April 2011 by Business Excellence Magazine

Businessexcellence ACHIEVING

APRIL 2011

O N L I N E

The backbone of

www.bus-ex.com

construction Emirates Steel is increasing productivity as construction activity regains momentum

Editor’s letter

Againstthe

grain

EDITORIAL

Managing Editor Becky Done bdone@bus-ex.com Editor In Chief Martin Ashcroft mashcroft@bus-ex.com

DESIGN

Production/Creative Director Zachary Smith zsmith@bus-ex.com Production Design studio@bus-ex.com

This month we turn the spotlight on companies proving that going against the grain of current thinking can be the best way of doing business—for staff, investors and the wider stakeholder community. MEO Australia puts more emphasis on creativity than you might expect from a player in the hydrocarbons industry. “Strategically, we search out angles to apply a different perspective to challenge prevailing paradigms,” explains Jürgen Hendrich, CEO and MD. “This is what differentiates us: we look for opportunities that others don’t see. As a company, we want a footprint in areas that are neglected, tired or overlooked where we can apply our technical imagination to create value.”

BUSINESS Director of Sales Sean Brett sbrett@bus-ex.com

Hendrich goes on to say: “Ultimately to be relevant as a business, we need to deliver value not only for our shareholders, but for all stakeholders.”

Sales Manager James Martin jmartin@bus-ex.com

South Africa-based mining investment company Village Main Reef has a similar view on stakeholder relations. “If any one stakeholder is exploited at the expense of another, it hurts everyone,” states COO Dorian Wrigley. “Unless communities, staff and shareholders all benefit, the asset will never be sustainable and reach its optimum value.”

Assistant Research Directors Vincent Kielty vincent@bus-ex.com Sam Howard showard@bus-ex.com Richard Halfhide rhalfhide@bus-ex.com Robert Hodgson rhodgson@bus-ex.com Administration & Operations Alice Doran adoran@bus-ex.com Chief Executive Andy Turner info@bus-ex.com Subscriptions info@bus-ex.com

Infinity Business Media Ltd Suite 22, St Francis House Queens Road Norwich, NR1 3PN UK Tel: +44 (0) 203 137 7100 Fax: +44 (0) 1603 666466

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Wrigley believes that the old mining mindset of emphasising large, centralised corporate structures is becoming outdated. “Each asset we hold is to be operated in a self-sustaining entrepreneurial way and each has to be sufficiently robust and commercially viable to stand as an independent entity. This may go against the grain of current thought, but we do not believe that large corporations are necessarily the most efficient way to build stakeholder and shareholder value in the long-term,” he concludes. It is Wrigley’s view that the benefits from economies of scale which large organisations produce initially are steadily eroded over time. That’s certainly food for thought.

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Contents STRATEGY:

Making mergers work

If the numbers stack up, why do so many mergers fail? Hereâ&#x20AC;&#x2122;s what every CEO should know before embarking upon a merger or acquisition.

OPERATIONS:

Communication overload

Companies should be aiming to get the most out of the increasing number of customer communication channels.

SUSTAINABILITY:

The power of power management

Developing a power management strategy can save you time and money, and provide a boost to your green credentials.

Eskom: Power Delivery Projects Super highway for energy

The building and refurbishment of transmission lines and substations in South Africa supports the countryâ&#x20AC;&#x2122;s plans for economic growth.

Emirates Steel

The backbone of construction

In line with the global drive towards self-sufficiency, efforts are being made in Abu Dhabi to become selfreliant in reinforcing steel production.

Jindal Drilling & Industries Limited Partner of choice

Teaming up with a preferred partner can be of great benefit to oil and gas companies hoping to create a footprint in India.

12 18 26 32 50 64

Contents Rajhi Steel Industries Reinforcing growth

This market leader in Saudi Arabia is turning out more than one million tons of steel products every year.

Oberoi Group Indian icons

This hotel group prides itself on offering superior service and first class hospitality from a variety of breathtaking locations.

Casinos Austria International: Viage Everything under one roof

Targeted marketing and a sophisticated choice of entertainment options is helping to change perceptions of casinos in Brussels.

National Airports Corp. Ltd of Zambia The gateway to Zambia

Improving Zambiaâ&#x20AC;&#x2122;s four most important airports is creating a gateway to the nation and a lasting impression for visitors.

Port of Port of Spain A growing port

Cruise ships are important to the Caribbean islands, but Trinidad & Tobago has seen a huge growth in cargo.

Mauritius Ports Authority Setting sail

Port Louis Harbour in Mauritius has been transformed over the past decade into a world class shipping facility.

72 82 96 108 118 128

158

Contents Sumo Coal

Fuelling the future

Coal has a much bigger role to play in South Africa’s future than simply meeting the country’s energy requirements.

Village Main Reef

A touch of alchemy

Avoiding a large, centralised corporate structure in favour of an independently minded, agile model can deliver greater long term value.

MEO Australia

The wonder of discovery

Creative thinking is crucial to the process of building value through the exploration and commercialisation of hydrocarbon resources.

Zinkgruvan (a Lundin Mining company) Seeing daylight

Sweden’s southernmost base metal mine celebrated the end of 2010 with the completion of two vital projects.

Zimplats

Expanding potential

During its nine years in operation, the total investment made by this company has set it apart as Zimbabwe’s number one investor.

Tobacco Processors Zimbabwe Back from the brink

Zimbabwe’s largest processor of green tobacco leaf will play a big part in this year’s forecast rise in tobacco sales.

140 150 158 166 174 184

192

Contents

Royal Swaziland Sugar Corporation Against all odds

One of Swaziland’s largest companies produces two-thirds of the country’s sugar, and is of great importance to its economy.

Dimension Data

Building solutions

Linking together the various elements of computer networks isn’t easy; but with the right approach, it can look that way.

Bytes Document Solutions Brand power

Following success and with a strong market share in Southern Africa, this Xerox distributor is seeking opportunities further afield.

192 200 212

Making mergers

If the numbers stack up, why do so many what every CEO should know prior to emb 12

April 2011

Strategy

work

y mergers fail? Phil Dunmore outlines barking upon a merger or acquisition

April 2011

ergers and acquisitions are up year on year, quarter on quarter and month on month. Looking ahead the trend remains positive, with financial services, pharma, transport, media and IT to name but a few sectors all expecting further consolidation this year. But value is destroyed as often as created when two companies come together. That’s a huge risk to throw into the corporate mix, particularly during such uncertain economic times, so why would any CEO ever give the green light? The reason is that everyone believes that theirs will be a successful venture. If the numbers are right, success will surely follow? Well, not really. Putting together ‘the deal’ and executing it effectively, even if the numbers look stellar, is only one of many battles. Experience dictates this is not where the war will be won or lost. Success is about minimising the downstream risk, and this is about planning. The best planning follows a basic route map and starts when the

April 2011

board first decides it wants to wade in to M&A waters—what kind of target is ideal? Is the motivation knocking out the competition, filling in skills and product gaps, entering new territories or acquiring technology? Or is the deal opportunistic? Clarity of purpose now will make the process infinitely more likely to succeed. On identifying the target, a business, together with its advisors, will start due diligence. Nothing is assumed about the target, every detail is checked from a financial and IT audit to staff contracts, corporate reputation, buildings, leases, pipeline both near and far, and a skills audit of staff. Finding the gremlins now will save money later. But there’s another sort of planning that is often overlooked: planning how your team is actually going to bring the two entities together— on time, on budget—ensuring the value is physically realised, not just a remnant on the acquisition proposal for shareholders to beat you with.

Strategy

April 2011 15

Once a deal is accepted, detailed plans for integration, fully costed and resourced, must be drawn up. Ideally, an experienced senior executive will be put in charge to liaise across the two companies’ departments. Without the right leadership it will be nigh-on impossible to motivate staff, drive through 30-day, 60day, 90-day and 180-day plans and prevent long and difficult delays to integration that so often destroy value. In successful projects, this person is often a consultant—an independent, experienced decision maker whose only vested interest is making the deal work. Their experience will help smooth the way and their independence will reassure staff, but whoever is in charge, they should follow five basic principles of integration that will heavily influence the outcome. 1. Keep a sharp eye on the performance of the main business. Sounds simple, but neglect here is so often the root cause of integration failures, resulting in a fall in business as clients are neglected and defect to the competition. Keep sales teams motivated and clients informed during the process—and monitor KPIs closely be they daily, weekly or monthly. If something appears to be going wrong, address it immediately to get it back on track. 2. Integration versus optimisation—no contest! Integration must be the priority and should only be eclipsed by KSoR (keeping the show on the road) or mandatory imposed change. This is not the time for fixing every operational issue or pandering to internal pressures to add functionality or structures, but for finding ways to take complexity (and change) out. 3. Do not strive for planning perfection... it will never be achieved! Aiming to create an integration plan that answers all of the

April 2011

questions before the organisation moves into execution will just result in delays and prolonged debate. Events will occur that, no matter how long you take in planning, you will never predict. The level of success will come down to how the organisation navigates through these points of pain. 4. Single accountability and dedicated focus on delivering integration. Whoever is in charge must be accountable and have direct access to the board. Managing the delivery of a successful integration (or any major change programme) is not a part-time activity nor is it for the uninitiated. A dedicated, experienced team will inject speed to decision making and create the relentless focus on the end game. 5. Manage the market and communicate like mad! The post-acquisition world is alive with uncertainty for both the external market and the enlarged organisation. This is the time to ‘up the ante’ on communications, increasing the frequency of updates to clients and staff; ensuring key third parties are clear on their roles in the integration process; and keeping the myriad of interested bystanders including the media and city analysts on your side. Across all of these groups, you must constantly communicate the logic of the acquisition, the integration plan and its progress. The importance of this cannot be overstated! Of course there is no ‘one size fits all’ model to integration; but success is closely linked to keeping sight of the above principles. When the one leading the business does so, the chances of unlocking the potential and creating value from the deal is maximised. Give it the green light! BE Phil Dunmore is managing director, UK & Europe, at PIPC, a leading project and programme management consultancy responsible for some of the largest business transformations and post-acquisition integrations in corporate history. Founded in 1992, the firm operates globally from 14 international offices across over 25 countries. www.pipc.com

Strategy

Putting together â&#x20AC;&#x2DC;the dealâ&#x20AC;&#x2122; and executing it effectively, even if the numbers look stellar, is only one of many battles. Experience dictates this is not where the war will be won or lost

April 2011 17

over

Communication

Marlon Bowser, CEO of HTK, looks at how com out of the increasing number of customer com

April 2011

Operations

load

mpanies can get the most mmunication channels

April 2011

ew would argue that over the last decade there has been a communications revolution. The explosive growth in web use, email and the whole range of mobile communications has given businesses the potential to dramatically improve the way they interact with their customers and increase satisfaction and brand loyalty. In a recent Forrester Customer Experience Survey, customer experience was rated as more important than low prices across all 12 sector categories, from banking and insurance to PC manufacturers and service providers. But it is not just about customer service: businesses should be making use of these channels to promote new products and services to increase revenue. The problem is that all too many companies are not only failing to grasp the opportunities that these communication channels bring; but they risk irritating and alienating customers by getting it wrong or simply not being equipped to handle so many contact methods. The result is disjointed, unpredictable and unreliable communication on all fronts. Maybe this is not surprising with so many ways for customers and businesses to connectâ&#x20AC;&#x201D;email, web forms, social media forums, instant messaging, Twitter, SMS and of course the old faithful phone, fax and post. Each of these has the potential to shape and change the all-round customer experience in an instant. For example, itâ&#x20AC;&#x2122;s great to send a customer a tailored offer via email that has been cleverly based on their recent buying habits; but if they end up on hold for ages or there is no record on the system when the customer calls, all that hard work is for nothing. In fact, it is likely that the customer will be less loyal that they would have been had they never received the special offer. So what needs to be done to avoid mistakes and take full advantage of this new world of choice and instant communication? One problem is that the increase in the number of new customer contact points has meant that many organisations are struggling to provide a seamless and personalised service because their CRM solutions are simply unable to cope. At the same time, tech-savvy customers have become increasingly demanding, expecting far more from their interaction with a brand. The younger generation in particular know how to use communications technology so expect a more immediate and far richer, personalised experience from the companies they deal withâ&#x20AC;&#x201D;and rightly so. What is lacking is true integration between the communication channels and CRM systems. While

April 2011

Operations

April 2011

most companies have the ability to send and receive messages in a variety of ways, they work independently of each other. Knowledge captured by a CRM solution needs to be harnessed and used dynamically to deliver highly tailored, targeted multichannel marketing and customer service, every step of the way. In fact, it is possible to use the information held within an existing CRM system to personalise each and every customer interaction. And by acknowledging customers as individuals and treating them accordingly, negative experiences can be avoided. Instead, positive emotions such as feeling valued and cared for can add to a positive experience and enhance loyalty. The problem is that most CRM solutions are designed to capture and analyse information and ensure maximum efficiency in dealing with and managing customers. They are not designed to support direct interaction with customers. So, while CRM systems can help to get things operationally right, they do not look at the wider issue of improving the whole customer contact experience. One of the most important and seemingly simple things to get right is to understand how customers want to be contacted. But all too often, companies just pay lip service to this. They ask the question and then file the answers neatly away in a CRM system before emailing everyone, just because it’s quicker and easier that way. Rather than expecting customers to fit around the way an organisation does business and communicates, these processes should be, where possible, automatically adapted to meet individual customers’ needs. Knowing how, when and why customers want to interact and acting upon this information is extremely valuable. Having to tell a customer ‘the computer says no’ is simply not an option when they have asked what seems to them a

April 2011

Operations simple request, such as a ‘could you text me to remind me about my delivery’ or ‘please don’t call me’ email. To get the most out of CRM data, there has to be a further link. It has to be opened up to all of the people and systems across an organisation that has any customer contact. But this can take a serious amount of time as well as money, and also presents significant operational challenges in terms of performance, governance and day-to-day control. What’s needed is a secure and controlled environment that can make CRM data readily available to customer service, marketing and other business departments, on demand—in essence, agile CRM. By making CRM flexible and integrated with communication channels, new and improved business processes for improving customer interaction can be rapidly tested and operationally deployed, without the risk of disruption to existing systems. A new generation of multi-channel marketing and customer service automation solutions, such as HTK’s Horizon platform, help to unlock the customer interaction potential of CRM, enabling a more personalised approach to customer service and marketing automation. With the sheer volume of incoming communications, many businesses find it hard to differentiate between important calls and messages that need to be actioned immediately and those that have a lower priority. For large customer-facing organisations in particular, it is important to automatically recognise incoming customers along with their value and nature of the contact, be it an ongoing complaint, service renewal or late bill payment, for example. In the case of an inbound phone call, it should route them automatically to the right person, avoiding leaving them frustrated because they are waiting in the queue or navigating IVR menus. This streamlines the process and prevents wasting the valuable time of both the customer and the service operators. For utilities and telecoms providers, it is also possible to use the same technology to play automated messages to update customers calling from a particular location that has been affected

April 2011

Operations

Knowing how, when and why customers want to interact and acting upon this information is extremely valuable

by a service outage, for example. The system can also intelligently ‘guess’ the most likely reason for a call if customers have just been sent their bills or specific personalised marketing promotions. Email and SMS messages can also be routed automatically based on knowledge built up about the customer. This makes customers feel valued and important. There is nothing more frustrating than getting the impression the company you have given your business to knows nothing about you. With so many communication options, it is also essential to control the sequencing or interaction between different channels. An SMS that was sent after an email may actually be read first; or a phone call could be made before an earlier email has got to the right person or department. This not only leads to confusion and wasted time but may well end in the loss of the customer altogether if there is no knowledge of order between disparate communication systems. But by bringing it all together into one multichannel platform, this can be easily achieved. In the past, poorly executed automated communication technology has earned itself a bad name: obvious examples are spam emails, outbound voice marketing and complicated ‘press 1,2,3’ menus that seem to bear no relation to what the call is about. However, these technical capabilities that were originally introduced to cut costs can actually help deal with the communications overload and improve the entire customer experience. Instead of a random, obtuse email, how about a timely email with options when the customer’s contract is about to end; or an outbound message to let them know that their train is running late and an IVR menu that immediately offers to route them where they want to go? Suddenly, it’s a whole different picture; and it’s even better when the outbound method of communication is the one the customer chose in the first place. It is only by integrating all customer communication into one cohesive platform integrated with CRM systems that businesses can truly harness the enormous potential of advances and variations in the communication channels. Once that is achieved, it is possible to personalise interaction to keep customers satisfied, deliver a whole new level of customer engagement and gain a competitive edge. www.htk.co.uk BE

April 2011

The

powe pow man

Nick Cavalancia, vice pres ScriptLogic, explains how strategy can save your bu providing a welcome boos 26

April 2011

Sustainability

er of wer

agement

sident of Windows Management at developing a power management usiness time and money, as well as st to your green credentials April 2011 27

ith World Earth Day approaching, businesses should need no reminder that going green can actually help support other strategic directives within the company. The UK’s Carbon Trust estimates that in just one weekend, organisations will waste over £2 billion from poor energy efficiency, with the average office wasting £6,000 a year just from leaving equipment such as servers and PCs on—which is equivalent to 26.7 million tonnes of CO2 needlessly emitted every year, or 73,000 tonnes a day. Companies throughout the UK are increasingly embracing green initiatives, from adopting recycling policies to reducing paper consumption—and while power management has become a key component of their eco strategy, there is a still a need to do a great deal more. The double economic downturn and the ensuing mass cuts across the board between 2009 and 2010 highlighted how organisations need to look at how they can do more with less money and resources, where money is being wasted, and how to take better care where this could really have a knock-on effect.

April 2011

Sustainability

April 2011

One of the easiest ways to lower energy costs, and directly influence an office’s energy bill, is to develop a power management strategy. Windows operating systems as early as Windows 98 offered built-in power management capabilities at varying levels, and today most major PC manufacturers’ products are ENERGY STAR compliant. With the need for more money, it is surprising to see the inefficiency in not implementing power management tools sooner— procrastinating over centrally configuring Windows desktop power management could be because the benefits have not yet been fully recognised. Possible methods of power management (and reasons why these methods are not often used) include: Exercise your IT Team: Manually visiting each PC to ensure that it is turned off at the end of the day. Aside from being time consuming, this method lacks the ability to have the power management settings changed based on who logs on to a given machine, and there is no way to ensure consistency across the enterprise. Group policies: With some work, administrators can develop group policies to initiate power management. But filtering the type of power management policy that users receive and creating exceptions is very difficult, and there is no ability to send warnings to users before taking power management actions. But help might already be at hand. IT administrators may not realise it, but the software they use on a daily basis as a desktop configuration platform can also be used to create policies to enforce power management. Solutions that offer power management capabilities allow administrators to easily create, modify or remove Windows power schemes, giving them centralised

April 2011

control over laptops, desktops and servers. Power saving options such as standby/hibernate and those that turn off monitors and disks all add to the savings for both the environment and office operating costs. These settings make it possible for organisations to establish power settings across the board, ensuring each and every desktop is participating and saving money. Additionally, software-based inactivity timers can be used to watch for inactivity and lock, log off, shutdown or restart the PC as needed. An example of a company using software to implement a power management strategy is that of the US-based high school, Walla Walla, in Washington, which has more than 1,800 students enrolled in classes each year. Dennis DeBroeck, network administrator at Walla Walla, is not only responsible for overseeing the IT management of more than 35 computers accessed by 120 students, but he also teaches computer technology and media technology & animation classes. For each class, students at PC workstations run applications specific to that curriculum and have complicated and demanding requirements. With the demand for the classes rising, DeBroeck’s IT management challenges were extensive. DeBroeck spent hours hand-writing scripts and managing policies to address everything from drive mappings to registry changes to application rollouts, ensuring each student would have access to the correct files, folders and programs at log-on. DeBroeck now uses a ScriptLogic power management solution to conserve energy, and is able to create and modify Windows power schemes, giving him centralised control over student desktops. Power saving options such as standby/hibernate and those that turn off desktops result in significant energy savings. The software monitors inactivity and will lock, log off, shutdown or restart as needed, even if students are not logged on, so DeBroeck can monitor machines after the school day ends. In addition to the conservation of energy, power

Sustainability

management of only 28 desktop computers has helped the school save more than $2,000 each year. More savings would be expected as the schoolâ&#x20AC;&#x2122;s IT network expands. At the end of each month, DeBroeck can print out a report on how much energy the classroom has saved and share it with the school districtâ&#x20AC;&#x2122;s energy manager. In conclusion, IT administrators should be implementing greener initiatives that can offer immediate energy and cost savings, while thinking about long term, cost effective methods that will save money and reduce their carbon footprint in the future. A simple power management solution is just one of the ways in which organisations can complement a greener initiative. If businesses take heed now and invest in the short term, they will ensure better benefits and success for years to come. Headquartered in Boca Raton, Florida, with offices around the world, ScriptLogic provides solutions in the areas of desktop, help desk, active directory, server and network management. For more information, please visit http://www.scriptlogic.com. BE

April 2011 31

Super highwa for

energy

With Eskomâ&#x20AC;&#x2122;s New Build Programme forging a acting general manager for Power Delivery Pr for the building and refurbishment of transmi

April 2011

Eskom: Power Delivery Projects

r ay

ahead, Jeff Daniel talks to Johan Bornman, rojects (PDP), the Eskom department responsible ission lines and substations in South Africa April 2011 33

DP was established in 2005 and is divided into four portfoliosâ&#x20AC;&#x201D;three based on geographical coverage: Northern, Central and Cape, and the fourth responsible for the new 765kV integration. This includes the integration of the new power stations into the national grid. PDP builds lines and substations and refurbishes others; it also has the task of building the popular 765kV transmission network, which will benefit the transfer of power from Mpumalanga down to the Western Cape. The main focus is on 400kV and 765kV with also some 275kV lines. There is also major power stations integration, including the Medupi, Kusile and Ingula power stations.

April 2011

By increasing the potential of the transmission line to 765kV, the network operates more efficiently

Eskom: Power Delivery Projects

April 2011 35

Eskom: Power Delivery Projects This department is entrusted with a massive budget stretching to tens of billions of rand, all in different phases of development and execution. PDP is currently working on 22 projects and schemes in execution on 51 sites around the country. The department has a total 209 permanent staff, complemented by the contractors total personnel pool of approximately 4,300. The number of sites will increase to about 80 sites at the end of 2011; and personnel will also increase to between 7,000 and 8,000. PDP prides itself on its mottos: “Passionate about safety; deliver and celebrate success” and “Powerful team—aligned, cohesive and fearless”, ensuring that Eskom stays recognised as one of the top utilities worldwide. Since inception, this department has built 3,103 kilometres of lines and

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April 2011

Eskom: Power Delivery Projects

15,670MVA as at the end of January 2011. Power transmission is the movement of electricity from the point of generation to a substation from which it can be distributed to consumers. The focus is on SA grid code compliance and to ensure the country has an uninterrupted power supply to support mines and industry, rural development, government objectives for growing the economy, job creation and domestic customers. The ultimate objective is to ensure excellent customer service. Acting general manager for PDP Johan Bornman explains: â&#x20AC;&#x153;Normally, long distance transmission networks operate at 275 or 400kV but the further you go, the greater the loss of power. By increasing the potential of the transmission line to 765kV,

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the network operates more efficiently. Itâ&#x20AC;&#x2122;s an expensive exercise because everything needs to be built on a much larger scale and itâ&#x20AC;&#x2122;s the sort of solution only justified where particularly long distances are involved or where a huge quantity of energy needs to be transmitted. To the best of our knowledge, we are one of only seven countries in the

April 2011

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world that utilises the 765kV platform extensively.” Everything about a 765kV transmission line is bigger and more costly than at 400kV, but it’s a system that does offer real economies of scale. The towers stand higher and wider but can transmit more than three times the amount of energy. “With 765kV,” says Bornman, “the three phases need to be held almost twice as wide as 400kV with regard to air insulation. Each phase has six 27mm diameter steel cored aluminium conductors in a hexagonal configuration, and it’s been calculated that the total amount of cabling strung over the last three years—just over 1,100 kilometres—would stretch halfway around the world. The balance of the 3,103 kilometres was done of 400kV and 275kV which makes up for stringing conductor around the other half of the world. Thus we have now gone around the world with all the conductor strung to date.” On the 765kV, the balance of the 1,800 kilometres is due for completion by 2013. Along the route there are a series of strategically placed transmission substations where the load can be distributed to centres of activity where it’s needed. The increase in activity in PDP has been truly staggering, doubling each year since the department was formed in 2005. However, just like in any project environment, PDP is faced with some challenges which

SOS Industrial Electronics SOS Industrial Electronics has been supplying various divisions of Eskom for the last 25 years. Our main product line is AC power supplies, DC-DC converters and DC distribution panels. We have the ability to design and manufacture equipment for special applications. In addition we hold ISO9000:2008 rating and are a level one B-BBEE contributor.

April 2011

Eskom: Power Delivery Projects

include servitudes acquisition and environmental issues. These possible delays are mitigated through the application of different procurement strategies, ensuring the deployment of more contractors and resources allocation. If this is done, there can be a depletion in the number of contractors available for the remaining work. PDP has realised this risk and proactively started three years ago with a Lines, Civil and Electrical Construction Forum, where all vendors are informed about new project releases and enquiries that are forecasted. This ensures a sustainable platform is built where growth is triggered in the construction industry through active partnering. This kind of workload impacts throughout the chain of command, as there is a direct correlation

between the amount being spent and the number of individuals needed to work on the project. Bornman and his team maintain a close partnership with these contractors. “With such a workload,” he says, “coupled with a general skills shortage, all those involved need to plan ahead to avoid skills shortages.” In terms of the projects synopsis in this five year window ending 2013, the transformers capacity installed will reach 20,600 MVAs. In total, the transmission lines will total 4,000 kilometres. It is also important to note Eskom itself does not construct the line but carries out detailed design and procurement and management

April 2011

Eskom: Power Delivery Projects

functions. In order to save costs, Eskom procures all its conductor, hardware and insulators to be used by various contractors. “Our role is to design, procure and manage,” Bornman says. “In line with our contracting strategy, we put together a complete bill of quantities and construction package that specifies all the necessary details for the construction tender. The actual supply and construction of the transmission line and substation work is left to specialist contractors.” With much of the work on the 765kV lines being carried out at heights of 50 metres, there is a greater risk of accidents and injuries. Therefore great emphasis is placed on working with contractors to ensure that they carry out the proper procedures and supervision of work so that incidents are avoided. “At some point our LTIR ratio (lost time incident rate) was unacceptably high. We have a target of 0.4 and at its worst the figure hit 0.74. However, through hard work and partnerships with our contractors, the efforts we have put in are bearing fruit as the current figure is down to 0.3. This is testimony that safety is a priority in all our projects.” A number of innovative proactive measures were taken. PDP has formed a Contractor SHEQ Forum with the whole construction industry,

April 2011

Eskom: Power Delivery Projects

where the industry is informed about the detailed requirements, latest developments and strategies being developed. This is done quarterly. PDP has actively formed working groups with the construction industry in developing strategies and solutions for

issues like sub-contractor management, training due to language barriers, supervising skills, design for safety and risk assessments. In addition, through reviews and utilising panel interviews, PDP interacts with the worst

April 2011

Eskom: Power Delivery Projects performing contractors to establish solutions for a turnaround. Apart from focusing on making sure that new transmission lines and substations are built, PDP, together with its contractors, always gives back to the communities. A number of corporate social investment projects have benefited communities and improved the lives of local people. PDP constantly partners with contractors to identify needs in rural communities, with initiatives executed through the contractors. Bornman concludes: â&#x20AC;&#x153;This is part of the legacy to South Africa that our teams are delivering. These projects are in the interest of the country and we have the duty to execute them in a professional and safe manner, building Eskomâ&#x20AC;&#x2122;s image and reputation.â&#x20AC;? www.eskom.co.za BE

April 2011

The backbon of

constr

With the global drive towar pace, Jeff Daniels looks at Dhabi to become self-relian

April 2011

Emirates Steel

ruction

rds self-sufficiency picking up the efforts being made in Abu nt in reinforcing steel production

April 2011 51

or years now, Abu Dhabi has been the sand-pit for the world’s biggest names in architecture. There can’t be many other places on earth that can boast the variety and quantity of groundbreaking buildings as this Middle Eastern city. Look at the architectural magazines and it could be that even more wild and wonderful designs are yet to come. The one thing that they all have in common is their utter dependence on copious quantities of reinforcing steelwork; and more than half of all steel used in their construction comes from Emirates Steel. Some of the landmark projects Emirates Steel has contributed to are the Emirates Palace Hotel in Abu Dhabi, the Corniche Development project, the Dubai Airport Expansion project, the Dubai Marina Towers, Shangri La Hotel in Dubai, the Four Seasons Hotel in Doha and water and power projects in Sharjah and Fujairah.

April 2011

Although some stability is returning to the GCC’ construction sector, with signs of a recovery alrea showing for 2011, we be that infrastructure projec accelerate the region’s in the next couple of ye

Emirates Steel

â&#x20AC;&#x2122;s h ady elieve cts will recovery ears April 2011 53

April 2011

Emirates Steel

Apart from focusing on domestic markets, we have exerted sustained efforts in increasing exports to regional markets, mainly Saudi and Qatar

Formally known as Emirates Iron & Steel Factory (EISF), Emirates Steel is a direct subsidiary of Abu Dhabi Basic Industries Corporation which is, in turn, wholly owned by the General Holding Corporation (GHC). The plant is strategically located at the recently developed Industrial City of Abu Dhabi, 35 kilometres from the heart of Abu Dhabiâ&#x20AC;&#x2122;s residential and commercial quarters. Established just 10 years ago in 2001 to satisfy the growing demand for quality steel products for the fast developing construction sector, the complex is the largest steel plant in the UAE, utilising the latest rolling mill technology to produce reinforcing bars (rebar) for the construction industry. In fact, Emirates Steel is the only significant domestic supplier of deformed reinforcing steel bars. EISF was initially designed to have a rolling mill capacity of 500,000 tons of rebar per year. But when Emirates Steel acquired the assets and business of EISF, the plant quickly ratcheted up to full speed during the boom years of 2005 and 2006, and everything being produced was quickly bought up by contractors within the UAE. It soon became clear that Emirates Steel would need to increase capacity; and various stages have been both completed and planned. Currently Emirates Steel has a finished product capacity of two million metric tons per annum, which will rise to three million in early 2012 as part of its AED9 billion (US$2.45 billion) phased expansion plan. The many strategic alliances that Emirates Steel has established with leading technology providers, coupled with its state-of-the-art facilities, are expected to maintain its position at the forefront of the industrial sector. The economic woes starting in 2008 put the brakes on construction activity but there are currently indications that the worst is over. Sales figures released in January registered

April 2011

an increase in finished products production of 17.5 per cent in 2010 compared to the previous year, while sales increased significantly, by 120 per cent. Break the figures down further, and it can be seen that reinforcing steel bar production was up 7.5 per cent and output of wire rod up by a significant 64.5 per cent. All told, billet production increased by 150 per cent in 2010 compared to the last three quarters of 2009. Further productivity increases achieved by Emirates Steel saw production of direct reduced iron (DRI) up by 640 per cent in 2010, compared to the last quarter of 2009. The plant’s Melt Shop commenced production in March 2009, while the Direct Reduction Plant was commissioned in October 2009. In order to fulfil its ambition of becoming one of the leading regional companies in the steel making industry, Emirates Steel is working

April 2011

on eliminating bottlenecks in production. Like any other steelmaker, facilities are operated at near or full capacity in order to maximise profits. As well as the local market, Emirates Steel also has existing trading links with Jordan, Saudi Arabia, Kuwait, Oman, India, Pakistan, China and the Far East. Mubarak Al Khaili, VP of Commercial Strategy, believes that construction projects in the GCC region (Gulf Cooperation Council) will be the key driver supporting the steel industry’s growth in 2011 and 2012, followed by oil & gas, petrochemicals and other infrastructure projects. “Although some stability is returning to the GCC’s construction sector, with signs of a recovery already showing for 2011, we believe that infrastructure projects will accelerate the region’s recovery in the next couple of years,” he says. In fact, GCC governments are using surplus funds to finance infrastructure projects. Qatar alone has budgeted to spend more than US$50 billion on the World Cup, according to recent media reports.

Emirates Steel

April 2011

Emirates Steel

Housing and the other requirements of a growing population in the GCC, which is expected to reach nearly 125 million by 2050, will also absorb increased capacity in the region’s steel sector. Furthermore, the current upward trend in oil prices will encourage continued development and growth of the region, and boost investments in oil and gas related industries, including petrochemicals. Sales figures show that Emirates Steel was able to increase its market share to just over 50 per cent in 2010, and has increased its domestic sales volumes by 54 per cent. “This has been achieved through targeted efforts to support our key customers,” says Al Khaili, “and by pursuing sales policies that ensure market stability. Apart from focusing on domestic markets, we have exerted sustained efforts in increasing exports to regional markets, mainly Saudi and Qatar, which further increased our total sales volumes.” Emirates Steel expects that around 85 per cent of rebar sales are likely to stay locally in 2011, but the company is anticipating exporting more than 50 per cent of its wire rod and coil products. And once commissioning of the steel sections mill takes place by the end of 2011, further export business will be targeted. In fact, Emirates Steel has ambitious plans to increase total production. So far, phase one has been completed, with further phases over the coming three years expected to take production to around 6.5 million tons per annum.

April 2011 59

April 2011

Emirates Steel

Last year, Emirates Steel and its ultimate parent company GHC were busy raising credit for Emirates Steel’s forthcoming expansion projects. In July, GHC announced that it had achieved financial close on a US$500 million export credit facility raised by GHC on a corporate basis and insured by SACE, an Italian group that operates in the field of export credit, credit insurance, investment protection, financial guarantees, sureties and factoring. The SACE facility attracted very strong interest from the international banking market, with the extent of proposals received resulting in the SACE facility being around four times oversubscribed. Working in parallel, Emirates Steel has successfully secured project finance and working capital commitments from both conventional and Islamic institutions for facilities totalling US$1.7 billion. Another positive occasion for the company was receiving the prestigious Emirates Quality Mark in

November last year, only two months after applying for the certification. The Emirates Quality Mark was launched in 2007 to promote excellence among locally manufactured products and will sit proudly alongside Emirates Steel’s Quality System Certification from the UK Certification Authority for Reinforcing Steel. “Together these two awards will reinforce confidence amongst existing customers,” says Al Khaili, “and give us a significant marketing advantage when attracting new business.” The verification and inspection process leading to the award of this certification included an assessment of the quality systems and a technical assessment of Emirates Steel’s plants and the procedures and systems used in controlling production and internal quality control. In addition, the

April 2011

Emirates Steel

plants were visited and inspected and product samples analysed in specialised laboratories. In order to be eligible, Emirates Steel had to be ISO 9001 certified. Of course, Emirates Steel has a macro and micro vision. On the one hand, the business is there to enhance the country as a whole; but at the same time, it wants to empower ordinary citizens. This is being done through a programme of â&#x20AC;&#x2DC;Emiratizationâ&#x20AC;&#x2122; initiatives. As a social responsibility, Emirates Steel looks to recruit UAE nationals throughout the organisationâ&#x20AC;&#x201D;and fundamental to this aim is education. Emirates Steel is sponsoring high school graduates to develop a talent management pool to support its Emiratization plans and offering recruitment opportunities, development programmes and scholarships leading to jobs in all areas from accounting to engineering and operations. Each year, Emirates Steel hires UAE nationals who then undergo an orientation and development programme. Employees are given individual development plans which enable them to monitor their development, fill their career gaps and take advantage of opportunities for progression within Emirates Steel. This ensures that Emirates Steel has the pool of talent it will increasingly require as development plans proceed. www.esi-steel.com BE

April 2011

Partnerof

Raghav Jindal, managing director of Jindal Jayne Alverca why the company should be and gas corporations wishing to create a fo 64

April 2011

Jindal Drilling & Industries Limited

hoice

Drilling & Industries Limited, explains to a preferred partner for international oil ootprint in the Indian market

April 2011 65

indal Drilling & Industries Limited (JDIL) was incorporated in 1983 with its prime focus on providing innovative and advanced technical solutions to the offshore drilling requirements of India’s oil and gas industry. “With modest beginnings but a mission to prosper with a strong emphasis on safety and quality driven by dexterity, integrity, professionalism, relentless commitment and operational excellence, JDIL is today uniquely positioned as a premium oil and gas drilling contractor, providing a wide spectrum of the highest quality services in the oil and gas sector,” explains managing director Raghav Jindal. From the outset, JDIL has benefited from the experience and technical expertise associated with being part of the D. P. Jindal Group, one of India’s most well-established and respected industrial organisations with revenues exceeding US$750 million and a workforce of more than 3,000. The group has a strong presence in India, manufacturing seamless (up to 14 inches) ERW and API 5L grade line pipes, and also deals in wind power generation, offshore drilling, directional and horizontal drilling, and mud logging services in the oil and gas industry. JDIL is a key contractor for the Oil & Natural Gas Corporation Ltd, the Indian government’s state managed enterprise, and also works closely with the US-based Nobel Corporation. Jindal explains that JDIL came to life as an intermediary to fill a gap in the marketplace and has since steadily progressed up the value chain. “We pioneered promoting the concept of chartering offshore rigs in the Indian offshore drilling industry, whereby rigs were hired from international companies and were then contracted to Indian E&P companies for their drilling plans. Understandably by this process, the E&P companies enjoyed the leverage of getting the latest technologies and specialised services and improving their chances of success. Moreover, the international companies who wished to work in India but could not do so primarily due to the regulatory environment, benefited from having an Indian alliance/partner with the capability of managing risks and shouldering responsibilities and liabilities, and that is where we found our niche,” he explains.

April 2011

JDIL is today uniquely positioned a a premium o and gas drill contractor, providing a wide spectru of the highe quality servic in the oil and gas sector

Jindal Drilling & Industries Limited

as oil ling

um est ces d

April 2011 67

Jindal Drilling & Industries Limited Accredited to ISO 9001:2008 standard, JDIL currently operates five jack-up rigs, which are all deployed in the shallow waters offshore Mumbai and have the capacity to drill to depths of up to 30,000 feet. These drilling operations are the key focus of current operations; and the drilling division has a turnover in the region of £170 million, which accounts for almost half of overall revenues within the group. Last year JDIL achieved the distinction of being

service quality, operational performance, equipment suitability and availability, reputation, reliability and technical expertise. “We are now positioned as a world class drilling contractor,” he states. “Our rigs have achieved a record for either zero or near zero downtime and this is a very important performance indicator in the industry because of the heavy losses that can rapidly build up when a drilling operation

one of a select group of companies that made it onto Asia’s Best Under A Billion list, compiled by Forbes magazine. Jindal believes that the company has won its leadership position by distinguishing itself from other service providers on the basis of superior

has to be suspended. Our quality management is second to none and the levels of efficiency we achieve mean that we waste absolutely none of our clients’ resources.” JDIL is committed to the achievement of a

April 2011

Jindal Drilling & Industries Limited safe, healthy, injury-free and environmentally sound business for all persons and operations under its control, and to continuously improving the quality of work. JDIL’s excellence in providing quality services with high safety standards has resulted in it winning the safety award for ‘Without any lost time accidents’ from the International Association of Drilling Contractors, Houston, on many occasions. “Our staff are extremely well trained to respond to any situation or emergency,” Jindal continues. “Equipment and staff requirements are processed immediately and we maintain excellent communications with our customers and partners. Staff training is a very important element of our success and each of our rigs has an additional personnel component which is there to watch, learn and be trained for future operations. We give deserving and excellent employees the opportunity to achieve the necessary level of skill and expertise and to progress vertically to superior and responsible positions within the company.” Two years ago, a strategic shift to add value to the business by adding two new generation, state-ofthe-art, premium jack-up rigs—Discovery I and Virtue I—led to the creation of a joint venture, with JDIL having a partial ownership stake. “The management is our responsibility and brings a new challenge, but obviously we also have the chance to derive a higher margin than when we are working on a purely contractual basis,” he adds. He is keen to add more jack-up rigs, and is also keen to extend the company’s reach into more sophisticated drilling equipment and operations, tackling reserves located in deeper waters by adding semi-submersible rigs and drill ships. “We are among the top-end highly acclaimed service providers in India in this market, and now is the time to build on our achievements and reputation,” he declares. Although the domestic market will remain the primary focus of operations (as there are huge opportunities to be tapped in various disciplines within India’s oil and gas market), JDIL is also studying opportunities in the Middle East and the Far East. “In the near future with India’s insatiable appetite to explore oil and gas natural resources to fuel its

domestic growth, I believe demand for offshore and onshore drilling rigs and drilling services, technology and other oilfield services will grow substantially; and we are actively seeking out more partnerships with companies abroad who want to enter the Indian market. We have been in the drilling industries for more than two decades and are well versed with the operational, legal and contractual requirements for carrying out such operations. We would be a powerful ally to international companies wanting to work in India and be able to extend comfort to them by providing our expertise, skills and experience for drawing technical, managerial and marketing intelligence inputs and operational back-up support. Our financial stability, professionalism and capability to shoulder responsibilities and manage risk will certainly be beneficial for building cordial business relationships. “We also look forward to working overseas and we do not see ourselves as in any way limited by national borders. We will go to wherever there is a demand for our knowledge, expertise and capability,” he concludes. www.jindaldrilling.com BE

April 2011

Reinforcin

grow

Rajhi Steel Industries t steel products each yea up, as commercial vice

April 2011

Rajhi Steel Industries

wth

turns out more than one million tons of ar; but the round figure keeps cropping president Abdul Aziz Al-Hudaib explains April 2011 73

The principal market for our products is within Saudi Arabia, where there is strong demand from manufacturing and the construction industry

t was on December 31 2008 that the workers at the AlRajhi Steel plant in Jeddah knew they had hit their one million jackpot. They had vowed to have turned out by the end of that year one million tons of billet steel from the smelter that only started full production in June the previous year. It was quite an achievement given the difficult conditions in the steel market at the time, but the steel produced by Rajhi Steel does not have to be sold abroad and is all absorbed into the considerable demands of the Saudi economy, reducing the amounts that need to be imported and increasing the countryâ&#x20AC;&#x2122;s proclaimed goal of becoming more self-reliant in strategic raw materials.

April 2011

Rajhi Steel Industries

April 2011

Rajhi Steel Industries Work on the $300 million steel plant began in June 2005 and it was completed in December 2006. This ultra-modern steel plant is designed to turn out 850,000 tons of billets annually, measuring 130 mm square and up to 16 metres in length. The bulk of the billets produced are consumed internally, feeding Rajhi Steel’s rolling mills in Riyadh and Jeddah, says commercial vice president Abdul Aziz Al-Hudaib. “The principal market for our products is within Saudi Arabia, where there is strong demand from manufacturing and the construction industry—there is not enough capacity locally to supply these customers.” Demand is being driven, he says, by massive current investment in Saudi Arabia’s infrastructure. “As one of the market leaders in the region it is our responsibility to provide these raw materials. Saudi Arabia has a huge government project coming up that will require a lot of steel bar among

Eissa Trading We are considered to be one of the first companies involved in the trade and processing of scrap iron for factories, and we are one of the first dealers with Al Rajhi Steel. We have the necessary capabilities to help with integrated performance. We have our own trucks and equipment for supplying any quantities of scrap that help the processing of scrap iron, loaded on trucks, weigh bridges, bailers and shredders. We are committed to principles of quality, safety, and punctuality. We are one of the oldest suppliers in the Kingdom of Saudi Arabia in the trade of scrap iron and equipment. We are proud to deal with the Al Rajhi Steel factory, and are committed to procedures and controls enabling the best performance at work.

April 2011

Rajhi Steel Industries

Vesuvius Vesuvius is a community of experts developing products and solutions and providing services in the molten metal, glass and renewable energy industries for its customers worldwide. Vesuvius has been the major supplier of refractory

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other materials. King Abdullah recently announced a major development push in the country; part of that is to build 500,000 residential units and a simple calculation tells us that this will need about 20 million metric tons of steel bar just to reinforce all that concrete!” Now Rajhi Steel is rising to the challenge of meeting this demand, while maintaining its supplies to the oil and gas downstream processing industry, also in a period of considerable expansion. The kingdom is highly focused on its programme of Saudization, which aims to maximise the number of jobs being given to Saudi nationals, the transfer of skills, and of course bring as much of the raw materials procurement chain within the country as possible. Rajhi Steel’s rolling mills specialise in the production of rebar, which is simply short for reinforcement bar, the strengthening element in concrete structures. Currently it supplies around 17 per cent of the country’s requirement for these products and about the same

amount of the industrial market for items such as steel tube, hot rolled sheet between one and 12 mm, galvanised steel and sheet for industrial flooring known as chequered steel from its raised profile. “We are a major producer of steel rebar from 10 to 40 mm with a current annual capacity of about 760,000 tons. This is produced at our three rolling mills.” Two of the rolling mills at present operated by Rajhi Steel are in Riyadh, where about two thirds of output is generated. The third mill, with a capacity of 260,000 tons, is at the Jeddah site, which is in the process of undergoing a massive transformation. The existing rolling mill is to be joined by a brand new, state-ofthe-art and environmentally friendly rolling mill that will produce a further one million tons of bar once it is opened in 2012. Commitment was made to invest in the $200 million plant following a study Rajhi Steel undertook on the market and the market needs going forward, says Al-Hudaib. “Apart from residential building, there is a lot of other expansion in hospitals, schools, social projects and industry that is going to take place over the next four years. There

April 2011

Rajhi Steel Industries is annual growth from five to six per cent in our national economy, and a marked gap between production and consumption. Our projections show a considerable shortfall over that period and that we will have the need to import a massive amount of raw material.” The new rolling mill was commissioned as a turnkey contract from the Italian steel plant design and manufacturing group Danieli. “We could have secured a rolling mill at a lower cost, but we wanted to have the best performance, the greatest efficiency, the most reliable and the most environmentally sustainable plant that was available.” The plant is being constructed from the foundations up, on a space adjacent to the existing Jeddah melt shop, and it is due to be commissioned in April next year. Clearly the new rolling mill is going to have to be fed. As part of the plan, the existing melt shop in Jeddah is being expanded from its current 850,000 to one million tons—that magic figure again—by the

Suez Steel Co. Established in 1997, Suez Steel Co. is a steel manufacturing company located in Egypt, Suez’s industrial area, overlooking the Red Sea Bay. Since the acquisition of Suez Steel in October 2006 by the Red Sea Group, the new management has invested in the plant and its people yearon-year. Today, it is a company of dedicated professionals, committed to quality products, efficient processes and continuous development. Environmental

protection

significantly

important to Suez Steel Co. Investing in green technology is as vital as investing in steel production improvement. Suez Steel Co. makes every effort to eliminate the adverse impact of steel production on the environment.

The

company

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taken

the

necessary steps to meet environmental standards by

implementing

processes

and

additional equipment,

air

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dust

collection systems and high efficiency burners.

In 2010 more than one million tons of rebar was imported by Saudi Arabia. We are keen to replace that with locally produced product time the plant is commissioned. Being one of the largest steel producers in the country carries a weight of responsibility, Al-Hudaib emphasises. “This is a strategic project for the whole country and the region and it puts more pressure on us to maintain ourselves as an industry leader, and to maintain and develop the market whether in raw material or finished product.” The deal is that all the civil engineering, and as much of the engineered component of the rolling mill will be sourced locally, though the rolling mill itself will be imported from Italy and assembled on site. Closer to the time of completion, the company will start a recruitment effort to recruit and train workmen, engineers and plant operators.

In the past Rajhi Steel has positioned itself as a regional rather than a national supplier, and it still intends to grow its operations outside of Saudi Arabia. However, the domestic market must come first. “It is part of our plan to open up new markets in the region but we know that with all this growth there is market share to be taken both from local producers and from imported materials. In 2010 more than one million tons of rebar was imported by Saudi Arabia. We are keen to replace that with locally produced product. We are accordingly putting on hold our plans for targeting other markets, just for the moment,” he says. www.rajhisteel.com BE

April 2011

Indian

icon

With many famous names in hospitality pres and approach, Alan Swaby looks at one grou offering superior service and hospitality from 82

April 2011

Oberoi Group

senting uniformity in appearance up of hotels that prides itself on m breathtaking locations April 2011 83

on’t you just love rags-to-riches stories? Well in this case, the story doesn’t exactly begin with ‘rags’—but it’s certainly a tale of a man who punched above his weight, was never afraid to take chances and continually seized every opportunity that came his way. And the story does end in riches—not surprisingly, as we are talking about a hotel group that is continually rated by guests as among the best in the world.

April 2011

Only about 20 per cent of our clients are from India, with most coming from the US and the UK

Oberoi Group

April 2011 85

Oberoi Group

The story starts back in the 1930s when a smart and presentable young Mohan Oberoi was on holiday in the Himalayan town of Shimla—the summer refuge for the governing classes of India. Mohan’s head was turned by the grandeur of the ladies and gentlemen he saw in Shimla and without a day’s experience of hotel life to his name, he blagged his way into a job as cashier at the best hotel in town. He must have displayed something special, because four years later the general manager of the hotel—an Englishman called Clarke—asked Mohan to go into partnership with him in the purchase of another hotel in town. Mohan had no money to speak of but used his wife’s wedding jewellery as collateral to raise his half of the down payment. Clarke eventually wanted to return to the UK, and sold his share to Mohan who had shown himself

April 2011 89

Oberoi Group more than capable of running the business. “Clarkes Hotel is still in the group,” says Prithvi ‘Biki’ Oberoi, son of Mohan and present chairman and CEO of the publicly listed company, “and retains the original name. It has a sentimental place in our hearts.” Sentiment only goes so far, though. The next acquisition Mohan made was the 350 room Grand Hotel in Calcutta that had gone into receivership when it lost business after a cholera outbreak. At the time, Calcutta was an important commercial centre. “My father got the lease in 1939,” says Oberoi, “just as World War Two was starting. It was a favourite with the British officers who were desperate to get one of the 1,500 beds that were squeezed into 350 rooms and were never empty for the duration of the war.” In 1942, Mohan pulled off what was probably the first hostile takeover in Indian history when he quietly bought up 51 per cent of the shares in Associated Hotels of India. When he announced his presence at the AGM, the British board of directors resigned en-masse but the chairman, Sir Edward Buck, agreed to stay on. At that time, in 1942, the group had 10 hotels and it now has 30—spread from Egypt to Indonesia— trading under the brand names of either Oberoi or Trident. Oberoi mistrusts the term ‘luxury’, thinking it overused; but there is no doubt that his hotels fall into the very highest possible category. Their downtown locations, in India’s important commercial centres, cater for business people; and for those seeking a leisurely holiday, they can also be found in stunning leisure settings. Despite being well into his 80s, Oberoi is still actively in charge of the group. He is only too aware that as he is in the business of selling service, one poorly trained or badly supervised employee could quickly wreck a reputation that has taken years to develop. “We have converted one of our smaller hotels into a training school,” he says. “Each year, we train 30 young men and women there who have been identified as potential future general managers. It’s a two year course, after which they get hands-on experience at front of house or in the restaurant, and then the best of them are sent overseas to get international experience.”

April 2011

Oberoi Group MEIKO For more than 84 years MEIKO has been using the most sophisticated technology to create the conditions necessary for superclean dishware. MEIKO technology produces sparkling

cleanliness

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catering establishments, restaurants, hotels, company canteens, hospitals and care homes but also across the world in the complex installations needed for airline catering, in all the high-speed ICE trains of the German railway system, on cruise ships and the VIP catering arrangements at Formula 1 tracks. Exceptional

quality,

outstanding

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and impressive customer benefits have made MEIKO dishwashers the most successful in the world. MEIKO (Asia) Techcentre Bangalore is one of MEIKO’s daughter companies which was founded in 2007. The company employs 23 staff. www.meiko.de

As well as future top management, the school provides a one year course for housekeeping executives and a two year course for hotel chefs. “Some people still have the idea that the whole of India is a health risk,” says Oberoi. “We want to categorically demonstrate that this is not the case.” The first quality all of the 12,000 strong workforce must demonstrate is fluency in English. They then need to show a willingness to leave bad habits—such as poor timekeeping—at home and provide the kind of discreet but attentive service Oberoi clientele expect. It’s not a cheap experience to stay at one of the group’s hotels. Prices range from US$300 to $500 per night, but Oberoi argues that this is good value

when compared to an equivalent hotel in the US or Europe, where prices will be two or three times higher. The single most important business sector for Oberoi is international businessmen. “Only about 20 per cent of our clients are from India,” he says, “with most of our clients coming from the US and the UK.” Not surprisingly, the economic climate has impacted on the group’s revenue. The accepted benchmark for occupancy is 70 per cent and in India this has slipped in the past couple of years to 65 per cent. The Mumbai terrorist attack in 2008 further compounded matters and put that particular hotel out of commission for 14 months. “The terrorist bombs and the subsequent battle with security forces,” says Oberoi, “did considerable damage and the hotel had to be practically rebuilt at a cost of $150 million.” Oberoi himself was in Mumbai that day and would have been at the hotel had it not been for another engagement. He has nothing but praise for the staff who risked their own lives

April 2011

Oberoi Group

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to help the unfortunate guests inadvertently caught up in the tragedy. To reward their efforts, all staff were kept on full pay for the duration of the redesign and rebuilding work. Following the refurbishment, the hotel re-opened last year and retains its reputation as an icon of quality and excellence in the very heart of India. www.oberoihotels.com BE

April 2011

Everythin

roo

under one

In 2010, Brussels saw the launch of the Viag Andrew Webb tells Andrew Pelis how the cas established itself as a successful venture and 96

April 2011

Casinos Austria International: Viage

ge Entertainment Center. Managing director sino and entertainment venue has quickly d benefactor to the local community April 2011 97

russels has long been held up as a doyen for international business. While that remains the case, a recent splash of glamour has seen entertainment become en vogue with the arrival last year of the Viage Entertainment Center. Viage offers the complete one-stop-shop for those seeking a sophisticated choice of entertainment options in Belgiumâ&#x20AC;&#x2122;s capital, providing the full casino experience, food, drink and live entertainment. Part of Casinos Austria International (CAI), it launched in Brussels last year amid the despondency of the global economic downturn.

April 2011

Casinos Austria International: Viage

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100 April 2011

Casinos Austria International: Viage

The casino, which has relocated from CAI’s Grand Casino Brussels, was the cornerstone of an ongoing urban regeneration programme. It has quickly become established as an integral part of the area’s economy, contributing the largest amount of tax for any business in the greater Brussels region and employing 370 full-time staff, with many sub-contractors and local suppliers also involved in operations. Twelve months on and its managing director Andrew Webb oversees a spectacular empire offering clients a variety of gaming and entertainment options, including Latin music clubs, classic theatre, several casual dining options and bars, a concert venue that plays host to artists such as Prince and Kool & the Gang, and a gastronomic restaurant—all spread across 14,000 square metres on nine levels in the heart of downtown Brussels. Viage also caters for the city’s thousands of business visitors by offering state-of-the-art multimedia and conferencing facilities for functions. “In our first year we played host to roughly 350,000 people, which worked out at about 1,000 people a day,” states Webb. “We are now up to 1,100 visitors each day, not including the 300 to 500 customers coming to see a show or to dine.” Webb says that the €43 million development is likely to change in appearance over the next few months, as Viage reviews the feedback it has received from visitors. In the meantime, he already has his sights set on new challenges. “We had our ‘soft’ opening in March 2010 when the gaming zones were operational, ahead of our grand launch in April. Our gaming zones (we have six different zones, including 39 gaming tables, 365 slot machines, live bingo and sports betting) take up about a third of our floorspace and accounted for about 90 per cent of our revenue for our opening year; but we are looking to reduce that as we grow our revenues across the business.” That includes changing the perception of casinos held by some sceptics used to reading negative headlines. Webb says that a concerted advertising and public relations effort, strategically targeting

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Casinos Austria International: Viage the Flemish- and French-speaking audiences with different messages, is beginning to pay off. “We eventually want to see gaming having a reduced impact on total revenues as people’s perceptions change and they realise they can visit us in the centre of Brussels just to eat or attend a show,” he explains. “We are always looking to target ‘Middle Belgium’— the recreational gambler who will arrive at our venue, eat, take in a show and perhaps gamble. We think there is an untapped market here and we are striving to overcome the traditional taboos and negative impressions. We want to break down those psychological barriers with a high-quality offering that gives people a choice. We like the fact that people can spend money across the various facilities and that they are aware that they are under no obligation to play in the casino environment.” Webb says that Viage’s efforts to change perception

are beginning to bear fruit. “We were given permission to drop the Casinos Austria International badge and use Viage; and we have appeared in over 454 press cuttings in Belgium alone in the last 12 months,” he states. “Right now we are going through a total impact assessment and should have the results by March; but I can say that in 2010 there was national brand awareness reaching 27 per cent of the population. “We are now developing refreshed communication messages and need to go back and see what the market understands about us and what it thinks of us. After nine months of operations, we understand that some of our components have worked well while others haven’t; and these will be reconfigured this year, resulting in some physical changes to the property.”

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Of equal importance will be the new Belgian Gaming Act laws, which will determine the parameters for online gaming. It is an arena that Webb is keen to tap into and a major marketing campaign is currently on hold pending the announcement of what online gaming hosts will be expected to provide. “We are already a significant player in Brussels,” Webb indicates, “but it is widely acknowledged that casinos across Europe have been in decline in recent years as customers have never had so much choice with their income—in addition, laws in Belgium were made to protect vulnerable players. This, for example, has an impact on how many slot machines we are allowed and limits turnover, so the introduction of online gaming will provide exciting new opportunities.

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Casinos Austria International: Viage

eventually want to see gaming having duced impact on total revenues as pleâ&#x20AC;&#x2122;s perceptions change and they se they can visit us in the centre of els just to eat or attend a show

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“Once the operating protocols [for online gaming] are in place we will be ready to launch; we are more or less there but we need to see the legislation before we make any major investments in hardware or software programs,” Webb continues. “For the time being we are looking with the Gaming Commission at how that market will shape up, before we start our major advertising campaign.” Viage, derived from the Italian word viaggio, meaning journey, has certainly been a rollercoaster ride for the past 12 months. The facilities have already played host to international pop star Prince on two occasions and Webb is currently in the process of lining up other major acts for 2011. “In Belgium, there is a significant leisure market, but it can be quite splintered and boutique-focused,” he says. “With a wide range of international quality entertainment choices under one roof, we are a unique destination in the heart of Europe.” www.casinosaustriainternational.com BE

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The gateway to

Zam

Prince Chintimbwe talks to G Corporation Limited of Zamb improve the nationâ&#x20AC;&#x2122;s four mo gateway to the country that 108 April 2011

National Airports Corporation Limited of Zambia

mbia

Gay Sutton about the National Airports biaâ&#x20AC;&#x2122;s strategy to upgrade, expand and ost important airports and create a will leave a lasting impression

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ambia is a country driven by two thriving industries. The primary revenue generator is the copper mining industry, which is based in the famed Copperbelt region. Having suffered many decades of slow decline, its fortunes have changed over the past five years and today it is in full expansion mode, fed by the insatiable demand for copper from the rapidly expanding Chinese economy. The countryâ&#x20AC;&#x2122;s second main revenue earner, tourism, is also undergoing serious growth. Having displayed only a temporary dip during the global economic crisis, it has resumed its strong upward trend and continues to draw increasing numbers of people keen to experience the countryâ&#x20AC;&#x2122;s stunning landscapes and wildlife.

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National Airports Corporation Limited of Zambia Most visitors and workers arriving in the country enter via the airport of Lusaka, the country’s capital. The expansion in mining and tourism has been reflected in the passenger figures, which have been increasing at a rate of 10 per cent year-on-year. And the growth has also been felt by the regional airports that supply these flourishing industries. The country’s four primary airports are run by the National Airports Corporation Limited (NACL) of Zambia. “We were established in 1989 by an act of parliament, with a mandate to provide air navigation across the nation and airport services at the four designated international airports,” explains the director of airports services, Prince Chintimbwe. “Last year we handled just under 1.09 million passengers, 65 per cent of whom travelled via Lusaka airport.” Lusaka airport, the international gateway to Zambia, is NACL’s flagship airport. The three remaining airports within its remit are Livingstone,

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National Airports Corporation Limited of Zambia which services the tourist destination of Victoria Falls, Mfuwe which provides a similar service for the South Luangwa National Park, and Ndola which lies in the heart of the Copperbelt province and is the route of access for the mining industry. “Being a landlocked country, the most direct route of entry into Zambia is by air,” Chintimbwe says. “So the airport is the first and last thing people see when they come to and leave the country. We want the experience to be pleasing, and to leave an impression that lingers on.” Responding to the combination of significant growth and the need to provide a suitable customer experience, NACL has invested $725,000 in grant aid from the US Trade and Development Agency to create a masterplan for the development of all four airports up to 2029, an exercise that was concluded just a couple of months ago. “We have already implemented one of the major recommendations through the work we have been doing at Livingstone, which is predominantly a tourist destination. Our intention here is to attract and handle long haul tourist flights, and we are already well advanced towards that goal.” Livingstone airport received attention as far back as 2007 when some €10 million from the European Union was spent rehabilitating and extending the runway from 2.3 to three kilometres. However, it is the construction of a new terminal that is expected to transform it into an international tourist destination. “We’re handling this in a phased approach,” Chintimbwe continues. “Phase I began in August last year and includes the construction and equipping of the concourse area and departure lounge, and this will go straight into operation when it’s completed in April next year. Phase II will then start immediately with the construction of the arrivals part of the international terminal.”

The new terminal will be furnished with the very latest technology from cargo and baggage handling through to passenger processing and security systems. Once construction is completed, the current terminal, which lacked sufficient passenger waiting and handling areas and commercial space for international use, will be retained for internal flights. The entire project, terminal and aircraft manoeuvring pavements, is expected to cost around $95 million and will boost capacity at the airport to over 200,000 passengers a year, a huge step up from the 30,000 handled in 2001. With the development masterplan in place, similar upgrades and construction projects are planned for the other three airports and work is currently being done to secure the necessary funding. Lusaka, of course, is the nation’s international gateway and the plans here are on a much larger scale. Designs are already completed for the construction of a new terminal capable of handling over two million passengers a year. Estimated to cost around $196 million, the work will also include expansion of the apron facilities. Although these improvements are NACL’s top priority, the vision for the future of the airport is much more ambitious. “The airport sits on 1,950 hectares of land, of which only 170 hectares is developed, so we have the capacity to do quite a bit more too. We will shortly be tackling things like car parking, and we would then like to build travel hotels here.” From the aesthetic perspective, considerable thought has gone into designing the airports to represent the region in which they are located. “All our airports will carry a theme,” Chintimbwe explains. “Livingstone, for example, is themed around the Victoria Falls and we would like to put a representation of the falls into the new terminal, although we haven’t finalised this element of the design yet

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Last year we handled just under 1.09 million passengers, 65 per cen of whom travelled via Lusaka airpor

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and we might make minor changes to it nearer the time. We will have to see what the cost implications will be. However, outside the current terminal we have statues of David Livingstone and his two African cohorts who were with him at the time he discovered Livingstone. We intend to move those statues to the new terminal.” From the strategic perspective, the short term aim is to begin work on Lusaka airport as quickly as possible, handling the construction in one single operation rather than in phases, and then to move on and improve and update Ndola and Mfuwe airports by constructing new terminals and improving the

aircraft manoeuvring areas in a similar way. “All our current infrastructure predates our independence,” Chintimbwe points out. “So in the short term we are working to raise the cash as quickly as possible, then we will begin building these projects either this year or next year.” Once the work is completed, it will equip Zambia to fully develop its blossoming tourist trade, and to provide comfortable and attractive travel facilities for the many people arriving and departing with the mining industry. www.nacl.co.zm BE

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or those of us yet to enjoy a Caribbean visit, Trinidad & Tobago are right at the bottom of the chain of islands that make up the West Indies, almost within hailing distance of South America; at certain points the seas between Trinidad and Venezuela divide the two nations by no more than about seven miles. Not surprisingly, the country has an economy that owes a great deal to tourism and in particular to cruising. And where you have cruise ships, you have to have an efficient port to cater for the ships and currencycarrying passengers.

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Agemar is the leading shipping agency in Venezuela. It was established in 1969 and is a privately owned, professionally managed company that offers world-class shipping agency services with well-trained and capable personnel. The company services oil tankers, product tankers, dry bulk carriers, chemical tankers, gas carriers, project cargoes, full cargoes, cruise ships, research vessels, cable-laying vessels, offshore platforms, crew attendance and bunker deliveries. Agemar offers agency services in Venezuela and in 14 locations throughout the region, including Trinidad. General operations are controlled from its head office in Caracas. Services include: • 24-hour operations • Port shipping agency for all type of vessels • Husbandry agency • Assistance for bunkering services • Supervision of delivery of spare parts, mail and provisions • Port information services • Crew attendance at airports and terminals • Up-to-date information technology system • On-time financial and operational reports • Risk assessment procedures.

Port of Spain—the principal city in Trinidad—is tucked behind a protective peninsula, sheltered from adverse weather coming either from the Gulf or the Atlantic. It’s an ideal haven for shipping, making it the obvious choice for the island’s major port, tautologically known as Port of Port of Spain. For the first 25 years of its existence, since the Port Authority was created by act of parliament in 1962, the port grew steadily but in the 1980s really began to take off, first calling for a doubling of working shifts and then in the late 1990s, a roundthe-clock working pattern. In the 1990s, the Port Authority initiated a program of restructuring. Under the guidance and coordination of a transition team, each of three separate parts of the business created its own development team

charged with the responsibility for organizing the formal side of setting up independent business units. This culminated in the creation of three new companies: Port of Port of Spain, Trinidad and Tobago Inter Island Transport and Port of Spain Infrastructure Company. The Port Authority appointed Portia Management Services (the international consultancy arm of Mersey Docks and Harbor Company) in 2006 to oversee development of the port facilities. Portia is the UK’s longest established and most successful port management and consultancy organization with over 200 projects under its belt in Africa, South America and India. It has three main areas of interest: consultancy, management and investment.

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Port of Port of Spain To give an indication of the scale of growth, in 1990 only 507 cargo vessel calls were recorded at the Port of Port of Spain, while nine years later, there were 1,294—a growth of over 150 percent— or around seven cargo vessels berthing every couple of days. These days, approximately 90 percent of all cargo handled is in the form of containers. The second most important cargo comes under the heading of dry/liquid bulk, accounting for around 8 percent of the total and the balance coming from break-bulk cargo. Interestingly, this latter segment, while only a quarter the tonnage of bulk freight, contributes significantly more to overall revenue than dry/liquid bulk operations. The Port of Port of Spain has established itself as the major general cargo port in Trinidad & Tobago, handling approximately four fifths of containerized cargo coming into the country. Add all facets of container operations together, in other words

Trinidad and Tobago Pilots’ Association Formed in 1939, Trinidad and Tobago Pilots’ Association has been providing pilotage services to vessels calling at Trinidad and Tobago for over 70 years. The Association is the only organization in Trinidad and Tobago authorised to provide pilotage services and presently consists of 29 member pilots, all of whom are licensed by the Government legislated Pilotage Authority. Performing in excess of 16,000 manoeuvres annually, the Association lends support to other regional pilotage organizations in regard to training and the supply of pilot launches. All pilots are members of both the International Maritime Pilots Association (IMPA) and the Nautical Institute. The Association was recently adjudged to be compliant with the requirements of the International Standard for maritime Pilot Organisations.

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imports, exports and transhipment, and the Port saw average annual growth in the 90s of over 20 percent, taking the volume as measured in twenty foot equivalent units (TEUs) from 58,427 TEUs in 1990 to 271,156 TEUs a decade later. Imports and exports are roughly equal in importance by tonnage but by far the largest contribution to revenue comes from transhipment business—equal in size to the other two sectors put together. The Port of Port of Spain has also experienced good growth in international cruise shipping over the last decade and this growth can be attributed to the joint efforts of the Trinidad and Tobago Industrial Development Corporation and the Port Authority in their overseas marketing of Trinidad and Tobago as cruise destinations. The Port has a dedicated passenger terminal at the Cruise Ship Complex in Port of Spain. As well as the single dedicated berth, one of its three general purpose berths can also be used for handling additional cruise vessels, if necessary. There is a considerable variety in the scope of vessels visiting Trinidad from boutique liners carrying no more than 90 passengers in stateroom luxury accommodation to cruisers capable of taking over 3,000 passengers at a time to the sun. It shouldn’t be forgotten that we are talking about a country that comprises two islands. The Port Authority manages a sister harbour in Tobago in the deep water harbour of Scarborough. The original name for Tobago gave birth to the word tobacco and some say that the story of Robinson Crusoe was inspired by the island. It is certainly true that a Walt Disney film based on the book was shot there and that eco-tourism is now big business. Tobago was first settled by Europeans from Latvia in 1654 and then changed hands 33 times as one colonial power after another took possession. In 1814 it became part of the British Empire and was twinned with Trinidad in 1889. Scarborough is linked with Port of Spain by a high speed ferry and visitors can get a different view of the country by taking an US$8 ferry ride over the 150km separating the two harbours.

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The third stream of revenue for the Port Authority comes from the management of the 155 hectares of land it owns on both islands. It is one of the largest single real estate owners in Trinidad. Approximately one third of its land in Port of Spain is dedicated to port operations. The remaining land is leased out to tenants for various periods from as short as monthly rentals to 30-year leases. Major tenants are National Petroleum Marketing Company, National Flour Mills, National Fisheries, Trinidad and Tobago Electricity Commission and the Customs and Excise Department’s Container Examination Station. The Authority also obtains revenue from the lease of the cruise ship terminal facilities in Port of Spain and Scarborough. BE

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Setting

The achievements of the Mauritius Ports Author transformed Port Louis Harbour into a world cla 128 April 2011

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sail

rity (MPA) over the past decade have ass shipping facility. Jayne Alverca reports April 2011 129

he Indian Ocean may be the stuff of dreams for tourists, but the authorities who manage Port Louis Harbour in Mauritius have more serious concerns to contend with. As an island state, the port’s management play a pivotal role in the Mauritian national economy, as it represents the main link with the external world for almost all transportation requirements. The port itself consists of three main terminals which house a total of 14 separate quays. Together, these facilities handle about 99 per cent of the total volume of external trade and contribute more than two per cent to the country’s GDP. All strategic imports such as foodstuffs, petroleum products and raw materials for the textile industry must also rely on the port as a transit point. By the turn of the millennium, two decades of heady growth and constant expansion had near exhausted the port’s capacity. During 2002, a new vision and a new strategic plan were formulated to modernise the port’s infrastructure and facilities and create the extra capacity needed to meet the demands of the fast expanding maritime trade, in

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Mauritius Ports Authority

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particular the deep berth requirements of a fifth generation of super large container ships. Over the past decade, the port sector has undergone major reforms and has been transformed into an economic nerve centre equipped with modern port facilities offering world class port services. A key improvement has been the dredging of the access channel to the Mauritius Container Terminal to provide additional draft. This means that fifth generation vessels can now use the portâ&#x20AC;&#x2122;s facilities. The size of the container yard has been almost doubled to give a storage capacity of 550,000 TEUs and the existing container berth was expanded by an additional 150 metres so it could accommodate three container ships at any one time. Because the Indian Ocean can be subject to devastating cyclones, the Mauritius Container Terminal had experienced recurrent floodings due to prevailing swell conditions. On occasion, this had caused major disruption to operations at the terminal. To prevent the flooding problem, MPA is now proceeding with the construction of a concrete wall along the length of the terminal and will rehabilitate the rock revetments located to the north and south. The work is being carried out a cost of Rs 100 million and is now nearing completion. A new radio station, which became operational in April 2008, is equipped with radars, modern radio/ communication and a vessel tracking system to provide an improved maritime service and ensure navigational safety for the portâ&#x20AC;&#x2122;s growing volume of traffic. There is also a new oil jetty which has been built at Mer Rouge at a cost of Rs 623 million to improve the unloading of petroleum tankers. In a handling operation that now meets world class standards of safety and efficiency, Port Louis Harbour handles well over a million tonnes of petroleum products each year. These comprise many toxic and highly flammable substances such as motor gasoline, gas oil and jet aviation fuel as well as standard fuel oil and liquefied petroleum gas (LPG). Petroleum products were previously unloaded at a series of different locations in the inner harbour which had negative cost, time and particularly safety implications as storage tanks were in close proximity to a residential area and potentially posed a major health and safety hazard.

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This problem has now been solved and with an increased alongside depth of -14.5 metres, the berthing of bigger tankers of up to 50,000 DWT is now also possible. The new oil jetty has a total throughput capacity of about four million tonnes per annum and has been built to meet requirements for many years to come In another ambitious move, MPA has embarked on a project for the construction of a dedicated cruise jetty at Les Salines. At a total project cost of about Rs. 485 million, this has enabled the port to cater for larger cruise vessels and also facilitated improvements to passenger comfort, transfer and safety. The contract for the construction of the jetty was entrusted to Messrs Afcons (India) in November 2008 and was officially inaugurated on 15 February 2010. The move will provide the national economy with a major boost to tourism revenues by supporting a

Lafarge (Mauritius) Cement Ltd Lafarge is the world leader in building materials. We are present in over 78 countries and employ more than 84,000 employees. We are the world leader in cement, world number two in concrete and aggregates and number three in gypsum. Lafarge (Mauritius) Cement Ltd started its operations in the Port area some 52 years back, in October 1959. Lafarge (Mauritius) Cement Ltd has contributed enormously to the construction of the new, modern, better and stronger Mauritius. Besides being the market leader for more than five decades, its BAOBAB Portland Cement brand has gained high recognition due to its consistent high quality and is very much appreciated by the professionals of the construction sector of the island.

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strategy that will see Port Louis Harbour acquire ‘home-port’ status for cruise tourism. During the last financial year, cruise traffic grew by almost 60 per cent with 22 passenger vessels calling in to the port. The ability to handle bigger vessels means that passenger numbers increased even more, growing by a record 105 per cent in a single year. MPA is proud of its achievements to date, but the work to maintain the port’s newly won world class status is ongoing. Forecasts claim that container traffic will double by 2015 and major shipping lines have made plain their intention to use larger container vessels in the area. In response, the size of the container berth is set to increase again and further deepening of the channel that gives access to the container terminal is also planned. The next project, due for completion in 2013, will include measures that will see the berth at the container yard extended by another 150 metres and able to accommodate ships with a draft of 16.5 metres. Meanwhile the reclaimed land of Les Salines at the southern edge of the port is the proposed site of a major waterfront development project which will provide a marina, top quality hotels and a wide spectrum of leisure and toursim facilities. This will complement the cruise ship facilities already in place and provide a major impetus to the nation’s emerging tourism industry. The project will be executed in three phases and will take at least 10 years to execute. www.mauport.com BE

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Fuelling the

Coal has a much bigger ro simply meeting the countr executive director of Sum 140 April 2011

Sumo Coal

uture

ole to play in South Africa’s future than ry’s energy requirements. Selim Kaymak, mo Coal, talks to Jayne Flannery

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oal is fundamental to the South African economy. It is the main energy source for domestic use and a rapidly growing export revenue stream in response to demand from energy hungry nations like India and China, as well as South Africaâ&#x20AC;&#x2122;s neighbours in the region. Approximately 90 per cent of the countryâ&#x20AC;&#x2122;s coal reserves are located in the province of Mpumalanga in the famous coalfields of Witbank, Highveld, Ermelo and Kangwane. This is where Sumo Coal has been targeting its operations since its inception in 1995.

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Companies like ours can only contribute to South Africaâ&#x20AC;&#x2122;s wider social and economic development if they have an ethical approach to governance April 2011 143

Sumo Coal

Sumo is an established coal mining company in South Africa with over 15 years experience in the mining industry. Sumo has a portfolio of exploration projects that span most of the Highveld and Ermelo coalfields. Over the years these projects have generated a string of subsidiaries in drilling, coal mining, beneficiating and marketing. Londani Coal, a company in which Sumo is a major shareholder, has rights to a producing open-cast mine within the Highveld coalfield. This has known reserves of five million tonnes of bituminous thermal grade coal and a further exploration project is poised to move into production later this year. Sumo as well as its subsidiaries are compliant with ownership requirements as stipulated in the South African Mining Charter. Selim Kaymak, Sumo’s executive director, sees its mission as reaching far beyond the profitable exploration and extraction of coal. For Kaymak, these values begin with strong corporate governance that emphasises an ethical and socially responsible approach to business. “From the outset, we have set out to make a stand and lead by example as an ethical investor. Sumo’s

company policy is to practice and follow ethically correct business policies in all its endeavours. We always work entirely within our country’s legal framework and adhere strictly to the detail of legal processes in every area of our operations. “This is a position we have adopted not because we simply want to abide by the rules: it is a mindset which dictates that companies like ours can only contribute to South Africa’s wider social and economic development if they have an ethical approach to governance,” he continues. “It is a direction that stems from Sumo’s board of directors and a strict position that all our managers and staff must adhere to in their relationships with the government, our partners and all third parties.” Sumo is an active member of Business Unity South Africa, or BUSA, which aims to ensure that businesses make a positive and constructive contribution to the country’s economic growth, development and transformation goals—not

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Sumo Coal

just within the mining industry, but within all sectors of South African society. “Mining is a very important element of the South African economy, but working through BUSA we aim to bring our influence and strive towards the progress of all companies in South Africa. We want to create an environment in which businesses of all sizes and in all sectors can thrive and grow, but in a way that supports South Africa’s goals for its people and development,” he explains. Sumo’s dedication to the empowerment of the South African people has led to a strong commitment to education, particularly towards historically disadvantaged South Africans. Education has been identified as one of the most important pillars in building a successful future for the country. In response, supporting educational initiatives lies at the heart of Sumo’s approach to corporate citizenship. The company has already contributed towards building eight classrooms and sanitation facilities at Horizon International High School based in Turfontein, Johannesburg. It is now funding the construction of a school at Willow Glen, in the Tshwane Municipality of Pretoria. This ambitious project will cover an area of about 1, 100 hectares and will have 400 pupils.

Both schools will implement a curriculum that stresses technology, mathematics and science—the subjects which are needed by the next generation of mine engineers, managers and technicians. The schools will also make a special point of reaching out to children from socially and economically disadvantaged communities. From a commercial perspective, Kaymak believes that Sumo’s stance on ethics and strong management is equally important. “For example, it means we can make fast decisions about opportunities which can be quickly implemented—which is vital in this type of fast-moving business environment,” he says. Strong management also allows for a corporate culture in which capable people can fulfill their potential. Kaymak is proud of the team that the company has put together—250 staff are supported by several teams of external contractors. “We look for a mix of education and experience in our staff, but it does not matter how capable a person is as an individual: they have to be able to

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148 April 2011

Sumo Coal co-operate and work as part of a team. That is the most important criteria by which we judge individual success and when we recruit contractors,” he states. This team-focused approach also plays a useful role in the execution of Sumo’s wider objectives. As a mining company, Sumo is particularly interested in forming joint ventures with companies that have prospecting or mining rights for coal, copper and other resources. For those that may not have the funding for such a huge project and would like to share the risk, Sumo can step in with investment and expertise, putting up funding for a project or resource which would be beneficial to both parties. “In South Africa, we underline the importance of partnerships and joint ventures and our ethical stance means that everyone we deal with can have total confidence in our integrity. We believe this will help us

to identify new partners who are the holders of prospecting and mining rights. Within Sumo, we have a proven in-house exploration company and the funds to bring new projects to production. Joint ventures are our future and we want others to come forward and work with us for the betterment of the nation.” Looking to the future, Sumo’s key objectives are to continue creating a firm footprint as a diversified mining company across the African continent, and to pursue exciting opportunities and joint ventures with mining companies for coal, PGMs, iron ore and manganese. By doing so, it hopes to make a positive impact on not only the mining industry, but the future of South Africa as a whole. www.sumocoal.com BE

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alc

Dorian Wrigley, COO of mining i talks to Jayne Flannery about th tradition in the companyâ&#x20AC;&#x2122;s strat 150 April 2011

Village Main Reef

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investment company Village Main Reef, he importance of innovation versus egic approach to its asset portfolio

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illage Main Reef has a long and chequered history. Originally incorporated in the 19th century, the companyâ&#x20AC;&#x2122;s gold assets lay dormant for many years after an early tranche of accessible reserves was exhausted. By 2010, it had become an almost forgotten shell company within the portfolio of Harmony Gold. Then Village won a new lease of life in the hands of Bernard Swanepoel, the current CEO. Formerly the chief executive of Harmony Gold, Swanepoel is renowned for a light and magical touch in breathing new life and energy into underperforming mineral assets. Working in partnership with BEE shareholder Umbono, Village quickly took a controlling interest in the Lesego platinum exploration project, which contains a high grade total inferred resource of 27.8 million ounces of platinum group metals, in addition to gold. â&#x20AC;&#x153;We have no doubt that this will prove to be a world class reserve. It is still at the feasibility stage, but every time we drill another hole, we get more good news and we are on track to develop a high quality, world class mine,â&#x20AC;? states COO Dorian Wrigley.

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Village Main Reef

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Village Main Reef The acquisition immediately positioned Village as an investment entity to be reckoned with; but as Wrigley explains, it never set out to be purely an exploration company. “Our key strength lies in turning around non-core or underperforming operating assets. Acquiring Lesego gave Village a solid base from which to acquire and develop further assets,” he explains. A second acquisition in 2010 saw Village take control of Metorex’s gold and antimony mine, Consolidated Murchison. This is an operating gold and antimony mine with a 1.3 million equivalent gold ounce reserve which formed an unwanted part of a much larger portfolio that was decidedly non-core to its owner’s copper interests. “In South Africa there are many large companies with marginal assets that consume disproportionate amounts of time and money. Simply closing the mine has huge negative social impacts on the area because of the damage to the local economy and is always an unpopular move. It is a far more attractive option to work with a team like ours who can develop these assets in an ethical and responsible way,” Wrigley explains. Ethics, and embracing South Africa’s broader development goals, are fundamental to the chosen modus operandi. Currently Village has a BEE ownership in excess of 60 per cent, which enables the company to access a broader set of South African and international mining opportunities. Its BBBEE partner Umbono already has an established portfolio of successful mining and exploration assets in Southern Africa with a strong capital base. “In South Africa, the historical legacy of apartheid and subsequent broad-based black economic empowerment and affirmative action policies have had a major influence on creating a corporate mindset that is acutely aware of the importance of ethical and socially responsible investment,” Wrigley explains. “We want to challenge the prevailing paradigm that what is good for staff and communities is in some way detrimental to shareholders. If any one stakeholder is exploited at the expense of another,

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it hurts everyone. Unless communities, staff and shareholders all benefit, the asset will never be sustainable and reach its optimum value. It has to be a win-win situation for everyone and when this results in a more competitive, efficient and sustainable offering one plus one does become three.” With that thought in mind, the first move on acquiring the Murchinson mine was to offer the staff a 26 per cent stake, which cost them nothing. “It means we are going forward with everyone on board and actively behind us. Over time and with our capable management, we believe that this asset will be worth up to R600 million,” he states. The company made headlines in the industry again in March 2011 with the announcement that shareholders of Simmer & Jack Mines (Simmers) had voted overwhelmingly in support of disposing of the gold group’s

April 2011 155

assets to Village. “We term it as a reverse takeover,” Wrigley explains. “Simmers shareholders will soon own 65 per cent of the shares of Village and the damaged Simmers brand can now be consigned to history. We offer a way to leave the legacy of their past behind by placing the assets into a new vehicle which will enable them to realise their potential,” he explains. The two companies are now in the process of merging and the existing assets will be combined in the new Village along with Simmers’ Tau Lekoa and Buffelsfontein gold mines, both of which have a track record of below par performance. With the right coaching, mentoring and management support, Wrigley believes that these assets have the potential to produce

156 April 2011

Village Main Reef much greater value and revenue. The deal has also given Village a minority stake in First Uranium, a listed company on the Toronto Stock Exchange, which has been underperforming. However, he is keen to point out that Village has no interest in empire-building for its own sake. The company does not view itself as a traditional player and does not want to become a huge cumbersome corporate entity, preferring a much more agile model. “The old mining mindset emphasised large centralised corporate structures. We want independently minded, competent managers on site, not hidden in a head office somewhere. Each asset we hold is to be operated in a self-sustaining entrepreneurial way and each has to be sufficiently robust and commercially viable to stand as an independent entity. This may go against the grain of current thought, but we do not believe that large corporations are necessarily the most efficient way to build stakeholder and shareholder value in the long-term. “The benefits of economies of scale which large organisations produce initially are steadily eroded over time,” he continues. “We do not want to become so emotionally attached to our assets that we cannot let go of them if the business case dictates that this is the best course of action. This approach gives us great flexibility in how we put our portfolio together and means we can accommodate a steady stream of transactions which will involve both buying and selling, rather than just continuing to accumulate assets,” he concludes. www.villagemainreef.co.za BE

April 2011 157

The

wonder of

disco

J端rgen Hendrich, CEO and MD of MEO A the importance of creative thinking to b through the exploration and commercia

158 April 2011

MEO Australia

overy

Australia, talks to Jayne Flannery about build shareholder and environmental value alisation of hydrocarbon resources

April 2011 159

EO, which is listed on the Australian Stock Exchange, manages a natural gas project portfolio centred in Australia’s premier offshore LNG provinces in the Bonaparte and Carnarvon Basins of the Timor Sea. However, for Jürgen Hendrich, who functions as both CEO and MD of the company, discovery means something much more far-reaching than identifying the physical location of gas deposits. “Strategically, we search out angles to apply a different perspective to challenge prevailing paradigms. This is what differentiates us: we look for opportunities that others don’t see. As a company, we want a footprint in areas that are neglected, tired or overlooked where we can apply our technical imagination to create value,” he states.

160 April 2011

MEO Australia

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MEO Australia MEO relies on a unique blend of strategic insight and technical expertise supported by the finest geotechnical and commercial talent that Hendrich can identify. “From the outset, we have sought to attract the highest calibre staff. It is the collective, intellectual capability that our staff bring to the organisation which creates a whole that is greater than the sum of its parts. Talented people working in a stimulating environment with aligned motivation enables us to punch well above our headcount or market capitalisation weight,” he explains. Last year, MEO introduced the world’s third largest listed oil and gas company Petrobras, as a partner. “Petrobras entrusted us to continue to operate the permit on behalf of the new joint venture. This demonstrates our ability to make an impact on the industry,” he adds. 2011 has started on an equally positive note. MEO is finalising a farm-out of part of its 100 per cent owned NT/P68 exploration permit in the Bonaparte Basin, which contains two significant gas discoveries. Hendrich is reluctant to be drawn on details of the deal’s terms, but confirms that MEO will retain 100 per cent ownership of one of the discoveries. “The deal is important to us, because it introduces risk capital to the joint venture to support appraisal drilling operations which will hopefully lead to a commercial development,” he says. In the same region, MEO has also developed a commercialisation path and secured environmental approvals to install a three mtpa LNG plant (the Timor Sea LNG Project) and two 1.75 mtpa methanol plants (the Tassie Shoal Methanol Project). “Most of the discovered gas resources in the region are economically stranded, firstly because of the remote location from any potential onshore infrastructure,” he explains. “The second challenge relates to the quality of the gas. Natural gas often contains varying quantities of natural gas liquids, which are a bonus as they generate an additional revenue stream. Many of the stranded gas fields are deficient in natural gas liquids. In addition, natural gas can often contain inert components such as nitrogen or CO2. Where gas is

Australian Drilling Associates Australian Drilling Associates (ADA) is a well engineering and drilling project management company. We strive to provide efficient drilling solutions for our clients, delivered safely, on time within budget and with minimal environmental impact. ADA has successfully provided a full range of drilling project management services to MEO over the last two years including all the supporting functions, HSE and logistics for wells drilled in the Carnarvon Basin. Drilling operations were effectively conducted within the cyclone periods without incident or accident. Working closely with MEO and the Joint Venture Partners such as Petrobras, the wells were all drilled within AFE.

low in liquids it tends to be high in these inert gases. The gas in the region contains variable CO2 which needs to be removed from the processing stream, thereby adding to operating costs,” he continues. It is easy to see that the economics associated with this sort of venture can quickly become marginal. But innovative thinking at MEO has addressed these two key impediments. “In the project for which we hold approval, we have identified a natural feature on the seabed that in places comes to within 15 metres of mean sea level. We plan to make use of this natural feature to locate the processing infrastructure in the heart of the stranded gas fields and overcome the tyranny of distance.” The second obstacle is the high CO2 content. The Evans Shoal gas discovery contains approximately 28 per cent CO2, which makes it ideal for conversion into methanol. Methanol synthesis using steam methane reforming generates excess hydrogen. Adding around 25 per cent CO2 to the natural gas stream balances the equation and increases the yield of methanol.

April 2011 163

Methanol has historically been viewed as a poor cousin in the energy business, but Hendrich believes this is an outdated paradigm. “In China, methanol demand is growing very strongly not only as a traditional chemical feedstock, but increasingly as a fuel blending agent. Methanol plants in China use gas derived from pulverised coal as their feedstock. Methanol has myriad applications including plastics, diesel substitution and as an LPG substitute. It is not as deep a market as LNG yet, but we believe it will grow strongly as pressure mounts on more traditional energy sources.” From a commercial perspective, Hendrich prefers to hitch the company’s fortunes to a rising star rather than link them inextricably to the mature LNG market, which as a global commodity, is subject to full exposure to global cost competition. “As far as LNG is concerned, the high quality, easily recoverable, liquids rich gas resources close to infrastructure have been cherry-picked. Increasingly, we must look to develop the more economically challenging resources. That means finding ways to break the traditional mould. I believe that monetising higher CO2 gas resources via conversion to methanol represents another potentially attractive economic alternative,” he states. The company currently has around $100 million in uncommitted cash reserves. Hendrich and the team are actively seeking attractive new projects to add to the portfolio, both in Australia and overseas. “Ultimately, I would like to see us lauded for making a difference to the energy equation on the planet and to achieve that, we need to demonstrate that we possess the intellectual and technical horsepower to view opportunities and challenges from a different perspective. Ultimately to be relevant as a business, we need to deliver value not only for our shareholders, but for all stakeholders. That means continuing to identify and exploit value gaps if we are to remain relevant and become a partner of choice in project developments,” he concludes. www.meoaustralia.com.au BE

164 April 2011

MEO Australia

As a company, we want a footprint in areas that are neglected, tired or overlooked where we can apply our technical imagination to create value

April 2011 165

Seeing

day

Zinkgruvan, the southernmost base meta of 2010 with a double whammy: the com 166 April 2011

Zinkgruvan (a Lundin Mining company)

ylight

al mine in Sweden, celebrated the end mpletion of two vital projects April 2011 167

hese days, Zinkgruvan near Ă&#x2013;rebro in Sweden is popular with German tourists who go there in the winter for the skiing and in the summer for access to the great lakes nearby. Its origins a centuryand-a-half ago reflect its name though, and are entirely utilitarian. It translates as â&#x20AC;&#x2DC;zinc mineâ&#x20AC;&#x2122;, and that is what the community and its economic importance have been based on since ground was broken in 1857. The surface operations and even the tailings are fairly circumscribed, but the underground operations are extensive, as one would expect after all the time it has been yielding mainly zinc/ lead ore, with a certain amount of silver as well. Despite the tourists, the mine is still the biggest employer locally, with some 420 personnel on its books. The mine is wholly-owned by the Lundin Mining Corporation of Canada.

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Zinkgruvan (a Lundin Mining company)

April 2011 169

170 April 2011

Zinkgruvan (a Lundin Mining company) Zinc production from the mine in 2009 was above 70,000 tonnes, with an additional 36,000 tonnes of lead and 1.8 million ounces of silver. As a rule, all Zinkgruvan’s output is sold on long-term contracts. However in late 2004 Lundin Mining sold all of the mine’s future silver production to Silver Wheaton Corporation for an upfront payment of $50 million in cash plus shares and options as a means of raising funding for its other development interests. It had been known since the late 1990s that there was also copper bearing ore in the vicinity of and accessible to the mine, and the last 10 years have seen the introduction of a programme to define and then exploit these resources in parallel with the zinc/ lead operations—which will always remain the core product of Zinkgruvan, says managing director Sam Rasmussen. With the objective of adding serious copper production capacity and at the same time enhancing the flexibility of zinc mining, Lundin began expansion of Zinkgruvan in 2007. Last year saw the fruition of this project. Alongside the existing crushing and concentration facilities, a €16 million semi-autogenous grinding (SAG) mill was installed by Metso. SAG grinding processes material in a grinding mill, using steel balls as well as the run of mine ore feed to break it down. Metso supplied the equipment for the primary and secondary crushing stages, grinding, flotation and pressure filtration, as well as the pumping and conveying of processed copper ore. The contract included supervision of erection and start-up. The new line, or circuit, increased Zinkgruvan’s ore processing capacity by a third, and was commissioned in June 2010, to Rasmussen’s great satisfaction. “The copper circuit was installed on time and just as it had been planned. It has been producing copper concentrate in commercial quantities since then.” There have been no surprises, he says, and the quality of the concentrate, at around 26 per cent copper, is just as Zinkgruvan’s metallurgists predicted, or a little better. Selling copper is not a problem these days of course, as testified by the amount of new capacity

Drillcon AB (publ), through its subsidiaries Drillcon Core AB (Sweden) and Drillcon Iberia SA (Portugal), is proud to be a supplier of diamond core drilling and raise boring to Lundin Mining’s operations at Zinkgruvan, Sweden and Somincor, Portugal. Drillcon’s long relationship of over 25 years with Zinkgruvan is proof of Drillcon’s focus on safety, productivity and customer satisfaction.

April 2011 171

coming on-stream worldwide. “We are still in negotiations for longer term contracts on the copper,” says Rasmussen. “Initial shipments will be sold spot while we search for longer tem agreements. There is huge demand and we have had no trouble selling it on the spot market—in fact we completed our first spot sale of copper concentrate in April 2011.” The addition of a significant additional operation to the long-established mine has caused quite a bit of disruption—but in a positive way. “There will be some modification to the copper circuit during 2011 to increase its flexibility for possible future processing of zinc/lead ores; though for the time being it will remain dedicated to copper,” Rasmussen continues. “The important thing is being able to respond to the rise and fall in market demand, and optimise the company’s net present value [NPV].” Associated with the copper project, though ironically quite separate from an operational point of view, was the construction of a 5.5 kilometre ramp so that ore, people and materials can be driven by truck to and from the underground operations. The ramp is basically a tunnel, though it is referred to a daylight ramp since it makes the underground as accessible as the above ground facilities. It was built by local firm Bergteamet AB which again delivered the project according to plan. The daylight ramp was opened on November 17 last year. “This was an historic event in Zinkgruvan’s 150 year history,” Rasmussen enthuses. “At last, man and machine can enter the mine through a daylight ramp!” It has expanded the mine’s possibilities immeasurably. Previously, everything had to be hoisted vertically through a shaft. Now the shaft is free to bring up copper bearing ore to feed the new processing circuit— the zinc/lead ore, the wood and concrete,

172 April 2011

the consumables and everything necessary for running the mine will go along the ramp. Records are being broken regularly, says Rasmussen, and there are many more benefits to be exploited. “For example the daylight ramp gives us the opportunity to make positive changes to the ventilation system—it is a tool that will benefit every aspect of our operation.” Bergteamet has been contracted to bring up a minimum of 110,000 tonnes of ore during 2011, he says, while a new mining partner, Befab, will conduct the underground haulage operations over the next three years. The new ramp will also be critical in the development and continued extraction of zinc/lead ore from the mine’s western field. That way, it will play its part in the flexibility being planned above ground, enabling the underground assets to be delivered to the market in a pattern dictated by the customers, rather than by the ability of the mine to produce. Rasmussen’s aim is to make Zinkgruvan a truly customer focused operation in an industry that has been characterised by its vulnerability to fluctuations in price and demand. And he is very happy with the achievements of the last year. Both projects have gone through with admirable safety and environmental performance levels. Commitment from the local community, which has seen at least 15 permanent full-time jobs added as a result of the expansion, has been fantastic. “We hire them, we train them, and we can offer them a really worthwhile career. As our operations become more diverse we need people to be able to work equally well on the different mineral circuits.” www.lundinmining.com/s/Zinkgruvan.asp BE

Zinkgruvan (a Lundin Mining company)

April 2011 173

Expand

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174 April 2011

Zimplats

ding

ential

Ngezi platinum mine in Zimbabwe nvestment made by the company during ets it apart as Zimbabweâ&#x20AC;&#x2122;s number one t margin too

April 2011 175

ike many an African mining operation, Zimplatsâ&#x20AC;&#x2122; Ngezi mine lies in splendid isolation, 150 kilometres south-west of Zimbabweâ&#x20AC;&#x2122;s capital Harare and is surrounded by...bush! Even though there is no expat workforce to push costs up, this remote location means that Zimplats has had to put in place competitive conditions of service in order to retain the full gamut of mining, engineering, geology and metallurgical skills it needs to keep the largest platinum resource in the country running effectively. The mine lies on a geological feature known as the Great Dyke, first recorded in 1867 as a sinuous, layered, mafic-ultramafic intrusion running 550 kilometres along practically the full north-south axis of the country and ranging in width from four kilometres to 11 kilometres. Fifty years after its discovery, the geological oddity turned into a valuable resource when minerals such as platinum, nickel and copper were identified in the rocks. The 90 kilometre long Hartley Complex is by far the largest and most important segment of the Great Dyke, containing approximately 80 per cent of Zimbabweâ&#x20AC;&#x2122;s total platinum group metals (PGMs).

176 April 2011

Zimplats

The 90 kilometre long Hartley Complex is by far the largest and most important segment of the Great Dyke, containing approximately 80 per cent of Zimbabweâ&#x20AC;&#x2122;s total platinum group metals April 2011 177

Zimplats In 1990 the mining company BHP, in partnership with Delta Gold, began to develop the Hartley Complex and established a mine, complete with smelter, at Selous in 1994. However, the mine never hit the production targets set by BHP to make it profitable and four years later, the mine was mothballed. Zimplats came into the picture in 1998, as a spinoff from Delta specifically structured to handle the groupâ&#x20AC;&#x2122;s platinum activities. In late 2000, Zimplats purchased BHPâ&#x20AC;&#x2122;s share of the Hartley Platinum and Mhondoro Platinum joint ventures, which included the concentrator and smelter, and in early 2001 commenced the development of the then Ngezi open pit mine, as well as the construction of an 80 kilometre tarred road linking Ngezi and Selous. Zimplats is a business with a complicated structure (it is registered in the UK, listed on the Australian Stock Exchange and 87 per cent owned by Impala Platinum of South Africa). Its success to date can be

J.R. Goddard Contracting (Pvt) Ltd J.R. Goddard Contracting (Pvt) Ltd has worked hard and conscientiously in the Zimbabwean mining and construction industry for 31 years. Providing employment and training to 1,400 people,

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thanks

Zimplats at Ngezi Platinum Mine most sincerely for their support over the last seven years.

April 2011 179

180 April 2011

Zimplats partly attributed to various financial provisions specified in the original 1994 mining agreement set up by BHP. Ngezi went into production in 2001 as a two million tonnes per annum (mtpa) open pit mine. By 2003, underground trial mining had commenced. The successful trial mine led to the establishment of the first of three underground mines which reached full production of one mtpa ore from FY2006. A second 1.2 mtpa underground mine reached full production in December 2008, thus completing the process of replacing the more expensive open pit ore with cheaper underground ore. A third underground mine is currently under development, and will produce two mtpa when it comes on stream in May this year. The three underground mines are quite shallow, with maximum depth of around 100 metres. Platinum is used mainly in automotive catalytic converters and at the height of the market in mid-2008, was selling for around $2,300 per ounce. The worldwide recession resulted in the platinum price collapsing to a low of around $800 per ounce in late 2008. By that time, Zimplats had a sizable ore stock pile and thus suspended the expensive open pit mining operations which were no longer viable. The ore body extractable by open pit remains an important source of ore for the future. Operations underground at Ngezi are completely mechanised—Zimplats has only to ship half the output 80 kilometres from Ngezi to Selous using a fleet of nine trucks working 20 hours a day. Interestingly, the road was built by Zimplats in just a few months and yet is capable of taking the weight of 100 tonne trucks every 20 minutes. In the four hours of downtime, routine service is carried out. But it’s worth the effort—many of these trucks have now been working since 2001, far longer than the five years anticipated.

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When the third decline comes on stream, Zimplats will mine 4.2 million tonnes of ore a year. Ninety-seven per cent of this is worthless; but the three per cent that doesn’t end up in a tailings dam produces 125,000 tonnes of concentrate containing a mix of PGMs and base metals. Process this further, and the concentrate is converted to 7,000 tonnes of white matte which realises 180,000 ounces of platinum, 150,000 ounces of palladium and 18,000 ounces each of gold and rhodium, 3,000 tonnes of nickel, 2,000 tonnes of copper and smaller quantities of silver, ruthenium, iridium and cobalt. The white matte is exported to a South African refinery in terms of an off-take agreement which buys the white matte at a price based on the open market value of the contained metals. This has led to profitable operations every year so far, with the exception of 2008. The second stage in a series of planned expansions to grow the business with the objective of achieving annual production of

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Zimplats

When the third decline comes on stream, Zimplats will mine 4.2 million tonnes of ore a year Leonard Light Industries (Pty) Ltd We are proud to be associated with Zimplats (since the original mine construction in 1995 to present) with installing their fire-assay laboratory furnaces and sample preparation equipment, and the ongoing supply of fireassay consumables (flux, crucibles, cupels, etc). Together with our Zimbabwe agent, Proglo Pvt Ltd, we look forward to strengthening our ties going forward.

one million ounces of platinum is the Ngezi Phase II Expansion project, projected to cost around $450 million. Including this investment, Zimplats will have invested $1 billion in the nine years that it has been in operation, making it the biggest investor in Zimbabwe by a significant margin. Completion for the Phase II

expansion is scheduled for 2014. The expansion project consists of a two mtpa underground mine, a concentrator module of the same size, a 35,000 megalitre dam, employee housing and other supporting plant and infrastructure. The project will increase milled tonnage to 6.2 million tonnes per annum and platinum production from the current 180,000 ounces to 270,000 ounces. Implementation is ongoing, with all components of the project expected to be completed by June 2014. Ngezi is not exactly within ‘let’s-have-anight-out’ distance from Harare or even Selous; but at least the improvements Zimplats has made are keeping the workforce—especially the key technical staff—in relative comfort and benefiting the whole of the Kadoma district in the process. www.zimplats.com BE

April 2011 183

Back from

Jeff Daniels looks at o operating in one of th 184 April 2011

Tobacco Processors Zimbabwe

brink

one of Zimbabweâ&#x20AC;&#x2122;s most successful companies he countryâ&#x20AC;&#x2122;s most important sectors April 2011 185

hatever your opinion on the rights and wrongs of smoking, there is no doubt that certain countries would be in real trouble if the tobacco industry disappeared completely. Zimbabwe is a case in point. Reliable and regular statistics have become hard to find since the 1990s but at the time, depending on who you believed, this southern African country was the largest or fourth largest exporter of tobacco in the world. What isn’t in doubt is the contribution that tobacco makes to the country’s economy. Historically, half of all agricultural exports came from tobacco and thereby accounted for nearly 10 per cent of GDP. At its peak, sales of nearly 250 million kilograms of tobacco brought almost US$600 million into the country and found employment for 170,000 farm workers, each supporting over 10 dependants. Since then, due to changes in the agrarian policies ushered in in 2000, output has plummeted, bottoming in 2007 with just 48 million kilograms produced. However last year’s harvest saw sales bounce back, with the Zimbabwe Tobacco Industry and Marketing Board announcing sales of 120 million kilograms at the end of the tobaccoselling season in September. What’s more, tobacco seed sales suggest enough land will be planted this year to take the harvest back up to 200 million kilograms, should growing conditions be favourable.

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Tobacco Processors Zimbabwe

The role of TPZ is to convert the green leaf into the form that cigarette producers want

April 2011 187

Tobacco Processors Zimbabwe

All of which will be good news for Tobacco Processors Zimbabwe (TPZ)—the country’s largest processor of green tobacco leaf, accounting for just under 60 per cent of all production. At the height of the season as many as 1,000 individuals could be working on the Harare factory floor. Next year, TPZ will celebrate its silver anniversary. It was created in 1987 by a group of three tobacco merchants: Export Leaf Tobacco (BAT), Inter-Continental Leaf Tobacco Company, and Standard Commercial (now part of Alliance One International). The company is now wholly owned by three local companies: Northern Tobacco, InterContinental Leaf Tobacco and Tribac. While primarily there for its owners, TPZ can, and does, carry out processing for non-shareholder merchants, in order to maximize economies of scale and scope. The company’s structure is essentially that of a non-profit making organisation whose role is to enhance the competitiveness of its

April 2011 189

A modern plant such as TPZâ&#x20AC;&#x2122;s can remove up to 99 per cent of the stem from the leaf and in so doing, 30 per cent of the leafâ&#x20AC;&#x2122;s weight

190 April 2011

Tobacco Processors Zimbabwe

customers through quality and cost. The role of TPZ is to convert the green leaf into the form that cigarette producers want. In the most simplistic terms, this means stripping away the nondesirable parts of the leaf and then drying, grading and distributing what’s left. Tobacco leaves have a rigid stem running the length of the leaf which creates headaches for end users, as it is so stiff that it would punch holes in a cigarette’s paper casing if it remained in the blend. At the tip of the leaf there is little or no stem, so this is removed immediately, leaving the rest of the leaf to go through several threshing stages in order to remove the stem. A modern plant such as TPZ’s can remove up to 99 per cent of the stem from the leaf and in so doing, 30 per cent of the leaf’s weight. At each stage of threshing there is a complex process of conditioning the tobacco by means of heat and moisture, both supplied by saturated steam from industrial boilers, to encourage the product to become soft and pliable—necessary in order to reduce breakage of the leaves to a minimum. The threshers use a system of fixed and rotating knife blades (teeth) to separate the stem from the leaf. Air blowers, known as classifiers, are used to separate the ‘lights’ or the stem-free tobacco from the ‘heavies’, where the stem is still attached. It can take as many as five passes through the thresher before all the stem is removed, so the skill derives from the process of achieving this with as little damage and stress to the tobacco as possible. Once threshing is completed, all the retained leaf material passes through a dryer where heat from above and below the conveying apron extracts excess moisture from the leaf until the precise specification is reached. The factory is designed to process 500 tonnes per day and is made up of two 10-tonnes-per-hour threshing lines, plus a separate loose leaf/bundle line. The lines have sophisticated PLC controls to govern the speed and TPZ is currently installing new visual impurity

checking equipment to be included in the line. Although the TPZ factory is one of the most modern in the country, it will probably come as no surprise to learn that the work is still highly labour-intensive. For example, tobacco arrives from the plantations in bundles which have to be carefully opened and sorted—work that can only be done by hand. With so many of the workers being casual seasonal staff, surrounded by complex and often dangerous machinery, there is considerable risk of accidents. As such, TPZ and the various strata of managers have safety as their highest priority. TPZ has been recognised by the government body that oversees safety aspects to be one of the foremost companies in promoting a safe and healthy workplace. At one stage, TPZ also won an award from BAT for completing five million accident-free hours of operation. By the same token, conservation of the physical environment is also high on the agenda. To this day, TPZ has put measures in place to ensure that the environmental impact of its operations is kept to a minimum. In line with this, the company has implemented an integrated management system which combines quality issues with environmental considerations. As long ago as 2002, TPZ received certification for both ISO 9001:2000 and ISO14001:2004 after being audited by SAZ (the Standards Association of Zimbabwe). Like many companies operating in the tobacco industry, TPZ is working on a number of social responsibility projects. TPZ itself is cooperating with BAT in encouraging its growers to adopt environmentally friendly farming practices. It is also taking part in BAT’s re-forestation and conservation programmes in Zimbabwe and is providing gardening services to a local hospital as part of its own contribution to the community. www.tpz.co.za BE

April 2011 191

Against all

Swaziland is a peaceful but p problemsâ&#x20AC;&#x201D;but there are som 192 April 2011

Royal Swaziland Sugar Corporation

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waziland is one of those African countries you never hear about, largely because since being dragged into the Boer War between South Africa and Britain 100 years ago, the country has existed peacefully under its odd mix of democratic monarchy. Landlocked between Mozambique and its dominant neighbour, Swaziland has some extremely scenic mountainous countryside around the administrative capital Mbabane that has long provided R&R to South Africans, and that could possibly be a destination for Europeans were circumstances different. Progress in the country is being held back all around by having the highest HIV infection rate anywhere in the world. Taking a lead from the former South African president, it wasn’t until 2004 that HIV was officially acknowledged as a problem. Now, though, a quarter of adults are infected and over half of all young adults in their 20s have the illness. Citizens of Swaziland have an average life expectancy of 32 years. So the country is battling on many fronts; but one of the bright aspects of its economy is the Royal Swaziland Sugar Corporation (RSSC). The royal tag of this publicly listed company comes from its largest shareholder, Tibiyo Taka Ngwane. It’s a unique business entity with many interests, of which its 53 per cent holding in RSSC is just one. Created by the former king of Swaziland on the day of independence from the British in 1968, it is the commercial face of the government’s national development efforts. Through its investments, Tibiyo has directly or indirectly created employment for many thousands of people over the years, as well as contributing heavily to the government through the corporate taxes it pays from these investments.

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Royal Swaziland Sugar Corporation

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Royal Swaziland Sugar Corporation The Swazi economy is largely dependent on South Africa, to where 70 per cent of its exports go. The remainder goes to other key trading partners such as the EU, from where it received trade preferences for sugar—so much so that exports between 2000 and 2005 rose by a half. Since then, there has been a phasing out of preferential prices for sugar, forcing Swaziland to the challenge of remaining competitive in a changing global environment.

throughput of 700 tonnes per hour, producing approximately 450,000 tonnes of sugar (96o pol) per season. The sugar pulp is then used in one of two ways—either going to the refinery, which produced 170,000 tonnes of refined sugar last year, or to a 32 million litre capacity ethanol plant. The majority of Swaziland’s one million population rely on subsistence farming, from

RSSC is located in lowlands in the north-east of the country. It’s one of the largest companies in Swaziland, employing 3,500 people (including additional seasonal labour) and produces two-thirds of the country’s sugar. It has approximately 15,600 hectares of irrigated sugar cane on two estates leased from the government and another smaller, privately owned plot. In addition, RSSC manages a further 5,000 hectares on behalf of third parties, which together deliver approximately two million tonnes of cane per season to the group’s two sugar mills. These two mills currently crush cane at a combined

which they manage to survive on just a few dollars a day. For those in the Lowveld, RSSC is an important partner. With an average of less than five hectares each, over 2,500 families are involved in small scale sugar cane production, delivering 1.2 million tonnes of sugar cane to RSSC’s mills. With the help of the Swaziland Water and Agricultural Development Enterprise, another 3,666 hectares of cane have been brought into production by smallholding farmers in the Komati Basin.

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Royal Swaziland Sugar Corporation With steadily decreasing prices being paid by the EU for sugar, RSSC has no option but to try and improve productivity. As well as the expansion into new districts as mentioned above, the company has accelerated its replanting programme in order to ensure optimum yields on the estates. In both cases, work has progressed quicker than budgeted. To enable precision agriculture into the future and to reduce compaction in defined traffic zones, state-of-the-art global positioning system (GPS) technology is being used for fields that are being replanted under drip irrigation. But so much depends on the rains, and they canâ&#x20AC;&#x2122;t always be expected to come at the right time and in the right quantity. RSSC has invested in drip irrigation lines for the plants but there is still a need for rain. Last year, for example, there were good falls at the start of the season but uncooperative late rains delayed harvesting of the sugar into December, resulting in lower sugar content than might otherwise have been the case. After the weather, the most important factors affecting profitability are input expenses. Milling and refining consume large amounts of electricity and RSSCâ&#x20AC;&#x2122;s largest expense is for coal. Last year it spent in the order of ÂŁ6 million on its own power generation as well as buying electricity from the grid. There was also several million pounds of expenditure on fertilisers. Power is one of the key factors influencing future performance and RSSC is planning to have two new 30MW power plants. Ideally, gases produced in the refining process will eventually be harnessed as fuel; but investigations are taking place on how waste from the fields can be brought into the process. Such a scheme would make the plants completely self sufficient and even enable power to be fed back into the grid with the possible long term goal of making Swaziland the first self sufficient country in Africa. With so many health and welfare issues affecting the country, all businesses which can must play a part in raising living conditions for ordinary citizens. RSSC provides healthcare at two site-based clinics where the emphasis is on primary healthcare and the prevention of diseases. RSSC has recognised that HIV/AIDS is a strategic business issue; and its management has the close personal attention of the managing director who chairs a tripartite committee overseeing operations. In addition there are two voluntary counselling and testing centres, and free anti retroviral treatment is available for employees. www.rssc.co.sz BE

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Dimension Data

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ll know that linking the various elements together t one organisation that makes it look that way April 2011 201

tudy the progress of Dimension Data since its inception—which has been nothing short of meteoric—and you’ll see that it involves three parallel strands. Despite having a global workforce of over 12,000 and revenues last year of £3 billion, Dimension Data is one of those companies that is a towering giant within the IT community but largely anonymous outside. Part of the problem here is the difficulty in defining exactly what it does—or at least putting limits on what it does. An article such as this can barely scratch the surface.

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Unified communication (UC) solutions that make a difference. In the crowded world of enterprise communication solution providers, one star shines brightly. As a leading global enterprise communications provider, Aastra delivers business communication solutions that truly shine above the rest. Experts in unified and collaborative communications, Aastra helps businesses and people communicate and collaborate more effectively. Innovative, experienced and customer focused, Aastra delivers communication solutions that help grow our customers’ business. Consumers are faced with excessive choice in terms of brand and technologies available in the market today. Unfortunately this buffet of options can sometimes cause more confusion than an actual understanding of the benefits a company will derive from each solution. Effective communication is more about culture than technology. UC simply provides the tools to get you to the level you require. The manner in which people communicate is also changing. More and more, we move towards communicating according to the situation we’re in. With the explosion of social media as the preferred method of communication between friends and family, we are able to choose ‘on the fly’ the best communications methods to fit your need. In some cases it makes sense to use voice, but in others you may find instant messaging (IM) or video to be the best choice. The person you’re contacting also has the option to choose how they wish to be reached, depending on their current activity and presence status. Aastra caters to and enables this level of flexibility through various solution components including: • Fixed mobile convergence – The integration of a smartphone into the core telephony solution, assisting to reduce call costs (LCR) and ensuring that your mobile workers retain the features and functions they have access to while using their desk phone (e.g. short number or extension dialling). • Remote agents – Your call or contact centre does not need to be restricted geographically. You can have remote agents working from different branches or even from home, while still reserving all the capabilities of being in the primary office. Contact centres are also able to route alternative media like SMS, web chat and email, along with traditional voice. • Softphone – Your ‘road warriors’ are able to set up a virtual office no matter their location, by simply having a portable computer and an internet connection. They are able to emulate desk phone features like corporate directory access, directly from their softphone. • Collaboration suites – There are many roles in a company that require specific competences and applications that cater to these roles. Aastra CMG addresses these different needs and is tailored to fit each user profile, while remaining flexible enough to integrate into a wide variety of corporate environments. For example: attendant console, presence and availability management, collaboration, automated self-services and desktop call handling. The suite enables the users to choose the most suitable way of communicating, via voice, professional networking, conferencing and chat. UC is a set of interfaces and applications that take the best parts of social networking tools and adapts them to the modern business environment, seamlessly integrated into current business processes. It’s not possible to ‘open up’ the internal communications and network of a company to everyone in the outside world, for security, reliability and usability reasons; but you can offer a similar look and feel in a corporate environment, maintaining the right level of controls and effectiveness that your business requires. This means that if you’re in a meeting, maybe you don’t want to take a voice call but rather an IM instead, because it’s non-intrusive. We avoid the all-or-nothing situation which typically sees the call diverted to voicemail. Then another number is called and ‘Please leave a message after the beep’. A voicemail is left and the call is returned at a later stage only to receive the same message. Ping…pong… Bottom line: loss of efficiency or lack of responsiveness. Time lost and maybe even business lost—not due to your lack of desire or effort, but simply due to the technology you were forced to use. With today’s technology and protocols (e.g. SIP), if someone contacts us, they offer several methods to communicate. The receiver’s device, based on a set of preferences, accepts one or several of these methods depending on what is convenient at the time. That is Unified Communications. That is also why Aastra has chosen to partner with organisations that are experienced in defining key requirements and desired benefits and matching them with the most efficient, cost effective and practical solutions available in the portfolio—keeping our customers’ best interests at heart, while improving the way in which they conduct their business. Dimension Data is a shining example of this, having been a business partner since 1998, well before the Aastra acquisition of the Enterprise business unit of mobile network provider Ericsson in 2008. Creating a staggered, easily adopted approach to UC and as an organisation focused on maintaining skills and expertise, Dimension Data has seen much success over the years while delivering tailored Aastra solutions into the sub-Saharan African market, including many government departments and blue chip organisations. To ensure accessibility to this level of quality and experience, Aastra is constantly striving to expand its channel footprint throughout sub-Saharan Africa through the addition of accredited business partners and resellers, ensuring professional and convenient service and support across most of the African continent. In support of this, Aastra recently redesigned its Partner Program, further accommodating and steadily developing new and up-and-coming organisations committed to the sale and support of the Aastra portfolio. Based in sub-Saharan Africa and looking for more information on the purchase or resale of Aastra solutions and applications? Give us a call on +27 11 723 9980 or send us an email at sales_ssa@aastra.com and we’ll get you started.

Started in Johannesburg in 1983, when the notion of networked communications was first making an entrance to the business world, Dimension Data has evolved into the archetypal specialist IT services and solutions provider, helping clients plan, build, support and manage their IT infrastructures. It operates at the forefront of networking and communications technology on five continents and 49 countries in all industrialised corners of the globe. Today, within the company’s worldwide interests, South Africa is one of several operating divisions including the rest of Africa and the Middle East. In charge is CEO Allan Cawood, himself founder of DNS, which grew to become South Africa’s third largest specialist networking organisation. “From the very outset,” he says, “the ambition and vision of the business has been clear. The managers of Dimension Data knew that the capacity to work on a grand stage was paramount.” One wonders, though, whether the three young South Africans who left the comfort of their salaried jobs to start a fledgling business could have anticipated the scale of what they were starting. Long before investing in dot com businesses was fashionable, Dimension Data had made a sufficiently strong name for itself to go public just four years after going into business. At the time, the R7.5 million that was raised seems a paltry amount compared with the magnitude of investments associated with the business these days. Last year, Nippon Telegraph and Telephone Corporation, one of the largest telecommunications service providers anywhere in the world, reached an agreement with Dimension Data and acquired the entire shareholding of the company for approximately £2.1 billion in cash. These days, Dimension Data’s Systems Integration business generates 82 per cent of

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the group’s annual income by providing specialist IT infrastructure solutions across six lines of business: Network Integration, Converged Communications, Security, Data Centre Solutions, Customer Interactive Solutions and Microsoft Solutions. To get to this point, Dimension Data has from the very earliest of days undertaken an aggressive programme of acquisitions. Within just a few years of going public, the first tentative expansion occurred— first into the neighbouring country of Botswana and then gradually casting the net wider across Africa and into the Asia Pacific region. Since 1996, barely a year has gone by without buying into some key business—either partially or entirely. The year 2000 was a particularly hectic year: first achieving public listing on the London Stock Exchange and then spending in the order of three quarters of a billion dollars making three IT acquisitions in the US and another in Switzerland, as well as buying outstanding shares in existing investments in the UK and Australia. So far, then, we have seen two of the three strands: inherent IT engineering skills and a global vision. The third element of Dimension Data’s success revolves around the strategic partnerships it has built—particularly with Cisco and Microsoft. “From the early 1990s,” explains Cawood, “we have been linked with Cisco. We were granted Gold Partner status in 1994—one of only six at the time outside the US—and since then we have won countless awards from Cisco for our performance.” In fact Dimension Data has been named ‘Partner of the Year’ on several occasions and last year became only the fourth company anywhere to achieve Cisco Global Certification. The relationship with Microsoft is almost as longstanding and equally bountiful in terms of awards won and Gold Partnership status earned. In addition, Dimension Data has technology partnership agreements with numerous blue chip names representing the crème de la crème of what’s available in IT. “Dimension Data’s global expansion,” says Cawood, “has mirrored the drive amongst corporations for a

Dimension Data

From the very outset, the ambition and vision of the business has been clear. The managers of Dimension Data knew that the capacity to work on a grand stage was paramount

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worldwide presence. We have identified all the key elements needed to work internationally and brought them into the group.” For clients, welding IT components together that have different technological biases, heritages and local business rules can be a daunting challenge. Global companies depend on networks providing fast, seamless connectivity but have often learnt the hard way of their fragility. When a network goes down, business suffers. Seemingly small slip-ups can cripple things and, in today’s competitive marketplace, outages can be extraordinarily expensive in terms of business productivity and damaged client confidence. “One of the key features in our success,” says Cawood, “is our capacity to provide a single point of accountability for all IT procurement and logistics needs. We open a window of visibility for clients into the entire supply chain.” While the majority of revenue for Dimension Data comes from the services it provides, one of the subsidiaries it owns is Plessey, a name synonymous with engineering hardware for over half a century. From an IT solutions perspective, Plessey, with a track record spanning 50 years and regional offices in 13 African countries, is Africa’s leading provider of telecoms infrastructure solutions. Plessey has built a reputation of trust and dependability through its project management approach and has become Africa’s premier provider of turnkey telecommunications solutions. Plessey’s commitment to quality is demonstrated by the company’s ISO 9001 accreditation and is acknowledged in the industry for its commitment to ‘execution excellence’. Plessey’s expertise has seen it build mobile network base transceiver stations (BTS), wireless local loop (WLL) systems and fibre optic installations in excess of 8,000 sites and 7,500 kilometres respectively, in 26 countries across sub-Saharan Africa.

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Dimension Data weathered the slump the IT industry felt in the early 2000s and despite a marked decline in business from the financial sector, has managed the past couple of years with equal success. Strong growth in Managed Services and in Internet Solutions has seen revenue growth in double digits. Internet Solutions provides IP-based connectivity, communications, data centre and carrier services throughout Africa, serving large public and private sector organisations, medium-sized organisations and, through its channel programme, smaller organisations and consumers. Connectivity solutions include corporate internet access, virtual private networks, community-based connectivity services and broadband; and the business also facilitates person-to-person communications, with services including voice, messaging, facsimile, mobility and fixed-mobile convergence. Internet Solutions’ data centre services provide physical computing infrastructure and applications in the cloud; while carrier offerings include the self-provision of physical connectivity services in cases where it is unable, through normal supplier relationships, to source those services at a competitive price or service level, or where attractive niche opportunities exist. Meanwhile, tight control over costs has increased gross margin to over 20 per cent with larger dividends and increased cash holdings. www.dimensiondata.com BE

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Brand

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n the world of information technology, where brands come and go with the speed of light, there is a handful of names that have withstood the test of time and are just as important now as they ever were. One such brand is Xerox—in some parts of the world a generic synonym for a photocopy but in reality an influential source of new technology concerned with every aspect of office automation and data presentation. Xerox has been a part of the South African business scene since 1964 but these days operates under the auspices of Bytes Document Solutions (BDS)—itself a subsidiary of the listed business of Altron, with Kagiso Trust Investments as its broad-based black economic empowerment partner. Altron also traces its roots back to the 1960s, when a small electronics business was started up by the legendary South African figure of Dr Bill Venter that has become one of the country’s most important and wide ranging business organisations.

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As we’ll see later, BDS has more strings to its bow than just Xerox; but as the sole authorised distributor to 27 sub-Saharan countries of the complete range of Xerox document equipment, software, solutions and services, the brand generates 70 per cent of BDS’s revenue. “Xerox is a wonderful brand to be associated with,” says BDS’s CEO Hennie du Plessis. “By investing five per cent of revenue in research and development each year—some of it with outside organisations such as MIT which has carte blanche to look at green technologies, smart document technology, nanotechnology and micro electro mechanical systems—it remains among the world’s leading innovators. Records show that Xerox has over 8,600 active patents and the 15 most prolific of Xerox’s scientists have each exceeded 100 US patents. No wonder there is never any shortage of new ideas to take to customers.” And BDS has customers aplenty—more than 10,000 to be exact—making it the largest automation company on the African continent, with revenues exceeding R1.8 billion. In all there are 40 South African service centres and 40 more throughout sub-Saharan Africa, employing in excess of 1,350 people. Xerox’s list of firsts is nothing short of amazing; and collectively, they have an impact on every office worker in the world: the fax machine, the graphical user interface, the mouse and laser printing are all courtesy of Xerox. And the march towards greater efficiency and lower operating

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Records show that Xerox has over 8,600 active patents and the 15 most prolific of Xeroxâ&#x20AC;&#x2122;s scientists have each exceeded 100 US patents

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costs continues unabated. As an organistion, Xerox has long embraced environmentally sound practices and is incorporating the same ideals into its products. When laser printers first took the commercial world by storm, the concept of sustainability and pollution barely existed. These days, though, it is known that a colour laser printer can produce more than 70 kilograms of waste in the course of producing 100,000 prints. The Xerox solution has been to eliminate the need for toner cartridges and replace them with solid ink sticks which work like crayons that melt and adhere to paper. Not only do such printers produce a fraction of the waste, the latest models are even more frugal with energy and consumable packaging. Similarly, Xerox’s emulsion aggregate toner uses a massive 60 to 70 per cent less energy per page than conventional toners as well as doubling the number of pages printed per kilogram of toner. But perhaps the most remarkable discovery by Xerox scientists has been to develop a way to make prints with temporary images, thus enabling the copy paper to be reused repeatedly. It’s been estimated that as many as two out of every five pages printed in the office are just for daily use—emails, web pages, reference materials and the like that have been printed for a single viewing. Now Xerox has the power to make a considerable ontribution to better use of the world’s paper resources. Apart from its hardware, Xerox is also one of the world’s leading providers of imaging supplies, paper and other consumables. For many businesses, all they ever need can be obtained from the Xerox brand. But as du Plessis explains, Bytes wanted to offer more. “Some years ago BDS recognised that for a truly all round service to the market as a whole, additional strengths would be necessary. As such, the development of our business is reflected in a series of strategic acquisitions that have been made through the years. The most notable standalone names in the BDS stable are NOR Paper and LaserCom which contribute the remaining 20 per cent and 10 per cent

of Bytes’ turnover respectively.” NOR Paper is in its own right one of the largest paper merchants for commercial printers in South Africa, with branches throughout the country, supplying clients which cover the full spectrum of companies from printing and allied trades, through stationers and small businesses. Whatever sizes and weights in coated, uncoated or carbonless papers clients need, they are quickly on their way via NOR’s own fleet of 68 delivery vehicles making scheduled deliveries twice per day. LaserCom, on the other hand, represents the modern outsourced version of what once was undertaken in-house in typing-, print- or filing-rooms. Mundane but vitally important business-critical documents such as bills, statements, invoices, cheques and even examination papers rub shoulders with full colour, highly personalised marketing material. LaserCom helps design, prints and delivers—either conventionally or electronically—and then can even store the documentation on behalf of space-starved customers, providing them with access via LAN, WAN or across the internet. With such a strong market share in Southern Africa, BDS is now looking further afield, wanting a presence in the remaining African countries and even across the waters into the Middle East. “The opportunities technology offers today,” says du Plessis, “means that developing countries are able to skip certain levels, giving them a shortcut to higher digital solutions. But to be truly successful, this can only be done with equipment and systems that are not only tried and tested in their own right but also work together seamlessly. In this respect, there are few organisations which can match what we offer, thanks to Xerox.” www.bdsol.co.za BE

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