ARB Holdings marks bittersweet 40th birthday amid COVID-19 shocks

ARB Holdings, a leading company in the South African market, is celebrating its 40th year in business amidst a challenging economic landscape. In an exclusive interview with CEO Billy Neasham on CNBC Africa, the company sheds light on the impact of COVID-19 on their operations and their strategies for navigating the current environment. Despite facing revenue challenges and cost management issues, ARB Holdings remains optimistic about the future, especially with potential opportunities in the infrastructure sector. Let's delve deeper into the key points discussed in the interview. One of the main challenges highlighted by Neasham was the impact of the COVID-19 pandemic on ARB Holdings' revenue. The company managed to increase its earnings, but operating profits fell due to lower revenue and higher costs. Neasham credited the company's executive team for focusing on managing people, properties, and working capital amidst supply chain challenges. Cost reduction efforts, including trimming labor costs by 9%, have been implemented to address these issues. Neasham mentioned a plan to rationalize between 10 and 15% of the workforce but clarified that no job losses had occurred yet. Looking ahead, Neasham sees potential opportunities in the infrastructure sector, particularly with the government's commitment to infrastructure development. He believes that participating in projects like power cables could fuel growth for ARB Holdings. However, Neasham emphasized the importance of the government delivering on its promises to stimulate economic growth and address unemployment. Supply disruptions were another concern highlighted during the interview, with Neasham mentioning sporadic interruptions in raw material supplies up until May or June. He stressed the need for suppliers to improve product delivery to meet demands efficiently. Neasham also discussed cost management strategies, including senior managers and executives taking pay reductions and implementing shift rotations to optimize efficiency. Efficiencies and savings are expected to materialize from the merger of operations, with anticipated benefits starting from July 2020. The interview concluded on a note of cautious optimism, with Neasham acknowledging the challenging road ahead but expressing confidence in ARB Holdings' ability to navigate through uncertainties. As the company continues its journey into its 40th year, it remains resilient in the face of economic adversities, poised to seize opportunities that lie ahead.