The Two Sides of Value Creation

The concept of duality has parallels in mathematics, philosophy and the sciences - like plus and minus, yin and yang or action and reaction. Value creation too exhibits this complementary phenomenon, as the ability of Hayleys to create sustainable value for itself is interrelated with the value it creates for its stakeholders over time. They go hand in hand. We briefly discussed this aspect under our report structure (in About this Report).

Value Creation

Hayleys delivers value to its stakeholders in the context of its key goals and strategies and the socio-economic environment in which it operates. Based on materiality we engage with these stakeholders, build relationships and nurture them as they are of value to us in driving future earnings. As stores of value, they constitute our stakeholder capital that are external to Hayleys, the key constituents being our investors, customers, business partners, employees and the society and environment in which we operate.

In turn we derive value through the dynamic interaction between our external capital and our own internal capital over the short, medium and long-term. The capital internal to Hayleys comprises financial capital and institutional capital. The latter includes integrity and business ethics, corporate culture, accumulated knowledge and expertise, intellectual capital including patents and copyrights, our capacity to innovate, brand image and reputation.

Capital Formation

Value creation is a dynamic process with flows taking place between the various forms of capital. We have access to and make use of these internal and external forms of capital in creating value for Hayleys (deriving value) and its stakeholders (delivering value) through our business model.

The discussion that follows reviews our performance during the year and next steps in this context - the two sides of value creation, that of deriving and delivering value that lead to capital formation.