Category: Retail and apparel
Winner: Dis-Chem Pharmacies – South Africa
Summing up: A large and remarkably quick implementation – amongst the largest and fastest in all of Africa – testimony to the support and low-cost finance made available to suppliers while enabling Dis-Chem to fund its ambitious expansion programme.
What the judges said: “An impressive SCF breakthrough in an emerging country. More than 200 suppliers have joined as a multi-bank capability ensures attractive funding rates. For Dis-Chem, the cash flow benefit is in excess of R600m.”
- South Africa’s largest SCF programmes and with the highest rate of supplier uptake compared with other programmes in the country.
- Dis-Chem improved its working capital to fund its plans to double in size while the SCF programme gives suppliers access to the cheapest source of funds
- The SCF programme, implemented by Propell in partnership with PrimeRevenue, receives plaudits from suppliers
Dis-Chem, a leading chain of South African pharmacies offering dispensaries, family clinics and self-medication centres, wanted to undertake a huge expansion over the next few years with some 200 new stores across southern Africa, doubling the size of the group.
Propell partners with PrimeRevenue, bringing the latter’s OpenSCi trade finance platform to organisations across Africa.
In January 2018, Dis-Chem implemented one of the fastest and most successful SCF programmes in Africa, with the aim of extending payment terms for all suppliers to fund the expansion plan, free up around R1bn in cash, and increase supplier loyalty and improve relationships by supporting their working capital needs. The goal for phase one was to free up 5% of total annual supplier spend. The longer-term strategy for the next 18 months is to offer these low-cost funding lines to every supplier.
The early result was that 70 suppliers registered within the first 30 days and more than 100 were live on the platform within the first 90 days, thanks in large part to Propell’s project management and implementation experience. After nine months, more than 200 have joined, making this the largest SCF project in all of Africa. Dis-Chem ensures that all invoices are available to be traded within 48 hours after upload.
Testimonials from a wide variety of suppliers made clear that they appreciated the support from Propell and the opportunity to get access to cash, allowing them to focus on growing their business. In fact, for 95% of suppliers, the multi-bank finance facility is their cheapest source of funding.
Within three months, Dis-Chem had freed up more than R600m of cash. Connectivity with Dis-Chem’s ERP system, eliminating the risks of error and fraud associated with the company’s previous manual processes.