African Business Review magazine - September 2016 by Business Chief Africa

September 2016 â&#x20AC;¢ www.africanbusinessreview.co.za

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ACCESS AND

EMPOWERMENT How free WiFi is transforming South Africa

Sustaining steel Green Village

Egyptian Steel: an efficient, Interview with Lukas thought-leading manufacturer Reichmuth, Swisatec CEO

2 – 3 November 2016 CTICC, Cape Town, South Africa

Developing Future African Cities DEVELOP YOUR PROPERTY PORTFOLIO IN THE TOP 10 AFRICAN CITIES Meet government officials and town planners from Africa’s real estate hotspots. Broker deals, drive real estate projects forward, expand your asset base and realise above market average double digit returns at this year’s launch of the African Real Estate Summit, taking place from 2 – 3 November in Cape Town.

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Meet and expand your business network with investors, developers and government officials in one place

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The African Real Estate and Infrastructure Summit is the only meeting place for commercial real estate in Africa. To discuss your company’s participation or to secure your seat please, contact our team below: Cape Town Stephan Herman, +27 21 700 3598 stephan.herman@spintelligent.com Invited Host City:

Lagos/Abuja Mej Obada, +234 809 800 8906 mej.obada@spintelligent.com Promotional Agency:

www.african-real-estate-summit.com

London Russell Hughes, +44 (0) 20 7384 8017 russell.hughes@clarionevents.com African Event Specialists:

EDITORS COMMENT

Working for a better future HELLO AND WELCOME to ABR’s Green issue. All of our September features are dedicated to environmental sustainability, because we think eco issues can’t be covered in one article. Green entrepreneurship is rocketing in Africa; innovative businesspeople are clubbing together to protect the environment and our future generations. In a time where factory production, car pollution and industrial agriculture are commonplace, showcasing these eco-friendly business practices is vital. For this reason, we sat down with the CEO of Swisatec, Lukas Reichmuth, to learn about Blue Rock Village. Blue Rock is set to become the first green village in Africa, and thus lead sustainable construction projects across Africa. We also analysed some big news: Elon Musk’s Tesla is coming to Africa. Is there a demand for electric cars on the continent? ABR speaks to BMW and Kiira Motors to find out. Finally, if you run a business in Africa and want to gain green points, check out our advice from three eco-entrepreneurs. We hope you feel inspired, enjoy the issue and join us again next month.

Enjoy the issue! Wedaeli Chibelushi Editor Wedaeli.chibelushi@bizclikmedia.com 3

CONTENTS

F E AT U R E S

PROFILE

Africaâ&#x20AC;&#x2122;s first green village TECHNOLOGY

The electric potential of transport in Africa

24 LIST

Six tips for running an environmentally sustainable business in Africa

C O M PA N Y P R O F I L ES

Project Isizwe Technology

Egyptian Steel Construction

Barloworld Equipment Supply Chain

The demand for better demands a better network.

www.juniper.net

LINX and Juniper Networks together at the heart of the U.K.’s Internet LINX, The London Internet Exchange, has been at the heart of the U.K. Internet for over 20 years, during which time the Internet has fundamentally transformed into a strategic national asset. The advent of the smartphone, the app-driven digital economy, high speed broadband and the arrival of Netflix have all been instrumental in putting the U.K. Internet at the heart of national services, consumer lifestyle and business I.T. In 2011 these transformations changed the approach the LINX team, led by CEO John Souter, needed to take to the network platform. Confronted by a forecast of continued massive traffic growth, huge increases in member connectivity, the coming of 100GE connectivity and a need for supreme levels of resilience and reliability, the team engaged with Juniper Networks. The early collaboration and design discussions between the two companies led to the delivery of a ground-breaking network solution, based on the PTX Series Packet Transport Router and MX Series 3D Universal Edge Router product families from Juniper Networks. LINX was the first customer globally to move into live production on the PTX. The new network was immediately put to the test with the World’s eyes on the London Olympics 2012 – a once-in-ageneration event for which the network simply had to deliver a flawless service, which it did with flying colours. Fast forward to 2016 and the growth of both Internet traffic and new member connections still continues at a phenomenal pace, proving LINX’s decision to future-proof its infrastructure to be incredibly foresighted.

Juniper Networks is proud to be a technology partner to LINX

PROFILE

Africaâ&#x20AC;&#x2122;s first green village CEO of Swisatec, Lukas Reichmuth, reveals the details about his new project: Blue Rock Village. Set to become the first Green Village in Africa, the development leads sustainable construction projects across Africa. W r i t t e n b y : W E DA E LI C H I B E LU S H I

LUKAS REICHMUTH LOVES Swiss design. An ambitious businessman, Reichmuth was born in Switzerland, completed his master’s degree there, then stayed to work among its bold, historic buildings. While working, Reichmuth produced a brainchild – his Swiss-inspired architectural project management firm, Swisatec. 17 years on and Reichmuth’s passion for Swiss architecture has seeped to the other side of the world. Swisatec’s latest project, Blue Rock Village, will be built in South Africa. The development is set to become the first Green Village in Africa. “I take pride in the Swiss heritage and you will see that in our design and style,” Reichmuth tells us. “My motto of design is environmentally friendly, green building, and European style.” The 14 billion rand Blue Rock Village will upgrade the well-known Blue Rock Resort, which rests on the Helderberg Mountain slopes and overlooks the crystal clear Lake Blue Rock. Without a doubt, the concept of the Village sounds wonderful. But why exactly does the African market need it?

PROFILE

“The live, work, play concept speaks to all retirees, young and mature, movers and shakers of industries. I believe in the village lifestyle, which all can enjoy – from young to the elderly” – Lukas Reichmuth, CEO of Swisatec

Current Climate “Not only for Africa, but in each and every part of the world we need to do as much as we can to preserve what we have for generations to come,” Reichmuth stresses. Through his new project, Reichmuth aims to fulfil the universal demand for eco-friendly projects. The green village is just that – green. Lush African foliage surrounds Blue Rock’s accommodation. 10

September 2016

Reichmuth adds: “The biggest difference is that we don’t only focus on trees and landscapes. We make a difference by coming up with innovative ways of building, positively impacting the environment, and increasing human well-being.” Swissatec has primarily focused on the buildings, devising several ways to save energy. For instance, the Giovanni Luxury Terraced Apartment (Phase One of the village)

A F R I C A’ S F I R S T G R E E N V I L L A G E

will save up to 70 to 90 percent of energy through insulation and double glazing. LED lighting will save up to 50 to 80 percent of energy. Swisatec also plans to use solar power to produce 80 percent of Blue Rock Village’s electricity. Furthermore, the village will be a car-free zone. Reichmuth also mentions that Blue Rock Village solves a shortcoming of modern life. “Most of our lives are spent travelling from home to work,”

he explains. “This takes away time that could be used to better enjoy our lives with our loved ones. Now, imagine a village where you can live, work and play. That’s our ideology.” Features Live: residents will stay in luxury apartments. The accommodation offers “high European quality and design”, “large, open terraces” and “spectacular views”. 11

PROFILE

Work: Blue Rock Village will hold a Hotel and Conferencing Centre, consisting of over 150 rooms, 30 condos, and a centre for over 500 executives. There will also be the Dollar House, “a professional office space for bankers, lawyers, consultants and financial advisors”. For those who want to gain new skills, there will be a hotel school, IT school, graphic designing and language centre. Play: After work is over, residents can relax in the village’s recreational facilities. The Wellness Centre boasts sports facilities, beauty and

September 2016

therapeutic centres. Additionally, the village will have boutiques, restaurants and cocktail bars. People “The live, work, play concept speaks to the young, mature, retirees, and the movers and shakers of industries. I believe in the village lifestyle, which all can enjoy – from young to the elderly.” Reichmuth says. More specifically, Blue Rock Villages’ target market is mid to high-earning individuals. Reichmuth plans to expand Swisatec’s market in the future.

A F R I C A’ S F I R S T G R E E N V I L L A G E

“We plan to venture to other countries. I believe that our way of building will change the construction industry not only in South Africa, but in other parts of the world,” he commented. Future Before Reichmuth achieves expansion, he hopes Blue Rock Village clinches the 6-star Green Star Communities Rating in South Africa. The Green Star SA Communities Rating tool (originally from Australia) evaluates the sustainability attributes of the development project, on a precinct, neighbourhood, or community scale. The tool is one of its kind in South Africa and is being adapted to the local context. If Blue Rock Village bags the 6-star rating, Reichmuth and his team would be elated. “Being awarded the first 6-star Green Star Communities Rating will place Blue Rock Village as world class development and the first village in Africa to achieve such a status. This will add value to potential buyers and investors as this makes Blue Rock Village a prime address

“Not only for Africa, but in each and every part of the world we need to do as much as we can to preserve what we have for generations to come” – Lukas Reichmuth in Cape Town,” he comments. Reichmuth and the Swisatec team are working hard to secure this rating and open up Blue Rock Village to the public. They envision that phase one of Blue Rock Village, Giovanni Luxury Terraced Apartment, will begin this September. Residents are expected to move in by December 2017. If the launch goes as planned, Reichmuth’s ambitions to blend Swiss design, African landscape, and eco technology will be fulfilled. He stresses the latter in his final comment: “Africa is at a point now that it’s moving towards sustainable building, and I hope this will not be a trend, but a new way of living”. 13

TECHNOLOGY

Electric potential

Tesla is coming to Africa, but is the continent ready for electric cars? Written by: W E D A E L I C H I B E L U S H I

TECHNOLOGY IN MARCH, ELON Musk made an exciting Twitter announcement. In just 140 characters, the Tesla owner revealed some big news: Tesla’s latest electric car will be available to buy for the first time in South Africa. Musk’s tweet sparked debates among online commentators; was this a major environmental breakthrough or complete waste of time? With Africa’s infamous power shortages and developing infrastructure, is there even a demand for electric cars? Current climate It’s important to know that electric cars are currently being sold in Africa. South Africa has the Nissan LEAF and BMW i3. However, statistics show that electric cars sales in South Africa are meagre. Only 160 electric cars were sold in 2015, compared to the 291,332 bought in the US, and 24,500 in the UK. In wider Africa, electric cars are even rarer. Home-grown electric vehicle companies like Uganda’s Kiira Motors are few, but they strongly believe that the electric car demand in Africa will grow.

September 2016

Kiira Motors was born in 2006, when University of Makerere students entered an MIT design collaborative project to build a plug-in electric hybrid car. Allan Muhumuza, VP Sales & Marketing at Kiira tells us: “Over time the initiative has evolved from an extracurricular activity by scholars at Makerere University Engineering School to a mainstream Government Funded Science and Technology Innovation Program in 2010”. The resulting five-seater sedan is powered by a rechargeable battery and has an internal combustion engine-based generator for charging. Kiira expects the first commercial vehicle from this line to roll out in 2018. Kiira Motors joins Kantanka Car, a Ghanaian automobile manufacturing company, as one of the few electric car producers outside of

ELECTRIC POTENTIAL

TECHNOLOGY

South Africa. Kantaka’s range of cars includes electric saloons, electric four-wheel drive vehicles and electric pickup trucks. These vehicles have been on the market since late 2015. Support Although electric cars are relatively rare across the continent, there is support for increased vehicle production. “Advanced research in optimisation of electric powertrain technology is still on-going at various

international locations,” Muhumuza explains. “With the invention of cheaper and optimised systems accompanied by the development of relevant infrastructure, electric cars shall avail clean, silent and ecofriendly transport solutions in Africa.” What will these developed systems and infrastructure look like? Thando Pato, a spokeswoman for BMW South Africa comments on how the firm are enabling such change. “We have always emphasised that

“With the invention of cheaper and optimised systems accompanied by the development of relevant infrastructure, electric cars shall avail clean, silent and eco-friendly transport solutions in Africa” 18

September 2016

ELECTRIC POTENTIAL

in order for electric vehicles and plug-in hybrid electric vehicles to be successful in South Africa, we need to make public charging easily accessible for customers who purchase these cars,” she says. BMW South Africa offers its own charging options, such as the Wall Box Pure and Wall Box Pro for the BMW i3. These are home charging units that can power the i3 up to a maximum of 80 percent charge in two hours. BMW electric car drivers can also use DV Fast Chargers (only available at five BMW i dealerships) and the brand new solar carport. “BMW South Africa are the first market within the global BMW Group network to implement this solar carport,” Pato adds. Nissan South Africa also provides support for electric car

growth in the region; it signed a memorandum of understanding with BMW to jointly roll out public charging infrastructure last year. Challenges Support from multinational corporations means little if African’s can’t afford to buy electric cars. In South Africa, the new Tesla will be sold for a steep 530,000 rand (at current exchange rates). Uganda is one of the world’s poorest countries (ranked 163 out of 188 countries in the 2016) so how will citizens afford Kiira Motor vehicles? “The KMC value proposition is

TECHNOLOGY premised against the two core gaps in the industry today – namely: affordable asset financing for vehicle financing and after-sales service and support. Our interventions will focus on closing these gaps as the key strategy for market share acquisition. Affordable asset financing is a key ingredient in making our cars affordable for a Ugandan,” Muhumuza responds. Charging resources in the rest of the region remain uncommon. “The vital support infrastructure for these vehicles such as charging infrastructure has not been developed,” Muhumuza explains. Open Charge Map, an online database of global charging equipment locations, backs Muhumuza’s statement. Across the entire continent, South Africa is the only country in which contributors have identified electric vehicle charging stations. However, despite this shortcoming, Muhumuza is optimistic. “The demand for clean, silent transport technologies such as electric vehicles shall increase with the development of such vital infrastructure in the region,” he insists. Africa’s infamous power shortages also challenge the demand for 20

September 2016

ELECTRIC POTENTIAL

electric cars. According to the New York Times, all of sub-Saharan Africa’s power generating capacity is less than South Korea’s, and “a quarter of it is unproductive at any given moment because of the continent’s aging infrastructure”. In South Africa, there is a long history of “load shedding”. When there is not enough electricity available to meet the demand from consumers, Eskom (the country’s largest producer) will interrupt supply to certain areas. Critics of Musk’s announcement cite this issue, but BMW South Africa claim that they adapt to the disruptions. “Loading shedding happens in

periods throughout the day and an electric car can be charged during off-peak times, like when it is parked and overnight,” Pato says. “With our ConnectedDrive App, a customer can constantly monitor the status of the car, even when they are not in it. So if the car is connected to a charger and there is load shedding and it stops charging, the ConnectedDrive App will be able to read this” Alternatively, Muhumuza believes that Africa’s electricity issue will be overcome. He tells us how Uganda’s power generation has risen to 830 megawatts from 596 megawatts in 2010. He also points 21

TECHNOLOGY

“All of subSaharan Africa’s power generating capacity is less than South Korea’s”

September 2016

ELECTRIC POTENTIAL

to the rise in renewable energy investment as a factor phasing out power shortages in Uganda. “Major big hydro power projects such as Karuma and Isimba are bound to double the hydro power supply coming to the grid. This presents power sufficient to run the Kiira Motors Complex as well as the economy.” Future Not only is renewable energy becoming more popular in Africa, cleantech (technology with commercial and environmental benefits) is as well. An EY report on foreign direct investment (FDI) found that cleantech is in Africa’s “next wave” of emerging sectors. If investors like Musk begin to fund

electric car manufacturing across the continent, and access to electricity continues to improve, we may see more electric cars on African roads. Notably, there is a clear gap in electric car presence between South Africa and the wider continent. Besides the fact that it’s his birth nation, there is an economic reason why Musk decided to launch the new Tesla in South Africa and no other African countries. However, electric car fever may gradually creep across Africa. According to Pato, BMW sees potential in wider Africa. “We have just started with operations into subSaharan Africa and electric cars will be part of the plan in future,” she says. Likewise, Kiira Motors states export within Africa as a core goal. Kiira, BMW South Africa and other electric car proponents recognise the vast challenges ahead of them. However, their counter-strategies and enthusiasm suggest that perhaps in the distant future, Africa will be ready for electric cars. For now, both naysayers and advocates will have to use Tesla’s South Africa performance as a litmus test. Will Musk galvanise Africa’s electric car revolution? 23

6 Tips For running an environmentally sustainable business in Africa

How do you successfully run a green business in Africa? We learn some handy tips from individuals who currently head sustainable African projects Written by: WE DAE LI CHIBE LUS HI

LIST

Parminder Vir (CEO of the Tony Elumelu Foundation, investors in African entrepreneurship)

Use natural products “A lot of African men and women suggest utilising natural products like avocado and cocoa. How can we produce make up that is made of natural products? This is what the founder of The Body Shop, Anita Roddick, did. She travelled around the world and leveraged a lot of the ancient, innate knowledge that’s here in Africa. Our entrepreneurs (whether they’re rural or urban based), they’re tapping into that.”

Keep the supply chain at home “This is one of the biggest sustainable things that an African entrepreneur can do. I was in Uganda and I spoke to the president of Uganda. He shared some mind blowing statistics with our entrepreneurs, like Uganda imports the most second hand clothes and second hand shoes. This is the country that is the largest cotton grower in Africa. There are over 40 million cows in Uganda. What the hell is Uganda doing importing second hand shoes?”

September 2016

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LIST

Xavier Helgesen (CEO of Off Grid Electric, provider of clean, affordable energy to off-grid Rwanda)

Avoid using imported oil “If you’re importing diesel to run a generator or if you’re importing kerosene to light your home, not only is it contributing to global warming, it’s also keeping countries poor. A country like Tanzania has a huge safari industry. The amount of money Tanzania brings in through tourism, is roughly similar to the amount they spend on importing oil. So this really does keep countries from investing in themselves.”

Consider how your staff travel “Remember that your transport of staff (both to and from work, as well as out of the office) drives a huge environmental impact. Find ways that staff can share transport or travel less in the course of work.”

September 2016

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LIST

Jérôme Douat (CEO of Vergnet, global renewable energy solutions provider)

Swap generators for renewable energy “One challenge for sustainability is having energy consistency across African economy. Because of the fragility in energy infrastructures, most companies, industries, and businesses have to provide their own power. There’s a high cost of living with thermal generators and businesses can reduce this drastically by the integration of renewable energy technology.”

Learn from other successful green businesses “African businesses that are trying to be sustainable can learn from businesses that have already done it. There’s our Kiffa plant in Mauritiana, there’s other plants across Africa. It’s possible to integrate renewable energy into processes.”

September 2016

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Access and emp

how free WiFi is transform Written by Jennifer Johnson Produced by James Pepper

powerment:

ming South Africa

PROJECT ISIZWE

The web is an unprecedented equaliser, permitting all users a similar degree of access to information and resources. With personal and economic development at stake, countries worldwide are clamouring to connect

n 2016, there are still just a handful of services which are deemed crucial to a thriving community — though running water, housing and electricity are invariably among them. However, with the advent of the internet, our idea of what constitutes an ‘essential’ utility has had to expand.

Deloitte research has shown that productivity in developing countries could be enhanced by as much as 25 percent with the expansion of WiFi access. For countries like South Africa, where 75 percent of citizens can’t easily or affordably get online, it is not yet possible to compete with industrialised, knowledgebased economies. Project Isizwe,

September 2016

a not-for-profit organisation based in the city of Tshwane, is currently working with government bodies across South Africa to bring free public WiFi to the country. “We all understand the value of Internet connectivity,” Zahir Khan, the CEO of Project Isizwe, explains, “especially in terms of educational benefits, improved healthcare services, better opportunities for economic development — and, of course, social cohesion. From that perspective it’s critical to connect the country sooner rather than later.” In 2013, a bid to connect every citizen was launched across the city of Tshwane. To date, it is Project Isizwe’s largest deployment effort,

with 850 Free Internet Zones (FIZs) installed in the local area and almost two million unique users accessing the web since November of 2013. By 2018, Tshwane will have WiFi within walking distance of every citizen. Project sponsors hand-select the hotspot locations based on their perceived value for the surrounding community. It is this kind of thinking which led to the installation of 213 Internet access points outside of schools in Tshwane. “The city has funded the provision of public access WiFi on their infrastructure outside of these schools,” Khan says. “This ensures that every learner, educator and community member in and around the schools is connected”. Rural environments in South Africa also stand to benefit from the efforts

of Project Isizwe, though installation in these locations is admittedly more of a challenge. The large majority of financial backing for WiFi installation comes from a locality’s government and public sector bodies. In more remote regions, state revenue is limited, thus it is more difficult to get these communities online. Ultimately, Project Isizwe hopes to have an Internet access point within five kilometres of every rural citizen. “Funding has been the biggest barrier for expansion across the entire country,” Khan says. “In five different provinces — Limpopo Province, KwaZulu-Natal, Eastern Cape, Western Cape, and Gauteng — the biggest barrier to expansion of the free Wi-Fi offering is the availability of funding.” Project Isizwe’s not-for-profit

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PROJECT ISIZWE

Zahir Khan Zahir has extensive experience in the telecommunications sector holding various positions at South African based organisations and seeing the rapid evolution and transformation within this region. His notable achievements include successfully driving business development, product development, project management and finance. With 17 years of telecommunications experience coming at the most significant growth periods in the industry, he is well positioned to lead in the wave of connecting an unconnected Africa. His core operations and project skills are complemented by his knowledge of network architecture and solutions with his initial experience in the finance field, ideally positioning him as a the Chief Operating Officer at Project Isizwe, spearheading the delivery of Free WiFi for South Africa and with ambitions to deliver the same achievments across the continent.

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TECHNOLOGY

status has enabled it to reduce the cost of installing telecoms infrastructure by what Khan describes as a “significant” margin. With the help of its partners, the project operates exclusively under costrecovery: it doesn’t charge users for its service and the large-scale financial benefits of WiFi access for South Africa will not be immediately evident. “We are essentially three times more affordable than traditional deployments of network companies,” Khan says. “We have been fortunate enough to have great OEM and Infrastructure partners that assist us in these reductions of price as they too firmly believe that bridging the digital divide will ultimately form a stronger and more active economy for South Africa.” Research by the World Bank has shown that a 10 percent increase in what is called ‘broadband penetration’, the amount of the Internet access market that has been captured by high-speed broadband, will result in a 1.3 percent increase in a country’s GDP. “The [financial] sustainability of Government funded public space free WiFi comes out of the long-term benefit of enabling Internet access for citizens today,” Khan says. Historically, access to an affordable mobile device — be it a smartphone, tablet or laptop — was also a barrier to Internet access in South Africa. Khan notes that, in recent years, as the cost of these items has fallen, they have made their way into the

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“The public hotspots become a place to bridge the digital divide, where regardless of personal circumstance or background, everyone has access to the same internet” WestconGroup is a distributor of a wide range of indoor and outdoor Ruckus Wireless “Smart Wi-Fi” products.

Andries Janse Van Rensburg +27118489012 Andries.JanseVanRensburg@westcon.com www.westcon.com

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TECHNOLOGY

hands of people all over the country. Project Isizwe has deployed in rural environments, places as remote as the mountain village of Tshedza in Limpopo province,” he explains, “even there you’ve got people with WiFi-enabled devices who can utilise and connect to the network. Devices are not the issue any longer.” As impediments to Internet access and availability are dissolved across South Africa, people are finding creative ways to reach out into their newly-connected world. Khan cites the story of Martin Nyokolodi, a young man in Tshwane who has launched his own Internet radio station, among his favourites. Not only does Nyokolodi utilise the City’s ‘TshWi-Fi’ service to broadcast his programme, he also takes Skype calls from listeners and maintains the station’s social media presence on the network. The benefits of connectivity have also been extended to the healthcare and hospitality sectors. Restaurant owners in proximity to a WiFi hotspot have been setting up shelters within

signal range so that customers can access the web. Khan reports that these makeshift ‘Internet cafes’ have increased restaurant profits by as much as 80 percent. Equally, the Internet has helped to streamline the process of care and diagnosis in South Africa’s clinics and medical facilities. In its National Development Plan 2030, the government of South Africa states that it wants universally available Internet across the country in 14 years’ time. “There’s a lot for us to do,” Khan admits. However, Project Isizwe, and its CEO, realise the transformative impacts that Internet access can have over lives and economies — and they will go forward knowing just how tremendous the return on public space free WiFi investment will be. “The public hotspots become a place to bridge the digital divide, where regardless of personal circumstance or background, everyone has access to the same internet,” Khan says.

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Making moves in Africaâ&#x20AC;&#x2122;s mining industry Written by Wedaeli Chibelushi Produced by Charlotte Clarke

BARLOWORLD EQUIPMENT

We speak to Daisy Kgosi, Head of Procurement at Barloworld Equipment, about procurement, the movement of mining and construction tools, and how the two areas combine

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frica is renowned for its burgeoning mining sector. Mining processes and big gems snare media attention, but there is less public focus on the movement of crucial equipment. How much do you know about the companies that transport essential mining and construction equipment in and outside of Africa? Daisy Kgosi, Head of Procurement at Barloworld Equipment shares a detailed insight into the supply chain aspect of transporting this equipment. Barloworld Equipment is the sole dealer for Cat earthmoving machines and other mining and constructing equipment in several countries. It operates in Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Zambia and the Democratic Republic of Congo’s Katanga province. The company has existed for over 100 years and is supported by 62 billion rand firm Barloworld Limited. Team leader As Head of Procurement, Kgosi manages the procurement of indirect goods and services. She tells us about how she got this role. “I started my career in the automotive industry in a supply chain training environment,” Kgosi says. “After, I moved to management consulting, where I was exposed to underground mining supply

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BARLOWORLD EQUIPMENT

chains. My role evolved from just management consultant into strategic sourcing specialist for underground mining equipment. Through this experience, I was then recruited into Barloworld Equipment.” Kgosi was a Strategic Sourcing Manager before landing her current role. Kgosi leads one of two supply chain departments. “We’ve got two supply chain departments: we have a supply chain related to the distribution of Cat equipment. This does not fall within my responsibility. My role is more to do with all categories of goods

“We always try and have regular engagement with all our service providers and to get to a situation where it’s a winwin relationship” 46

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and services that are supporting the organisations’ processes,” Kgosi explains. Kgosi’s supply chain enables business to support the customers, ensuring that Barloworld is able to deliver the services required. It covers facilities and transportation of parts to customers and the sourcing of third party contractors. Well-versed in procurement, Kgosi describes wider industry trends. For example, the supply chain market is simplifying buying technology. “You have easy access to your catalogue; you can actually

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log on to your ERP system and have live information in terms of what your approved supplier base is able to offer you as a business. Especially in a changing market environment, that is one things that we are struggling with.” Keen perception Barloworld Equipment keeps up with the industry through innovative projects like Vision 2020. “Vision 2020 is about inspiring a world of difference as an organisation and creating shared value that makes a positive difference for all our stakeholders.

It does this by building a world class business generating superior shareholder return,” Kgosi explains. “From a procurement perspective, our vision is to create a procurement function which is supported by high performance procurement capabilities. We do this to ensure that we add value to the wider business and also to ensure recognisable impact on our company’s bottom line. That’s how we align with our corporate strategy.”

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Augustino General Construction and Labour Hire Augustino Construction and a Labour hire is a company that was founded on the 23rd August 2008.We specialise in metal Fabrication and Mechanical Engineering. We have been conducting Dragline shutdowns from 2011. We have grown from strength to strength with initially a team comprising of 60 employees to our current level of 640 employees. Our mission is to deliver the best quality, safe and affordable service to our clients at all times. We strive to be the unquestionable dragline shutdown team of choice on the market. We also empower our staff through numerous training programmes and are involved in various community development projects.

Contact: Address: 18 Sunflower Street Pineridge Witbank 1039 Tel: 082 365 2184 | Fax: 013 6927233 Email: augustinoconstruction@yahoo.com www.augustinoconstruction.com

S U P P LY C H A I N

5,000 Building bonds Barloworld Equipment doesn’t stand alone; it works closely with likeminded suppliers. “We have regular engagements with all our service providers and to get to a situation where it’s a win-win relationship,” Kgosi states. To Barloworld Equipment, suppliers are invaluable partners. It’s not in the company’s interests to drive its suppliers’ prices down and risk running them out of business. Rather, the firm makes the effort to thoroughly understand its suppliers and in turn, give them the opportunity to understand Barloworld Equipment. Kgosi says: “In terms of innovation we heavily rely on our suppliers to say ‘okay’. For example, there is a new innovation that is available in the market and we believe it can create savings within

The total number of staff working at Barloworld Equipment

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BARLOWORLD EQUIPMENT

Cape Town | Tel: +27218528250 | Tel: +27119740932 | www.sllogistics.co.za SL Transport is an efficient Overnight Service from Cape Town and Johannesburg to the West Coast Mining Industry. At present we are the leading Overnight Transport Company on this route and offer the most reputable and professional services throughout the country. Our Emphasis is on delivering the freight entrusted to us on-time and safely.

“VISION 2020 IS ABOUT INSPIRING A WORLD OF DIFFERENCE AS AN ORGANISATION AND CREATING SHARED VALUE THAT MAKES A POSITIVE DIFFERENCE FOR ALL OUR STAKEHOLDERS” 50

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our customers’ businesses. These are the type of suppliers we look for and maintain relationships with.” However, not just any company can be a Barloworld Equipment supplier. A supplier must align with the company’s core values. “It’s a little bit difficult to work with somebody that doesn’t fully align with your values,” Kgosi affirms. Barloworld Equipment also looks for suppliers that are progressive in their use of technology. They also

do a lot of business with small to medium enterprises (SMEs), because they believe that not only do SMEs have a reduced turnaround time, they have a large impact on Barloworld Equipment’s economy. Kgosi adds, “you get to work directly with the CEO or the owner of the business as opposed to bigger corporations.” Barloworld Equipment seeks out suppliers that are interested in the economic transformation of Africa.

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BARLOWORLD EQUIPMENT

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Looking ahead Along with acquiring and maintaining relationships with suppliers, Barloworld Equipment has several other plans for the future. “We plan to step up our sustainability efforts. We will ensure that we get the right skills and capabilities in-house and also develop a governance framework that will ensure sustainability in the long term. I think a combination of the right skills, the right governance framework and the right technology will ensure sustainability,” Kgosi says. The organisation also wants to enhance its current way of doing business. We want to ensure efficiencies, visibility and transparency of spend. “We are currently busy with our procurement transformation Barloworld programme; part of our overall business Equipment’s annual revenue transformation,” Kgosi reveals. Barloworld hasn’t started this programme yet, but Kgosi tells us it’s in the pipeline. “It’s taken us longer than we expected, but it will transform the way we do procurement because we have done an overall assessment of all our activities and we have identified a lot of opportunities where we can create value and add value to the entire business. That’s one very exciting project we’re working on”.

billion

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SUSTAINING STEEL Written by Nye Longman Produced by Richard Deane

EGYPTIAN STEEL

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LEVERAGING SIGNIFICANT INVESTMENT AND NATIONAL DEMAND, EGYPTIAN STEEL IS MAKING A NAME FOR ITSELF AS AN EFFICIENT, THOUGHT-LEADING MANUFACTURER AT HOME AND ABROAD

tepping into the steel industry in 2010, propelled by over $2 billion of investment, Egyptian Steel is growing to become a leading diversified manufacturer and stalwart of the recovering Egyptian economy. Backing up substantial capex with robust social, environmental and operational programmes, the company is looking forward to years of sustained growth and success. Since we spoke to CEO Ahmed Abou Hashima in the July 2015 issue, the company has undergone a number of structural changes and is now in the process of diversifying its offering to the domestic and international market.

Abou Hashima is proud of how far his company has come – and is optimistic about its place in developing the country. He says: “Steel is crucial for

the economy. We have a shortage of 8 million housing units and infrastructure. The whole population lives on only 7 percent of the land. In order to develop Egypt, steel is vital for at least several decades. It’s a strategic industry that employs thousands of people.”

Operational development Operations are shared across a number of subsidiaries which consist of Egyptian Steel for Building Materials, National Port Said Steel (NPSS), and IIC for Steel Plants Management. Together, these divisions enable the company to provide a range of steel production capabilities to the market – supported by a number of technological innovations. “When all four plants of Egyptian Steel are at full capacity we will be able to acquire a 20-25 percent

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EGYPTIAN STEEL

market share in Egypt,” says Abou Hashima. “We’re also expanding into the cement industry with a production capacity of 2 million tons per year, and going into IPO is in our plan, although there’s no set time for it yet. “We have already taken our first step into the cement industry by establishing the sister company Egyptian Cement, and in the future, after mainly operating in steel and cement we might look into diversifying into other building materials such as wood, ceramic, and glass. Our vision is to make the group a onestop shop for all building materials.” By the end of 2017, all of Egyptian Steel’s plants will become operational and the company will have an estimated workforce of 6,000 people. “With the opening of the Beni Suief plant we’re also opening a vocational development centre for training steel plant workers in order to improve their skills and performance,” Abou Hashima adds. But the centre is not limited to just people working for Egyptian Steel: “It’s open for free to anyone who wants to learn,” he says, “It helps us raise

September 2016

the calibre of our workers, and at the same time is part of our role to give back to society, and enable people to have an opportunity to improve their skills to be able to compete in today’s workforce market.” While Egyptian Steel is backed up by significant investment, the company has had to face up to the industry-wide challenge of sourcing enough energy for production. “The government has made an enormous effort to improve the power grid,” Abou Hashima says. “There have been new power stations launched, as well as mega projects with companies like Siemens to generate power, and the outstanding natural gas field discovered by Eni, which will have a great impact in the future.” “The situation is definitely better, but we have started using new energy-saving technology which will enable us to avoid any problems in both the long and short run.”

Sustainable steel Embedded within Egyptian Steel’s business model is the imperative to operate as responsibly as possible, a

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AHMED ABOU HASHIMA CEO

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EMB BUSI OPER

BEDDED WITHIN EGYPTIAN STEELâ&#x20AC;&#x2122;S INESS MODEL IS THE IMPERATIVE TO RATE AS RESPONSIBLY AS POSSIBLE

EGYPTIAN STEEL

philosophy that it applies holistically to its workers, the environment and the Egyptian people. At a technical level, the company has made massive strides in energy saving through use of more efficient technology. Combined, the eco-friendly technology the company is using saves almost 60 percent of the energy required and saves as much as 30 percent of emissions – innovations that have added an extra competitive edge. Egyptian Steel also recycles 100 percent of its steel scrap. This technology is the first of its kind in the Middle East and Africa, and only the third instance in the world. The other two steel plants that use this technology - one in Arizona and the other in Greece - produce 250,000 tons/year, while Egyptian Steel’s Beni Sueif and Al Ain Al Sokhna plants each have a production capacity of 830,000 tons/year, making Egyptian Steel the biggest manufacturer of green steel globally. Abou Hashima adds: “I created a concept that I like to call ‘socially responsible capitalism’ which emphasises that the civil society has rights that should be fulfilled - it’s our duty to improve people’s lives and to lessen their suffering as much as we can.” And the company is continuing to achieve this social mission. In 2014 Egyptian Steel scrapped its advertising agenda in order to refit 40 of the poorest villages in the country with basic amenities. Since then it has also sponsored a large number of Egyptian

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EGYPTIAN STEEL

WHEN ALL FOUR PLANTS OF EGYPTIAN STEEL ARE AT FULL CAPACITY WE WILL BE ABLE TO ACQUIRE A 20-25 PERCENT MARKET SHARE IN EGYPT â&#x20AC;&#x201C; CEO Ahmed Abou Hashima

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athletes, and the Paralympic team. What is clear from its conscious social work is a desire to share the success of the company in order to raise the standing of as many people in the county as possible. Abou Hashima adds: “It’s very flattering that our CSR efforts got recognition on a local and on an international level. But what actually keeps me motivated is the happiness I saw on the villagers faces when they moved into their revamped homes.” The company is also currently working to obtain ISO 9001 (Quality Management Systems), IS0 14001 (Environmental Management Systems) and OHSAS 18001 (Occupational Health Safety Assessment Standard). Having built on an already strong foundation of investment and national demand for its products and services, Egyptian Steel is set to play a major role in developing the country’s economy and skills base for many years to come

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