BC Africa magazine – January 2018 by Business Chief Africa

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Think GLOBAL Act LOCAL CITY FOCUS

Johannesburg January 2018

AFRICA EDITION

SPECIAL REPORT

BREWING UP ECONOMIC GROWTH IN AFRICA TOP 10

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FOREWORD HELLO AND WELCOME to the January edition of Africa’s Business Chief. This month, we speak with the largest mobile vendor in Africa, Chinese manufacturer TRANSSION, regarding how the company has seen its sales grow from 310,000 phones annually to around 80mn in 2016. Vice President Arif Chowdhury discusses how the company came to focus solely on the African market, realising its significant growth potential and its ability to support the need for mobile technology in the country. “We saw the industry in terms of China and the global technology movement, so we knew the market would really flourish, even in African countries, because mobile phones were a kind of revolution,” he says. This edition of Business Chief also looks at Johannesburg, and how industries such as mining and retail continue to provide billions in annual revenue for the South African economy. Its growth in the last five years has seen the country ripen with untapped potential, which will provide increased employment opportunities for its citizens. Following on from this is a look at the economies in Africa which gained the highest increase in GDP in 2016. Other exclusive insights this month include interviews with Convoy Haulage and Anheuser-Busch InBev.

Enjoy the issue!

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F E AT U R E S L E A D E R S H I P & S T R AT E G Y

Think globally, act locally: TRANSSION’s management of Africa, from Africa

PEOPLE

THE BREAKTHROUGH YEAR FOR IOT? TECHNOLOGY

18 28

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Indeed shows shows how how to make an ‘unlimited ‘unlimited leave’ policy work work

36 S U S TA I N A B I L I T Y

Can the UN and World Bank’s ‘Roadmap for a Sustainable Financial System’ lead to a brighter tomorrow?

TOP 10

CITY FOCUS

JOHANNESBURG: AN UNTAPPED RETAIL HUB

Top 10

fastest growing African economies

C O M PA N Y P R O F I L ES Anheuser-Busch InBev SUPPLY CHAIN

Convoy Haulage Ltd SUPPLY CHAIN

January 2018

Lilongwe Water Board ENERGY

Think globally, act locally: TRANSSION’s management of Africa, from Africa Africa’s largest mobile vendor, Chinese manufacturer TRANSSION, is going from strength to strength – Vice President Arif Chowdhury says success in the developing world is about showing you take the market seriously Writ ten by OLIVIA MINNOCK

L E A D E R S H I P & S T R AT E G Y

SINCE STARTING IN 2006, TRANSSION – formerly known as TECNO TELECOM LIMITED – has seen its sales grow from 310,000 phones annually to around 80mn in 2016. The company was founded by George Zhu, who according to current Vice President Arif Chowdhury, was “a Chinese veteran, and one of the most experienced mobile entrepreneurs in China”. Prior to founding TRANSSION, Zhu had travelled to over 90 countries exploring opportunities. Chowdhury explains that TRANSSION was born from the idea that “there is a great need for good quality products in emerging markets, and if you can offer good products the consumer can benefit from, it will be good for the market as well as the company”. Chowdhury himself has well over a decade of experience in the smartphone industry and an extensive knowledge of Africa’s smartphone market, an awareness of consumer needs which has proved central to the company’s success. The decision to focus solely on Africa came not two years after the company’s foundation. But why ignore the world’s largest smartphone market, TRANSSION’s home of China, 10

January 2018

TRANSSION sold 80mn phones in 201

to focus on the African continent? “At the end of the last decade and in the early 2000s, there weren’t too many brands coming from China and doing business in the global market,” Chowdhury explains. “So we could make a real change in the industry by entering some key emerging markets and trying to understand and benefit the consumers - we wanted to open up a company that was more consumercentric and to do a long term ‘good’.”

L E A D E R S H I P & S T R AT E G Y

The decision to focus on Africa was based on its high population – at around 1.2bn, it has a market of similar size to China or India – and comparatively low mobile penetration. “If we look at 2006-7, the mobile phone penetration in China or the west was 60-70%,” Chowdhury explains, “but for Africa’s market the penetration rate was less than 30%.” TRANSSION also had faith in smartphones taking off in the country,

despite its different economy to China and the west. “We saw the industry in terms of China and the global technology movement, so we knew the market would really flourish, even in African countries, because mobile phones were a kind of revolution. In China and some other countries, it happened faster than Africa, but we knew it would happen,” says Chowdhury. And it’s been a successful move by 11

L E A D E R S H I P & S T R AT E G Y all accounts: “Since then TRANSSION has grown substantially over the past decade to become market leader, and we have been able to increase our headcount and at the same time our number of customers. We’ve seen lots of customers who own their first device thanks to our brand. That has been pretty amazing for us.” Its three brands, TECNO, Infinix and itel, have all been listed on Brand Africa’s 100 Most Admired Brands. As Chowdhury explains: “TECNO was our first brand and it’s the most wellknown, so that’s probably why it was rated number 14 on the list. However, itel has come a long way - it was 24 in 2016, 52 in 2015 and 72 in 2014. And of course, Inifinix has been ranked 37th, entering the top 100 for the first time.” Understanding what Africa wants from a smartphone Chowdhury mentions several key areas smartphones must differ in Africa to be successful. These include dual-SIM enabling, battery life, camera quality and languages. He says that it was important first to “understand what the challenges were, what the ‘pain point’ was for the consumer”. “In Africa they do count every 12

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penny due to their low income,” says Chowdhury, “so they are very cautious about their expenses.” As such, African consumers take advantage of cheap intra-network rates and promotions by having several SIM cards and using Orange SIMs to call Orange numbers, then switching to Vodafone to call Vodafone numbers, and so forth. Chowdhury explains how this resulted in dual-SIM enabled phones to make it easier for users to save money: “Most people had four or five SIMs they’d keep in their wallet. We found that if we brought in dual-SIM phones, they would be able to put both in their phone and just choose which number to call with.” Another key way TRANSSION has shown its understanding of African needs is through the pixel technology developed for its smartphone cameras. Chowdhury says: “For African consumers, a main medium of entertainment is photos – they love to take selfies and share them with friends. The traditional camera was not optimised for the African consumer because often, for those with darker skin, the photos don’t come out well especially in low light. We did research using over 10,000 photos of

Several TRANSSION brands are on Brand Africa’s most admired list

African consumers to create a special algorithm to optimise the camera to attract 30% more light on the darker face. We call this ‘Africa Focus’. It’s been heavily popular. It improved our cameras and won the hearts of Africans who like to take selfies. Languages were also added to show the consumer TRANSSION was serious. “We developed local language. In Ethiopia, we launched our phones with Amharic, Tigrinya and Oromo in the East African market and in countries such as Kenya and

Tanzania we launched devices with Swahili, and in Nigeria with Hausa. This brought to the consumer’s mind: ‘OK, this company is very serious and wants to stay in the market’.” It’s also launched various platforms to cater for consumers’ needs. “Palmchat and PalmPlay are another message to the consumer about how we care for them. Some other messaging tools are more popular in the smartphone segment but what about the millions of users in Africa who still have feature phones 13

‘Think globally, act locally’, is a key company slogan 14

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L E A D E R S H I P & S T R AT E G Y and want to chat with their friends and make new ones?” Palmchat now has over 170mn subscribers. “We have also developed an app called Boomplay which, in terms of licensed songs, is the largest of its kind in the world. We’ve signed agreements with renowned artists from different countries in subSaharan Africa and Google now ranks it as the most famous music app for the continent. It’s been downloaded over 5mn times.” Pricing for the African market In addition to understanding tariff costs, TRANSSION takes a multibrand approach to ensure a range of pricing. Chowdhury explains that TECNO, itel and Infinix are “different brands to cater for the different needs and demands of the different segments”. “We never claim we’re the cheapest brand,” he clarifies, “because we believe in providing value. Most importantly, African consumers are price conscious and therefore we need to give them more value.” He uses the example of selling a $10 phone which might only last six months, versus a $15 phone which will

have a long-lasting battery and will include quality after-sales service, so the cost per use will be much lower. “We try to really engage with that particular segment. So in terms of pricing, while we have different brands with different kinds of pricing, quality and affordability have always been the key concerns, while providing value to the consumer.” Chowdhury explains the three brands of TRANSSION: “itel is massorientated with a wider focus – it tries to provide products for people who want something affordable but good quality. TECNO is a bit more premium, and focusses on some specialised technologies like music and low-light selfies. Infinix is our online brand which includes offline access – more young people now are really techsavvy and have the desire to try the newest, highest spec, but again affordability is an issue. They want to try a phone with a 20 megapixel camera, but must be able to afford it.” Here to stay: Think globally, act locally TRANSSION has further proved itself as a permanent fixture in Africa by opening a factory in Ethiopia. “This 15

is actually a way to show the firm is confident in the market and we have a true desire to demonstrate a full commitment to Africa. In addition, having a factory in Ethiopia has allowed us to increase our distribution capabilities and to significantly improve lead times.” Is there potential in Africa for more multinationals? “Why not?” says Chowdhury. “If they are serious. Having a factory will show this, as will investing in after-sales service because this is also something that costs money - if you’re offering a good warranty and after-sales support for your consumers, then it does mean you’re giving a commitment to the society.” TRANSSION provides this through Carlcare: “It’s one of our subsidiaries and provides after-sales services across all of our brands. This is something we found was missing in African business.” In relation to challenges of setting up in the African continent, Chowdhury concedes: “China was previously our manufacturing hub, so an initial challenge was quality control and supply chain management. Initially we brought Chinese teams over to Ethiopia to train the local people. Human resources was a challenge, but we offered that initial support and now the facility is run almost entirely by locals.” For TRANSSION, a key slogan is ‘think globally, act locally’. “This means using global technology to solve local needs and demands,” Chowdhury explains. “In the African market, we’ve done lots of things as a first, such as solving the dual-SIM problem, and we have to continue to listen to the market, staying ‘on the ground’ and not managing Africa from China. Africa has to be managed from Africa.” 16

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L E A D E R S H I P & S T R AT E G Y

T E C H N O L O G Y T R A N S F O R M AT I O N

THE BREAKTHROUGH YEAR FOR IOT? STUART HODGE LOOKS AT WHAT 2018 HOLDS FOR THE INTERNET OF THINGS, HOW ITâ&#x20AC;&#x2122;S SET TO GROW AND WHAT THE REMAINING CHALLENGES ARE Writ ten by STUART HODGE

T E C H N O L O G Y T R A N S F O R M AT I O N THE INTERNET OF Things is ready to take its rightful place at the forefront of business in 2018. Or so it would seem: a recent report from Navigant Research claims that combined cumulative global revenue for Industrial IoT (IIoT) devices, software, and services is expected to total more than $1trn between 2017 and 2027. IoT is essentially the glue which binds people, machines and data – so it’s no surprise to see it becoming a major point of focus for businesses around the globe. The Navigant report also states that revenue from annual global shipments of IIoT devices is expected to grow from $47.9bn in 2017 to $129.3bn in 2027. Ralf Gladis, CEO at global payment solutions provider Computop, can see the change happening. “The Internet of Things is fast becoming a reality around the world,” he says. “Both small and large devices will process payments for us. Our cars will automatically pay for fuel and parking fees, our smartwatches will pay for taxis and our smartphones will prove to be a universal tool to buy and pay everywhere. 20

January 2018

“With that scenario in mind, payment will become a silent, smooth and automatic process. Only payment methods that support this will have a future.” But for the technology to become a truly global phenomenon, Gladis believes ensuring consumer trust is key. “How do you want your car to pay for fuel? Credit card, PayPal or your company’s fleet card? Handing that process over to our devices will be a big change in consumer behaviour. “New payment brands with no history or trust would keep consumers from embracing new technology and would slow the process down. Established brands will probably make the decision easier.” Gladis is speaking in terms of the end user, and IoT disrupting numerous industries: especially manufacturing, energy, agriculture, healthcare, and automobiles. As a result, more and more organisations who are embracing IIoT are beginning to recognise the potential of leveraging the technology. “We are starting to see more and more companies across the spectrum adopt IIoT strategies,” says Neil

How the Internet of Things Will Change the World

“How do you want your car to pay for fuel? Credit card, PayPal or your company’s fleet card? Handing that process over to our devices will be a big change in consumer behaviour” RALF GLADIS CEO of Computop

Strother, principal research analyst with Navigant Research. “They are deploying hardware and software platforms to help lower operational spend and to serve as a competitive differentiator that can help them sell products and services at lower costs. “IIoT technologies also support a broad digital transformation initiative within a business, enabling it to offer customers enhanced services and improved experiences.” 21

T E C H N O L O G Y T R A N S F O R M AT I O N

January 2018

At this moment, there is an argument that IIoT solutions appear somewhat overwhelming to deploy for managers unsure how to harness the array of technology choices. Industrial managers face additional costs, complex technologies, big data, and uncertain outcomes with the result being a confused potential customer base and a market which has both the desire and potential to grow more quickly. Further research, from $7.4bn turnover IT services company HCL Technologies, drilled a little more deeply into these struggles. Their work, based on a Vanson Bourne survey of 263 organisations across Europe and the United States, found that as many as 49% of organisations surveyed are struggling to get off the ground with IoT, due to an uncoordinated and siloed approach, with 43% saying their customers will suffer as a result. The findings of this report indicate that despite widespread acknowledgement of the potential benefits of IoT, many organisations are limiting its use to just one process or function, as opposed to a businesswide approach. According to HCL, 23

T E C H N O L O G Y T R A N S F O R M AT I O N this represents a major threat which could derail IoT projects by postponing the time-to-value, and thereby reducing the competitive advantage that businesses stand to gain. Matthew Dunkley, a Director for IoT at Flexera who works with businesses to monetize their IoT investments, recently penned some notes around best practice for intelligent device manufacturers. “The Internet of Things is transforming today’s landscape – promising higher margins, new revenue streams and steep profits. Manufacturers used to be able to deliver updates yearly, which seems almost inconceivable today,” he says. “Constant updates are now the

“The Internet of Things is transforming today’s landscape – promising higher margins, new revenue streams and steep profits” MATTHEW DUNKLEY Director for IoT, Flex

January 2018

norm – be it weekly, daily or even hourly. Producers must absolutely do that to keep their software safe and secure and mitigate vulnerability risk. “Companies making this transition are already reaping the rewards and commanding premiums. Why? Because they understand the power of their device is in the software, which includes all of the features buyers desire. And managing the software in devices requires a different way of looking at their entire business model.” He expands: “Take software upgrade management, for example – the process of making sure customers have the latest and greatest technology powering their devices. IoT companies that think like software companies know they must manage the core processes (renewals, delivery of software and updates, maintenance and services). If they do not do this right, they will suffer from low renewal rates. “For instance, IoT companies often do not have processes in place to manage the software lifecycle over time and drive renewals – meaning that end users are often unaware of available upgrades, or have trouble finding them. When

Lenovo Tech World - Internet Of Things

that occurs, satisfaction falls.â&#x20AC;? Customer satisfaction will be the key to making the technology more widely popular, particularly with end users. The HCL report also pinpointed security concerns as being the principal reason as to why the technology has not been taken up more widely to this point. Indeed, 38% of respondents cited this as the primary barrier. Global security company Forcepoint has just released its 2018 predictions, and the report asserts that because of the wide-scale adoption of IoT

devices in consumer and business environments combined with the fact devices are often both easy-to-access and unmonitored, these devices are now a highly attractive target for cybercriminals wishing to hold them to ransom or obtain a long-term, persistent presence on the network. Whilst ransomware of these connected things is possible, it remains unlikely in 2018. The main new threat that will emerge this year is what the report is calling â&#x20AC;&#x2DC;the disruption of thingsâ&#x20AC;&#x2122;. The belief is that, because the 25

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IoT offers access to both disruptive possibilities and massive amounts of critical data, we will see attacks in this area, and may also see the integration of a ‘man in the middle’ (MITM) attack. In short, IoT will not be held to ransom but instead become a target for mass disruption. “At the heart of our predictions is a requirement to understand the intersection of people with critical 26

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data and intellectual property,” said Dr. Richard Ford, Chief Scientist at Forcepoint. “By placing cyberbehaviour and intent at the centre of security, the industry has a fighting chance of keeping up with the massive rate of change in the threat environment. “We know that data leakage and ransomware will continue to be the focus for remediation and prevention,

“By placing cyberbehaviour and intent at the centre of security, the industry has a fighting chance of keeping up with the massive rate of change in the threat environment” DR. RICHARD FORD, Chief Scientist, Forcepoint IOT revenue is expected to surpass $1trn in the years up to 2027

but behavior-centric risks are now behind a multitude of security incidents. People’s behaviour should not be set in opposition to security: the two are not mutually exclusive. “Users have the potential to unintentionally compromise their own systems in one minute and be the source of innovation in the next, but we can only empower users if we truly understand the ways they

interact with critical business data.” Caution must therefore be exercised by anyone in business who is choosing to embrace IoT. Without doubt, the future of IoT is a positive, if uncertain, one. No doubt there are multiple barriers which will need overcoming if the technology is to reach its full, disruptive potential. Could 2018 be that year? Let’s wait and see. 27

Indeed shows how to make an ‘unlimited leave’ policy work Indeed’s Senior Vice President and Global Head of HR, Paul Wolfe, explains how and why the company implemented a policy of unlimited leave for staff Writ ten by STUART HODGE

PEOPLE

PEOPLE AS A COMPANY specialising in recruitment, it should come as no surprise that Indeed, the worldâ&#x20AC;&#x2122;s number one job website, knows what it takes to be a good employer. Indeed, which now has over 200mn monthly visitors to its global website, offers all manner of benefits to its 5,000 or so global employees including parental leave for both primary and secondary caregivers, adoption assistance, back-up child care, student loan repayment management, a wellness programme and even pet insurance.

The company also ensures that all offices are stocked with healthy snacks and beverages, with remote workers receiving a monthly box of snacks, similar those available onsite. Indeed implements a casual dress code in open offices with convertible desks that offer a sitting or standing option for employees, and there is plenty of comfy seating and spots where employees can go for some quiet time or one-on-one meetings. Communication access is also a premium consideration, with Indeed ensuring that video conferencing

Indeed believes it helps to have spaces for staff to break out, work and collaborate. Opposite: Indeedâ&#x20AC;&#x2122;s 9th floor terrace at its New York office. 30

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“ Compensation consistently ranks as the least significant factor when it comes to considering what makes people happy at work” – Paul Wolfe, Senior Vice President and Global Head of HR.

is available for all employees to connect with the rest of the company’s global workforce. But despite that myriad of resources and benefits available to help keep employees comfortable and happy, there is still one policy we are yet to mention which seems the most innovative and potentially groundbreaking of them all: Indeed allows all of its employees unlimited leave. Under what the company calls its ‘Unlimited PTO’ policy, employees can take as much time as they wish

– for sickness, personal days or vacation days. There are no limits. A company statement says: “Open PTO empowers current employees, makes for happier workers in the long-term, and also demonstrates to potential talent that the company cares about the health and wellbeing of its employees. “Beyond salary and benefits, most workers will gravitate towards opportunities that are employeecentric. Compensation consistently ranks as the least significant factor when it comes to considering what 31

PEOPLE makes people happy at work.” This last statement is backed up by findings in the company’s own Workplace Happiness Index, 2016. Indeed considers the unlimited PTO policy to be an unmitigated success, so we caught up with the company’s Senior Vice President and Global Head of HR Paul Wolfe to find out more. “An engaged workforce is critical - if you don’t have an engaged workforce, you are going to be facing constant turnover, low productivity and a lacklustre employer brand,” he says. An engaged workforce is really

January 2018

the foundation for a successful company and a company’s greatest asset - a happy employee is your best brand ambassador. “These days it’s rare that you would interact with a candidate who hasn’t researched your company either formally using tools like Indeed Company Pages, or informally by asking their family, friends and extended network what they think about your company brand. Happy employees will have strong messages to share about why your company is a great place to work.

Chill out areas help to keep staff happy and motivated

“ We believe that trusted, empowered and rested employees have a better chance of being happier and also performing better” – Paul Wolfe, Senior Vice President and Global Head of HR “Companies who are actively engaged in offering a rewards culture need to make sure they are promoting it in their job descriptions to help bring candidates in, and companies who are struggling with retention should think about ways they can make their environment more attractive to effectively compete for talent.

“Ultimately, the investment it takes to create a supportive work environment is rewarded with happy, highperforming and retained employees.” And unsurprisingly, the policy proved mightily popular with staff. “It was extremely well received and is very popular with our employees,” Wolfe says. “Part of the reason this

PEOPLE is successful is that we are showing we trust our employees to take the amount of time off that makes sense for them and their roles. “We also encourage people to take time off: managers have conversations with employees who aren’t taking time away, and also take time away themselves to set a good example that rest and recuperation is important. We consider our paid PTO programme a success because employees have taken a healthy amount of time off and simultaneously been very productive.

“ These days it’s rare that you would interact with a candidate who hasn’t researched your company” – Paul Wolfe, Senior Vice President and Global Head of HR

January 2018

In fact, we saw a 28% increase in the number of days taken off by employees after the first full year.” The unlimited leave policy is not a global first. It remains pretty rare but there are other companies within the technology sector who have done the same or similar – however, the size of Indeed as a company makes its rollout of this kind of policy particularly noteworthy. Where did the idea come from for Indeed to do this and how does it make sure that employees

Open-plan eating and meeting spaces (above) along with chill out areas (below) help staff unwind yet remain productive

don’t abuse the privilege? “We believe that trusted, empowered and rested employees have a better chance of being happier and also performing better,” says Wolfe. “Our leadership team thought through the pros and cons of implementing an Open PTO programme and the benefits were overwhelmingly outweighing any cons. Ultimately, we want to create a great work environment for our employees so they can, in turn, help others find great jobs as well. “The open paid time off policy was rolled out on a global scale at Indeed, and managers were provided with FAQs and support on monitoring their team’s time off. The unlimited vacation policy also reflects Indeed’s core mission of helping employers attract the talent they need, and job seekers find work that they enjoy. “Our managers are responsible for approving time off - so we don’t really have any issues of abusing the policy. Managers and employees work together on discussing PTO and covering off on responsibilities during time away.” It seems then like a good idea,

well-executed, by a successful company. As well as the higher performance of a highly-motivated and cared-for for workforce, what other positive benefits has Wolfe seen as a byproduct of the policy? “Indeed is a rapidly growing global company,” he explains, “so like any growing company, we have to make sure we are keeping engagement high as we grow and that we don’t lose our culture and the things that make Indeed a great place to work. “Numerous factors go into this: the office environment, the kind of work staff are doing, their manager and team, to name just a few. You have to work on all of these aspects which in concert contribute to an engaged workforce. “And tenure is certainly a byproduct of motivated employees. We want to keep people that we hire with Indeed as long as we can, and motivation is critical to that. “We realise it is unlikely we will keep all of our employees for the length of their careers, but while they are at Indeed, we want them to be happy, and if they decide to leave, we want them to look back at their experience with us positively.” 35

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Can the UN and World Bank’s ‘Roadmap for a Sustainable Financial System’ lead to a brighter tomorrow? A range of commentators have mixed reviews on the potential impact of research from the UN’s top environmental body and the World Bank Group Writ ten by STUART HODGE

S U S TA I N A B I L I T Y

AXA and the United Nations Environment Program Inquiry held a conference to discuss ‘New Rules for New Horizons: Reshaping Finance for Sustainability’

SWEDISH FINANCE AND sustainability expert Sasja Beslik knows that things need to change: the status quo with the current construction of the global economy and the rate and means by which we are using the planet’s resources is not sustainable. Beslik, one of his country’s foremost experts on finance and sustainability, feels an awakening and a global 38

January 2018

recognition of the need to reshape how financial challenges are looked at is necessary to effect meaningful change and bring long-term solutions. At the end of last year, the UN’s top environmental body and the World Bank Group released a roadmap “to help governments and the private sector design a global financial system that is fit-for-purpose”. The research found that climate

â&#x20AC;&#x153; The challenge is not about what to do any more, the challenge is how to do it and how quickly you do itâ&#x20AC;? SASJA BESLIK, Head of Group Sustainable Finance at Nordea Bank

action has opened up an initial investment opportunity of $22.6trn from 2016 to 2030 and stressed how the next two years will be crucial to build on existing initiatives and finance sustainable development globally. Beslik is pleased to see a progressive move towards recognising the issues we are facing, but is adamant that this can only afford to be the mere 39

January 2018

The roadmap is built on traditional logics that are linked to alternative and innovative finance

S U S TA I N A B I L I T Y beginnings of any real progress. “The roadmap is a very good first step, but the devil is in the implementation side,” he says. “The challenge is not about what to do any more, the challenge is how to do it and how quickly. “When I started working 10 or 15 years ago, sustainability was not on the agenda in the financial sector, but now it is. We all agree that we have responsibility but now we need to figure out how to meet it.” The UN and World Bank research backs Beslik’s assertion, showing

“ The UN and World Bank roadmap for a sustainable financial system includes three major insights: a definition of sustainable finance, clear mapping and certain actions” ARINE GIRARD, Finance Professor C at Audencia Business School

that policy and regulatory measures targeting sustainability have grown 20% year on year since 2010. “I think it’s a very ambitious road map,” Beslik continues, “but a good first step. The magnitude of this transition that we need to happen in the financial sector is huge, but it’s so needed. And it needs to happen much more quickly, because while you and I can do things on a personal level to, say, reduce our private impact, we are digging a hole beneath ourselves if we don’t get financial systems to act much more swiftly on this.” But is Beslik, who works as Head of Group Sustainable Finance at Nordea Bank, surprised at how often these challenges are ignored by vast swathes of the market? “Saying we have a long way to go is an understatement, but all of us have seen more focus on sustainability within the financial sector over the last three years, purely because more players are understanding the market opportunity in this from the product side. Also I think some are feeling more pressure, both from regulators and from customers, and they think they need to take a stance on this.” Carine Girard, Finance Professor 41

S U S TA I N A B I L I T Y at Audencia Business School in Nantes, France, believes the report has provided clarity. “The UN and World Bank roadmap for a sustainable financial system includes three major insights: a definition of sustainable finance, clear mapping and certain actions,” she says. “These proposals were developed from a multi-level analysis that was international, national and marketbased. This analysis integrates not only the stakes in terms of governance, but also environmental, social and governance risks as well as We have seen more focus on sustainability within the financial sector over the last three years

January 2018

impact investing. Such an approach is designed to ensure effectiveness, efficiency and resilience. “This type of financial system makes sense because it is built on traditional and local logics using high-impact drivers that are linked to alternative and innovative finance.” Technology investor Jeff Stollman has an MA in economics and many years spent as an environmental economist, and he takes a different stance. “The concept addresses currently popular trends, but is, itself, unsustainable for a number

Proposals were developed from international, multi-level analysis

of reasons,” claims Stollman, who currently manages Rocky Mountain Technical Marketing, Inc. “A key element of the programme is redirecting negative externalities, especially environmental externalities, so that they are accounted for in the cost of production. “Problems with that could include businesses resisting adding cost to their products because it will make them less marketable, or because the redirection of externalities will be uneven across industry sectors and across pollutants and other deleterious impacts, there will be

‘ The entire financial sector since 2008 has been facing a cultural revolution needed within the industry’ ongoing crises moving from industry to industry as products that have grown costly are displaced with alternatives. “This will upset the employment market and create a significant downward shift in the value of capital assets used to produce goods 43

S U S TA I N A B I L I T Y and services that are impacted. In turn, this will cause bankruptcies of industries which are no longer sustainable. And while this will be beneficial to the environment, it will have an uneven impact on those displaced by the shrinking or closing of their employers’ businesses.” It is perhaps a change in consumer attitudes that will be necessary to effect real change, but even then Stollman points out this could be problematic. “Another issue is that one of the biggest impacts on the global environment arises from wanton consumerism: people buying “stuff” because advertising makes them want things that they don’t need. Environmentally, much could

‘ Beslik is adamant that the release of the report was a ‘crucial’ step in the hope of any meaningful move towards a sustainable global financial model’ 44

January 2018

be gained by merely reducing this surplus consumption, but doing so would cause a massive contraction of global markets. How will we keep people employed if we stop producing this surplus?” he asks. “I could go on endlessly about the deficiencies of the program, but I don’t mean to suggest that it is not worth pursuing. I just expect that the results will be mixed and the benefits will remain hard to justify.” Beslik understands Stollman’s concerns but is adamant that the release of the report was a ‘crucial’ step in the hope of any meaningful move towards a sustainable global financial model. He wants to see more guidance given to politicians to help lobby for legislative change and feels there is certainly an appetite for this. “The entire financial sector since 2008 has been facing a cultural revolution needed within the industry,” he says. “I think it now demands awareness from the top. The leaders of the big financial institutions really need to step up and show what to go for with regards to sustainability within the role of the financial sector. “Still, the majority of the financial institutions in the world do not educate

A change in attitudes will be necessary to effect real change

financial analysts and professionals with a full understanding of sustainability aspects related to their future jobs, and how the investment or lending of banking decisions will impact the societies they live in. “We need to reform the educational system, because then you get people that are educated about this in the financial system. They will embrace the change and make that change happen. “I think we are at the beginning of a very big shift, with big players getting engaged, and we see a lot of interest from customers and clients.” For Beslik, it comes down to a triumvirate of issues. “I call it a

triangle,” he explains. “You have an income inequality or income distribution on one hand. Then you have climate change as one of the sort of risks that are not related to any particular society, it’s more of a global issue. I think income inequality is also. “The third one I think is related to transparency and participation – how transparent are you about your business and the way you run it, and also how do you participate in solutions that we need as a society going forward? “I think these three things interact with each other in a very interesting way going forward, and they all demand a quite big mental shift.” 45

CITY FOCUS

JOHANNE

NESBURG AN UNTAPPED RETAIL HUBâ&#x20AC;¦ A look at Johannesburg, home of the South African stock exchange and the Chamber of Mines, a city brimming with potential for retail Writ ten by OLIVIA MINNOCK

IN THE NEWS

CITY FOCUS

January 2018

Mining in the city of gold Nicknamed eGoli (city of gold), Johannesburg is South Africa’s major commercial, financial and industrial centre. It houses the South African stock exchange, leading banks, mining companies, the Chamber of Mines, and the government regulatory agency in charge of mining. The Chamber of Mines is an employers’ organisation to serve those who work in the industry by promoting their interests. Formed in the 1800s, the organisation wants to “reposition the South African mining sector as South-Africa’s foremost industrial sector”. The Chamber is a member association of the International Council on Mining and Metals and has teams dealing with economics, employment relations, safety and sustainability, health, education, legal issues, environmental issues and public affairs. The Chamber represents companies producing around 90% in value of South Africa’s mineral production. The mining sector contributed $1.33bn to the South African economy in 2014 and employs roughly 495,568 people.

‘ A survey found that around $793mn was spent every year in Johannesburg’s CBD by cross-border shoppers, around the 53 city blocks with more than 300 shops which make up the central district’ Retail – an untapped hub? Johannesburg is also home to 10-12,000 street traders whose operations in the CBD bring in about 50mn rand in combined annual revenue. It is a major retail centre in southern Africa with people travelling from all over the region to shop there. The city is home to no less than 20 large shopping malls including the Carlton Centre, the Small Street Mall and the Hyde Park Mall. Added to that, street vendors, galleries, theatres and flea markets make it a popular destination

CITY FOCUS

‘ Johannesburg is also home to 10-12,000 street traders whose operations in the CBD bring in about 50mn rand in combined annual revenue’

BIG BUSINESS IN JOHAN for purchasing crafts, from jewellery and wood carvings to fertility dolls. Recently Dr Tanya Zack spoke to fin24.com about the potential for the city to grow even farther in the retail sector. According to Dr. Zack, the city is a hive for “low-end globalised trade” in cheap clothing, shoes and the like. A survey found that around $793mn was spent every year in 50

January 2018

Johannesburg’s CBD by crossborder shoppers, around the 53 city blocks with more than 300 shops which make up the central district. Around 70% of total shoppers were cross-border, and spent an average of $1061 on a trip including about $258 on services like transport. According to Zack, this shows “untapped potential” for the city as the

for over 150 years and was listed on the JSE in 1970. The bank operates in 20 countries across Africa and works across three areas: personal and business banking, corporate and investment banking, and liberty â&#x20AC;&#x201C; its insurance segment.

NNESBURG increased demand for services and products as well as infrastructure will lead to investment and create jobs. Standard Bank Standard Bank Group is the largest African banking group buy assets. As of year-ending 2016, it holds total assets of $143bn and employs 54,000 people. It has been around

Sasol Sasol is an international integrated chemicals and energy company which works across 33 countries employing 30,300 people. The company has a 63-year history and was listed on the JSE in 1979. Its main units include mining, exploration and production. It operates six coal mines and offers fuel for domestic and industrial use, lubricant, greases and automotive fuels. MTN Group MTN is a mobile operator which offers services to consumers and businesses. It became incorporated in 1994 and employs over 25,000 people. It also offers digital services like e-payment and apps, including MTN Football, MTN Music and MTN Play. The company has a revenue currently of $9.8bn. 51

The facts Johannesburg is the largest and fastest-growing city in South Africa, with its 500 plus suburbs stretching as far as 1,100 sq km and an average growth rate of 2.1% per year. Its population is 2.42mn making it the 126th most populous city in the world. It holds about 5% of South Africa’s total population. Johannesburg is also the legislative capital of Gauteng Province. The economy The city is one of the key contributors to the Gauteng and South African economies. Its economic growth rate is higher than provincial and national levels, but growth predictions have dropped in recent years due to high youth unemployment. The “ease of doing business” in Johannesburg has been measured as 39th in the world and 2nd in Africa by the World Bank. The city is referred to as the “economic powerhouse” of Africa and has more than one CBD, with Sandton, Rosebank and Roodepoort centres for commerce in addition to the central district.

January 2018

JOHANNESBURG FACTS

CITY FOCUS

â&#x20AC;&#x2DC; Johannesburg is the largest and fastestgrowing city in South Africa, with its 500 plus suburbs stretching as far as 1,100 sq km and an average growth rate of 2.1% per yearâ&#x20AC;&#x2122;

TOP 10

Top 10

fastest growing African economies

According to Africa Insider, these are the economies in Africa experiencing the highest increase in GDP Writ ten by ANDREW WOODS

TOP 10

=09 SIERRA LEONE www.visitsierraleone.org

=09 UGANDA www.gou.go.ug

Uganda’s economy grew by 5.3% (GDP) in 2016, which is actually a lower rate of growth than during the 1990s and early 2000s when it was developing at an average rate of 7%. Difficulties behind Uganda’s drop to joint ninth on the list have included adverse weather, civil unrest in South Sudan, global economic uncertainty and private sector credit constraints. However, the World Bank expects increased growth over the next three years.

January 2018

Sierra Leone reported 5.3% growth in its GDP in 2016 in spite of significant shocks that shook its economic foundations during 2014 and 2015, during which the nation demonstrated great resilience. The country experienced a real-term GDP swing of -20.6% in 2015 as the result of the collapse of iron ore prices and the Ebola epidemic, but the World Bank projects that Sierra Leone will continue to rebound with a 5.4% increase in 2017. This economic growth is expected to be fuelled by continued investment in agriculture, fisheries and mining. The International Monetary Fund (IMF) also predicts that Sierra Leone will continue on its upward trajectory of recovery.

07 MOZAMBIQUE

www.turismomocambique.co.mz

08 CENTRAL AFRICAN REPUBLIC

www.rca-gouv.net

The Central African Republic reported growth of 5.7% in 2016. The nation is showing promising economic growth with its first democratically-elected president, Faustin Archange, at the helm. Though economic recovery within the Central African Republic has been slower than anticipated, the World Bank expects the next few years will see increased stability and growth. Growth in exports and increases in production are expected to boost an increase in GDP.

The country has a labour force of 10.1mn and its key economic sectors include manufacturing, agriculture, tourism and finance, all of which declined after independence from Portugal was gained in 1975. The economy then picked up in the 2000s after the Mozambican Civil War. Mozambique reported growth of 6% in 2016 and a notable change was linked to the discovery of oil and gas in East Africa, but agriculture remains the mainstay of the economy, employing more than 80% of the countryâ&#x20AC;&#x2122;s workforce. Other key profitable industries for the nation include fertilisers, glass, cement, tobacco and textiles.

TOP 10

=05 RWANDA

www.gov.rw/home

=05 KENYA

www.ktb.go.ke Kenya reported a 2016 GDP growth of 6.3% and is expected to continue on its path of economic growth. Located in East Africa, Kenya enjoys a stable currency, low inflation and reasonable fuel prices. Coupled with an increase within its construction and services sectors, as well as rising incomes and a burgeoning middle class, it’s easy to see the drivers behind its upward trend.

“Four themes govern Rwanda’s push for growth and include rural development, economic transformation, employment by youth and increased productivity” 58

January 2018

Located in East Africa, Rwanda is a landlocked country with a population of 11.61mn. According to the World Economic Forum, Rwanda is among the fastest growing economies on the African continent. Its 6.3% growth in its GDP is expected to continue thanks to the country’s development goals as outlined in it Vision 2020 strategy. Four themes govern this push for growth and include rural development, economic transformation, youth employment and increased productivity.

Rwanda has a population of 11.61 million

03 SENEGAL

04 DJIBOUTI

www.visitdjibouti.dj

Senegal experienced economic growth of 6.6% in 2016. This was fuelled, at least in part, by President Macky Sall’s economic plan that includes major reforms for industries as diverse as tourism, education, financial services and energy. With a focus on improving Senegal’s productivity and increasing the country’s GDP, the plan also calls for 27 flagship projects to be undertaken.

A small port country, Djibouti’s economy hinges on services that take advantage of its strategic location at the Red Sea’s southern entrance, as well as foreign investments and financing. The GDP of Djibouti increased in 2016 by 6.5% as a result of construction, transport services and port development. The establishment of a free zone within the country, as well as the profits from a railway leading to Ethiopia, are also drivers of growth.

TOP 10

02 TANZANIA

www.tanzania.go.tz Tanzaniaâ&#x20AC;&#x2122;s economy grew by 6.9% in 2016. In spite of slumping growth in many other parts of Sub-Saharan Africa, Tanzania is expected to deliver a 7% growth in its GDP in 2017. In addition to the service sector and agricultural production delivering strong results, Tanzania

January 2018

also demonstrated an increase in the growth of quarrying and mining. Measures designed to halt corruption and tax evasion, as well as a relatively low interest rate, are other factors fuelling Tanzaniaâ&#x20AC;&#x2122;s growth.

The Ivory Coast is the worldâ&#x20AC;&#x2122;s largest exporter of raw cashew nuts and cocoa

01 IVORY COAST

www.cotedivoiretourisme.ci The Ivory Coast reportedly grew its GDP by 8.5% in 2016. The nation is led by President Alassane Quattara, an economist and former director with the IMF. According to the World Bank, the country boasts a sizable

manufacturing base and is a major exporter of oil. It is also the worldâ&#x20AC;&#x2122;s number one exporter of both raw cashew nuts and cocoa.

Brewing up economic growth in Africa Written by Dale Benton Produced by Justin Brand

FOLLOWING ONE OF THE WORLD’S LARGEST ACQUISITIONS INVOLVING SABMILLER, AB INBEV HAS SET ITS SIGHTS FIRMLY ON MAJOR GROWTH NOT JUST IN AFRICA, BUT FOR AFRICA

or centuries, AnheuserBusch InBev (AB InBev) has brought people together by brewing some of the world’s most renowned beers, including Budweiser, Corona and Stella Artois. With a footprint which spans Africa, Europe, Asia and the United States, AB InBev can lay claim to the title of being the world’s largest brewer. But the organisation has loftier ambitions than size, and a responsibility to focus on more than just the bottom line. Its vision is to generate real growth that in turn creates a better life for more people in more places, and the company is doing this by investing heavily in people and communities. This is evident nowhere more so than in Africa, where in 2016, there was a business combination between AB InBev and SABMiller, a leading brewer on the continent. As with any acquisition, changes

were made to both structure and staff complement. AB InBev Procurement and Sustainability Vice President, David Hauxwell, has been blown away by the dedication and the love for the company felt by those who remained. “We have been able to go to market and find passionate people, and more importantly, kick off our Global Management Trainee and Procurement Trainee programmes to attract and retain the best talent. AB InBev has people who really believe in this company and in the culture of what we are trying to achieve,” he said. SABMiller, founded in Johannesburg in 1895, was very much rooted in Africa. AB InBev is at the beginning of its African journey, but it can call upon more than a century of experience as one of the largest and most successful brewing companies in the world as it looks to the future.

A map outlined in barley in The celebration of the Grower’s global Appreciation Day business combination signals the company’s intent on establishing a firm foothold in the African market, not only to drive success and profit but to drive growth and create a real legacy of change across the entire continent. “We realise that to be a sustainable, futurefocused business, the resources, health and wealth of the communities in which we operate are vital,” said Hauxwell, who is responsible for leading the procurement and sustainability charge. Hauxwell, who has more than two decades of experience in the supply chain and procurement space, said AB InBev had a clear procurement

“We realise that to be a sustainable, future-focused business, the resources, health and wealth of the communities in which we operate are vital” DAVID HAUXWELL VP of Procurement and Sustainability at AB InBev

africa.businesschief.com

Visit our website for more information: convoy.ducorpgroup.com

REDEFINING VALUE LOGISTICS FOR EAST AFRICA

Fleet Network (Owned And Subcontracted): 200+ Trucks

African Countries Covered: 6

Regional Hubs: 3

Warehousing Space: 10,000Sqm

Dedicated Staff: 170+

Freight Moved: 300,000 Tons

Industries Served: 9+

Logistics Service Verticals: 11+

Convoy Haulage Limited provides pivotal transp and contract logistics solutions for many DSE lis companies, and multinationals in Tanzania who fields of beverage, tobacco, humanitarian relief, and exploration, FMCG, and industrial supplies.

We have one true goal â&#x20AC;&#x201C; to provide cost effective, efficient, agile and reliable logistics to all of our c Our road freight services include full truck load, l than truck load, domestic and transit transport, w our contract logistics services include value adde

port sted are in , mining

clients. less while ed

DELIVERING SUCCESS FOR ABINBEV services such as warehousing, distribution, supply chain management and customs brokerage services. For our clients, we provide full visibility into order status, generate performance reports, and keep scorecards of service quality which are on par to ISO requirements and Occupational Health and Safety Assessment Series (OHSAS) certified. We are also gradually increasing our offerings for customers by proposing innovative strategies to shorten the time from order to delivery, reduce carbon footprint on inbound and outbound transportation, and further work towards cost minimization on freight.

COMMITMENT TOWARDS JTI We provide dedicated trucks to TCC, with standby trucks parked for loading 24/7. We keep TCC trucks away from unhygienic material and are committed to only tobacco transport.

We work with ABInbev strategically to lower transport spend and bring innovation towards their transport requirements; tackling complex issues such as trailer modifications to increase payload and tyre modifications to increase lead times.

www.convoy.ducorpgroup.com When you navigate through the road network of Tanzania, you are bound to come across a Convoy Haulage truck, a company that was born out of a single vision to provide pivotal transportation solutions and an unrivalled commitment to the customer. Convoy Haulage was founded in 2013, focusing its operations on providing logistics services across East Africa, including entire geographical coverage of Tanzania where the company is based. Convoy’s network reach also spans up to South Africa and South Sudan, where trucks fulfil routine consignments. The company has helped deliver more than 300,000 tonnes of freight. The company has over 170 employed staff, is based at three major hubs in Tanzania, three state of the art workshops, and over 10,000sqm of warehousing facilities within those three hubs. With such a significant workforce, the company has one true goal – to provide cost effective, efficient, agile and reliable logistics to all of its clients - many who are owned and/or operated by global multinational giants. Convoy Haulage’s road freight services include full truck load, less than truck load, domestic and transit transport, while its contract logistics services include services such as warehousing, distribution, supply chain management and customs brokerage services. For its clients, many of whom are also Dar es Salaam Stock Exchange(DSE) listed, Convoy Haulage provides full visibility into order status, generate performance reports, and keep scorecards of service quality which are on par to ISO requirements and Occupational Health and Safety Assessment Series (OHSAS) certified. The company is also gradually increasing its offerings for customers by proposing innovative strategies to shorten the time from order to delivery, reduce carbon footprint on inbound and outbound transportation, and further cost minimization on freight.

Brewing success Delivering Success Tanzania Cigarette Company Ltd (TCC), a member of of Japan Tobacco International, is Tanzania’s premier tobacco manufacturer and distributor. Convoy Haulage Limited is the logistics provider for TCC’s finished goods and raw materials. Convoy Haulage moves freight for TCC throughout Tanzania and additionally in regions covering Zambia, South Sudan, and DRC.

In the company’s journey to become the premier transporter and logistics company throughout East Africa, one of the largest international companies currently operating in Africa chose Convoy Haulage as its partner of choice – the world’s leading brewer, AB InBev. With AB InBev Tanzania, Convoy Haulage was selected not only for its cost effectiveness but for its key service offerings that were customized to AB InBev’s requirements. This understanding and local touch allowed Convoy Haulage to provide true value to AB InBev, value that surpassed all expectations that the brewer had in the company.

“Convoy Haulage has delivered high quality added-value logistics solution for TCC. Convoy’s team understand and adhere to our strict SHEQ requirements and standards, and provide us with timely reports, dedicated new trucks, and cost-optimized services. Convoy Haulage is our strategic partner and we look forward to maintaining this over the years” Paskas Rauya, Logistics Manager for TCC

PATTNI FOUNDATION Each year, Convoy Haulage pre determines a percentage of turnover, to allocate towards not-for-profit initiatives through the Pattni Foundation. The Pattni Foundation is an in house grant-making foundation. The Pattni Foundation has previously been involved with projects that include: • Close and Clean Water Project which involves building of water bole holes in remote areas of Tanzania • Provision of bed sheets and pillow cases for local hospitals in Geita • Bridge2Aid Empowerment project- Training of rural Health workers • Project Shiksha – envisions aims at getting more and more students enrolled into the primary classes and to put a check to the current number of primary school dropouts

and supply chain strategy across its entire African footprint which helped to provide the best raw ingredients sourced from local providers. “AB InBev is continuously investing in a legacy which has been established through a commitment to work with local farmers, retailers and entrepreneurs to brew beer using only the best ingredients.” As AB InBev focuses on enriching the lives of local suppliers and producers, Hauxwell has overseen something of a procurement transformation in recent years. “What we see today in the procurement and supply chain space is that supply chain has taken on a much more key strategic role in an organisation like ours,” he said. “Not only are we driving efficiencies, but also leading real transformation in sustainability and entrepreneurship.” With AB InBev’s footprint covering 27 breweries across 14 countries, this strong procurement and supply chain approach is driving the top and bottom line by supporting new product development and innovation by ensuring suppliers are ready and capable. With global operations, one could be forgiven for assuming that the company applies a

“AB InBev is continuously investing in a legacy which has been established through a commitment to work with local farmers, retailers and entrepreneurs to brew beer using only the best ingredients” DAVID HAUXWELL VP of Procurement and Sustainability at AB InBev

africa.businesschief.com

one-size- fits-all mentality across its operations. In Africa, AB InBev has four different business units: West, East, Southern Africa and a standalone South African business unit, which each operate in different territories. “While there are only short distances between these units, each presents its own unique challenges. We have to tailor solutions to fit each market. What is successful in South Africa, is not going to work just across the border in Mozambique. It’s about working on the solutions that will be successful, and not solutions that look good on paper,” said Hauxwell. The key element to a successful beer lies in what is inside the bottle, and in order to obtain the perfect ingredients, AB InBev invests significant funds into African agriculture. The company views the agriculture industry as one way in which it can truly support and build local communities. John Rogers, Raw Material Procurement and Agricultural Development Director for AB InBev, said the company had a best practice mentality. “We try and apply a standard approach as much as possible across our agriculture development programmes within each market and we take a farmer centric approach - our prices will be competitive - but we also focus on driving other areas that allow the farmers we work with to be more profitable, to want to partner with us and to ultimately continue to supply us with essential ingredients.”

PHOTO (left to right): Bishen Morgan, Procurement Director: Logistics and Marketing, SAB & AB InBev Africa; Taryn Rosekilly, Procurement PPM Director, SAB & AB InBev Africa; Thabo Machethe, Procurement Director: Indirects and Commercial, SAB & AB InBev Africa; David Hauxwell, Vice President for Procurement & Sustainability: SAB & AB InBev Africa; Tsungi Mandebvu, Procurement Director: Packaging, Procurement, SAB & AB InBev Africa; David Grant, Sustainable Development Manager: SAB & AB InBev Africa; Zoleka Lisa, Procurement Capabilities Director: SAB & AB InBev Africa; John Rogers, Director of Raw Material Procurement and Agricultural Development: SAB & AB InBev Africa; and Sanjay Premraj, Supplier Development Director: SAB & AB InBev Africa

AB InBev’s procurement team

This ‘farmer-first’ mentality is evident throughout AB InBev’s entire global agriculture vision. Whether it’s in North America, Europe or Asia, Rogers points to a desire for the company to develop and maintain a hands-on approach which is vital in ensuring that the company can truly develop and grow communities. “This talks to the company’s other key growth initiative of entrepreneurship. Through a number of agriculture programmes, AB InBev ensures that it has the resources in the field to drive real value to the

grower, which in this instance are the farmers and suppliers,” he said. One such example of this is evident through the deployment of trained agronomists that are the embodiment of that hands-on approach. “These agronomists are in the field, working with the farmers, providing greater knowledge and sharing best practices,” said Rogers. “They ensure the grower has the technical resources and access to latest research they need to be more productive and more efficient.” AB InBev can promise to deliver

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Powering brewin in Africa

Vodacom takes pride in enabling ABinBevâ&#x20AC;&#x2122;s digital journey through Africa The future is exciting Ready?

growth and value to a local community and to the African agriculture space, but how does it measure that it is walking the talk? “We know we can drive tangible value within African agriculture,” said Hauxwell. “But we need to be able to demonstrate this, and we have a number of measurement and evaluation processes in place to look at who is within our growth programmes and exactly how we’re delivering that growth.” David Grant, Head of Sustainable Development: Africa Zone, can attest to this drive for growing value within African agriculture. As a brewer, sustainability and agriculture go hand in hand, as the company has a responsibility to create and foster a sustainable supply chain. “Sustainability is definitely one of the core values of our business,” said Grant. “It’s evident in a number of ways – we have grounded strategies surrounding entrepreneurial growth and development, water stewardship, circular economy and our renewable energy drive.” That renewable energy drive refers to AB InBev’s ambitious goal of sourcing all of its electricity from 100% renewable sources by 2025 and, as Hauxwell noted, the role of procurement has become more and more relevant to the

“We have to tailor solutions to fit each market. What is successful in South Africa, is not going to work just across the border in Mozambique. It’s about working on the solutions that will be successful, and not solutions that look good on paper”

DAVID HAUXWELL VP of Procurement and Sustainability at AB InBev

Established in 2001, Pride Milling is known for the production of world-class products. A dynamic company, our values have seen us grow both locally and internationally, and today we are known for our market leading quality, continued innovation and exceptional service.

TAILOR-MADE SOLUTIONS: Pride has a range of 14 superior products specifically milled to meet our customers’ individual needs, cost structures and performance criteria.

Tailored to each customer’s end use and operating parameters, our products are designed to maximize productivity and profitability in the most demanding commercial environments.

WE PRIDE OURSELVES ON: • MILLING EXCEPTIONAL QUALITY WHITE, YELLOW, GMO AND GMO FREE MAIZE PRODUCTS • PRODUCING PROFESSIONAL RESULTS • ENSURING CONSISTENT SUPPLY • STRICT QUALITY MANAGEMENT SYSTEM • EXCEPTIONAL FOOD SAFETY STANDARDS

Our extensive know-how, skill and professionalism are essential in our ability to produce consistently perfect maize products that conform to our customers’ requirements.

(Twitter) @pridemilling

Aside from our non-GMO Certification, we have also successfully obtained certification for one of the most recognised Food Safety and Quality Management Systems in the world, FSSC22000. Pride Milling are also dedicated to complying with responsible and ethical business practices and is audited against SMETA requirements.

Website: www.pridemilling.co.za

Email: info@pridemilling.co.za

FOR A CLEANER, SAFER, MORE PRODUCTIVE BREWERY, TURN TO OUR TEAM. LET THE EXPERTS AT ECOLAB keep your brewery at the forefront of quality, safety, efficiency and sustainability. Experienced, highly trained, and backed by the full resources of the global leader in water management and cleaning and sanitation, your dedicated team will deliver the proven solutions you need to:

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PROTECT YOUR BRAND. IMPROVE YOUR PRODUCTIVITY. CONTACT ECOLAB. www.ecolab.com | EcolabSA@Ecolab.com

TOGETHER WE MAKE A DIFFERENCE The need to provide a comprehensive supply chain service to clients gave rise in 1987 to the establishment of Unigrain and in 1991 Grain Carriers, a trading company and a road transport company. Unigrain Commodities was established in 2001 to service the winter grain market. Grain Logistics was a further extension of the group’s strategy to penetrate the supply chain. Unigrain Storage supply services to grain producers and grain processors to facilitate and manage grain on their own premises.

www.unigrain.co.za | info@unigrain.co.za

People management is a high priority at AB InBev company’s sustainability strategy. “Sustainability has been a buzzword for years, however our approach to tackle it is changing. Climate change and sustainability impacts everything that we do. It affects our growers, our production and the communities we operate within.” Sustainability has become even more focused under AB InBev’s global procurement strategy through the leadership of Tony Milikin, Global Chief Procurement and Sustainability Officer. There is a commitment to impactful projects and initiatives that

will make a measurable difference. With the acquisition of SABMiller, AB InBev had the opportunity to deliver a series of entrepreneurship programmes which were aligned under the wider procurement and supply chain umbrella. “Procurement holds the key to allowing entrepreneurs access to the markets they need in order to grow their business,” said Hauxwell. “As procurement professionals, we are constantly trying to figure out how we can go beyond simple price, beyond the traditional

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relationship with suppliers and for to create 10 000 jobs across me, we’ve really cracked that with in South Africa by 2022, and the Accelerator programme.” the Accelerator programme is The Accelerator and key to reaching this goal. Entrepreneurship programmes, “We understand that by creating headed up by Sanjay Premraj, and growing the suppliers, we’re Supplier Development Director creating real, meaningful jobs and Zoleka Lisa, Procurement, and in the end, a more robust Capabilities and Sustainability local economy,” said Premraj. Director, respectively, Hauxwell looks at it from create and develop a broader perspective, the key suppliers of noting that the the future which company’s entire are representative leadership team The year that of relevant across its African Anheuser-Busch demographics. zones has what InBev can be “What we have he describes as an traced back to found in Africa is that, “African dream.” while there are a number “We want to be a company of local suppliers that we can that’s growing, a company that work with, they don’t immediately is efficient, a company that people have the capabilities required to be love to work for and that makes a real a part of the AB InBev supply chain,” difference in society,” said Hauxwell. said Premraj. “The Accelerator “We want to attract suppliers and programme works with these retain them in our company, while suppliers to grow them to a point growing that community. That’s where where they can integrate seamlessly the job creation agenda fits in.” and become key partners.” As AB InBev keeps an eye on AB InBev has set itself a target building its future supply chain, “it

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AB InBev invests in many community programmes as part of its CSR strategy

also nurtures its current supply chain to ensure that the relationships we have continue to be of true benefit not only to us at AB InBev, but to the suppliers themselves,” Lisa said. A new bidding tool has been launched in the African zone for all of AB InBev’s suppliers. “We’re constantly introducing new capabilities in procurement,” she said. “As part of the new tools we are rolling out, we ensured that we went into each of our African markets to

equip those suppliers with a better understanding as to how to use the new technologies. We’re really looking at it as bringing our suppliers into the digital age by introducing them to new technologies and working with them to expand their skillsets.” This is a sentiment echoed by Premraj, who noted that the world is changing and both AB InBev and the supplier base must change with it. “Sometimes, given the geographical limitations regarding

skillset and workforce capabilities, this can prove challenging.” But that challenge is part of AB InBev’s mission to create real and tangible growth. “We want to push the change, and in many cases suppliers want to change, but don’t have the capability to do so. That’s where our Accelerator programme works to ensure longevity, relativity and helps the supplier to grow as we grow.” While Premraj and Lisa are focused solely on the African markets, creating long lasting competitive suppliers, this concept expands

“We are bringing our suppliers into the digital age by introducing them to new technologies and working with them to expand their skillsets” ZOLEKA LISA Director Procurement Capabilities & Sustainability at Anheuser-Busch InBev for Africa

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“We want to make sure that people in this continent understand that we’re here to make a difference. That we’re here to grow the communities we operate in. We truly care about Africa and we really want to grow Africa” DAVID HAUXWELL VP of Procurement and Sustainability at AB InBev

QUALITY CRATES MANUFACTURED IN SOUTH AFRICA. Chespak manufactures premium quality plastic crates, which are popular for their strength, optimal weight-bearing capacity and durability. We also have comprehensive recycling facilities and have served the beverage, bread, dairy and other industries.

chespak.co.za chespak@global.co.za

AB InBev helps populations around the world to access safe water supplies

beyond African boundaries. “We try to create world class supply and world class suppliers. It’s about creating suppliers that can compete with one another, not just in Africa but on a global scale. We want to create globally placed suppliers.” Both Lisa and Premraj worked for SABMiller and were two of many people based in Africa who embarked on a new journey as part of AB InBev. With the business combination completed in 2016, the whole African arm of AB InBev is just over a year into this new venture and as one would expect with any acquisition, there were changes.

“There was some consternation from employees as to what it meant for their futures that a big company such as InBev had come in,” said Premraj. “And while there were clear similarities and shared DNA in the two companies, of course you’re going to lose people, which is unfortunate.” “AB InBev has people who really believe in this company, in the culture of what we are trying to achieve,” said Hauxwell. “They believe in the future of this company, and the future for themselves.” Two of the people that truly embody that belief and love for what AB InBev is striving for,

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are Lisa and Premraj, who had InBev looks to drive growth and to previously worked with SABMiller. empower people and communities, Lisa, for example, had been because she has been working in Africa, shaping empowered by this and directing key merger to lead some procurement strategies exciting initiatives for SABMiller, and can post the business see first-hand exactly combination. The number how AB â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s been of Anheuser-

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Busch InBev employees

SAB entrepreneurship programme launch

incredibly interesting to be a part of this change,” she said. “The company has enabled me to work with my global counterparts, to understand and apply the best procurement practices across the two organisations globally. The concept of being an owner and dreaming big has allowed me to drive ideas that I am passionate about and that will build our business. “ As with any merger, particularly one involving one of the largest brewing companies worldwide, how much of what made it the leading brewer in Africa will still remain? “A year down the line, AB InBev has adopted or absorbed some of the best practices from SABMiller,” said

Premraj. “We operate as one company - one organisation - and we apply a set model consistently across all parts of the globe, which is made up of the best of both companies.” Hauxwell believes that the only way the company can grow in Africa is to grow Africa itself. “We want to make sure that people in this continent understand that we’re here to make a difference by growing the communities we operate in. As we progress into the future that will become much clearer and, in 10 years from now, we will be known as the best company on the continent, and the most preferred company to work in. That for me, personally, is what it’s all about. Delivering real value, and growth for both people that work within the organisation and for the communities in which we operate.”

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Convoy Haulage Limited:

FUTURE-PROOFING TRANSPORTATION AND LOGISTICS FOR TANZANIA Written by Dale Benton Produced by Kiron Chavda

Convoy Haulage Limited provides pivotal transport and logistics solutions to companies that have complex supply chain requirements and require cost-effective results

hen you navigate through the road network of Tanzania, you are bound to come across a Convoy Haulage truck, a company that was born out of a single vision to provide pivotal transportation solutions and an unrivalled commitment to the customer. That vision for unrivalled commitment to the customer is present throughout its customer base in East Africa, providing the highest quality of Scania and Mercedes Benz trucks, peerless lead times and unbeatable prices. It is a core value that has remained within Convoy Haulage as the company has grown. Convoy Haulage was founded in 2013, focusing its operations on providing logistics services across East Africa, including entire geographical coverage of Tanzania where the company is based. Convoy’s

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network reach also spans up to South Africa and South Sudan, where trucks fulfil routine consignments. The company has over 170 employed staff, is based at three major hubs in Tanzania, three state of the art workshops, and over 10,000sqm of warehousing facilities within those three hubs. With such a significant workforce, the company has one true goal – to provide cost effective, efficient, agile and reliable logistics to all of its clients - many who are owned and/or operated by global multinational giants.

THE ROAD TO SUCCESS Since its founding in 2013, when its entire operation consisted of only two trucks making in house deliveries for a sister company, Convoy Haulage’s fleet now boasts over 100 owned trucks, over 100

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‘For Convoy Haulage, there has always been one key element in the company’s growth - the people’

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subcontracted trucks, and works across a wide range of industries, from beverage to mining, tobacco to agri-businesses, humanitarian relief to FMCG, and many more. For Convoy Haulage, there has always been one key element in the company’s growth - the people. As the company has strove to provide agility, efficiency and integrity throughout such significant growth, it has not come without challenge. Throughout this growth however, a commitment to its people has seen Convoy establish a strong sense of positive synergy from top to bottom, synergy that has realised far greater results through collaborative working than the sum of individual performances. Over its three major hubs in Tanzania that spans the northern, southern and central regions of the country, the company has helped deliver more than 300,000 tonnes of freight. A crucial component that has enabled such a significant amount of haulage has been the company’s approach to client base. For its clients, many of whom are also Dar es Salaam Stock Exchange(DSE) listed, Convoy Haulage provides full

visibility into order status, generate performance reports, and keep scorecards of service quality which are on par to ISO requirements and Occupational Health and Safety Assessment Series (OHSAS) certified. The company is also gradually increasing its offerings for customers by proposing innovative strategies to shorten the time from order to delivery, reduce carbon footprint on inbound and outbound transportation, and further cost minimization on freight.

BREWING SUCCESS WITH AB INBEV In the company’s journey to become the premier transporter and logistics company throughout East Africa, one of the largest international companies currently operating in Africa chose Convoy Haulage as its partner of choice – the world’s leading brewer, AB InBev. This partnership in particular represents exactly the way in which Convoy Haulage wants to be seen as the logistics partner of choice. With AB InBev Tanzania, Convoy Haulage was selected not only for its cost effectiveness but for its key

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170+

Number of employees at Convoy Haulage Ltd

service offerings that were customized to AB InBevâ&#x20AC;&#x2122;s requirements. This understanding and local touch allowed Convoy Haulage to provide true value to AB InBev, value that surpassed all expectations that the brewer had in the company. The partnership between the two companies came at a time when AB InBev was in the midst of completing a major acquisition of the African brewing company SABMiller as it looked to solidify a footprint within Africa.

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Tanzania is one of the most remote regions of East Africa and so navigating this challenge required a logistics partner that had a key understanding of the geography and a network of high quality trucks. Convoy provides not only cost effective logistics, but works closely with AB InBev to be part of the conversation surrounding innovation and a world leading product offering. This, then, made choosing Convoy Haulage as its logistics partner a no-brainer.

CONTINUOUS IMPROVEMENT Convoy Haulageâ&#x20AC;&#x2122;s major service is the provision of economical and reliable road freight services and end-to-end contract logistics with value added services at no additional cost. The company creates long term solutions for clients who focus on growing their core business and give Convoy the responsibility to create logistics as part of their core competitive advantage. Its road freight services include full truck load, less than truck load, domestic and transit transport,

while its contract logistics services include services such as warehousing, distribution, supply chain management and customs brokerage services. Having secured a major partner, perhaps now would be the time for Convoy Haulage to take the foot off the gas? Not for Convoy Haulage; the road to becoming the premier logistics partner across East Africa is very much only at the beginning. Convoy Haulage is aggressively growing to cater to wider range of industries that have even more complex logistical demands.

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To ensure that it continues to grow, continues to push the boundaries of its capabilities and deliver key logistics solutions that fit some of the most dynamic clients, Convoy Haulage must continue to assess itself and its relationship with its partners in order to quantify exactly how, where and when it can improve. There are a number of key ways in which Convoy Haulage achieves this, using transparency and selfassessment. Convoy has invested more than $2million in state of the art workshops that ensure its trucks have zero breakdowns. The company tracks its performance heavily and provides performance reports to all clients, scrutinising its performance on key metrics such as lead times, on-trip breakdowns and delays. This is consistent with the companyâ&#x20AC;&#x2122;s promise to deliver reliable fleets and solutions that are exceptionally well maintained. That reliability and credibility is everything and it is built not only through unrivalled lead times and a strong approach to safety, but through a commitment to continuous improvement.

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THE ROAD TO FUTURE SUCCESS As Convoy Haulage continues to grow, a key element is that the company continues to test itself and seek new ways to further optimise itself in order to continue to provide service solutions for its ever-expanding portfolio of clients. Following year-on-year growth, where next for Convoy Haulage? Well, the company is integrating cloud based systems for clients to access and monitor their warehousing and freight requirements into an optimised cross solution, and the company is also working in partnership with clients to achieve joint sustainability goals that are aligned towards carbon offset programs. Innovation in service provision allows Convoy Haulage to provide enhanced agility, cost savings and new efficiencies through the supply chain, which then get transferred directly to the client. This, is what Convoy Haulage does best.

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Tanzania Cigarette Company Ltd (TCC), a member of of Japan Tobacco International, is Tanzania’s premier tobacco manufacturer and distributor. Convoy Haulage Limited is the logistics provider for TCC’s finished goods and raw materials. Convoy Haulage moves freight for TCC throughout Tanzania and additionally in regions covering Zambia, South Sudan, and DRC. “Convoy Haulage has delivered high quality added-value logistics solution for TCC. Convoy’s team understand and adhere to our strict SHEQ requirements and standards, and provide us with timely reports, dedicated new trucks, and costoptimized services. Convoy Haulage is our strategic partner and we look forward to maintaining this over the years,“ says Paskas Rauya, Logistics Manager for TCC.

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LILONGWE WATER BOARD

A STEADY SUPPLY OF PROFITABILITY

Written by Dale Benton Produced by Greg Churchill

In the small town of Lilongwe, Malawi, one water utility provider has turned around its struggling fortunes in order to serve a growing population

he Lilongwe Water Board (LWB) is mandated to provide adequate water supply services to Lilongwe City (which is the capital of Malawi) in a sustainable, efficient and customer responsive manner. That mandate covers over one million people across the city, and this is a figure that is expected to grow significantly with Lilongwe being identified as one of the fastest growing cities in the world. Come 2025, Lilongwe Water Board will need to provide water supply to more than two million people. For Alfonso Chikuni, CEO Lilongwe Water Board, part of his own personal journey when entering the company back in 2008 was to oversee and develop a transformative strategy. The goal? To create an organisation that could withstand this huge projected growth and grow as a customer oriented supplier of choice,

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“Our focus is aimed directly at customer loyalty, so that the customer should like us, we don’t want to force them to do that” ENG. ALFONSO CHIKUNI LWB CEO

Kamuzu dam 2. Water source for Lilongwe City

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but to do so against the backdrop of a struggling organisation beset by year on year financial losses. “When I became CEO, the very first step was to develop a corporate strategy in order to enable the company to grow,” he says. “We identified gaps in the plan and we developed our interventions.” This process saw the development of a transformative strategy centred A tour of the water treatment plant

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around key pillars in order to turn the business’s fortunes around and establish itself as a leading customer focused, nationally viable water board in Southern Africa. The pillars include working on the reliability of the water, a customer loyalty focus that strives for customer satisfaction, a focus on investment in order to maintain a profitable business and performance

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“When I became CEO, the very first step was to develop a corporate strategy plan in order to enable the company to grow. We identified gaps in the plan and we developed our interventions” ENG. ALFONSO CHIKUNI LWB CEO

improvement and developing the capacity of the institution and staff. These pillars are the cornerstones of the business. “They were formed to point out where each department of the organisation should focus on and improve,” says Chikuni. “Each department throughout the business has developed its own

business plans off the back of these pillars, and already we can point to clear improvements at LWB.” Turning of the tide Prior to Chikuni’s role as CEO, LWB was a struggling organisation. As it does not receive capital or operational grants from Government, with non – cost recovery tariffs,

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LWB was making year on year losses, hence the development of a new business strategy. But in the bid to turn the company’s fortunes around, financial loss was not the only challenge that needed to be overcome. “The people that work in the organisation, they have and have had a traditional way of working established over many years here,” Chikuni says. “We have put a lot of effort in over the years in changing the mindsets, the culture and attitudes and drive the change management for efficiency.” Chikuni recognises that it is not easy to transform an organisation from top to bottom and this is where key partnerships come into play. LWB has partnered with Vitens Evides International, a Dutch based water provider that works with colleague water companies in developing and transitioning countries to help expand and professionalise its operations. “They have worked with us on the change management and changing of attitudes within the organisation,” says Chikuni. A digital divide Part of this change management and transformation has been the implementation of technology into the LWB process - a strategy called Working Hard to Working Smart to address the digital divide head-on. “With technology, we didn’t want to be too ambitious, so we started slowly looking

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550 The total number of Lilongwe Water Board employees

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Tree planting exercise in March 2017 as part of catchment management

at our plant and facilities and developing technology processes into those,” Chikuni says. Vitens Evides International has played a key role in addressing this digital divide. LWB now has automatic processes in place and can access information at a single touch point, and Vitens has worked with employees to train them and adapt their way of

working to working with technology. “Vitens has played a huge role in getting to where we are today from where we were,” Chikuni summarises. That position today is one that Chikuni and the entire LWB organisation can be proud of. The organisation was recently named the African Utility of the Year at the African Utility Week 2017 – placing

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Best public service delivery award for 2016. Eng Alfonso Chikuni holding the trophy

LWB not only on the same platform as leading African utility providers, but standing tall above them. “It’s incredible and so much more than we could have ever imagined,” says Chikuni. “But, and this is important, it means we can’t go back. The effort to sustain this position should be so much more than what we did to get here. We should extremely hard to maintain the status quo and continue to improve.” The award is a testament to the complete scale of the transformation

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of LWB, but it is also highlights the company’s focus on one of the four key pillars – customer satisfaction. “Our focus is aimed directly at customer loyalty, so that the customer should like us. We don’t want to force them to do that,” he says. Through this, LWB has created more opportunities for the customer to engage with the organisation. It has eased and minimised the effort for customers to access the company’s facilities, including electronic payments

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“We will see an organisation that is fully developed and achieving greater efficiencies. We want to be a leading, customer focused, nationally viable water board not only for Lilongwe, but nationally across Southern Africa” ENG. ALFONSO CHIKUNI LWB CEO

through banks and mobile applications. “We are changing our systems and thinking about how we can help customers come to us, but also how can we go to customers,” says Chikuni. “We are creating a 360-degree feedback loop, and through our work on the digital divide we will only continue to enable customers to be more in tune with the organisation and vice versa.” The steady flow of success LWB has come a long way over the last three years, but the overall transformation strategy is still in its infancy – there is a long way still to go. For Chikuni, his eyes are well and truly on the present, continuing the hard work that has enabled the organisation to become the beacon of success it is today. But he is all too aware, as a governmental organisation, that leadership will change and the strategy will change with it. “In five years’ time, the water board will change. So, there will be new initiatives and new programmes,” he says. “We will see an organisation that is fully developed and achieving greater efficiencies. “We want to be a leading, customer focuses, nationally viable water board not only for Lilongwe, but nationally across Southern Africa.”

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