Enterprise Africa February 2016

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THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

AFRICA

ENTERPRISE February 2016

www.enterprise-africa.net

BANKING ASSOCIATION:

How to Navigate a

Difficult Year

ALSO IN THIS ISSUE:

JT Group / Willowton Logistics / KFC SA / Brights Hardware


Some call them optimists. The founders. The builders. The producers. The doers. Making good the many challenges of our times. We call them progress makers. And we’ve made it our job to believe in their ideas. Be they multinationals wanting to invest in South Africa or South African companies looking to expand into markets around the world. Wherever they come together to create or to build something, we’re there to help make it real.

© 2016 Citigroup Inc. Citi and Citi with Arc Design are registered service marks of Citigroup Inc.


EDITOR’S LETTER

Joe Forshaw EDITOR joe@enterprise-africa.net Timothy Reeder SUB EDITOR tim@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 Nathan Murphy PROJECT MANAGER nathan@enterprise-africa.net Shannon James PROJECT MANAGER shannon@enterprise-africa.net John Mulley FINANCIAL DIRECTOR john@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 Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU,

Welcome to our latest edition…

//

We have two distinct topics up for discussion this month: fast food and financial services. In an eye-opening exchange, I spoke to MD of South Africa’s Banking Association, Cas Coovadia who explained that the country needs to start sending out a clear message that it is a secure and reliable investment destination in an effort to attract more FDI so that we can stimulate the waning economy. He said that there needs to be more cooperation between government and business in order to get this message out there. It is certainly possible; countries such as Kenya, Tanzania and Ethiopia are just a few that are becoming more and more attractive to investors because of a clear message – “we’re open for business”. In the restaurant sector, we look at two of Africa’s (and the globe’s) biggest chains; McDonald’s and KFC. Both are keen on further developing their footprint and both are keen on shaking their traditional image of being an unhealthy, unethical option. There’s only one way to do this - effective marketing. We explore what has been done so far to inform customers, and potential customers, about what really goes on behind the scenes at these African favourites. In other significant features, we hear from two of the country’s biggest hardware chains and find out that although the economy is biting, attention to detail and effective management means that you can in fact thrive while others fall away. Get in touch with us and tell us your tales of success (or woe) during these tough times @EnterpriseAfr1

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 / February 2016 / 3


06/NEWS: The Month that was... A round up of some of the latest news stories in the industry

08/FEATURE: US Singer, British Entrepreneur and Global Energy Company Bring Light to Nigerian Community An innovative energy solution, that could hold great potential for the African continent, has been installed underneath a football field in Lagos.

74/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.

12/

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

12/BANKING ASSOCIATION SOUTH AFRICA : How to Navigate a Difficult Year The economic climate in South Africa is something we discuss on a regular basis. It effects the business of every company and every individual in the country. In a bid to learn more about what we can expect in 2016, Enterprise Africa talks to the head of the Banking Association.


CONTENTS 24/

50/

60/

20/CENTRIQ INSURANCE: Customers Central for Centriq

42/WILLOWTON LOGISTICS: Driving Willowton Forward

There’s one way to ensure that your customers are happy – ensure that your employees are happy.

Willowton Logistics is becoming known as one of the most reliable and consistent performers in the transport and logistics industry.

24/JT GROUP: Building a Sustainable and Affordable Future for Gauteng Gauteng-based JT Group is a diversified property development company focused on undervalued raw land earmarked for future residential property development.

28/BRIGHTS HARDWARE : The Leading Hardware Solutions Provider in the Western Cape Brights Hardware has seen fantastic growth in the last decade and is now one of the most respected DIY and hardware suppliers in the Western Cape.

34/MICA HARDWARE: Building on Historical Success and Growing In Africa We talk to the company’s 30 year veteran and CEO, Nareen Daya to find out more about Mica’s story and its industry-leading offering.

38/MASSMART: Developing Wholesale Coverage Across Sub-Saharan Africa South Africa’s Massmart is growing its presence on the continent with new stores coming from its fantastic range of brands.

50/KFC SOUTH AFRICA: KFC Looks To Take A Bite Of Sub-Saharan Africa One of the most important factors behind the ongoing success of the KFC brand in Africa is the strong focus on being local.

56/MCDONALD’S SOUTH AFRICA: A ‘Modern Progressive Burger Company’ The world’s most famous burger chain is looking to revitalise its global expansion methods by focussing closely on customer interaction and regional relevance.

60/DENEL: New Partnerships to Bolster Denel’s Arsenal Over the past six months, Africa’s leading defence company, Denel, has announced a number of new partnerships that will see the company grow into new sectors and new geographical markets.

66/LANCET LABRATORIES: Pathology Services Without Borders A pioneer among the original private pathology laboratories in South Africa,

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


NEWS IN BRIEF

PETROL PRICE TO RISE BY SIX CENTS The price of petrol increased by six cents a litre on February 1st. The announcement was made by the Department of Energy. The prices of diesel and paraffin decreased by 62 cents and 63 cents. The price of illuminating paraffin also decreased by 59 cents. The department explained that the main reason for the decrease in diesel and paraffin prices is the oversupply of middle distillates such as diesel and illuminating paraffin in the global market. “This is mainly due to the fact that the Northern Hemisphere experienced mild winter season compared to previous periods. China contributed to the situation by exporting diesel into the market. “On the other hand, the increase in the petrol price is mainly due to tightness in the market because some major refineries in the USA were on unplanned shutdown. The weakening of rand against the US Dollar contributed massively to the current fuel price adjustment,” the department said.

DEVELOPMENT OF SHALE GAS INDUSTRY ON THE HORIZON? Over and above being a massive energy resource, shale gas has the potential to boost business development within communities, establish black industrialists, create employment and develop specialised skills and the youth. “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 5th largest reserves, estimated at 485 trillion cubic feet (Tcf ). “We however take a conservative view of a 30 TcF economically recoverable resource, which is equivalent to 30 times the size of the Mossgas plants,” said the Minister for Mineral Resources, Mosebenzi Zwane last month. “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.” On discovery of the shale gas prospect a few years ago, government started processing applications for development of the resources. However a moratorium was placed on processing applications and any further receipt of applications when concerns were raised by stakeholders. “The government, based on the balance of available scientific evidence, took a decision to proceed with the development of shale gas in the Karoo formation of South Africa,” said Zwane.

SA GROWS SWEDISH RELATIONS Increased cooperation between South Africa and Sweden was one of the issues discussed by President Jacob Zuma and Swedish Prime Minister Stefan Löfven during the WEF in January. The two leaders met in Davos, Switzerland, last month. They underscored the need to strengthen South Africa-Sweden bilateral relations, which are structured through a Bi-National Commission (BNC) that is chaired by

6 / February 2016 / www.enterprise-africa.net

Deputy President Cyril Ramaphosa and the Prime Minister. The two leaders also discussed the implementation of the 2030 Agenda for Sustainable Development, which was adopted by the United Nations General Assembly in September 2015. President Zuma and the Prime Minister discussed the warm and strong bilateral relations between the

two countries, which date back to the period of the struggle against apartheid when Sweden supported the oppressed in South Africa to gain freedom and democracy. Prime Minister Löfven has invited President Zuma to join an informal group of world leaders from different regions to support the implementation of the Sustainable Development Goals (SDGs) at the highest political level.


NEWS ROUNDUP JSE TO OPEN SAA ANNOUNCES IN CAPE TOWN CLOSURE OF ROUTE The JSE announced recently that it is opening a new office in Cape Town. According to the JSE this is because Cape Town is becoming an increasingly important hub of South Africa’s financial services industry. It said the new office in the city will enhance its service to clients, build and strengthen relationships and provide accessible support to the market. “Cape Town is a major centre for global and local institutional investors as well as listed companies. Being the second largest economic hub of South Africa, the head office base of many institutional clients and an increasing number of member firms and brokers, an office in the city is a logical part of the JSE’s client strategy,” explained capital markets director Donna Oosthuyse. In the new office the JSE will be represented by senior capital markets specialist Maryke Vreulink. It will be used for all JSE-related activities and events held in Cape Town.

Finance Minister Pravin Gordhan has granted approval for South African Airways (SAA) to cease operating its route between Johannesburg and Abu Dhabi. In a statement released last month, National Treasury said the route, which was commenced by the national carrier in March 2015, did not perform as expected. “SAA’s interventions to improve the financial performance on this route had unfortunately not yielded the desired results, warranting that decisive action be taken to mitigate the negative impact on the airline,” said National Treasury. SAA operated the route in codeshare with Etihad Airways. Etihad will still be flying between Johannesburg and Abu Dhabi, and offering South African Airways passengers the opportunity to connect to a range of destinations in China, India and Asia as well as in Europe and the Middle East. “National Treasury and the Department of Tourism are certain that the decision will not impact tourism and connectivity. National Treasury worked

closely with the Department of Tourism to weigh the costs and benefits of closing the route and agreed that the closure was in the best interest of both South Africa and SAA,” National Treasury said. In November 2015, the airline announced that its Chief Commercial Officer, Sylvain Bosc, had been suspended. “SAA has taken a decision to suspend Mr Bosc, pursuant to a forensic investigation by ENSafrica into various allegations that were received through Deloitte’s tip-off hotline,” said SAA at the time. SAA said a forensic investigation confirmed that there was substance to the tip-off allegation, which suggested that Bosc allegedly doctored the numbers for Abu Dhabi to favour the opening of this route and sold SAA out.

MORE HELP FOR GAUTENG TOWNSHIP BUSINESSES The Gauteng Department of Economic Development has intensified its campaign to assist township entrepreneurs to formalise their businesses. The Qondis’ Ishishini Lakho (fix your business) campaign was launched in October 2015 and has since assisted over 6000 businesses in 20 townships across the province. The department says due to the high demand of this service, it is now extending the programme to June 2016, instead of March, as initially planned, to meet the demands of township entrepreneurs.

The MEC of Economic Development, Environment, Agriculture and Rural Development, Lebogang Maile, said formalising businesses will no doubt break the norm of township settlements being just labour reservoirs, but transform township economies and create opportunities for sustainable growth. “The campaign reflects the Gauteng Provincial Government’s commitment to transforming township economies. The decisions and the interventions that we make as a provincial government are a clear indication of our unwavering support of township based SMMEs,” said MEC Maile.

Townships that have been visited to date include Tembisa, Kokosi, Khutsong, Ivory Park, Ebony Park, Thokoza, Wattville, Actonville, Mamelodi, Tsakane, Reiger Park, Soshanguve, Kagiso, Munsieville, Azaadville, Khutsong and Hammanskraal.

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


FEATURE

US SINGER, BRITISH ENTREPRENEUR & GLOBAL ENERGY COMPANY BRING LIGHT TO NIGERIAN COMMUNITY EDITORIAL BY: Joe Forshaw

An innovative energy solution, that could hold great potential for the African continent, has been installed underneath a football field in Lagos.

//

In a first for Africa, at the Federal College of Education in Akoka, Nigeria, a football field has been turned into a mini power station, utilising the kinetic energy of player’s footsteps. Opened in December 2015, and coming as an early Christmas present for staff and students, the new pitch is made up of more than 90 tiles located under the pitch. These tiles can produce up to seven watts of power per footstep and during peak times, the power generated from the system can control the surrounding floodlights, allowing for exercise and other activities after the sun goes down. The project has a number of key stakeholders including the Federal College of Education, global energy giant - Shell, British alternative energy experts - Pavegen and international music figure – Akon who runs the solar business, Akon Lighting Africa. The area in which the field is located is completely dark at night and the college runs diesel generators to power lights. Now, with Pavegen tiles under the areas of the playing surface with the most footfall, the players power the lights with kinetic energy that is

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

harnessed by the tiles. The energy is then combined with power stored from solar generation and the floodlights are energised; bright and clear. Pavegen is the brainchild of British tech-entrepreneur, Laurence KemballCook. The company has worked on innovative energy installations all over the world that demonstrate the vast potential for harnessing kinetic energy. The ingenious tiles have been fitted in airports, on high-streets, in shopping centres, in train stations and in many other locations with high foot traffic – even at the finish of the 2013 Paris marathon. Kemball-Cook won the Shell liveWIRE competition in 2010, a challenge which honours excellence from young entrepreneurs, and since then has gone on to achieve great things. As one of his most widely reported projects in Africa so far, the football field follows on from the successful partnership he has already developed with Shell in Brazil where Pavegen built a similar system under a pitch in Rio.

He said that Africa can benefit in a big way from ground-breaking technologies like Pavegen and he hopes to continue working with Shell to demonstrate the possibilities to a younger generation. “Africa has huge issues around access to energy. The project shows how the energy mix of the future will combine kinetic and solar power to improve communities. “The background to this project is that I won the Shell LiveWIRE entrepreneurship award in 2010 and have made it my mission since then to collaborate with Shell, to create breakthrough projects that excite the younger generation and raise awareness to STEM (science, technology, engineering and maths) careers,” he said. Osagie Okunbor, Country Chair, Shell Companies in Nigeria & Managing Director of The Shell Petroleum Development Company of Nigeria Ltd (SPDC) said: “Shell makes a significant contribution to energy solutions for Nigeria, and we are committed to supporting the Nigerian economy and its people. We need bright energy ideas. Some of these will come from Shell but

//AFRICA HAS HUGE ISSUES AROUND ACCESS TO ENERGY//


PH

OTO S

:©

PAV EG

EN

PAVEGEN

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


FEATURE

//NOT ONLY OUR STUDENTS BUT THE COMMUNITY THAT SURROUNDS US WILL ALL GET TO BENEFIT FROM THIS PITCH FOR YEARS TO COME//

naturally, others will come from outside our business. So it’s crucial that Shell supports energy entrepreneurs, and we hope that this pitch will inspire more entrepreneurs and young people to help us make a smarter energy future.” Akon, whose full name is Aliaume Damala Badara Akon Thiam and who is American but spent much of his childhood growing up in Senegal, commented: “New, reliable and smarter energy solutions play a major role

in driving human progress in Africa. Projects like this innovative football pitch draw attention to the major opportunity that Nigeria as well as the whole of Africa have if we look to better harness new technologies and the continent’s abundant renewable energy resources. That is why DJ Hardwork and I will feature this pitch in our upcoming video for ‘Tell Me We’re OK’ because I want young people, whether they are in Lagos, Los Angeles or London to think about

PHOTOS: © PAVEGEN

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


PAVEGEN

how they too can help us make the future.” Akon Lighting Africa was founded in 2014 and now provides electricity in 15 African countries. Siji O Olusanya, Provost of the Federal College of Education, Akoka, added: “We have more than 10,000 student teachers, who will benefit from this innovative solution to light our football pitch. They will be the next generation of teachers across Nigeria and can they use their first-hand experience of this pitch to inspire their pupils that they too can work towards developing bright energy ideas that could make a real difference to their community, Nigeria or even the world. Not only our students but the community that surrounds us will all get to benefit from this pitch for years to come.” Shell has included the project in its #makethefuture marketing campaign, which also includes its Pavegen pitch in Rio. The energy multinational, that has a broad range of operations underway in Africa, has been criticised in the past and accused of causing environmental damage to the Niger Delta region of Nigeria. There has also been questions from industry commentators as to whether Pavegen and Shell’s technology produces enough energy in comparison to the cost of installation.

//IT’S CRUCIAL THAT SHELL SUPPORTS ENERGY ENTREPRENEURS, AND WE HOPE THAT THIS PITCH WILL INSPIRE MORE ENTREPRENEURS AND YOUNG PEOPLE TO HELP US MAKE A SMARTER ENERGY FUTURE// But Kemball-Cook says that as the demand for the technology grows, the price will continue to decrease. “We’ve been taking production up, it’s about economies of scale, it’s about using materials that are more suitable. We’ve reduced the price by over 500%, to about 20% more than normal flooring that you might find in a typical shopping mall in Africa. “When we’re ready to roll out in Nigeria we would of course have local assembly and local manufacture. You need to do a certain amount of piloting to test it, of course the energy to

transport those 96 tiles there was a lot, but this is the start of us understanding how big the market is,” he told RFI. As the demand for energy in Africa continues to grow indefinitely, innovative ideas like this, which provide inspiration to young entrepreneurs, are vital for the continued development of the continent. “This is the beginning of a huge step towards how to create and harness energy here in Africa. We have to support all the young entrepreneurs and thinkers and help to develop ideas and turn those into reality,” said Akon.

www.enterprise-africa.net / February 2016 / 11


CAS COOVADIA - MD, BANKING ASSOCIATION SOUTH AFRICA


BANKING ASSOCIATION SOUTH AFRICA

How to Navigate a

Difficult Year PRODUCTION: Joe Forshaw

The economic climate in South Africa is something we discuss on a regular basis. It effects the business of every company and every individual in the country. In a bid to learn more about what we can expect in 2016, Enterprise Africa talks to the head of the Banking Association.

//

“I think that this is going to be a tough year,” concedes Banking Association MD, Cas Coovadia while speaking to Enterprise Africa. When discussing the current dark economic cloud that seems to have settled over the country in the past 12 months, Coovadia says that the situation is certainly manageable but requires the cooperation of the private sector and the government and there must be a clear signal for investors that

the country offers an environment for business to thrive. “It would be foolish to say that we’re not in a difficult situation. The IMF is of the view that we will grow at only 0.7%, cutting the prediction of the treasury and the Reserve Bank by a whole 1%. We have had some policy issues and some decisions around positioning in government that have combined to send out messages that do not instil much confidence in investment and

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


BANKING ASSOCIATION SOUTH AFRICA

“We have tremendous potential in the country but we are prevaricating about the thought of the global economy that we are working in. The reality is that it is a very competitive economy and, countries not too far from us, on our continent, are actually sending messages that they are open for business and they are convinced that growth in the long term is good for the economy and good for their people. We are prevaricating on that; we are not sending out clear messages and so I think that this is going to be a tough year. “You also have to factor in that we are moving towards local government elections so the whole process will also muddy the waters – it’s a difficult situation but if there’s a willingness, particularly in government, to say that government and business needs to work together with other stakeholders, and we as South Africans need to come together and develop a common vision, I think we can do it.”

business generation, given that we have a regulatory environment that seems to be making it increasingly difficult for small and medium sized businesses to operate and start,” he says. This is coming from the man in charge of the Banking Association; the organisation that is the mandated representative of the banking sector in the country with the responsibility of lobbying, influencing policy, guiding transformation, catalysing constructive and sustainable change, and engaging with stakeholders. The problems that are causing concern have been amplified in recent months after a drastic dive of the Rand in international currency markets, a lack of confidence in the ministry of finance and global fall in commodity prices and energy constraints in SA that have resulted in much slower growth than expected. And now with global rating agency, Standard & Poor’s, issuing more warnings of the country slipping into

//BUSINESS WANTS CERTAINTY AND REGULATIONS THAT ENABLE INVESTMENT// junk status (along with other agencies like Moody’s and Fitch), South Africa’s traditionally robust financial sector looks set to come under some pressure as consumers feel the burden of the slow economy. But with some hard work and collaboration, Coovadia believes that a positive solution can be found. It will take work from both sides of the industry but the main goal is that the message that SA is open for business is sent out to investors. “I think there are a whole range of issues that we could deal with internally that could turn the situation around that we are not doing,” he says. “The latest example is the founding of the investment protection law which sends out contradictory and negative messages to potential investors.

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NENEGATE FALLOUT The widely reported and widely condemned fiasco with the finance minister was just one situation where a better message could’ve been sent to international investors. Thankfully, the situation has now been resolved but a lasting impression was made on South Africa’s Rand and this type of negative catalyst is not welcomed by the business sector, especially the financial sector that thrives when times are stable and consistent. “There was no major criticism of Nhlanhla Nene. He had been Deputy Minister for some time, he had a good team under him and then to just remove him without any reason and replace him with a parliamentary backbencher who nobody knows, without any appreciation of the impact the removal would have, is problematic


Some call them optimists. The founders. The builders. The producers. The doers. Making good the many challenges of our times. We call them progress makers. And we’ve made it our job to believe in their ideas. Be they multinationals wanting to invest in South Africa or South African companies looking to expand into markets around the world. Wherever they come together to create or to build something, we’re there to help make it real.

© 2016 Citigroup Inc. Citi and Citi with Arc Design are registered service marks of Citigroup Inc.


BUSINESS PROFILE

//WE DO NEED AS SOUTH AFRICANS TO COME TOGETHER AND DEVELOP A COMMON VISION, I THINK WE CAN DO IT// and could have been done better,” explains Coovadia. “Even now, there seems to be no rational reason as to why Nene was removed and business wants certainty and regulations that enable investment. Business will manage itself within these regulations as long as the goal posts are not constantly moving. “Government needs to be more awake to how global economies react to what may seem to be simple acts of redeployment in our country. There is a big reaction, and to say that the markets are over sensitive doesn’t help because the reality is that business and investment will go where there is certainty, where their investments are safe, where they can repatriate dividends, where rule of law applies and where property rights are safe. If we conduct ourselves in a way that

ignores that then we will have a problem. Could we have handled things better – absolutely,” he says. The banking sector is inextricably tied to the success of the economy and the economy is also tied in closely to the performance of the Rand. Following the sacking of Nene, the Rand plummeted to a record low against the Dollar, partly due to uncertainty in the Chinese economy but also thanks to what some commentators have called undue political interference in economic policy. Fortunately, when it comes to fluctuations in the currency price, the big banks in South Africa are well equipped to deal with changes. They employ economists, consultants and market specialists, and use industry leading technology and reporting to understand even the smallest of

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variations and their effect on the banks investment. But smaller companies are much more susceptible to the impacts. “The falling Rand becomes a serious problem, particularly for those that import. The currency issue is more complex than just what we are doing; all markets are feeling the pain. The Rand is one of the most traded currencies in the world so Rand is always going to feel the pain of the developed world and commodity markets,” says Coovadia. “While acknowledging some of the global issues that impact our currency, we should also recognise what we can do or should not do to cushion the Rand in the global economy. We should never shoot ourselves in the foot and worsen our own situation, we should manage internally as well as we can so that we can mitigate to some extent the pressures from the global economy,” he adds. A CHANGING BANKING SECTOR As we discovered in October, banks are adapting the portfolio of services on offer to clients by investing in digital


BANKING ASSOCIATION SOUTH AFRICA

//YOUNGER PEOPLE WANT SERVICES NOW, NOT TOMORROW, NOT IN AN HOUR’S TIME; THEY WANT IT WHILE THEY’RE ON THE MOVE. THEY ARE INTO TECHNOLOGY AND CUSTOMER CULTURE// technology to back up an already impressive physical network (especially for the ‘Big 4’ - ABSA, First Rand, Nedbank and Standard Bank). These companies have hundreds of branches but are keen to improve their digital online offering to keep up with demands of the younger, more impatient generation. Coovadia and the Banking Association are firmly behind these advancement ideas and, as a member of the International Banking Federation (IBFed), can offer advice on initiatives that have taken off in other parts of the world.

“The advent of mobile service providers and other service providers that are to a certain extent intermediating with banks means that banks have to be more innovative,” he says. “If you look at our democracy, the up and coming market is the youth market. Younger people want services now, not tomorrow, not in an hour’s time; they want it while they’re on the move. They are into technology and customer culture. The banks have to respond to those demographics and there’s no doubt that you’ll see more innovation from the banking sector towards technological platforms.

“We may also see collaboration between banks and mobile service providers as these service providers use mobile payment systems which require involvement from the banks. There’s talk about some mobile service providers wanting to apply for banking licenses so the situation is quite fluid. Gone are the days where the banks are the only organisations involved in financial intermediation. There are a whole range of instruments and platforms that will allow the banks to continue to innovate, compete and collaborate. Today’s customers want these type of services and banks have to respond,” he adds. As well as growing through investment into innovative ideas and technology, the big banks are also growing their physical footprint and moving into the rest of Africa. This is not a new idea and is attractive because of the vast amount of growth

EMPOWERMENT THROUGH DEVELOPMENT Ithala has taken enterprise development to the women of KwaZulu-Natal, through a province-wide programme ‘Imbokodo Iyazenzela’- ’women doing it for themselves’. Aligned to the key priority areas of Rural Development, Township Revival, and Youth and Women Empowerment, the 16 workshops, focused mainly in the rural areas and townships offering inspirational talks, advice, direction and opportunities for women in communities who are in business or who want to get into business. Furthermore, Ithala’s ‘Inkunz’ isematholeni Youth in Business competition’ has provided a platform to identify and groom young unemployed youth to become entrepreneurs.

Ithala is assisting the winners to turn their creative concepts into fully operational businesses by providing start-up capital and the necessary business support to help them launch, manage and run their businesses successfully.

organisation has, for over 54 years, remained deeply entrenched in enterprise development. Ithala remains well placed to provide financial services to communities in KwaZulu-Natal.

New to Ithala’s enterprise development package is the recently launched ‘Siyasebenza Entrepreneurial Development Programme’ which comprises of a series of interactions, coupled with workshops which are taking place in the 11 district municipalities. The programme includes the highly successful ‘See, Seek, Seize series.’

Contact details: Telephone - 031 907 8911 www.ithala.co.za

BUILDING THE NATION THROUGH SKILLS DEVELOPMENT

Ithala’s brand essence speaks to enabling dreams and the

www.enterprise-africa.net / February 2016 / 17


BANKING ASSOCIATION SOUTH AFRICA

//AS OUR MEMBERS BROADEN THEIR FOOTPRINT ON THE CONTINENT, IT IS OUR RESPONSIBILITY TO FOLLOW AND SEE HOW WE CAN SERVICE THEM IN CONJUNCTION WITH ASSOCIATIONS IN THOSE COUNTRIES// potential – it was reported last year that Standard Bank’s rest of Africa business has grown at a compound annual rate of 37% since 2010. “The banking sector remains a very solid sector. There are opportunities in other parts of the continent and hopefully we will come together as a country and get things right because we see tremendous opportunities and the potential is great,” says Coovadia. “The banking sector remains very sound and at the cutting edge of internet processes and will continue to find different and new services to offer to customers. “The African continent has some of the highest cell phone penetration in the world. If you look at things like M-Pesa in Kenya, that is going to be the way to go.”

Expansion in Africa had many benefits, one large one being a reduction of risk from a stagnant home market, but it is a not an easy process; after all, Africa is a complex web of differing legislation and differing cultures. This is why partnering with the experienced and knowledgeable association is key. “There are other African associations but I don’t think there’s another as strong and capacitated as ours. We do work very closely with associations in the SADC region and we are the secretariat for a SADC banking association. We work closely with all the SADC associations through this medium,” says Coovadia. “With the SADC association we have developed an integrated payments and settlements system which id working very well for the region. We have

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interactions with other associations and we do try and work together and it feels like there is an initiative under way to work together more,” he adds. As the challenges in the South African economy escalate, those banks and financial institutions that have already made the move across the continent, and those that are planning growth in the future will certainly be able to rely on the services of the Banking Association and considering the ‘tough time’ that we all face, it’s always nice to have an experienced helping hand. “As our members broaden their footprint on the continent, it is our responsibility to follow and see how we can service them in conjunction with associations in those countries,” concludes Coovadia.

BANKING ASSOCIATION SOUTH AFRICA +27 11 645 6700 info@banking.org.za www.banking.org.za


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Opportunity to engage with the latest thinking in the areas of investment & banking.

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• Adv Certificate in Banking Services: Minimum duration 1 year • Higher Diploma in Banking: Minimum duration 2 years • Diploma in Banking: Minimum duration 3 years

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• Higher Certificate in Banking Services: Minimum duration 1 year • National Certificate in Banking Services Advice: Minimum duration 1 year

Quality teaching and academic support by industry specialists.

Visit our website today to find relevant Online Short Courses Email us: Study@milpark.ac.za | Call us: 086 999 0001 | Visit: www.milpark.ac.za

Milpark Education (Pty) Ltd is registered with the Department of Higher Education and Training (DHET) as a Private Higher Education institution (No 2007/HE07/003).


CENTRIQ INSURANCE

Customers

Central for Centriq PRODUCTION: Karl Pietersen

There’s one way to ensure that your customers are happy – ensure that your employees are happy. A strong workforce usually results in a strong order book and at Centriq Insurance, they certainly have a strong and happy employee base…

//

South Africa’s insurance industry is among the strongest and most resilient sectors in the country today. As established companies find nothing but closed doors, hurdles and brick walls, insurance companies are reaping the rewards for persistence and a focus on quality delivery of service. After all, insurance is a people focused business and satisfying the customer, a person, remains the most important objective. It’s an important sector that helps to eliminate risks, spreads risks from the individual to the larger community, and provides an important source of long-term finance for both the public and private sectors. But even with the relative stability in the financial services sector, innovation is still needed and it remains important to plan effective strategies. “Companies that want to lead the way in the insurance industry need to relook at their strategy and cost effective business models, flexibility of their portfolios and innovation in value adding products. Emerging Markets,

including Africa, are receiving increased attention as future industry investment destinations,” says Malcolm Rapson, Insurance Sector Leader at Ernst & Young South Africa. He adds that “for many businesses, their very survival depends on pursuing a growth agenda. By 2050, fast-growth economies (in Asia, Africa, the Middle East, Latin America and Eastern Europe) are projected to account for 65% of the global economy “Companies that increasingly focus on customer centricity are likely to show most growth. “Given the ongoing changes in the industry landscape, companies that can lead the way in strategy and implementation of cost effective business models, flexible portfolios and distribution of innovative value adding products are likely to emerge at the forefront of the industry.” That given, a perfect example comes from Centriq Insurance. The Illovo-based business is 100% owned by Santam and offers a diverse range of specialist and general insurance

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

solutions for all your personal and business needs. CEO Gareth Beaver highlights the company’s focus on customer-centricity saying: “Like any business, the life blood of Centriq is the customer who takes a decision to place and renew their insurance business with Centriq and our business partners on an ongoing basis. We therefore see that it is our responsibility to ensure that our products, services and business partners add value to our customers always – this means ensuring our insurance products are relevant to our customer’s needs, are fairly priced and are supported with service standards that meet our promises made at the time of selling the product.” This focus on delivering for the customer has been fruitful for the business and has resulted in a number of accolades in the past few months. AWARD WINNING SERVICE Last year, Centriq was named in a report from the Ombudsman for Short-Term Insurance (OSTI) as one of the country’s best insurers. The report reviewed statistics on the number of complaints it received per 1,000 claims handled by an insurer. Centriq was in the top 10 (number 7) ahead of a number of large companies including Alexander Forbes,



BUSINESS PROFILE

//LIKE ANY BUSINESS, THE LIFE BLOOD OF CENTRIQ IS THE CUSTOMER WHO TAKES A DECISION TO PLACE AND RENEW THEIR INSURANCE BUSINESS WITH CENTRIQ// Guardrisk, Absa, Mutual & Federal and a host of other big names. The research found that of nearly 83,000 claims filed with the company in 2014, just 153 complaints were submitted to the ombudsman; that’s two in every 1000. Another success for the company came last month when Centriq was given a Silver Achiever Award in the 2015 Deloitte Best Company to Work for Survey. “The award recognizes the positive sentiment of our employees, rewarding their commitment to making Centriq a great place to work for,” said Beaver. “When one invests in your employees, your partners and clients benefit in the sense that they can

concentrate on what they do best, and this is another goal we are continuously striving to achieve. “Long-term company growth is difficult to achieve without committed employees. If you truly care about your employees, they will truly care about you. And this is why we here at Centriq we are passionate about providing our employees with a balanced platform to develop their skills and identify and improve their weaknesses and strengths. We want to guide, support, help and motivate our staff to be the best they can be on both a personal and professional level,” he added. This strategy of investing in employees so that you can reap the

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

benefits later in the order book is not unique to the insurance industry and has been realised by many of the country’s top companies who are often regarded as top employers. Another area where investment has been fruitful is with technology. Like any business, tech is changing the working environment and you cannot afford to be left behind. Centriq embraces technology and Beaver says that it only benefits the customer: “Technology is a constant treadmill that we’re all on. It’s helping to improve the way we do business, how we deliver the end product to our customers, aligning the guys in the value chain more closely and cutting down duplication between parties in the value chain so minimising the cost of delivering the product. “In the financial services sector more broadly I think South Africa is considered to be on a par or ahead. Our banking industry leads the way in terms of technology. Our partners are


CENTRIQ INSURANCE

//HERE AT CENTRIQ WE ARE PASSIONATE ABOUT PROVIDING OUR EMPLOYEES WITH A BALANCED PLATFORM TO DEVELOP THEIR SKILLS AND IDENTIFY AND IMPROVE THEIR WEAKNESSES AND STRENGTHS// launching technology products around the world in markets such as the USA where it was found that people are still using chequebooks to pay their monthly insurance premiums so South Africa is not far behind the curve when it comes to technology – there has been an incredible adoption and there is incredible use of technology in this country,” he told FA News. But despite the advances in technology and the apparent willingness for individuals and businesses around the continent to

take out important insurance policies, Africa remains underinsured. This means that there is opportunity for growth for the company that has a strong base developed through industry expertise, technology and, of course, the highest level of customer service. Highlighting the opportunities for the industry, Lloyd’s CEO Inga Beale said at the IISA/SAIA/FIA Conference last year: “Insurance plays a key role in ensuring that governments, businesses and individuals protect themselves from new and previously unconsidered

risks. South African companies are expanding abroad and in doing so are encountering new and emerging risks – everything from supply chain disruption and corruption to cyber and currency devaluation. “New risks mean we as an industry have to innovate – to identify and quantify new risks, and then develop and price new products that offer the required protection,” and Centriq is perfectly positioned to innovate and meet the needs of the market, even in an economy that is facing a challenging and demanding year.

CENTRIQ INSURANCE +27 11 268 6490 info@centriq.co.za www.centriq.co.za

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


JT GROUP

Building a Sustainable & Affordable Future for Gauteng PRODUCTION: Manelesi Dumasi

Gauteng-based JT Group is a diversified property development company focused on undervalued raw land earmarked for future residential property development. In these times of doubt and economic uncertainty, the company is diversifying its offering but not abandoning its core principles. Enterprise Africa finds out more from this ambitious organisation…

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

//

It’s looking like 2016 is going to be a tough year for South Africa’s construction sector. Uncertainty in the economy and murmurs of slowdowns in China, SA’s biggest trading partner, have caused the pipeline to begin drying up. In November, SA’S construction and engineering sector index was trading 69% lower than at the peak of the global economic crisis. A construction report by global consultancy PwC, released at the end of 2015, revealed that five of the nine biggest listed construction firms surveyed had market capitalisations below their net asset value. The declining Rand, the lack of confidence in the industry, the lack of investment into new infrastructure projects and the uncertainty in the global economic climate have piled substantial burden on construction companies and many industry commentators are now suggesting that the big firms are under pressure and will remain under pressure for some time to come. FNB released a report in September stating that the industry is facing difficulties; Jason Muscat: senior industry analyst at FNB said: “While many projects are now coming to an end, few new projects are being brought into the pipeline.” International consultancy and construction company, Mace, said recently that it forecasts continued slow growth in South African construction market. Mace’s Associate Director for Sub-Saharan Africa, Alan Lemberger said: “Some consultants and contractors are looking at opportunities in other parts of Africa where there has been good growth in the last couple of years.” However, it’s not all bad news. Andries Rossouw, energy and mining assurance partner at PwC, said when presenting the company’s report last year: “(Public sector) expenditure is not really happening in line with expectations. Meanwhile, a recent shift in public sector spending towards social infrastructure such as housing and associated schools, clinics and water reticulation, along with spending by


//POWER RESTRICTIONS ARE A SERIOUS PROBLEM. THERE IS A LOT OF LAND THAT IS SIMPLY NOT DEVELOPABLE AT THIS STAGE BECAUSE OF THE LACK OF ELECTRICITY// the SANRAL, has kept some smaller construction companies ticking over nicely,” indicating that there are some positives to be had for companies that are specialised in these specific areas. One company that is operating successfully in the affordable property construction sector is Gauteng’s JT Group. Established in 1984, JT Group specialises in all aspects of land development namely the acquisition of land, town planning, project management, overseeing installation of civil and electrical services, construction and property consulting services, obtaining the rights to develop, managing the marketing and construction of top structures. To date, the company has completed projects involving the development of more than 18,000 residential properties and various

commercial and industrial developments and has 16,000 residential opportunities under development. Project Manager, Nicholas Nolte tells us that the key to thriving in difficult economic conditions is diversification and adapting to the market. In recent times, the company has looked at broadening its strategy to ensure a continuous and steady cash flow. Affordable housing development remains a vital component but in the future, JT will look at developing its shopping centre portfolio and also its rental market capabilities. “In terms of retail, strategically, we are moving towards the purchasing of smaller shopping centres, neighbourhood-sized shopping centres, which are undervalued with high vacancies but high potential,” explains Nolte. “We would perform a lease

analysis and a value audit to determine the potential for a revamp on the entire centre. We would then acquire the property through bank financing, and then spend additional money – up to about 10% of the value of the property – revamping the property. We then go out and find new tenants for the centre and this creates extra additional value. We also manage the shopping centre and eventually sell the property to a fund or investor or keep it to supplement cash flow streams,” he explains. “The most recent one we did is the Evander Shopping Centre in Mpumalanga.” Nolte also explains that the company is currently involved in a big project just outside the capital where it is seeking a partner to move forward on an exciting industrial development. “For new industrial/commercial work, we have about 23 hectares of land in Atteridgeville in Pretoria where zoning rights are in place for industrial and commercial use and we are planning a value-mart type shopping complex,” he says. “We own the land and we are now in negotiations with a development partner who would come

www.enterprise-africa.net / February 2016 / 25


BUSINESS PROFILE

//WE BELIEVE THERE IS GOING TO BE A STRONGER RENTAL MARKET IN THE NEXT ONE TO THREE YEARS // in and form a JV agreement with us for the development. This means we would be able to fund the financing shortfall from the banks and that enables us to increase our gearing ratio.” “We like to work in partnerships, especially with land owners, as this reduces the holding cost which is helpful as the process is so uncertain.” Further diversifying its offering and bolstering its strong presence in the local property market, JT will also look at investing in the residential rental market. “We believe there is going to be a stronger residential rental market in the next one to three years so we are acquiring sectional title properties in the middle income class where we would buy the land, do the construction and rent the property

out to individual tenants or sell off a phase of the development and use the capital to develop the next phase of the complex and look after the property management side of things,” says Nolte. TODAY’S CHALLENGES The company’s diversification has only been made possible by a longterm focus on its core business – the development of affordable housing. While this market has become more and more difficult over the years with increased legislation, decreased availability of suitable land and fluctuating interest rates, it is still an important sector for JT but Nolte notes the difficulties that now face developers. “The risk/reward ratio is getting worse and that is one of the reasons that we are moving towards commercial

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

investment and asset management. Our company was originally an affordable housing land developer but the margins in that sector of the market has changed drastically in the last decade and we are starting to move away from that; not entirely, but it’s not our main focus for the next two to three years. “You used to be able to do 200 units a year, along with a couple of other developments, and get by ok but now, because of the low margins, you need to be doing at least 2000 to make it worthwhile. There is now so much infrastructure which needs to be funded by the developer where previously the municipality would have funded this,” he says. “Land development processes have become very cumbersome. There is a lack of understanding from government institutions regarding practicalities for the developer. Many officials have no understanding of the major impact that a time delay can have on the financial viability of a project.


JT GROUP

“Power restrictions are a serious problem. There is a lot of land that is simply not developable at this stage because of the lack of electricity. The municipality will grant approval for a development but then you have to install or supply the electricity yourself and that can make the project literally unfeasible for the next five to ten years. “Interest rates going up, inflation and the cost of building materials all affect us. The main concern is the increase in interest rates which affects the spending power of our clients,” he adds. STRONG FOUNDATIONS Even considering the challenges that face the affordable housing development market, JT Group has performed particularly well in recent times and currently has important projects underway. “We’re busy with the Grootvlei Estate that is located in Springs. It’s 187 houses in an affordable gated community. We are basically sold out on that development and we’re about 70% complete with the construction,” says Nolte. “We’re busy in Daveyton, we call it Mayfield Village. It’s 611 affordable housing stands. We bought the land as a farm from a farmer and we then embarked on the planning process, doing the township establishment, doing the surveys, and all the necessary studies such as traffic studies and geotechnical investigations, we then obtained approval from the municipality. We started with that process in 2009 and the stands were only ready for transfer in 2015 so it’s around a six year process from start to finish. We went into a JV with the farmer

in order to cap our holding costs and we also established an estate agency where in-house agents are appointed to market and sell the properties. We recently sold a large chunk of this development to another affordable housing developer.” “Another project in our portfolio is the Zamdela Project which is also affordable housing but is a mixed development. It’s in Sasolburg in the Free State. It has 346 stands which includes a sectional title component, a full title component and a retail component. That project started in 2007. We decided to sell the entire development to a construction company and we retained the shopping centre site which we are now either planning to sell or to go into a joint venture with a shopping centre developer. We would then partner with the experienced shopping centre developer where we would put the land

//THE RISK/REWARD RATIO IS GETTING WORSE AND THAT IS ONE OF THE REASONS THAT WE ARE MOVING TOWARDS COMMERCIAL INVESTMENT AND ASSET MANAGEMENT//

in and keep that as cash flow income stream for the future,” he explains. These, along with the many other projects which JT is part of, make up a significant market for both the company and the municipalities which are involved. JT Group has the vision to become the leader in the South African property development market and as long as it continues to successfully complete projects - while focussing on sustainable development, sustainable environment and sustainable communities – it can certainly achieve that; especially while the big, sub-Saharan organisations battle for share in tough economic conditions.

JT GROUP +27 (0)11 883 0420 info@jt.co.za www.jt.co.za

Terraplan Associates/ Terraplan Gauteng CC PO Box 1903, Kempton Park, 1620 First Floor, Forum Building, 6 Thistle Road, Kempton Park, 1619

T: (011) 394-1418/9 F: (011) 975-3716 E: jhb@terraplan.co.za www.terraplan.co.za

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



BRIGHTS HARDWARE

The Leading

Hardware Solutions

Provider in the Western Cape PRODUCTION: David Napier

Even though the economy has had its woes, Brights Hardware has had consistent growth over the last decade and has grown to become one of the most respected DIY, hardware and building retail suppliers in the Western Cape. With their growing customer base and plans for further expansion, the company is continuously investing in new products and facilities to solidify its reputation as a proactive all-round solutions provider for the Western Cape consumer.

//

As a South African, one would experience a wide range of challenges. These are all real challenges facing people and as a company Brights face them too. In just one year the business has experienced interrupted and inconsistent power supply, an extremely volatile exchange rate and one of the worst droughts to ever to hit the country. These challenges must be met and by offering industry leading solutions, Brights now stands out among the rest. Brights is not a hardware retailer that just sells goods, it is a hardware retailer that invests in staff and

community and listens to staff and customers. When load shedding took effect, the company sourced and negotiated various products at excellent prices with the correct technical advice. “Initially, we looked at generators and then legislation came in regarding the noise, then we looked at silent inverter generators and finally we focussed on UPS-type inverters with solar connections – they call them hybrid inverters and you can charge batteries and create power for other parts of the home. With Eskom continuously pushing for increase’s South African power is going to become

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


BUSINESS PROFILE

ORLANDO LUIS, BRIGHTS CEO

//OUR COMPANY COMES FROM A TECHNICAL BACKGROUND, WE USED TO DO MAINTENANCE AND REPAIRS, SO WE’VE ALWAYS BEEN A SOLUTION DRIVEN COMPANY FOR OUR CUSTOMERS// very expensive. UPS type invertors with solar connections will reduce power usage and save you money,” explains CEO, Orlando Luis Another problem area where Brights is seeking to help is with the country’s drought difficulties. The South African Weather Service recently announced that 2015 was the driest year on record and it shows no sign of abating. In early January, Marico in North West recorded temperatures of 45°C and the hot and dry conditions are expected to continue for at least another two months. “This year, with the El Niño effect, the drought will get worse. This is

going to affect us all and as we adapted during load shedding we will be forced to adapt to the shortage of our most precious resource, water. “We have invested in a wide variety of water saving products to enable us all to save as much water as possible. We have sourced products that reduce the evaporation of water and items that save water. For example, we’re offering pool covers, units to connect to taps to reduce the flow, new shower heads to ensure less water is used, tanks for storing grey water, cleaning products that require no water and garden watering products that control water usage - these are only the tip of

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

the iceberg. Since the beginning of the year, we have focussed on products that conserve water; as a company we are incentivising our stores to reduce water and 20% is not the bench mark it’s the starting point,” explains Luis. A SOLUTIONS PROVIDER Helping customers to solve problems is a trait that Brights has become known for over the years. Originally founded as an electrical contracting and repairs company before opening the first warehouse in Stikland, Cape Town in 1995, providing solutions is part of the company’s pedigree. “Our company comes from a technical background, we used to do maintenance and repairs, so we’ve always been a solution driven company for our customers,” says Luis. “When we started the hardware store, we grew the product line to 40,000 products with the idea of sourcing anything that a customer might require. Back in the 70’s and 80’s, if we didn’t have something,


BRIGHTS HARDWARE

we would put it in our special order book. When products in this book became more popular we would turn it into a product line. “We’ve always continued in this vein as businesses have to have the mind-set of listening to the customer, understanding the needs and providing solutions when people are in distress when it comes to a product or a technology.” And it seems like this unrelenting focus on customer satisfaction has bought about positive results for the company, even during tough economic times. “10 years ago, we only had two stores and now we have seven so you can see the massive growth that we’ve had. Even during the recession years we remained positive and we’re always working on our systems and morals that have bought us this far. We always stay positive and continue to look at opportunities that you can find in the marketplace no matter how bad the recession. As long as you always meet the needs of the customer, they’ll always come back again,” says Luis. NEW STORES The retail environment is a tough place right now; research shows that people have less money to spend because of economic turmoil. Euromonitor International suggests that the retail environment often reflects the economic situation in a nation but in June 2015, the research company also found that home and garden in South Africa recorded positive growth despite the tough economic conditions that continued to diminish consumer confidence. Luis is certainly not one to dwell on reports of a sluggish economy and he has started 2016 searching for

//BUSINESSES HAVE TO HAVE THE MIND-SET OF LISTENING TO THE CUSTOMER, UNDERSTANDING THE NEEDS AND PROVIDING SOLUTIONS//

We have a wide range of products available from Brights stores and franchises. We also have an outdoor range of products, plus we manufacture ceiling and flooring boards, skirting and corniches. “Ours is a journey of continuous improvement and we are only limited by The limitations of our own minds”

Contact: Ingrid Williams T: +27 82 755 2550 E: petsavvy950@gmail.com

www.enterprise-africa.net / February 2016 / 31


BUSINESS PROFILE

new products and new customers to strengthen the company’s position. “You can’t rely on your existing clientele forever, you have to go into areas that have traditional industries but also new developments,” he says. “You must have a diverse product and client range. When one product line slows, you must have something else to pull you through. Along with meeting the needs of our customers, that is why we have such a large product range and that is why we needed to expand the distribution centre. “Cape Town is always growing so we have looked to spread up to 100km from the city and we’ve strategically located our stores approximately 10km from each other, in all the growth areas to the North and to the East.

“We will continue the expansion by growing our distribution centre throughout 2016. It’s been on the cards for a while but because we’ve been opening new stores, three in four years, that has caused us to consolidate slightly. “Opening new stores is a possibility but only when the distribution centre has been completed. We are a family business and we would like to stay in the Western Cape, there’s no doubt about that,” he adds. DIY DEVELOPMENT Development of the distribution centre will provide Brights with a new base for expansion and will also reinforce the strength of the seven existing stores. An extra 5000m2 will allow for new

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

product ranges and a comfortable and efficient supply to the branch network. “We’ve reached a point now where our existing distribution capacity for the seven stores needs to be expanded to take us to the next level. If we want to open stores in the future, we have to get ourselves to the next level from a procurement perspective as we can only just meet the needs of the seven stores right now,” explains Luis. Growing the distribution centre will also help when it comes to expanding the customer base. By investing in the company’s website, and making the most of a growing number of people who research and shop online, Brights is looking to continue increasing its female clientele.


BRIGHTS HARDWARE

//10 YEARS AGO, WE ONLY HAD TWO STORES AND NOW WE HAVE SEVEN SO YOU CAN SEE THE MASSIVE GROWTH THAT WE’VE HAD// “What we have noticed is that more woman visit our website,” says Luis. “Female involvement is 55% and male 45%. In the stores, more visitors are male. Women are becoming much more involved in hardware projects .There’s no doubt that they will enjoy our website. Not spilling too many beans, but we have some exciting new developments in the pipeline with regards to our social media platforms.” The company is embracing its growing number of female customers

and actively supports a local initiative which encourages the development of DIY and hardware skills with women. When the company was approached to get involved with DIY classes aimed specifically at ladies who want to learn new skills, Brights did not hesitate , providing workbenches, vices, toolsets, saws, cordless drills for use at these classes along with expert advice where needed. All of these developments mean that Brights Hardware will be in an extremely strong position, in what is a

competitive market, for the challenges that 2016 will throw its way. “We are also changing our stores, making them cleaner, neater, easier and quicker to shop in; this is mixed with engaging and knowledgeable staff who don’t shy away from their customers. We want our customers to experience a ‘wow’ shopping experience both on the sales floor and online. Visit our stores and experience the difference in care you receive,” concludes Luis.

BRIGHTS HARDWARE 0861 333 777 brights@brights.co.za www.brightsonline.co.za

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



MICA HARDWARE

Building on

Historical Success

and Growing In Africa

PRODUCTION: David Napier

The South African hardware market is a constantly changing, dynamic sector. The SA Government’s commitment to provide every man with a home has created an opportunities for those who can supply quality hardware at affordable prices. Mica Hardware is taking up these opportunities and is now looking to grow in sub-Saharan Africa. We talk to the company’s 30 year veteran and CEO, Nareen Daya to find out more about Mica’s story and its industry-leading offering…

//

Two of the key markets for Mica Hardware, small to medium contractors and industrial clients, have fallen on tough times recently as the challenges of a slow local and global economy have started to build around the country. The company, founded in 1985, has over 140 stores nationwide and employs around 2200 people, all specialised in DIY and hardware and customer service – working by the motto ‘let us show you how’. Growth since its formation has been fast and wide-spread and the building and construction industry, along with the DIY sector, provided the company with a strong platform to build on. In short, until the start of the global financial meltdown, Mica had it good. The company had hit the nail on the head when it came to providing a broad range solutions to customers. In 2009, when the financial crash began to take full effect around the

world, South Africa, especially the construction, building and hardware industries, was somewhat shielded because of the huge amounts of money that had been poured into preparations for the 2010 FIFA World Cup. But today the economy is feeling the pinch. The World Cup is now a memory and builders, construction companies and contractors are lowering their prices to take a cut of the much smaller market. As we have already discovered, the IMF says that SA is only set to grow at 0.7% and the national treasury said at the end of last year that “employment growth and household income constraints are holding back consumption”. These circumstances do not make business easy and Mica Hardware CEO, Nareen Daya says that times are certainly more challenging. But even through the trials, the business has managed to maintain itself and, because of an effective model, is planning on growth in the future.

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


BUSINESS PROFILE

“The last few years have been very difficult,” he says. “The conditions in the global economy have made things difficult. Obviously, we’ve had local challenges to review as well. Importantly, we’ve seen more competition, especially from global competitors coming into the market. “The competition makes things difficult, especially when they’re corporate organisations with lots of money to spend. There’s been shifts in demographics around stores which means there has to be changes and we have to market different products to different consumers. Peoples needs have changed, people have moved, there’s been a shift in who has money so it has been a few years of adjusting.”

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36 / February 2016 / www.enterprise-africa.net

BUILDING IN 2016 Mica does hold a leading position in the SA market and works towards the vision of ‘continually re-engineering and innovating, to be at the forefront of new developments in the retail hardware industry and thereby maximising the overall benefit of the Mica Group to all of the Mica stakeholders’. As such, the company has protected itself during in the slow market. “As a group we have coped well and we’ve been able to defend our market share to a large extent but it’s always a challenge,” explains Daya. “We are investing in our supply chain and other business so we are growing and spreading our investment portfolio. “In 2016 we are focussing on stabilising the business and growing.

//WE WOULD LIKE TO DOUBLE THE NUMBER OF STORE ACROSS THE COUNTRY, WE WANT TO MAKE THE STORES LARGER AND WE WANT TO OPEN STORES IN SOUTHERN AFRICA//


MICA HARDWARE

We want to take advantage of any opportunities that present themselves.” By focussing on the renowned ‘4 P’s’ of marketing (Product, Place, People, Promotion), the company has built a strong growth strategy for the coming 12 months and beyond. Product-wise, the company has an unbeatable range and includes some of the biggest brands in the business. “We believe in bringing top quality brands that are local and function appropriately in the South African conditions,” the company says. Its portfolio includes products from Plascon, Bosch Ryobi, Heunis Steel, Dulux, Voltex, Yale, Stanley, Webco and many more. Place-wise, Mica has positioned itself as the ‘around the corner’ hardware store, with each outlet very much focussed on its local community. The company’s people are DIY experts who can answer any questions a customer may have and this helps drive repeat business. “The store owner runs the store and he has a vested interest in the business and gives the best possible service to the customer so we have the element of great service,” says Daya. From a promotional point of view, Mica is pushing its business through multiple channels and has not made the major mistake that many companies make during tough times and cut its marketing. “We run monthly promotions, localised promotions and we do a broad sheet which advertises all the categories that we sell. We do TV advertising, we do magazine advertising and each store runs

localised advertising campaigns in their communities. We are also trying to push our social media effort,” explains Daya. TURNING THE SCREW Despite the aforementioned economic climate, Mica has its sights set on growth in the future. The company’s 140 stores across SA give it the largest footprint of any DIY or hardware retailer in the country but resting on laurels is not in the nature of this innovative and ambitious organisation. “We would like to double the number of store across the country, we want to make the stores larger and we want to open stores in southern Africa,” says Daya. “There’s always opportunities to grow depending on market conditions, stability in other countries and whether you can trade

//AS A GROUP WE HAVE COPED WELL AND WE’VE BEEN ABLE TO DEFEND OUR MARKET SHARE TO A LARGE EXTENT BUT IT’S ALWAYS A CHALLENGE//

effectively. Other countries are very different to South Africa but some have similar infrastructure; the fact is, there is huge potential in the rest of Africa,” he says. As the company expands its footprint further into Africa and continues to develop its product offering and customer service capabilities, this will be a business that rides out the problems in the economy and comes through in an extremely strong position, remaining South Africa’s first choice for DIY and hardware supplies.

MICA HARDWARE 011 479 3300 info@mica.co.za www.mica.co.za

Passion, Pride, Quality

A LEADER IN THE RAINWATER GOODS INDUSTRY T: +27 (0)12 372 0021 F: +27 (0)12 372 0033 E: marketing@heunis.co.za

www.heunis.co.za

www.enterprise-africa.net / February 2016 / 37


MASSMART

Developing Wholesale Coverage Across Sub-Saharan Africa PRODUCTION: David Napier

South Africa’s Massmart is growing its presence on the continent with new stores coming from its fantastic range of brands. The hope is that these stores will bolster the impressive sales figures that have been realised over the past 12 months.

//

2016 looks set to be an interesting time for the retail industry on the African continent and especially in South Africa, where the big names are all starting to look north to build on their successes while growth in their local markets begins to slow. PwC, the largest professional services company in the world, released a report in 2012 covering the outlook for the South African retail and consumer products industry for the period 2012-2016, and even back then it was being predicted that 2016 would be a challenging year for the sector. “With slow GDP growth, high unemployment and structural shortcomings in the economy persisting, overall growth for the forecast period is expected to be modest, if not fragile. In particular, retail and consumer products companies must contend with limited volume growth, increasing costs and falling prices,” commented the report’s authors, Diederik Fouche and John Wilkinson. But even with the pressures of a dull economy, the sector was still receiving positive predictions; “…in 2011, the country’s aggregate retail

sales surpassed a trillion rand for the first time in history, and are likely to hit R1.46tr by 2016,” the PwC report claimed. But now that we’re here, there seems to be a bit of worry still surrounding the industry. The economy is expected to perform badly, the exchange rate is making things difficult and business confidence is at worryingly low levels. Fortunately, there are some organisations that are managing to make the most of the situation and continue developing and growing, despite what the economists say. Massmart is the perfect example. The company is a managed portfolio of four divisions, each focused on high-volume, low-margin, low-cost distribution of mainly branded consumer goods for cash, through 400 stores in 13 countries in sub-Saharan Africa. The company operates four business divisions in a wholesale retail format: Massdiscounters, Masswarehouse, Massbuild and Masscash. Even with many reports suggesting that the country’s credit rating is heading towards junk status because of the economic climate,

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Massmart has managed to continue growing sales and expanding its continental footprint. 9.1% SALES GROWTH In August last year, just as the new Finance Minister was settling in and realising the size of the task in front of him, Massmart was announcing positive results. Game, Builders Warehouse, Makro, Liquorland, CBW, DionWired, Jumbo Cash & Carry, Cambridge Food and Saverite Supermarket are just some of the main brands that operate under the Massmart umbrella and perhaps the most well-recognised Game, Builders Warehouse and Makro all continued to perform well last year. The company stated that effective margin management and robust expense control keeps expense growth below sales growth. For the six months ending June 28 2015, Massmart reported a total sales increase of 9.1%, while comparable sales increased by 6.9% with product inflation at 3.7%, suggesting good volume growth. Group operating profit, excluding foreign exchange movements and interest, grew by a satisfactory 12.7% given the soft economic environment. “Despite the constrained consumer environment, Massmart sales remained resilient during the period,” said CEO, Guy Hayward. “We are pleased with the effective margin management and robust expense control which allowed us to keep expense growth below our sales



MASSMART

//DESPITE THE CONSTRAINED CONSUMER ENVIRONMENT, MASSMART SALES REMAINED RESILIENT DURING THE PERIOD// growth, particularly in an environment where all participants are competing keenly for profitability and market share. The intense retail competition, however, is good news for consumers.” After rolling out food products in Game stores, Massmart has seen a positive effect on the same of general merchandise. “Food comparable sales’ growth remains strong at 14.1% and our customer research has shown that 20% of Game customers regard Game as a food destination and the majority of these food customers cross-shop the Group’s general merchandise categories,” Hayward said. In January 2016, it was reported that Massmart had grown its sales again at the end of 2015, by 8.4%, to R84.7 billion. Its full results are expected on February 25th.

Like the other big retailers in South Africa, continental growth has long been a target for Massmart and it has secured a strong presence in Africa, especially in sub-Saharan Africa, in the past few years. In 2015, two of Massmart’s strongest brands bolstered their African presence. Hayward said: “We remain excited about the long-term growth opportunity across several African countries and will continue with a patient and measured approach.” WHOLESALE GROWTH IN AFRICA In May 2015, Massmart opened its first Game store in Kenya, in Nairobi at the Garden City Mall. The 5000m2 modern store is designed to suit even the most discerning shopper but also offer quality branded product ranges that will suit every customer’s budget.

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“We are pleased to see that the nation of Kenya has already shown us a warm welcome through the generous support we have received in setting up our store. We can guarantee that our new store in Nairobi will offer our customers our signature shopping experience of pleasure, convenience and unbeatable value,” said Game’s Marketing and Customer Director, Mark Turner. “Game’s value for money concept of discount retailing, which has earned the group a loyal customer base across Africa, will dramatically expand the shopping options that have been available to consumers in Kenya before now,” he added. Later in 2015, in November, Massmart announced the opening of the first Builders Warehouse store in Zambia, in Lusaka. The new store at the East Park Shopping Mall was the sixth outside of SA and the 39th in total. “We are delighted to bring our Builders format to Zambia and are excited by the opportunity to create


//WE REMAIN EXCITED ABOUT THE LONG-TERM GROWTH OPPORTUNITY ACROSS SEVERAL AFRICAN COUNTRIES AND WILL CONTINUE WITH A PATIENT AND MEASURED APPROACH// jobs. We have been looking forward to bringing our customers in Lusaka the best choice at the most competitive prices possible, while offering the signature Builders shopping experience,� explained Africa Director for Builders, Karen Ferrini. It is also expected that Massmart will make moves in the near future into oil-rich Angola. The company hinted at these plans back in 2014 but nothing is yet to materialise. If rumours are anything to go by then you might expect Massmart to also explore West African countries such as Senegal and Cameroon. And then there’s the investment into e-commerce, something which Massmart has been investigating for some time. While, according to PwC, e-commerce remains a niche part of the retail mix in South Africa but it is rapidly expanding hence the interest from the big companies. These strategies could help Massmart grow further in what looks set to be a very tough year and take steps towards realising its vision of achieving continual improvement of performance in the portfolio; becoming the first choice for the market while developing strong relationships with suppliers, investors and the communities in which it operates.

MASSMART +27 (11) 517-0000 info@massmart.co.za www.massmart.co.za

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


WILLOWTON LOGISTICS

Driving Willowton

Forward PRODUCTION: Manelesi Dumasi

With one of the best fleets of vehicles on the South African roads, Willowton Logistics is becoming known as one of the most reliable and consistent performers in the transport and logistics industry. Top man, Antonie Jacobs tells Enterprise Africa more about the importance of modernising vehicles and successfully navigating a stagnant economy…

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South Africa’s roads are like the arteries of the country, moving much needed goods and services around the country, supplying the fuel that allows the country’s beating heart - its commercial industries – to thrive. Whether its food, water, coal, FMCG, construction materials, agricultural equipment or any product that needs to be shifted from place to place, it’s often easiest, quickest and cheapest to move it by road. South Africa’s total road network is about 747,000km, the longest network of roads of any African country, and SANRAL is always looking to extend and improve the system. But with congestion increasing all the time, and time-delays on deliveries not an option for most companies, finding a logistics partner who can successfully navigate the country’s road network is now vital. Take the Willowton Group for

example. As one of South Africa’s largest FMCG producers, Willowton manufactures products such as edible oils, margarines and spreads, beauty, toilet and laundry soaps, candles, chocolate, baking and industrial fats. It has large facilities in Pietermaritzburg, Johannesburg and Cape Town, and is the producer of popular brands including Sunfoil, Sunshine D, D’lite, Crown, Nuvolite and Allsome rice. It is essential for Willowton to get its products from A to B quickly and with minimal hassle so it utilises the services of its subsidiary – Willowton Logistics. Founded in 2008, to provide logistics and transportation services to the group, Willowton Logistics has grown and carved its own space in the market, attracting customers from all over the country. After expanding its fleet in 2015, the company is now looking to grow its customer base and develop its people

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Woodford Commercial Always on the move. The Woodford Group believes that the journey is just as important as the destination. That’s why its Commercial Division has committed itself to a total solution for its clients, so that they’re free to do what they do best - run their business. Speak to the Woodford Group today. 031 207 8669 | woodford@woodford.co.za | www.woodford.co.za


GROUP


//WOODFORD COMMERCIAL ALWAYS MOVING FORWARD The Woodford Group and its Commercial Division is proud to be associated with Willowton Logistics – a partnership it has enjoyed for the past 20 years. The progress Woodford Commercial has enjoyed has been due – in no little part – to the sage guidance and support from Willowton as well as the emulation of its core values. Integrity, humility, imagination and sound business principles and ethics are but a few tenets learned from Willowton that has allowed Woodford to thrive. Central to this has been Woodford’s appetite for growth and innovation. It has kept Woodford looking forward, in order to grow our market share, provide support for our partners and most importantly, to give unparalleled value to our customers and clients. Positioning has been key. And after Willowton served as the pilot for the model, Woodford’s truck division has moved into a niche area of service with a total solutions package for contract rental. Woodford Commercial offers full support for the duration of the rental, including provision of a driver, of diesel, of support during breakdowns and a host of associated benefits that allow customers peace of mind while their goods are en route.

//WOODFORD HAS SEEN THE BENEFIT OF INVESTING IN AND BACKING ITS PEOPLE AND PARTNERS// Woodford Commercial has looked inward as well. We’ve improved technology and invested in infrastructure that is able to track and monitor vehicles with a fully-fledged in-house team. We’ve built a system that keeps wheels turning by employing three in-house mechanics to work from a fully-stocked workshop, keeping turnaround time for breakdowns and repairs as low as possible, and without having to rely on third parties. We’ve tried to keep up with customer trends and satisfaction levels, so we know whether we’re going in the right direction. We’ve given attention to driver wellness by paying drivers above-average industry rates and upskilling and training them with professional programmes and staff. We’ve also ensured that there is place for our drivers to grow at the company – a truck assistant who began some years ago has recently been trained to the point that he has been awarded his own Superlink truck. Woodford has seen the benefit of investing in and backing its people and partners. We’ve enjoyed extremely low turnover of staff with the majority of

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drivers having been with the Commercial Division for 10 years or more. We’ve also tried to back our commitment to the community as much as we have the people that it sends us. We’ve set up feeding schemes and charities that involves many hands coming together. Most recently, Woodford has pledged its support and staff to Operation Hydrate – a national initiative that involves multiple organisations that will deliver water to drought-stricken areas. Currently, Woodford Commercial believes it is poised for even more dramatic growth in all aspects of the business. We’ve grown and improved organically and gained valuable clients, but we’re hungry for more market share and diversification of the business. We’ve already earmarked the 3PL and 4PL Logistics arena as one we’d like to explore. We’ve obtained a fuel licence to provide the sale of diesel to clients and are considering adding warehousing to our list of capabilities. Our aim – to can provide an even more comprehensive offering for our clients. We’ve valued relationships with those clients, as well as our employees and suppliers, regardless of size, and as far as possible, we’ve tried to be selective over who we work with, because we believe that the strength and future of the Woodford Group lies in the people and companies it partners with. T. 031 207 8669 E. woodford@woodford.zo.za www.woodford.zo.za


WILLOWTON LOGISTICS

//THE TRUCKS LOOK BETTER WHEN THEY ARRIVE AT A CUSTOMER, THEY’RE MORE FUEL EFFICIENT, MORE DRIVER FRIENDLY AND THEY GIVE BACK MORE DATA TO THE HEAD OFFICE// so that it can offer industry leading service across-the-board. “For this year, we are not going to expand the fleet much more. Maybe next year we will expand the fleet further,” says Head of Logistics and Operations and Acting Managing Director, Antonie Jacobs. “We have already expanded our personnel base to allow us to look closer at the small details and cove more aspects so that we can control our environment. “Business-wise, we’re looking at getting some additional customers in certain areas but that’s still a work–inprogress and is more of a tender type aspect so we’re still 50/50 as to whether

that will come off.” As the main logistics provider to the Willowton Group, Willowton Logistics is fortunate to have its mother company, an important customer, right on its doorstep. “We are based on the same premises and because we are part of the group we get first choice on work,” explains Jacobs. “The Willowton Group only contributes about 32% of our income and the rest is from our wider customer base. Obviously, 32% of the customer base is quite big so we see it as a huge benefit and we’re proud of the relationship.” Willowton Logistics already moves products onto the continent

for the group; countries including Mozambique, Swaziland, Lesotho, Zimbabwe, Botswana and Namibia are all importers of Willowton products and as the group continues to build its African presence, the logistics division will be ready to assist. “Africa is becoming more and more important. The group is putting up new branches and we will be handling the logistics and we try to handle it the same way as we handle our local business. In Africa, our operations are exactly the same, just in another country,” says Jacobs. FLEET IN TOP GEAR As a major South African transport company, Willowton Logistics has many excellent attributes including fantastic staff, enviable location, loyal customers and a robust business model but perhaps the jewel in its crown is its fleet. The company boasts one of the largest Freightliner fleets in the country

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BUSINESS PROFILE

//IT’S LIKE ANY BUSINESS – YOU HAVE TO PLAN EFFECTIVELY AND MAKE DECISIONS CREATIVELY// and has different options available including tankers, tippers and refrigerated vehicles. Jacobs is proud of the fleet and says that it helps to set Willowton Logistics apart from the chasing pack. “We have some of the best branded vehicles from Mercedes-Benz. We have already updated about 70% of our fleet to Mercedes-Benz. These vehicles have always been one of the best so our whole fleet, technology-wise, has improved tremendously,” he says. “We pride ourselves on our equipment – we have new vehicles, new trailers; better products than our competition. The trucks look better when they arrive at a customer, they’re more fuel efficient, more driver friendly

and they give back more data to the head office; it’s all to do with online connections so that we can see exactly what the vehicle is doing instead of waiting until the end of the week when a driver brings in paper work and you have to work it all out manually. Technologywise, we are quite far ahead at this stage.” PwC released a report in 2013 stating that roads in Africa still remain vastly under developed and leave much to be desired, causing real headaches for transport and logistics companies. The rail, port and air freight industries all require further investment, especially in less-developed nations, and until there is a better alternative, road freight remains the most efficient way to move

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goods across the border. As South Africa remains the gateway for international companies to grow on the continent, Willowton Logistics will have many opportunities to bolster its cross-border transport business. “As our customers grow each year, we accommodate them with any type of growth. We try to grow with them. We use our assets to the maximum and we do not add assets if it’s not necessary,” says Jacobs. ECONOMY PUTTING THE BRAKES ON Even with customers growing into Africa and a high-tech fleet, Willowton Logistics still has to be mindful of the current economic situation in the country. With many industry commentators predicting 2016 to be a particularly difficult year for South Africa, and nothing being helped by the unusual decisions made by the government regarding he Minister of Finance, Jacobs admits that


WILLOWTON LOGISTICS

//TECHNOLOGY-WISE, WE ARE QUITE FAR AHEAD AT THIS STAGE// now is a time when companies do need to be careful with every cent and manage each situation effectively. “With the economy the way it is, especially in transport, it’s a hard game right now and we have to look after the penny and the pound,” he says. “Obviously, when the economy slows, the market moves much slower – everything gets more expensive. People can’t always afford everything in the way they used to three or four years ago so the market does move slower and when this happens, transportation moves slower. This is why we look for additional customers. It is very grim but you just have to manage it day by day. We have long-term and mid-term aspirations and also short-term aspirations and you have to manage things as you go along, even if things slowdown a bit.” But with as much negativity as a slow economy brings, Jacobs and Willowton remain upbeat, trying to manage every situation as it comes and make the best of every opportunity. “There are still certain customers that are on full steam and they stay very constant throughout the year but the economy effects everyone so it does cause a problem but you have to manage it as best you can. “We try to hope and plan for the best and do that as efficiently as possible, making the best use of the resources we have, and it’s like any business – you have to plan effectively and make decisions creatively. You must also embrace technology as that sets you two or three steps ahead of your competition,” Jacobs concludes.

ANTONIE JACOBS – MD WILLOWTON LOGISTICS

WILLOWTON LOGISTICS + 27 (0) 33 355 7800 info@willowtongroup.com www.willowtongroup.com

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


KFC SOUTH AFRICA

KFC Looks To Take A Bite

Of Sub-Saharan Africa PRODUCTION: Karl Pietersen

One of the most important factors behind the ongoing success of the KFC brand in Africa is the strong focus on being local. The fast food giant has local elements in its menu, uses local suppliers and tries to set the price to local levels. This is all with the goal of solidifying its position among the biggest and best on the continent.

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It has been widely recognised for some time now that KFC is South Africa’s fast food industry leader. With close to 800 stores across the country, and hundreds more on the continent, this American brand has learnt over the years that international expansion is all about catering for local tastes while maintaining high-quality service and sticking to sound business processes and principles. KFC entered the South African market place in 1971 and quickly began expanding. Although its spread was slowed somewhat by US Congress laws forbidding American companies from owning South African assets, when the sanctions were lifted in 1994, KFC quickly continued bolstering its presence. Unlike other sectors, and not just those in the food industry, fast food is a booming market. The annual turnover of SA’s fast food industry in 2014 was estimated at a staggering R302 billion and reports suggest that the industry accounts for just under 40% of total consumer foodservice sales across the country. The rising middle class and the increasing spending power of the lower LSM groups have resulted in more and more customers flooding through the doors at KFC and other local and multinational franchise-style outlets. So with a booming market, a brand that is known the world-over, food that is enjoyed by millions and a dominating share of the market, how can KFC continue to grow? According to Roger Eaton, CEO of KFC and Senior Officer for Yum! Brands (KFC’s holding company),


//WE ARE NOW MOVING FURTHER NORTH AND PUSHING INTO GHANA, NIGERIA AND UGANDA AND THAT HAS BEEN OUR GROWTH STORY – WE’RE VERY CONFIDENT// expansion on the continent, in emerging markets, will provide real opportunities for development. AFRICAN CHICKEN “We have close to 800 stores in South Africa, we’re exploding there and we will continue to grow at about 50 stores per year so we have a great model. That has helped us build a great platform which is enabling us to expand into Africa,” Eaton told CNN’s Marketplace Africa. “We are slowly moving north. We’ve been strong in the surrounding countries but we are now moving further north and pushing into Ghana, Nigeria and Uganda and that has been our growth story – we’re very confident,” he added.

Obviously, the most important factor when assessing development in a new region is the local supply chain. KFC likes to source its ingredients locally, avoiding importation costs and helping to provide support to the native economy. This is not always an easy task; take Angola for example, KFC is still searching for a quality lettuce supplier and currently sells all of its products without the leafy vegetable. In other parts of Africa, KFC imports potatoes for its fries from Holland because of the lack of reliable, high-class supply. Fortunately, for the majority of its products, in the majority of regions, KFC has managed to successfully build robust relationships with quality suppliers and Eaton admits that this is

one of the most important concerns when considering a new marketplace. “The first and most important thing is, can we access the products we need to meet the standards we have – that’s absolutely critical. The second thing is, how can we make the food affordable to consumers in those countries. “In Africa, in virtually every single country that we operate, the chicken is locally sourced and we need to make sure we have a high-quality supply. That can actually take 18 months, not only to get the supply, but to bring the supply to the standard of which we want to operate,” he told CNN. “You have to make sure that the supply chain is built around standards that you’ve set and that you hold rigorously against those suppliers. We have a very detailed audit system on all of our supply chain globally,” he added. Tailoring the menu to meet local tastes is also important when it comes to marketing and driving sales. In a unique-to-each-region project, KFC has used its side dish offering in Africa to

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BUSINESS PROFILE

mould its menu to local customers. “One of the things that is great about the brand is that it can always do the local side, local context. In Nigeria its Jollof Rice, in South Africa it’s a maize porridge called Pap and in Kenya we’ve gone for a twist and deep fried balls of Pap in original recipe breading. “It’s a local specialty and ours is the KFC version,” KFC Africa MD, Doug Smart told CNN’s Marketplace Africa. UNDERSTANDING KFC In recent times, there has been more of a focus from the end-consumer on exactly what goes into a product, how it is made and where the product comes from. KFC has already answered two questions by organising local supply chains and making their production methods transparent. When it comes to what goes into the product, the whole industry has faced a plethora of rumours, slurs and

sometimes crazy accusations of what the food is actually made up of. McDonalds and Burger King have faced similar problems and the former has even undertaken a complex advertising campaign to defend its products by educating consumers and reassuring them that nothing ‘nasty’ goes into its food. Eaton told CNN that he thinks people’s consciousness is an advantage for KFC as it means people gain more of an understanding about exactly how much hard work goes into ensuring quality standards. “I see this as a great thing for our brand,” he told Marketplace Africa. “One of the things that’s not understood about KFC is how much work we put into getting fresh chicken into our stores and hand-breading it. I’m very comfortable, I think we have great supply chains and a great formula for

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KFC SOUTH AFRICA

//ONE OF THE THINGS THAT’S NOT UNDERSTOOD ABOUT KFC IS HOW MUCH WORK WE PUT INTO GETTING FRESH CHICKEN INTO OUR STORES AND HAND-BREADING IT// how we make the product; it’s getting more and more appreciated.” As more and more people in more and more countries start become loyal KFC customers, it looks like there will be no slowing this fast food giant. As Africa’s want and subsequent need for fast food outlets grows, KFC will be at the forefront of the market (set to be worth a reported $1 trillion by 2020), pioneering local supply chains and quality service, and this global icon will likely become the single most wellknown fast food brand on the continent. “It all comes back to the fantastic taste of the food; we have an incredible

recipe, the food tastes fantastic and that’s why it works everywhere we go and Africa is no different. We’ve done a great job of finding great partners, building fantastic looking stores and having great team members and all of those things come together to make a great business,” Eaton told CNN.

KFC SOUTH AFRICA 0860 100 222 kfccustomercare@dsg.co.za www.kfc.co.za

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www.enterprise-africa.net / February 2016 / 53


SLO-JO

TAPPING TASTE TRENDS BOOSTS BUSINESS IN SOUTH AFRICA’S LEADING RESTAURANTS The team at Slo-Jo has spent the last 16 years tracking trends in taste and flavour in the local market, working closely with leading restaurant brands to create beverage solutions that are tasty and on-trend, but more importantly, that keep customers coming back for more.

TASTE ARCHITECTS The food and beverage industry locally is inspired by international trends – but the most successful solutions are the ones that respond to global trends, while offering the familiar flavours we’ve come to love. With local palates increasingly sophisticated and demanding, restaurants need to keep their menus up to date with seasonal trends, enticing patrons to return for food and beverage experiences that are unique to their particular environments. While it’s up to the chef at each establishment to keep the food innovative and exciting, it’s up to the team at Slo-Jo to work with franchise operators and independent outlets to create a drinks menu that extends beyond the standard sodas, to complement food items. Slo-Jo founders Geoff Prissman and Johnny Davis saw an opportunity in the South African marketplace when a small beverage company filed for liquidation in 2000. Armed with buckets of smoothie powder and sheer determination, the two savvy businessmen introduced a range of powdered smoothies to the local restaurant scene, gently taking South Africans on their first steps towards a far more flavourful future. Geoff and Johnny took the business to heart, with no opportunity too big or too small, and they used organic networking and good, old-fashioned chutzpah to position the new brand to leading South African restaurants. The founders would literally carry buckets of powdered products from store to store, selling their drink creations and revolutionising the beverage industry en route. Today, Slo-Jo is an industry leader, constantly developing new flavours and beverage solutions to meet the demands of the ever-changing markets in which it operates. Having recently updated its branding, packaging and marketing to enthuse both internal and external audiences, the company has strengthened its positioning, and has become a trusted partner to small businesses and international franchises alike.

2016 – A YEAR FULL OF FLAVOUR Counting brands such as KFC, Wimpy, Vovo Telo, Mugg & Bean and McDonalds among its most valued clients, Slo-Jo collaborates with menu executives at each brand to develop unique beverages and drink experiences to keep their offerings original and cutting-edge. The company’s collaborative approach to creating new drinks and flavours for its clients is key to its well-established relationships – along with the vision and determination of its ‘Taste Architect’, Chrissy Beedle. Chrissy works with each brand to conceptualise beverages that are on-trend (and often trendsetting) when it comes to flavour, composition and presentation, taking the time to understand each business’s vision and strategy – as well as the simple logistics of their kitchens, to make sure that staff are able to produce beverages consistently. Fine-tuning a beverage is so much more than flavour though – it’s about finding the balance between ‘yumminess’ and satiety. If a patron enjoys a drink but doesn’t finish it because the drink is too sweet or too rich, they won’t order it again. If the drink is refreshing and gulped down quickly leaving the patron thirsting for more, they will feel that they haven’t had good value for their money. This is where Chrissy advises on balancing sweetness with saltiness in a drink, or taking the bold (for South Africa) step of offering a bottomless iced tea or ginger beer.


Chrissy points out that her job also has much to do with fine-tuning international trends to respond to local tastes. “In Europe, people prefer the more natural taste of lemons. In South Africa, our palates are not the same, so we normally add some sweetness to our lemon flavours to balance the acidity to be more appealing to the local market,” she says. “South Africans also love hazelnut flavours – but not the same roasted flavours as European hazelnut, which tends to be nuttier than what works here.

GROWING AFRICAN FOOTPRINT Slo-Jo has already established a solutions offering in Africa with the likes of Ghana, Kenya, Tanzania, Angola, Botswana, Namibia, Zimbabwe and Zambia, and plans on further extending this African footprint through a cautious approach of building relationships in each country, and understanding the local trends.

“We are constantly developing new beverages as and when the beverage market trends change, whether they are tea or coffee based, or whether they tickle the fancy of milkshake and smoothie fans, or those seeking more natural or health-oriented drinks. These are often developed specifically for chain store/restaurant clients – for example we recently developed a drink that pops in your mouth. It literally explodes as you take a sip, it’s one of my personal favourites at the moment! It’s made with Popping Candy and will take you right back to being a kid again!”

Offering its existing product portfolio and also presenting new solutions, including Coffee Pods, Almond Milk and Slo-Jo Pop, as well as hardware such as blenders, glassware, dispensers, jugs, carafes, squeezy bottles, pumps and various other types machinery, Slo-Jo aims to become the preferred partner when restaurant owners and franchises want to update their drinks menus to add value to their offering to their own patrons. You can certainly expect more wizardry and flair from this inspiring company. With a determination to boost local manufacturing and a commitment to establishing and nurturing relationships with its customers in its home country and abroad, Slo-Jo offers the perfect blend of old-fashioned great service and visionary product development, spiced up with a good dose of street smarts and a commitment to having fun! T. +27 11 608 0607 E. HelloDirectors@slo-jo.co.za www.slo-jo.co.za


MCDONALD’S SOUTH AFRICA

A ‘Modern

Progressive

Burger Company’ PRODUCTION: Manelesi Dumasi

The world’s most famous burger chain is looking to revitalise its global expansion methods by focussing closely on customer interaction and regional relevance. New products, new stores and new focus on servicing local people in a local way with local ingredients will help to rejuvenate the company’s fortunes in 2016.

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The world’s largest chain of hamburger restaurants, McDonald’s, has fallen on tough times in the past few years. The global economic climate and the many criticisms that face the company on a daily basis, regarding health and hygiene, continue all over the world, despite the best efforts of the company and its marketing team. In March 2015, Steve Easterbrook became the company’s new CEO, replacing Don Thompson who stepped down in January. The former chief brand officer and head of UK and northern Europe operations quickly went about turning the company’s fortunes around and admitted, quite frankly, that the company did recognise the issues it was facing. “Our recent performance has been poor, the numbers don’t lie. I will not shy

away from the urgent need to reset this business. Our existing organisation is inefficient and lacks clear accountability. We need to execute things better. In the last five years, the world has moved faster outside the business than inside and we cannot ignore what customers are saying when the message is clear: We’re not on our game. We need to deliver great-tasting, high-quality food with better service each and every time and we need stronger financial discipline, faster decision-making, and hard-edged accountability,” he said last year. In South Africa, fast food is as popular as ever with the consumer goods market expected to grow to $1 trillion by the year 2020. But here, the company has also had to field questions about quality and tailor its offerings to meet the needs to a constantly changing local market.

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PURE BEEF Any business has to ensure a quality supply chain and that the products that are sold to customers are of a high standard and this is no different for the world’s biggest restaurant business. KFC, Burger King and Pizza Hut have all faced similar accusations, that their burgers contain nasty additives that are harmful to human health but Amesha Mohun, Quality Assurance Manager for McDonald’s SA explains that the company’s burgers contain nothing but 100% pure beef and seasoning. “We got a lot of questions around our beef patties. At McDonald’s we are proud of the beef we serve,” she says. The burgers are supplied by City Deep-based Finlar Fine Foods and Operations Director, Essop Dawood explains that nothing untoward is added to the product. “The beef comes from approved raw material suppliers who are quality audited and halal certified,” he says. “We use lean forequarters and flanks which are fattier. Using a combination of lean and fat meat to get the right blend of fat level in the product will enhance the juiciness and the flavour.” “We use 100% pure beef which is



BUSINESS PROFILE

//FAST FACT In November, it was revealed by The Economist’s Big Mac index and the Biznews community that President Jacob Zuma could afford to buy 293 Big Mac’s every day and 106,937 every year. Developed as a light-hearted guide to determine whether currencies are at their “correct level”, the Big Mac index is now a popular measure of wealth based on the theory of purchasing-power parity. Perhaps there’s an under-serviced market for African leaders that is waiting to be exploited.

//WE USE 100% PURE BEEF WHICH IS GROUND AND THEN SHAPED AND THERE ARE NO FILLERS OR ADDITIVES AT ALL IN THE PRODUCT// ground and then shaped and there are no fillers or additives at all in the product.” While providing McDonald’s with a good base for business in South Africa, quality supply chain partners are often more difficult to come by in other African nations. Similarly to KFC, plans to open stores in new markets have been slowed as the company looks to build a supply chain that meets its highquality standards. For McDonald’s, Nigeria will be a market to attack in the future – as soon as a supply chain can be established. “It is not about if, it’s about when,” said McDonald’s South Africa CEO, Greg Solomon, adding that McDonald’s takes a market dominance strategy to solidify its footprint and

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brand strongly in any new market. “When entering a new country, whether global or African, I guess you either have to be first or you have got to be best,” he said. REGIONAL RELEVANCE At the end of 2015, McDonald’s SA celebrated 20 years of operations in the country and Solomon was keen to point out the impact the company has had explaining that 11,500 jobs had been created. Those employees, working at more than 230 stores around the country, are key when it comes to growing the business. “We will always seek innovation and use the customer as the generator for change,” he told Fin24.


MCDONALD’S SOUTH AFRICA

“We are growing nice and steadily and our next goal would be to reach 300 restaurants in SA. Then we will reset that goal even higher. We see the potential in SA. Roughly 60% of our growth will be in large urban areas, but we expect a substantial part of our growth to come from rural areas. We believe we have so far under-penetrated this market.” As the company grows in these areas, it will look to become more relevant in differing areas and offer local people local products. “You have to listen to your consumers and evolve your brand in that way,” says Solomon. “What we may deploy in KwaZulu-Natal to what we may deploy in Johannesburg versus in the Western Cape will be completely different product offerings.” At group level, the company has experimented with new products such as organic burgers and kale salad bowls in a bid to remain relevant and satisfy customer demand for clean and healthy products. “We actively strive to remain relevant to our customers and we have evolved our business as our customer’s needs have evolved. We believe that constant innovation is key to our continued success and since establishing our first restaurant in 1995 in South Africa, we have continued to amplify new innovations to the local market – like Drive-Thru which we introduced to South Africans 19 years ago, or 24/7 service and hand held Breakfast offerings to the country a few years later. “McDonald’s restaurants are situated in locations which are convenient and easily accessible for our customers and we provide them

with a menu that offers choice and great value. The future success of our business is built on our people strength, and successful partnerships, with our owner operators, our suppliers and our staff,” Solomon told the World Retail Congress. However, there are factors that are affecting the market in South Africa, and further afield, that McDonald’s will have to take into account as it continues on its growth path. As we have already learnt this month, the economic climate is proving to be challenging to say the least, the brand is still trying to change its reputation, there is talk of a ‘sugar tax’ being implemented (which may or may not directly affect the business) and there is lots of local competition. Other American brands, including Starbucks, Dunkin’ Doughnuts and Baskin Robbins, will all follow Domino’s

Pizza which opened in SA in November, and they will all look to take share from McDonald’s and KFC. After a better financial performance in 2015 on a global level, the company must ensure its local efforts are not hampered by overconfidence and ignorance of the local market. “As it always has been throughout our rich history, our success will be driven, market by market, through the power of local management and franchisees working together,” said Easterbrook.

MCDONALD’S SOUTH AFRICA +27 (11) 236 2300 customer.care@za.mcd.com www.mcdonalds.co.za

//ROUGHLY 60% OF OUR GROWTH WILL BE IN LARGE URBAN AREAS, BUT WE EXPECT A SUBSTANTIAL PART OF OUR GROWTH TO COME FROM RURAL AREAS// www.enterprise-africa.net / February 2016 / 59


DENEL

New Partnerships

to Bolster Denel’s Arsenal PRODUCTION: Joe Forshaw

Over the past six months, Africa’s leading defence company, Denel, has announced a number of new partnerships that will see the company grow into new sectors and new geographical markets.

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

//

In November last year, after Denel’s Vehicle Systems division concluded a deal that will see the company supply advanced mine-protected vehicles to NIMR in the United Arab Emirates, it became clear that despite the gloomy economic situation in the country, South Africa still remains a leader in technology and defence solutions. The R900 million contract has been welcomed by Denel which says that the deal will provide work for two of its divisions for two years and confirms its leadership role in landward mobility and mine-protected vehicles. “We are delighted to work with NIMR, one of world’s leading manufacturers of wheeled armoured vehicles,” said Zwelakhe Ntshepe, Acting CEO at Denel. “There is a strong synergy between our companies and products and we are confident that we can, together, develop and improve the N35 to be among the best in its class,” Ntshepe said. Denel will work with NIMR on the N35 model and variations of the design. Formerly known as the RG-35, the N35 is an armoured vehicle with superior mine protection and combat capabilities and can be used in command, ambulance and recovery roles. In other Denel news from the Middle East, the company was in Dubai in November, promoting the Rooivalk helicopter, the jewel in the crown of South Africa’s leading supplier of defence products and solutions. The Rooivalk has been deployed in numerous peacekeeping missions in Africa and Ntshepe explained that this experience proved that SA defence tech can mix with the world’s best. “The helicopter is designed to operate in harsh environments and can be deployed for lengthy periods without sophisticated support. It has a cruise speed of 280 km/h and a range of more than 700 kilometres,” he said. “The Rooivalk programme has underscored the capabilities of the South African defence industry to


//THE ROOIVALK PROGRAMME HAS UNDERSCORED THE CAPABILITIES OF THE SOUTH AFRICAN DEFENCE INDUSTRY TO DESIGN AND MANUFACTURE WORLD-CLASS PRODUCTS AND SYSTEMS// design and manufacture world-class products and systems. It has further promoted Denel’s growth into a high-technology powerhouse that contributes greatly to South Africa’s defence and security needs, with the capacity to provide international clients with tailor-made solutions,” he added. The Rooivalk was a game-changer in the Democratic Republic of the Congo when it was deployed in support of the United Nations Intervention Brigade in November 2013. It provided a real boost for UN forces that had been locked in battle with M23 guerrilla groups in the eastern part of the DRC, firing multiple rockets against rebel bunkers and destroying targets within minutes of entering the combat zone.

CASSPIR RECOVERY VEHICLE In January, Denel announced that it was ready to expand range of its recovery vehicles based on the wellknown Casspir mine resistant system in response to increasing demand from customers on the African continent. Denel’s Mechem division launched a new 6x6 armoured and mine-protected recovery vehicle based on its Casspir NG armoured personnel carrier (APC). This is yet another example of product innovation that is keeping Denel at the forefront of defence in Africa and further afield. In its basic configuration the Eland has an operational weight of 18.5 tonnes. It is 8.802 m long, 2.588 m wide, and 3.121 m high

The Casspir Eland complements the existing Casspir range, which includes a basic APC, a flatbed variant with a mine-protected cab, the Gemsbok 4x4 mine-protected recovery vehicle, an ambulance configuration, and a command vehicle. The 6x6 layout is also available on other variants, not just the new recovery vehicle. Denel stated that the two Gemsboks had recently been ordered by the Angolan military. All Casspirs have monocoque hulls that protect their crews against small arms fire and up to 14 kg of explosive under any wheel. INTO THE DEEP In a move that solidifies Denel’s position as a company that is constantly pushing the boundaries, an announcement was made at the end of 2015 stating that Denel would launch its new maritime division, with the aim of becoming a strategic partner to the South African Navy, at the Maritime Africa conference in Cape Town. “Maritime Africa is a fantastic opportunity for Denel to launch

www.enterprise-africa.net / February 2016 / 61


DENEL

//OUR KEY OBJECTIVE IN THE NEXT YEAR IS TO BECOME A STRATEGIC PARTNER TO THE SOUTH AFRICAN NAVY// our maritime division in public and articulate our aspirations within the sector,” said Ismail Dockrat, chief executive officer, Denel Integrated Systems and Maritime “Our key objective in the next year is to become a strategic partner to the South African Navy and from that foundation to play a broader role in terms of supporting other navies in the region, as well as working with the South African shipbuilding and ship repair industry to grow the industry to the benefit of everybody in that sector. “We have very strong systems integration, programme management and integrated logistics support capabilities and we think there is a gap in the market in this context. Denel is not going into the business of building

ships. We know that there are strong players in the industry that we can partner with, both locally but also importantly, globally. So we are there to form partnerships with others and to offer our value proposition,” he added. Denel already has a longstanding and fruitful relationship with the SA Air Force and the SA Army and it was said in parliament earlier in 2015, in the defence review, that Denel should bolster its involvement with the Navy and maritime industry. NAVIGATING TURBULENCE At corporate level, even with the successes that the company has witnessed over the past few months, Denel still has a cloud hanging over it following the suspension of three high-

62 / February 2016 / www.enterprise-africa.net

ranking employees in 2015. CEO, Riaz Saloojee, CFO Fikile Mhlonto and Denel group company secretary, Elizabeth Africa were all placed on special leave in October pending an investigation into a variety of issues which reportedly include recent business acquisitions. Public Enterprises Minister, Lynne Brown is reviewing the situation in partnership with the Denel board and will make an announcement on the situation in the near future. This situation came as a shock to many as the company is often regarded as a benchmark for how state-run companies should be organised. More uneasy questions were forwarded to Denel soon after the high-profile suspensions when it was reported that it had failed to pay suppliers and this bought about worry of financial trouble. “How Denel has gone from boasting R1.9bn in cash reserves in its recently released annual report, to now declaring


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//WE NEED A FIRM FOOTHOLD IN THIS REGION AND THE ESTABLISHMENT OF DENEL ASIA WITH ITS HEADQUARTERS IN HONG KONG WILL GIVE US A STRONG PRESENCE AND THE ABILITY TO PURSUE OPPORTUNITIES THAT WILL SOON ARISE// that it cannot pay its own employees, if it pays contractors for their products and services. How did Denel get itself wrangled in financial malfeasance after it has kept a clean track record for so long?” asked Democratic Alliance spokeswoman for public enterprises Natasha Mazzone, in a statement. “I will be writing to the auditorgeneral to commission an investigation into Denel’s financial disarray,” she added. In the year ended March 2015, the company’s profit rose 39% to R270m on the back of a 28% rise in revenue to R5.9bn. ASIA-PACIFIC EXPANSION Despite the uncertainty in the leadership ranks, Denel has been vocal about its plans for the future and its strategy for 2016. The ambitious

organisation has its sights on growth, and not just in South Africa. In January, Ntshepe announced that the company would extend its footprint into the Asia-Pacific defence markets with the establishment of a joint-venture company in Hong Kong. The arms producer announced the establishment of Denel Asia, saying it has partnered with VR Laser, another South African defence and technology company. “This is a vitally important region for Denel to expand its business and find new markets for our world-class products, especially in the fields of artillery, armoured vehicles, missiles and unmanned aerial vehicles,” Ntshepe said. “We need a firm foothold in this region and the establishment of Denel Asia with its headquarters in Hong Kong will give us a strong presence and the

64 / February 2016 / www.enterprise-africa.net

ability to pursue opportunities that will soon arise,” he added. Denel Asia will focus its marketing attention on countries such as India, Singapore, Cambodia, Indonesia, Pakistan, Vietnam and the Philippines, which have all announced their intentions to embark on major new defence acquisitions and grow their research and development budgets in the next four years. This venture is just another standout point in what has been a productive time for Denel. The company, which is now ranked as one of the world’s top 100 defence companies (and the second largest in the southern hemisphere), is driving the entire industry in southern Africa, even in times where the economy is not making business easy. Keep an eye on Denel as 2016 looks to be yet another prosperous year for this all-round industry leader.

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LANCET LABORATORIES

Pathology Services

Without Borders PRODUCTION: Timothy Reeder

A pioneer among the original private pathology laboratories in South Africa, Lancet has since gone on to cement its presence in the territory through 60 years of continuous growth and development, with a primary focus on pairing high quality, cutting edge pathology services with client-centred, efficient turnaround times.

//

With its main offices and laboratories based in Johannesburg, Lancet operates primarily in the private healthcare environment, while also offering specialist pathology services for the corporate, insurance and mining sectors. Its range of service provisions is extensive, whether this be sophisticated molecular and cytogenetic investigations or advanced chemical analyses, and it possesses the capability to process upwards of 1.8 million of these complex tests every month. Lancet Laboratories’ nascent forays into the pathology industry took place in the heart of the central business district of Johannesburg, although a move in 1996 of the main laboratory to Richmond, a district strategically well placed at the intersection of Johannesburg’s main highways, meant that it could henceforth effectively service the whole of the Gauteng region. Alongside its hallmark of continual growth and development, Lancet is defined by providing diagnostic excellence. One of the company’s most significant historical landmarks has been the 2000 merger of the Johannesburg based practice with the Pillay MacIntosh practice in Durban, to allow not only a

much expanded geographical distribution of its service but also a consolidation of combined expertise. It is this commitment to growth, together with Lancet’s central role in providing the specialist pathology services and infrastructure required to fight against the key health issues affecting the continent, which has seen it become the first choice of partners for those seeking pathology and diagnostic services in Africa. According to the World Health Organisation, medical laboratory services are crucial to modern day health-care provision, as they enable doctors to diagnose diseases correctly and deliver the right treatments in a much shorter timeframe. Lancet specialises in PCR and Genetic tests for Oncology and infectious Diseases, Anatomic Pathology (Histopathology/Cytopathology / Immunohistochemistry), Tuberculosis testing, Microbiology, Endocrinology, Clinical Chemistry, Coagulation assays, Haematology, Toxicology and Occupational Health tests. Its services are offered directly to patients, their doctors and clinical groups and a vast array of clientele, ranging from corporate groups, NGOs, insurances, universities and research teams through to occupational health establishments.

66 / February 2016 / www.enterprise-africa.net

Partly key to the continued and notable success that Lancet enjoys is its industry leading team of more than 100 specialist pathologists (medical doctors and PhD scientists), each with his or her own particular area of expertise, which heads up the service. These individuals combine to ensure the quality and validity of investigations, while simultaneously offering consultative services to physicians, managed healthcare institutions, the occupational health environment and the insurance industry sectors. The provision of services across such a diversity of fields and industries has afforded Lancet the opportunity for considerable geographical growth, seeing Lancet burgeon from its strong base within South Africa to its current conducting of operations in 12 countries throughout Southern, East and West Africa. In Kenya, Lancet established in October 2009 and has gone on to expand to its current 15 service points, becoming in 2012 the largest private independent laboratory network. Lancet Tanzania, meanwhile, has grown to possess an extensive branch network with laboratories and patient service points across its key population centres. It is also actively seeking to grow its presence through collaborative work with other laboratories and hospitals in towns across the country, from Dodoma to Mwanza, Arusha to Tanga and Zanzibar, among many others. Its Ugandan operations comprise a presence in four medical centres and hospitals in Kampala. Across all sites quality is stringently implemented



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and international standards of excellence are followed, to ensure that any laboratory opened operates to international standards and is audited to these standards. Lancet also places emphasis on close interaction with the local community it serves, training and empowering local staff via its external teams who implement the requisite procedures, and then withdraw to leave the local team of experts to head up operations. Lancet’s primary focus on achieving an ever expanding footprint has seen the company recently open a new facility in the Rwandan capital of Kigali, furthering its growth into East Africa and adding to its 40 branches in Kenya, Uganda, and Tanzania. This marks its first foray into Rwanda, one which Group CEO of Pathologists Lancet East Africa Dr Ahmed Kalebi is confident will bring huge advantages to the country, saving its residents from needing to travel abroad either for specialised or

//OUR AIM IS TO ENHANCE ACCESS TO QUALITY MEDICAL LABORATORY SERVICES WHICH IS AT THE HEART OF QUALITY HEALTHCARE// routine medical laboratory tests. “The new facility avails specialised laboratory tests that were unavailable in Rwanda before, thereby enhancing accessibility and affordability for better healthcare within the country,” Dr Kalebi stated. “Our aim is to enhance access to quality medical laboratory services which is at the heart of quality healthcare.” The newly constructed facility is placed to offer some 3800 medical laboratory tests, many of which have never been available to the region and its inhabitants to date. The new facility in Rwanda is closely linked with Lancet’s main branches in Nairobi and South Africa through a dedicated fibreoptic and wireless network, allowing its pathologists to ensure that international

70 / February 2016 / www.enterprise-africa.net

expertise is present in every result. Lancet Laboratories Rwanda was established in September 2015 as an independent laboratory in the country following the success of its sister laboratory in Kenya, and expects to have extended its service offerings to the whole of Rwanda by the close of the first quarter of 2016. The final months of 2015 brought about further notable achievements for Lancet Laboratories, with the company unveiling in October Africa’s first ever automated microbiology lab, in its Durban location. This is a cutting edge technology, and one which will contribute to reducing health care costs via a quicker and more efficient diagnosis of medical conditions and the subsequent treatment of those patients affected. This is the first of its kind for microbiology in Africa, and is poised to revolutionise patient diagnosis in KwaZulu-Natal. Known as the BD Kiestra, the newly commissioned machine at the Lancet Laboratories in Durban will enable the testing of different medical samples like urine and blood in a much quicker and more standardised manner than previously. The General Manager of Kiestra’s developers Becton, Dickinson and Company, Ian Wakefield, says that the success of Kiestra in Durban has brought about plans to roll out the same technology to Johannesburg and Pretoria soon. “As a manual method, it’s very time consuming, very laborious and requires a lot of resources to do. What it has done is firstly standardised clinical practice leading to improved quality of results. It’s really setting the tone in terms of the future of microbiology showing that through an automated system you can get better efficiencies.” The potential benefits look set to resolve some of the key issues


LANCET LABORATORIES

currently being experienced in this field of testing, as Wakefield adds: “We are excited to bring to market cutting-edge technology with proven capabilities that will revolutionise traditional methods of testing, the total lab solution is designed to streamline workflow, increase productivity and address the challenges of ever-increasing specimen volumes coupled by a lack of skilled workers.” The launch of the BD Kiestra system at Lancet Laboratory has seen microbiology in South Africa taken to new heights, with the machine designed to operate as a 24/7 diagnostic microbiology laboratory. It is geared toward reducing the current time between gathering samples and the detection of infections, and is considered a significant boon for the medical profession. Its features can perform automated specimen processing, automated plate incubation and the production of high quality images that can be viewed on highresolution monitors day and night, and as such replace traditional, manually

conducted processes now considered laborious and time-consuming. Curbing antibiotic use and resistance is at present a more pressing concern than ever before, and one which finds itself high on the agenda of the Department of Health and healthcare service providers and funders. It was revealed in the 2015 report ‘The State of the World’s Antibiotics’ that antibiotic consumption in humans is increasing globally, with a total global antibiotic consumption increase of more than 30 percent reported between 2000 and 2010. The result has been an increasing prevalence of antibiotic-resistant bacteria, which will be significantly aided through the introduction of BD Kiestra, which will be an important contributor to the antimicrobial stewardship process. As such, early diagnosis will enable medical practitioners to modify antibiotic administration and thus reduce antibiotic resistance for many medical conditions. “The BD Kiestra system offers a comprehensive makeover of the microbiology laboratory. The benefits

are evidenced by the increase in productivity by as much as 2.5fold to 4-fold as reported by laboratories adopting microbiology automation,” stated Dr A K Peer, a Medical Microbiologist at Lancet Laboratories and project leader for the implementation of BD Kiestra. “The strong focus on quality, efficiency and quick turnaround times to obtain patient results is extremely beneficial in optimising patient management. As early adopters of this revolutionary system, the forward-looking approach towards innovation of the calibre of BD Kiestra will enable us to significantly improve patient care by consistently providing a first-class pathology experience.”

LANCET LABORATORIES 0861 LANCET www.lancet.co.za

www.enterprise-africa.net / February 2016 / 71


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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. ICIMA 2016 01 - 03 FEBRUARY 2016 The 4th International Conference on Intelligent Mechatronics and Automation (ICIMA 2016), will be held in Cape Town, South Africa during February 2016 by International Academy of Computer Technology (IACT). ICIMA is an annual conference, which offers a track of quality R&D updates from key experts and provides an opportunity in bringing in the new techniques and horizons that will contribute to Intelligent Mechatronics and Automation. We expect that the conference and its publications will be a trigger for further related research and technology improvements in this important subject.

MINING INVESTMENT CAPE TOWN 08 – 09 FEBRUARY 2016 121 Mining Investment Cape Town offers an exclusive forum where mining executives and institutional investors can connect, build relationships and forge deals in the beautiful setting of this historic Cape Town manor house and gardens. By providing an exclusive forum away from the hustle and bustle, 121 Mining Investment Cape Town provides a time and resource efficient way for miners to meet new investors and for investors to appraise a range of opportunities. ECOMMERCE AFRICA CONFEX 17 – 18 FEBRUARY 2016 Africa’s leading eCommerce event dedicated to all aspects of selling online. The eCommerce Africa Confex is more than just another eCommerce event, It is designed with those entrenched in eCommerce in mind. Leaders in the industry have been consulted to tailor an agenda that is both current and topical. The eCommerce Africa Confex prides itself on bringing you the latest trends and industry developments. Through keeping our finger on the eCommerce pulse we are able to give you a deeper understanding of what is happening in the world of selling online, while introducing you to the pioneering suppliers.

74 / February 2016 / www.enterprise-africa.net

//TABLE OF ALL EVENTS: RUBYFUZA 2016 Protea Hotel President, Cape Town 04-05 February AFCA CONFERENCE & EXHIBITION Landmark Conference & Exhibition Centre, Mbezi, Tanzania 03-05 February EAST AFRICA OIL AND GAS SUMMIT & EXHIBITION Kenyatta International Conference Centre 10-12 February PROJECT ENERGY Cairo International Conference Centre 11-14 February WOMEN IN ENERGY CONFERENCE Sandton Convention Centre 15 February WOOD CONFERENCE Cape Town International Convention Centre 15 February GMSG – SAIMM FORUM 2016: BUILDING TOWARDS THE FUTURE OF MINING Emperors Palace Convention Centre, Johannesburg 15-16 February METAL & STEEL MIDDLE EAST Cairo International Convention Centre 18-20 February


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Fascia and Barge Systems Ease of installation Corrosion and impact resistance Durability

VYNADEEP®

Marley fascia and barge boards are made from superior formulated uPVC foam utilising the latest technology, making them extremely lightweight yet surprisingly tough and maintenance free.

Streamline Double-Flo®

Fascia and Barge

Aesthetics SABS and ISO9001 certification

For more information on this and other Marley Pipe Systems products, call +27 11 739 8600

or visit www.marleypipesystems.co.za

Southern African Vinyls Association


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