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Wal-Mart Loses Another Star: South Africa’s Danie Kieviet To Leave

When we returned from our trip to South Africa, we wrote a column for Pundit sister publication, PRODUCE BUSINESS, that, among other things, advised the following:

What is really needed is for some corporate giant, a Wal-Mart, a Costco, a Kroger, a Supervalu, etc., to step up to the plate and locate a global procurement office in South Africa.

Let them procure fruits and vegetables, but also wine, seafood, canned goods, juices and many more things. I think the company that does this can make a buck. But, beyond that, the company would be serving both American interests and the hope for future world peace.

And by the way, I have just the guy for the job. A gentleman named Danie Kieviet showed me around South Africa. He is a member of the board of directors of PMA. He also is the founder of the modern South African retail produce industry, as he built from scratch the procurement arm for Africa’s largest supermarket chain, the Shoprite/Checkers group. He pioneered direct procurement for retailers and built up supply chains where there were none.

Now, he has built an organization, known as Freshworld, involving his two eldest sons, that champions the interests of the Sunkist brand, and he has built a substantial counter-seasonal market share in Asia. He is knowledgeable and modern, up on RFID, category management and all the latest technologies, but he is also old school. Like a great African bull elephant, he cannot be stopped.

Danie travels across the country and around the world to create opportunities in South Africa. If some giant organization, with stores that could sell product, gave him a shot, he would not only make them plenty of money but also open up opportunities for producers all across South Africa and into the recesses of the continent.

He could identify not only traditional exporters but also new farmers being assisted by empowerment programs. To give him a shot would be a contribution to peace and prosperity for a continent with precious little of either. Who will step up to the plate?

As we said at the time, great minds think alike because soon after that post, we were able to ran another piece entitled, Wal-Mart Picks Right Man In South Africa that made the following announcement:

The Pundit has always thought well of Wayne McKnight, Wal-Mart’s Vice President of Global Procurement. His announcement that Danie Kievet will join Wal-Mart, heading up its South African Procurement Operations, is a coup for Wal-Mart, the realization of a life-long dream for Danie and proof that great minds think alike….

Since that column was written, Danie’s term on the PMA board has ended, but he was appointed as Chairman of PMA’s International Council.

Wal-Mart has done a good thing. For itself, it has secured the single top man in the South African deal. For the world, it has done something special by putting such an effective executive in such a crucial position. You can be sure that exports from Africa will receive a boost. To help such a country as South Africa and a continent such as Africa is a very good thing indeed…

Although initially the South African product is likely to go to traditional South African markets, such as Wal-Mart’s ASDA subsidiary, Danie is not the type of guy who accepts convention as a limitation. He will find wine and seafood, produce and ethnic products, and he will in his own persuasive manner have Wal-Mart buyers from China to Mexico convinced they must have South African product…

The right man, the right moment and the right opportunity have certainly met. The Pundit congratulates all concerned.

Well the moment came and went. The right man, the best man in South Africa to represent Wal-Mart’s interests, has resigned. He will be leaving Wal-Mart’s Global Procurement team effective February 29, 2008.

There are always specific circumstances. Danie is fortunate in that his family business, Freshworld, is growing rapidly and he has plenty of opportunities. So he has a place to go.

Sources in the United Kingdom also point out that the key to the South African business for Wal-Mart’s global procurement efforts was to procure the volumes purchased by ASDA, Wal-Mart’s UK subsidiary.

The UK is the traditional market for South African fruit exports. Yet ASDA’s supply is done through International Produce and executives there preferred to make their own deals, thus frustrating Wal-Mart’s corporate goal of establishing a strong South African procurement office. In fact Wal-Mart Global Procurement executives around the world report frustration with an inability to actually get Wal-Mart’s massive volumes substantially committed to procuring through this system.

In effect, the procurement executives have to become salespeople, selling Wal-Mart’s far-flung executives on buying through Global Procurement. But if the offices have to become selling offices, they lose the cost advantage over any traditional exporter.

Danie did a great job for Wal-Mart, securing for it the ability to export and import in its own name — a big advantage in the South African business. Yet the combination of other opportunities calling, with the unwillingness of Wal-Mart corporate to compel those with conflicting interests to follow the corporate imperative to enhance global procurement, led Danie to leave.

This is no small loss for Wal-Mart. And following the loss off Bob DiPiazza, Bruce Peterson, Danie’s boss at Global Procurement, Wayne McKnight, and the cultural shift at Wal-Mart we discussed in conjunction with John Menzer’s departure, Danie Kievet’s departure is very bad news for Wal-Mart.

We can see in Bruce Peterson’s departure a conscious effort to get out of the way executives who were steeped in Sam Walton’s culture and were thus obstacles to a new way of thinking. Whether this was a good or a bad idea will depend on the success or failure of the new culture that Eduardo Castro-Wright and Lee Scott are attempting to create.

Thus in some ways the loss of Wayne McKnight and Danie Kievet are more dangerous for Wal-Mart. These guys are superstars. It is not as if Wal-Mart will hire more knowledge, smarter people to fill these positions; they will hire people less knowledgeable, less insightful.

When a company can’t hold onto executives like this, it indicates either a dysfunction at a very high level or a dramatic shift in priorities.

Most likely it means that the organization is shifting to value a different kind of expertise — so Wayne McKnight will not really be replaced at all. His department will wind up being supervised by an executive in China who knows nothing at all about produce and knows a lot about spreadsheets.

That is quite a dramatic shift in an organization; it takes an enormous amount of confidence on the part of Wal-Mart executives to believe it is likely to be a success.

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