
2015.
SEM
CEO Mr Heinie Werth says the company is pleased with the progress made
by the business cluster responsible for Sanlam’s expansion in emerging
markets outside South Africa.
Currently, SEM is doing business in 10 countries in Africa, excluding South Africa and Namibia, as well as India and Malaysia.
In
2012 SEM concluded transactions to the value of roughly R3 billion. In
the first quarter of 2013 a further transaction worth approximately R1
billion with Shriram Transport Finance Company was concluded.
For
the 2012 financial year, SEM managed to increase gross operating profit
from its Indian operation (Shriram) by 750% from R4 million to R34
million. With the Shriram transactions completed in 2012, a contribution
of approximately R400m in profit is expected in 2013.
Gross
operating profit for Namibia increased 10% to R225 million and 20% for
Botswana to R499 million. For the rest of Africa, the businesses managed
to increase gross operating profit by 134% to R117 million.
Among
the highlights was the Nigeria operation which has managed to break
even within two years of its launch, testimony to SEM’s low cost
expansion model in Africa.
Says
Werth: “We are making steady progress towards our objectives and we are
satisfied that the cluster is well positioned to increase its
contribution to the Group over the next five years as the markets we
operate in are seen as key growth engines.”
In
addition, Werth says strong local partnerships play an important role
in the company’s performance: “We rely on strong local partners and
management to drive business growth within each country and this has
been mutually beneficial in India and in our operations in Africa.”
Sanlam
has been in partnership with the Indian Shriram Group in respect of
life insurance (Shriram Life) since 2005 and short term insurance
(Shriram General) since 2008.
SEM
was established in 2011 as a separate cluster within Sanlam to focus
exclusively on emerging markets. As part of the restructuring,
operations outside of South Africa formerly managed within SPF, Sanlam
Developing Markets, Santam and Sanlam Investments were transferred to
SEM. The integration of these businesses within SEM was successfully
completed during the first half of 2012, without losing operational
focus.
“We
take a number of factors into account when investing. These include
potential market size, growth potential, market accessibility, general
business environment, specific information around financial services in
life insurance, asset management and retail credit in the countries in
which we operate as well as those in which we seek opportunities.
“A
key focus area for SEM is South East Asia. To this end, we have already
taken the first steps with the transaction in December to acquire a 49%
stake in Malaysian short term insurer Pacific & Orient Insurance
Co. Berhad (POI). Earlier this month their shareholders voted
overwhelmingly in favour of the transaction.”
SEM
continues to focus on growing the Group’s stake in existing operations.
In 2012, SEM concluded some major transactions and the Group redeployed
a total of R3, 3 billion of its discretionary capital during the year.
The bulk of this was invested in SEM initiatives.
Some highlights of 2012 include:
- A further R2 billion investment in the leading Indian financial services group Shriram Capital Limited;
-
The acquisition of a 49% stake in the Malaysian short term insurer
Pacific & Orient Insurancce Co. Berhad (POI); and
-
Sanlam has been granted approval from the relevant Kenyan authorities
and the South African Reserve Bank to increase its shareholding in Pan
Africa Insurance Holdings (PAIH) from 50% to 60% in the open market.
Looking
ahead, Werth says SEM will continue to explore further opportunities in
Africa, India and South East Asia, in line with the Group’s strategy
and to create value for shareholders.
“We
are actively working with our partners to identify appropriate
opportunities. In 2013 we will focus on extracting more value from our
existing partnerships in Africa.
“We
have finalised our Malaysian acquisition and continue to identify other
opportunities in South East Asia, which we believe offers tremendous
growth opportunities,” concludes Werth.
Distributed by the African Press Organization on behalf of Sanlam Group Communications.
ABOUT THE SANLAM GROUP
Sanlam (http://www.sanlam.co.za)
is a leading financial services group listed on the JSE Limited and the
Namibian Stock Exchange. The South African based Sanlam Group conducts
its business through Sanlam Limited, the corporate head office and four
business clusters – Sanlam Personal Finance, Sanlam Emerging Markets,
Sanlam Investments and Santam. The Group operates in South Africa,
Botswana, Malawi, Nigeria, Ghana, Kenya, Swaziland, Tanzania, Uganda,
Zambia, Namibia, India, Malaysia and the United Kingdom. It also has
business interests in the USA and Australia. Sanlam provides financial
solutions to individuals and institutional clients across all market
segments. These solutions include personal financial services such as
individual, group and short-term insurance, estate planning, trusts,
wills, personal loans, savings and linked products, business fitness
assessment and insurance investment management, investment management,
stock-broking, risk management and capital market activities.
Established in 1918 as a life insurance company, Sanlam has grown into a
diversified one-stop financial services group. http://www.sanlam.co.za
Enquiries:
Ainsley Moos, Head of Group Communications
OR
Pearl Majola, Sanlam Group External Communications
SOURCE
Sanlam Group Communications
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