A leading financial services group has achieved strong growth in its emerging market operations and Is looking to expand its business.

Sanlam Emerging Markets (SEM), the division within the Sanlam Group 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 percent 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 percent from R656 million in 2011. SEM is expected to deliver a compounded annual growth rate of (CAGR) 17 percent between 2011 and 2015.

SEM CEO Heinie Werth said 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 percent 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 percent to R225 million and 20 percent for Botswana to R499 million. For the rest of Africa, the businesses managed to increase gross operating profit by 134 percent 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.

Werth said: “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 said 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.”

Source : abdas.org