Enterprise Africa April 2016

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

AFRICA

ENTERPRISE April 2016

www.enterprise-africa.net

NFB FINANCIAL SERVICES:

Sowing the Seeds

of Success ALSO IN THIS ISSUE:

Shell SA / Build It / Steval Engineering / Blaauwklippen Vineyards

Wherever a major project is transforming the sector, we’re there.

As a top-ranking advisor right across the sector, we can be found at the heart of significant developments all around the world. We are routinely involved in projects that redefine the industry – not just in terms of sheer scale, but also in terms of innovation within emerging markets.

This means that we can offer a guiding hand, no matter how far your next project will take you.

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EDITOR’S LETTER

Joe Forshaw EDITOR joe@enterprise-africa.net Hal Hutchison SALES MANAGER hal@enterprise-africa.net Sophie Bolderstone SENIOR PROJECT MANAGER sophie@enterprise-africa.net Sam Hendricks SENIOR PROJECT MANAGER sam@enterprise-africa.net Shaun Cousins PROJECT MANAGER shaun@enterprise-africa.net Shannon James PROJECT MANAGER shannon@enterprise-africa.net Daniel Scott PROJECT MANAGER daniel@enterprise-africa.net Alex Kane PROJECT MANAGER alex@enterprise-africa.net Jane Larkman ACCOUNTS MANAGER jane@enterprise-africa.net Design by Naked Marketing +44 (0) 1953 850211 www.nakedmarketing.co.uk

Published by CMB Multimedia Chris Bolderstone – General Manager E. chris@enterprise-africa.net John Mulley - Financial Director E. john@enterprise-africa.net Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU,

Welcome to our latest edition…

//

Last month we had the opportunity to taste some fine South African wine and needless to say it didn’t disappoint. The country is blessed with some of the finest winemakers and wine making conditions in the world and it shows in the quality that comes from the first-class estates. However, South Africa is also boosting its export reputation in a big way when it comes to other drinks, especially gin, brandy, whisky and craft beer. This month, we had the pleasure of trying some excellent offerings from the Blaauwklippen Vineyards, where they make outstanding wine as well as other spirits. The gin, brandy and other aperitifs all helped us to relax over the Easter break and we look at what makes them great on page 10.

We also take an in-depth look at one of the country’s leading wealth management businesses, NFB Financial Services, where CEO Mike Estment explains more about how the company invests heavily in its people to ensure ongoing success. Now is an interesting and challenging time for those looking to invest. The economic climate is playing havoc with finances and confidence and the fluctuating currency means that even offshore investments are not as predictable as they used to be. Fortunately, NFB has many years of experience and an industry leading team, offering sound advice and looking to build relationships rather than ‘hit and run’.

If you are an investor and have had positive or negative experiences in the market in recent times, we would like to hear from you – get in touch online @EnterpriseAfri1. Tell us how you navigated the waves in the markets and where you think is a safe destination for money in the future.

T. +44 (0) 20 8123 7859 E. info@enterprise-africa.net www.enterprise-africa.net CMB Multimedia does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published.

All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Multimedia Ltd 2016

Joe Forshaw EDITOR

GET IN TOUCH +44 (0) 20 8123 7859 joe@enterprise-africa.net

www.enterprise-africa.net / April 2016 / 3

06/NEWS: The Month that was...

A round up of some of the latest news stories in the industry

10/FEATURE: Special Spirits from Stellenbosch At Enterprise Africa, there’s nothing we love more than handcrafted produce straight out of Africa so we’ve taken it upon ourselves to review and recommend some of our favourite spirits, not based on price or region, but based purely on taste and enjoyment…

60/EXHIBITION CALENDAR: Key Upcoming Events Across the Country Our regular update to help you keep track of important events and exhibitions taking place across the spectrum of industry sectors.

14/

4 / April 2016 / www.enterprise-africa.net

14/NFB FINANCIAL SERVICES: NFB Sowing the Seeds of Success NFB’s financial advisors are farmers but not in the traditional sense. These industry-leading experts provide independent financial advice, products and services to high worth individuals, trusts, businesses, and institutions and help them to grow and nurture their wealth.

CONTENTS 24/

24/SHELL SOUTH AFRICA: Adding Value to Our Mineral Wealth Shell South Africa has a nationwide retail network of strategically located service stations as well as interests in many business areas.

30/CONLOG: Smart Satisfaction for Consumer and Utility As the need for electricity grows, so does the need for effective solutions when it comes to billing their customers and ensuring fair, efficient and stable supply.

34/LONA CITRUS: Growing in Harmony With Nature 20 years on from its founding, Lona Citrus is today one of the largest citrus fruit exporters in South Africa.

40/STEVAL ENGINEERING: Strength Through Strategy ‘Possibility is everything’ at Steval Engineering but with new challenges emerging all too frequently for companies working with steel, how do you go about ensuring a smooth pipeline for the future?

40/

52/

46/SOUTHERN AIR CONDITIONING: The Western Cape’s Largest and Most Successful Air Conditioning Contractor With a long history and reputation for quality, SAC is now one of the Cape’s and country’s go to companies when it comes to HVAC solutions.

52/BUILD IT: Complete Solutions for the African Home A division of the SPAR Group, Build it is a voluntary group of independent retailers, whose specialities lie in building materials and the related hardware. Among its primary focusses are the building of the basic urban house and rural housing, alongside all manner of home improvements across its ever increasing Southern African footprint.

56/NEOLIFE: Rebrand Boosts Growth for Neolife The Neolife business in South Africa tells a story of success in a commercial sector where so many others have failed.

Following a rebrand and the release of a number of exciting new products, this a company that is set to thrive throughout 2016 and beyond.

www.enterprise-africa.net / April 2016 / 5

TRANSNET DELIVERS NEW COACHES TO BOTSWANA

Transnet Engineering has delivered the first batch of passenger coaches engineered and manufactured at its centres of excellence in Pretoria and Cape Town to Botswana Railways.

Transnet said the successful delivery of the first 22 of 37 passenger coaches confirms the strides it has taken as it advances towards becoming Africa’s leading manufacturer of rolling stock.

“Transnet Engineering, Transnet’s specialist engineering manufacturing and maintenance of railway rolling stock division will deliver the remaining 15 coaches by May this year.

“The order is part of Botswana Railway’s purchase of 37 coaches,” said the SOC. The passenger coaches were transported to Gaborone on rail from the company’s facility in Koedoespoort, east of Pretoria.

Transnet said the supply to Botswana Railways is a significant step

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//THE ORDER IS PART OF BOTSWANA RAILWAY’S PURCHASE OF 37 COACHES// in Transnet’s drive to establish itself as Africa’s premier manufacturer of rolling stock.

“In the previous financial year, Transnet’s Board of Directors adopted the Africa Strategy which outlines the company’s intention to extend its business beyond the borders of South Africa,” said Transnet.

The entity won the contract following a public and competitive bidding process in which it excelled on technological innovation, delivery schedule and pricing.

It said the order is a key element of Botswana Railways’ plan to reintroduce its passenger rail service.

The coaches were engineered and manufactured to exact specifications at Transnet’s state-of-the-art facilities in Koedoespoort and Salt River,

Cape Town. They boast modern features including roof-mounted air conditioners, state-of-the-art first-class sleeper designs, Wi-Fi technology and entertainment systems.

“As a result, the company’s revenue from cross-border activities has increased from R1.5 billion in 2014 to R2.6 billion in 2015. As a percentage of revenue, the contribution of crossborder activities has grown from 2.6 percent in 2014 to 4.2 percent in 2015,” said Transnet.

Transnet Engineering Chief Executive Thamsanqa Jiyane said this is a huge milestone towards their goal of becoming an “original equipment manufacturer of distinction” and Transnet’s objective to extend its business beyond the borders of South Africa.

NEWS ROUNDUP ST HELENA COULD BECOME STRATEGIC STOP OFF FOR AFRICA-SOUTH AMERICAN TOURISTS With the opening of a new airport on St Helena in May, not only will the remote South Atlantic Island’s centuries of isolation come to an historic end, but it could also become a stepping stone for those travelling between South America and Africa.

In recognition of its unique position, St Helena has been welcomed as a member by both the African Travel & Tourism Association (Atta) and the Latin American Travel Association (Lata), becoming the only country in the world to do so.

St Helena is best known as the final home of the exiled Napoleon Bonaparte. It is located 1200 miles from the South-West coast of Africa and 1800 miles from the coast of South America, and currently only accessible by boat. Officially, St Helena is part of Britain.

Each year, approximately 600 yachtsmen and women stop off on St Helena as they sail between Africa and South America, as well as thousands of passengers on cruise ships travelling between the two continents.

Director of tourism, Chris Pickard said St Helena is uniquely positioned as the only habitable island virtually half way between the two continents.

“Both are seeing significant increases in visitor numbers and we believe that St Helena could, over time, become a twin destination for holiday makers looking for a new experience.

Although we have only recently joined them, we have already had several meaningful discussions with organisations from both continents and I am confident that St Helena will soon emerge on Latin America and Africa itineraries,” he said.

R5BN SOLAR PLANT OPENS IN NORTHERN CAPE The R5 billion Bokpoort concentrated solar plant (CSP) has officially been launched in Groblershoop, Northern Cape.

Trade and Industry Minister Rob Davies welcomed the major investment by ACWA Power, a Saudi Arabian company. “[The] project instils confidence in government’s long term infrastructure roll out, providing energy access, contributing to economic, community and sustainable development,” he said at the launch of the plant.

Minister Davies was joined at the launch by Saudi Arabian Trade and Commerce Minister, Dr Tawfiq Al Rabiah, who is also in South Africa for the 7th session of the South Africa-Saudi Arabia Joint Economic Commission (JEC).

The 50 MW Bokpoort plant forms part of South Africa’s Renewable Energy Independent Power Producers Procurement Program (REIPPP).

“This project marks a key milestone in South Africa’s electricity supply security and CO2 reduction. With its record 9.3 hours thermal energy storage capacity, the Bokpoort CSP project will provide electricity to approximately 21 000 households during the day as well as night time and save approximately 230 000 tons of CO2 equivalent emissions during every year of

operation,” said Minister Davies.

Within five years, the REIPPP has attracted R194 billion of investment and is fast becoming a global model and blue print for other countries, providing policy certainty and transparency.

The Minister said the project has a major socio-economic development impact for the Northern Cape and South Africa. Over R2.4 billion was spent on local content, with 40% of the Bokpoort plant being sourced and manufactured locally. This includes the manufacturing and assembly of solar field collector steel structures and the supply of piping and cables.

During construction peak time, more than 1 200 people worked on site, while 70 permanent jobs have been created to operate and maintain the plant. The plant was constructed over 30 months.

“The operation of the plant will provide electricity to the Eskom grid to power communities and industry by ensuring a reliable source of renewable energy and increasing power supply.”

ACWA Power aims to expand its Southern African portfolio to 5 000 MW by 2025. The group has identified South Africa, Namibia, Mozambique and Botswana as key growth markets in the region.

www.enterprise-africa.net / April 2016 / 7

NEWS IN BRIEF EKURHULENI TRAIN MANUFACTURING PLANT TO CREATE JOBS A 72-hectare train manufacturing plant, which will be built in the City of Ekurhuleni, is expected to create more than 2 000 job opportunities.

The plant which will be built in Dunnottar in Nigel, is an initiative by Prasa-Gibela in partnership with the National Department of Transport and the City of Ekurhuleni.

Ekurhuleni Mayor Mondli Gungubele said at the sod turning ceremony that the establishment of the plant is a great milestone for the city.

“Zoning such a big space of land for such an initiative gives one a sense of relief knowing that it is for the benefit of our people. The job opportunity projections and the economic boost that will be brought about by the existence of this plant in our city speaks volumes,” Mayor Gungubele said.

The city said the plant, which is valued at approximately R1 billion, will enable the Passenger Rail Agency of South Africa (Prasa) to have new trains manufactured and maintained locally.

Several kilometres of rail network and a 1.2km test track is also included in the plant design.

Approximately 30 hectares have been reserved for a supplier park.

This will house all the suppliers to the main manufacturing plant, which are made up of small, medium and micro enterprises (SMMEs) specialising in various areas of rail-related manufacturing.

Within the next 10 years, the supplier park will become a centre of excellence for train manufacturing.

8 / April 2016 / www.enterprise-africa.net

LOCAL MANUFACTURERS GET R54BN OF TENDERS Tenders worth R54 billion have been awarded to local manufacturers and suppliers in the past year, according to Trade and Industry Minister Rob Davies.

Speaking at the Buy Local Summit, hosted by Proudly South African, in March, Minister Davies said more than 160 tenders went to local manufacturers and suppliers in the country.

According to the Minister, the increase in local tenders going to local manufacturers is due to the support of government in the Preferential Procurement Policy Framework Act, which designates specific goods that should be locally manufactured. These tenders, said the Minister, include local components manufactured for locomotives and buses.

“These 2011 designated products also include rail rolling stock, bus bodies, the textile, pharmaceutical, clothing and leather sector, power valves, steel conveyance pipes, electrical and telecommunications cables and set-top boxes. There are more designated products in the pipelines for fruit products and steel,” explained Minister Davies.

The Buy Local Summit serves as a platform for government and business to provide feedback on local procurement efforts and the influence it has on job creation.

The summit also provides an opportunity for government and

corporate businesses to access the Proudly SA member companies, with some 200 exhibitors showcasing their products and services at the Expo.

The Minister praised the Passenger Rail Agency of South Africa for awarding a tender to Alstom to manufacture more than 7 200 coaches locally at a cost of R123 billion that will see the company creating more than 8 000 direct jobs.

“Transnet also awarded a total of R50 billion in contracts to a number of local companies to build 1 064 electric and diesel locomotives in South Africa that were mainly imported during the 2010 World Cup. This has also led to all the buses that are being procured by municipalities for rapid transport being made and procured in the country,” added the Minister.

The Minister urged local consumers to support, buy and consume local products and goods in order to create jobs and grow the economy. South Africa needs to move away from just government procurement, the private sector also needs to take decision in favour of local goods and products.

Minister Davies also encouraged ordinary consumers to learn a few tricks and pay attention to products that display a country of origin. He said if a product bar code doesn’t start with 600, then the consumers must know that the products or goods are imported.

NEWS ROUNDUP SA, MIDDLE EAST RELATIONS GET MAJOR BOOST South Africa and Saudi Arabia’s economic and political relations received a significant boost following a successful state visit by President Jacob Zuma to the Middle East in March.

President Zuma spent his Easter weekend telling the South African story in the Middle East.

The Presidency described the visit as an important structural catalyst for strengthening bilateral political and economic relations particularly in the areas of trade and investment.

This, in addition to bilateral trade in targeted sectors, including the South African agricultural and agro-processed goods and services, defence procurement, manufacturing, mineral beneficiation as well as South Africa’s participation in the Saudi National Transformation Plan, especially in infrastructure development, including construction and engineering.

“We are very pleased that this state visit will ensure, among other

things, continued Saudi private sector investment in our country’s renewable energy sector in support of the National Development Plan; the South African petrochemical sector; banking and finance; tourism infrastructure as well as Saudi participation as a maritime state in our Operation Phakisa,” President Zuma said at the end of his visit.

On Sunday, the President Zuma had met with Saudi King Salman bin Abdul Aziz where he was also given the First Order, the highest award the King bestows on a foreign national.

“I am very humbled to receive

this rare award from His Majesty King Salman Bin Abdul Aziz on behalf of our people and our country South Africa,” said Zuma.

The President also addressed a high level meeting of South Africa – Saudi Arabia business entities where he emphasised the importance of creating a platform to enhance business-tobusiness cooperation in order to increase South African exports to the Saudi market and attract Saudi investors to South Africa.

The President said he was pleased the state visit offered South Africa an opportunity of an overview of the regional security challenges from Saudi Arabia’s perspective.

“We are looking forward to the possibility of us as South Africa sharing our own experiences with regards to negotiation and reconciliation to assist in moving towards peace and security in that region,” he said.

SA DETERMINED TO AVOID DOWNGRADE Cabinet says it is committed to ensuring that the country works together to make certain that South Africa’s credit rating is not downgraded.

Moody’s Investors Service (Moody’s) was in South Africa for its annual review from 16 – 18 March. The ratings agency placed South Africa’s long and short term ratings of “Baa2” and “P-2”, respectively, on review for a possible downgrade.

Finance Minister Pravin Gordhan has undertaken roadshows to the United States and United Kingdom with various stakeholders, including business leaders, to engage with

international investors after the tabling of the Budget. He also provided stakeholders with updates on the latest economic developments in the country, as well as plans for the medium term.

The South African delegation met with investors that collectively manage several trillions of dollar assets. The delegation held meetings with over 250 investors. In a media briefing after the roadshows, Minister Gordhan said investors are still confident in South Africa as an investment destination.

Government said the visit

by Moody’s is an opportunity for

South Africa to share the initiatives implemented to deal with the prevailing challenges.

“These include collaborative actions to accelerate inclusive growth, measures to fast track fiscal consolidation, speed up implementation of our R870 billion Infrastructure Investment Programme and progress made in resolving the energy constraints, including through renewable energy,” said Cabinet.

It called on all sectors to communicate all the positive programmes and interventions undertaken to safeguard the economy.

www.enterprise-africa.net / April 2016 / 9

FEATURE

SPECIAL SPIRITS FROM STELLENBOSCH PRODUCTION: Sam Hendricks, Hal Hutchison & Joe Forshaw

At Enterprise Africa, there’s nothing we love more than handcrafted produce straight out of Africa so we’ve taken it upon ourselves to review and recommend some of our favourite spirits, not based on price or region, but based purely on taste and enjoyment…

//

Last month, we talked about some of our favourite South African wines, and we were spoilt for choice – reviewing a range of award-winning bottles, and this month we’ve been equally boozy by opting for something a little stronger.

We looked at three brands from the Blaauwklippen estate; Triple Three Gin, the Blaauwklippen Potstilled Brandy and the Blaauwklippen Before & After Aperitif.

Nestled on the slopes of Stellenbosch Mountain, this estate is a tranquil and picturesque place.

Located in a lush green setting, the estate respects its natural surroundings and works with the natural environment to produce wines and spirits of the highest quality.

Blaauwklippen is one of the oldest estates in South Africa, dating back to 1682, and the name comes from the Dutch word meaning ‘blue rocks’. The estate is now an important tourism destination for both local and international travellers; you can imagine the setting; it plays host to weddings, picnics, functions, pony rides,

10 / April 2016 / www.enterprise-africa.net

children’s activities, a family market, a bistro and of course, wine tasting.

But it’s the company’s spirits that have been teasing our taste buds this month. Gin and brandy are both individual specialities in their own right and take a particular focus. They have both also enjoyed a resurgence in demand recently, becoming fashionable and trendy drinks. Blaauwklippen has produced some fantastic offerings and we can certainly recommend the following: TRIPLE THREE GIN African Botanicals Gin: This is the earthiest of the three offerings and the smell, right from the off, is strong and powerful. Lemony, but with elements of aniseed and liquorice, the smell is clean but sharp. This gin is made with a mix of seven botanicals including ‘flora of the Western Cape’ and you can certainly tell.

On first taste, you get green tea along with earth, partly minty, notes.

Officially, the flavour profile should include flavours of forest with honey, maple and almonds but we agree that the herby-earthiness outweighs the sweetness to give more of a savoury taste. And the 43% volume does leave a

little sting but it’s pleasant, leaving you wanting more.

We tried a few additions but the best turned out to be combining with cucumber and tonic – or possible fresh rosemary if you’re more adventurous.

Of the three, the African Botanicals Gin certainly gave use the most to talk about so perhaps a good one for a party.

100% Juniper Berries Gin: According to Blaauwklippen, the recipe for this 100% Juniper Berry Gin is one of the oldest around. The juniper smell is fresh and very slightly balsamic, reminiscent of typical London gins. The taste is warm and fruity and the juniper gives a sweet note but it’s not overpowering Menthol, eucalyptus, pine, cloves and lime are suggested elements that should be picked up but we found more floral and peppery notes.

This is definitely the most traditional flavour of the three, this is great enjoyed with lemonade and fresh lime wedges or tonic with fresh thyme.

Citrus Infusion Gin: Blaauwklippen say that ‘natural sun-ripened oranges from the Eastern Cape, as well as

ENTERPRISE SPIRIT

FEATURE

Stellenbosch grown organic lemons’ build the flavour of the Citrus Infusion Gin but we found that the red grapefruit notes are the more powerful element.

Like the African Botanicals Gin, the nose here is earthy and herby with perhaps more juniper than expected and less citrus than we thought.

The full citrus flavour comes later in the taste and the finish is mediumlong. The flavour is strong, more powerful than the other two, and is not overpowered by the citrus additions which is a good thing. There are definitely notes of perfume and floral flavours but it remains tasty and not too spicy.

Although we tried with many mixers, you can drink it on its own over ice but we would recommend a strong homemade lemonade or even a sparkling elderflower to accentuate the citrus. It would also obviously make a great addition to cocktails that have a citrus base such as the Gin Rickey.

POTSTILLED BRANDY 10 YEARS OLD The Brandy has an apricot-banana-pear smell with hints of vanilla. Its taste is strong thanks to the 38% proof but it’s not stingy like you would get with a mass produced product, aimed at the lower end of the market.

The taste here is soft and clean with elements of caramel sweetness. There’s also a vanilla creaminess - likely from the sauvignon blanc used in the production.

It’s characterised by a light golden colour – like apple juice. It’s smooth and not searing. The back notes bring up oily charcoal, maple, brown sugar and wood.

We found the finish to be medium-long.

The flour comes from double distillation in an old Copper potstill which was originally used at Oude Molen in Stellenbosch.

It makes for a great addition to cocktails and can bring a mix to life, adding glitz and glamour to a Metropolitan. For something very unusual, you could even try adding this to a traditional Irish coffee.

//THE TASTE HERE IS SOFT AND CLEAN WITH ELEMENTS OF CARAMEL SWEETNESS. THERE’S ALSO A VANILLA CREAMINESS - LIKELY FROM THE SAUVIGNON BLANC USED IN THE PRODUCTION// 12 / April 2016 / www.enterprise-africa.net

ENTERPRISE SPIRIT

//THE TASTE IS OF RICH DARK BERRIES WITH SILKY SMOOTH BUT SMOKY, WOODY HONEY NOTE. TWO THIRDS OF US AGREED THAT THERE WAS A NOTE OF APPLE AND WE ALSO COULD NOT AGREE ABOUT THE STRENGTH OF CINNAMON WHICH WAS NOT OVERPOWERING//

BEFORE & AFTER APERITIF Blaauwklippen’s specialities and brandies include the aforementioned Potstilled Brandy 10 Years Old, the Potstilled Brandy – 8 Year Old, the Zinfandel Distiller’s Reserve and the Before & After Aperitif.

The Before & After is certainly the sweetest of the drinks, like a port but thinner. The smell is sweet with warm berries and honey/syrupy notes and the colour is a deep, dark purple-red-ruby.

Because of its consistency, lighter and thinner than a port, almost like a wine, we actually found it to be a perfect spring/summer aperitif; it could even replace coffee or port with cheese at the end of an evening meal.

The taste is of rich dark berries with silky smooth but smoky, woody honey note. Two thirds of us agreed that there was a note of apple and we also could not agree about the strength of cinnamon which was not overpowering.

The company suggests that this could be used successfully as

an ingredient in cocktails and we would certainly agree with this – it would add in perfectly to berry based drinks. As it is, perfect on its own, at room temperature, accompanied by something cheesy.

With all of these drinks, the Blaauwklippen Estate shows its creative side and its ability to move away from wine; a move that scuppers so many other SA wine producers. All of these drinks are the perfect addition to the menu at a party and offer something different form the norm. we’ll be keeping a close eye on this business in the future, excited about what’s next with both wine and spirits.

www.enterprise-africa.net / April 2016 / 13

NFB CEO - MIKE ESTMENT

NFB FINANCIAL SERVICES

NFB Sowing the Seeds

of Success

PRODUCTION: David Napier

NFB’s financial advisors are farmers but not in the traditional sense. These industry-leading experts provide independent financial advice, products and services to high worth individuals, trusts, businesses, and institutions and help them to grow and nurture their wealth.

//

South Africa’s financial services sector, and Africa’s more widely, is a constantly changing landscape which has presented huge opportunities for growth over the past 20+ years. Despite its ‘emerging market’ status, South Africa has a sophisticated financial sector and regulations governing the market, and particularly risk management, have undergone considerable refinement to align them to internationally recognised standards and best practice. The whole financial infrastructure has changed dramatically and today, the government calls the financial, real estate and business service sectors “pillars of the country’s economic growth over the years.”

Clearly, there is every reason to be positive if you operate in or around SA’s financial services sector and if

you are an investor or financier where perhaps the bleak economic climate in the country right now is dampening your confidence, you can rest assured that South Africa has a large pool of very experienced experts who can offer you industry leading financial advice and guidance.

A leading example is Sandtonbased NFB Financial Services Group.

Formed more than 30 years ago, the business has been operating specifically in the provision of independent financial advice, products and services to high worth individuals, trusts, businesses, and institutions. The company is now one of the country’s leading broad spectrum financial services advisory businesses and holds an extremely strong position in the financial services market.

www.enterprise-africa.net / April 2016 / 15

NFB FINANCIAL SERVICES

CEO and Founding partner, Mike Estment tells Enterprise Africa more about the formation of the company and its plans for development in the future.

“There were five of us,” he says.

“I’m unfortunately the only remaining founder, and we started the business in April of 1985. The rationale behind it was the creation of something we owned as opposed to something we worked for. We were all into wealth management, we all came from banking backgrounds and we wanted to create something that had a long-term legacy and wealth creation opportunity for ourselves and others and it’s worked out rather well. We’re 31 years young and terribly excited about things.”

In the early years, NFB was a very

different outfit compared to the current set up. There were five people in an office, with a small but important client base and today, the company has 150 highly skilled, highly educated employees and one of the country’s largest assets under management portfolios.

“We have more than 150 people employed around the country. The Sandton office contains around 50 people and the rest are in East London, Port Elizabeth and Cape Town,” explains Estment.

“NFB’s client base or assets under management is approximately R25 billion. Of that probably 23 would be individuals and their family trusts and less than 10% is what we would call institutional – such as pension funds

//CREDO WEALTH MANY INVESTMENTS, ONE APPROACH Credo is an independently owned, private client wealth management group established in 1998 which has grown into a multi-national business with offices in London, Geneva, Bermuda, BVI and South Africa and interests in Australia and Luxembourg. Credo Capital is authorised and regulated by the FCA in the United Kingdom and is a member of the London Stock Exchange. In addition, it is an Authorised Financial Services Provider (FSP No: 9757) regulated by the FSB in South Africa.

The group has assets under management and administration in excess of £1.9bn and employs over 80 skilled staff. Credo’s primary aim is to protect and enhance our clients’ wealth. We have a strong culture of building long-term relationships with our clients and we operate in an environment of trust and confidentiality.

Through Credo, clients have a choice between having Credo manage their global portfolio on a discretionary basis or making their own investment decisions by using Credo’s trading platform that provides access to global markets.

Clients who choose Credo as their global trading partner can buy / sell listed equities on 21 global stock exchanges, direct bonds, ETFs, mutual funds and structured products.

Credo’s discretionary service includes managing global segregated direct equity, income and / or multi-asset

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class portfolios. For HNWIs Credo can construct a fully bespoke portfolio, based on the client’s objectives and risk profile, with exposure to multiple asset classes and instruments. In addition, clients who want exposure to global equities have a choice between segregated direct portfolios or the Credo Global Equity Fund.

Credo believes in a long term, low turnover investment philosophy. We do not define risk in terms of quantitative metrics, but simply as the potential to lose clients’ money; accordingly, our approach to investing can be described as a relatively conservative one, focusing first and foremost on capital preservation.

Irrespective of whether a client chooses our discretionary management or trading service, each client has access to our MyCredo system. MyCredo is an online trading and / or reporting platform which we believe is state-of-the-art. It is a multi-asset class, multi-currency reporting tool that enables clients to obtain real time data about their portfolios and transactions. MyCredo provides a single portal to all your investments in a secure environment. The platform is easy to use, secure and is truly an openarchitecture service. www.credogroup.com

BUSINESS PROFILE

//THE RATIONALE BEHIND IT WAS THE CREATION OF SOMETHING WE OWNED AS OPPOSED TO SOMETHING WE WORKED FOR// and universities.

“We inherited clients because we had come out of different banking and investment backgrounds so there was a small degree of loyalty and client based build up but it was tiny compared to where we are today. We had to go and find new people, new products and new opportunities. In our early years, we were about yield and fixed interest and bond trading. In the late 80s/early 90s we graduated into broad spectrum financial advice which includes other forms of asset management, equity, assurance products, risk products and similar things.

“We had some very important clients that were significant in the success of the business because of the

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timing. Product-wise we have always been quite diverse. As soon as we became broad-spectrum investment managers, diversification was, has and will always remain a key tenet.”

BEATING ANY SLOWDOWN Standard & Poor’s, Moody’s and Fitch – three of the most recognised international credit rating agencies – have all cast the SA economy in something of a negative light in recent times following the sharp downward revision of the country’s proposed GDP output and the Finance Minister debacle, but NFB’s business remains strong and despite the lack of confidence in the market and people’s increasing focus on looking after the pennies, Estment is

confident with the strategy.

“There’s no question that South Africa is in a very tedious position economically and politically, yet NFB prospers for very good reasons,” he explains. “Firstly, we’ve created a business philosophy of ‘farming’; an analogy which means that you own the field, you fertilise it, if the rain comes it’s your fault and if it doesn’t come it’s also your fault; you own it and you don’t blame anyone if things don’t go right.

“Secondly, we have a high calibre client base with a high net worth aggregate and they’re less affected in their investment portfolios by the immediate short-term state of the economy and its upheavals.

“Thirdly, our business is very annuitized. It’s not about earning fancy sales commissions or hitting and running, it’s about the annuity income that portfolios will deliver as they prosper which will insulate NFB from inflationary risk and assures our income in the future.”

NFB FINANCIAL SERVICES

Another issue that has become an ongoing problem, running alongside the slow economic performance, is the depressed currency. In the past five years, and especially in recent months, the Rand has performed poorly against the US Dollar, British Pound and the Euro and this has added to the uncertainty in the economy. However, Estment doesn’t believe it’s all bad.

“The Rand has been, for the last 25 years, as volatile as hell. This is down to two things, the first is us being a resource-based economy. When China gets cold feet and realises it has overstocked itself and pulls back on inventory, you’ll have volatility in any emerging market, particularly the resource focussed markets. The second thing is political folly which is hard as it is totally unpredictable.

“The currency is vulnerable but it’s not always all bad news. When managed properly, a weak currency – within reason - can become globally attractive because it creates an environment in which export led industries can thrive.

“Is the currency going to bedevil every aspect and facet of the economy – no, but it has to be well managed.”

Importantly, in times like this, NFB can count on its most significant asset – its people - for effective strategy planning. The company describes its workforce as ‘a strong and talented team of experienced professionals committed

to providing unparalleled levels of personalised service’. This is perhaps an understatement. With many years of experience between the management and wider employee network, NFB’s people are a credit to the industry. For this reason, the CEO is very confident when it comes to the future success of the business and the success of its clients.

“We have a really healthy mix of people in their mid to late-50s, fellows in their mid to late-40s and people like our MD, Andrew Duvenage in their mid-30s,” he says. “There’s a lot of succession and the younger people have a greater tendency to go and search new mandates whereas people like me have a strong reputation that I’ve nurtured and looked after which now feeds itself. I’ve got clients, who are high-worth, who will continue to introduce their friends to us because they feel there is good reason to.

“We’re not the sort of company that goes around knocking on doors.

Our marketing is very good but it’s to an audience that we have identified for ourselves and not just a situation where we call 20 people, set up appointments and sell them whatever’s going – that’s not how we play. We are dependent on referrals and that helps to tailor our culture towards one where we provide quality service that assures us of those networks.”

NFB is happy to invest in its people and takes a slightly more modern approach to HR, which involves viewing staff as an asset to be nurtured rather than a cost to be stringently monitored and minimised.

“We wouldn’t want to compete with high sales oriented life assurance brokers. We look for quality; people who are prepared to ‘farm’ alongside us. We bring in young talent and pay

OLD MUTUAL INTERNATIONAL IS PROUD TO BE ASSOCIATED WITH NATIONAL FINANCE BROKERS OLD MUTUAL INTERNATIONAL provides South African residents with a comprehensive offshore investment offering through its INVESTMENT PORTFOLIO+.

//WE’VE CREATED A BUSINESS PHILOSOPHY OF ‘FARMING’; AN ANALOGY WHICH MEANS THAT YOU OWN THE FIELD, YOU FERTILISE IT, IF THE RAIN COMES IT’S YOUR FAULT AND IF IT DOESN’T COME IT’S ALSO YOUR FAULT; YOU OWN IT AND YOU DON’T BLAME ANYONE IF THINGS DON’T GO RIGHT//

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If you would like to find out more about INVESTMENT PORTFOLIO+ please contact your NFB adviser.

www.enterprise-africa.net 6974 OMI_ENTERPRISE Ad_100x70mm_FA.indd 1

/ Issue No.46 / 19 10:18 AM 2016/04/01

NFB FINANCIAL SERVICES

for their education, we encourage that side of it as we want people who are plausible, intelligent and not in a hurry,” says Estment.

The company was even happy to sponsor and support Andrew Duvenage’s efforts in the 2016 Cape Epic, an annual mountain bike stage race held in the Western Cape that typically covers more than 700 kilometres (435 miles), and lasts eight days. This shows that NFB encourages both personal and professional development, making for an

invigorated mind-set when it comes to customer service.

And the company will have to utilise all of the expertise at its disposal to continue growing in the aforementioned tedious economic situation. Estment details some of the challenges facing the company but says NFB is fully prepared. “The team that we have built over the last 20 years is very capable.

“We’re in a preferred position relative to mining or traditional industrial labour-intense businesses

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Local solutions Another attractive option for high income investors who have used up their interest exemptions, is our local endowment. With this investment vehicle, there are no restrictions on the maximum levels of equities and offshore investments, as is the case with retirement savings products. Glacier also has a number of top stockbrokers on its platform, allowing investors to include a personalised share portfolio within the endowment structure.

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Its flagship offering – the Navigate range of funds – has recently enhanced its model portfolio range to provide active portfolio management. This range, now called Navigate Optimised Model Portfolios, simplifies the many options available to investors wanting to invest offshore by offering risk profiled model portfolios in two currencies (USD and GBP).

The Navigate funds and model portfolios can be combined with other investment choices in the Global Life Plan, an offshore life plan issued in South Africa.

The plan forms part of your South African estate, thereby avoiding any complications arising from having

20 / April 2016 / www.enterprise-africa.net

Retirement annuities remain a popular and attractive way to accumulate retirement savings – even with the capping of tax deductible amounts at R350 000 from 1 March this year.

Affluent clients should also take advantage of the opportunity to invest in tax-free savings accounts.

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BUSINESS PROFILE

but we’re challenged by our own set of realities which include burgeoning regulations, examination, qualification, capital adequacy requirements and all sorts of things which are being added to the game. Fortunately this suits NFB down to the ground but it does create a hurdle or a barrier to entry,” he says.

FUTURE GROWTH Both Estment as CEO and Duvenage as MD are obviously keen to see NFB grow in the future, in terms of relationships with current clients, numbers of new clients, types of client, number of employees and assets under management.

The MD tells us that business is ‘buoyant’ and Estment explains that

22 / April 2016 / www.enterprise-africa.net

//WE’RE CHALLENGED BY OUR OWN SET OF REALITIES WHICH INCLUDE BURGEONING REGULATIONS, EXAMINATION, QUALIFICATION, CAPITAL ADEQUACY REQUIREMENTS AND ALL SORTS OF THINGS WHICH ARE BEING ADDED TO THE GAME// growth will come in the form of acquisition.

“For many years I’ve been wanting to merge or acquire other advisories into NFB as we have fantastic systems and services but there’s been a resistance to that as the advisors were doing very well in a rather unregulated environment. Now, with the regulation

being pushed on them, they are revisiting the whole rational for being in the business and that suits us as they’ll become more open to merging or they’ll leave, and both of these scenarios result in opportunity for us.

“We are part of a listed entity and we will be looking for other advisories

NFB FINANCIAL SERVICES

NFB MANAGEMENT L TO R: GRANT MAGID, ANDREW DUVENAGE, PHILIP SHAPIRO, MIKE ESTMENT, LAURIE WIID, PAUL MARAIS, TERRANCE VAN RENSBURG, STEPHEN KATZENELLENBOGEN

that can identify with NFB’s culture and proposition and be added to the portfolio so that we can gain from that,” he says.

NFB will also be accelerating its marketing push in an effort to broaden the spectrum of assets under management and grow its share of the market with ‘institutional money’.

“NFB will continue developing its strengths and in addition we have an online agenda which includes robo-advice that’s going live right now,” explains Estment. “It’s early days but we are excited about the outcome with that. We are also looking at marketing through the media, particularly with online stuff, and we want to increase our footprint in the

non-individual wealth management space – that’s the institutional money.”

With this strategy, which is focused around continual development, NFB looks set to grow further in 2016. This is not a company living on the edge in an industry that is in trouble; this is a business that is well positioned, pushing off a strong base and offering unparalleled service and expertise.

Estment and Duvenage are right to be confident about the future and the CEO concludes by telling us that customer service will always remain paramount: “Our clients have direct and personal relationships with our advisors and support staff. We know our clients’ wealth plan and we know

how it has evolved over time, and continues to evolve.

“We use the scale of the NFB Group and the quality of our business relationships to ensure that our clients get an outcome that they might otherwise not have.

“Everything we do is focused on making our clients happy and keeping them with us for the long term.”

NFB FINANCIAL SERVICES +27 11 895 8000 nfb@nfb.co.za www.nfb.co.za

www.enterprise-africa.net / April 2016 / 23

SHELL SOUTH AFRICA

Adding Value to Our

Mineral Wealth PRODUCTION: Timothy Reeder

Shell South Africa has a nationwide retail network of strategically located service stations as well as interests in many business areas including manufacturing, aviation, chemicals, LPG and, potentially, natural shale gas. But is South Africa prepared for the challenge of producing shale gas and is Shell prepared to wait for the country to be ready?

//

Over the past 18 months, the story surrounding South Africa’s shale gas industry development has been one with many ups and downs but in the early part of 2016, the picture has become slightly clearer with the government now seeming to back the growth of the industry and the big corporates looking to the future and how they can move forward with this exciting energy sector that has proved so successful in the USA. The development of shale gas in South Africa goes back to 2009 when the Petroleum Agency South Africa (PASA) awarded Shell a Technical Cooperation Permit (TCP) for a one-year study to determine the Karoo’s natural gas potential. Early signs suggested that there was a plentiful supply of gas laying under the dry, arid Karoo desert – as much as 480 trillion cubic feet (TCF); some of the largest reserves in the world, but these figures have been disputed.

In December 2010, Shell submitted

24 / April 2016 / www.enterprise-africa.net

three separate exploration licence applications for areas of around 30,000 square kilometres each. These areas are in the Western Cape, Eastern Cape and Northern Cape.

All seemed to be on track for the fast and efficient growth of the market as SA looked to follow the example of America and profit from vast reserves, but development turned out to be slower than everyone wanted. The government are yet to award rights for development, the global oil price crash has caused many companies to revaluate their involvement in shale exploration and there are many groups that are opposed to shale gas exploration because of the nature of the techniques involved in releasing the valuable product.

The main method is of course ‘Fracking’ or hydraulic fracturing where exploration and production companies will drill into the earth before injecting a high-pressure water, sand and chemical

mix into the well, breaking the rock buried deep in the earth and releasing the gas trapped inside.

Mineral Resources Minister, Mosebenzi Zwane said in January: “Currently South Africa is a net importer of energy sources such as crude oil, refined petroleum products and natural gas. It is estimated that the Karoo shale gas resources would mean South Africa has the fifth largest reserves, estimated at 485 TCF. FRACKING FOR GAS “We have taken a decision to diversify our energy basket in our pursuit to provide not only cost-competitive energy security, but also significantly reduce the carbon footprint and drive our industrialisation and beneficiation programme to grow the economy inclusively in order to create a critical mass of employment, amongst others.”

He also said that producing shale gas is not only a tool for economic growth, but something which should benefit everyone. He was speaking at a community engagement event in the Eastern Cape.

“It is my firm belief that the excitement we have about the discovery of this resource needs to be shared and also enjoyed by communities.

“We have also taken measures to ensure the farming community benefits

BUSINESS PROFILE

//EXPLORATION ACTIVITIES ARE SCHEDULED TO COMMENCE IN THE NEXT FINANCIAL YEAR. THIS WILL LEAD TO EXCELLENT PROSPECTS FOR BENEFICIATION AND ADD VALUE TO OUR MINERAL WEALTH// from the development of shale gas, whilst the astronomy programme, such as the Square Kilometre Array (SKA) would not be affected through such development.”

The ongoing success of the SKA project and the impact that Shell’s work could have on that groundbreaking project have long been concerns but as far back as 2014, organisers of the SKA project have stated that the projects can cooperate.

“We’re looking for a co-existence with fracking,” said Science and Technology Department Chief Director for Astronomy, Val Munsami. “What’s very important is that there must be concurrence… from the Science and Technology Minister around any licences for exploitation and exploration around fracking.”

26 / April 2016 / www.enterprise-africa.net

Just last month, the SA government said that it will give the green light in the next 12 months to companies looking to explore for shale gas. This comes as great news for Shell who have been patiently waiting along with a handful of other companies for the government to progress with license allocation.

At this time last year, the company was looking at scrapping its shale activities in SA thanks to ‘lower energy prices and delays in obtaining an exploration licence for the onshore Karoo Basin’; Country Chairman, Bonang Mohale was even quoted saying: “Capital is mobile and is looking for the best commercial terms everywhere else in the world. We were hoping that we would have had a licence (for Karoo) in 36 months” – this was after six years of waiting.

But now that the government has expressed an interest in exploring the shale industry, after years of under supply in the country’s energy business, Shell’s attention has been refocussed.

“One area of real opportunity for South Africa is the exploitation of shale gas. Shale gas regulations were published in the second quarter of 2015/16.

Exploration activities are scheduled to commence in the next financial year.

This will lead to excellent prospects for beneficiation and add value to our mineral wealth,” said Gugile Nkwinti, Economic Sectors, Employment and Infrastructure Development Cluster minister when briefing the media in March.

Clarification like this from a minister is exactly what the industry has been waiting for, albeit still not concrete.

Even business advisory company, Teneo Intelligence was clear when detailing the problems caused by indecision: “At a time of low oil prices and exploration budgets being slashed, the onus is on governments to put in place clear and attractive investment conditions,” said senior vice president Anne Fruhauf.

“The longer the government takes

SHELL SOUTH AFRICA

//THOSE THAT ARE TRUTHFULLY INFORMED AND UNDERSTAND WHAT FRACKING HAS DONE OVERSEAS AND HOW LITTLE IT HAS BEEN ABLE TO DELIVER AT THE HANDS OF LOCAL COMMUNITIES IN TERMS OF BENEFITS, AND WHAT RISKS IT HAS BROUGHT WITH IT ARE VERY CONCERNED// to clarify fracking regulations, the less sense it makes for a company like Shell to maintain anything more than a holding operation in relation to its South African shale project.�

And then, of course, there are those that are against fracking, and this is a big concern for companies like Shell as well as the SA government.

Getting local communities on board with projects like this has long been a

desire for exploration and production companies and where they have succeeded in with this, operations have often run with less resistance.

Those opposed to fracking in the Karoo made their intentions clear in March, saying they would quickly challenge the government, in the High Court if necessary, to halt the progress of Shell and the other oil corporates who are interested in investing in the region.

Jonathan Deal, CEO at Treasure Karoo Action Group (TKAG) in the Eastern Cape said: “They have overlooked the fact that the shale gas regulations are the subject of a High Court application brought against the Department of Minerals Resources by AfriForum and TKAG as an alliance. Effectively and logically, those regulations are under attack by terms of being completely and wholly inadequate to regulate something like shale gas exploration. If they go under those circumstances and still see fit to issue exploration licenses, we will have the way cleared for us to approach the High Court for urgent release to have the exploration licenses set aside so government has still got a lot of work to do not the least to involve some High Court activity before they can make promises like that.

www.enterprise-africa.net / April 2016 / 27

BUSINESS PROFILE

“I think, as a community, those that are truthfully informed and understand what fracking has done overseas and how little it has been able to deliver at the hands of local communities in terms of benefits, and what risks it has brought with it are very concerned. I think the big elephant in the room in South Africa at the moment is something that is facing every single person in this country- that is that we have a water shortage. So for our government to even consider an activity that takes place in above and around our very precious water source which has the potential to pollute it, is really nonsensical,” added Deal when speaking to SABC. But despite the claims of those who are opposed to the development of a shale gas industry in South Africa, the government is unwilling to ignore the potential investment that Shell and similar companies could bring. Some reports have suggested that even the initial investments, aimed at just

//SHOULD SUPPORTIVE PETROLEUM LEGISLATION AND ATTRACTIVE COMMERCIAL TERMS BE PUT IN PLACE, THE KAROO PROJECT COULD COMPETE WITHIN SHELL’S GLOBAL SHALE GAS AND OIL PORTFOLIO// exploration, could be as much as R2.5 billion. The company told IOL last month that it was monitoring the situation and was ready to invest if a viable environment presents itself. “We will continue our ongoing consultation with government, industry and the people of South Africa about the long-term opportunities of shale gas exploration and the regulations that will govern this industry,” Shell said.

“Should supportive petroleum legislation and attractive commercial terms be put in place, the Karoo project could compete within Shell’s global shale gas and oil portfolio.”

Fortunately for Shell, the business has strong assets in South Africa including an excellent supply chain, a robust brand and strong, visible leadership in the form of Mohale.

LEADERSHIP In 2015, at the Future CEOs event in Johannesburg, Mohale spoke of his own credentials and those of Shell, leaving the aspiring young leaders in the audience in no doubt that the company is in good hands and the decisions it makes are in the interest of all stakeholders.

“Even if you hate me, you cannot deny the extraordinary results that have been achieved because I’ve always known that to be the best you have to go the extra mile and work the extra hour.

“This company has been in this country for 112 years and we employ around 20,000 people across various businesses. Last year, we made earnings before expenses of $384 million.”

In a country going through an energy crisis and with the need for a long-term solution as soon as possible, supporters of the shale gas initiative are keen to have an experienced global operator on their doorstep.

Mohale said in 2012, after the fracking moratorium was lifted, in an interview with Moneyweb: “We will

//WE WILL NOW BRING ELECTRICITY, WE WILL BRING JOBS, WE WILL CREATE SMALL AND MEDIUM ENTERPRISES AND WE’LL GENERALLY STIMULATE THE ECONOMY// 28 / April 2016 / www.enterprise-africa.net

SHELL SOUTH AFRICA

now bring electricity, we will bring jobs, we will create small and medium enterprises and we’ll generally stimulate the economy.

“This technology is being deployed in four continents, it is 60 years old.

We are a responsible company that has a brand to protect. We are going to continue to work with all the stakeholders in the Karoo, including TKAG, to look at improving the quality of lives of the majority of the people.”

And hopefully progress will be swift as the energy industry continues to battle through what has been a tough period thanks to falling oil and commodity prices.

“All the data out there is suggesting higher supply and lesser demand for oil, and that could only mean lower prices,” said Phillip Streible, market strategist at RJO Futures in Chicago in a recent statement.

After a brief period of stability, global oil prices have once again dropped and in March the price was sitting at around $35 a barrel with

some predicting the price to drop to $20 in the near future. Other reports suggest that the US now has some of the largest stock piles of oil that it has ever had. This of course makes life difficult for companies likes Shell and can hamper investment into new projects. For consumers, the news might be more welcome and some sources have suggested the low price might even cause pumps at fuelling stations to drop the price by as much as 59 cents per litre.

In West Africa, Shell Nigeria, a sister of Shell South Africa, realised success in October when it announced the start-up of the Bonga Phase 3 project - an expansion of the Bonga Main development, with peak production expected to be some 50,000 barrels of oil equivalent. The Bonga field, which began producing oil and gas in 2005, was Nigeria’s first deep-water development in depths of more than 1,000 metres. Bonga has produced over 600 million barrels of oil to date.

Andrew Brown, Shell’s Upstream

International Director, said: “This new start up is another important milestone for Bonga, adding valuable new production to this major facility.”

These signs of commitment to Africa, along with the plans to begin with shale gas exploration in the near future, mean that people can be sure that Shell has a long-term future in Africa that is set to be profitable or both the continent and the company.

“Shell is committed to South Africa and determined to build our business with all communities that endorse our license to operate. In the years to come we will continue to conduct our business according to our core values of honesty, integrity and respect for people,” the company says.

SHELL SOUTH AFRICA +27 11 996 7000 info@southafrica.shell.com southafrica.shell.com

www.enterprise-africa.net / April 2016 / 29

CONLOG

Smart Satisfaction for

Consumer and Utility PRODUCTION: Karl Pietersen

As the need for electricity grows, so does the need for effective solutions for utilities who supply electricity when it comes to billing their customers and ensuring fair, efficient and stable supply. This is where Conlog excels and where it can help companies and individuals grow.

//

Global management consultant McKinsey & Company detailed in its ‘Powering Africa’ report from 2015 that ‘sub-Saharan Africa is starved for electricity. The fact that sub-Saharan Africa’s residential and industrial sectors suffer electricity shortages means that countries struggle to sustain GDP growth’. But many of the globes top ten fastest growing economies are based in sub-Saharan Africa, the region has a growing middle class and a population going through changes to both the economic and political landscape and moves towards modernising its output. Of course, with this comes the growing need for power and the efficient, stable, affordable supply of electricity. This has been an issue that even South Africa, one of Africa’s most advanced economies, has failed to deal with. But even when demand has been met with

30 / April 2016 / www.enterprise-africa.net

supply and the system has worked in relative harmony, another challenged has surfaced – the commercial side of business; charging people for their use.

One estimate, from researchandmarkets. com, suggests that a huge amounts of the valuable power generated in Africa is actually never billed.

“Prepayment metering (PPM) provides an intermediate solution to the chronic problem of energy theft in Asia, especially the Indian sub-content, sub-Saharan Africa and South America.

In some African countries only 50% of electricity generated is paid for; half is not even billed to the distribution companies and another half is stolen by the consumers; PPMs are the preferred solution,” the report states.

Vahid Monadjem CEO at Nomanini reiterated the problem of payment in a column in Electric Light & Power saying: “Installing prepaid meters is a

BUSINESS PROFILE

//OUR OFFER COMPRISES PREPAID ELECTRICITY METERS, VENDING AND REVENUE MANAGEMENT SOLUTIONS, AS WELL AS ALL THE NECESSARY SUPPORT, CONSULTATION AND TRAINING REQUIRED TO ENSURE YOUR PROJECT IS A SUCCESS// big part of the solution, and will play a huge role in protecting electricity suppliers’ revenues, enabling them to provide sustainable power for the long term. These meters are already having an impact in a number of countries including Kenya, Nigeria, Uganda and Zambia, and the potential for growth is huge. In Nigeria alone, the prepaid electricity market is worth an estimated $915 million, with 50% of the market yet to receive prepaid meters.

“While prepaid meters go halfway to solving the problem, making payment points widely available for people to purchase prepaid electricity vouchers is just as important.

Unfortunately, it’s proving difficult in areas where retail is primarily informal,

32 / April 2016 / www.enterprise-africa.net

and where household incomes are so low that people can often only afford to purchase a couple of dollars’ worth of electricity at a time.

“Perhaps the best solution to Africa’s electricity payment challenge is to empower informal vendors such as taxi drivers, local shop owners and micro entrepreneurs to use mobile technology to buy prepaid electricity vouchers, which they can then sell for cash. This replicates the success of mobile airtime distribution and enables electricity providers to ensure that even unbanked, unconnected people in the remotest of areas can access and pay for electricity conveniently,” he explains.

So the market for PPM is big, especially in Africa, and fortunately, the

continent is home to one of the world’s most well recognised companies in this space, Conlog.

Located in Durban, Conlog has, for decades, been providing holistic electricity prepayment solutions to enable utilities worldwide to effectively collect, manage and protect their revenue.

“Our offer comprises prepaid electricity meters, vending and revenue management solutions, as well as all the necessary support, consultation and training required to ensure your project is a success.

“Conlog’s pioneering spirit, coupled with an unrivalled depth of experience in prepayment which spans over 25 years, has resulted in us developing numerous world firsts and industry standards. It is this spirit and the embracing of technology that continues to drive us to provide solutions to address the challenge of service delivery,” the company states.

With customers spanning more than 30 countries on four continents, Conlog is a truly global operation.

In addition, with the world’s largest

CONLOG

installed base of over nine million STS prepaid meters and the associated vending infrastructure, more than 45 million people interact with a Conlog product each day.

Founded in 1965 as an electronics design company, Conlog has continuously provided innovative solutions to everyday challenges.

In the 60s, the company focussed predominantly on the industrial sector with monitoring devices and alarms.

The 70s saw the focus expand to incorporate monitoring and control devices with a special focus on the refinery industry. With the growth of the digital age in the 80s, Conlog began diversifying into new industries such as lighting, automotive alarms and cruise controls, and, towards the end of the decade, electricity prepayment. The 90s saw Conlog excel with automotive products and prepayment solutions and quickly become the industry leader. In the 00s, after many years of diversification, the company focused its efforts of electricity prepayment solutions after being purchased by Schneider Electric in 2000. Today, Conlog has the world’s largest installed base of prepaid solutions, has been Operating in the prepayment industry for more than 20 years, has skilled people with Collective experience of over 100 years, has a footprint spanning more than 20 countries across four continents and is used by more than 70 utilities.

With the next development stage in the global prepayment industry coming through digital advancements and smart connectivity, making transactions

faster and more secure, Conlog has had to ensure it innovates with both products and services to remain the industry leader.

Many major African cities have stated their intention to become ‘smart cities’. IBM’s Communications Manager for Emerging Markets, Jonathan Batty says that while there are still many differing definitions of a smart city, IBM says it’s “all about data: how you mine it, leverage it and ultimately use it to make better decisions about how to run your city and to provide better services to citizens.” In Kenya, Konza city is already under development; in Modderfontein, a major smart city development is being planned by the Chinese and Lagos, Accra, Abuja, Durban, Mombasa and Nairobi are already putting plans in place for smart city developments.

Conlog’s products would suit this environment perfectly, and this is

//OUR METERING PRODUCT RANGE IS ONE OF THE MOST COMPREHENSIVE IN THE INDUSTRY. ALL OUR METERS ARE MANUFACTURED TO THE HIGHEST QUALITY STANDARDS//

where the company will look to grow in the coming years, not just in Africa but worldwide.

“Our metering product range is one of the most comprehensive in the industry. All our meters are manufactured to the highest quality standards,” the company states Conlog has stated that it ‘can see a world where we can all achieve more while using less’ and it is this vision, along with the focus on smart, industry leading products and first-class service that will keep the business at the forefront of the prepayment industry.

CONLOG +27 (31) 268-1111 info@conlog.co.za www.conlog.co.za

ARROW ALTECH DISTRIBUTION, SUPPLIER TO CONLOG OF ELECTRONIC COMPONENTS, WOULD LIKE TO THANK THE ELECTRICITY PREPAYMENT SPECIALIST FOR ITS LONG AND BENEFICIAL RELATIONSHIP.

www.arrow.altech.co.za

www.enterprise-africa.net / April 2016 / 33

LONA CITRUS

Growing in Harmony With Nature PRODUCTION: David Napier

20 years on from its founding, Cape Town-based Lona Citrus is today one of the largest citrus fruit exporters in South Africa.

Recent times have thrown up new challenges but Lona’s carefully thought-out business model has allowed it to thrive.

www.enterprise-africa.net / April 2016 / 35

BUSINESS PROFILE

//

Lona Citrus is one of the leading citrus fruit export businesses in South Africa.

The company moves more than 4.5 million 15 KG equivalent cartons of citrus each year and takes this wellestablished, much-loved South African product to important markets all over the world. The UK, Canada, Germany, France, China, Japan, Russia, Saudi Arabia, the Netherlands, Norway, Malaysia and many other countries bring in fruits from Lona every year and with demand growing, the industry is in a good place.

However, like any industry, the citrus business has its own set of unique challenges, especially in South Africa where some of the worst droughts in generations have decimated farming operations and the ongoing citrus black spot (cbs) debacle continues to frustrate.

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LONA CITRUS

//WE ANTICIPATE A REDUCTION IN OUR EXPORT VOLUMES BECAUSE OF THE DROUGHT CONDITIONS AND EXTREME HEAT// The droughts which were exacerbated by the powerful weather effect known as El Niño, where warming in the Pacific Ocean sea surface temperatures causes differing weather effects across many parts of the world, reportedly cost the South African agriculture sector R16 billion.

Problems arising from the droughts came about towards the end of last year and some subsequent water restrictions were imposed by the government. The result on the citrus industry is that the harvests will be reduced and the actual fruits will be smaller than normal and therefore harder to sell.

Justin Chadwick, CEO of the South African Citrus Growers Association (CGA)

said in a recent interview: “We anticipate a reduction in our export volumes because of the drought conditions and extreme heat. The big concern now is we have small amounts of small fruit and a lot of markets don’t like small fruit.

They like big fruit.”

This news is a blow for the industry which employs an estimated 100,000 people and where exports account for 80% of the industry’s R9.4 billion in annual revenue.

Lona Citrus is an integrated exporter and owns, or partially owns, a number of farms across the country. The business helps farmers to grow and is a part of joint ventures where knowledge and financial advice is shared with

partner farmers. Lona is also involved in the transportation and packaging of fruits, and has a part in production all the way through the value chain, from growth to export.

Lona’s farms are Imibala, Mimosa, New Dawn, Riverside and Zalo. These are located in the Eastern Cape, Limpopo and the Western Cape. Its ventures alongside other farmers allows them more cost efficient terms with suppliers. The prices and payment terms negotiated by Lona are naturally better than what the individual farms are able to achieve and Lona also takes care of marketing all crops produced.

Despite the damaging drought conditions, Lona has an expansion and development program on its existing operations that will enable it to grow substantially in the next 10 years, with a particular focus on its core export market as well as the local markets in Africa.

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BUSINESS PROFILE

Today, the company is a totally different operation compared to when it started in 1996. Managing Director, Spencer Johnson had only a garage in cape town, a R30,000 loan, and a can-do attitude. There was disgruntlement in the industry as deregulation made people’s lives chaotic and this made for the perfect conditions for starting what was then a marketing company, selling many different fruits and vegetables.

After some time, it became clear that the focus was citrus, with 70% of fruit exported being citrus. Today, the company’s main product lines Navel oranges, Valencia oranges, Soft Citrus (Clementines, Mandarins and Satsumas), Grapefruit and Lemons and the portfolio is bolstered by mangoes, grapes, pears, plums, avocados, pomegranates and various vegetables.

The business model is unique as it encourages profitable business and commercial success but also

//AGRICULTURE NEEDS TO ENCOMPASS SUSTAINABLE AND ENVIRONMENTALLY RESPONSIBLE FARMING AND OPERATION PRACTICES AS WELL AS ENSURING PROFITABLE YIELDS, A GROWING BUSINESS AND FARMER AND FARM-WORKER WELL-BEING// sustainability and the development of previously disadvantaged farmers.

The company says of its success: “Compared to similar firms operating in the South African citrus industry, the Lona Group possesses key characteristics that enable it to occupy a growing and unique space within the sector. As mentioned, agriculture needs to encompass sustainable and environmentally responsible farming and operation practices as well as ensuring profitable yields, a growing business and farmer and farm-worker well-being.

“Lona manages to achieve this through our unique transformative business model which combines: participating at each level of the value

//THERE’S STILL MORE PLANTING GOING ON, SO THE PROBABILITY IS THAT OUR EXPORT VOLUMES WILL CONTINUE TO GROW// 38 / April 2016 / www.enterprise-africa.net

LONA CITRUS

chain right up to export ensuring greater control and reliability of internal company operations and supply security; development of strong relationships with suppliers and final market; socio-economic development of farming communities; support and mentoring to emerging black farmers which results in increased returns and markets; and commitment to innovation and research and development with regards to solutions to reducing energy consumption and improved business practices.”

But even with the success that the company has seen over the past 20 years, there’s never time to rest of laurels. The drought, the cbs, the economic climate, the ongoing energy issues and labour all create hurdles.

By focussing on key markets, Lona can maximise its income, and the UK is becoming an increasingly vital market, despite EU laws around cbs.

“The bare facts are that in 2015, the UK usurped Russia to become

the single biggest country to receive South African citrus, with just over 11 million cartons (11,046,000 cartons) arriving on our shores,” said Produce Business UK in December.

Deon Joubert, the CGA’s special envoy to the EU, says that South Africa is still spending R1 billion each year trying to navigate and mitigate the risk of cbs, and hopefully a concrete solution can be agreed at some point, sooner rather than later.

However, the CGA is confident about the future of the industry, especially in the UK. “The UK is a massive part of our success story. The UK is by far the most dominant in terms of soft citrus market share and I expect it to grow,” Joubert told Produce Business UK. “There’s still more planting going on,” said Chadwick. “So the probability is that our export volumes will continue to grow. There’s work [being done] on varieties for [production in] different regions – looking at soft citrus that can grow in

warmer climates where we’ve battled before. We’re constantly looking at new products and improving the yield and the brix level, improving colour and the like.”

Lona calls Tesco, Sainsbury’s, Marks and Spencer and other large-scale UK fresh produce retailers some of its most important clients so the continued development of trade between the two countries looks set to be vitally important for the continued growth of the company.

One thing that is certain is that Lona will continue to mature but in a sustainable and considered manner, following one of its key values “Growing in harmony with nature”.

LONA CITRUS +27 21 481 8200 info@lona.co.za www.lona.co.za

www.enterprise-africa.net / April 2016 / 39

STEVAL ENGINEERING

Strength

Through Strategy

PRODUCTION: Manelesi Dumasi

‘Possibility is everything’ at Steval Engineering but with new challenges emerging all too frequently for companies working with steel, how do you go about ensuring a smooth pipeline for the future? Steval’s answer – come up with a sound business strategy.

www.enterprise-africa.net / April 2016 / 41

BUSINESS PROFILE

//CLIENTS CAN EXPECT TO REALISE THEIR PROJECT OUTCOMES WITHIN THE CONSTRAINTS OF TIME, COST AND SCOPE WITH HIGH QUALITY PRODUCTS AND SERVICES//

42 / April 2016 / www.enterprise-africa.net

//

Although it seems as though 2016 is going to be another difficult year for the steel industry and those operating within it, there is reason to be hopeful for companies who have built up a strong reputation over the years.

Creamer Media’s review of South Africa’s steel sector research report, Steel 2016, found that ‘large-scale stimulation is needed to grow the steel industry and market, as the industry has recently been fulfilling only small orders for various projects as a means of simply obtaining work and surviving’.

But for those that have built a strong reputation, based on quality service, innovative product offerings, timely business strategy and diversification, it seems that the future is bright.

Take Mpumalanga-based Steval Engineering, a company with a

long history and a reputation for excellence. This is one business operating in the structural steel sector but managing to thrive where others are faltering.

Founded in 1997 by current Directors Mike Naude and Barry van der Merwe, Steval Engineering focussed on the erection and fabrication of structural steel, mainly tanks, vessels and storage solutions in the sugar milling, paper and pulp industries.

Today, the company is a larger, better-equipped outfit with offices in multiple African countries, global customers, hundreds of employees and state-of-the-art facilities.

Steval specialises in the fabrication and erection of structural steel, mechanical installations, piping and plating (SMPP), pressure

STEVAL ENGINEERING

//STEVAL TEAMS UP WITH CLIENTS TO ENSURE THAT NEEDS, EXPECTATIONS AND PROJECT DREAMS BECOME A REALITY// vessels, spheres, tank farms, bulk storage tanks, civil and building work and engineering procurement construction (EPC) projects.

Clients include Alstom, Eskom, Jindal Africa, African Rainbow Minerals, Xstrata, Murray & Roberts, PPC, Sasol, Hitachi, Illovo Sugar, Mondi, Sappi, Puma Energy and BHP Billiton to name just a few.

The company boasts a long list of successful projects for these big name customers and has proven its mettle in many different environments. Just a few examples include; an expansion project at the ADX Sugar Mill in Mozambique where tanks, piping

and structures were installed; an expansion project for PPC in Pretoria at the Loesche Mill; installations at the Burnstone Gold processing plant and Konkola Copper processing plant; fuel depot tank farms with LPG spheres for Glencore in Mozambique; and upgrades and new hydrocarbon storage facilities also in Mozambique.

Steval cites its core purpose - “to experience the sheer joy and pride that develop from making our clients dreams come true when building and completing their projects successfully.”

One of the most important decisions in the development of the company came in 2011. After dabbling

in the energy market, a previously untapped sector, Steval Engineering found success after positive installations in the oil and gas industry and so the company decided to officially move strongly into the power market. Also, following contract wins at the infamous Medupi and Kusile power stations, Steval’s reputation burgeoned and the company invested in additional capacity to meet the demands of the energy industry across sub-Saharan Africa.

The company has completed projects in 14 African countries including oil rich-Angola, Botswana, Chad, DRC, Ghana, gas richMozambique, Namibia, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Zimbabwe and Zambia and already has established offices in South Africa, Mozambique (Maputo) and Ghana (Accra) – where Eni was

Industrial and Designer Valves Holdings (Pty) Ltd.

Valves for the Petroleum, Gas and Chemical Industry

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Goyen and Mecair offer efficient reverse pulse filter cleaning solutions for air pollution control.

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BUSINESS PROFILE

recently awarded a new exploration license in the prolific Tano basin.

ENERGY INDUSTRY Steval’s move into the energy sector has been a fantastic strategy and has resulted in big benefits for the business. African energy, especially oil and gas, is an important sector right now. Some of the largest recent oil and gas discoveries in the world have been in Africa and the demand for electricity to drive growth means that exploration will continue.

The Zohr field in Egypt and the Rovuma basin in Mozambique have had all industry commentators in a spin with talk of how the resources can benefit the respective economies.

But the U.S. EIA says that inland infrastructure and restricted port

44 / April 2016 / www.enterprise-africa.net

capacity, especially in Mozambique, will hinder the development of these assets. This is why expertise like that supplied by Steval is vital.

At home in South Africa, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) reiterates the importance of infrastructure development following on from announcements just last month where government stated that it would spend R865.4 billion on public sector infrastructure with a large percentage going on energy and also plans for a new nuclear build in the near future.

“In order to fast-track economic growth in South Africa and the rest of the Southern African Development Community (SADC) region during the prevailing turbulent economic conditions where competition is

rife, countries within SADC have to develop infrastructure and transport logistics that would enable them to compete globally,” said SEIFSA Chief Executive Officer, Kaizer Nyatsumba.

As the infrastructure requirements grow from an expanding energy industry Steval remains well positioned to prosper thanks to its ISO 9001:2008 quality certification and also commendation from Alstom, Hitachi Power, Galana Fuel Terminals and BP. STEEL PRICE The one negative issue for Steval to navigate, an issue that has cast a shadow over the entire industry, is the price of steel in South Africa.

ArcelorMittal announced recently that it would raise the price of its

STEVAL ENGINEERING

//COUNTRIES WITHIN SADC HAVE TO DEVELOP INFRASTRUCTURE AND TRANSPORT LOGISTICS THAT WOULD ENABLE THEM TO COMPETE GLOBALLY// SA-produced steel in order to combat rising input costs. The company said it would increase the prices of hot rolled coil by 8% on average and plate by 11% with other products also set to feel the rise.

“The global economic developments and the sustainability of the steel industry are among the factors which led the company to increase prices following its monthly price review,” the steelmaker said in a statement.

“The challenges faced by ArcelorMittal South Africa and the local steel industry are still persisting, and they are putting the company and the steel sector in a difficult position,” the company added.

Of course, this means for those like Steval that use steel in their products the choice will be, accept the increase in price or look to imports which are also facing price hikes thanks to government tariffs.

Whatever the outcome, Steval will

continue to supply one element that cannot be priced – quality.

“Clients can expect to realise their project outcomes within the constraints of time, cost and scope with high quality products and services your satisfaction is Steval’s guarantee.

“Steval teams up with clients to ensure that needs, expectations and project dreams become a reality.

With Steval Engineering, possibility is everything,” the company says proudly.

STEVAL ENGINEERING +27 (0)13 758 1015 info@steval.co.za www.steval.co.za

www.enterprise-africa.net / April 2016 / 45

SOUTHERN AIR CONDITIONING

The Western Cape’s Largest and

Most Successful Air Conditioning Contractor

PRODUCTION: Karl Pietersen

With a long history and reputation for quality, SAC is now one of the Cape’s and country’s go to companies when it comes to HVAC solutions.

//

A vital aspect of today’s construction industry is innovation. The need to be creative with space, efficient with energy supply and modest with impact on the environment all require innovative thinkers and inventive technologies.

Getting to know the needs for a building or structure comes only with experience but in today’s modern industry, that experience is being challenged by ingenious thinkers who are coming up with increasingly unique and distinctive designs and ideas.

But when you create building designs that have been widely adopted in the past, you then create a problem for those furnishing the

building. Everything from electrical contractors, flooring companies, shop fitters, decorators, tenants and suppliers of other technology such as air conditioning and security.

Just look at Dubai for example.

The huge buildings that have been designed and built in the city are different to anything else that has been built anywhere in the world and came with their own set of original challenges.

One of the main problems here is the temperature. Keeping people cool when the megastructures are complete is massively significant considering the desert climate and average summer temperatures of around 41°C and so, air conditioning solutions have to be

www.enterprise-africa.net / April 2016 / 47

BUSINESS PROFILE

//WE HAVE BEEN IN OPERATION SINCE 1971 AND OUR COMMITMENT TO PROVIDING A QUALITY SERVICE IS PARAMOUNT TO OUR SUCCESS// effective both operationally and in terms of cost. Dubai has stated that in the future it plans on building a fully covered, indoor city which will be completely air conditioned throughout – it’s essential.

While there have been alternative methods for heating and cooling buildings discussed and tested, some successfully, the major buildings in the major cities around the world all have air conditioning systems and the goal of this is to ensure complete comfort and optimum working conditions to guests and inhabitants.

In London, an example of an

48 / April 2016 / www.enterprise-africa.net

innovative heating system is being utilised in the One New Change shopping centre. 60km of pipes are constantly transferring heat to and from an underground aquifer, providing a source of natural heating and cooling for the shopping centre.

An intelligent control device enables the system to redirect heat from warmer to colder areas, improving the eight-floor building’s energy efficiency. Its green credentials are further enhanced by solar-controlled glass, which reduces the need for air conditioning by limiting heat gain, and a series of so-called green roof planted

terraces to encourage biodiversity.

But in South Africa, the construction industry is going through a strange period right now. In the middle of 2015, there was concern as the global economic climate began to slow and stock prices for major JSE-listed construction companies plummeted and this of course meant challenges for suppliers to these companies. But then there was a small resurgence as more public-sector work was announced.

Finance Minister, Pravin Gordhan’s budget speech said: “Over the next three years, government and stateowned companies have committed R865.4 billion for investments in housing, roads, rail, public transport, water, electricity and community infrastructure,” bringing hope to construction and related businesses.

SOUTHERN AIR CONDITIONING

//ALL THE DIRECTORS ARE ACTIVELY INVOLVED IN ALL ASPECTS OF EACH PROJECT. WE ARE DEDICATED TO QUALITY AND MEET OUR CONTRACT DEADLINES AT ALL TIMES// But if you talk to people on the ground; the builders, the floorers, the painters and the air-con fitters, they will all tell you to just look around; every corner has a building project, there are sky-risers going up all over the country, there’s shopping malls and industrial buildings on the rise all the time so things are not as bad as the number crunchers might suggest.

And in particular, the Western Cape has seen much activity. Atterbury’s development manager for its Western Cape developments, Gerrit van den Berg said recently: “We’re back in the Western Cape in a big way.”

At the Cape Construction Conference in August, Western Cape Economic Opportunities Minister, Alan Winde told delegates that agro-processing, tourism and the oil and gas sector had been earmarked for development.

All of this means opportunity for specialised businesses who can supply required services. One company with a skillset unmatched in the Cape is Southern Air Conditioning (SAC). As the Western Cape’s largest and most successful air conditioning contractor, SAC offers customers the best in service and reliability which has placed the business at the forefront of the industry.

With a well-developed quality assurance program in place as well as staff who have been in place for many years, SAC continues to bring only top level expertise and experience in this field.

While Cape Town’s average temperatures are lower than Dubai’s at 23°C, the city is still in need of effective air conditioning systems and for the best part of 50 years, SAC has been supplying shopping centres, universities, company headquarters and other important buildings with quality heating, ventilation and air conditioning (HVAC) systems.

“We have been in operation since 1971 and our commitment to providing a quality service is paramount to our success. SAC is a privately owned company with our directors and shareholders holding 25% of the company each,” says SAC. The company is currently managed by John

Heat Pump International (Pty) Ltd is proud to have been able to count Southern Air as a valued customer for the last 20 years Suppliers of the following to the HVAC industry: • Package units from 10Kw – 500Kw (VRV compressors where required) • Chilled water units from 10Kw – 500Kw • Nicotra fans (full range of belt driven fans) • Louvres and dampers (all sizes as required)

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www.enterprise-africa.net / April 2016 / 49

BUSINESS PROFILE

Schuurmans, Mark Botha, Antoni Krige and Lloyde Schlosz.

“All the directors are actively involved in all aspects of each project.

We are dedicated to quality and meet our contract deadlines at all times. We enjoy priority, price and delivery from all our suppliers. We have managed to negotiate and secure a large percentage of our contracts using these policies as a measure for our success,” the company explains.

Many occupational health and safety guidelines will recommend a satisfactory temperature range from 60°F to 76°F degrees. This is a good average range for most areas, but employers should always be prepared to respond to employees for whom these temperatures are too hot or too cold. It’s also important to remember that site-specific conditions could affect

50 / April 2016 / www.enterprise-africa.net

temperatures for certain individuals.

Employees working near equipment that generates heat, in the path of outdoor breezes or near doorways, or in areas that are naturally cooler or warmer might not be able to appreciate the average temperatures in the rest of the building – this is why the modern air conditioning system must be smart and tailored to the specific needs of the building.

“More than just air conditioning, SAC addresses various elements in the fulfilment of our projects. This includes intelligent buying, design, cost saving, communication and experience in dealing with professionals, programming, safety and environmental issues,” the company says.

And because of the reputation, the quality people and products used, and reach of the company, SAC has

secured contracts on some of the most recognised buildings in South Africa.

“Some of our large contracts include Canal Walk, Cavendish Square, Mountain Mill, and V&A Clock Tower at the Cape Town Waterfront.

“Other projects we have completed in the last three years include De La Rey, SHG House, Mandela Rhodes, Pearl Valley clubhouse, North Wharf, Lagoon Beach and Stellenbosch Square,” the company says.

Ensuring that the company doesn’t get left behind in these times of innovation and progress, diversification is underway SAC and a recent investment into equipment that can manufacture ducting on site, saving time and transportation costs.

Wherever in Africa that the company is called upon, with this new system

SOUTHERN AIR CONDITIONING

//SOME OF OUR LARGE CONTRACTS INCLUDE CANAL WALK, CAVENDISH SQUARE, MOUNTAIN MILL, AND V&A CLOCK TOWER AT THE CAPE TOWN WATERFRONT// SAC will be able to answer demands from customers. The company has a fleet of generators and only needs a satellite connection for this system to work effectively.

The technology used with this system falls under the company Southern Duct Manufacturing, a subsidiary of SAC, owned by the four shareholders of SAC. “The directors of Southern Air Conditioning are also the directors of Southern Duct Manufacturing.

SDM has recently acquired the latest fully automated duct manufacturing production line, enabling it to produce ducting faster than before.

These ducts are manufactured complete with an integral flange folded onto the duct, reducing air leakage at the joints and making it suitable for cleaning. This new machine is one of six in the world and supplements our spiral duct manufacturing machine purchased in 2005,” explains SAC.

As the construction landscape continues to change, and as big name local firms including Group 5, Murray & Roberts, Grinaker and NMC continue to expand into Africa, SAC will remain perfectly positioned, as the Western Cape’s largest and most successful air conditioning contractor, to grow alongside its customers bringing cool comfort and quality to people and businesses who occupy impressive new buildings.

SOUTHERN AIR CONDITIONING 021 551 6180 info@southernair.co.za www.southernair.co.za

www.enterprise-africa.net / April 2016 / 51

BUILD IT

Complete Solutions for the

African Home PRODUCTION: Timothy Reeder

A division of the SPAR Group, Build it is a voluntary group of independent retailers, whose specialities lie in building materials and the related hardware. Among its primary focusses are the building of the basic urban house and rural housing, alongside all manner of home improvements across its ever increasing Southern African footprint.

//

Build it’s stores currently span urban and rural areas throughout Southern Africa, in locations in South Africa, Namibia, Lesotho, Swaziland and Mozambique.

These are soon to be joined by further sites in Botswana, Mauritius and Zimbabwe, as it looks to continue its rapid expansion into more and varied African territories.

Through its voluntary trading system, Build it aims to put independent retailers in a position whereby they are able to compete with larger chain stores in the hardware and building materials market, offering a complete home building solution and the best value for money of any of its competitors.

The organisation’s staff compliment of approximately 8250 people services its

52 / April 2016 / www.enterprise-africa.net

current membership of over 300 stores in Southern Africa, with these serviced by its six regional offices, central office and distribution centre.

This is a long way from its beginnings in 1984, which saw it start life with a membership of only 20, largely rural independent retailers, as part of a business launched in KwaZulu-Natal. Moving inland in the 1990’s afforded steady, albeit slow, expansion, before the decision in 2000 to take the group national provided the growth required to bring it to its current standing. July of last year brought about a significant milestone in the company’s operational history, marking 30 years since the opening of its first trading location. Ray Whitmore, Managing Director, explained: “We (Build it) were born in a time of

© BUILD IT

BUSINESS PROFILE

© BUILD IT

turmoil and we’ve created a strong brand with a great platform for growth ahead of the market”; this strength is evidenced by the group’s experiencing an average of 27% annual growth since its inception.

In line with such ambitious plans for growth, and following months of steady progress, the completion of Build it’s new R11 million hardware store at Bothasig Mall was announced in April of last year. Construction began in mid2014, at the site spanning over 1000 m² with an additional 1000 m2 yard area, and it is now well placed to offer the full range of solutions for home improvement or construction projects - be this paint, plumbing, electrical and gardening, everything is easily accessible and located under one roof. John de Smidt, the owner of the former Pick ‘n Fix hardware

54 / April 2016 / www.enterprise-africa.net

BUILD IT

retail turnover growth of 14% to R10.4 billion, news matched by a similarly positive summary of its wholesale turnover, where an increase of 12.4% took it to R6.2 billion. This growth on Build it’s part was supported by a 39% increase in neighbouring countries.

Such strong performances enabled Build it to enter into the DIY market in the same period, with its first branded TrenDIY store opening toward the close of the year, a brand set to appeal to the middle to upper-LSM interior decorating market.

Build it made the decision over the course of the year to close certain underperforming stores in Botswana, which was mitigated by considerable improvements in same-store growth and increased contributions from, in particular, its Namibian operations.

It focussed heavily on improving its available product range, and both

//WE HAVE CREATED A STRONG BRAND WITH A GREAT PLATFORM FOR GROWTH AHEAD OF THE MARKET//

Y o u r

expanding and renovating the selling areas of its stores. To this end, it was able to upgrade 48 of its stores, having set out to do so with 35, and will continue to expand store formats and layouts to match the changing need of its customers. This, together with the successful introduction of the TrenDIY arm of its brand, will enable Build it to achieve its eventual ambition of dominating the supply of basic building materials to the southern African, and thus becoming the best known quality brand on the market.

BUILD IT +27 31 719 1759 www.buildit.co.za

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store at Bothasig Mall, has now taken the reins as General Manager of the Build it store. He heads up an experienced team poised and ready, as at each of its outlets, to welcome customers into this newest addition to the Build it group of independent retailers and provide them with the complete home building package, from foundations to finishings.

While Build it continues to bolster its presence across multiple territories, the SPAR Group was celebrating a notable achievement of its own at the turn of the year, having been awarded the Top Employers South Africa 2016 certification. It was revealed through comprehensive independent research that The SPAR Group provides exceptional employee conditions, nurtures and develops talent throughout all levels of the organisation and has demonstrated its leadership status in the HR environment. As such, it displays a continual commitment to optimising its employment practices and to developing its employees. This is a remarkable boon for the Group, with certification only awarded to the best employers around the world – those companies that demonstrate the highest standards of employee offerings following the Top Employers Institute’s research assessing all critical areas of the Human Resources environment.

The Spar Group’s operational overview of Southern Africa revealed yet more positive news for Build it in recent times. In spite of a general atmosphere of continued pressure on consumer spending, Build it was able to maintain what had been a strong first-half performance last year with

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www.enterprise-africa.net / April 2016 / 55

NEOLIFE

Rebrand Boosts Growth for Neolife PRODUCTION: Manelesi Dumasi

The Neolife business in South Africa tells a story of success in a commercial sector where so many others have failed. Following a rebrand and the release of a number of exciting new products, this a company that is set to thrive throughout 2016 and beyond…

56 / April 2016 / www.enterprise-africa.net

//

Direct selling is a proven, successful tool for building a network of customers and marketing products to a relevant commercial audience quickly and effectively. But somewhere along the way, direct sales has gained something of a bad reputation in some corners, largely due to the negative publicity around Ponzi and pyramid schemes that have been shut down in the past.

Some direct sales companies, years ago, didn’t have the integrity they needed, hard sales tactics in which recruits were pressured into buying products or front-end loading were used but today, with the reputation of the industry on the mend, this model is proving hugely positive for some companies and their distributors.

Selling directly to consumers generates referrals and creates demand and direct-selling companies are now focusing on general consumer transparency, leveraging new technologies to reach beyond distributors to general consumers and developing corporate sophistication.

The perfect example in South Africa is NeoLife. The company recently rebranded (previously known as GNLD or Golden Products) and is pushing to build its market share in the healthcare and consumer products industry.

“Unfortunately, because we are a direct selling company, we quickly get thrown into the basket with pyramid or Ponzi schemes,” says NeoLife Executive Vice President for Africa, Marco Taylor.

“We are part of the Direct Selling Association which has 36 member companies in South Africa and in 2014 there was a growth of 15% in people joining our industry and sales grew by 5% as an industry so we see more and more people looking at this as an opportunity to trade and in Africa people still like to trade.

“People join our company as they can see the benefit of the product and the value for money the products offer. People also join NeoLife to make extra money.”

Now officially known, globally, as NeoLife, the South African division has undertaken a complete overhaul of its image to modernise and align the business units from around the world.

“We have had an extreme

//WE BELIEVE PEOPLE NEED TO LOOK AFTER THEIR HEALTH; OUR MISSION IS TO MAKE THE WORLD A HEALTHIER AND HAPPIER PLACE// makeover,” explains Taylor. “We renewed the packaging and the look to make our brand fresh and new.

We believe people need to look after their health; our mission is to make the world a healthier and happier place. People are conscious of the environment and we have made sure that remains part of our philosophy.

“We’ve come a long way and people are seeing this rebranding as a rebirth of who we are or where we’re going. Even though times are tough, we are very excited about the future and we’re in a building process, getting the brand out there and reminding people who we are, and just by changing our packaging and the way we look, people are picking up the product and seeing that it’s fresh and new and then realising that it’s GNLD or Golden Products and that excites them as it’s a quality brand that they know and trust,” he says.

NATURAL GROWTH Neolife started in the USA and was founded by entrepreneur, Jerry Brassfield. After selling nutritional products from his home, Brassfield quickly grew the business and today the company is a multimillion dollar organisation.

“The company arrived in South Africa, via Australia, in 1971. Jerry started in a small town in California and grew quickly. Soon, it was all over California, then all over the USA, then Australia, Europe and eventually South Africa.

“Back then, the company was called Golden Products and mainly sold cleaning products. We still sell these products today and they are environmentally friendly, just as they were back then – we were green before it was cool to be green.

“As Jerry acquired more businesses,

we added additional nutritional products based on wholefood concepts and nature,” explains Taylor.

As the company grew in Africa, and around the world, more products were added, there was a need to consolidate the brand and centralise marketing.

“We had different names throughout the world; Africa and Europe were trading as Golden Products, USA and Asia Pacific were trading as NeoLife,” explains Taylor.

“The company grew in Africa, using South Africa as a hub, we started bringing in products in bulk from the US, we package, we re-export, and we realised that the brand is not looking that great. We were looking slightly 80s/90s and we began to ask, how can we be more current? We looked at what’s easy to remember, what’s something that will stick with people, and we felt the brand NeoLife was suitable.

“We call ourselves NeoLife but we make sure people know we are GNLD as that is a well-established brand in Africa. People still know Golden Products from our two popular

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BUSINESS PROFILE

we found that a lot of parents liked the product for their children and sales quickly increased,” he says.

The power of NeoLife’s nutritional products has even attracted the attention of some of the healthiest people around – the country’s elite athletes.

“We see more and more sportspeople and athletes approaching us for our nutrition. NeoLife sponsors a Superbike team who use our products and they have won the SA championship back-to-back using NeoLife products. We also have some of the top rugby players asking to use our products as supplements,” Taylor boasts.

//WE WERE GREEN BEFORE IT WAS COOL TO BE GREEN// products Super 10 and LDC which are light and heavy duty cleaning products,” he says.

HEALTHY PRODUCT LINES The NeoLife products span different lines; there’s Nutritionals, which include vitamins, minerals and diet supplements; there’s Home Care, which includes carpet cleaner, car wash products and laundry goods; finally, there’s Personal Care, which consists of soaps, facial products and shampoos.

Taylor is excited about nutritional products which are whole food based, backed by NeoLife’s Scientific Advisory Board.

“We have a few products like grain oils, where we extract the material that is good for the cells to assist in a healthy diet, which are extremely popular. Our product

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called Tre-En-En is one of our best selling product, we have our Salmon Oil Plus which is a top seller, we have a very convenient packed product called Pro Vitality+, 4 products in one small sachet, where we combine grain oils in the form of Tre-En-En, a multivitamin product, a product called Carotenoid which is an antioxidant that helps to repair cells and boosts your immune system as well as our Salmon Oil Plus capsule.

“Last year we introduced a healthy snack bar. People drive around a buying a doughnut or a muffin and they don’t get nutritional value, so we launched a fruit and nut bar and a chocolate bar filled with nutrition, protein and even omega 3. Both of these flavors are growing. Initially it was released as an add-on to our weight loss portfolio, encouraging healthier snacking, but

2016 AND BEYOND The difficulties of operating in stagnant economic times have been somewhat sidestepped by NeoLife as the company’s target audience is addressed through the direct sales model which is based principally on personal contact with the customer. Nevertheless, Taylor does concede that demand may be slower in challenging times when people are less-flush.

“We feel demand may be a little flat this year because people are being very careful with their money due to the current economical environment in South Africa. However, we see opportunities with our cleaning products as we can show people how you to save money. We expect that we might not have significant growth this year but when you build a brand, you need to be positive and we see the current situation as an opportunity.

“Bad health is an expensive deal.

People are stressed, they are not eating properly, there’s an increase in chronic disease and when you come with natural health products people are open to listen, especially when you offer value for money.

There’s no limit to the market for NeoLife; everyone is a potential customer and this of course drives further business. As health and fitness become more fashionable

NEOLIFE

//WE ALSO HAVE SOME OF THE SPRINGBOK PLAYERS ASKING TO USE OUR PRODUCTS AS SUPPLEMENTS// and more on-trend, the company’s products are set to thrive.

“In wholesale or retail, you don’t always see the effect that your business or products will have on people. In this business I’ve noticed everyone from engineers to accountants, teachers to doctor’s start using the product and they start referring it and then they make money and realise how easy it is.

It’s an interesting business to look at, especially the sales side of our business, but for the rest – operations, finance, distribution, IT – it’s normal business,” Taylor explains.

He concluded by saying that he is “very excited about the company and the group” and why not? This

is a business with nearly 60 years of global sales experience, internationally respected products that are backed by scientific research, a brand that is valued and recognised by customers, and a growing market that is hungry for further advancement. The next step will be further development on the continent and pursuing further market share in South Africa.

NEOLIFE 0800 600 790 web_info_us@us.gnld.com www.gnld.co.za

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EXHIBITION CALENDAR

KEY UPCOMING EVENTS ACROSS THE COUNTRY Our regular update to help you keep track of important events and exhibitions taking place across the spectrum of industry sectors.

//TABLE OF ALL EVENTS: ILTM AFRICA 2016 Cape Town ICC 04-06 April WTM AFRICA 2016 Cape Town ICC 06-08 April AFRICA PRINT / SIGN AFRICA 2016 Meropa Casino, Polokwane 07 April INTERNATIONAL FRANCHISE SHOW 2016 Sandton Convention Centre 08-10 April INDUSTRIAL KENYA 2016 Sarit Expo Centre, Nairobi 15-17 April PHARMACONEX Cairo ICC 19-21 April

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60 / April 2016 / www.enterprise-africa.net

INTERNATIONAL LUXURY TRAVEL MARKET | AFRICA 2016 04 - 06 APRIL 2016 In 2013, ILTM launched the first luxury travel event for the African continent. Now in its 4th year, ILTM Africa introduces buyers from across the globe to a collection of high-end African travel experiences.

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INTERNATIONAL FRANCHISE EXPO 2016 08 - 10 APRIL 2016 Always dreamt of owning your own franchise? Visit the International Franchise Expo 8 to 10 April 2016. The International Franchise Expo held in South Africa is the perfect opportunity to show thousands of visitors what you offer. Flaunt your recipe for success by booking your stand and have the opportunity to speak directly to interested entrepreneurs to generate sales and leads.

INDUSTRIAL KENYA 2016 Ò 15 - 17 APRIL 2016 KENYA INDUSTRIAL 2016 is the main international Industrial Event. Setting new highs for participation from over 20 countries & visitors from over 12 African countries, the event is all set for its exhibitors to meet serious buyers within the 3 days.

The event continues to lead the way in showcasing the new products & technology not only to Kenya but also to its surrounding countries. The event held in conjunction with 12th Kenya Trade Show 2016.

GHANA OIL & GAS SUMMIT Accra ICC 20 -21 April MOZAMBIQUE MINING, OIL & GAS AND ENERGY CONFERENCE AND EXHIBITION Maputo ICC, Mozambique 27-28 April

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