Every year The Australian’s John Durie asks some of the biggest names in Australian business five key questions about what’s coming in the year ahead.
Here, in his own words, is what Sigma’s Mark Hooper sees ahead in 2020.
Read more from the CEO Survey.
How is your company affected by low-interest rates and what is needed to boost the economy?
Lower interest rates benefit our pharmacists who want to buy or invest in their pharmacy, and we continue to support them in running better businesses, so they have the confidence to make that investment. Sigma has also taken advantage of the low-interest-rate environment and is investing more than $300m in our distribution centre (DC) network across Australia. This will deliver the most efficient DC network in Australia’s pharmacy sector. Ultimately, companies need to make this sort of investment to support a growth mindset. A stable policy environment would also give greater confidence to consumers and business to invest and spend, which will, in turn, boost the economy.
What is the impact of government regulations on your company, including those applying to the financial sector?
The most critical thing on the horizon when it comes to the pharmacy network will be the new (seventh) Community Pharmacy Agreement. This is critical to ensure that patients have access to the medicines they need when they need it and that’s particularly important given Australia’s ageing population and broad geography.
What percentage of company revenues are spent on research and development, and how is your company using technology to improve performance?
We are a high-volume and relatively low-margin business, so efficiency in the way we operate is critical. Technology plays an important role in that, and we leverage the R&D of others. We have invested and continue to invest heavily in new technology to improve the efficient operation of our new DCs around Australia. In total, this will be over $300m by the time it is completed.
What are the three major policy issues facing the country and what should be done about them?
What Australia desperately needs is some common-sense leadership. This applies across all sectors and becomes more critical in a health setting where there will be an increasing demand for health services in an environment where there is potentially less capacity to pay for it. At the risk of stating the obvious, we also need to ensure we avoid a recession and in part that’s about giving people the confidence to spend more. The tax cuts were a good start, but more needs to be done. Obviously, our pharmacy network is part of Australia’s retail sector, and it plays an even more critical role in rural and regional areas where the main street of every town has a pharmacy.
What are the major impediments to long-term growth facing your company and what can or is being done about them?
There is always the need for more infrastructure spending. We support pharmacies in every corner of Australia and our trucks delivering medicines have to negotiate a vast variety of different quality roads and transport links. It’s important always to do more to improve Australia’s transport infrastructure. Timely investment in core infrastructure (rather than when it’s already too late) should always be a key focus.
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