Dis-Chem founder and CEO, Ivan Saltzman

by Andile Makholwa
It's been 31 years of hard work for Ivan Saltzman, founder and CEO of discount pharmacy chain Dis-Chem, who entered a fragmented and competitive market when the prevailing wisdom was that retail pharmacy was an expensive and risky industry. It was in 1978, with as little as R10 000 of capital investment, when Saltzman and his wife, Lynette - both recently qualified as pharmacists - opened their first pharmacy in Mondeor, south of Johannesburg. "At the time pharmacies were seen as expensive stocks to buy," says Saltzman.

But the Saltzmans saw an untapped business opportunity on which they could build a family empire. Dis-Chem is now arguably the most successful privately owned pharmacy retail group in South Africa, with a turnover exceeding R4bn, 37 stores and more than 4 000 employees, including 252 pharmacists. "I'd like to think we're efficient in what we do," says Saltzman proudly. "We offer good service and good prices."

However, Saltzman's journey was never easy, just like most successful entrepreneurs in SA, where two in three entrepreneurial ventures tend to fail in the first two years after opening. At R84 000 in revenue, Dis-Chem was able to break even in its first year of operation. But that wasn't enough, because the stand-alone operation remained constrained by high running costs. The major breakthrough was the success of the Dis-Chem opened in 1982 at the Randridge Mall in Randburg, north of Johannesburg, which resulted in neighbouring competitors either closing or relocating.

"Towards the end of the Eighties we started discounting and expanding our front shop," says Saltzman. If there was any magic in Dis-Chem's exponential growth over the years, it was probably the strategy of keeping prices as low as possible while not compromising the quality of the products offered.

"Precisely: it's on good prices and good service we've built our customer base over these years," he says. But maintaining low prices is a major challenge when it comes to suppliers. "Suppliers are always a problem. They're quick to raise prices and slow to take them down."

Buoyed by the success of the discount formula, Saltzman aggressively expanded the business in the Nineties in Johannesburg and Pretoria from three stores towards the end of the Eighties. He continued that expansion early this century - the deregulation of pharmacies period, where non-pharmacists were allowed to own pharmacies, opening opportunities for large supermarket chains to enter the business and pose a major competitive threat to Dis-Chem.

The deregulation, says Saltzman, surprisingly turned out to be one of the growth periods for Dis-Chem. "By then we were already established. We wanted to be the cutting edge of pharmacy retail."

Born in 1950, Saltzman grew up in Port Elizabeth and qualified as a pharmacist in 1974 at the Johannesburg School of Pharmacy, now part of the University of the Witwatersrand. It was there that he met Lynette, who would not only later become his wife but his business partner and source of inspiration in hard times.

Surprisingly, Saltzman says getting Dis-Chem where it is today was only a natural evolution: he never dreamt of reaching that milestone. Although Dis-Chem is largely a family-owned and run business, Saltzman also attributes its success to his pharmacist partners who have been with the group since the late Eighties.

Saltzman says further expansion plans are already afoot and he is hoping to raise turnover to R5bn over the next two financial years. That entails joint venture franchise arrangements as well as corporate investments. "We've appointed six franchises this year, the first of which will open in Nelspruit in six weeks' time."

What's not yet a priority for Saltzman is listing on the JSE, although he doesn't rule out going that route in the future. "It's obviously an option - but there's no deadline. I enjoy running my business without outside interference." He has also turned down offers from private equity investors.


What would you be doing if you weren't running Dis-Chem?

I can't imagine doing anything else other than running my business. I enjoy what I do; I enjoy retailing. I enjoy this business more than anything else.

What was your single biggest mistake?

Not expanding earlier. I should have expanded much earlier. You know when you have little children you don't want to do a lot of things, but everybody works hard.

What troubles you most in this country?

Crime. It's a real big problem.

What keeps you going in hard times?

I'm the man. Too much depends on me. I just have to be strong. My wife is also an inspiration.

How do you keep your employees motivated?

We'd like them to feel secure - that they have a career with us. We spend time teaching them life skills and coaching them.

How do you spend your free time?

I have very little free time - retail is a seven day job. But I enjoy reading and being with my family. I'm currently reading How the Mighty Fall, by Jim Collins.

What time do you start work?

I'm a late starter. I start working around 9am and work through to midnight.

What can you say about family-owned businesses?

It's interesting for me to observe other family businesses. Family businesses tend to prosper in the second generation, but third generation is more of a chance. But I'm not worried about the near-term future.

Useful resources:
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