How clover creates value and reporting on the six capitals

• How Clover creates value today
• Overview of Clover’s value creation process
• Reporting on the six capitals
• Clover’s business model
• Human capital
• Natural capital
• Manufactured capital
• Intellectual capital
• Social and relationship capital
• Financial capital
• How Clover sustains value for Tomorrow
• Clover’s future value creation philosophy
• Human capital
• Natural capital
• Manufactured capital
• Intellectual capital
• Social and relationship capital
• Combined Assurance

Intellectual Capital

How Clover sustains value for tomorrow: Intellectual Capital

Future Value Creation

To optimise the brand portfolio

The Company continuously and actively seeks to

• Acquire complementary brands that can be added to the Clover stable
• Develop new brands able to add synergistic value to the existing portfolio and distribution network
• Evolve and improve existing brands in light of changing consumer profiles and regulation such as the implementation of sugar tax

Commercial sales

Clover’s commercial sales department is mandated to stay ahead of changes in existing markets and to enter new markets and product categories through continuous development and evolvement.

From Clover’s perspective, vertical growth is essential to its sustainability. In this regard the Company has progressed well in assimilating customer insights, analytics and research. Our sales teams have introduced new concepts in selling, in which consumers are attracted to bigger basket buying and reward programmes that ensure sales right through until till point.

Clover’s horizontal growth will be driven by improving structures and implementing new route-to-market methods, while building up support systems and processes. Our Masakhane project is a major driver of this process.

Future Value

Collaboration with IBM

Collaboration is critical to maintaining close working relationships with our retailer partners. Clover embarked on an initiative with IBM, called Project Kolabo that enables Clover to make use of big data analytics to provide insights into market dynamics, consumption trends and the needs of our retailers, allowing for more informed decisions across all levels of management (More information on Kaleobo is available under Information Systems below).

Product Innovation and Technology

As the owner of numerous household brands, Clover needs to continuously refine its marketing strategy. We do this by acquiring or developing new value added products for integration into our brand portfolios. New products are developed by CIover’s in-house Product Innovation and Technology Department (PIT), or through joint ventures. PIT constantly seeks to improve Clover’s current product offerings by revising product formulations and packaging, with an emphasis on “greener” alternatives. Ideally, these projects should also result in cost savings. PIT’s project engineering section oversees the construction of new factories and production lines.

Information Systems

Clover’s in-house Information Technology (IT) Department provides the digital backbone for all our management systems. Clover’s IT governance and its independent assurance is outlined in the Governance, Risk and Compliance Report, here.

Clover’s Commercial Sales division and our IT department are working with IBM to implement an analytical platform for customer collaboration and data analytics. Once operational, this platform will be expanded to other business areas to provide improved analytics and business insights. In manufacturing, for example, improved analytics around machine maintenance can result in a major reduction in scrap, downtime and related costs. We could also align the system to Clover’s HR and access control systems to generate savings from overtime management.

Clover is examining mobile solutions to automate and/or improve many routine operations. Smartphone and tablet applications could speed up administrative processes such as credit notes, overtime, driver reconciliations and delivery turn-around times.

Clover is presently implementing an integrated Supply Chain Planning System to ensure that sales, production and logistics planning activities are synchronised and optimised for:

• improved order fulfilment
• reduced finished goods inventory levels and holding costs
• reduced raw material and packaging inventories
• less waste
• improved production throughput.

This system will enable improved tactical and forward scenario planning to make Clover more responsive to market dynamics, while also increasing our demand forecasting accuracy.

Clover continuously evaluates changing trends in technology to identify systems that can generate maximum value to our business, customers and shareholders. We are examining the adoption of cloud services, big data, collaboration, mobility and analytics for improving process efficiencies and enhancing customer experience. Our business is all about partnerships, therefore technologies should be introduced that will enhance and deepen these relationships.