THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS
AFRICA
ENTERPRISE July 2015
www.enterprise-africa.net
MONTIGNY INVESTMENTS
Leading the Drive Toward Sustainable Forestry ALSO IN THIS ISSUE:
Transnet / Afrisam / Shell / SA Shipyards
EDITOR’S LETTER
Timothy Reeder EDITOR tim@enterprise-africa.net Sophie Bolderstone SENIOR PROJECT MANAGER sophie@enterprise-africa.net Sam Hendricks SENIOR PROJECT MANAGER sam@enterprise-africa.net Karl Pietersen PROJECT MANAGER karl@enterprise-africa.net David Napier PROJECT MANAGER david@enterprise-africa.net Rose Whittaker PROJECT MANAGER rose@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, 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 2015
Welcome to our latest edition…
//
This month has been fascinating viewing from a business perspective – troubles across the Eurozone persist which of course has a knock on effect when it comes to investment across countries in Africa. Combined with the landscape of the telecommunications industry in SA changing drastically, with Neotel being bought by Vodacom – who themselves have been partially purchased by the Public Investment Corporation, its been a struggle to keep up with the news! Speaking of acquisitions, this months lead article tells the story of Montigny Investments in Swaziland, who reflect on a year that saw the purchase of Sappi’s local business and impressive plans to turnover R1bn as a result. We also take a look at Shell South Africa and their plans to diversify now that the option of fracking appears to be ruled out, highlight the contribution of companies such as Afrisam and Isowall to the ongoing upturn in the construction market and help to mark the 40th anniversary of Botswana Insurance Company – all among other fascinating stories. As always, we thank you for taking the time to read our publication which we take great pride in putting together and bringing to you every month. If you would like to get in touch, feel free – we welcome your comment!
Timothy Reeder EDITOR
GET IN TOUCH +44 (0) 20 8123 7859 tim@enterprise-africa.net
www.enterprise-africa.net / July 2015 / 3
06/NEWS: The Month that was... A round up of some of the latest news stories in the industry
08/EVENTS: KZN Industrial Technology Expo 2015 The growing importance of KwaZulu-Natal as one of South Africa’s hi-tech success stories has been put in the spotlight – thanks to a major exhibition.
12/
4 / July 2015 / www.enterprise-africa.net
12/MONTIGNY INVESTMENTS: Leading the Drive Toward Sustainable Forestry Montigny Investments started life in 1997 as a small sawmilling and timber trading business, supplying just one mine, and has since grown into a diversified international organisation with an annual turnover in excess of R 800 million.
CONTENTS 20/
30/
56/
20/AFRISAM: Leading the Way in Sustainable Construction
56/SOUTHERN AFRICAN SHIPYARDS: Sailing Towards Success
AfriSam has established itself as a leading supplier of the highest quality construction materials and technical solutions guided by its core values of people, planet and performance.
As Africa’s largest building and repair company for commercial ships, naval vessels and a range of other marine structures, Southern African Shipyards is at the forefront of the growth and development of the African shipbuilding industry.
30/SHELL SOUTH AFRICA: Shell in the driving seat for future energy When you’re sat on the fifth largest reserve of shale gas in world, it helps to have experts like Shell South Africa on your doorstep.
40/TRANSNET: The Key Link In the Chain Transnet is both the largest and most crucial aspect of the freight logistics chain, ensuring the safe passage of thousands of tons of delivered daily to each and every one of the country’s citizens.
48/BOTSWANA INSURANCE COMPANY: Hassle-Free Insurance Following new management BIC aspires to be the insurer of first choice in its market of operations, providing services above and beyond the expectations of its growing list of customers.
62/ISOWALL GROUP: Insulation for the Nation Decades of experience and an enviable national reputation are serving Isowall Group well as the insulated panel specialist goes from strength to strength amid tough economic conditions.
66/SAFAL STEEL: Pioneering Steel Protection The combined outputs of its operations in 11 African countries make the Safal Group the continent’s largest producer of steel roof sheeting, with the coil used in its roofing operations produced through world leading metal coating technology and colour coating processes.
72/DATACENTRIX: ICT trialblazers The Midrand-based company are making vital connections in both business and the local community.
www.enterprise-africa.net / July 2015 / 5
NEWS IN BRIEF ICASA APPROVES VODACOM’S R7BN PURCHASE OF NEOTEL VODACOM Group’s R7 billion offer to buy broadband provider Neotel has been approved by the communications regulator. The Independent Communications Authority of SA (Icasa), which had been deliberating the proposal for about a year, would allow the company to proceed with the deal, the regulator’s chairman Stephen Mncube said. He said the takeover would be subject to compliance with a local ownership law and adherence to terms of the roll-out of broadband infrastructure and services. “We will work with Icasa to finalise the conditions of the approval,” Vodacom said. Vodacom, 65 percent owned by Newbury, England-based Vodafone Group, agreed to buy Neotel from Tata Communications of India in May last year.
BIDVEST BUYS RETROVIRAL JSE-listed conglomerate Bidvest has acquired a majority stake in Retroviral Digital Communications, a digital agency founded by entrepreneurs Mike Sharman and Murray Legg. The value of the deal has not been disclosed. The acquisition will result in Retroviral becoming a subsidiary of Bidvest Media, a company which currently has a 100% stake in integrated sports marketing and sponsorship agency MSCSports and airport media business Create. Sharman will retain an interest in Retroviral post-acquisition and will continue to lead the company. The Retroviral team will move into the Bidvest Media stable.
6 / July 2015 / www.enterprise-africa.net
SOUTH AFRICA’S STATE WAGE BILL TO RISE BY $4.8BN OVER THREE YEARS Acting Public Services and Administration minister Nathi Mthethwa told Parliament that a new three-year deal to increase the wages of South Africa’s public sector workers will cost the country 61 billion Rand. Last month, the government had agreed to a 7 percent wage increase, but is now looking to pay 0.6% less. Over the last decade, the wage bill for the public sector has increased by 80%, averaging 6% above inflation, and the government is keen to curb spending where it can. Unions representing more than a million police officers, nurses and
teachers have threatened to walk away from the agreement, a situation the government will be hopeful to avoid in order to protect the economy and confidence in South African business and investment.
ROUND ONE OF GOLD WAGE TALKS COMPLETE The first round of wage talks in the gold mining sector was completed. The negotiations saw mining unions, the National Union of Mineworkers (NUM), the Association of Mineworkers and Construction Union (Amcu), Solidarity and Uasa table their wage demands while the gold producers, AngloGold Ashanti, Evander Gold Mines, Harmony, Sibanye Gold and Village Main Reef also tabled the principles of their Economic and Social Sustainability Compact. Chief negotiator for the Chamber of Mines, Dr Elize Strydom, explained that the principles of
the compact involves partnerships between stakeholders, employment retention, the profitability and sustainability of the sector, transparency and information-sharing and fair returns to all stakeholders within the context of the gold sector’s situation. The second round of talks are expected to shortly, where the gold producers are expected to table their wages and benefits offer with respect
to the compact framework. Strydom urged both parties to negotiate in good faith. “We urge all parties to proceed with wage negotiations with an open mind and in good faith and recognising our interdependence, that the gold mining industry’s sustainability, its transformation and the welfare of its employees are a shared responsibility,” said Strydom.
NEWS ROUNDUP SA: VODACOM STAKE SOLD TO AID ESKOM South Africa’s government has sold its 13.91 percent stake in mobile phone firm Vodacom to the Public Investment Corporation to raise R23-billion in funding for power utility Eskom, the Treasury said. “The sale of the Vodacom stake was the most viable option for ensuring that government was able to swiftly realise the proceeds and inject equity into Eskom to bolster the utility,” it said in a statement. Eskom, which is struggling to keep the lights on in South Africa, is facing a funding gap to 2018 of up to R200billion. The energy regulator rejected its latest request for a price hike this week. In addition to the funds from the Vodacom sale, the government is converting a R60-billion subordinated loan granted to Eskom into equity. “These measures will further strengthen the company’s balance sheet,” the Treasury said.
SOUTH AFRICA’S ASSORE BUYS AFRICAN RAINBOW MINERAL’S STAKE IN CHROME MINE South African iron ore producer Assore has bought out African Rainbow Minerals’ s (ARM) 50 percent stake in the country’s Dwarsrivier chrome mine for 450 million rand ($37 million) to take full ownership. Assore said in a statement that the long-term fundamentals for the chrome ore market supported an investment in the commodity and that the acquisition would help the firm expand its chrome capacity.
The Dwarsrivier chrome mine was owned by Assmang, a joint venture between Assore and diversified miner ARM. The sale of ARM’s stake is pending approval from the mines ministry, Assore said. As of June 2014 Dwarsrivier mine, located in Mpumalanga province, had an attributable net profit after tax of 68 million rand.
SOUTH AFRICA’S AMPLATS SAYS H1 PROFIT TO BE AT LEAST 20 PCT HIGHER Anglo American Platinum (Amplats), the world’s top miner of the metal, said its first-half profit would be at least 20 percent higher versus a year ago after recovering from a five-month strike. The unit of Anglo American said headline earnings per share would likely came in at 72 cents in the six months to the end of June compared with 60 cents a year earlier. Headline EPS is the main profit measure in South Africa that strips out certain one-off items. Amplats, along with rivals Lonmin and Impala Platinum, is recovering
from the strike that cost the industry billions of dollars in lost output and damaged the viability of some mines, leading to job cuts. The strike and depressed prices of the metals used in auto catalysts prompted a sector-wide strategic review that included selling unviable mines and scaling back on capital expenditure. Amplats is considering floating its labour-intensive South African mines around Rustenburg, the epicentre of the strike, after attracting offers that undervalued them.
www.enterprise-africa.net / July 2015 / 7
FEATURE
KZN INDUSTRIAL TECHNOLOGY EXPO 2015 EDITORIAL BY: Ian Bullock
The growing importance of KwaZulu-Natal as one of South Africa’s hi-tech success stories has been put in the spotlight – thanks to a major exhibition.
//
Organisers of the four-day KZN Industrial Technology Expo 2015 (KITE) are celebrating a “resounding success”, showcasing the region’s increasing role as a technological powerhouse and attracting thousands of visitors, including innovative business leaders from a range of sectors. The 16th KITE, held at the Durban Exhibition Centre in June 2015, is being hailed as “the most successful and exciting” yet. Plans have already been unveiled for an Industrial Indaba to run alongside the next KITE, in 2017. Visitors from throughout the KZN region were able to learn more about, and share, best-practice technologies, services and products. Once again, a series of free seminars – all aimed at driving learning opportunities, job creation and business growth – proved a great success. Manufacturing is the key sector in KZN, contributing an average 15% to the provincial GDPR, and generating an almost equal 14% of the provincial employment. KZN’s manufacturing sector is also the second largest in the country, after Gauteng province. There are a number of vehicle component manufacturers based in
8 / July 2015 / www.enterprise-africa.net
KZN with a total annual turnover of R9.5 billion and employing some 13,500 workers. The region also provides nearly a third of the country’s plastics requirements. This industry, which uses 150 000 tons of polymer a year, consists of mainly small and medium size companies. Gary Corin, managing director of Specialised Exhibitions Montgomery, organisers of KITE, was delighted with the event’s success. “The concept of industrial shows is second nature to us. As a locally registered business, we have been organising industrial trade shows in South Africa since 1968,” he said. “Our shows are delivering a good return on investment for exhibitors and providing a world-class event for visitors keen to see the latest in products, services, technologies and trends.” More than 100 companies took part in the Durban expo, showcasing technologies covering Mechanical and Materials Handling, Electrical and Electronics, Chemical and Plastics, Commercial and Business Solutions, and Safety, Health and Environmental. Among KITE exhibitors was Mega Measurements, which supplies flow
EVENTS
FEATURE
//THE CONCEPT OF INDUSTRIAL SHOWS IS SECOND NATURE TO US. AS A LOCALLY REGISTERED BUSINESS, WE HAVE BEEN ORGANISING INDUSTRIAL TRADE SHOWS IN SOUTH AFRICA SINCE 1968// level and pressure instrumentation to the water, waste water, mining and chemical industries, along with other industrial clients. Established in 1992, Mega Measurements operates out of Midlands (Howick) in KZN and has a chain of subdistributors across SA. In 1999 it acquired the Pulsar Process Measurements Agency for Sub-Saharan Africa and later became an agent for STS. Today, Mega Measurements is a leading supplier of measuring tools to SA, specialising in open channel flow measurement and non-contact ultrasonic level measurement. Following KITE, the company said: “Once again the show was very successful and we would like to thank all who visited our stand.” Industrial strength aplenty was on
10 / July 2015 / www.enterprise-africa.net
display at KITE as Konecranes featured its latest technology-driven hoists and cranes, including the versatile CTX and CLX ranges. Konecranes is a leading group of lifting businesses, established in Finland over 100 years ago and serving manufacturing and process industries, shipyards, ports and terminals. The group now has branches in 48 countries, including nine branches in SA (Johannesburg, Port Elizabeth, Durban, Cape Town, Witbank, Klerksdorp, Richards Bay, Rustenburg and Ngodwana). Its KZN branch is headed by manager Mark O’Connor on the Southgate Business Park, Umbogintwini. Making sure companies have the power to perform at the highest level is the aim of Impact Energy, of Westville, KZN – another KITE exhibitor.
The business was formed five years ago by a group of companies and individuals who had been participating in energy optimisation and supply projects within their own client base. Impact Energy identified the need for advanced power quality hardware that would compensate for load variations in real time. None was on offer in the African market at that time. The company’s search led to it partnering with Elspec Engineering in Israel. Impact Energy is now the sole distributor of Elspec products in SA and the gateway to distribution into the rest of Africa. Visitors to KITE were able to learn more about the importance of Power Quality Impact Assessments and the ways in which power quality can affect the reliability of industrial operations. According to Impact Energy, Elspec’s technology protects valuable equipment, decreases network losses and reduces electricity costs, enabling sustainable use of energy and offering financial savings. KITE exhibitors Briggeman Material Handling Solutions turned the spotlight
EVENTS
on greener ways of illuminating busy industrial premises. Energy-saving technologies, such as LED, can save businesses up to 70% of their electricity bills. For ports and industry – operating in the most demanding and harsh environments – durability and maintainability are equally important, however. Briggeman representatives were able to discuss the benefits of the hi-tech Phoenix range. Phoenix has been in the lighting industry for over 60 years and produces durable, energysaving and low-maintenance lights for industrial and port uses. With premises in Brownsdrift Road, Durban North, Briggeman offers a range of material handling solutions for port and industry. It has recently become the distributor for Corrosion Block and
ACF-50 in KZN. Imported from North America, they provide an “all-in-one solution that prevents corrosion, kills corrosion and lubricates”. The products come in sprays, gels and grease, and are non-toxic and non-hazardous. The importance of 21st century valve technology in industrial operations was stressed by representatives from Valve & Automation, of Springfield Park, Durban. V&A provides manual, on/off and control valves and actuators for the chemical, oil and gas, refining, pulp and chemical cellulose, mining and minerals, and power generation Industries. The company talked about the dangers and potential damage of pumps running dry – and the benefits of the Schroeder SMV multifunctional valve, which prevents canned and magnetic pumps from running dry,
causing pump wreckage and wider plant damage. V&A also celebrated the launch of the Intelligent Valve Positioner SRD 991, which it says offers the most advanced technology available on today’s market. With more and more companies turning to satellite technology to keep track of their vehicle fleets, Geotab Africa’s stand at KITE was kept busy. Geotab provides GPS fleet management solutions to businesses. The company was born in SA in 1996 and can now be found worldwide, including premises in Canada where Geotab engineers design its hardware and software. Geotab’s “black box” telematics include Garmin integration, tyrepressure monitoring, refrigerated truck temperature monitoring, load cells and engine data monitoring.
//ONCE AGAIN THE SHOW WAS VERY SUCCESSFUL AND WE WOULD LIKE TO THANK ALL WHO VISITED OUR STAND//
www.enterprise-africa.net / July 2015 / 11
MONTIGNY INVESTMENTS
Leading the Drive Toward Sustainable Forestry PRODUCTION: Timothy Reeder
Montigny Investments started life in 1997 as a small sawmilling and timber trading business, supplying just one mine, and has since grown into a diversified international organisation with an annual turnover in excess of R 800 million. Committed to sustainable forestry practices, the company believes firmly in utilising as much of the harvest as possible to ensure environmental security, as well as creating value for suppliers, customers and stakeholders.
www.enterprise-africa.net / July 2015 / 13
BUSINESS PROFILE
// R1bn
Predicted annual turnover for this year
MONTIGNY INVESTMENTS
//
Montigny Investments started life in 1997 as a small sawmilling and timber trading business, supplying just one mine, and has since grown into a diversified international organisation with an annual turnover in excess of R800 million. Committed to sustainable forestry practices, the company believes firmly in utilising as much of the harvest as possible to ensure environmental security, as well as creating value for suppliers, customers and stakeholders. “In a nutshell, Montigny Investments is an integrated forestry business based in Swaziland, focussing on plantation growing as well as sawmilling,” explains Andrew le Roux, Executive Director of the company. Since its inception in 1997, Montigny Investments has grown from a small sawmill supplying timber to just one mine into a multi-faceted organization, offering both timber and mining products to customers in Swaziland and internationally. It has expanded over the years to include ownership of four sawmills producing a variety of products, and principal clients including the planking industry, charcoal consumers and paper manufacturers, with the addition of a new chipping plant allowing this list to include furniture makers and construction companies. Montigny has continuously expanded through the years to acquire ownership of 6,000ha of tree plantations in Swaziland, with control of an additional 40,000ha. Montigny is fiercely and famously committed to sustainable forestry practices, and one way in which this manifests is its focus on getting
//WHAT MAKES US STAND OUT FROM OUR COMPETITORS IS THE WAY IN WHICH WE ADD VALUE TO EVERY PART OF THE TREE//
maximum value from the timber at its disposal, ensuring that nothing is wasted in the production process. “What makes us stand out from our competitors primarily is the way in which we add value to every part of the tree,” details Le Roux. “Our point of departure is not to maximise, or to justify, our processing operations – rather what we do is look at every tree and decide how best to extract value from it. Depending on that discussion we then decide where to send our fibre. Certainly, this is a novel way of looking at the process, but we see our trees as our primary assets, and it therefore makes sense to work out how best to maximise value from them.” This quest to use 100% of the product each time is aided greatly by Montigny’s serving a wide range of businesses in many different markets, and having at its disposal a vast selection of products. As Le Roux explains, this “has the added advantage of protecting us against market vagaries and cycles. It’s tougher to manage, of course, but it does give us a lot of comfort, as well as being highly profitable. We extract a lot of value from the tree – where a lot of other growers would extract and utilise 50 or 55 percent of the tree’s value, for us the figure would be in excess of 95 percent, just because of the breadth of our markets.” These markets are many and varied, encompassing a variety of fields. “At the top of the value chain we have significant structural timber market dealings. These are highly regulated, high-grade timber planks used primarily in the construction industry. A little further down would be what is known as wet off saw, which goes principally into furniture manufacture. Montigny is the largest supplier of this in Southern Africa, with a 40 percent share of the market.” “From there down would be mining timber, to the pulp market, through to high quality chips and biomass as boiler fuel, and finally low grade chips as stock to industries that are less fussy
www.enterprise-africa.net / July 2015 / 15
BUSINESS PROFILE
about the product they receive.” The construction of its very own chipboard plant has gone a long way toward aiding Montigny in this quest for really maximising value from each and every tree, even the detritus from the planking process: “We are able to utilise a lot of our own waste in this plant, which means that genuinely every part of the tree is used and used effectively, from the quality timber on the inside all the way through to sawdust used in the chipboard.” This prudent, product-intensive approach has paved the way for success across the board at Montigny. “We really are performing well at present, and we’ve enjoyed a record year,” Le Roux says of the company’s current health. “This is due to acquisitions as well as organic growth, and improved pricing on our part, so we are very aggressive at the moment. Up until last year a
16 / July 2015 / www.enterprise-africa.net
MONTIGNY INVESTMENTS
significant challenge we faced was that our forestry holdings did not match our turnover, and subsequently we were dependant on buying in certain things from external sources. We have been able to resolve that over the last year, buying a significant estate from Sappi South Africa, and as such both our turnover and our market penetration are growing.” Almost exactly a year ago came the conclusion of the sale of Sappi’s Usutu Forest Products Company Ltd to Montigny Investments. It was a sale whose intention had been announced by Sappi in July 2013, and Andrew Le Roux labels the Usutu estate acquisition ‘a landmark purchase’, one which has represented much of the company’s success over the past year or more. “We’ve grown somewhat organically from 1978 to the past year, and then this really was a huge
//ESSENTIALLY, WE ARE BRINGING THE MONTIGNY DNA TO THE USUTU ASSET// jump for us in terms of getting our timber base really secure. From there has followed the integrating of the two businesses, which has entailed knitting together the traditional Montigny structures with those of Usutu, and requiring much change management to induct teams and integrate systems and processes. Essentially, we are bringing the Montigny DNA to the Usutu asset, which has been greatly successful.” The purchase of Usutu also affords Montigny the opportunity to garner more high grade structural timber
from its mills; “we want to grow that market in South Africa in particular,” adds Le Roux, “and in Mozambique as well, which is a very under-supplied country right on our doorstep, giving us a real competitive advantage in growing this market significantly.” The very nature of the timber business itself means that fire is an everpresent and potentially catastrophic threat. This proved the case at Usutu, with devastation wreaked by forest fires leading to the closing and decommissioning of the Usutu Pulp Mill in 2010. “Fire is clearly a constant
www.enterprise-africa.net / July 2015 / 17
BUSINESS PROFILE
// 1 997 Year Montigny Investments was established
risk to the industry,” details Le Roux. “The Sappi estate that we purchased had suffered a catastrophic fire in 2008, ultimately leading to the closing and decommissioning of the estate’s pulp mill. As a result, we have implemented new fire strategies, which make us very confident for the year ahead. Sawmilling is less vulnerable to fires, too, so it is less of a risk for us, and one we are managing well having learned our lessons from the Sappi events.” This ever-present threat is largely responsible for the state of flux in which the South African timber industry finds itself currently, he explains. “Some of the larger players have really battled with fires over the last two years, and as a result there is much uncertainty surrounding pricing and the availability of power.”
18 / July 2015 / www.enterprise-africa.net
Alongside all of this recent growth and expansion, there is still much to come from this forwardthinking, ever-developing company, as Andrew Le Roux details some of the principal concerns for Montigny’s development moving forward. “We will be looking now to fully integrate the two teams,” he states when asked of the company’s planned next steps. “We place a lot of importance on human resources and the people in our teams, and we believe that we can extract a lot more value through them simply through better
management practices. We can also achieve this through more effective forestry practices that are more aligned with the sawmilling industry, as opposed to the pulp industry, which is what we have inherited. This requires a lot of work but will bear much fruit going forward.” Diversification of Montigny’s plantings is a further arm of its plans, including acacia and black wattle. “This will open up all sorts of new avenues and markets for us internationally, particularly to Japan. It is also a very good species as a
//WE WOULD LIKE TO BE TRULY INNOVATIVE WHEN IT COMES TO USING RESIDUE IN ENERGY PRODUCTION//
MONTIGNY INVESTMENTS
//WE HAVE A NATIONAL AMBITION, WHICH IS TO MAKE A DIFFERENCE IN SWAZILAND, MORE THAN ANYTHING ELSE// mitigation factor against fire.” Another aim this year is to increase production capacity across the company, taken care of principally by the two new mills due imminently. “For high grade timber we are going to put in a dry mill, to give us higher value products to offer to regional markets. We are also going to try and extract more value from our residue, and, as such, along with everyone else in the region we are focussing on energy, and specifically increasing our ability to turn biomass into electricity.”
Perfectly in line with the sustainability concerns at the core of each of Montigny’s operations, this will inform much of the company’s research and development in coming years. “We would like to really understand fully the energy landscape of Southern Africa,” Le Roux sets out, “and see how we can be truly innovative when it comes to using this sawmill and plantation residue in energy production.” He sums up how the company-wide drive toward sustainability will ensure the “It’s not just financial stability
that concerns us, we are driven by adding value not just to the balance sheet and to shareholders, but to the communities around us and to the country as a whole. Swaziland is a small country and we are a significant company within it, and we set out to make a significant contribution to the populace as a whole. We have a national ambition, which is to make a difference in Swaziland, more than anything else.”
MONTIGNY INVESTMENTS ward@swazi.net www.nhrinvestments.co.sz
www.enterprise-africa.net / July 2015 / 19
AFRISAM
Leading the Way in
Sustainable Construction
PRODUCTION: Timothy Reeder
AfriSam has been at the heart of African infrastructure development for the past 80 years, having established itself as a leading supplier of the highest quality construction materials and technical solutions guided by its core values of people, planet and performance.
www.enterprise-africa.net / July 2015 / 21
BUSINESS PROFILE
//
Among its principal offerings are the products forming AfriSam’s range of cement, readymix concrete and aggregate materials, the highest quality and most environmentally-responsible products from a company renowned for both its technical expertise and provision of superior quality construction materials. Operating as part of an industry which, by nature, has a huge impact on the environment, AfriSam looks to achieve its constant growth and development in a manner geared toward sustainable development. It is through its extensive research on improving cement and cement-based products, as well as its partnerships with many various organisations with parallel aims, that it will continue to ensure that its customers receive the most advanced and environmentally-
AFRISAM PRODUCTS
22 / July 2015 / www.enterprise-africa.net
AFRISAM
friendly products on the market, without compromising on quality and durability. Among its principal offerings is the vast range of cement that AfriSam has crafted over its 80 year history. One of the most popular of these products is its All Purpose Cement with C-Tech, the company’s top performer in concrete, mortar and plaster applications, and whose specially blended high quality formulation offers 15% more concrete per bag than before. Billed as a masterpiece of cement engineering, meanwhile,
is its greener alternative, AfriSam’s Eco Building Cement. This is the most environmentally-friendly cement currently on the market, and forms a large part of the company-wide drive towards a sustainable life for future generations. A unique combination of Portland cement and mineral components, it embodies AfriSam’s desire to protect the environment and to lessen its carbon footprint while still providing the utmost in construction materials. Slagment, another strand of its concrete dealings, is the result of Ground Granulated Blast Furnace
//IT WAS THE CEMENT ASPECT OF AFRISAM’S OPERATIONS THAT ALMOST BROUGHT ABOUT AN HISTORIC MERGER WITH PPC LTD EARLIER THIS YEAR//
Slag (GGBFS) from the steel and iron industry being dried and ground down to a fine consistency, then used as a partial replacement to cement. AfriSam’s plant in Vanderbijlpark has the capacity to produce over 800 000 tons of this slagment each year year, contributing to the building of major structures such as dams, bridges and roads for more than 50 years. It was the cement aspect of AfriSam’s operations that almost brought about an historic merger with PPC Ltd earlier this year. The aim was to create a dominant player in Africa’s second biggest economy and expand on the continent, with the enlarged company to “contribute meaningfully to South Africa and the continent’s developmental plans,” according to the Public Investment Corp, Africa’s biggest fund manager and majority owner of AfriSam. “There has been extensive
Agents for:
REFRATECHNIK
For all your klin project needs: Refractories / Engineering / Maintenance
Head Office: Crocker Road, Wadeville Ext 4, PO Box 14676 Wadeville 1422, South Africa T. +27 (11) 902 6930 F. +27 (11) 902 5749
KZN Office: Quality Street, Jacobs, Durban PO Box 13256 Jacobs 4026, South Africa T. +27 (31) 461 4383 F. +27 (31) 461 2864
CPT Office: 12 Matthews Street, Atlantis Industria Dassenberg 7350, South Africa T. +27 (21) 577 1901 F. +27 (21) 577 1702
www.insimbi-alloys.co.za
www.enterprise-africa.net / July 2015 / 23
BUSINESS PROFILE
©ISTOCK.COM/ MATHIEU-JULIEN
discussion between the two companies on the merger proposal,” explained AfriSam, although, “the parties have not been able to reach consensus on the terms of the merger and therefore have, for now, terminated their discussions.” For the time being, then, AfriSam is instead looking to “continue implementing its growth strategy of sustainable, value enhancement for all stakeholders,” and thus further strengthen its stranglehold over the competition in Africa. PPC’s position was similar, itself, “committed to its strategy of enhancing the company’s position in southern Africa and expanding its footprint into other African countries,” instead. Portland cement is the most common type in general use around the world, having served mankind well for over a century since its development in England in the mid 19th century. However, with the shifting focus
24 / July 2015 / www.enterprise-africa.net
AFRISAM
//THE MINERAL COMPONENTS IN COMPOSITE CEMENTS HAVE BEEN ENGINEERED TO MAKE THEM SUPERIOR TO PURE CEMENT// within the industry toward sustainable methods of operating becoming ever more of an overriding concern, its high carbon footprint and relatively inferior performance in many traditional applications compared to composite cements render it somewhat a product of a bygone era. AfriSam has turned its hand to specially engineering cement products to extract maximum value from the use of mineral components. Its C-Tech cements are expanding what was previously thought possible of of composite technology to offer exceptional performance characteristics which are also environmentally
Moffett truck mounted forklifts · ·
Decreases loading and unloading times of cargo
· · · · ·
Increased profitability
Gives the company more flexibility and control as the forklift travels with the load. No need to wait for the supplier or customer’s forklift to free up in order to use it
“We have found them highly beneficial to our business.” AfriSam
Higher productivity
2A Drill Street, Boltonia, Krugersdorp, 1739
Less product damage
T: + 27 11 953 6806
More trips can be done per day
F: +27 11 953 6397
Mounts and dismounts in 60 seconds
E: louise@shamrockhandling.co.za
www.shamrockhandling.co.za
www.enterprise-africa.net / July 2015 / 25
BUSINESS PROFILE
//OUR ACHIEVEMENTS IN THE ARENA OF COMPOSITE TECHNOLOGY – C-TECH - PERSONIFY AFRISAM’S ETHOS OF INNOVATION//
26 / July 2015 / www.enterprise-africa.net
responsible. “Our achievements in the arena of composite technology – C-Tech - personify AfriSam’s ethos of innovation, aimed at ensuring that our customers always enjoy the benefits of high performing products,” Mike McDonald, manager of AfriSam’s Centre of Product Excellence, says. “This methodology is also driven by our commitment to supporting the environment by producing cements with ever lower carbon footprints.” “Our C-Tech products are the result of an on-going development process that began in 2000 and is still moving forward, beyond conventional boundaries,” continues McDonald. “The mineral components in these cements have been engineered to make the resultant composite cement superior to pure cement. These products offer a spectrum of functional attributes that provide our customers guaranteed quality performance.” C-Tech technology reduces the traditional Portland clinker content of cement, itself very carbon
intensive, ensuring that AfriSam cements can begin to gain real ground on reducing their impact on the environment. Their mineral components also carry far less embodied carbon than clinker, which effectively reduces the carbon footprint associated with the cement production process. Theconstructional advantages of cement products developed with this C-Tech technology are also notable. There is an improved workability and an increase in resistance to erosion, an area where traditional Portland cement finds itself particularly vulnerable, as well as a reduced permeability to increase resistance to corrosion. Through employing this technology AfriSam is also able to conserve natural resources such as limestone, as the use of C-Tech minerals in the manufacturing of composite cements effectively recycles materials from other industries, mitigating the need to acquire them via landfill. Further refining the application of
AFRISAM
//OUR C-TECH PRODUCTS ARE THE RESULT OF AN ON-GOING DEVELOPMENT PROCESS THAT BEGAN IN 2000 AND IS STILL MOVING FORWARD, BEYOND CONVENTIONAL BOUNDARIES// these advances will play a crucial role in reducing the carbon footprint associated with producing such vast quantities of this most widely used material on earth. While recent advances in kiln design and alternative low energy clinkers have helped to kick-start this process, the greatest carbon savings from the industry are likely to be made by the inclusion of mineral components like limestone, GGBFS and PFA, as exemplified by AfriSam’s latest development. Together with this drive toward sustainable innovation, came the
Phoenix Risk Solutions is a Financial Service Provider and authorised by the Financial Services Board to conduct all aspects of Short Term Insurance. This includes a full Insurance Broking and Risk Management Service in respect of all Corporate, Commercial and Domestic Insurance as well as Self Funding Alternatives. We offer a range of products and services under the following categories: • Corporate Services • • Domestic Insurance • • Commercial Insurance • • Risk Management • • OHSI Insurance • • Risk Solutions For Professionals • Contact us for more information: T - 021 702 7960 | F - 021 702 4108 | E - peterd@phoenixrisk.co.za www.phoenixrisk.co.za
www.enterprise-africa.net / July 2015 / 27
AFRISAM
THE AFRISAM OFFICES
//WE’RE A VERY STABLE ORGANISATION — THE EMPOWERMENT-RELATED DEBT CHALLENGES ARE BEHIND US AND WE ARE FOCUSED ON DEFENDING OUR SOUTH AFRICAN BUSINESS AND GROWING THE BUSINESS FASTER IN THE REST OF AFRICA// announcement from AfriSam CEO Stephan Olivier earlier this year that ‘the health of the company had been restored’, since the firm’s balance sheet and shareholder registry were overhauled after a costly empowerment deal in 2007. “We’re a very stable organisation — the empowermentrelated debt challenges are behind us and we are focused on defending our
28 / July 2015 / www.enterprise-africa.net
South African business and growing the business faster in the rest of Africa,” he explained. AfriSam has spent at least R1.5bn on what it calls “efficiency upgrades” to its plants over the past decade, which included a R80m project to further upgrade its Ulco cement facility in the Northern Cape. The investments “have kept us up to speed” with the technologies and efficiencies
that new operators had brought to the South African market, Olivier said. This all forms part of the company’s gearing up across the board to be perfectly placed to handle the growth in future demand it expects to see, making investments in a variety of expansion projects designed to boost its internal capacity. This has been paired with a re-engineering of its entire product portfolio to meet future demand and avoid shortages, and thus achieve the sustainable growth towards which it continues to strive.
AFRISAM 0860 141 141 customer.service@za.afrisam.com www.afrisam.co.za
COMING THROUGH
©ISTOCK.COM/IGMARX
SHELL SOUTH AFRICA
Shell in the
driving seat
for future energy
PRODUCTION: Rose Samuel
When you’re sat on the fifth largest reserve of shale gas in world, it helps to have experts like Shell South Africa on your doorstep.
www.enterprise-africa.net / July 2015 / 31
SHELL SOUTH AFRICA
//
Since their arrival in 1902 to supply paraffin and kerosene to help light and heat communities, Shell South Africa has a long-held understanding of the country’s energy requirements. During that time, their mission has both changed beyond recognition and hardly changed at all. While you could argue that the company’s aim remains broadly the same - to supply communities with the energy they require - the challenge is how they achieve that. “Some 10 million South African’s have no access to electricity,” said Shell
South Africa Chairman, Bonang Mohale, last year. “The country has in recent years experienced power blackouts with dire consequences for the economy. South Africa is in a position where, because of the huge gap in the energy supply, it will need to invest in all types of energy sources.” The South African government’s Department of Energy (DoE) is placing an emphasis on broadening electricity supply technologies (to include gas, nuclear, biomass and renewable energy resources) in order to meet the country’s future electricity needs while at the same time reducing CO₂
//SOME PEOPLE TALK ABOUT KAROO SHALE GAS AS IF IT’S THERE. THAT’S NOT THE CASE. I THINK EVERYBODY NEEDS TO MANAGE EXPECTATIONS HERE//
32 / July 2015 / www.enterprise-africa.net
emissions. In 2013, Cabinet approved the Household Electrification Strategy, which will ensure that electricity is supplied to all households. South Africa produces about 5% of its fuel needs from gas and it faces a number of challenges in the liquid fuels sector, namely that gas stocks from offshore fields are declining. The DoE believes that the best option to secure ongoing stocks and keep marginal costs low would be to invest in gas fields close to those that already exist in the southern Cape. In the longer term, the Mossel Bay Refinery could use either liquefied natural gas or imports and then there’s the Karoo Basin and its potential shale gas reserves. Which is where Shell South Africa join the story. The DoE views natural gas as an evolving energy source, despite the country’s limited reserves. There are projects underway to explore the potential of importing natural gas, both
BUSINESS PROFILE
©ISTOCK.COM/ MAURO GRIGOLLO
as liquid natural gas and compressed natural gas, but according to the USA Energy Information Administration, technically recoverable shale gas resources in South Africa form the fifth largest reserve globally. Even if the actual recoverable amounts of the gas are much lower than currently estimates, shale gas has the potential to contribute a very large proportion of South Africa’s electricity needs. In upstream exploration, Shell South Africa holds the rights in the Orange Basin Deep Water area, off the country’s west coast, and has submitted applications for shale gas exploration rights in the Karoo in central South Africa. The belief is the Karoo has such a plentiful supply of natural gas in the shale rock formations deep beneath the surface that these reserves would help to secure South Africa’s energy future for centuries. Until very recently, it looked like the energy giant was readying itself
34 / July 2015 / www.enterprise-africa.net
SHELL SOUTH AFRICA
//IN MY BOOKS, THE FISCAL TERMS HAVE TO REFLECT NOT ONLY THE RISK, BUT ALSO THE FINANCIAL EXPOSURE THAT THE COMPANIES TAKE TO ACTUALLY EMBARK ON THESE ACTIVITIES// for a full-scale move into the area, with plans for test drilling in the search for gas reserves at an advanced stage. Shell’s Jan-Willem Eggink, who heads up the exploration project as South Africa Upstream GM, spoke candidly about the Karoo project last November during a Fracking Masterclass for biznews.com. Shell, said Eggink, knew there was shale gas in the area thanks to the Soekor wells that were drilled there in the Sixties. But the 50-year-old drillings wouldn’t provide the detailed data required to
make an informed decision about any kind of quantity. Shell needed to run their own tests, at an estimated cost of $200m for exploration alone. “Some people talk about Karoo shale gas as if it’s there,” said Eggink. “That’s not the case. I think everybody needs to manage expectations here. For us, it’s key to drill a few wells to get more information and on the basis of that we can see what the rocks look like at two to three kilometre depths, as well as whether we can extract gas from it in commercial quantities.”
Estimates by the US Energy Information Administration (EIA) put the shale gas reserves under the Karoo Basin at some 480 trillion cubic feet, although it has subsequently been revised down to a mere 390 trillion cubic feet. “That’s a humongous amount of gas,” said Eggink. “In Holland, where I come from, I live on top of the Groningen Gas Fields. It was discovered in the Sixties and put on stream, and Holland is rich already for 50 years because of that gas field and that’s 100 trillion cubic feet.” In investigating the potential for accessing shale gas in the Karoo Basin, the government decided little could happen until a proper regulatory framework had been put in place. A task force was charged with evaluating the use of a hydraulic fracturing technique in the extraction
www.enterprise-africa.net / July 2015 / 35
BUSINESS PROFILE
of shale gas and the potential environmental risks and the negative and positive social and economic impacts of shale gas exploitation. Cabinet approved the team’s report and lifted the stop on processing applications for exploration in the Karoo Basin on condition that the appropriate regulations, controls and coordination systems were established. Despite the apparent solution to securing the country’s energy needs sitting, literally, under their feet, Shell’s proposal to drill six exploratory wells stalled when the required licenses from the government were delayed by the prolonged legislative process that involved updating the Mineral, Petroleum & Resources Development Act (MPRDA) and the publication of the long-awaited hydraulic fracturing regulations. But the biggest sticking point
©ISTOCK.COM/RITAJACO
36 / July 2015 / www.enterprise-africa.net
SHELL SOUTH AFRICA
in negotiations was believed to be the 20% free stake the government required. While it’s believed Shell would agree to the figure if the quantities of gas proved accurate, it would only do so after they’d recovered their extensive exploration costs. “We still need a significant amount of money invested before we can produce,” explained Eggink. “In my books, the fiscal terms have to reflect not only the risk, but also the financial exposure that the companies take to actually embark on these activities.” And then in March 2015, amid claims of further legislative foot dragging, stories began to emerge that Jan-Willem Eggink had been pulled out of South Africa by Shell along with his team. “As part of a review due to falling oil prices, the company had adjusted its activities in shale oil and gas
//SHELL NEEDED TO RUN THEIR OWN TESTS, AT AN ESTIMATED COST OF $200M FOR EXPLORATION ALONE// exploration at the very least. Neither party has made any further comment following the publication of the MPRDA, but with so much at stake it will be interesting to see who blinks first. While shale gas has been taking up much of headlines where Shell South Africa are concerned this year, there has been another innovation afoot that if successful would be equally game changing. Recognising a skills shortage in geophysics and petrolum engineering specifically in Africa, Shell are attempting to bridge the gap by working with the University Of The Witwatersrand (Wits), part
opportunities outside of the Americas,” read a statement from Shell HQ, which went on to say it had also adjusted staffing in local exploration in South Africa. The company said it needed clarity on legislation and technical regulations in the country before making any further decisions. On 3 June 2015, the government finally gazetted the long-awaited fracking regulations in the MPRDA. The new act provided the very legislative and technical clarification that Shell sought and without which they were unable to acquire a licence to begin exploratory work. The Act’s 52 pages should now open the door for that
Global reach local touch SLR’s comprehensive range of consultancy services supports all stages of the oil and gas value chain:
• • • • • •
Environmental permitting Stakeholder engagement Environmental Impact Assessments Baseline and specialist investigations Oil spill modelling and planning HSE management and compliance
SLR’s local knowledge combined with our global experience is equally valued by majors, independents, associations, governments and policy makers. ABERDEEN
ANCHORAGE
BRISBANE
CALGARY
CAPE TOWN
DUBLIN
HOUSTON
LONDON
PERTH
www.slrconsulting.com Jonathan Crowther: jcrowther@slrconsulting.com +27 21 461 1118 Unit 39 Roeland Square, Cnr Roeland Street and Drury Lane, Cape Town, 8001, South Africa CCA ENVIRONMENTAL - An SLR Group Company
www.enterprise-africa.net / July 2015 / 37
BUSINESS PROFILE
©ISTOCK.COM/ ROBWILSON39
funding their Seismology Reflection Centre to the tune of R5m over the next five years. The centre, at the Wits School of Geoscience, will conduct research, train and teach students from all spheres from across the continent, which in turn will lead to an increase in the number of highly skilled geosciences professionals across the oil, gas and minerals industry. “Shell South Africa has invested in the centre because we want to be a good neighbour to the communities in which we operate, where we focus on addressing various challenges in the country including poverty, inequality and unemployment,” Shell South Africa upstream GM Jan-Willem Eggink during a tour of the facility in April 2015. “At Shell, we support skills and capacity development, innovation and technology to help develop a more prosperous future and responsibly unlock energy to power lives and improve living standards.”
38 / July 2015 / www.enterprise-africa.net
SHELL SOUTH AFRICA
//THIS PARTNERSHIP BETWEEN SHELL AND WITS IS A WONDERFUL EXAMPLE OF HOW WE CAN BRIDGE OUR INSTITUTIONAL BOUNDARIES TO ADDRESS OUR COLLECTIVE CHALLENGES// Dr Musa Manzi, Wits Seismology Reflection Centre director, said that the centre hoped to collaborate with private sector, governmental organisations and the minerals and oil and gas industries to try and help fill the skills gap. He said that the research undertaken at the centre could lead to better mapping and characterisation of the oil and gas reservoirs from some of the major South African basins, with particular interest in the offshore Orange basin and onshore Karoo basin. The centre aims to attract [151mm students Tanker Services wide from a wide range of fields, from
x
geophysics to engineering. With the increasing number of new petroleum and natural gas discoveries being made in Central and Southern Africa, the centre hopes to provide a first-class training facility to provide the necessary expertise for this growing field. “With the opening of the centre, we anticipate increased interest from those interested in the petroleum and natural gas sectors,” said Wits School of Geosciences head Professor Roger Gibson. “This partnership between Shell 112mm].pdf 1 2015/07/06 8:44 AM and Wits is a wonderful example of
how we can bridge our institutional boundaries to address our collective challenges,” said Wits vice-principal and chancellor Professor Adam Habib. “The net effect is that we all benefit. Students have world-class facilities to train in and industry gets both enhanced human resource capacity and innovative solutions to their operational challenges.” Shell South Africa and geophysical service company CGG were jointly responsible for funding the computer hardware for the centre, which cost R1-million.
SHELL SOUTH AFRICA +27 11 996 7000 www.shell.com/zaf.html
C
M
Y
CM
MY
CY
CMY
K
www.enterprise-africa.net / July 2015 / 39
TRANSNET
The Key Link
In the Chain PRODUCTION: Timothy Reeder
Delivering efficient, safe and reliable services to South Africa, Transnet is both the largest and most crucial aspect of the freight logistics chain, ensuring the safe passage of thousands of tons of delivered daily to each and every one of the country’s citizens.
40 / July 2015 / www.enterprise-africa.net
TRANSNET
//
//TRANSNET IS EXCITED ABOUT PLAYING A ROLE IN ENTRENCHING CAPE TOWN AS A LEADING DESTINATION IN AFRICA AND THE WORLD// 42 / July 2015 / www.enterprise-africa.net
Transnet operates an integrated freight transport company, one which is formed around a core of five operating divisions all working in tandem with one another. Every day Transnet delivers thousands of tons of goods around South Africa, through its pipelines and both to and from its ports. That cargo is then moved on to ships for export while it unloads goods from overseas. The central mission driving the company forward is to cement its position as a focused freight transport company, delivering integrated services which continue to be efficient, safe, reliable and costeffective, which will go on to promote economic growth in South Africa. This will be achieved through an increased in the market share it possesses, an improvement in productivity and profitability and by providing sufficient capacity to its customers ahead of demand.
While Transnet is fully owned by the South African government, it still operates as a corporate entity which aims to both support, and contribute to, the country’s freight logistics network. Transnet is continually looking to develop South African industry, and reduce the cost of doing business in the country, while at the same time operating efficiently and profitably. The newly restructured Transnet is made up five central operating divisions, among them Transnet freight rail, formerly known as Spoornet. This is the largest division of all those constituting Transnet as a whole, specialising in the transportation of freight with approximately 25 000 employees spread throughout the country. It maintains an extensive rail network across South Africa with connections to other rail networks in the sub-Saharan region, a rail infrastructure representing about 80% of Africa’s total. Transnet freight rail has succeeded in positioning itself
BUSINESS PROFILE
// R337bn Transnet will spend on revamping works
to become a profitable and sustainable freight railway business, assisting in driving the competitiveness of the South African economy and perfectly placed to dramatically alter the country’s rail industry. With its origins dating back more than a century, Transnet rail engineering forms the backbone of South Africa’s railway industry, boasting eight product-focused businesses, 150 depots, seven factories and 15,000 employees across the country. This engineering organization has actively supported railways in the expansion of the country’s economy, over the decades developing some of the most innovative bogies and wagons ever designed for 1067mm track. Today, it is dedicated to the in-service maintenance, repair, upgrade, conversion and manufacture of freight wagons,
44 / July 2015 / www.enterprise-africa.net
mainline and suburban coaches, as well as diesel and electric locomotives, wheels, rotating machines, rolling stock equipment and services. The proximity of the coastal plants to major ports also renders far easier the movement of products to and from overseas markets, which will facilitate its ever-expanding range of rolling stock products and a burgeoning list of satisfied customers, as well as serving to enhance the organisation’s international reputation. Transnet national ports authority, meanwhile, manages the national
port system in a landlord capacity to ensure its safe, effective and efficient economic functioning. It provides port infrastructure and marine services at the eight commercial seaports in South Adfrica, those at Richards Bay, Durban, East London, Ngqura, Port Elizabeth, Mossel Bay, Cape Town and Saldanha. It has the core functions of maintaining and improving port infrastructure, managing port activities and assisting in the manoeuvring of vessels within port limits and along the coast. Due to the everevolving nature of the maritime industry,
//WITH ITS ORIGINS DATING BACK MORE THAN A CENTURY, TRANSNET RAIL ENGINEERING FORMS THE BACKBONE OF SOUTH AFRICA’S RAILWAY INDUSTRY//
TRANSNET
//ESTABLISHED IN 2000, TRANSNET PORT TERMINALS CAME ABOUT THROUGH TRANSNET’S SPLITTING OF ITS SINGLE PORT DIVISION, PORTNET, INTO OPERATIONS AND LANDLORD BUSINESSES// the National Ports Authority seeks to continue to enhance its role in facilitating trade, influencing growth through the provision of port infrastructure capacity and aligning itself and its core activities to shifting dynamics in the market. TNPA also looks to enhance the ports’ geographical positioning as a leading gateway for trade coming from both the eastern and western seaboards. Established in 2000, Transnet port terminals came about through
Transnet’s splitting of its single port division, Portnet, into operations and landlord businesses. Since its inception, Transnet port terminals has played a key role in supporting the South African government’s export-led growth strategy. Most Southern African import and export commodities are handled through the country’s seven logistics ports. The division deals with the container sector, alongside mineral bulk, agricultural bulk & Roro sectors.
Transnet Port Terminal’s major customers represent a broad spectrum of the economy and among them it numbers players from the shipping industry, vehicle manufacturers, agriculture, timber and forest products, the mining industry and exporters of minerals, metals and granite. The South African Government has embarked on a massive infrastructure drive geared toward boosting the economy, while alleviating poverty. The ports are seen as key to this plan to facilitate for economic growth, and as part of the Transnet Market Demand Strategy, TPT will receive R33billion to create new capacity for terminals to meet projected demand. Transnet pipelines, formerly known as Petronet, is currently servicing two key industries in fuel and gas by transporting these products over
www.enterprise-africa.net / July 2015 / 45
BUSINESS PROFILE
//TRANSNET PIPELINES’ NETWORK CURRENTLY TRANSPORTS 100% OF SOUTH AFRICA’S BULK PETROLEUM PRODUCTS// varying distances. Transnet pipelines’ network currently transports 100% of South Africa’s bulk petroleum products. The business, established in 1965, is also widely regarded as integral to the well-being of the South African economy. It is equipped to handle an annual average throughput of some 16 billion litres of liquid fuel, alongside more than 450 million cubic metres of gases. These liquid products include among them crude oil, diesel, leaded and unleaded petrol and evrn aviation turbine fuels. The liquid fuels network crosses a vast area, encompassing the provinces of KwaZulu-Natal, Free State, Gauteng, North West and Mpumalanga. The intake stations are its two Durban
46 / July 2015 / www.enterprise-africa.net
refineries, the crude refinery at Coalbrook and the Sasol 2 and Sasol 3 synfuel plants at Secunda. The network includes a tank farm at Tarlton with a capacity of 30 million litres, used mainly for the storage and distribution of liquid fuels into Botswana. Transnet pipelines’ customers are all South Africa’s major fuel companies, ranging from BP, Caltex, Engen, Exel, Sasol Oil to Sasol Gas, Tepco, Shell and Total. The final of the five core divisions of operations is Transnet National Ports Authority, recently the subject of a major development at one of the country’s most scenic ports. Against its backdrop of Table Mountain, TNPA awarded V&A Waterfront (Pty)
Ltd the development of a cruise terminal at the Port of Cape Town. This will entail significant investment of R179m to finance, design, and develop the terminal, as well as the ensuing operation, maintenance and transfer of ownership of the facility back to TNPA after a period of 20 years. Once completed, it will be able to accommodate the port’s current and future passenger vessel fleet, while t is also expected that the upgraded facility will offer value-added retail and hospitality services. The award is also in line with Transnet’s commitment to promoting private sector participation as a key element of the company’s Market Demand Strategy, while at the same time playing a significant role in enhancing tourism and job creation in the Western Cape. TNPA Chief Executive, Richard Vallihu, was clear in the value that this develop will bring to the port:
TRANSNET
//THE COMPANY WILL SPEND MORE THAN R337 BILLION IN THIS PERIOD ON REVAMPING ITS RAIL, PORTS AND PIPELINES INFRASTRUCTURE// “The upgraded Cape Town cruise terminal facility to be developed by V&A Waterfront will be a gateway to a unique African experience in cruise tourism. Transnet is excited about playing a role in entrenching Cape Town as a leading destination in Africa and the world. The city will benefit from a world-class facility that will attract greater international cruise liner calls, create jobs and strengthen the tourism offering of not only the Mother City, but South Africa as a whole,” he stated. June also saw Transnet conclude a R30 billion loan facility agreement with China Development Bank, to
fund the hundreds of locomotives the company is building with China South Rail and China North Rail. As its build programme gathers momentum, the proceeds of the loan will be used to finance the company’s 232 diesel and 359 electric locomotives it plans to construct, with CNR and CSR respectively. It is a significant milestone in Transnet’s funding strategy, representing 60% of a required investment of more than R50 billion for the programme, where Transnet plans to acquire 1064 additional engines. The acquisition of the 1064 locomotives is at the heart of
Transnet’s Market Demand Strategy, aimed at increasing volumes while simultaneously bringing down the average age of the company’s current locomotive fleet. The programme is designed to aid Transnet’s plans to grow volumes, from a current tonnage of 210-million to over 350-million tons in just seven years. The company will spend more than R337 billion in this period on revamping its rail, ports and pipelines infrastructure, with the majority of its infrastructure spend, some R210 billion, to be dedicated to rail developments.
TRANSNET +27 11 308 3000 info@transnet.net www.transnet.net
• alien clearing • tree felling • • tools & equipment supply • • weed spraying • tyre fitment • • minor construction • • grass cutting • bush clearing • Established in 2007 and growing rapidly, Ziyenzeka Weed Control and General Services cc is the company of choice for your environmental management services. Our clients include: Transnet Freight Rail, Transnet Property Services, PRASA/ Metrorail, Airports Company South Africa(ACSA), East London IDZ, Dube TradePort, Eskom and The Department of Water and Sanitation, Environmental Affairs.
+27 824 974 200 • +27 844 041 265 • ziyenzeka@vodamail.co.za • www.ziyenzeka.co.za
www.enterprise-africa.net / July 2015 / 47
©ISTOCK.COM/KUPICOO
BOTSWANA INSURANCE COMPANY
Hassle-Free
Insurance
PRODUCTION: Timothy Reeder
The Botswana Insurance Company’s history is steeped in local ownership and investment, ever since its incorporation on the 12th August 1975 for the purpose of dealing originally in both general insurance and life assurance business. BIC aspires to be the insurer of first choice in its market of operations, providing services above and beyond the expectations of its growing list of customers.
www.enterprise-africa.net / July 2015 / 49
BUSINESS PROFILE
//
Its incorporation in mid-1975 makes Botswana Insurance Company Limited the oldest short term insurance company in all of Botswana, dealing originally in both general insurance and life assurance. The company today operates out of its head office in Gaborone, catering for the southern region and the branches in Francistown and Maun caters for the northern region. At its inception, the ownership of the Company was divided between two parties, with Botswana Development Corporation holding 51% of the shares and J.H. Minet & Company Limited of London the remaining 49%. J.H. Minet then sold its 49% holding to St Paul (UK) Ltd, a subsidiary company of The St Paul Incorporation of Minnesota USA, in 1985, while in 1991 the new company Botswana General Insurance Limited was formed, with a focus on short term insurance. This
ONE OF BIC’S CSR DRIVES, A PARTNERSHIP WITH A LOCAL CANCER FOUNDATION
50 / July 2015 / www.enterprise-africa.net
BOTSWANA INSURANCE COMPANY
followed the restructuring of Botswana Insurance Company to comply with The Botswana Insurance act of 1987. Botswana Life Insurance Limited was thus born, while Botswana Insurance Holdings Limited was listed on The Botswana Stock Exchange as a holding company for BGIL and BLIL. In 1998, BGIL was sold out of the holding company and became a wholly owned subsidiary company of St Paul (UK) Limited. It was at this point that its name was changed to Botswana Insurance Company (BIC), and following suit in 2003 Teledimo (Pty) Ltd bought BIC from St Paul. Zimnat Lion Insurance, a Zimbabwean based insurance company was awarded the management contract, and as a result has ever since been providing the technical expertise, strategy and management consultancy to Botswana Insurance Company. BIC has the capabilities to ensure almost
anything which might require it – from vehicles and houses, valuables and household goods, right through to aircraft and businesses. BIC is the first insurance company in Botswana to be awarded the AA- rating, which is the highest national rating a short term insurer in Botswana can currently attain as accorded by Credit Global Ratings. An insurer of first choice then since 1975, BIC is at the forefront in developing innovative solutions and strategic affiliations that delivers the best service quality to its customers. Strategic affiliations with reputable organisations such as Orange Botswana and Standard Chartered Bank Botswana offers not only us but the customers flexibility and convenience in doing business. BIC’s teaming up with Orange Botswana will allow its customers to make their premium payments through the Orange Money mobile money
//BIC HAS THE CAPABILITIES TO ENSURE ALMOST ANYTHING WHICH MIGHT REQUIRE IT – FROM VEHICLES AND HOUSES, VALUABLES AND HOUSEHOLD GOODS, RIGHT THROUGH TO AIRCRAFT AND BUSINESSES//
www.enterprise-africa.net / July 2015 / 51
BUSINESS PROFILE
//THE FOCUS GOING FORWARD IS TO PROVIDE COMPLETE INSURANCE SERVICES UNDER THE ‘ONE ROOF CONCEPT’ TO STANDARD CHARTERED BANK CLIENTS//
52 / July 2015 / www.enterprise-africa.net
service. This service is available to all those BIC customers who also subscribe to Orange Money, and who will now be able to pay their premiums directly from their Orange Money accounts through their mobile phones. It is a partnership focussing on providing BIC customers the convenience of paying their premiums from anywhere, at any time that may suit them. Orange Money offers easy-to-use and secure mobile financial services and transactions, while Orange Botswana is a leading mobile operator and provider of telecommunication services in Botswana, serving more than one million customers countrywide on a GSM/GPRS/EDGE/3G+/Wimax and 4G network.
In a similar vein was BIC’s announcement earlier this year of an exciting and potentially very valuable partnership with Standard Chartered Bank (SCB). The partnership will, conveniently for SCB clients, provide innovative solutions in line with what has been termed the evolution of Bancassurance. Together with BIC, SCB will be providing these convenient and easily accessible insurance solutions to its many clients. Commenting on the launch, Johann Claasen, MD of Botswana Insurance Company Limited, had the following to add: “For a while now, insurance in Botswana continues to be difficult to obtain for the vast majority of people. Through this
BOTSWANA INSURANCE COMPANY
L-R. BETTY TOGARASEI, JOHN HELDSINGER & KOMISSA BURZLAFF, MARKETING MANAGER
Bancassurance partnership with Standard Chartered, we will be able to provide useful and relevant general insurance products to Standard Chartered Bank clients. We strongly believe this partnership will help us deliver our commitment to our society, shareholders and regulators.” Adding to these sentiments, of opening up new possibilities and avenues of advice for these valued customers, Moatlhodi Lekaukau, CEO, Standard Chartered Bank of Botswana stated: “Bancassurance in Standard Chartered has evolved to ensure that the distribution partnership with Botswana Insurance Company provides our esteemed clients a selection of
general insurance offerings that touch on the protection of their assets when they may not necessarily be in a position to do so. They will help our clients plan and make provision for the unexpected with minimum financial strain.” SCB & BIC have developed this opportunity while ensuring at all times that the right strategic affiliation is formed with the most important aspect in mind, the customer. Claasen detailed this focus on ease of operation: “The focus going forward is to provide complete insurance services under the ‘one roof concept’ to Standard Chartered Bank clients,” further adding that this future thinking approach to doing business is just the first step toward transforming banking and insurance.
BOTSWANA INSURANCE COMPANY (+267) 360 0500 info@bic.co.bw www.bic.co.bw
www.enterprise-africa.net / July 2015 / 53
BUSINESS PROFILE
Q&A: Johann Claasen, MD of BIC Enterprise Africa: Tell us Johann, in your words, what is it that defines BIC as a company? Johann Claasen: BIC is a home grown company, it’s proven over the years that it’s a reputable company that’s here to stay – I think at the end of the day that’s what defines us, we’ve been here for 40 years and plan on staying for a while. Over the years we have built a very robust service delivery model, and we’ve basically become a one stop shop for people who require products that are not core or run of the mill products so if somebody comes to us with anything unique we’re always able to assist, always able to find support for whatever the products are. We try and optimise our broker and agency networks because in Botswana that’s the main service delivery channel, so we ensure that our relationships with our brokers and agents remain intact and remain strong.
EA: In terms of performance, how has the last year or so been? JC: 2014 was a mixed bag of tricks, it was a very good year from a top line growth – we grew our book quite substantially but unfortunately it was also a bad claims year. This isn’t necessarily a bad thing, we had a lot of high value claims coming through which gives us the ability to show the market that you’re able to pay these claims and that the capabilities are there. We managed to make an underwriting profit, which wasn’t as much as we wanted, but it was still pleasing. It was just one of those years where there were a lot of floods, a lot of fires and hijackings increased. The only way you can improve your claims experience is by assisting clients and by ensuring their risk management is up to standard.
EA: The company is approaching it’s 40th anniversary, an impressive landmark, what sort of plans do you have in place to mark this locally? JC: There’s a number of things that we have planned, it’s a big milestone for us. We aim to build and maintain our strategic partnerships and we are giving back to our stakeholders as
54 / July 2015 / www.enterprise-africa.net
well as the community at large. We are actually in the midst of a campaign where we are celebrating with the BIC team and our stakeholders, we’ve got numerous activities planned from a corporate social responsibility view and as an appreciation to our clients all kinds of initiatives. One of the events that we have got lined up at the moment but its not limited to just this one is a charity donation day for the Cheshire Foundation that helps improve the lives of disabled children – BIC strongly believes in giving back to society, we support all kinds of projects that are looking to improve the lives of the less fortunate so we’re not making this so much about BIC, its about what we can give back to the community to celebrate the 40 years of support. At the end of the day, we are here because of the support of the community, by us giving back I think it’s the right way to go about it.
EA: Looking at the industry overall, did last year affect the industry in a negative way? JC: Yes it did. We weren’t unique in our claims experience, I think it was felt by the entire industry. Early in the year we were hit by a number of floods, there were a number of fires throughout the country so everybody had their fair share of bad luck last year. We’ve also seen a marked increase in motor claims and especially hijackings in South Africa which the Botswana market has never been exposed to so that has had a negative impact on the insurance industry as a whole.
EA: What would you say the biggest opportunities and plans for growth are? JC: There’s always opportunities regardless of how you look at it – we’ve recently signed a partnership deal with one of the major banks here in Botswana, which is a unique partnership that’s never been done in the country before that provides a platform to provide useful and relevant general insurance products to those banking clients. So strategic partnerships is one of the areas we are certainly going to try and look at and grow going forward. The market is ever changing as you know, it will always present opportunities for BIC to carry out research and to appreciate market trends and identify gaps in the
BOTSWANA INSURANCE COMPANY
market. Whenever we are approached by clients with unique product requirements, many a time once we’ve developed them and we are able to provide a solution, it becomes one of our mainstay products so there’s always opportunities.
EA: How would you like to see the business develop over the next 2-3 years – do you have a vision for the company’s growth? JC: I think it’s probably a standard answer that you’ll get from most MD’s! It’s to grow the top line, make money, and make your shareholders happy! The ultimate goal at the end of the day is to keep on growing, to maintain our leading role in the industry, and maintain our market share & where possible to grow this. Our market is extremely competitive at the moment – the competitors have grown over the past 5-6 years, probably almost doubled, so rates are under pressure, margins are under pressure but I guess time will tell. We are very positive and still see growth opportunities – with that hopefully there will be bottom line growth as well.
EA: Finally, what would you say is key to BIC’s success? JC: First and foremost is customer satisfaction – with 40 years’ experience you tend to understand what your clients want and as long as you can grow with your clientele – that has been one of our big mainstays, to understand what our clients want and to satisfy those needs. Relationship management has always been very big with us – building and maintaining our relations with all of our stakeholders and the community is very key to us. Staff development is very high on our priority list, it’s been key to our success – we’ve got highly skilled staff members and we’re known in the market as a company who trains their staff and are almost a shopping window for our competitors when it comes to looking for staff. We’ve got a passion for business diversification, we’ve got all the products you can possibly think of and are always happy to look at new products. We’re looking forward to another 40 years! If we can continue building and maintaining what we have done up until now I’m sure we can do another 40 years with smiles on our faces!
www.enterprise-africa.net / July 2015 / 55
SOUTHERN AFRICAN SHIPYARDS
Sailing Towards
Success PRODUCTION: Emily Ayson
As Africa’s largest building and repair company for commercial ships, naval vessels and a range of other marine structures, Southern African Shipyards is at the forefront of the growth and development of the African shipbuilding industry. Although with an already illustrious history, their recent R1.5 billion contract with The Transnet National Ports Authority looks set to completely blow their previous successes out of the water, as they promise to deliver nine state-of-the-art tug boats within just 42 months.
56 / July 2015 / www.enterprise-africa.net
©ISTOCK.COM/DANIEL BARNES
BUSINESS PROFILE
//
©ISTOCK.COM/LEBANMAX
58 / July 2015 / www.enterprise-africa.net
Located in the Port of Durban Bay, the 11 hectare site of Southern African Shipyards (SAS) boasts sophisticated facilities, equipment and space to take on multiple projects, a dedication to employee training and satisfaction and strong relationships with other allied businesses and organisations. Such a combination has evidently brought great success to the company in terms of both revenue and reputation; a position that has been over five decades in the making. The shipyard was first established in 1960 by Barends, but it was taken over in 1973 by Sandock Austral as the specialist site for a Naval Ship Building Program. Later, a deal between Oceanco and Dorbyl Marine resulted in the yard being used as a basic construction site for Oceanco’s ships. In 1995, the shipyard hit turbulent times as Dorbyl enacted the closure of all their shipbuilding operations in Durban, leaving Oceanco without a space or means to manufacture their vessels. However, the breakdown of this coalition constituted a prime opportunity for someone to acquire the site and work to ensure it would reach its full potential - one seized by Southern African Shipyards. Today, the company is thriving and continually expanding in both positive reputation and workload, with the company’s back catalogue of projects showcasing the diversity and quality of their abilities. For example, from 1977 – 1985, they were commissioned to manufacture the largest naval ship ever built in South Africa, the S.A.S Drakensberg and from 1987 – 2002, they produced 14 mega luxury yachts. As well as taking on prolific commercial contracts, SAS also serve smaller, niche marine organisations. For instance, they conducted extensive repairs to the Subhiksha, an offshore tug that was ravaged by fire and requiring a new engine, propellers and over 15km of wiring. Similarly, research vessel Save Our Seas underwent
SOUTHERN AFRICAN SHIPYARDS
//THIS IS A REAL DEMONSTRATION OF HOW THE MARITIME ECONOMY CAN BE USED TO UNLOCK THE ECONOMIC POTENTIAL OF SOUTH AFRICA// phenomenal procedures to increase the size of the ship and modernize on-board equipment. Of course, such feats would be impossible without a highly skilled and dedicated workforce and investment in their employees is a paramount tenet for SAS. Under the company’s Work Place Liaison Committee Scheme, employees own 12% of the company and so have the ability to participate in company decision making. Recognising the extreme shortage of skilled workers in Africa, since 2008 SAS have also implemented an Apprenticeship Scheme in which young Africans can gain knowledge, experience and work
towards specialised trade qualifications. The company have so far taken on 42 apprentices in various sectors of the business, with 21 qualifying as artisan boilermakers and electricians. Even more impressive is the fact that within such a labour intensive and maledominated arena, 8 of these apprentices were women. Such a proven track record of excellence within the industry perhaps made SAS the obvious selection for the Transnet contract, especially since these two parties already have some history together. Between October 2007 and July 2011, SAS built and furnished 7 Voith Schneider Tug Boats for Transnet,
not only meeting but exceeding the specifications and expectations of the client. As such, this second collaboration between SAS and Transnet attests to the shipbuilders’ trusted reputation for providing high quality wares, but also to how they strive to foster mutually beneficial relationships with other sectors and organisations with vested interests in the shipbuilding industry. The contract came about as a necessary response to the growing influx of large vessels visiting African ports including Durban, Richards Bay, Post Elizabeth and Saldanha Bay. As such, there was a crucial need to replace and upgrade the current fleet of tugs, which were becoming increasingly inadequate and obsolete for safely manoeuvring incoming ships into anchoring position. As bidding closed for the new Transnet contract in December 2012, SAS
Over 125 years Aveng has evolved in character, capability and reach Aveng Grinaker-LTA is a multi-disciplinary construction and engineering group that delivers landmark projects. The company combines African roots - and a proud South African heritage going back 117 years - with an unwavering commitment to world-class safety and quality. Our expertise in building, civil engineering, roads, earthworks, concrete, ground engineering, mechanical, piping, electrical and instrumentation contracting is delivered through focused business units acting in synergy. Aveng Grinaker-LTA, Mechanical and Electrical Division, Durban branch, has been actively involved in both the merchant and naval marine shipbuilding sectors, by providing electrical installation contracting services to the various Durban shipyards since the early 1970’s and as such is proud to be associated with Southern African Shipyards by providing these services for their past and present shipbuilding contracts. Aveng Grinaker-LTA is :• ISO 14001:2004 and ISO 9001:2008 accredited • BS OHSAS 18001:2007 accredited • BBBEE Rated Level 2 service provider
Johannesburg head office: T +27 11 923 5000 | F +27 (0) 923 5046 Durban branch office: T +27 (0) 31 705 4502 I F +27 (0) 31 705 4230 Email: info@grinaker-lta.co.za | www.avenggrinaker-lta.co.za
www.enterprise-africa.net / July 2015 / 59
BUSINESS PROFILE
// R800 million
The project will bring to the local economy
stood victorious over a host of other international companies, with actual work beginning in August 2014 and due to last just 42 months. The deal worth an unprecedented R1.5 billion; the largest contract ever awarded to an African harbour-craft construction business; will see the production of nine state-of –the-art tug boats which will be both bigger and more powerful than any of the 29 tugs currently in use by Transnet. According to Eugene Rappetti, Transnet’s Project Manager, the new tugs will benefit from the latest technology which will allow them to change direction whilst actually moving, giving ultimate manoeuvrability and reducing docking time. Furthermore the new tugs will be able to drag double the weight of the current vessels, with the largest of the fleet having a
60 / July 2015 / www.enterprise-africa.net
//AS OF MAY 2015, THE PROJECT IS 11% UNDERWAY, WITH THE FIRST TUG 35% COMPLETED AND ITS HULL AND SUPERSTRUCTURE 70% FINISHED// maximum bollard pull of up to 100 tons. This particular tug will also be one of the largest of its kind in existence. As of May 2015, the project is 11% underway, with the first tug 35% completed and its hull and superstructure 70% finished. With 5 tugs being manufactured simultaneously at any one time, SAS hopes to deliver 1 vessel every 3 months until completion, with the first due in January 2016. Pivotally, not only will this project help to increase and strengthen African
Sea Trade routes, but there are also extensive ramifications for the wider community and shipbuilding industry. Prasheen Maharaj, the CEO of SAS has disclosed that the contract will inject an estimate R800 million into the local economy, with the creation of up to 500 direct jobs and a further 3500 indirect jobs. This stems from the fact that 60% of the ships’ components will be locally manufactured by allied industries and the other 40% outsourced from other international organisations.
SOUTHERN AFRICAN SHIPYARDS
700 tons of steel have been ordered and several subcontractors have also established premises at the shipyard including Caterpillar, Siemens and local business, Bradgary Marine Shipfitters. SAS and Transnet are also dedicated to widening the opportunistic reach of the project to young people, particularly women, through the imposition of up to 60 apprenticeship places. Transnet employees have been offered project specific training within the vicinity of the yard 4 – 6 weeks before they begin work on the tugs and they have even sent staff to Germany and Norway for specialised technological training. Furthermore, Transnet are funding training for engineers and deck cadets, so that the new vessels have expert crew when they are delivered. Thus, the SAS shipyard may be the hub of
industrial activity, but the ripples of this contract are being felt far and wide. Maharaj proudly asserts that ‘[The contract]’ is a real demonstration of how the maritime economy can be used to unlock the economic potential of South Africa… Our country definitely has the skills and capacity to succeed in sectors such as marine transport and manufacturing, ship building and ship repair’. Such a statement is increasingly ringing true for SAS, for since the inception of the Transnet contract, a wave of other prolific business deals have been struck. In November 2014, the company were entrusted with major engine refits to a South African Navy ship, the S.A.S Amatola and they are currently in talks to acquire 6 other Navy ships to work on. Furthermore,
in April 2015, SAS joined forces with the world’s largest shipbuilding group, China Shipbuilding Trade Company, amalgamating their experiences and expertise to become a maritime industry powerhouse. With their superior work and reputation hauling in interest on both a national and international scale, SAS is nothing if not a quintessential example of an African company sailing towards success.
SOUTHERN AFRICAN SHIPYARDS +27 (0) 31-274 180 info@sa-shipyards.co.za www.sa-shipyards.co.za
www.enterprise-africa.net / July 2015 / 61
HEINEKEN PROJECT © ISOWALL
ISOWALL GROUP
Insulation for
the Nation
PRODUCTION: Ian Bullock
Decades of experience and an enviable national reputation are serving Isowall Group well as the insulated panel specialist goes from strength to strength amid tough economic conditions.
//
Thanks to Isowall’s panel technology, precious stocks of food and drink across South Africa are being stored safely and hygienically for major retailers and producers. And the quality-driven company is working ceaselessly to retain its crown as Africa’s market leader. Isowall Group manufactures Isowall sandwich panels, Isolite expanded polystyrene (EPS) and expanded polypropylene (EPP) products for the insulation, construction, packaging, agricultural and automotive markets. Wholly SA-owned, Isowall operates from a 45,000m2 factory in Pretoria, along with facilities in Cape Town, Tema in Ghana and East London. The group was founded in 1973 and now employs some 500 people, 300 of whom are based at the Isowall headquarters in Silverton. Annual group turnover is around R300 million. “We specialise in insulated panelling, which is manufactured and supplied for temperature-controlled rooms – such as cold rooms, freezer
rooms, distribution centres for major retail outlets like Pick n Pay, Shoprite Checkers, Spar, Nestlé, City Deep Coldstores and Woolworths,” says sales and marketing director Neil James. “Isowall is now pretty much a household name in insulation in South Africa, which has stood us in good stead. We have been around for a long time and I’ve been here for 17 years, so have seen huge changes in that time. We have come so far and have grown exponentially. The Isowall Group is the dominant panel and polystyrene producer in Africa – and we’re very proud of that.” South Africa’s ambitions to become cleaner and greener are presenting fresh and lucrative business opportunities for Isowall. “The whole legislation in South Africa of insulation is now starting to happen – so no building plans will be passed without proper insulation. That’s been a huge step in the right direction for us, as manufacturers of insulation material. There’s now an acceptance that
www.enterprise-africa.net / July 2015 / 63
BUSINESS PROFILE
ISOCORNICE PRODUCTS
//OUR LONG-TERM SUCCESS HAS BEEN LARGELY THROUGH WORD OF MOUTH// buildings have to be constructed with proper insulation today – something that was never done before,” says James. “That presents so many opportunities for a business like ours as we work more closely with the construction industry and the project managers involved in new developments. We have also done some work with the universities so that students coming out of the engineering and architectural faculties are aware of Isowall and our products, which is already reaping rewards.” Isowall’s projects division, Isoprojects, builds insulated structures such as coldrooms, distribution centers, freezers, abattoirs and even classrooms. These structures are built all over Africa and specialist Isowall crews are sent to sites. “A major project for us was Heineken’s new South African breweries,
64 / July 2015 / www.enterprise-africa.net
fermentation facilities and bright beer cellars. That was a wonderful challenge for Isowall. Our managing director, Peter van Duyn, and his team went over to Holland to put that contract together. It was a big project for us. Indeed, we were the only panel manufacturing company in the country really that was able to manage the job,” says Neil James. Isowall has also been involved in new Coca-Cola bottling plants in Angola (project managed by Halliburton) and the building of tank farms and hop coldstores for South African Breweries. Other Isowall clients have included: Abakor, the Botswana Meat Commission, the Meat Corporation of Namibia (MeatCo), Chubby Chick, Earlybird Farm, Rainbow, Country Bird, Clover Danone, Parmalat, DairyBelle, Outspan/Capespan, Banana Board,
Sea Harvest Corporation, Sasol, Kodak, Altron, LSG Sky Chefs, Pillsbury, I & J, Heinz and Denny Mushrooms. “Our long-term success has been largely through word of mouth. We are seen as a company which delivers on its promises. When you’ve been in business as long as we have, people come back for more. Word spreads: if you’ve got a big job, don’t use anyone except Isowall,” says Neil James. “That constant endorsement has been excellent for us – it’s all about having a good reputation in the marketplace and not being a fly-by-night. A number of other panel manufacturers have come and gone and have let down contractors and engineering companies. The industry is aware of that and, whilst we might not be the cheapest, we are the most reliable panel supplier in the country – of that there is no doubt. You get what you pay for.” He adds: “Quality control is always a priority for Isowall. If a problem arises, we get out there and we fix it. I
ISOWALL GROUP ISOWALL GROUP
//THE SUCCESS OF ISOWALL COMES //THE SUCCESS OF ISOWALL COMES
DOWN TO ONE MAN, PETER VAN DUYN, DOWN TO ONE MAN, PETER VAN DUYN, WHO SHOWS A TOTAL COMMITMENT TO WHO SHOWS A TOTAL COMMITMENT TO THE COMPANY EVERY DAY// THE COMPANY EVERY DAY//
firmly believe that such an approach firmly believe such an with approach has stood us in that good stead the has stood us in good stead with the contractors: they know that we will take contractors: they know that we will take responsibility and fix things.” responsibility and fix things.” In the face a weakened Rand In the face a weakened Rand and squeezed margins, Isowall has and squeezed margins, Isowall has developed some export trade – creating developed some export trade – creating distribution centres for chainstores in distribution centres for chainstores in Sub-Saharan and being paid in dollars. Sub-Saharan and being paid in dollars. But the company’s clear focus, says But the company’s clear focus, says James, is on further strengthening its James, is on further strengthening its core coredomestic domesticbusiness. business. “Trading “Tradinghas hasbeen beengood goodin interms terms ofofvolumes but doing business volumes but doing businessin inthe the economy economyofofSouth SouthAfrica Africaisiscurrently currently
really tight. Margins are very thin and, reallythat, tight.you Margins are very and, with can’t afford tothin make with that, you can’t afford to make mistakes – so you have to get it right mistakes – so you have to get it right first time,” he explains. first time,” he explains. “We put an emphasis on “We put an emphasis on productivity, quality, minimising re-work productivity, quality, minimising re-work and driving down scrap levels to the bare and driving down scrap levels to the bare minimum. There are really tough times minimum. There are really tough times ahead and it’s not getting any easier.” ahead and it’s not getting any easier.” Isowall’s group chairman, Peter van Isowall’s group chairman, Peter van Duyn, has been in the industry for more Duyn, has been in the industry for more than years. As As well wellas asdriving drivingthe the than 30 30 years. business forward, he he isisactively activelyinvolved involved business forward, in groups such suchas asthe theExpanded Expanded in industry industry groups Polystyrene Associationof ofSouthern Southern Polystyrene Association
Africa (EPASA), the Thermal Insulation Africa (EPASA),ofthe ThermalAfrica Insulation Association Southern (TIASA) Association of Southern (TIASA) and the Thermal Panel Africa Manufacturers’ and the Thermal Panel Manufacturers’ Association (TPMA). Association (TPMA).of Isowall comes down “The success “Theman, success of van Isowall comes to one Peter Duyn, whodown shows toa one Peter van to Duyn, who shows totalman, commitment the company aevery total commitment the company day,” says NeiltoJames. every “It’s day,”his says Neil James. life. He is first there in the “It’s hisand life.last He to is first there in theHe morning leave at night. morning and last to leave at night. He works tirelessly to ensure the success of works tirelessly to ensure the success of Isowall. He has a love for the job and the Isowall. He has a love for the job and the company – and that, in turn, drives our company – and that, in turn, drives our employees and makes us the successful employees and makes us the successful South African business we are today.” South African business we are today.”
ISOWALLGROUP GROUP ISOWALL 012804 8043564 3564 012 www.isowall.co.za www.isowall.co.za
Looking for an insurance broker? Business insurance Corporate insurance Engineering insurance Specialist insurance
www.enterprise-africa.net / July 2015 / 65 www.enterprise-africa.net / Issue No.38 / 65
SAFAL STEEL
Pioneering
Steel
Protection PRODUCTION: Timothy Hands
Safal Steel forms part of the Safal Group, a major manufacturer and supplier of coated steel and roofing products in Eastern Africa. The combined outputs of its operations in 11 African countries make the Safal Group the continent’s largest producer of steel roof sheeting, with the coil used in its roofing operations produced through world leading metal coating technology and colour coating processes.
//
Safal Steel forms part of the Safal Group, a major manufacturer and supplier of coated steel and roofing products in Eastern Africa. The combined outputs of its operations in 11 African countries make the Safal Group the continent’s largest producer of steel roof sheeting, with the coil used in its roofing operations produced through world leading metal coating technology and colour coating processes. The Safal Group is not only Africa’s largest producer of steel roofing, but also its sole producer of Aluminium Zinc coated steel, building its reputation over 50 years as Africa’s market leader in the core aspects of its operations. The beginnings of the company lay in its trading of corrugated roof sheeting in the 1940s, while its first manufacturing
66 / July 2015 / www.enterprise-africa.net
facility was opened in Mombasa, in Kenya, in 1962. Today, the Safal Group has manufacturing capabilities in 11 African countries, and sells its products across 3 continents. This is achieved by its staffing compliment of over 3,800 people, which provides the leadership, resources and training to engineer a company with such a depth of experience and skills, requisite to compete in both pan-African and global markets. The inception of Safal Steel came about initially through the Group’s construction of a pioneering metal coating facility in Cato Ridge, South Africa, which represented just one aspect of the Group’s growth strategy at the time. From this plant the company manufactures aluminium zinc coated steel coils, which are then transported to be sold on both the local and global markets. It began
©ISTOCK.COM/MADY70
SAFAL STEEL
©ISTOCK.COM/ BARANOZDEMIR
its tradings as Safal Steel in 2011. The manufacturing plant, with its 30,000 square metres spread over a 14.4 hectare site, comprises such key facilities as a pickling and oiling line, a cold rolling mill, an alumnium zinc coating line alongside a colour coating line. It was officially opened in March 2012 by the country’s Minister of Trade and Industry, Dr Rob Davies, who spoke of the vast potential the plant offered across country’s steel industry. “We understand the whole facility has a capacity of 150,000 metric tons a year on both un-painted and painted coated coil, sold onto the roofing and general engineering sectors,” the minister stated, adding that, “there are plans to double the volumes to 300,000 tons in the near future.” Also installed at the manufacturing facility were various support lines and services all geared toward helping Safal Steel succeed in the challenge of maintaining environmental friendliness. These include an acid regeneration plant, a rewind and trim line, Nitrogen
68 / July 2015 / www.enterprise-africa.net
and Hydrogen generation plants as well as effluent and sewerage treatment plants. On the whole the plant is able to produce 150,000 tonnes of Metal Coated Coils, which trade under the name ZincAl, and 100,000 tonnes of Colour Coated Coils, or ColorPLUS. The plant has managed to create jobs for 350 permanent employees as well as 1800 indirect work opportunities, all within the confines of its base in KwaZulu Natal. Safal Steel has, as its central vision, the desire to be both the leading manufacturer and supplier of unpainted and pre-painted aluminium zinc coated coil. As a material steel is among the most widely used the world over, only hampered by one marked weakness in
its susceptibility to corrosion when used unprotected. In order to combat this, the two most widely used coatings are aluminium-zinc and galvanised steel. Safal Steel was the first manufacturer in Africa to set up the aluminium–zinc coating technology, an operation carried out under license to Bethlehem International Engineering Corporation (BIEC), the worldwide licensor and market leader in AZ coated steel technologies, an association which has brought about the birth of Safal Steels ZincAL and ColorPLUS. In order for Safal Steel to achieve its vision of domination, the company has put in place an assured and pioneering set of processes, in order to extend the service life of steel.
//SAFAL STEEL HAS, AS ITS CENTRAL VISION, THE DESIRE TO BE BOTH THE LEADING MANUFACTURER AND SUPPLIER OF UNPAINTED AND PRE-PAINTED ALUMINIUM ZINC COATED COIL//
BUSINESS PROFILE
// 150,000 metric tons per year is the facilities capacity
The first stage sees Safal Steel purchase Hot Roll Coils (HRC) from a variety of the Safal Group’s current global suppliers. These coils are then cleaned through Safal’s fully automated Pickling and Oiling Line, to remove any remaining mill scale. The cleaned coils are then Cold Rolled to a variety of gauges, which range from 0.2mm through to 1.2mm. The next stage of the operation sees the coils once again cleaned, and then comes the metal coating process, where the coils are covered with an alloy of aluminium zinc made up of 55% aluminium, 43.5% zinc and 1.5% Silicon. These are then ready for sale to customers as ZincAL®, while a final process can add the painting of the coils if required, whereby the product is sold to market as ColorPLUS®. The paint line has been manufactured
70 / July 2015 / www.enterprise-africa.net
to the leading ‘white goods’ standard, and performs its role primarily using the modified polyester system. Safal Steel’s innovative methods and production techniques are seeing steel being taken to new heights of strength, formability and versatility. ZincAL works to extend the service life of modern coated steel even further, produced by a unique process whereby rolled steel is hot dipped into an Alloy made up of Aluminium, Zinc and Silicon. This serves to protect the steel twofold, with the aluminium component of the coating providing a resolute physical barrier between the atmospheric conditions and the steel at the core, while the zinc contained in the coating also protects the steel at its cut edges. The thermal mass of ZincAL is much lower than traditional
galvanised steel and clay roof tiles thanks to its aluminium content, and as such provides an increased reflection of the sun’s rays. This acts to provide ideal results in differing seasons, creating a cooler building in summer and a much warmer environment when necessitated by lower temperatures. Increasingly too, architects and builders are seeking ways to lend their projects individuality, character and a centrally defining style. ColorPLUS helps professionals everywhere to achieve exactly this, offering modern innovation to pre-painted steel roofing, alongside a range of durable and aesthetically appealing colours. The premium product has been developed to withstand even South Africa’s harshest conditions, with many years of research having led to this paint process capable of resisting
SAFAL STEEL
©ISTOCK.COM/NITEENRK
//SAFAL STEEL’S INNOVATIVE METHODS AND PRODUCTION TECHNIQUES ARE SEEING STEEL BEING TAKEN TO NEW HEIGHTS OF STRENGTH, FORMABILITY AND VERSATILITY// everything thrown at steel roofing in these times. Innovative pigments used in the paint have been carefully selected to avoid any rapid colour change and to keep a fresh appearance for many years, while the coating’s technology also limits chalking. It is a fairly prevalent misconception that steel and galvanised steel are essentially the same proposition, and thus that no metal roof could reasonably be expected to provide the longevity of its tiled peer. This is
patently not the case, however, as AZcoated steel has been regularly proven to offer up to four times the lifespan of galvanised steel. This technology also offers two unique environmental benefits, with the products being not only 100% recyclable but also ‘green’ to manufacture too. Not having to import product from Australia, as was the case for local suppliers prior to Safal Steel’s construction of its Cato Ridge plant in 2011, also brings with it great savings in terms of both cost and time.
Steel’s own most valuable property is its ability to recycle itself over hundreds of years without any reduction of its inherent qualities. Through its endless reincarnations from washing machines and oil cans to cars and ocean liners, precious raw materials are continually saved and energy consumption minimised. Global recovery rates now stand at more than 83%, making steel one of the most sustainable and environmentally crucial products available.
SAFAL STEEL +27 (31) 782 5500 info@safalsteel.co.za www.safalsteel.co.za
www.enterprise-africa.net / July 2015 / 71
DATACENTRIX
Datacentrix: ICT trialblazers PRODUCTION: Rose Samuel
The Midrand-based company are making vital connections in both business and the local community.
//
Based in Midrand, with regional offices in Cape Town, Port Elizabeth, East London and Durban, Datacentrix is fast establishing itself as a major player in the ICT market. The key to their growing success lies in the company’s all-encompassing offering as a provider of complete, high performing, secure ICT solutions. With a focus on improving business processes and systems, Datacentrix enables customers to expand their own businesses by offering a one-stop solution for their ICT needs. Across its three divisions - Managed Services, Technology and Business Solutions Datacentrix provides everything from cloud computing to managed print and document solutions and all points in between. While operations are managed from the Midrand head office, with a state-of-the-art Logistics Centre in Samrand and service centres in George, Bloemfontein, Polokwane and eMalahleni, their ambition doesn’t end in SA. Datacentrix has also partnered with a leading ICT services provider in Central, East and West Africa (CEWA) in order to extend their local operations to 28 countries across sub-Saharan Africa. A strong set of yearly results back up the talk, showing that earnings grew in 2014-15 by 16.4% from R89m
72 / July 2015 / www.enterprise-africa.net
to R103m, while generating R199m in cash from operations and so improving the cash balance of the group to a very healthy R291m. Across the three divisions, the most significant earnings jump came in the Technology group, which saw a 38% increase for R33m to R45.5m. While perhaps not as spectacular, good growth was achieved in other areas, for example earnings in the Business Solutions division increased from R9.8 million to R10.8 million. Perhaps most pertinently, the Enterprise Resource Planning business announced the capture of a number of important contracts. “The group secured new three to five-year contracts worth approximately R500m,,” says CEO Ahmed Mahomed. “In addition, the Outsourcing business secured new contracts and extended a key outsource contract for an additional five years.” He believes the group is well positioned for the year ahead, pointing out that in addition the Managed Services division has also extended a number of expiring contracts, valued in excess of R300m. So with a healthy set of results and the order book looking full, what does the CEO put the company’s increasing success down to? “One of the contributing factors for our success is the skills investment,”
©ISTOCK.COM/HOCUS-FOCUS
BUSINESS PROFILE
CEO AHMED MAHOMED © DATACENTRIX
//DATACENTRIX HAS MADE AN ONGOING COMMITMENT TO EDUCATION, IN ORDER TO HELP NOURISH THE INTELLECT AND SELF-ESTEEM OF TOMORROW’S INNOVATORS, PROBLEM-SOLVERS, EMPLOYEES AND LEADERS// he believes. “Skilled staff are crucial to business success, they provide us with the capability to design, implement and manage complex technology solutions, resulting in better strategic business partnerships with our customers. As such, Datacentrix will continue to recruit, develop and retain the right skills to deliver on the group strategy.” Mahomed also believes the group’s new contracts and extensions bear testimony to the recognised value that Datacentrix creates for its customers. One such customer is ArcelorMittal South Africa, the largest steel producer on the African continent, who hired Datacentrix to look at the effectiveness of its data centre. “The original data centre was more than 30 years old and needed to be upgraded to improve energy consumption, space utilisation and environmental conditioning efficiencies,” explains Brian Lendrum,
74 / July 2015 / www.enterprise-africa.net
commercial business development manager at Datacentrix. Following a year of planning and discussions, a brand-new data centre was rolled out within a record 76 days and improved the centre’s power usage effectiveness by over 65%. In addition, the enhanced power, water and cooling efficiencies will save the organisation more than 20% on operational costs over a five-year period. But it’s not all business business business at Datacentrix. They are increasingly stepping up their CSR work by supporting their local communities. They’ve recently teamed up with one of the world’s largest producers of platinum group metals, Johannesburgbased Lonmin, to supply local schools and community-based institutions with pre-loved PCs and peripherals. Datacentrix’s role is to refurbish the hardware currently being replaced throughout Lonmin offices as part of
their three-year equipment refresh contract with Lenovo PCs. “As a company that is socially aware, with a deep-seated commitment to corporate social responsibility, Datacentrix is most proud to join our customer, Lonmin, in helping to enrich the lives of our surrounding community,” offers Datacentrix senior account manager, Deon Insel. Their commitment to education is further enhanced when they recently donated and installed computer equipment, worth R150,000, at the newly-built at the newly-built Sophumelela Senior Primary School in King Williams Town, Eastern Cape. Contructed by the Department of Basic Education (DBE), the school is part of the Accelerated Schools Infrastructure Delivery Initiative that will see 25 new schools established in the province. After the technology needs of the school were brought to Datacentrix’s attention by the DBE, the company donated all manner of equipment, which it also installed. “Datacentrix has made an ongoing commitment to education, in order to help nourish the intellect and self-esteem of tomorrow’s innovators, problem-solvers, employees and leaders,” explains Mahomed.
DATACENTRIX
//RECEIVING THE FROST & SULLIVAN AWARD IS EVIDENCE OF DATACENTRIX’S COMMITMENT TO PROVIDING COMPETITIVE AND INNOVATIVE ICT SOLUTIONS TO OUR CUSTOMERS// And while the numbers on paper, satisfied customer testimony and good work in the community all bodes well for Datacentix, there’s nothing like a prominent award to ice an already successful cake. The company’s tagline “Serious about performance, passionate about value” was born out recently when renowned US-based business consultants Frost & Sullivan presented the firm with one of its prestigious Best Practice Awards, the 2015 Southern African IT Systems Integration Competitive Strategy Innovation and Leadership Award. “To achieve excellence in competitive strategy is never an easy task,” explains Frost & Sullivan Chairman David Frigstad. “But it is one made even more difficult due to today’s competitive intensity, customer volatility, and economic uncertainty – not to mention the difficulty of innovating in an environment of escalating challenges to intellectual property. Within this context, Datacentrix’s receipt of this award signifies an even greater accomplishment.” “Receiving the Frost & Sullivan award is evidence of Datacentrix’s commitment to providing competitive and innovative ICT solutions to our customers,” sums up the CEO, Mahomed. “Our superior rating is a testament to our commitment to consistent service delivery, underpinned by the quality and depth of our skills in our product and service teams.”
DATACENTRIX DATA CENTRE © TC DESIGN
DATACENTRIX 087 741 5000 info@datacentrix.co.za www.datacentrix.co.za AxizWorkgroup is a proud supporter of Datacentrix
www.enterprise-africa.net / July 2015 / 75