African Business Review magazine - July 2016

www.africanbusinessreview.co.za | July 2016

TECH: Q & A with Pierre van Hoven, CEO of Tuluntulu

The art of

INNOVATION

BEST OF:

Most innovative African start-ups

CEO of Woolworths SA, Zyda Rylands, on sustainability, success stories, and the secret to staying on top

EDITOR’S COMMENT

IN THIS ISSUE

The key to

innovation W E L C O M E T O T H E J U LY issue of African Business Review. In this issue, we take a look at the continent’s key innovators.

Zyda Rylands, CEO of Woolworths SA, explains how the 85-year-old retail store stays relevant after all these years.

In conversation with Tuluntulu, we learn how CEO Pierre van der Hoven is offering the mobile continent 24/7, afrocentric TV on their phones. And that’s not all.

We’ve also compiled a list of Africa’s top innovators, featuring progressive bee farms and fish leather fashion.

Africa’s business climate is constantly changing – our July issue attests that.

We hope you enjoy the issue. Let us know what you think - tweet us @AfricaBizReview

Enjoy the issue!

Wedaeli Chibelushi Editor Wedaeli.chibelushi@bizclikmedia.com

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F E AT U R E S

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Woolworths

The art of innovation

Q & A with

Pierre van Hoven, CEO of Tuluntulu

TOP innovative START-UPS

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Company profiles

LOMBARD INSURANCE Technology

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THE SOUTH AFRICAN INSURANCE ASSOCIATION Finance

NANDO’S Food & Drink

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PROFILE

THE ART OF

INNOVATIO Written by: Wedaeli Chibelushi

ION 7

PROFILE

African Business Review speaks to the CEO of Woolworths South Africa about sustainability, success stories, and the secret to staying on top

WOOLWORTHS HOLDINGS LIMITED (WHL) was established in 1931. Despite being 85 years old, the South African Chain flouts convention. In the last five years, it has collaborated with musician Pharrell Williams, installed eco mannequins, and kick started a ‘sow-friendlier pork’ initiative.

WHL’s blend of innovation and longevity has placed it among South Africa’s largest retail chains.

The Group comprises of food stores, Woolworth’s Financial Services, and premium fashion lines such as Country Road.

African Business Review speaks to the CEO of Woolworths SA Zyda Rylands, who explains WHL’s current and future plans.

Zyda Rylands, CEO of Woolworths SA

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T H E A R T O F I N N O V AT I O N

Current projects In 2014, WHL acquired Australian department store chain David Jones for 22 billion rand. The gamble paid off. Since Woolworths procured the iconic brand, its shares have risen by approximately 25 percent. “It provided us with a platform to leverage the design and procurement capability of the Woolworths Group; and to establish scale benefits from group systems, processes and structures,� Rylands says.

WHL has also acquired a big name from America, namely Grammy Award-winning musician, record producer and philanthropist Pharrell Williams. WHL

1931 The year that Woolworths Holdings Limited (WHL) was established 9

PROFILE

and Pharrell are collaborating on a sustainability-based project. Are You With Us? asks customers to join the Woolworths Good Business Journey, an initiative that encourages sustainability through social cohesion, environmental awareness and advancement through education.

Alongside Are You With Us? WHL has also implemented programmes such as Farming for the Future and Fishing for the Future. 98 percent of primary Woolworths fruit, vegetable, wine, and horticulture producers

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July 2016

work as part of Farming for the Future, a scheme which assists suppliers in improving environmental performance. Fishing for Future sees WHL working with partners such as the Marine Stewardship Council and WWF South Africa. WHL commits to sourcing all seafood from sustainable fisheries and responsible farming operations. Rylands adds: “We are also committed to supporting the development of small, blackowned businesses in South Africa through our Enterprise and Supplier

T H E A R T O F I N N O V AT I O N

“We overachieved against our new customer acquisition target and now have an active customer base of 3.1 million customers. 74 percent of revenue is tracked on cards – up from 3 million and 71 percent tracked last year.”

Development programmes.”

She also speaks about WHL’s sowfriendlier pork initiative.“Towards the end of 2014, we announced plans to start sourcing pork from farms that no longer use sow stalls to restrain pregnant sows for prolonged periods of time. The introduction of ‘sow-friendly’ pork represents another milestone on our Good Business Journey.”

WHL’s Good Business Journey also involves the Group replacing its regular fiberglass mannequins with ‘green mannequins’. British company Global Display supplied WHL with eco-mannequins, which have up to 20 percent less styrene content than fiberglass ones. According to

Rylands, the eco mannequin is “45-55 percent biodegradable” and “provides a reduction in CO2 emissions”.

The wider climate “As a result of the deterioration in the outlook for the global economy, conditions are expected to become more difficult both in South Africa and Australia.” Rylands explains how increasing interest rates in South Africa will add further pressure on the local consumer. “Our response in both markets is to ensure that we offer our customers value and quality across our brands, products and services, as well as focus on costs and efficiencies.”

Eskom’s load shedding measures

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billion rand

The amount that WHL paid to acquire the Australian department store chain, David Jones also pose a challenge to several South African businesses. Load shedding is a nationwide measure – when there is not enough electricity available to meet demand, Eskom withholds supply to certain areas.

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Despite this inconvenience, Rylands insists that load shedding has an “insignificant” effect on Woolworth’s sales. “More than 99 percent of Woolworths’ corporate stores have standby generator power supplies, enabling them to continue to trade despite Eskom’s capacity and maintenance issues. The store’s emergency backup generator keeps equipment like refrigeration units and tills, up and running, and provides ambient lighting.”

People power Despite the growth of technology at WHL, the company places emphasis on attracting and retaining employees.

WHL has an Employee Value Proposition (EVP) that’s designed to “attract, inspire, engage, retain and motivate the right diverse leadership and talent”. The EVP balances remuneration with non-financial rewards (e.g. career development) to create a high performance culture. Furthermore, employees are

encouraged to give feedback to WHL. Rylands says: “The Group conducts an annual employee satisfaction survey to provide feedback on how well the Group delivers the EVP and the employment experience, and also to learn from our employees where we need to improve.”

WHL also believes that talent and succession management is a critical enabler of business strategies.

Employees have opportunities for development, such as the WHL talent

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PROFILE

pipeline programme which provides extensive training opportunities for the next generations of leaders and specialists. Additionally, WHL offers a range of NQF accredited training and tertiary studies designed to foster talent. The company also focuses on appointing the right leaders.

This year, 1,192 WHL staff members received Values-based Leadership (VBL) training – a training programme that supports WHL’s vision of being a values-led organisation.

Naturally, customers are also a huge part of WHL’s success. Customer Relationship Management allows WHL to develop a deeper understanding of its customer’s needs. “We leverage our customer insights and data to inform all our business decisions, improve our loyalty proposition and offer our customers a brand aligned total retail experience,” says Rylands. In South Africa, Woolworths’

WRewards programme performs strongly. “We overachieved against our new customer acquisition target and now have an active customer base of 3.1 million customers.

74 percent of revenue is tracked on cards – up from 3 million and 71 percent tracked last year.”

Looking to the future Customers are also part of WHL’s development plans. Rylands details WHL’s plan to become a more customer centric business: “Our customer insights and data will drive and inform all our business decisions to ensure that we offer our customers a compelling proposition and better serve their needs. To build on this we continue to enhance our loyalty proposition.”

WHL also has several other future plans. Among its strategic objectives are to “be a leading fashion retailer in

‘In the current financial year, they will invest approximately 2 billion rand in South Africa and 156 Australian dollars in growing its store (and online) presence’ 14

July 2016

T H E A R T O F I N N O V AT I O N

the Southern Hemisphere”, “embed sustainability through the business” and “expand into [wider] Africa”. To achieve its strategic capabilities, WHL will continue to invest capital in all of its businesses. In the current financial year, they will invest approximately 2 billion rand in South Africa and 156 Australian dollars in growing its store (and online) presence.

Where does WHL see itself in

five years? Its goals aren’t set in stone, but its management vow to constantly assess its business model and maintain current high standards.

Rylands tells us: “We will continue to focus on building strong relationships with the upper end consumer in all our businesses, taking advantage of scale and technology across the Group and embedding our values of quality, innovation and sustainability.”

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TECHNOLOGY

ABR Talks TV with W r i t t e n b y W E D A E LI C H I B E LU S H I

DUBBED ‘THE MOBILE CONTINENT’, Africa has seen a rapid spread of portable handsets across its countries. During the first half of this decade, the number of mobile phone subscribers has jumped up by 13 percent a year.

Tuluntulu translates from Zulu as ‘continuous stream’, which is exactly what der Hoven is offering Africa’s mobile users. Founded in

2014, Tuluntulu is an app that allows users to access online video on their phone. From news to documentaries, Al Jazeera to AfriDocs, Tuluntulu offers a range of free 24/7 channels.

It may seem that Van Hoven has found a magic formula, but developing Tuluntulu came with challenges.

African Business Review catches up with van Hoven to talk strategy, technology and Africa’s TV industry.

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TECHNOLOGY

Can you give us a brief overview of Tuluntulu?

Tuluntulu is an African content platform and what we’ve done is taken TV and radio to mobile phones.

There were a couple of challenges along the way – the biggest one is that the last mile networks are basically low bandwidth networks; we have to develop technology that enables video to work H-networks.

So there is an underlying technology and methodology that enables video to work on low bandwidth mobile networks, including on EDGE networks. The other thing we did very differently is that a lot of our opposition (if you want to call them that - well I don’t call them that because I don’t really regard them [as our opposition]) work with pay models. We decided to go with the traditional free to air model, and to this day we remain uniquely free across Africa. So it wasn’t rocket science, we’re basically just taking TV and radio to mobile devices, Africa is a mobile-only continent and we just needed a bit of tech to do that.

We launched that two years ago and now we have over 430,000 app installs.

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So how come you decided to opt for the pay model, rather than using subscriptions?

I think Africans are not too keen to pay for things, especially if they haven’t tried them. For a lot of our territories, the pay model is foreign - they are not used to paying for television, it’s a free to air model normally driven by a public broadcaster. Radio has always been free. So I think it was a bit of a miscalculation on behalf of a lot of people who thought that Africans were suddenly going to jump from a

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free model to a pay model. There’s huge amounts of competition in the upper ends of the market where the pay model does work, but there are very few players going further down the demographics. We’re looking for a business that is scalable and has huge numbers. I think the free model was a better model, or certainly a better model to get traction we’re not excluding the possibility that we will do ‘pay certain premium channels’ in the future but we just think the market is not entirely ready for that yet.

I see! You’ve kind of answered my next question, which is about how you’re competing with Netflix’s African arm?

Yeah, we don’t. We don’t compete with Netflix. Netflix is aimed at the top of the market and it is specific content. It’s mostly Americanproduced series, feature films... it’s on demand. We’re focusing on African content, so we’re not even in the same content space. We appeal to people who are more interested in local, African variations of content, rather than the latest Hollywood blockbuster. We’re not in that space.

If Netflix appeals to the top of the market, which demographic does Tuluntulu appeal to?

We’ve got 22 channels so we appeal to all demographics. It’s not limited to any demographic. But if you had to put us in a generic box, we’re further down the pyramid and we’re more focused on local. That’s how I would describe us, relative to Netflix and DSTV.

What are your plans for expansion or investment?

Our mission is to be the biggest database in the whole of Africa. We’re 19

TECHNOLOGY constantly adding TV channels; it seems to be getting to 2/3 a month now. We want to extend the audience base primarily and we’ll do that by expanding the content offering. We’re in the process of raising capital. I think you’re going to see a lot of growth coming from Tuluntulu. We’ve done the hard graft – we’ve proofed the model and we’re now in the position to raise capital. Now it’s the process of competing properly with some resources. Before that we’ve pretty much done it on a shoe string.

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Why did you decide to set up Tuluntulu in Africa, and not anywhere else in the world?

Partly because I’m African. I grew up here and I was born here, I’ve been here for many generations. I’ve launched a couple of other media projects in Africa so it’s familiar to me. I understand the market now, the source content, all that familiarity.

The other sign was that it’s a great market because there’s very little competition. The opportunities are massive in Africa. If you look at the

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bigger picture, if there’s big growth areas globally it’s the explosion of mobile, and Africa’s history of growth is bigger than probably any other continent, because it came from a very, very low base. Globally, there’s an explosion of video so we’re all moving towards video, so we’re in that vertical. Lastly, even for companies like Facebook the last areas of growth, last growth branches are in the developing world and we’re squarely positioned as a developing world product, so yeah it’s a good place to be. There’s a lot of growth happening between mobile Africa and video.

Can you highlight the importance of technology to the African economy?

Well the key thing about technology is that in the past streaming simply did not work. Most of the streaming systems were developed in the first world and they ran at very high bit rates. That just didn’t work in Africa, full stop. So we developed technology that works on EDGE. What that did was it increased the potential reach across Africa by a massive factor because they are very few (or certainly when we started) there were very few

3G networks out there. And lastly, it gives the consumer the choice to save money. Ultimately, I think that’s going to prove to be a very important competitive advantage. If I watched an hour on Tuluntulu its going to cost 1/3 of if I watched an hour on YouTube.

It’s a choice, so the consumer can 21

TECHNOLOGY choose to drop the quality of picture and save money - I think that’s a very important customer focused offer.

Does the company have any continuous growth strategies?

We’re in a massive growth market, we’re in a market that’s relatively unexplored, you can’t look at competitors because there aren’t any direct to us. We’re in an extremely dynamic environment. We’re acutely aware that nobody really knows what’s happening in Africa, so we have a very focused philosophy. Our pay-off line is ‘Africa 4 U’, a lot of our channels have the ‘4 U’ after it. It’s trying to say to the market “you tell us what you want, what you like”. So we’ve developed a culture of being very customer-orientated listening to the market telling us what content they like, what they don’t like, all that kind of stuff. Listen to the customer.

Sounds good. So what is the general quality of African TV at the moment?

The first response is “what is quality?”.

A lot of people in TV industry think quality is HD, 4G etc. We don’t believe that at all. We believe that quality 22

July 2016

is about the emotional connection that the viewer has with the content.

So if you depart from that point of view then we’ve got to find content that’s relevant to our audiences, and

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We know from the experience of Nollywood that low cost emotional stories are popular. In fact, one of our most popular channels across Africa is a Nollywood channel. I don’t know if that answers the question.

Yes, it definitely does. I agree with your point about Africans telling their own stories, they’re all too often told by Westerners... it reduces their authenticity.

that really means African content for Africans. For too long people have been telling African stories on behalf of Africans. Now it’s time for Africa to tell its own story.

I think authenticity is a very good word you’re using there. People have to relate to the stories, which often means they have to make them themselves. They shouldn’t be made by third parties. Our vision is to be the distribution platform, so we look at the content producers and creators as our partners, they plug in to our platform and our job is to ensure distribution and monetisation.

Our business philosophy is to partner with these content people, we don’t want to be dictating all the stories, we just want to be the distributing platform. So if you look at our 21 channels at least half of those we don’t have editorial control of at all. We give that to the expert in that particular vertical. So the 23

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content producers in Africa are very specifically part of our vision, and part of our partners. Our job is to generate funds that flow down to the producers.

Moving from partners to employees, how many staff members does Tuluntulu have?

Well, good timing with that question – what I’ve just told you answers a lot of that. We don’t employ a lot of people, because we partner with a lot of people. Our own staff complement is quite small, but our partner network is quite big. If the question is how many people are directly or indirectly involved in the Tuluntulu company, I have no idea! But as a company, we’re small - we’re less than 10 people.

That’s interesting. Do you think that as companies become more tech-orientated, this kind of staffing model will become more prevalent?

I think it’s a function of a start-up per se, you’ve got to keep your overheads down, keep your fixed costs down.

It’s a part of our philosophy, which is a lean start up philosophy. We listen to the market and a lot of tech companies do the same thing, it’s kind of a

collaborative company we’re in.

So we need to find people we can partner with. We’re in a digital space, maybe it is a little bit of a new way of working but I think in our industry it’s a way we want to work We want to partner with people rather than make them employees.

I think that opens up the scope for creativity and expression. All the good stuff is not going to come from formally employed staff members.

We’ve got to do a couple of things really well, and we’ll have a huge footprint in terms of distribution and have a monetisation platform that works. The creative expression in our content channels, we need to open that up as wide as possible.

Brilliant! So finally, where do you see Tuluntulu going in five years’ time?

I think we will have 15 -20 million people who would have downloaded our app and used it in on a monthly basis. I think those numbers are conservative. I think we’ll have hundreds of TV channels Hopefully we will be by a long way the market leaders in Africa for the distribution of TV and radio content.

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Start-ups are developing all over Africa,

Fact: everybody loves an underdog story. Big businesses like S are shaking up the market below them. With original ideas, bus aim to solve real African problems. African Business Review sc these start-ups. From sustainable beekeeping to smartphone o Written by: Wedaeli Chibelushi

LIST

TOP innovative START-UPS

, but which ones are sparking change?

Sasol and Sanlam dominate trade, but a swathe of start-ups siness smarts and bold ambition, these unique businesses coped diverse industries to find the most innovative of optometry, here are Africa’s most ingenious start-ups

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LIST

PEEK Approximately, 39 million people are blind. 80 percent of this blindness is avoidable, but in many African regions people don’t have access to eye care. PEEK offers a solution. The Portable Eye Examination Kit delivers professional eye exams - from a smartphone. A team of experts developed a camera adapter which clips onto a smartphone and gives high quality images of the retina. The device enabled healthcare workers to diagnose cataracts, glaucoma and other eye diseases. Created by ophthalmologist Dr Andrew Bastawrous, PEEK is supported by Médecins Sans Frontières and the International Agency for the Prevention of Blindness.

The team want PEEK to be context specific - extensive trials have been completed over the last two years in Kenya, Botswana and Mali. PEEK have further studies planned in the UK, Tanzania, Malawi and Kenya.

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28 July 2016

www.peekvision.org

I N N O V A T I V E S T A R T- U P S

SafeMotos

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Peter Kariuki may have lost three teeth in a motorbike taxi crash, but he founded an app that’s sparking a Rwandan safety revolution. After his accident, Kariuki and friend Barrett Nash decided that Rwanda’s dangerous motorbike taxis needed to change. Six months later, they had sourced local drivers, and through a smartphone app, began recording their speed, acceleration, GPS and gyroscope information.

SafeMotos was born. From the recorded details, SafeMotos reach an overall safety score. If its drivers achieve less that 90 percent, they’re off the books. According to the World Health Organisation, 80 percent of accidents in Rwandan capital Kigali involve motorbike taxis. SafeMoto want to bring this total down. Through this venture, the start-up has received attention in the form of investment (from SOSV and Carma Axlr) and accolades (named among the 2015 Nominet Trust 100). www.safemotos.com

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LIST

Aryodi’s Bee Farm 80 percent of Uganda’s population are low-income subsistence farmers.

Aryodi Bee Farm hopes to increase farmers’ profit margins, teach modern beekeeping and reduce environmental harm. Aryodi (Adyaka Rural Youth Development Initiative) Bee Farm trains local farmers and helps them start sustainable bee farms. Aryodi’s business strategy is holistic – the company is involved in managing its value chain, which transforms locals into valued shareholders. Aryodi’s farmers earn a living from honey production, and Aryodi buy the honey (and by-products) from them. The company then package and distribute the honey throughout Uganda and international markets. Aryodi doesn’t stop there, it increases profit by processing some honey into more valuable products such as propolis, honey wine and beeswax. Currently, Aryodi have over 1,850 trained farmers.

45 percent of these farmers now earn their living from honey production.

Aroydi’s Bee Farm plan for continuous innovation – along with their daily operations, they plan to conduct research in bees and beekeeping.

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www.aryodi.com

I N N O V A T I V E S T A R T- U P S

Alisam Product Development

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Newton Owino has truly earned his ‘innovator’ label - he produces shoes out of discarded fish skin, scales and innards. Owino’s company, Alisam Product Development, design and make fish leather products. The idea materialised after Owino clocked that fish factories in Kisumu, Kenya were producing too much waste. This fish waste pollutes the environment.

Every week, about 70 tons of waste fish skin is generated in the region.

Alisam fashions shoes, book covers, belts, purses and more from this byproduct. Alisam sells its products locally and internationally in Canada, Italy, United States, Denmark, Ethiopia and Rwanda. Owino has specialist knowledge – he’s a leather chemist with over 17 years of experience in leather research. For his work with Alisam, Owino has been honoured during an international conference at the Kenyatta International Convention Centre. www.chicamod.com

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LIST

Toto Health Every year, more than one million mothers give birth. 46 percent of these births are not within a hospital setting, and the lack of medical attention can endanger the life of mother and child.

Based in Kenya, Toto Health helps pregnant and nursing women gain health information through SMS technology. The technology delivers targeted messages timed at a child’s age or a stage of pregnancy. The messages highlight warning signs in a child’s health while supplying knowledge about nutrition, reproductive health, parenting and developmental stimulation. Toto Health aims to reduce maternal and child mortality – all through mobile technology. For its efforts, Toto Health emerged the overall winner of the Innovations Awards at the Connected East Africa event in Diani. www.totohealth.org

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Assuranc

transforming

Written by Dale Benton P

ce in data:

g the industry

Produced by Mariana Lee 35

LOMBARD INSURANCE

Lombard Insurance Company Limited provides world-class trade and commercial insurance products to support businesses’ sustainable growth. It is a leader in specialist risk insurance with a focus in construction, customs and mining rehabilitation guarantees, and credit insurance

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n 2008 the global insurance industry endured a crisis considered to be the most impactful financial crisis since the Great Depression.

As a result of this, governments introduced Solvency 2, an EU regulatory regime designed to integrate a robust system that will give policyholders greater confidence in the products of insurers. This has been adapted for South Africa through the Solvency Assessment and Management Regime (SAM).

“Regulators want to ensure in the event of any major economic crisis that the insurance companies have the necessary capital to continue operating and meet client obligations,” says Ian Gatley, Head of Data Management at Lombard Insurance.

“It’s a fundamental shift in how the management of insurance companies needs to determine what is a successful investment and what is not.”

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FINANCE

“It’s a fundamental shift in how the management of insurance companies needs to determine what is a successful investment and what is not”

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LOMBARD INSURANCE

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FINANCE

Assurance in surety Lombard Insurance is first and foremost a surety business. Gatley believes that SAM has encouraged insurance companies to look internally at its business processes and consider how best to improve them and better serve clients.

“It is important for us as a business to look at things differently. We can’t just look at the business from a profit perspective, we need to consider how we prioritise what’s important to the business,” says Gatley.

Lombard saw the rollout of SAM legislation as a catalyst for change, kickstarting a transformative process to become a more digital insurer.

“The regulation was an opportunity to collect information for the regulators and actually consider what value there could be in how we can use that information internally to make us more competitive as a business going forward,” adds Gatley.

Through digitalisation, Lombard is simplifying its entire business processes. Simplifying ‘big data’ is a major trend across the industry, through digital technologies such as Telenetics, commercial grade

analog and digital technology used for transmitting data.

“The first step for any organization when starting a data management journey is understanding how information flows through the organization. You’ve got to consider where the data comes from, how we use it, where do we store it and finally, how are we ensuring that consumers of data can access the relevant information they need to make decisions,” adds Gatley.

Through the process, Lombard recognises the potential in digitalization and data management, which is embodied by Gately, a member of the executive group with a core focus in data management.

“We can use this data to streamline our processes and as a result make more informed decisions as a business,” says Gatley.

It’s not about the money Lombard has focused on projects involving data governance and master data management, as well as focusing on self-service analytics and dashboarding.

The benefit of the digitalisation w w w. l o m b a rd i n s . c o m

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LOMBARD INSURANCE

“The regulation was an opportunity to collect information for the regulators and actually consider what value there could be in how we can use that information internally to make us more competitive as a business going forward�

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FINANCE

process is clear, by streamlining all of the processes the company can move forward as a market leader in the insurance sector.

This capacity for growth is what Gatley identifies as a key benefit for Lombard Insurance.

“It’s about the improvement of the service we can offer as a business to our brokers and clients,” he adds.

Cost reduction measures are commonplace across the industry, but Lombard is trying to look beyond that.

“It’s not about saving costs, it’s about taking the knowledge we have gained through this process and opening up the ability to grow as a business,” Gately explains.

One shared vision With any company wide transformation there will be challenges along the way. Surprisingly, simplifying the technologies involved was considered one of the easier aspects.

“The technology side of things is actually the easy part. With any transformation process, you need to understand the vision and the desired outcomes of the business,” says Gatley.

“Communication and making the business divisions work closer together throughout the process, that’s where the challenges arise.”

A key component of digitisation is change management; Gatley works alongside the heads

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LOMBARD INSURANCE of the various divisions to advise how technology can help them grow their unique businesses.

“In order for the project to succeed, it’s absolutely critical that there’s an equal buy in from the business divisions and the IT divisions that are doing the work.

We need to work together and understand exactly what those outcomes are and how can we help the businesses in meeting those requirements,” he adds.

Everybody’s changing As the Head of Data Management, how does Gatley respond to the ongoing boom in technology and innovation?

“We’ve spent a lot of time with our analyst team looking at the market and making sure that we are always aware of the trends so that we in the best position to serve our customers,” he says.

“We are continuously learning and growing through interactions with businesses, trying to understand what is needed to progress as a business.”

As data management becomes more pertinent, Gatley believes 42

July 2016

change is on the horizon.

“A change in corporate culture will be essential. All staff will be required to analyse and gain insight from the vast quantities of data in order to perform their daily functions,” says Gatley.

And what role will technology play in this change?

“Technologies such as machine learning and cognitive computing will dramatically change the role of the actuary and the underwriter as well as how insurers understand and underwrite risks,” “The increased use of data will enable insurers to better understand their risks and create more personalised and customer centric products,” adds Gatley.

Partnership mentality rests within the core of Lombard, beginning with the biggest of partners -the client.

“Any insurance relationship is based on trust and insurance can only work on complete trust. It is absolutely critical that we are stay aware of the trust clients have in us and we respect that and do all we can to maintain those levels of trust,” Gatley concludes.

FINANCE

“ The increased use of data will enable insurers to better understand their risks and create more personalised and customer centric products� w w w. l o m b a rd i n s . c o m

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THE SOUTH AFRICAN INSURANCE ASSOCIAT

TION (SAIA)

THE SOUTH AFRICAN Insurance Association (SAIA) is the representative body of the non-life insurance industry. Its origins can be found in the early part of the twentieth century when the Council of Fire Insurance Companies was established in 1907. Over the years, the trade association served the industry in different guises and became the South African Insurance Association in 1973. The SAIA has 60 members, comprising all categories of nonlife insurers including reinsurers.

The SAIA recently moved from an executive driven business model to a participative model, which allows SAIA to continue to drive common industry issues on behalf of and with the assistance of its members.

The SAIA also takes on a broader collaborative approach that involves playing a role within the broader financial sector and becoming more involved at a higher level in finding solutions for South Africa’s challenges, and to assist with the goals of the National Development Plan (NDP), using the strengths of the industry and making a contribution where appropriate. The NDP, which is South Africa’s economic roadmap, 45

SAIA speaks to a faster and more inclusive economic growth goal by, for example, creating more jobs and supporting small businesses, as well as reducing the cost of financial services and improving access to them for small and medium-sized businesses.

The Motor Transformation and Sustainability Forum (MTSF) which is a partnership between the SAIA and four national motor body repairer associations is an example of a project that relates directly to one of the key actions identified by the NDP: to reduce poverty and inequality, and raise employment and investment.

Support for small black businesses in the motor body repair industry is one of the key priorities addressed by this project, and the association hopes to replicate this project in other industries as well. In addition, the SAIA is in the process of finalising an enterprise development project, which will further assist in this key area, even though many of its members are already doing a lot of good work in the area of enterprise development.

The SAIA Consumer Education Initiative that was initiated in 2004, continues to be a crucial initiative for the industry in terms of promoting 46

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LizĂŠ Lambrechts SAIA Chairperson

Viviene Pearson - SAIA CEO

INSURANCE

‘Its origins can be found in the early part of the twentieth century when the Council of Fire Insurance Companies was established in 1907’ financial literacy in the lower income market, and relates both to reducing poverty and developing communities.

Since inception SAIA members have contributed R116 million towards the initiative, allowing SAIA to implement various projects on behalf of its members, as stipulated by the Financial Sector Code.

Road safety also remains a key priority for SAIA and the industry.

The SAIA established the Business for Road Safety Initiative, with the assistance of Business Against Crime South Africa (BACSA) to assist with the promotion of road safety in South Africa. The association has also had discussions with the Department of Transport and other relevant role

players with a view to enter into a partnership on road safety.

SAIA members abide by the SAIA Code of Conduct, which was introduced in 2010 with the purpose of promoting high ethical standards and good business practices in the industry, as well as to give a clear indication of the self-regulatory guidelines followed by members.

The SAIA also introduced a code of practice in 2012, the Code of Motor Salvage to establish a common approach, applicable to all members when dealing with motor salvage. The Code of Motor Salvage also ensures that members assist in combating motor vehicle crime, specifically the cloning of motor vehicles.

The SAIA has four key focus areas namely; Transformation and Governance Risks, Insurance Risks, Stakeholder Relations and Communication and Operations. It has a number of committees, which play a crucial role in assisting the association deliver on its mandate. The committees are made up of member representatives who meet to discuss and find solutions on issues of mutual concern that impact the sustainability of the short-term insurance industry. w w w. s a i a . c o . z a

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From street food to high street Written by: Nell Walker Produced by: Charlotte Clarke

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Nando’s Supply Chain Director, Linda Reddy, describes the challenges facing the company within its South Africa base, and how these complexities have been overcome with aplomb

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T

he world’s most popular chicken restaurant began life in 1987, in a decidedly unfashionable suburb of Johannesburg, South Africa. It was born from the dream of two young men, allowing people to enjoy the most delicious chicken in the world: fresh, flame-grilled, and prepared in a PERiPERi marinade. It was Mozambican street food, inspired by the colonial influences of Portuguese cooking.

Nando’s PERi-PERi chicken was an immediate hit.

It was a massive, global taste sensation that the world couldn’t – and still can’t – get enough of.

Today, Nando’s continues to offer the world delicious chicken in 1,200 restaurants across 30 countries.

Nando’s is especially popular in the UK, Canada, and Australia and it remains South Africa’s favourite way of eating chicken.

Linda Reddy, Supply Chain Director at Nando’s South Africa says the business’s success can be attributed to a number of things: first and foremost, it’s the incomparable chicken. It’s also the warm, welcoming, and hospitable culture of the business; the ambience of the restaurants, the great value that Nando’s offers, and the entrepreneurial culture instilled by its founders 29 years ago.

“It’s a business about making money and having fun,” she says.

“Our values say it’s okay to make mistakes and try different things.

The company has a long history

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33k+ Number of employees working for Nando’s globally

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of things that haven’t worked out and things that have worked out successfully. So it’s built on a strong foundation of those values and it’s really made the business what it is today.”

Starting a company The poultry production industry in South Africa is enormous, but sourcing chicken was not always simple for Nando’s. The company approached one of the largest national suppliers when it began, but was turned away: “They said ‘thank you very much, your products are really good and you’re going in

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the right direction, but we cannot supply you’. So it was the smaller chicken producers and abattoirs in this country which helped the founders over time.

More family-run businesses came to the fore and said ‘we’ll supply you’, and would deliver right to the door. Ever since, we’ve only ever used fresh chicken.”

Using fresh products, however, creates complexities within the supply chain, particularly with regards to managing the balance of a short shelf life and consumer demand. As the company has grown, logistics have become a great deal more sophisticated; fresh chicken can last up to seven days thanks to cold chain management, and distribution is completely outsourced.

“In an unpredictable economic environment it’s key to have a professional supply chain team in place to support Nando’s business and to manage risk. Linda has brought an exceptional team together who are doing a great job for Nando’s and having fun doing it” – Geoff Whyte, Nando’s CEO Southern Africa

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Proud to be affiliated to Nando’s as a Spice supplier for over 14 years

Africa Spice (Pty) Ltd Tel: 011 623 1322 | Fax: 011 6232188 Email: emil@africaspice.co.za Website: www.africaspice.co.za

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Each country now has its own local supplier for Nando’s globally renowned sauces and bastings.

“Up until eight years ago, we made our own bastings in our central kitchen here in South Africa,” Reddy explains. “That’s where we use our African Bird’s Eye chilli.

It’s one of the key components that goes into the spice pack of our sauces. We made that and we controlled every element of it, from equipment to staff. We sent

out sauces from South Africa to the UK, Australia, Canada, and the US. It’s at the heart of our IP. “We still manage the African Birds Eye chili and spice pack supply relationships, ensuring they’re properly managed to create the sauces that are eventually used in the restaurant, and also to marinade the chicken in the processing plant. Fresh chicken arrives pre-marinated which gives the chilies the chance to settle into

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the meat. This enhances tenderness and gives a delicious flavour.”

Building a team Finding staff to implement this now-extensive supply chain has not always been simple.

“For me, coming into the business was really about how we could take the supply chain

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business we already had to the next level: how to be commercially astute, and create an integrated function for the broader business whilst still giving customers the best-tasting chicken in the world.”

Reddy’s immediate priority was to take the Nando’s supply chain to a world class

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“Coming into the business was really about how we could take the supply chain business we already had to the next level: how to be commercially astute, and create an integrated function“ – Linda Reddy, Nando’s Supply Chain Director

standard by being more proactive, and managing supplier relationships into committed partnerships. She latched onto her previous experience in business banking, innovation, food industry, and supply chain expertise to reinvent her business area. The company manages supply chain as a business within a business – and beyond a traditional support function.

“We have a road map of where we want to go. There were things we needed to put in place to get us into the journey. We’ve developed

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Our Passion... Your Pleasure

Amaro Foods, passionately supplying baked goods since 1968. Based in Cape Town South Africa, we proudly produce a variety of flatbreads for both local and international markets. Our commitment to deliver premium quality product, relevant to our customers’ needs, is evident in the fact that we have been privileged enough to supply some of South Africa’s most favourite retail and restaurant chains. We do baking better.

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the road map over two years, and in the process, supply chain has evolved to become a focussed, customer-centric, specialised division of the business. The team has grown from four people to 17.

Members of the team earned their place on it for their deep commodity skills and experience and having a great attitude, which is consistent with the vibrant Nando’s culture.

“My vision was to bring together people with strong experience and skill in strategic sourcing

and logistics, who wanted to be part of an exciting journey to build our supply chain.

We deliberately seek people who reflect our values of passion, courage, integrity, pride and family.

We invest a lot of time and effort making Nando’s a great place to work and believe that our people are the reason for our success. As Robbie Brozin, one of our founders, has been saying since 1987: ’it’s the people that make the chicken’.”

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Proud partner to Nando’s

Toll Free: 0860 Vulcan / 885226

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Up until three years ago, the supply chain team would plan just three months in advance; now, the timeframe is six to 18 months, in line with marketing, innovation, and new restaurants plans.

The team also holds a long-term roadmap that assists the large suppliers: how they are expected to develop in terms of capability and capacity in order to meet quality and demand.

plans within the Nando’s supply chain that counteract such issues, and methods to ensure sustainability of supply.

Electricity, water, infrastructure, and labour all pose challenges in our Southern African business climate. There was recently a drought that put a strain on production not only of chicken, but also of sauce, basting, and marinade ingredients.

Moreover, the Challenges drought significantly Running a company increased the cost – however large of maize, which is The year Nando’s – in South Africa the main component can be challenging. of chicken feed. It was founded Resources are also had a knock-on constrained, as are manufacturers, effect on key products such as and it puts businesses at risk. potatoes and greens, which are Reddy and her team has started needed for the Nando’s side dishes. to implement contingency Despite these challenges, Reddy

1987

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is enormously confident in the company’s plans for expansion. Nando’s has recalibrated its business model to include more restaurant relocations, the team having decided that some restaurants are not optimally placed. Nando’s has also introduced drive thru restaurants in South Africa, something that has proven a popular concept. Takeaway food is a huge business in South Africa, and Reddy expects the drive thru format to expand to the UK and Australia.

As for the restaurants themselves, Nando’s plans to remodel many restaurants to be more reflective of the fast casual dining style model, which will require a huge overhaul and volume of Capex.

Reddy feels that the way Nando’s handles the

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complexities of conducting business in South Africa sets the company apart: “When you are in this environment and you have been in it for so many years, you learn to work with it and make it happen,” she concludes. “We deal with so many challenges, but still achieve transformation within the diverse consumer and business landscape. South Africa is on a big drive to create opportunities for diverse people of all cultures and Nando’s is fully aligned with that goal. All of that outweighs the risks.”

“We deal with so many challenges but still achieve transformation within the diverse consumer and business landscape“ – L inda Reddy, Nando’s Supply Chain Director

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