Having completed the acquisition of the local BMW dealership, payment platform PayToday and a 50 percent stake in Kaap Agri, Pupkewitz Holdings says it’s eying an acquisition in 2019, has already identified some potential businesses.
Dougie Truter, who has been at the helm of the family controlled mega company since 2015, said the company was looking at possible acquisitions in the pharmaceutical, automotive and agricultural sector.
“I have three possible acquisitions that I am presenting to the board next week. Those are in the pharmaceutical, automotive and agricultural sector. Then I have one in packaging, environment and so on. I have a long list,” he told the Windhoek Observer.
Quizzed on which sector was more of interest to the company, looking at the potential buys, Truter said, “I think the pharmaceutical one is a very exciting of the three.”
He said the company will be funding the proposed acquisitions from its own resources.
“I really don’t want to say much, but yes, we will be using internal resources and no borrowings,” the Pupkewitz boss said.
Truter maintains the company’s acquisition of the BMW dealership last year was the right move, despite a depressed motoring sector, where sales volumes are at an all-time low due to tough economic environment and government’s austerity measures.
“The timing of the acquisition of BMW in this tough motoring time as a luxury brand is not good, but we believe in the brand. It’s the biggest luxury car brand in the world and again the current situation is a short-term issue. We have a long term view of the business and thus have refurbished the dealership to improve the customer experience,” he said.
“But again, we also didn’t over pay for the business. We paid the right price.”
He said the company’s acquisition were meant to compliment the group’s product offering, while also improving what’s on offer for its customers.
“If you look at Kapp Agri, it’s a difficult time but it’s performing well and we are in the process of moving the Windhoek branch to a better location along Monte Cristo road and in Ondangwa we have opened the country’s first 24-hour store and it’s doing very well. There was never an agriculture offering in the north and it is a 24-hour store, so that people can come and buy at any time, even at night,” he said.
“We very happy with Kaap Agri obviously, but we are concerned about the south, where we have a store, which started catering for the Hardap scheme, but the drought in the south is terrible, the purchase of products by farmers in the area has reduced massively.”
On PayToday, Truter said the group was pleased with the digital platform’s performance and its growth prospects going forward.
“We are happy with PayToday and excited about the plans they have. We have been adding vendors on the platform and have hundreds of persons who already signed up. It’s a real easy way of paying and they are looking at now adding water, electricity and parking payments too,” he said.
When asked how the group was fairing despite the economic challenges and if it was considering streamlining its operations as part of cost containment measures, Truter said,” We make sure that we consolidated our business and also expand the business through opening selective branches. We spent almost N$20 million in refurbishing the main branch and it was last done 45 years ago. In these tough times we opened branches in Omaruru and Otjo, and are still going to places where the people want us. Is not the best time, is not the best possible decision to do, but we don’t believe in short term decision in the business.”
“One of the things that we have been serious about is unifying principles in people development and in the past three years, despite the very tough economic conditions, we have increased funding in people development every single year. I think last year we spent over N$7 million on people development. We have different programs such as management programs, skills training and various trainings initiatives. We cannot be part of the problem, so we haven’t laid off any people in any of our businesses in the past three and half years and we employing 2,000 people.”
Going forward, Truter said the tough economic conditions will continue to hit the business as people spend less.
“Of course, we feeling it. If you think about the construction sector, its down from over N$8 billion to under N$4 billion, so 55 percent of the sector is wiped-out. The people that used to buy the materials don’t build anymore. We have seen people that were developers in the past are now becoming builders, so there is a shift in the customer base. The motoring business went from 1,000 new cars down to 700 new cars a month. We have a 35 percent market share on the car market, but we only selling 35 of 700,” he said.
“With MegaTech interestingly enough, because people are moving to renewable energy, we have gone into a venture where we install solar panels for large buildings, so that side of the business is growing tremendously,” he said.
Pupkewitz is one of Namibia’s largest private owned companies with interest in the retail, automotive, agriculture and now digital payment platforms.