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Namibia: Nictus Group Reclaims Market Share
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New Era (Windhoek)
25 July 2008
Posted to the web 25 July 2008
Desie Heita
Windhoek
It was not an easy feat for Nico Tromp, the Group Managing Director of Nictus Group, to report the sterling results, as he did, to stockholders on both the Namibian Stock Exchange and the Johannesburg Security Exchange.
In the last 10 years, the growth of Nictus Group, particularly the furniture business unit stagnated, as the group engaged in a fierce battle to defend its turf in the retail market from the invasion of South African mass retailing houses of the mid-1990s.
"We had to defend base, [and as a result] we could not grow," said Tromp, adding that the group did not have serious competition since its inception in 1963.
"I am very proud we defended our base," he said. The battle cost the group 50 percent of its retail market share, as clients rushed to the offers of massive discounts combined with easy payment terms.
On top of it, the group embarked on a restructuring programme that included disinvesting from a number of business interests that the group says were unproductive and acquisition of the insurance and financial company, Corporate Guarantee.
The consolidation and restructuring of the group is almost complete, although total restructuring ends next year. Tromp says they have managed to have all three business units in sync with one another and to align new operations with existing ones and to get synergies took four years.
The furniture business unit has successfully reclaimed 40 percent of the lost market share. Many of the competitors have folded - after a short stint of gobbling up the other - with massive debtor books uncloaked, thanks to their easy-term purchase plans.
The focus for the current financial year is to 'grow the total group'. To achieve this Nictus management is expanding its customer base of 80000 in Namibia to millions of customers found in the three towns of South Africa where the group has opened up shop. Increasing the customer base is most important because Nictus wants to break through the turnover barrier of N$250 million.
"At the level where we are playing now, we need at least N$1-billion turnover to be a significant player," said Tromp who said Nictus is no longer playing in the small boys league.
"We are trying to move in the Rugby World Cup level and no longer the Currie Cup," he said of the business' current operations.
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This means no more acquisitions, for now, as the focus is solely on growth. Namibia will be the springboard into South Africa and to do that, the group wishes to "optimise what we are busy with here", says Tromp.
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