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Barloworld Ltd (ticker: BAW, exchange: )
News Release -
Globalisation a fundamental requirement for growthThe decision by Barlow Limited to internationalise is a fundamental requirement for the continued success and growth of the group, Warren Clewlow says in his annual chairman's statement issued today.
Indeed, hindsight shows that when Barlows moved to internationalisation some years ago, it was well ahead of the times.
He adds: "We have high market shares in most of our South African businesses. If we had not set out to seek markets elsewhere, we would have remained linked only to the success of the South African economy."
Clewlow describes Barlows' strategy as one of "purposeful globalisation," which he defines as expansion both organically and through acquisition into growth markets with competitive products, back-up and services.
"It demands that we are nimble, understand where we are strong and where we are not, and not only acquire or establish businesses elsewhere in the world, but actually translate the Barlows culture."
Management teams are well established in the United States, Europe and now in Australia. In Iberia, the integration of the 1-800 Spanish and Portuguese former Bibby employees into the Barlows mainstream also opens the potential for more rapid development in new territories such as Central and South America, where language and broad cultural identity are shared.
Adds Clewlow: "Internationalisation also demands a review of every aspect our activities, from the sourcing of products, brand management and distribution, to performance targets and executive development.
"The process also creates jobs, not only in the countries in which we expand, but in South Africa, which will remain the nerve centre of our business."
In summary, Clewlow says the Barlows purposeful globalisation strategy is aimed at building a truly multinational corporation with a solid South African base which:
*delivers products to customers at world prices;
*creates interesting jobs; and
*produces sustainable quality returns to shareholders.
To achieve this, the company has been re-organised significantly, integrating its international operations into the mainstream of its organisational structures.
The company reported another year of solid growth with earnings per share rising 18 percent to 388,3 cents. Capital investment in existing businesses totalled R885-million and acquisitions an additional R977-million.
Commenting on the South African economy, Clewlow says its has become fashionable to blame monetary policy for the lack of job creation and to argue that monetary expansion should stimulate growth and reduce unemployment but that this is a dangerously flawed conclusion.
"To solve South Africa's recalcitrant unemployment problems, the linkage between wage levels and productivity must be restored. Flexibility in the labour market is imperative for job creation. A lesson on the benefits of labour market flexibility can be found in the contrast between the 8-million jobs created in the United States since 1991, and the loss of nearly 5-million in the same period in the European Union."
Clewlow says the prospects for Barlows in the coming year remain fundamentally unchanged from last year, with the growing strength of the global business offsetting short to medium term lower growth scenario in South Africa. Another real improvement in earnings is anticipated.
For further information please contact Mark Drewell, manager: group corporate communications, at Barlows on (011) 801-2204 or email@example.com.