LUSAKA (The Business Telegraph) – Disease pandemic has changed the business ecosystem in landscape and has revealed synergies, integrations and brought sectors closer than ever. On Friday, 17 July, the celebrated Anakazi banking online conversation hosted C- Suite leaders from the cement and banking industries – Jimmy Khan and Leina Gabaraane who serve as Chief Executive Officers of Lafarge Plc and Stanbic Bank Ltd in Africa’s second largest copper producer. One thing homogenous about the two executives in heterogenous sectors is that they head the largest and most profitable entities in their respective sectors and have been impacted by the same pandemic in a similar fashion. Stanbic is the largest bank by asset size and most profitable financial institution in the country while Lafarge has remained the top cement producer for over 70 years.
Jimmy Khan, shared how investments in digital initiatives way before the COVID pandemic are now paying off in pandemic times.
“Digital initiatives, we undertook last year on how to serve our clients are now providing us with silver linings as we interface with clients,” Lafarge Chief Executive Officer Jimmy Khan said.
There are three areas that COVID19 has impacted significantly namely operations, people and the clients side, he said. The operational side has impacted the supply side of Lafarge Zambia causing delays in parts required for maintenance for plants ordered from abroad which would ideally take 2-months. Working from home solutions has provided its own challenges as staff grapple with load shedding while the client side was addressed with innovation in usage of an App for retailers that which is being used for purchase of cement. Lafarge has partnered with Afri delivery a food delivery company to distribute cement in these disease pandemic times for which 1.2mln bags are being sold on a monthly basis as the company services its retail clientele.
“COVID19 is making us relearn our processes to the extent that Kiln Shut Downs – KSDs that took 6-months will now take 18-months and as such will require 3 times more planning,” Khan said.
As for Stanbic Bank, enhanced health and safety protocols for staff have been implemented with 33% of its staff operating from home which does come with unique challenges homogenous to the ones Lafarge staff face such as cyber related security issues and power outages causing business disruption. Bandwidth for working from home solutions is a challenges to use the large amount of files of digital data that staff will need to transmit between points, Stanbic Bank Chief Executive Leina Gabaraane said.
“One of the biggest challenges we face as a bank is customers struggling to trust technology because even with digitized solutions most will still want physical interface. They still will not trust cash deposit machines, Automated Teller Machines – ATMs and as such will prefer queuing up,” Gabaraane said. We have invested in innovation and digitization but to push transactions through a digital network requires stability of systems. Our clients are stressed as business activity continues to decline, he said. The bank continues to explore effective ways of contacting clients in a contactless environment.
OPPORTUNITIES IN AND POST COVID ERA
One of the opportunities that this period has revealed is effective utilization of floor space revealing the quantum of capital tied up in real estate which could be channeled to residential accommodation, Gabaraane revealed.
“Other opportunities for the bank include redistribution of capital towards new emerging industries such as in the public health sector and other related sections such as Personal Protective Equipment – PPEs and mask manufacture. Other sectors include telecommunications as they seek to expand their landscapes to accommodate rising demand,” he said.
Lafarge is still selling cement fo real estate purposes. Despite larger government funded projects slowing down, our analysts are seeing an uptick in demand for cement from individual homebuilders who are believed to have a bit more disposable income to channel to investment in personal construction which ideally serves as an effective hedge for inflation.
“Retail demand has in fact doubled in this period which is a sustainable business opportunity for Lafarge. Infact we will soon be launching Wallcrete (mortar) which is specifically structured for finishes and is much cheaper and is of lower cost nature for the end users which will reduce the financial burden on construction projects,” Khan said. COVID19 is forcing us to be client centric, he said.
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