T S E B O FA C I L I T I E S SOLUTIONS
TSEBO FACILITIES SOLUTIONS
Happy New Year Africa PRODUCTION: Colin Chinery
New ownership is propelling Africa’s leading integrated facilities management provider, Tsebo Facilities Solutions, towards major Continental expansion. “As an African company with African solutions, we have something unique that appeals to the African Market,” says Director of Projects, Andrew Mason.
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Led by heavyweights South Africa and Nigeria, and with ongoing growth from rising top performers such as Côte d’Ivoire and Ghana, 2018 is set to be the year that gives African growth a new boost, says Ecobank Group Research. It’s a regional hot list that could double as the expansion strategy roll-out map of Tsebo Facilities Solutions, Africa’s leading integrated facilities management provider. Serving some of the biggest clients in the industry such as Barclays Africa Group, and currently managing more than 4000 sites across the continent in sectors including leisure, retail, banking
and commercial, the Johannesburgheadquartered company is delivering African expertise with global standards. “As an African company with African solutions, we believe we have got something unique that appeals to the African Market,” says Director of Projects, Andrew Mason. FORCE FOR AFRO-EXPANSION And not only Africa. Early this year the French group Wendel, specialists in investing in African businesses, moved in to acquire Tsebo Facilities Solutions. Impressed by its 47-year credentials and potential as a force for geo-expansion, the Morocco-headquartered business
wasted little time unfolding its ambitions. In what Mason calls “a very in-depth strategic exercise,” Tsebo is looking at expansion into North and Mid Africa as well as sub-Sahara. Egypt has been identified as a likely market - Tsebo is already established in Saudi Arabia - with Nigeria, Ghana and Côte d’Ivoire marked for further growth, and countries such as Mali, Niger, Rwanda and Senegal in its sights. “This will be a new adventure for us and one predominantly guided by our shareholder.” It’s a strategy that combines ambition with sensitivity towards national, cultural and economic nuances. “We see Africa as a huge growth
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INDUSTRY FOCUS: PROPERTY
potential, and being a South African born and bred company, we feel we have some insight into what goes on in Africa, although that is always dangerous to overstate. “We in South Africa – I speak as a Brit who has lived here for 20 years – have a tendency to parachute in and tell the locals what we know, what we are doing, and then - probably not having understood the indigenisation and localisation requirement - promptly go and stuff it up. And this comes across as a very arrogant attitude.” FAULT LINE Recognising the fault line, Tsebo held back. “We saw a lot of our competitors trying to parachute solutions and people into those countries and come away with their tail between their legs. So, we took a very different, much more slowly-slowly approach, and went in and bought companies in those locales. “As the South African economy
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was slowing down we saw the growth potential in some African countries was in double figures. It has slowed down a little since, but in certain cases you are seeing growth in high single figures that makes our 1% in South Africa look pretty sick.” Commercial arguments for African penetration are sound and Tsebo is best placed to drive it, says Mason. “We are seeing America-centric and Euro-centric based companies coming in trying to conquer Africa and finding it difficult. So, we feel there’s a place for an African provider to go in and provide African solutions.” But for African countries, facilities management is a “brand new term they are still getting to grips with. However, they do understand asset management, and the maintenance cycle within an FM environment aligns itself very much with asset management. So, we are looking to improve our hard services in terms of the products we offer - we still offer
this through a supply chain - but we are looking to bring this closer and closer into our core business.” INCREASING SOPHISTICATION And facility management solutions are expanding both in reach and sophistication. Initially a starting point of single-purpose contracts - typically maintenance, cleaning or security facilities management has broadened to encompass an assortment of services outsourced to a multi-discipline contractor. Businesses and organisations are freed to focus on what they do best, while the facilities management company assumes responsibility for the rest. “Typically, facilities management has always been focused on non-core services. Take cleaning for example. Most companies in South Africa, and also in the UK, outsource their cleaning; it’s natural and it’s non-core. “Turn that around and look at the
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healthcare market, and cleaning is actually a core business. It’s the same in the hospitality market – walk into a hotel and you will see this - so while the same services, you have to focus them differently in those different verticals. There’s nothing new under the sun, but each vertical you go into offers a different context and focus.” According to a study in which he was closely involved, a mere 13% of companies are outsourcing their FM. “We have a scenario where the majority of companies will outsource cleaning, security and catering, but keeping the management in-house. “So, in looking to grow we have to produce a bid that talks to the people in that business, and this is one of the areas we are very highly focused on.” MORE THAN A MOP And technology is improving delivery. “South Africa has just been through a drought, and we have implemented new mop technology in KwaZulu-Natal’s health care environment that has produced significant water savings. So, whilst cleaning is cleaning is cleaning is cleaning, it’s really a case of context, differing wherever you deliver it.” One potentially rewarding new sector entry is oil and gas. “Certainly in West Africa it’s one of the areas we want to get into. This brings with it a whole new context around health and safety, compliance – an increasingly significant issue - and probably industrial-type cleaning, which we probably haven’t yet fully grasp. “We operate the oil and gas market in Saudi, but predominantly from a catering perspective not FM services and we will probably try and cut our teeth in that environment and then use that expertise to sell into West Africa. “We are not yet there, but are looking at opportunities, and have just purchased an FM company in Nigeria with contacts in the oil and gas market and we are busy incubating these.” In a highly diverse continent, local knowledge can be best gained through
TSEBO FACILITIES SOLUTIONS
acquisition. “Nigeria for example is a seven-hour flight from here, so the idea of trying to export South Africans and South African technology to a very proudly West African country is just nonsensical. You have got to go in and acquire. It’s the only way to do it.” Close to home however, and selfbuild becomes attractive. “I am looking to build up operations in Botswana, very akin to South Africa but with cultural nuances, and with the government there controlling much of the infrastructure you have to go in with open eyes and see what is required. So we are not buying a business but building one from scratch.” BOTSWANA SHOWS THE WAY Mason sees Botswana not only as an opportunity but also a realistic business savvy model in bleak contrast to South Africa’s ruling political orthodoxy. “Here we have a very labour focused left-wing government that sees outsourcing as a threat to organised labour, almost a dirty word, with a lot of politicians running on a ticket to re-insource or kill it off. “In Botswana, a strategy is being implemented in which all government buildings will be outsourced to private facilities management companies by 2026. I am currently involved with the Ministry of Health where we are looking to kick off a big FM operation in health care facilities. So here we have two governments which share a border, but with two diametrically opposed views on outsourcing. “And from a South African perspective this is why we started moving out into Africa. There, it’s very much more business friendly compared with what is seen in this country as a very business unfriendly government, particularly around outsourcing.” And for Tsebo, the troubled South African economy brings a paradox. “Because people are looking for cost savings, outsourcing is one of those industries that tends to do quite well in a falling economy. But there’s a sting in the tail, for while we are probably busier than we have ever been in terms of answering
Andrew Mason
tendering and other enquires, these are very very cost focused, many of them unrealistically so. “I have one sitting on my desk at the moment where they effectively don’t know what assets they have or what they are. And yet they want us to give them a fixed price that will save them 15% on the bottom line. It’s very much an immaturely led cost-savings procurement pick box bidding war out there, and quite frankly we are not in that business.” Tsebo’s backdrop year-on-year near-20% growth is outstanding and the pressure is on to maintain that, says Mason. “Not always easy to achieve in this environment, but we are certainly very positive that we can.” AFRICAN BANDWAGON He had just come off a phone call from a major European telecoms company with global ambitions. “They can’t find a provider that wants to provide for them in Africa. There are a lot of European,
American and Far-Eastern companies looking to get on the Africa growth bandwagon of growth in Africa in all sorts of industries. “They want to export their ex-pats into Africa, but knowing they will still have to provide them with services and support, they are looking to the likes of us. And compared with some of our competitors I think we have something unique; an African company with African solutions delivering to world class standards. Yes, the future is very exciting.”
TSEBO FACILITIES SOLUTIONS 011 441 5300 southafrica@tsebo.com www.tsebo.com
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Issue No.65
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