Funeral homes increase in Botswana

 

The funeral home industry is expanding rapidly, with new players entering the market almost daily.

Thankfully, the business remains largely localised, although most operators face stiff competition from the more than 90 existing funeral homes spread across the country.

In such a crowded space, survival depends on being the most resilient and innovative, as those qualities often translate into a larger share of the market.

One standout in this sector is the FSG Group, which currently holds an estimated 65 percent market share of funeral services operating in Botswana.

Having operated for 32 years, FSG is among the most established players in the industry and has experienced notable growth in recent years.

FSG Group CEO Fergus Ferguson shared these insights at the recent Africa Lighthouse Capital (ALC) annual investor meeting.

ALC, which has seven pension fund clients, hosted the event with participation from asset consultants and investors, including the Botswana Public Officers Pension Fund (BPOPF)—the fund's anchor investor with a capital commitment of P500 million.

Ferguson said key challenges that FSG faces include competition from more than 90 funeral home operators across the country.

ALC is the arguably the largest individual shareholder of FSG with 57 percent equity stake. It first invested in FSG with a 20 percent equity stake in September 2020 and then made a 37 percent equity stake in February 2023.

Through its 57 percent equity stake, ALC was able to increase its influence over the strategy of FSG and restructure its management.

Fergus Ferguson was appointed Group CEO in April 2024, and another highly industrious professional Bishy Butale, was appointed Group CFO in December 2024.

During the COVID-19 pandemic, a time of immense national loss and grief, FSG had to enhance its operational capacity to cope with the high volume of funerals.

The company received good customer reviews despite handling a much higher volume of funerals than usual. Since then, the operational enhancements have improved, resulting in market share gains as more families choose FSG for their loved ones’ funerals.

FSG has also modernised its fleet of vehicles. Numerous new vehicles have been bought, and the company makes a conscious effort to keep its fleet current to ensure the best send-off for its customers’ loved ones.

He said FSG has improved its funeral insurance offerings. More insurance policies are more differentiated for different customer segments and needs. The benefits of insurance policies have been improved across the board.

In 2024, FSG started partnering with SMEs in every town and village where the company has a branch so that the SMEs provide ancillary services needed by FSG’s customers.

The SMEs provide a broad range of service providers like florists, photographers, videographers, tent providers, among others. In addition to helping SMEs grow, the partnerships provide a convenient

one-stop shop for FSG’s customers.

FSG has a sizeable manufacturing operation in Gaborone that designs and makes caskets and coffins. The company has plans to significantly grow its manufacturing operations and to diversify into new wooden products.

FSG employs 362 full time employees in Botswana, working across 23 branches and 20 service points. Further, 120 employees in Zambia and another 35 employees in South Africa.

'We are a proud public company, with over 800 shareholders all receiving their annual reports from the Board and management, and benefitting directly from the continued growth of the Group. This, we are very proud of.'

Going forward, FSG sees opportunity to strengthen insurance business by offering more products, diversifying from Funeral Insurance only, to other solutions appropriate for their customer segment.

'We have over 600 informal groups within our portfolio – these are metshelo, local women groups, and other community groups which come together to access an FSG product. We are proud that

through this, we have been able to cover over 20,000 policyholders.'

Further, they have over 140,000 individual policyholders in Botswana, covering more than half a million lives.

'We see a significant opportunity in Zambia. We have grown from three branches in Zambia at the beginning of 2024 to 11 branches in 12 months, with further expansion planned during the year.'

He added that their 3X by 5 strategy is pivotal, as it seeks to consolidate their position in funeral services, expand share of market in Insurance, modernize Manufacturing factories, and leverage geographic opportunities, where they exist.