A sporting chanceTiming is critical in businessÔÇöand perfect timing has been an essential component in The Laser GroupÔÇÖs success, particularly as the logistics firm vows to exceed customer expectations. Andrew Pelis talks to chief executive Philip Hayes.With its headquarters in Cape Town, The Laser Group has been around since 1971, having initially started out as a household removals business. Today, the company is one of South AfricaÔÇÖs leading logistics experts; and a series of partnerships and opportunities is now heralding a number of new and exciting business developments.
Perfect timing came into play in 2003, when a management takeover was effected just prior to a strong economic upturn that allowed for excellent growth. This has been further enhanced by the opportunity to diversify the business and become involved in the 2010 FIFA World Cup, which just happens to be taking place in South Africa.
Philip Hayes, chief executive for Laser, takes up the story: ÔÇ£I joined the group as group finance officer in late 2000, at a time when we were still listed on the Johannesburg Stock Exchange. In the latter part of 1998, the business was sold to a new management team who decided to create a group of more diverse logistics businesses, which forms the basis for the services we provide today.
ÔÇ£By 2002, it was apparent that small cap stock sentiment was not high so we put together a consortium and purchased the group in March 2003,ÔÇØ he continues. ÔÇ£Since then, we have experienced significant growth, fortunately just as interest rates were falling. We have had five very good years as a consequence of large consumer spending around the world,ÔÇØ he adds.
At present, Laser operates in three distinctive areas of the logistics market. Its express distribution offers a conventional courier service for freight typically weighing up to 100 kilograms on a same-day, next-day and 72-hour basis around South Africa and internationally. This division (referred to as DPD Laser Express Logistics) is well-known throughout the country via its high-profile Dawn Wing and Time Freight brands; it employs roughly 1,800 people and operates a fleet of nearly 600 vehicles. According to Hayes, by 2007, the company had acquired just short of 20 per cent of South AfricaÔÇÖs market share for parcel express.
Laser also provides independent clearing and forwarding services to importers and exporters, while a third line of service takes on other logistics services not covered by parcel express or international trade. Services here include bulk and public warehousing; refrigerated distribution; retail distribution; linehaul, and project and event logistics and truck rental. Significant investment saw the company recently introduce ÔÇÿpublic warehousingÔÇÖ, a service providing small and medium sized enterprises with a dedicated modular suite of services, including web-enhanced security.
At present, Laser employs in the region of 2,350 staff and generates annual pre-distribution revenue of ZAR650 million. The success of its operations and the future direction of the business have been greatly influenced by the introduction of two international parties and the additional expertise and synergies that these partnerships provide. ÔÇ£In December 2006, we sold 50 per cent of the parcel express business to GeoPost, a wholly owned subsidiary of La Poste, the French post office,ÔÇØ Hayes explains. ÔÇ£At the same time, Swedish-owned Gulf Agency Company [GAC] acquired 50 per cent of our clearing and forwarding operations.
ÔÇ£These sales have resulted in us forging strong partnerships with overseas businesses at a time when we were looking to develop our domestic markets but also looking to align ourselves much more with international business.ÔÇØ
Hayes says that while Laser retains its South African culture and management style, the new partnerships have introduced some changes. ÔÇ£Both GeoPost and GAC have global technology which we have integrated into our suite of applications. We now offer global track-and-trace systems that we would not otherwise have been able to. Our partnerships have also provided cross-border trade; and in this way, the partnerships with global companies GAC and GeoPost are now reaping benefits.ÔÇØ
The recent global economic downturn has affected business but Hayes believes that the corner may have been turned. ÔÇ£Certainly sea freight has been most greatly affected but this appears to have bottomed out now. We have also had to adjust our fuel surcharges accordingly, as oil prices fluctuated.
ÔÇ£Our biggest challenge currently, though, is the development of our businesses beyond South Africa. Our international partnerships have provided the opportunity to develop in the sub-Sahara region, across Africa and the Indian Ocean, and this will be our focus post-2010.ÔÇØ
That all happens after the FIFA World Cup and as Hayes explains, Laser started preparing for this event over a year ago. ÔÇ£We committed to 2010 in August last year (2008) and saw this as an important opportunity for our business, both internally and from an external, commercial perspective.
ÔÇ£The 2010 platform has enabled broad organisational development within Laser,ÔÇØ he continues. ÔÇ£Specifically, it has provided for a more collective and collaborative approach to important criteria such as corporate social responsibility, skills development and training. Emphasis has been placed on youth, football and team developmentÔÇörecently, Laser donated 10,000 soccer balls to underprivileged school children through its participation in SuperSportÔÇÖs ÔÇÿLetÔÇÖs Play a MillionÔÇÖ campaign. We have used this platform to share the spectacle with our people and to promote events through the medium of sport,ÔÇØ he explains.
ÔÇ£We have seen many logistics opportunities created by the World Cup and while we were not experienced in mega-global events, we have forged a strong alliance with DB Schenker, who is FIFAÔÇÖs lead logistics provider. The recent Confederations Cup offered a good opportunity to demonstrate our capabilities and we have already space banked warehousing for 2010-related opportunities,ÔÇØ he says.
With the entire Rainbow Nation in a state of excitement, the responsibility for running a safe and successful tournament lies squarely at the feet of companies like LaserÔÇöa challenge Hayes relishes. ÔÇ£We have put into place resources to promote and develop our event logistics capability in international projects and sporting events, as South Africa has played host to so many in recent years.
ÔÇ£The entrepreneurial spirit of our people will play a big part as we move into new markets and geographical locations,ÔÇØ he concludes.
