Enterprise Africa December 2015

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

AFRICA

ENTERPRISE December 2015

www.enterprise-africa.net

TRANSNET:

Revitalising SA’s Ports –

Still the Best Gateway to Africa ALSO IN THIS ISSUE:

SARU / HPA / Ferro SA / John Craig

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EDITOR’S LETTER

Joe Forshaw EDITOR joe@enterprise-africa.net Timothy Reeder SUB EDITOR tim@enterprise-africa.net Hal Hutchison SALES MANAGER hal@enterprise-africa.net Sophie Bolderstone SENIOR PROJECT MANAGER sophie@enterprise-africa.net Sam Hendricks SENIOR PROJECT MANAGER sam@enterprise-africa.net Nathan Murphy PROJECT MANAGER nathan@enterprise-africa.net Shannon James PROJECT MANAGER shannon@enterprise-africa.net John Mulley FINANCIAL DIRECTOR john@enterprise-africa.net Jane Larkman ACCOUNTS MANAGER jane@enterprise-africa.net Design by Naked Marketing +44 (0) 1953 850211 www.nakedmarketing.co.uk Published by CMB Multimedia Chris Bolderstone – General Manager E. chris@enterprise-africa.net Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU, T. +44 (0) 20 8123 7859 E. info@enterprise-africa.net www.enterprise-africa.net

Welcome to our latest edition…

//

December has so far been quite an unusual month and we have witnessed the problems that result from indecision. Following the sacking of Nhlanhla Nene as Finance Minister and the appointment of the relatively unknown David van Rooyen, the Rand hit an all-time low against the Dollar.

Astonishingly, van Rooyen was then replaced after just four days in the job by a man who had previously held the position, Pravin Gordhan. It all seems a little unusual and unnecessary and put undue pressure on the already strained exchange rate.

As we head towards the New Year, hopefully we will now see stability with the Rand and solidity in the government so that the business community can make decisions without having to worry about what is going to happen in what is already an economy that is dicing with death.

In this edition of Enterprise Africa, we have stories from another set of industry leading organisations including Transnet, SA rugby Union, Hyprop and Castrol SA. All of these companies are heading into 2016 with big plans and projects underway and will be looking for an explosive start to the year.

Our big interviews this month come from men’s fashion business John Craig and Managing Director Lily Moreira who explains more about expansion into Africa. We also talk to Mark Martinovic from HPA who details potential in the hotel market across sub-Saharan Africa. Robin Legg of Ferro SA and Uwe Boegl of Rako Tamperseal both tell us more about the potential of exports into Africa – such an important part of any SA business nowadays.

Enjoy reading, and have a fantastic Christmas and New Year!

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

Joe Forshaw EDITOR

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

www.enterprise-africa.net / December 2015 / 3

06/NEWS: The Month that was...

12/TRANSNET: Revitalising SA’s Ports – Still the Best Gateway to Africa

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

08/FEATURE: Simple Technology for a Complex Problem Across Africa, 200 million smallholder farmers lose 606 million tons of perishable food each year because of the lack of storage infrastructure.

ColdHubs, an innovation from Nigeria, can extend the shelf life of perishable food from two to 21 days and this fantastic idea is making headlines around the globe.

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

12/

4 / December 2015 / www.enterprise-africa.net

Away from its highly publicised work of upgrading South Africa’s dated rolling stock, Transnet has also been investing heavily in its port infrastructure. With billions of Rand already committed, the company’s MDS has promised much more spending and this is bringing about very exciting times for South Africa.

CONTENTS 24/

18/SA RUGBY UNION: Positive Despite RWC Third Place SA Rugby Union has recently announced some impressive new sponsorship deals and has also been celebrating success of strategic marketing campaigns.

46/

70/

56/DA GAMA TEXTILES: Productivity Improvements Provide Boost for Da Gama In just 14 months, Da Gama textiles has managed to increase production by 40%.

24/JOHN CRAIG: Helping More Men to Be At Their Best

60/BOSVELD SITRUS: Business Growth in a Difficult Industry

John Craig’s well-thought-out business model is proving to be an example to follow for the entire SA fashion industry.

2014’s National Farmer of the Year, the Bosveld Group is the biggest private citrus grower and exporter in South Africa.

32/FERRO SOUTH AFRICA: Exporter of the Year planning for Further African Growth

66/HYPROP INVESTMENTS LIMITED: Standing Strong in Tough Times

Group Export Manager, Robin Legg talks to Enterprise Africa to explain more about the company’s plans for further expansion into lucrative African markets.

38/HOTEL PARTNERS AFRICA: Hotel Partners Africa Hotel Partners Africa is one of the continents go-to companies for all hospitality real estate needs.

46/FANCOURT: The Garden Route’s Pièce de Résistance On the Garden Route, set in lush countryside with the backdrop of the Outeniqua Mountain Range, you’ll find Fancourt South Africa.

50/RAKO TAMPERSEAL: German Excellence Proudly Produced In South Africa In an industry that is teeming with competition, Rako Tamperseal has managed to develop a strategy that has seen the company grow significantly in recent times.

Hyprop Investments is one company that is showing positive signs as we move into 2016.

70/CASTROL SOUTH AFRICA: Slick Marketing Cements Castrol as Industry Leader Castrol South Africa has recently invested in a product that could improve the safety of the thousands of drivers.

74/DB SCHENKER SOUTH AFRICA: A Growing Presence in African Logistics DB Schenker has grown to become one of the leading transport and logistics companies in South Africa.

78/ICASA: Studying Pricing in South Africa Prices continue to form the basis of discussion for ICASA.

82/ZEISS SOUTH AFRICA: An Innovative Vision Zeiss has been represented on the African continent for the past 75 years, as part of the renowned global organisation.

www.enterprise-africa.net / December 2015 / 5

PRAVIN GORDHAN APPOINTED MINISTER OF FINANCE Pravin Gordhan has been appointed as the minister of finance, replacing David van Rooyen who was in the seat for only four days.

The Presidency issued a statement saying: “I have received many representations to reconsider my decision. As a democratic government, we emphasise the importance of listening to the people and to respond to their views.

“I have appointed Pravin Gordhan, the current minister of cooperative governance and traditional affairs as the new minister of finance. Minister Gordhan will return to a portfolio that he had held proficiently during the fourth administration.”

Van Rooyen who replaced Nhlanhla Nene will be transferred to the Cogta. He was appointed on Dec 9th and sworn in on Dec 10th amid mixed reactions from the country. The move also saw the rand plummeting to its lowest mark in years.

“I have also decided to appoint the current Minister of Finance David van Rooyen as the new minister of cooperative governance and traditional affairs.

“Mr Van Rooyen, a former executive mayor, will also be bringing to Cogta the finance and economic sector background gained in serving in the Finance Portfolio Committee and Economic Transformation Cluster as whip in National Assembly.”

FUEL STORAGE PROJECT LAUNCHED IN CAPE TOWN The R650 million Burgan Cape Terminals fuel storage project – which will create 350 new local jobs – has been launched in Cape Town.

The Burgan Cape Terminals was launched by Trade and Industry Director General Lionel October and the Dutch Minister of Agriculture and State Secretary of Economic Affairs Martin Van Dam. The facility has a storage capacity of 118,670 m3 and includes a five bay road truck loading gantry.

Speaking at the launch, Director General October said the Burgan Cape Terminals was an Operation Phakisa project and a good example of how the state and private sector can work together in achieving strategic objectives.

“Following the launch of Operation Phakisa in 2014, this is the first major project to be rolled out in the port of Cape Town. The infrastructure is critical to the security of fuel in the Western Cape region and will … support the economic growth of the region,” said October.

He further welcomed the partnership that has been established between Dutch terminal operator VTTI,

Thebe Energy, a subsidiary of Thebe Investments and Jicarro a 100% black owned entity.

Minister Van Dam congratulated the partnership, saying it was fitting that a Dutch company such as VTTI which has a long history of port operations, logistics and distribution in the oil and gas sector is part of the Burgan Terminal project.

He welcomed the partnership between the Port of Cape Town and the Port of Rotterdam.

The project is expected to create around 350 new skilled and unskilled local jobs during the construction phase and will be completed in 2017.

Director General October said the Burgan Cape Terminals has been approved as a Greenfield industrial policy project under the 12i tax allowance program with qualifying status and total tax allowance to the value of R234 452 000.

ESKOM REGAINS CAPACITY Cabinet has congratulated Eskom for operating 100 days without cutting power supply to citizens, says Minister in the Presidency for Planning, Monitoring and

6 / December 2015 / www.enterprise-africa.net

Evaluation Jeff Radebe.

He was briefing media earlier this month after a Cabinet meeting.

Minister Radebe said Eskom reached this milestone.

“The 100 days of

uninterrupted electricity supply does not suggest we must be complacent.

Instead, Cabinet calls on communities to continue observing the energy saving interventions,” said Minister Radebe.

NEWS ROUNDUP MINISTER DAVIES WELCOMES BMW’S R6BN INVESTMENT Trade and Industry Minister, Dr Rob Davies, has welcomed BMW Group South Africa’s decision to invest R6 billion at its plant in Rosslyn, Pretoria.

“This investment is testament to the important partnership that exists between business and government and the role that business is playing in the development of the economy.

“We are excited at the prospect of the BWM Rosslyn plant as home to the next generation of BMW X3 vehicles. For us, this is a boost to our industrial policy objective of positioning South Africa as a manufacturing hub for high valued consumer products,” said Minister Davies.

The investment is one of the biggest in the local automotive industry and will enable the Rosslyn plant to produce the next generation of the BMW X3. The vehicle will be sold locally and exported to various countries.

The production of the next generation BMW X3 at the plant will replace the BMW 3 Series Sedan, which will now be allocated to other plants within the global BMW production network.

BMW Plant Spartanburg in South Carolina in the United States of America will also continue to produce the next generation BMW X3.

The Minister said a few days ago, the Department of Trade and Industry announced the findings of the mid-cycle review of the Automotive Production and Development Programme (APDP).

The APDP reaffirmed the department’s commitment to providing continued support to the automotive industry for the short to medium term. The department said it trusts that this provides the industry with the policy certainty necessary for long term investment planning.

“As we change production of the BMW 3 series sedan programme, it is our expectation that the new generation X3 programme will make a telling contribution to the long term development of the sector through higher production volumes, local value addition and inclusion of previously excluded groups in the sector,” said the Minister.

The Managing Director of BMW Group South Africa, Tim Abbott, said the potential for Africa as a future market for exports as well as the current APDP enables South Africa to play a significant role in the manufacturing industry and production of high quality cars.

“We are excited about the future prospects of the Rosslyn plant and cannot wait to start with the production of the next generation BMW X3,” said Abott.

SASOL APPOINTS NEW PRESIDENT, CEO Sasol has appointed Bongani Nqwababa and Stephen Russell Cornell as Joint-President and Chief Executive Officers, with effect from 1 July next year, the beginning of the company’s next financial year.

This follows the announcement in June this year that current CEO David Constable had decided not to extend his contract with Sasol beyond end of June next year.

Nqwababa is currently Chief Financial Officer of Sasol, while Cornell is currently the Executive Vice President: International Operations. Both are members of the company’s Group Executive Committee.

Sasol has also appointed Paul Victor as Chief Financial Officer and Executive Director, with effect from 1 July next year.

www.enterprise-africa.net / December 2015 / 7

FEATURE

SIMPLE TECHNOLOGY FOR A COMPLEX PROBLEM EDITORIAL BY: Joe Forshaw

Across Africa, 200 million smallholder farmers lose 606 million tons of perishable food each year because of the lack of storage infrastructure. ColdHubs, an innovation from Nigeria, can extend the shelf life of perishable food from two to 21 days and this fantastic idea is making headlines around the globe.

//

In rural Africa; on the farmlands far away from the bustling cities of Lagos, Nairobi and Harare; the food crisis continues. We discussed it last month in our feature on South Africa’s Vegtech. Many African countries have experienced difficulties because of hot weather, droughts, climate change and lack of investment.

This problem is made all the worse when considering that there is in fact plenty of food produced in Africa that goes to waste because of a lack of facilities.

This was something that Nigerian entrepreneur, Nnaemeka Ikegwuonu picked up on. He gave a presentation in June this year to potential investors at the Fledge Demo Day in Seattle, USA. He was invited to talk at the event to help raise money for his project, ColdHubs, which hopes to offer solar powered refrigeration to small farmers and market traders in Nigeria and further afield.

“The Rockefeller Foundation published a report last year saying that this problem, lack of cold storage

8 / December 2015 / www.enterprise-africa.net

for perishable food in Africa, effects 200 million small holder farmers across Africa and they lose 606 million tons of perishable food each year,” he said at the event.

He went on to tell the story of a Nigerian tomato famer who struggles to make ends meet because of the difficulty of selling his produce because of the lack of infrastructure at his farm and at the market.

“There is a farmer named Chibueze; a very hardworking farmer. Every day he harvests about five baskets of tomatoes.

From the moment he picks the tomatoes from the plant, the clock starts to tick. He calls Eugene who arrives with his van to take the tomatoes on a long journey to the central market – still the clock is ticking for the tomatoes.

Eugene gives the tomatoes to Alex, a retailer, who sells the tomatoes under the 95°F sunshine. After four hours, Alex has to use leaves to cover the tomatoes as there is no storage at the market. At 6pm he has to dump the tomatoes and go home – the clock has finished ticking for the tomatoes.

“As a radio broadcaster, I got out and ask farmers like Chibueze and retailers like Alex ‘how was business today?’ and they tell me ‘forget about it, we lost 45%’.

“In our world of so much advancement in science and technology, there is no reason for these numbers. Three years ago, we started research and 18 months ago we launched the first solar powered cold room – a working refrigerator, so well-designed that it can work at the farm for Chibueze and at the market for Alex. All they have to do is bring their product to the cold room, transfer to clean plastic crates and then we stack them in the cold room extending the shelf life from two days to 21 days.

This costs them 100, or $0.50 for one days storage. With this system, we are eliminating loses completely and increasing income. It’s simple technology for a complex problem.”

GROWING REPUTATION The ColdHubs system has already attracted a lot of attention from around Africa, and around the globe, because of its uniquely simple solution to a hugely important problem.

The concept has been chosen by the science ministries of United Nations member states as one of 14 environmentally friendly innovations from over 800 global ideas that best

COLDHUBS

FEATURE

//NOW WE ARE READY TO BUILD 10 BY THE END OF THE YEAR AND ANOTHER 50 NEXT YEAR. THEN WE CAN GO TO KENYA AND THEN TO ZIMBABWEY//

10 / December 2015 / www.enterprise-africa.net

represent the UN’s 2030 Sustainable Development Goals.

Ikegwuonu knows about growing an enterprise and has himself been recognised for positive contributions. In 2010, he was presented the Rolex Young Laureate award for applied technology after his idea, the Smallholders Foundation, had managed to help many Nigerian farmers to improve their farming methods.

“I am a farmer, I am a social entrepreneur and I am a radio presenter,” Ikegwuonu said during his Fledge speech.

He knows farming and has experienced the problem of wastage first-hand. He started the Smallholders Foundation radio station in order to educate other farmers on topics ranging from sustainable farming to HIV/Aids. He now broadcasts 10 hours a day to over 250,000 listeners with the goal of reaching 3.5 million farmers in

COLDHUBS

almost 5,000 villages in his own region, Imo State, in south-east Nigeria.

In 2013, he also received the Yara Prize which honours youth entrepreneurship and policy advocacy.

PROBLEM: SOLVED Following the successful trials of ColdHubs, Ikegwuonu is now spearheading a campaign to raise extra funds for the growth of the idea.

“We built one cold room, took it around 11 Nigerian states to validate the technology and farmers proposed the business model. Now we are ready to build 10 by the end of the year and another 50 next year. Then we can go to Kenya and then to Zimbabwe.

“We are on a mission to raise money so that we can source the cold room panels, the solar panels, the batteries and money for operations so we can build and install these cold rooms in markets and farms across Nigeria,” he said in Seattle.

The cold rooms are environmentally friendly as they do not require diesel generators to

//ALL THEY HAVE TO DO IS BRING THEIR PRODUCT TO THE COLD ROOM, TRANSFER TO CLEAN PLASTIC CRATES AND THEN WE STACK THEM IN THE COLD ROOM EXTENDING THE SHELF LIFE FROM TWO DAYS TO 21 DAYS// keep the power going, they maintain an internal temperature of five degrees Celsius using 12cm-thick cold insulation walls, and they are extremely affordable for the farmers who desperately need them.

Ikegwuonu has built a strong team with experienced business development manager Bright Benjamin Igbokwe acting as COO, electrical and electronics engineer Chukwudi Anyanaso as CTO, and veteran technology entrepreneur Jacob Colker on the Board of Directors.

Widespread implementation of the ColdHub concept across Nigeria and other countries could put an end to millions of farmers living on less than $2 a day; it could put an end to these farmers losing 25% of their annual

income and it could create jobs and reduce malnutrition.

This is a fantastic innovation and although it seems so simple, it has taken a farmer who truly understands the local conditions to come up with a solution.

“Poverty is massive in rural Nigeria.

The life of a farmer is very tough. I would say that the majority of farmers are struggling for their daily life and existence. Farmers don’t have a lot of support from government or from private sector,” Ikegwuonu said in an interview in 2012, but with ColdHubs, all of that could change. The final hurdle is raising the funds and maintaining significant demand. Who knows, perhaps we will see a ColdHub in rural South Africa in the near future…

www.enterprise-africa.net / December 2015 / 11

TRANSNET

Revitalising SA’s Ports –

Still the Best Gateway to Africa PRODUCTION: David Napier

Away from its highly publicised work of upgrading South Africa’s dated rolling stock, Transnet has also been investing heavily in its port infrastructure. With billions of Rand already committed, the company’s MDS has promised much more spending and this is bringing about very exciting times for South Africa.

//

This year has been an unusual one for South Africa’s rail, port and pipeline company, Transnet. In October, the business announced that revenues were up 6.4% to R32.2 billion, EBITDA increased by 9% to R13.9 billion and cash generated from operations increased by 11.6% to R15.2 billion.

These successes were despite the infamous muted global economy that has crippled many large organisations.

But this year also saw the hugely popular Brian Molefe seconded to struggling energy utility Eskom, where he has already started to make an impact.

To fill the chasm left by Molefe, Transnet turned to their most experienced member of the executive team, a man with 21 years of Transnet know-how under his belt - Siyabonga Gama.

Gama was appointed as Chief Executive in April and quickly went about building on the growth strategy left by Molefe.

“My job is to galvanize the executive team, to make sure that we steer the ship, that we keep it on course and we continue our plans. We already have a business plan for the 2015/16 financial year. We have to take that and make sure that we execute,” Gama told Bloomberg Business.

Gama has previously held the position of CE at Transnet Freight Rail where he transformed that operating division from yearly losses averaging R21 million in 2005 to R5.1 billion profit in the last financial year.

He commented on the company’s recent spending pattern saying that it would continue for the rest of the year and beyond as Transnet looks to continually grow its footprint.

“With the market demand strategy up to now, we have spent more than R108bn. For the rest of the year that number will grow to about R125 billion.

But over the next ten years we expect to invest between R340 billion and R380

12 / December 2015 / www.enterprise-africa.net

billion on infrastructure and rolling stock, as well as on deepening some of the ports that we have because ships are getting bigger.

“In order for us to take advantage of some of the 9000 TEU ships that are being built we will deepen some of the ports, especially the port of Durban. The port of Ngqura is already well poised to be able to accept some of the bigger ships,” he told Moneyweb’s Siki Mgabadeli.

PORT BUSINESS Port business is a vital part of Transnet’s portfolio and just last month the company announced that it had seen improvements in efficiency and volumes in the last year.

A 2.3% increase in its port container volumes to 2.34 million TEU during the six months to September 30, from the 2.29 million TEU handled in the same period last year, was welcomed by management and improvements in ship turnaround times in September 2015 compared to March 2015 at most of its container terminals, including the Port of Durban, were also well-received.

The Port of Durban recorded a 6% drop in its ship turnaround times from 51 hours in March to 48 in September this year. The same was true at the

BUSINESS PROFILE

//THIS IS THE LARGEST SINGLE CONTRACT TNPA HAS EVER AWARDED TO A SOUTH AFRICAN COMPANY FOR THE BUILDING OF HARBOUR CRAFT// Ngqura terminals which recorded a 23% drop from 34 hours in March to 26 in September, while Cape Town facilities also showed a decrease, down 11% from 27 to 24 hours. In addition, Port Elizabeth operations registered a 19% drop from 26 to 21 hours. The average moves per ship working hour (SWH) (a measure for terminal productivity) recorded an increase from 42 to 62 moves at the Ngqura Container Terminal, while Durban’s Pier 1’s moves increased from 47 to 50 and Pier 2’s moves from 59 to 62.

Investment into port business is strong from Transnet as it understands the importance of efficiently dealing with exports of vehicles and commodities such as iron ore and coal as well as imports

in the FMCG markets. As part of its Market Demand Strategy (MDS), Transnet has already ploughed a huge amount of money into its ports and this looks set to continue after Transnet Ports Authority Chief Operations Officer Phyllis Difeto explained more about infrastructure upgrades at ports of Durban, Saldanha, Cape Town, East London, Ngqura, Richards Bay and Port Elizabeth. She told worldmaritimenews: “A total of around R2 billion will be spent over the next five years, as part of Operation Phakisa, to refurbish existing repair facilities, while we will invest an estimated R13-15 billion to create new repair facilities at the South African ports.

14 / December 2015 / www.enterprise-africa.net

“Once completed the berths will have a draught of 14.5m enabling them to handle vessels with draughts up to 13m, however the Maydon Wharf entrance channel will still need to be deepened thereafter to enable these vessels to sail in fully laden.”

These infrastructure projects are expected to create additional bulk capacity at the Port of Ngqura and at the port of Richards Bay which will have a new LNG terminal and bulk liquid berth to handle up to 100,000 TEUs of containerised cargo.

Additionally, TNPA plans to launch a fleet management programme for all ports as part of its efforts to support the oil and gas, ship repair and building industries in the region.

Another major milestone for TNPA was realised recently after further investments into port operations were marked with the launch of the first of nine new SA built tugboats.

The Mvezo is named after Eastern Cape village where former president Nelson Mandela was born and was built

by SA Shipyards.

TRANSNET

Mvezo had a bottle of champagne broken over its bow in a traditional launch ceremony on November 12.

TNPA programme manager Eugene Rappetti, Senior Manager for Marine Operations, said the ports authority had 29 tugs presently in service nationally, but the requirement for bigger, strong tugboat fleets had increased in line with bigger commercial vessels calling at South African ports more frequently.

TNPA chief executive, Richard Vallihu said: “This is the largest single contract TNPA has ever awarded to a South African company for the building of harbour craft.

“The building of Mvezo and the eight other tugs in this project, demonstrates that this country has the expertise to compete in the global shipbuilding industry and to use the maritime economy to unlock the economic potential of South Africa, in

TRANSNET CEO – SIYABONGA GAMA

www.enterprise-africa.net / December 2015 / 15

BUSINESS PROFILE

line with the government’s Operation Phakisa initiative.

“These nine tugs are 31 metres long with a powerful 70 ton bollard pull, so this is a big step up in power from our older tugs with 32.5 to 40 ton pulls.

“The new tugs feature latest technology, including Voith Schneider propulsion which makes them highly manoeuvrable and able to change direction and thrust almost instantaneously while guiding large vessels safely into our ports.

“We have also committed to ensuring that each tug has a minimum of 60% locally manufactured components, while partnering with international companies on the remaining aspects that cannot be manufactured here, for example, the engines and propulsion units.

“Ultimately South Africa will achieve a socio-economic benefit of more than R800 million as a result

//WE HAVE ALSO COMMITTED TO ENSURING THAT EACH TUG HAS A MINIMUM OF 60% LOCALLY MANUFACTURED COMPONENTS// of the supplier development plan attached to the contract,” he said.

AFRICAN INFRASTRUCTURE Away from its port business, Transnet has also been making moves which will benefit South Africa’s neighbouring countries.

Just last month, the company announced plans to build a large multi-purpose fuel pipeline in Zambia.

The distance between the capital and Zambia’s third largest city is 316 km and the pipeline would aim to reduce the price of fuel at the pump.

Initial plans suggest that the pipeline would transport 500 million litres of stock per year and there would be a charge to the fuel companies looking to use the facility – meaning that no government money would be needed for construction and maintenance.

Transnet Executive Manager for International Business, Nyameka Madikizela said that if the project was to go ahead it would be between Transnet, Zambia Railways Limited and another local partner. She also commented on the importance of Zambia in the NorthSouth Corridor, a route through which SA ports can benefit in a big way.

“Transnet has been working closely with Zambia Railways Limited as a

//A LOT OF INVESTORS SAID THEY LIKE WHAT WE ARE DOING IN SA; THEY BELIEVE OUR FINANCIAL SERVICES MARKET IS VERY STABLE, OUR STOCK EXCHANGE IS STABLE AND IT’S STILL A GOOD HAVEN TO INVEST IN// 16 / December 2015 / www.enterprise-africa.net

TRANSNET

strategic partner, as Zambia is one of the few countries where there is return cargo originating from its source.

“This is a huge project which, just as in the case of a similar project we have just finished between Durban and Johannesburg, will directly and indirectly create significant employment for Zambians both during and after construction.”

“This way of transporting fuel has several advantages which include reduced fuel cost for owners, it is safer compared to road tankers, there is reduced pressure on roads and above all it guarantees fuel security or availability in the country as the pipeline is complete with a depot which could contribute to increased fuel holding capacity in the southern region of Zambia,” she said.

These ambitious plans are good news for Transnet and as many other large companies begin to streamline and consolidate operations because of a bleak economic outlook, proposals like this display the strength of the

state-owned business. Gama even went as far as saying that the company still had more room for borrowing when he spoke at the company’s half year results announcement in September.

“The gearing ratio at 41.4% gives us enough headroom for us to be able to execute the capital investment programme and to borrow more if we need to do so.

“But, we remain conservative… in the medium term we will continue to keep that in check and it is not likely to exceed the limit we have set of 50%.”

Acting Chief Financial Officer Garry Pita reiterated Gama’s optimism, saying: “A lot of investors said they like what we are doing in SA; they believe our financial services market is very stable, our stock exchange is stable and it’s still a good haven to invest in.”

Going back to port investment, it seems as though this vital economic resource will not have its development threatened by the dulling economy.

Transnet Port Terminals Chief Executive Karl Socikwa said at a recent stakeholder

event: “We shouldn’t get despondent that the Chinese downturn affects our dependency; we should look for opportunities in regional Africa, working with other growing African economies.

“We have a lot of good people on the ground at this company, people who know, from experience, how things work and how they can be improved, finding practical solutions to practical problems.”

Perhaps now is the time to get into the maritime industry; with all of this investment and development there will be job creation and innovation and the industry will need skilled people and companies with expertise to continue growing this highly-valuable business.

TRANSNET +27 11 308 3000 info@transnet.net www.transnet.net

www.enterprise-africa.net / December 2015 / 17

SA RUGBY UNION

Positive

Despite RWC Third Place

PRODUCTION: Karl Pietersen

SA Rugby Union has recently announced some impressive new sponsorship deals and has also been celebrating success of strategic marketing campaigns. As the emphasis moves from the RWC in England to preparation for Japan 2019, the focus now is on becoming the world’s number one team.

//

In modern times, professional Rugby is often regarded as both a sport and a business, with the latter’s influence growing more and more each year. There are many out there who view professional athleticism as a contradiction of the central ethos of sport, competition performed for its own sake and pure enjoyment, rather than as a means of earning a living. But the reality is that the business side of things has come too far to be lost and the money and interest generated by corporate involvement is vital for the lives of so many.

So how do you manage a sport like a business; how do you set goals and targets and also ensure financial success for an entity that is essentially formed by people playing games? It’s a tough ask and when it comes to Rugby, one of South Africa’s national sports, the responsibility falls to South African Rugby Union (SARU).

SARU is the official governing body for rugby in South Africa. It is a federation made up of 14 independent

rugby unions covering the length and breadth of the country and is responsible for the Springboks, Springbok Sevens, Junior Springboks (Under-20s) and Springbok Women’s teams, as well as such domestic competitions as the Absa Currie Cup, the Vodacom Cup, Absa Under-21 and Under-19 competitions and Cell C Community Cup. SARU’s mandate covers three main areas as General Manager of Corporate Affairs, Andy Colquhoun explains: “We have a strategic transformation plan which is a weighty document but in broad terms, we want to be number one in the world, we want to transform our game and we want to make money.

“New Zealand are in such a good space at the moment’ it’s going to take some serious on-field work to reach number one. In terms of transformation, we’ve got a plan which is aligned for 2019 and we are working on that on an annual basis. In terms of making money, we’ve reported profits in the last four years, we’re managing our income and

www.enterprise-africa.net / December 2015 / 19

SA RUGBY UNION

//NEW ZEALAND ARE IN SUCH A GOOD SPACE AT THE MOMENT’ IT’S GOING TO TAKE SOME SERIOUS ON-FIELD WORK TO REACH NUMBER ONE// we will continue to do that.

“We manage the national teams and competitions as well as the broadcasts and sponsorship rights, and we drive development programmes and transformation in South African rugby so we are involved in all aspects of the game,” he says.

MARKETING In November, SARU received recognition for its marketing innovation when it was nominated for three Discovery Sports Industry Awards.

The ‘Home Grown Advantage’ campaign saw SARU put grass grown in South Africa in the dressing rooms of the springboks, promoting the message that

the entire country was behind the team during the Rugby World Cup in England.

A special piece of turf was grown in soil drawn from all South African rugby provinces and was taken to England where it was planted and placed in special trays making it the last thing the players’ boots touched before they entered the field during the tournament.

The campaign also featured unique jersey numbers for the players made up of hundreds of fan selfies as well as social media campaigns and a television commercial.

“We wanted some way to make our Home Ground Advantage campaign tangible for the players,” said SARU CEO, Jurie Roux.

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The campaign was nominated for Best Use of Digital Communications in Sport, Creative Activation of the Year and TV Sport Commercial of the Year.

“Our Home Ground Advantage campaign achieved the objective of igniting support for the Springboks at the Rugby World Cup and the nominations are a reward for the hard work put in by our various SARU departments and their partners. This is particularly satisfying given how competitive the sport industry has become over the past few years,” said Roux.

This month, SARU is focussed on driving interest in the sevens and the Super Rugby for 2016, building on the success of the campaigns from the World Cup. “This year, being a Rugby World Cup year, was marketed around the competition and specifically supporting the springboks. We ran the Home Grown Advantage campaign which was successful. We have been busy marketing the World Rugby Sevens Series and next year we will start with Super Rugby so we market around our competitions and our national teams.

We don’t do a generic ‘rugby is great, play rugby’ campaign; the 14 provincial unions run their own marketing campaigns,” explains Colquhoun.

In a positive sign for the marketing department, attendances in South Africa have managed to maintain good levels, showing that the campaigns are having an impact.

“Attendances are not where they were prior to the invention of satellite television but it is good in Super Rugby.

Australia and New Zealand saw a sharp decline in live attendances whereas ours held up well on TV and in live attendances,” says Colquhoun.

SPONSORSHIP In a recent sponsorship announcement, SARU was excited to detail its new partnership with insurance company Outsurance who will sponsor the union’s referees for the next three years.

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BUSINESS PROFILE

//OUR HOME GROUND ADVANTAGE CAMPAIGN ACHIEVED THE OBJECTIVE OF IGNITING SUPPORT FOR THE SPRINGBOKS AT THE RUGBY WORLD CUP // Sponsorship forms a big part of SARU’s income and forming longstanding partnerships with companies that want to be involved with the game is hugely important.

“It’s a privilege to have a company with a high public profile such as Outsurance commit to sponsoring rugby in South Africa and I’d like to welcome them to the team,” said Jurie Roux.

“The fact that big companies are excited to become involved in South African rugby speaks volumes and we’re grateful for their wonderful support. We can’t wait to work together with them in the coming years.”

Outsurance replaces previous referee sponsor, Marriott Hotels, and

comes at a perfect time for SARU who have recently lost two high-profile sponsors in Absa and BMW. Absa announced it would not renew its contract as jersey sponsor and BMW quickly followed in removing its sponsorship which included the automotive manufacturer’s logo on the team shorts and provision of vehicles for the team when there were in South Africa. While many reported the ongoing battle to transform SA rugby as the key reason for the loss of sponsorship, the SARU committee met to discuss the appointment of a new head coach, transformation targets and also how to divide its estimated R1 billion budget between 14 provinces over the next year.

22 / December 2015 / www.enterprise-africa.net

Attracting people to the game, from a range of different backgrounds, is key for SARU and the organisation is currently working hard to promote the ‘Get Into Rugby’ campaign devised by World Rugby to encourage youngsters into the game.

“We work with World Rugby on a programme called Get Into Rugby which we are rolling out across the county so we do have a grassroots version of the game.

A lot of our development programmes are managed by our provincial rugby unions.

They will apply for grants from us and if their projects are aligned with our broader strategic transformation plans, then we will disperse money to them. We’ve got one kind of overarching project and the rest are run by our 14 provincial rugby union members,” says Colquhoun.

The coming years will be both challenging and exciting for SARU as the preparations for the World Cup in Japan begin.

On the business side, two important announcements, again

SA RUGBY UNION

//THE FACT THAT BIG COMPANIES ARE EXCITED TO BECOME INVOLVED IN SOUTH AFRICAN RUGBY SPEAKS VOLUMES AND WE’RE GRATEFUL FOR THEIR WONDERFUL SUPPORT// pertaining to sponsorship, were made in December. Firstly, SARU welcomed Bidvest Car Rental into their sponsorship family as the Official Car Rental Supplier to the Springboks and SA Rugby as part of a five year deal.

Gaynor Von Loggenburg, Sales and Marketing Director of Bidvest Car Rental, said: “We believe in the power of the Springbok brand and that we will be supporting something that our customers are passionate about. We have made major strides as a company since our launch and this sponsorship is a key part of our strategy to build the

Bidvest Car Rental brand in the minds of local and international travellers.”

This welcome news was quickly followed by more positivity when market-leading sports drink, Energade, renewed its sponsorship of the Boks for another five years.

“We know that Energade pick their involvement with sports sponsorships very carefully and it speaks volumes that they have decided to renew with us, especially as we’re currently in a tough economic climate,” said Jurie Roux.

Both of these announcements came after one of the most high-profile

sponsors in the portfolio, Tsogo Sun, successfully renewed its deal with SARU for another five years bringing the relationship between the two to more than 20 years together.

“Tsogo Sun has established itself as one of the top hotel groups in Africa and we are delighted to extend our partnership with them for another five years,” said Roux.

“We have developed a strong partnership with Tsogo Sun over the last 20 years, and we are looking forward to another mutually-beneficial five years with the group.”

SA RUGBY UNION +27 21 928 7000 yourview@sarugby.co.za www.sarugby.net

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www.enterprise-africa.net / December 2015 / 23

JOHN CRAIG

Helping More Men to Be At

Their Best PRODUCTION: Manelesi Dumasi

John Craig’s well-thought-out business model is proving to be an example to follow for the entire SA fashion industry as the men’s clothing and footwear specialist expands its offering into Africa.

www.enterprise-africa.net / December 2015 / 25

BUSINESS PROFILE

//IT’S ABOUT KNOWING WHO YOUR CUSTOMER IS AND WHAT HE IS WANTING FORM YOU IN TERMS OF PRODUCT//

//

As the saying goes; longevity is a true mark of greatness, but in business today, sustainability is a problem. In 2010, ABSA reported that around 63% of start-ups failed within two years and in 2014, Standard Bank reported that 50% failed in the first two years because of the inability and inexperience of their owners. In June this year, SME South Africa reported that 80% of start-ups failed to make it past three years – it makes for grim reading.

However, there are some businesses out there that have managed to not only get through their first two years but they have managed to survive, grow and thrive. There’s even a handful that have defied the odds and successfully navigated economic turmoil, political transformation and ever-changing market trends for over fifty years.

One of these companies is men’s fashion retailer, John Craig. Founded in 1943 in Johannesburg, John Craig sells top quality men’s branded apparel,

26 / December 2015 / www.enterprise-africa.net

footwear and accessories to its target market of middle income, 30-plus male South Africans.

To be successful in fashion retail requires close attention to detail and precise implementation of strategies that satisfy the vexatious four P’s of marketing: Product, Price, Place and Promotion.

Over the years, the company has worked hard to get these areas right and thanks to its commitment to customers, always looking to provide products that people want (not what marketers think they want), John Craig has built an extremely loyal customer base which continues to grow as the business continues to open more and more stores.

Managing Director, Lily Moreira explains that even though the country’s economic outlook is depressed, this fashion star has no intent on resting on its laurels and will continue to look for exciting opportunities in South Africa and across its borders in neighbouring countries where economic growth is still positive.

JOHN CRAIG

//ANOTHER POTENTIAL AREA FOR US WOULD BE BOTSWANA// “We’ve only recently ventured into Namibia,” she says. “We started off in Windhoek where we opened two stores (Maerua and the Grove). They are great malls because they have many South African brands so it’s a good benchmark for our own company.

“Recently we opened another two stores further north, one in Rundu and one in Oshikango. These have started a bit slower but sometimes it takes customers a little longer to get familiar with the John Craig brand and what it offers.

“Another potential area for us would be Botswana but we are moving onto a new IT platform in the next six to 12 months, so we felt that it

was best to wait until this conversion has been concluded.

“We still have a number of opportunities in South Africa. A number of factors are reviewed in this process – is it in a mall, the location within the mall, the catchment area, rental etc? We prefer to trade in malls. CBD locations over the past few years have been severely affected by malls due to customer convenience.

“Ultimately we look for the right rate of return; if we don’t think we’re going to get it then we won’t open.”

GROWING WITH THE GROUP John Craig’s history has been varied.

When it comes to ownership, the

structure has changed a number of times. In 2000, there was a management buyout from the then owner, industrial group Waco International.

In 2006, Pan-African retail company, Pepkor, purchased John Craig allowing the company to continue on its growth path.

Pepkor boasts an extremely strong position across Africa, Australia and Poland (with over 4100 stores) and John Craig utilises the experience and expertise of the group when expanding its own footprint.

“We’re trying to align ourselves with the rest of the group in terms of where they perform better and the group is trading well out of Namibia and Botswana. We looked at Namibia because firstly, the currency is one for one which makes things a little easier and secondly, the group was showing the best growth there,” explains Moreira.

Southern Africa has seen excellent

www.enterprise-africa.net / December 2015 / 27

JOHN CRAIG

//ULTIMATELY WE LOOK FOR THE RIGHT RATE OF RETURN; IF WE DON’T THINK WE’RE GOING TO GET IT THEN WE WON’T OPEN// conditions for retailers in the past decade, with many prominent international players entering the industry because of the growing middle class. PWC said in a 2012 report: “Growth is driven by the number of black consumers rising into middle- and upper-income groups, with a consequent expansion in their disposable income. By 2016, some 11 million households are expected to have an annual income above R89,500 (US$10,000). At the upper end of the income scale, some forecasters believe the country is already home to about 71,000 dollar millionaires. Their

spending power is further bolstered by widely available consumer credit, both from retail banks and retail chains.”

After gaining a foothold in Botswana, the logical next step in the company’s African expansion plan would be other neighbouring countries like Zambia or Mozambique before heading further north and attacking markets with huge potential like Nigeria and Kenya. Pepkor is in the midst of a R100m expansion into Nigeria where it hopes to eventually open 50 outlets.

“There’s no reason why can’t go into those markets,” says Moreira. “If

28 / December 2015 / www.enterprise-africa.net

the group trades there then there’s already a logistics platform for us to benchmark ourselves. We need to explore these markets to make sure they make business sense for John Craig – it wouldn’t make sense to have just one store, you’d have to have a node of stores to be able to build a full infrastructure.

When the time comes, once we’ve explored Botswana, then we’ll probably look at Zambia and other places where the group trades like Kenya and Nigeria.

There’s no cap on the opportunities in Africa but we feel we still have a number of opportunities in Southern Africa before we move further north.

“We’ve slowed down our new store growth slightly in the last few months.

At one stage we were growing at about 20% year-on-year with new stores but with the way the economy is at the moment that was a little too aggressive.” she explains.

- SINCE 1976 -

BUSINESS PROFILE

//THE FACT THAT WE HAVE A GREAT MIX OF BRANDS AND A WIDE ASSORTMENT OF PRODUCTS WHICH ALLOWS THE CONSUMER TO HAVE A CHOICE IS IMPORTANT// ECONOMIC PRESSURE With the growth forecasts for the SA economy giving many business and political leaders’ sleepless nights, there is definitely a need for companies that operate across the country to focus on productivity and value creation. When the economy slows, consumers generally lose spending power and this makes things tough, especially for retailers and especially for those in the mid-high price sector.

“High inflation has been a challenge in the past few years as the Rand/Dollar has devaluated considerably,” explains Moreira. “Consistently, in the last three seasons we’ve seen double digit inflation

making trade difficult - the value retailers have benefited from this. Consumers are transacting less often and definitely looking for more value items. It’s a huge challenge at the moment and I don’t see it changing in the next six to 12 months, at least not until the exchange rate stabilises.

“We have our own private brands and we buy from local agents but they source their materials from overseas so whether it’s our own private label or any of our brands, like Polo or Jonathan D, all of those brands are actually sourcing internationally so they’re having the same challenges bringing their product into South Africa – the exchange rate is a

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killer,” she says.

Fortunately, it’s not all doom and gloom. Although economic pressure puts a strain on business, organisations like John Craig, which has support from an international group and a clear strategy, is well set to ride the wave.

“The fact that we have a great mix of brands and a wide assortment of products which allows the consumer to have a choice is important. He may aspire to buy a top end brand but may choose to purchase a similar product at a lower price point, still getting the best quality for his purchase. John Craig offers world class premium aspirational brands that adds value to the customer’s lifestyle,” she says.

INDUSTRY LEADERS Weathering the storm comes from not only a good selection for customers to choose from, it also comes from having products that are better than others on the market – a real focus on quality, style

JOHN CRAIG

//THE ONLY WAY YOU CAN GUIDE YOUR COMPANY IN THE RIGHT DIRECTION IS TO BE AS HANDS ON AS YOU POSSIBLY CAN// and timeless product crafted for today’s market. John Craig and Moreira certainly have this.

“The quality of our products ensures John Craig is the house of premium classical brands,” she says.

“The brand has been around for many years; we’ve got a very loyal base of customers. We’re constantly looking at how we can improve prices and fashionability. Service does play a big part - people are loyal if you give great service and a product that they can rely on. All retailers are going to see challenges in the next six to 12 months and hopefully our customers will continue to be loyal and continue to

shop at John Craig.”

Customer loyalty is an extremely difficult thing to create and even more difficult to sustain. In these times of online shopping, where everything can be found at a cheaper price one way or another, to come across a retailer that enjoys genuine loyalty from its customers is rare. You need to successfully mix all elements of your offering and John Craig does this perfectly. The company offers multiple payment options, it has clearly defined its target market, it connects with its customers both digitally and physically, and it makes life easy for people with its broad spread of stores.

A lot of this is down to the equally

loyal staff who implement strategies and ideas set out by the MD. She is clearly a deft business person and an experienced and savvy fashion expert who, after more than 15 years in charge of this successful company, has no intent on slowing down any time soon.

“The only way you can guide your company in the right direction is to be as hands on as you possibly can. It’s about knowing who your customer is and what he is wanting form you in terms of product. As far as I’m concerned, as long as I’m MD, I’ll be as hands on as possible,” she concludes.

JOHN CRAIG 011 615-0133 info@johncraig.co.za www.johncraig.co.za

www.enterprise-africa.net / December 2015 / 31

FERRO SOUTH AFRICA

Exporter of the Year planning for Further

African Growth PRODUCTION: Manelesi Dumasi

Ferro South Africa has been named as the Exporter of the Year for 2015 by the Durban Chamber of Commerce and Industry.

Group Export Manager, Robin Legg talks to Enterprise Africa to explain more about the company’s plans for further expansion into lucrative African markets.

//

South Africa has become an important exporter to the global markets since democracy in 1994. As a provider of many mineral resources, agricultural products and engineering parts, the county has positioned itself as a reliable, trustworthy and efficient trading partner for some of the world’s major economies.

Germany, China, Japan, the USA, the UK and the Netherlands are just some of the countries that benefit from relations with South Africa but it’s on the African continent where SA exports have had huge success and where opportunities look set to grow in the coming years.

Almost 90% of South Africa’s exports to the rest of Africa go to the SADC economies. In 2011, SA’s trade with the rest of Africa exceeded R220bn which amounted to 17% of the country’s total trade with the world. This amounted to a R40bn trade

surplus for SA compared to a R68bn deficit with Asia. In July 2015, SA’s exports reached an all-time high of R93084.33m; a stark comparison to the all-time low of August 1958 when the figure was just R55.8m.

In Africa, important trade partners include Botswana, Zimbabwe, Namibia, Kenya and Ethiopia, and there is now a growing market in West Africa in markets such as Ghana and Nigeria.

One company that counts exports as one of its primary offerings is Ferro South Africa Pty Ltd, the Gauteng and KwaZulu-Natal-based manufacturer and supplier of specialised performance materials.

Ferro Corporation was formed in the USA in 1919. Ferro Corp invested in a company in Brakpan South Africa in 1946. It was then sold to a private investor in 1994 and current CEO Ian Forbes acquired the company in 2004 along with Investec Private Equity.

In Ferro South Africa itself, there

www.enterprise-africa.net / December 2015 / 33

FERRO SOUTH AFRICA

//THE BIG GROWTH IS GOING TO BE IN EXPORT MARKETS//

are five different divisions, offering different products: Vedoc Powder Coating, Plastic Masterbatch & Additives, Porcelain and Enamels and Glass Colours. These all have been complimented with the acquisition of Spectrum Ceramics Pty Ltd in 2007, NCS Resins Pty Ltd in 2012 and recently Arkema South Africa Pty Ltd in 2014, now named Ferro Coating Resins Pty Ltd. All carry strong brands and global technology agreements.

EXPORTER OF THE YEAR Ferro’s main products include thermo-setting powder coatings, plastic masterbatch, ceramic glazes, porcelain enamels, a wide range of inorganic colours, unsaturated polyester resins and accessories and solvent based coating resins.

Just last month, Ferro South Africa

34 / December 2015 / www.enterprise-africa.net

was given the KZN Exporter of the Year Award 2015 (Large Manufacturing Category) by the Durban Chamber of Commerce and Industry. ‘’Exports are a cornerstone of the country’s economic strategy as it improves South Africa’s balance of trade through earning foreign revenue. Exports also serve to boost manufacturing demand domestically, creating jobs and developing skills,” said international trade expert, Richard Cookson.

“We celebrate and attempt to encourage exports out of KZN,” said Dumile Cele, CEO of the DCCI. Ferro South Africa’s export department is based in New Germany, KZN and Group Export Manager, Robin Legg tells Enterprise Africa that the export market is a vital focus area for the company.

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“Our exports are running at around 11-12% and our target is to get to 25% of turnover.

“The target growth in Exports into Africa is definitely more lucrative than our local market. Our local market growth year-on-year is around 2-3%.

The export markets offer opportunity of 5-6%, we are currently operating in 23 countries, 17 of which are in Africa. We have set up a hub in Kenya via Time Chemicals Ltd our agent and have registered a business in Nigeria called Ferro NCS Resins Nigeria ltd.

“The sub-Saharan Africa Region is the main focus of our export efforts, where, despite the impact of the drop in oil and commodity pricing which has resulted in the slowing of some economies, our method of having stock on hand in some select business areas have resulted in us growing our share of these markets substantially.”

Ferro South Africa has positioned itself as a local African partner offering knowhow, technology and cost savings to clients putting us ahead of the importing international players – especially in regions where there is significant investment in manufacturing, mining and construction where Ferro products are widely utilised.

“The weak Rand has helped us.

Most of the trading in Africa is in Dollars and we’re up against global players that produce out of Dubai, Saudi, China, India, Taiwan, Turkey and Europe and we find ourselves to be holding ground competitively.

“There is a lot more opportunity in the export market due to the weakening Rand along with providing our knowhow and added value to our clients in Africa,” says Legg.

African development is providing

www.ferrosa.co.za 36 / December 2015 / www.enterprise-africa.net

huge opportunities for all SA exporters and Ferro is no exception.

Sub-Saharan Africa’s growth improved, for the second consecutive year, to 4.5% in 2014. Despite challenges, growth is projected to pick up to 5.1% by 2017, lifted by infrastructure investment, increased agriculture production, and buoyant services.

GROWING IN AFRICA Since the company was bought out by Ian Forbes in 2004, Ferro SA has grown ten-fold thanks to strategic acquisitions, good management and leadership.

“In the last ten years Ferro SA has spent well over R600 Million on capex and acquisitions with the objective of broadening and diversifying the product and market base of the group. The major part of the capex spend has been focused on quality enhancements and total cost savings,”

FERRO SOUTH AFRICA

//WE EXPORT AND DISTRIBUTE TO CLIENTS IN NIGERIA WHICH WE SEE AS OUR BIGGEST GROWTH MARKET//

explains Legg.

Importantly, along with all acquisitions, Ferro SA has retained all the licenses to the products of Ferro Corporate and also has a territorial agreement with Ferro Global only allowing operations in Indian Ocean islands, Australia and sub-Saharan Africa. The reach of the global Ferro business (based in Ohio, USA) is vast hence the importance of not allowing cannibalisation in the African market.

When it comes to continuing the magnificent growth the company has seen in the last decade, acquisitions will remain a large part of the strategy and Ferro SA will build on its already significant investments.

“We’re well positioned now and we’re market leaders in most market segments in which we operate. We have signed technology agreements that ensure we are abreast of the latest developments available internationally – these include Ferro corporate, Esmalglass, Reichhold, Tiger Coatings, Arkema, Smaltochemica, Durst, Akzonobel and Owens Corning all global players. We have access to all of their innovation and development so we’re in a good position to stay at the cutting edge of supply for our clients,” he concludes.

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FERRO SOUTH AFRICA +27 (0) 11 746 4000 info@ferro-sa.co.za www.ferro-sa.co.za

www.enterprise-africa.net / December 2015 / 37

HOTEL PARTNERS AFRICA

African Hospitality at its Best PRODUCTION: Karl Pietersen

As Africa’s middle-class continues to grow, and tourists and business travellers flock to the cities of some of the world’s fastest growing economies, the need for international-class quality hotels is increasing. Hotel Partners Africa is one of the continent’s go-to companies for all hospitality real estate needs…

//

In October, the World Bank predicted that sub-Saharan Africa’s continental GDP is expected to pick up to an average of 4.4% and 4.8% in 2016 and 2017 respectively. This is despite the fact that growth is projected at an average of 3.7% in 2015, down from 4.6% in 2014.

This increase in GDP is largely down to the growing economic activity in Africa’s emerging markets – six of the 10 fastest growing economies in the world are in Africa. And with all this development comes the need for quality travel solutions such as hotels, air travel and tourism infrastructure.

But you cannot simply turn up in Africa, buy some land and build a hotel – there is a web of laws, legislations, rules and regulations at every stage of the process and they all need to be stringently reviewed and obeyed so that any investment can be successful.

One company that is in the perfect position to help is Hotel

Partners Africa (HPA). Founded after the coming together of three award-winning consultants; W Hospitality Group, Hotel Spec and Leisure Property Services; HPA has been driving development in the hotel industry in sub-Saharan Africa since 2013.

The company can provide a seamless service for hoteliers and developers across Africa, making the most of over 100 years of hospitality experience. HPA looks after all needs related to hospitality real estate in Africa, from the initial appraisal of a potential development, to sourcing the money to develop the hotel, to building and opening the business, and finally to selling the asset.

Enterprise Africa spoke to Mark Martinovic, CEO and Head of Design and Construction at HPA, and asked about the partnership and whether transition into his relatively new position was a difficult one.

38 / December 2015 / www.enterprise-africa.net

“It was very seamless,” he says.

“We work very closely with each other.

Naturally there’s more responsibility now with the company itself to look after but I’ve taken it in my stride.

“We’re all good friends, with many common interests, both at work and outside of it. Most importantly, we are professionals and we’ve been working together for many years. It certainly helps that we are friends and we do see eye to eye on most issues. The focus is on getting the job done and client satisfaction.”

HPA BUILDING FOR GROWTH The tourism industry can be a driver of economic growth if invested in correctly.

Research by the W Hospitality Group (a founder member of HPA) suggests that employment in the hotel sector in Africa is set to grow substantially in the coming years. It estimates that 136,000 new jobs were created in 2014, 87,000 in 2015, 70,000 in 2016 and 27,000 thereafter based on current signed contracts from international brands plus regional brands and non-branded developments to come.

It is reported that there are almost 50,000 hotel rooms at 270 hotels in the pipeline for development in Africa, and sub-Saharan Africa is home to some of the most exciting projects. It perhaps

BUSINESS PROFILE

comes as no surprise then that HPA is going to focus its efforts here before expanding internationally.

“We’ve been invited a couple of times and we’ve discussed it at board level and certainly in the medium-term, we’re not looking at expanding out of the continent. With 48 countries in sub-Saharan Africa there is more than enough to keep us all busy at the moment,” explains Martinovic.

“To go and establish yourself in the Middle East, Europe, Asia-Pac or the Americas you need to have an understanding of the market. You need to understand the client culture, the expectations, the availability of resources and materials and many more things. We know Africa, between us we’ve worked and travelled in nearly every African country whereas we don’t

have that experience in other regions.

We don’t want to go there and compete with 2,000 other consultants when we already have a big established market that we know intimately, where we are recognised and appreciated, and that is our home,” he says.

Even in times when the economic climate in SA has not been conducive to growth, the reach of HPA and the demand for its services has resulted in a smooth flow of business.

“Because of our broad footprint in sub-Saharan Africa; we’re dealing with 48 different countries and that means many different cultures and languages, and different economic cycles; when one country slows down, another picks up and that counts in our favour.

“For us, West Africa slowed down this year because of the Ebola

40 / December 2015 / www.enterprise-africa.net

crisis, the elections in Nigeria and the oil price slump, but whilst that was happening East Africa has been experiencing a boom – everywhere including Mozambique, Kenya, Rwanda, Ethiopia etc. so it’s been a balancing act running from one part of the continent to the other. Overall, I would say it’s been a relatively positive year. In general Africa has had a bit of a slump but the region is certainly bouncing back from the 2009 financial crisis, 2016 is looking good,” explains Martinovic.

Earlier this year, it was reported in South Africa that construction companies were really starting to feel the challenges thrown up by a slow-economy. Stock prices for major JSE-listed construction companies plummeted between 42% and 72% but

HOTEL PARTNERS AFRICA

happening in the hotel industry in SA. “In the last six months I’ve seen some incredibly exciting news with hotel developments, refurbs and conversions in SA.”

//WE’RE ALL GOOD FRIENDS. WE ARE PROFESSIONALS AND WE’VE BEEN WORKING TOGETHER IN OUR OWN FIELDS FOR MANY YEARS// in the hotel sector, Martinovic suggests that there has been something of a revival with new deals being signed and plenty of activity coming off the back of a difficult few years.

“South Africa surprised me a few months back by startlingly reawakening,” he says. “The country has had a terrible slump since 2010 because of the oversupply thanks to the 2010 FIFA World Cup and the cancellations because of the financial crisis and South Africa took a number

of years to come out of that oversupply situation where there were a number of distressed hotels. Operators and developers found it cheaper to buy a distressed hotel compared to going and building a new one at a premium rate. However, in this last year, we’ve seen a number of deals signed in Cape Town and Jo’burg primarily and there’s opportunities in Durban, on the East Coast, in obscure places like Nelspruit and this activity caught us by surprise as there is now quite a bit of activity

SUB-SAHARAN GROWTH Business travel in Africa, especially sub-Saharan Africa, is a booming sector.

With markets like Ghana, Kenya and Nigeria enjoying a burgeoning travel industry following on from fantastic economic growth, the opportunities for development are vast compared to more developed markets such as Egypt, South Africa and Morocco.

“For me, and for the company, sub-Saharan Africa is where the opportunities exist,” explains Martinovic.

“If you compare the two economic powerhouses of sub-Saharan Africa,

www.enterprise-africa.net / December 2015 / 41

BUSINESS PROFILE

Nigeria and SA, you can compare hotel statistics, there’s around 43 branded hotels in Nigeria but over 300 in SA. We have barely a third of the population of Nigeria yet we have seven times the number of branded international quality hotels. From a contextual point of view, you can see the massive growth opportunities for not just Nigeria but any African country,” he says.

And the benefits are not only to be had for developers and consultants like HPA; there’s also huge opportunities for operators. A survey conducted earlier this year by hospitality research firm STR Global found that the Addis Ababa is the most expensive place in Africa for a night’s sleep, coming in at almost 60% more than a night in Nairobi. The reason for this is basic economics - a lack of supply and a high-level of demand.

“Specifically it’s because of the lack of quality hotel accommodation.

If you look at Angola, you can go and stay in an unbranded barely two-star

//WE KNOW AFRICA, WE’VE WORKED AND TRAVELLED IN VIRTUALLY EVERY SINGLE AFRICAN COUNTRY BETWEEN US WHEREAS WE DON’T HAVE THAT EXPERIENCE IN OTHER TERRITORIES// equivalent hotel room and you could pay around $400 per night – you could get a suite at the Waldorf in any western country at that price,” says Martinovic.

“The guys that have the foresight and the funding to go and put up a quality international product will charge what they want. Many western companies that work in Africa have very strict criteria as to what types of properties they will put their staff in, so if you have the only branded international hotel in a particular location people will come to you. It’s simple supply and demand, there’s a lack of supply and a high demand and

the guys who own quality properties charge what they like,” he adds.

HPA CEO & HEAD OF DESIGN & CONSTRUCTION – MARK MARTINOVIC

PIPELINE CHALLENGES? With the on-going success of the industry and the broad footprint that has allowed HPA to sidestep economic and political challenges somewhat, you might think that everything is almost perfect for this group of experienced, knowledgeable consultants, but things do not always run smoothly and like any industry, the hotel business has its problems. In Africa, the pipeline of

//IMPORTATION COSTS HAVE ALSO CAUSED A PROBLEM. WITH THE DOLLAR STRENGTH, PEOPLE ARE PAYING MORE FOR STEEL AND OTHER CONSTRUCTION MATERIALS THAT ARE IMPORTED// 42 / December 2015 / www.enterprise-africa.net

HOTEL PARTNERS AFRICA

rooms under construction was recently under the spotlight.

Because of a number of issues including funding, politics and laws, projects in the pipeline sometimes never materialise and the worry is that the current 50,000 hotel rooms in the pipeline for Africa could be persistently stalled because of a slowdown in investment.

“When there’s a deal signed with an international operator, it goes into a pipeline. When there’s a deal signed, land available and designs done, there can then be a lack of funding.

Western, Eastern and Middle Eastern investors have all been hit by a number of problems, mainly the oil price. Then there’s the African problems such as Ebola, Al Shabaab in the east and Boko Haram and Al Qaeda in the west, and all of this makes international investors a bit sceptical and more risk-averse, and this stops funding,” says Martinovic.

“Then there’s interest rates. Many African countries have rates north of 20% and when you add this to the premiums that are tacked on to account for political and commercial risk aversion factors, it makes it difficult and this is why people will look to borrow in Euros, Dollars or Pounds. But when the foreign capital starts to dry up, things slow down and that has been a major concern.

“Importation costs have also caused a problem. With the Dollar strength, people are paying more for steel and other construction materials that are imported,” he says.

Fortunately, it seems that these issues are temporary and the industry as a whole is expecting investment to continue and demand to remain.

“Africa continues to show great promise and opportunity,” President and CEO of Hilton Worldwide Chris Nassetta said recently.

Hassan Ahdab, Starwood Hotels & Resorts Vice-President and Regional Director of Operations for Africa and Indian Ocean region said in a World Bank report: “Africa is an important emerging growth market and despite political uncertainty in parts of the region, we continue to see demand for growth of all of our brands throughout the continent.”

With these two global players among many showing confidence in the region, the future looks bright for the African tourism sector and especially for HPA.

HOTEL PARTNERS AFRICA +234 (0)1 295 6217 info@hotelpartnersafrica.com www.hotelpartnersafrica.com

www.enterprise-africa.net / December 2015 / 43

//BENCH EVENTS: AFRICA HOTEL INVESTMENT FORUM AHIF WILL TAKE PLACE IN LOMÉ, TOGO, APRIL 2016 AND KIGALI, RWANDA, OCTOBER 2016 Tourism in Africa is like a diamond in the rough. As primary industries make way for secondary and tertiary sectors thanks to the continent’s ever-growing middle class, the tourism industry holds more potential than ever. All that is needed is the correct level of investment in the most appropriate areas. The Africa Hotel Investment Forum from Bench Events is the leading event for discussion on this topic and connects business leaders from the international and local markets, driving investment into tourism projects, infrastructure and hotel development across Africa.

African tourism is an untapped gold mine according to the African Development Bank Group (AfDB). Mthuli Ncube, AfDB Group Vice-President and Chief Economist said last year: “To maximize Africa’s tourism potential, critical investments are needed.”

The economic potential of tourism is remarkable, with large-scale direct and indirect impact on employment.

In Africa alone, travel and tourism generated 8.2 million direct jobs in 2012.

Africa is home to some of the world’s fastest-growing economies, and revenues from tourism in Africa already represent more than double the amount of donor aid.

Tremendous opportunities exist to further expand tourism across the African continent, yet challenges remain. The need for solid infrastructure, in the form of good roads and transportation corridors, for better airline connections, and fewer visas to cross African borders are just a few of the challenges faced by Africa’s tourism sector.

According to the World Tourism Organization (UNWTO), 56 million international tourists arrived in Africa in 2014, compared to 17.4m visitors in 1990. Earlier this year, W Hospitality Group released a report stating that there are around 50,000 rooms at 270 hotels in Africa on the books for development. Clearly, tourists and travellers want to stay on the continent. According to Iain Christie, Co-author of the World Bank’s report ‘Tourism in Africa: Harnessing Tourism for Improved Growth and Livelihoods’: “Africa’s mountains, savannahs and rivers, and cultural events such as music, dance and festivals are far above the natural assets found in other regions.”

But with such high demand for tourism solutions on the continent and such great potential in the industry, how can the sector unlock all of its possibilities? Londonbased Bench Events launched the Africa Hotel Investment Forum (AHIF) in 2011 to answer just this question.

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Attended by the highest calibre international hotel investors of any conference in Africa, AHIF drives investment into tourism projects, infrastructure and hotel development across Africa. Managing Director of Bench Events, Matthew Weihs says: “These events are for the industry by the industry - that’s why they are so successful. Africa has been a great success in a short space of time and seeing that it is an emerging economy we can really see the results happening on the ground.

“Many development projects still have MICE facilities incorporated because events and conferences for the business traveller are going to fuel the travel industry.

Much of the demand is still local but I think we’ll see more and more conferences developing. I would say that anyone with the mind for the long game in Africa won’t be deterred and will see the current economic climate as an opportunity.”

With growth in the more-developed Northern markets (inc. Egypt, Morocco, Tunisia) slower than those in subSaharan Africa (inc. Ghana, Nigeria, Ethiopia, Angola, Togo, Cameroon, Rwanda, Mozambique, Cote d’Ivoire), AHIF is expanding its reach and will host two highprofile events in 2016.

“We are delighted to be hosting our first AHIF in West Africa in Togo on April 7-8 as well as AHIF in East Africa in Rwanda on October 5-6. To have two AHIF’s in one year and expanding into the Francophone markets is a wonderful achievement,” says Weihs.

//IT’S ALL ABOUT THE DEALS – WE BRING PEOPLE TOGETHER TO GET BUSINESS DONE. WE’RE VERY PROUD OF THAT// AHIF has recently increased its focus on infrastructure investment, in particular with airlines and airport authorities. Already identified by prominent industry experts as a focus area, air-connectivity is a vital component in the travel and tourism mix and at AHIF in Lomé and Kigali this will spark vital discussions.

“I think our biggest innovation has been to develop our capabilities in the airline industry,” explains Weihs. “In Africa it is so important to address connectivity – it’s going to underpin the success of the market. Investing into this sector will bring together investors, hotel operators and other hotel professionals with the airlines and the airport authorities. If we can start dialogue between these parties then we can instil confidence that will open the skies across Africa.”

AHIF 2016 is the perfect platform for starting the dialogue between important players and Weihs says that the essence of the conference - the element at the very heart of AHIF - is deals; agreements that lead to investment.

“It’s all about the deals – we bring people together to get business done. We’re very proud of that,” he says.

The two most important ingredients in concluding successful deals are market knowledge and the opportunity to network with the right people. Networking is the essence of AHIF, with over 500 attendees from over 45 countries. The events in Lomé and Kigali will provide an opportunity to meet local organisations and forge partnerships and also provide an opportunity to experience some of the renowned attractions the countries have to offer.

AHIF 2016 has something to offer for everyone; from people and businesses inside and outside the industry to investors looking for new opportunities. “It’s the place to do business,” says Weihs. “Do not to be afraid of launching in sub-Saharan Africa - it’s where the action is and there are real opportunities. There are real returns but you must find local partners.”

For more info on AHIF, you can visit www.africa-conference.com and learn more through the in-depth audio podcasts and YouTube channel.

“There’s huge potential in Africa. We want to showcase the relevant topics and issues in Africa and celebrate our wonderful clients in the industry,” Weihs concludes.

www.enterprise-africa.net / December 2015 / 45

FANCOURT

The Garden Route’s Pièce

de Résistance PRODUCTION: Nathan Murphy

On the Garden Route, set in lush countryside with the backdrop of the Outeniqua Mountain Range, you’ll find Fancourt South Africa. Just seven kilometres from the town of George, this 613 hectare site is one of Africa’s favourite tourism businesses.

46 / December 2015 / www.enterprise-africa.net

//

South Africa’s Garden Route, a stretch of glorious countryside between Mossel Bay in the west and Plettenberg Bay in the east, is high on the list of must-see attractions for most visitors to the Rainbow Nation.

Many local tourists also appreciate this part of the Western Cape, where you can enjoy a mix of modern golf courses, ancient forests, secluded artists’ communities, retirement estates, modern malls, craft centres, mountain hideaways and beach holidays.

In this part of the country, there’s many attractive lures but one of the jewels in the Garden Route’s crown is Fancourt South Africa, the region’s leading leisure and lifestyle destination.

Opulent, grand, luxurious, beautiful, picturesque are all words that have been used to describe this location and, surrounded by the Outeniqua Mountain Range with a luxury-spa, four restaurants, three world-class golf courses and a fivestar hotel and manor house boutique hotel, you can certainly understand why the business is held in such high regard.

Golf is a major draw for Fancourt and its courses - Links, Montagu and Outeniqua - are famous not just in SA but around the world. Gary Player even went as far as saying that the Links course at Fancourt was his greatest design feat.

Player and his design team spent months studying classic links courses of Scotland and Ireland and then, taking the best those courses had to offer, constructed the Links on what was once an airfield with over 700,000 m3 of earth being moved to create it. Many people refer to the second hole as the most eyecatching. Over 200-metres long, the parthree hole is surrounded by a dramatic, rolling landscape, with a bunker precisely where one might find some relief just off the green, this is a challenge even for experienced players.

For local and international golf travellers, South Africa is a dream destination. With a perfect climate and established accommodation solutions, you couldn’t ask for much more.

For Fancourt, golf is hugely important and after the estate was

//THE GOLF COURSES REALLY SET US APART. LINKS IS RANKED NUMBER ONE IN SOUTH AFRICA AND ALL THREE OF OUR COURSES ARE RANKED IN THE TOP 20 SO IT’S A GOLFING MECCA// transformed into a hotel and golfing destination in 1989, under the direction of Andrea and Helene Pieterse, and developed under the current owners Hasso and Sabine Plattner, management has constantly focused on growing its golf business along with its hotel occupancy rates.

“We set ourselves targets in terms of occupancy and we set ourselves targets in terms of rounds of golf - we’re targeting 60,000 rounds of golf in five years’ time. Were currently at about 45,000 rounds of golf a year and we want to develop that,” explains Head of Sales, Peter Dros.

“The golf courses really set us apart.

Links is ranked number one in South Africa and all three of our courses are ranked in the top 20 so it’s a golfing Mecca. We have four restaurants at the

hotel that cater for different needs. We are very technical when it comes to service delivery and that sets us apart.

Our location is great, we’re very close to George airport which makes it easy to get in and out,” he says.

ECONOMIC SLUMP The SA economy is currently experiencing something of a rut after recovering well from the 2009 global financial crisis. In October, former Finance Minister, Nhlanhla Nene revised the country’s growth forecasts down from 2% to 1.5%.

However, tourism is regarded by the government as an economic driver that can create jobs and contribute significantly to GDP and in March, Tourism Minister Derek Hanekom announced R600m of investments to

help grow SA tourism.

Of course, each business has to develop its own strategy to deal with a slower economy and at Fancourt, the focus has been on investing in existing infrastructure.

“We continue to grow as a business.

Tourism can be a volatile sector at times and if you look back over 20 years we’ve had 9/11, Ebola and many other ups and downs but that is part of the business and to make sure you can get through the difficult times you need to make sure you build a sustainable business.

Certainly, some years have been tougher than others but the business continues to grow, the brand is strong, there is still demand for the product, demand for golf and demand for the Garden Route and that is always a good thing. But we do have our challenges and that goes for any business,” Dros explains.

“The economy is key. As soon as the economy goes down, tourism is normally the first thing to suffer and the first place that people cut their expenditure and that’s not unique to Fancourt, that a global trend.

“We continue to expand the real

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BUSINESS PROFILE

//WE HAVE A VERY IMPORTANT LOCAL MARKET WHICH REQUIRES A COMPLETELY DIFFERENT STRATEGY// estate component of the business but right now we are not looking at new properties or new golf courses. You’re always investing on your existing infrastructure and you always have to maintain your standards and continually renovate and keep up with the trends so that in itself is a big investment. We will always be investing in our portfolio to ensure we meet international standards as a minimum,” he says.

The real estate arm of the business is a major contributing component.

The company sells luxury residential property, which comes with family memberships to all of the hospitality amenities, in a variety of lifestyle options. There are six different types of residential address: Colonial Lodges, Cape Dutch Homes, Oakland Residences,

Links Avenue Properties, Links Ridge Properties and Montagu Ridge Properties. “There’s goals to sell certain percentages of real estate and we are on course to reach those goals right now,” says Dros.

A VARIED OFFERING While Fancourt is probably most well-known for its golf and hotel offerings, it’s important to remember that these are elements of the business that inevitably have lulls throughout the season. To combat this and stimulate activity during slower periods, the business offers a first-class business conferencing and events service – something the modern hotel can rarely afford to go without.

“That is an important part of our

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business particularly in the low season,” says Dros. “Our summer is great but in winter we need to find a different source of revenue and conferencing is an important part of that.”

Business guests can take advantage of modern audio-visual and computer equipment, a 400-seater ballroom, a boardroom and a number of breakaway rooms. Then there’s the fully equipped spa, gym, indoor and outdoor swimming pools, tennis courts, running and walking trails and team-building activities such as golf clinics, night golf, 4-hole challenge and potjie competitions.

When business is done, the Fancourt Hotel offers 117 rooms and the manor house has 19 superb suites.

Even though the company has an extremely strong brand and a reputation for warm and personal service, there’s no resting on laurels and the sales and marketing department work tirelessly to drive the business forward.

“The company was bought in 1994 so we’re just celebrating our 21st year in

FANCOURT

//WE HAVE A VERY IMPORTANT LOCAL MARKET WHICH REQUIRES A COMPLETELY DIFFERENT STRATEGY// business,” explains Dros. “We have around 450 members of staff so it’s quite a big operation. That includes the two hotels, the golf courses, food and beverage; there’s a lot that goes into it.

“We have a few different marketing channels. We have our international channel for international clientele travelling to Fancourt. We market there through traditional means; through the travel trade. We have international tour operators that will book through us. Obviously we have some business coming to us directly so it’s important that our brand is strong. We have a very important local market which requires a completely different strategy. We also

have the big corporate component coming to our business and again those are either corporates coming directly to us or through PCOs (Professional Conference Organisers). We have a few different channels that we are active in and through which we drive different market segments.”

Fancourt is also taking advantage of so-called ‘new media marketing’, utilising online tools to drive interest in the brand. Facebook, Twitter, Instagram and LinkedIn are all used by the company to great effect and Dros says creativity in this space is important.

“It’s a dynamic industry and it’s changing all the time. If you look at the

online space and what’s happening there, that’s a whole different ball game, social media is a whole different ball game so it’s not just about staying in traditional channels; you’ve got to be innovative and creative all the time,” he says.

In future editions of Enterprise Africa, we will be exploring the Fancourt business further to understand more about the operational side of running such an impressive empire, and also looking at the Garden Route and its offering to the country’s imperative travel and tourism industry.

FANCOURT +27 [044] 804 0000 hotel@fancourt.co.za www.fancourt.co.za

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www.enterprise-africa.net / December 2015 / 49

RAKO TAMPERSEAL

German Excellence // Proudly Produced

In South Africa PRODUCTION: Manelesi Dumasi

In an industry that is teeming with competition, Rako Tamperseal has managed to develop a strategy that has seen the company grow significantly in recent times.

Investments into its African operations and its technology portfolio have been central elements of this strategy and MD Uwe Boegl tells Enterprise Africa that the company is targeting even more progress in the next five years….

MD – UWE BOEGL

50 / December 2015 / www.enterprise-africa.net

Rako Tamperseal is one of South Africa’s most advanced manufacturer of eye catching labels and shrink sleeves that assist in the effective branding and protection of your products. Established in SA in its current form in 2011, Rako Tamperseal has seen impressive growth in the past two years, investing in new technology and building its customer base across the border in Africa.

The company supplies products and services including self-adhesive labels, shrink sleeves, tags and swing tickets and application machinery to customers across sub-Saharan Africa and it strives to be ‘your preferred partner for premium label and shrink sleeve solutions’.

Rako Tamperseal is part of the wider Rako-Group based in Witzhave, Germany and is proud to offer ‘German excellence proudly produced in South Africa’.

MD, Uwe Boegl recently spoke to Enterprise Africa and explained that in the past 12 months the company has seen a growth in turnover of 28% and growth in exports to Africa of 45%.

Drivers behind this growth include investments in new technology and also a focus on developing business in Africa.

“The major reason for our growth is the broadening of our product portfolio,” he says. “We were only printing self-adhesive labels and tags but in 2014 we took over a company that converts shrink sleeves and we integrated that business into RAKO and being able to offer both shrink sleeves and self-adhesive labels opened new doors for us and we found new clients.

That helped us grow in South Africa but since we noticed that the South African FMCG market was stagnating we took the decision to extend our market from South Africa and move further into Africa where we approached customers in the SADC region and we realised significant growth.

“We did also look outside the SADC region; we’re exporting into Tanzania, DRC and Ghana. There has been sustainable growth there so we

//IF WE LOOK AT OUR EXPORT MARKET, IT’S A COMPLETELY DIFFERENT ANIMAL. THERE’S HARDLY ANY SMALL ORDERS// are definitely going to intensify our activities further in these regions.

“We wanted to have a bigger footprint and looking at what’s happening in South Africa, we had to take some effective measures as the order volumes were coming down and the price was under increasing pressure.

“We have installed digital print technology to cater better for smaller and individualised print runs and we are now able to offer a competitive price for a premium quality. If we look at our export market, it’s a completely different scenario.

There’s hardly any small orders. The export business consists of consolidated and bigger orders” Boegl explains.

ADAPTING FOR A SLOW ECONOMY It’s no secret that the SA economy is struggling. Growth has slowed, unemployment is still high and major companies (especially in key sectors

such as mining and construction) have had to cut staff because of the lack of investment in the country. This all filters through to the secondary and tertiary sectors leaving the future outlook uncertain. Three of the world’s largest credit rating agencies (Fitch, Standard & Poor’s and Moody’s) have hinted at downgrading SA’s economy, causing concern among investors and government. This has resulted in everyone being very careful about how and when they spend their money.

But focussing on client satisfaction and being aware of industry traits has allowed Rako to adapt its strategy in SA and navigate these difficult times.

“We haven’t been affected by the slowing economy at all, we’ve actually seen growth because we have changed our technology and strategy accordingly and in time,” explains Boegl.

“What I’m seeing is people being

more careful,” he says. “The majority of our clients used to order in bulk but now they are ordering smaller quantities in shorter cycles to reduce their working capital. At the same time successful retailers and brand owners have developed the African market for their business.

“We’ve stayed connected with our clients as they’ve moved into new regions and in doing so we’ve discovered new markets for ourselves where there is a lot of business opportunities we haven’t tapped before.

“For each market situation, you have to find the right marketing strategy to master challenges and threats. You can’t just change the market. If the market is slowing down then you have to find a strategy to survive and we changed technology to cater for smaller volumes while still making a decent margin. Based on our SWOT analysis we have not only changed our sales strategy, we also have changed our entire range of machinery.

Not one of the machines we had in the factory five years ago is still here today.

All of our printing presses have been

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RAKO TAMPERSEAL

the previous model for just two years.

Further investments to increase capacity have been in a further 8 colour Gallus ECS340 UV-flexo press and a further sleeve converting line.

//WE’VE STAYED CONNECTED WITH OUR CLIENTS AS THEY’VE MOVED INTO NEW REGIONS AND IN DOING SO WE’VE DISCOVERED NEW MARKETS// exchanged to cater to the market and we’re just about to get another new digital and flexo print press which are specially catered for our high-quality print market. These latest technology presses are designed for easy and faster set-up and also reduce waste.

“At the same time, we have put a lot of effort into our R&D activities” says Boegl” so we introduced RAKO HOFlexo, a technology substituting screen printing by high opacity flexo printing, RAKO bright shine, a technology to apply inline coldfoiling to shrinksleeves and last but not least RAKO brand fortress tamperseals, a shrink sleeve including a holographic strip to prevent counterfeiting of genuine brands. All these new developments

have been accepted with excitement by our clients. Since we are a solution and service driven company we always strive to find solutions for our clients daily challenges.”

Investment in technology provides huge benefits in terms of offering higher refined labels, reducing lead times, increasing flexibility and operating as efficiently as possible but these investments come with a cost and this, of course, represents a risk. Fortunately, Rako utilises its relationship with its global group to leverage the best possible deal. Just recently, the company purchased a new, top-of-the-range HP Indigo WS6800 digital press to cater for short runs and this was after using

52 / December 2015 / www.enterprise-africa.net

EVOLVING RAKO As we move into 2016, Rako and Uwe Boegl have no intention of slowing the fantastic growth that the company has seen over the past 12 months. In fact, there are plans in place to drive the company towards an extremely bright future, despite the miserable economic outlook in South Africa.

“We have a growth plan for the next five years to double our turnover and we’re very confident that we can achieve our goals,” says Boegl. “We’re still quite small and that means we’re much faster in reacting to changes in the market and I believe there are a lot of changes happening in Africa. It’s very different to the European market where you can have fairly reasonable forecasts; in Africa things are very unpredictable. Being part of a big international group, we have that financial background to invest if need be – whenever we see the potential for growth or a change in technology then we can react immediately.

“Our management here is flexible enough to work quickly when reacting to changes in the environment,” he adds.

Even though Rako Tamperseal is part of the global Rako-Group, a 1500 employee organisation with roots going back to 1969, the South African operation enjoys decision making freedom and is not stifled by its parent.

“The group consists of nearly 20 facilities worldwide and each facility runs its own business. We are completely responsible for our own budget as well as our strategy,” explains Boegl. “There are core areas of our business which are defined by the group. We are very clear on the type of products that we want to produce. It’s very clear that our portfolio is in flexible packaging, labels and shrink sleeves. We will not be going into rigid packaging, we will focus on high-value added

®

You cut, we care.

RAKO TAMPERSEAL

//WHENEVER WE SEE THE POTENTIAL FOR GROWTH OR A CHANGE IN TECHNOLOGY THEN WE CAN REACT IMMEDIATELY// products and high-quality printing.

These strategies are set by the group along with the technology we use but sales, marketing and budgeting is completely independent.”

Utilising this independence, but following the lead of Rako globally, Rako Tamperseal is targeting the environmental side of its operation. The nature of the business does not lend itself to being a very ‘green’ operation but Boegl believes there are solutions to be had.

GREEN IDEALS “Most packaging is not environmentally friendly by its nature but they are protecting and decorating goods for transport and retail,” explains the MD. “What we’re doing to reduce that, through a strong strategy in place across all our factories, is to look internally at how we can reduce waste

as that’s a big factor in our industry.

We have a very strong focus on waste reduction as it has an environmental and commercial benefit. We want to recycle as much as possible. We have found facilities to recycle our ink and chemical waste, we are in talks with PET manufacturers, with recycling capabilities to recycle our polyester waste. Most of our other waste materials are multi-layer laminates with ink which are challenging for recyclers.

“Our waste would be a perfect fuel for an incineration plant that could generate electricity. There isn’t a plant like this in the Western Cape but we hope invetments in this direction will happen here soon,” he says.

The development of a recycling/ waste management initiative that could benefit the entire packaging/ labelling/branding industry and wider manufacturing industry is

54 / December 2015 / www.enterprise-africa.net

something that will require the work of all players involved and not just Rako.

“I believe there will be a change in the near future where people will look at how they can reduce their wastage by as much as possible but it has to work in an industrial environment, on a large-scale,” says Boegl.

“That is a task for the entire industry; to stand together and establish a credible recycling infrastructure,” he adds.

Combine this effort with the ambitious African growth plans and the constant investment into technology and you begin to realise that Rako Tamperseal is a company that will ride the economic wave and come out the other side in an industry leading position.

RAKO TAMPERSEAL +27 (021) 709 00 33 contact@rakotamperseal.co.za www.rako-labels.co.za

BORDIC

A Division of Industrial Commodities Holdings (Pty) Ltd

Supplying High Quality POLYESTER SHRINK FILMS into the Southern & East African Label Markets.

Shrink Polyester proudly manufactured by Benefits of Polyester Shrink Sleeves: • Environmentally Friendly • Excellent Optical Clarity • Good Mechanical Strength • Thickness Ranging from 35 - 70 Micron

www.bordic.co.za T +27 11 880 5200 sales@bordic.co.za 57 Eastwood Road • Dunkeld

DA GAMA TEXTILES

Productivity Improvements Provide

Boost for Da Gama PRODUCTION: David Napier

In just 14 months, Da Gama textiles has managed to increase production by 40% by reducing machine downtime and productivity.

Managing Director, Greg James has been a big part of this turn-around and he tells Enterprise Africa more about the company’s on-going plans to install further improvements.

56 / December 2015 / www.enterprise-africa.net

//

South Africa’s textile industry is often understated. It holds huge potential and importance within the economy. In 2013, a department of the dti stated that the Clothing, Textiles, Footwear and Leather (CTFL) industry accounted for about 14% of manufacturing employment and represented South Africa’s second largest source of tax revenue, supporting an estimated 6080,000 jobs and contributing around 8% to the country’s GDP. However, in recent times, with the economy making the business environment increasingly difficult, many local textile companies are losing out to cheap imports from places like China, Vietnam, India and Bangladesh.

Back at the beginning of the global financial crisis in 2009, negative effects on South Africa’s economy started to filter through the system and in 2011, things became even more difficult for the textile manufacturers with volumes being squeezed and retailers and manufacturers looking abroad for savings.

Zwelitsha based Da Gama textiles is a perfect example. The company produces textile products for a wide range of customers across three main sectors: Home sewing, furnishing and workwear/government tenders. Once a hub of activity with high productivity and employing thousands of workers in the 80s, it lost ground due to its ageing

//WE’VE INCREASED PRODUCTION BY 40%, IMPROVED THE MACHINE AVAILABILITY AND PUT IN PROPER SYSTEMS TO RUN THE FACTORY EFFICIENTLY// fleet of machines, its slack order book and the bleak nation-wide economic outlook.

But just over a year ago, the fortunes of Da Gama began to turn. New shareholders brought new strategy, new processes and renewed vigour, allowing the factory to achieve high-levels of efficiency and competitiveness.

“Da Gama went through a shareholder change at the end of August last year. It was held by a German industrialist and he wanted to exit as the factory was not performing, the machinery was 30-40 years old and there was a lot of downtime so the possibility was to sell or close and the main supplier to Da Gama, Cowie Trading, bought his shares and we’ve really turned the company around in the past 14 months. We’ve increased

production by 40%, improved the machine availability and put in proper systems to run the factory efficiently,” explains Managing Director, Greg James.

“Da Gama was started in 1946 and that was post-Second World War where people came out of the UK where the textile industry was quite big. They started a textile industry here in the Eastern Cape and it grew from there through until the mid-80s when Da Gama was biggest textile factory in South Africa, employing just over 9000 people and producing about 80 million metres of cloth each year – that was in the height of SA’s textile industry,” he says.

BATTLING CHEAP IMPORTS Ever since China joined the WTO in 2001, the global textiles and garments

industry witnessed competition of a new kind. The low prices and highefficiency were, for many, just too much to deal with.

But following Da Gama’s investment and focus on increasing productivity and output, James is confident that the factory can be competitive in not just local, but also international markets.

“When we have the factory running at full capacity, we will produce on par or cheaper than imports. Currently, we can weave at cheaper than what you can import cloth for. As we get the volumes up and the throughput in the business, this factory can compete internationally.

Also, if you buy local you don’t have to tie up cash in terms of getting letters of credit. It’s about educating the market and getting them to understand the benefits of buying local,” he says.

These benefit include; cost reductions, reduced lead times, supporting local employment and the benefit of being viewed as a ‘local company’ which, in marketing terms, is now a huge advantage.

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BUSINESS PROFILE

//THE SLOWDOWN HAS DEFINITELY HIT THE WORKWEAR MARKET. 30-40% OF THE VOLUME FROM THE MINING INDUSTRY HAS DISAPPEARED// “This is a very important industry,” says James. “It currently has government support in terms of putting in new machinery and as we start changing towards the retail industry we will grow. Our local retailers are up against international retailers like Topshop, H&M and Zara and this means our local companies will have to secure local production because it’s now about speed to market. The whole industry is changing and local fashion retailers can’t rest on their laurels and think they can import ready-made product; they have to

produce locally just to stay ahead of the fashion. Companies like Zara will change fashion within six weeks and if you can change fashion in this time by producing locally then you can compete.”

Working with local retailers looks set to become important for Da Gama who traditionally have not worked with SA’s high-street fashion retailers. Typically, the company has produced shweshwe which is the traditional African cloth that goes into the informal home-sewing market.

Shweshwe accounts for about 50% of

58 / December 2015 / www.enterprise-africa.net

Da Gama’s work and the other 50% is workwear related cloth that is made for heavy industry related activity with mining, power generation and other government contracts. All production is done locally for a local market.

However, as the economy slowdown has increased, mining and construction activity has seriously deteriorated which has forced Da Gama into a strategy change and bought about the focus on working with local retailers.

“The slowdown has definitely hit the workwear market. 30-40% of the volume from the mining industry has disappeared. What we’ve done is look towards retail where we will make retail-type products for companies like Foschini, Truworths, Woolworths and the like. That market is a lot bigger and we haven’t focussed on it in the past as the workwear market was sufficient,” explains James.

DA GAMA TEXTILES

//AS WE GET THE VOLUMES UP AND THE THROUGHPUT IN THE BUSINESS, THIS FACTORY CAN COMPETE INTERNATIONALLY// When it comes to building markets outside of South Africa, Da Gama is ensuring this is done in the right way and is not rushing into a big export push. Often, SA companies can become overstretched resulting in a loss of productivity because of over ambitious plans to expand into Africa and countries where growth is high without looking at the true market potential.

“Growth in emerging African markets is relative. If you’re expanding off a zero base then growth comes quickly. Everyone forgets that South Africa is a well-established African country and hence growth won’t be as rapid as it will be in these emerging

countries as they’re coming off a zero base,” he adds.

Of course, operating in a ‘wellestablished market’ has its benefits including spending power of potential customers, logistical infrastructure and the availability of tried and tested suppliers and if Da Gama, along with local retailers, can begin to build an integrated value chain for the local fashion market, the possibilities for growth of textile manufacturing could add to accomplishments of the last 14 months for this reputable Eastern Cape company.

“Our major success in the past 12 months is installing a proper

maintenance program so that we have managed to increase the availability and productivity of our ageing machinery. Being able to achieve this has made us more competitive.

There’s not a lot of downtime, we’ve increased the throughput in the factory and by making these improvements, we’re able to deliver on time and keep customers happy and that is the biggest success story,” concludes James..

DA GAMA TEXTILES +27(0)40 608 6200 info@dagama.co.za www.dagama.co.za

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www.enterprise-africa.net / December 2015 / 59

BOSVELD SITRUS

Business Growth

in a Difficult Industry PRODUCTION: Karl Pietersen

2014’s National Farmer of the Year, the Bosveld Group is the biggest private citrus grower and exporter in South Africa. The family-run business is recognised by most as one of the most innovative and forward-thinking companies in the agricultural sector.

60 / December 2015 / www.enterprise-africa.net

BUSINESS PROFILE

//

South Africa’s citrus industry has had its fair share of challenges in the past few years. There has been industrial action, economic difficulty with the falling Rand, drought issues, and of course the on-going saga involving citrus black spot (CBS) and the export of fruits.

In 2013, the EU banned most imports of South African citrus fruit because of fears that citrus black spot could spread. CBS is a fungal disease caused by Guignardia citricarpa and it effects the look of the fruit.

The EU Commission said: “The introduction of citrus black spot into EU territory would pose a serious threat to the EU’s citrus-producing areas. For that reason, it is necessary to further restrict the import of citrus fruit from South Africa.”

With the EU being one of the biggest importers of SA fruit (reportedly €1 billion per year), this caused serious concern for all involved and threatened the existence of farmers both small and large.

Fortunately, the ban was lifted in January 2014 but strict conditions were

put in place which made life tough for exporters. But now, as we approach 2016, the industry is seeing brighter times. Interceptions of exports with CBS at European borders are down, with November recording the lowest level this year (15 down from 28 in 2014), and 50 million of the 118 million exports going to Europe.

These numbers are largely down to the improvements that have been made at production level by SA’s hardworking farmers. Techniques such as using cleaner water, spraying plants and inspecting the fruit before and after packaging have all yielded positive results.

Citrus Growers Association (CGA) CEO Justin Chadwick said to BDlive last month: “We hope that they (EU) might consider reviewing their emergency requirements that place an additional burden (on us). Hopefully, this good result will help lift those emergency requirements.

“The result also underscores the positive findings made by the EU’s Food and Veterinary Office in August, when they conducted an audit on SA’s

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risk management system in February and March this year.”

Unfortunately, all of this success comes at a cost. The CGA estimates that citrus farmers now spend R1 billion a year keeping up with sanitary measures to keep CBS at bay. This has resulted in growers working with the government to try and reduce the strict regulations imposed by EU officials.

“This (emergency measures) is not sustainable in the long term, which is why we continue to work hand in hand with our government to reach a permanent resolution of this dispute to ensure the continued growth and survival of this key trading relationship,” Chadwick commented.

So what has this all meant for the farmers; for the people on the ground producing the fruit and exporting it around the world? Well, if you’re of significant size and properly managed, you shouldn’t have been thrown out too much.

Bosveld Sitrus is one of the leading exporters in South Africa, currently producing over five million cartons of fruit for foreign markets. By operating

BOSVELD SITRUS

//SUSTAINABILITY IN THE MODERN ERA IS UTTERLY DEPENDENT ON ADAPTABILITY. BOSVELD SITRUS EXEMPLIFIES THIS// as a commercial operation, with robust business principles, Bosveld Sitrus has managed to thrive through these tough times.

Piet Smit, CEO of Bosveld Group Holdings, told BizConnect that the family business sticks to thorough business philosophies.

“The executive directors of the business are sons-in-law of Milaan Thalwitzer, who joined his father’s 100 hectare citrus farm in 1965, later taking ownership thereof and built the extensive business we have today,” he said.

“We have properly constituted

financial risk extremely effectively and manage to innovate on a continuous basis,” he added.

companies, monthly exco meetings, and full sets of accounts for each division and company. We also have non-executive directors on the board to ensure we have independent advice to keep us focused on financial planning and to help us continuously assess our risk and adapt our strategies accordingly.

“For any primary producer to be sustainable and grow, it must make decisions based on sound business principles.

“If you take care of the detail and plan using as much data as possible, you can reduce your operational and

SPREAD THE RISK As part of the company’s plan to reduce operational and financial risk, it has diversified its product range over the years and now supplies many other fruits to complement its citrus business.

1750 tons of banana, 300 tons of avocado, 550 tons of litchi, 2000 tons of mango and 60,000 tons of sugar cane are grown on the various estates in Letsitele, Hoedspruit, Burgersfort, Politsi, Malelane and Komatipoort.

Furthering the variety in the portfolio, Bosveld has made acquisitions over the years that have bolstered its production capabilities. In 2011, Bosveld purchased Golden Frontiers Citrus and Komati Fruits. Around the same time,

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//FOR ANY PRIMARY PRODUCER TO BE SUSTAINABLE AND GROW, IT MUST MAKE DECISIONS BASED ON SOUND BUSINESS PRINCIPLES// the company also took up shares in Zest Fruit, a company which exports to markets in the Middle East, Far East, Russia and other important regions.

Expansion and broadening the scope like this brings huge benefits and Nico Groenewald, Head of Agribusiness at Standard Bank, says that the largest African bank supports diversification: “We have recommended for some years that farmers improve profitability through participation in the extended agricultural value chain,” he told BizConnect.

“We also believe it is essential for

farmers to move away from putting all their effort into one or two main crops and, instead, have a range of crops to spread their risk, increase revenue streams, enable more environmentally positive activities, and intensify the productivity of existing resources.

“Market tastes shift frequently, so it is vital that farmers become more agile in their operations. Sustainability in the modern era is utterly dependent on adaptability. Bosveld Sitrus exemplifies this.

“It also demonstrates that diversifying within the value chain enables you to spread existing resources

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over more output, reducing operating costs and increasing margins. You can do more with less.”

Moving into new international markets is also important in times when economic activity can change so quickly. The issues with European exports are ongoing and just a few interceptions of cartons containing CBS could drastically change the fortunes of SA exporters. This is why spreading the risk and heading for Asian and Russian markets is now critical.

“There is a big move towards Asian countries in general,” Dirk Hoffmann, Southern Africa Cluster Manager of Safmarine told IOL’s BusinessReport. “There is a bigger effort aimed at expanding and growing markets other than southern Europe. Of course you never want to walk away from any market, but if

BOSVELD SITRUS

//IN ORDER TO AVOID A BAN OF SA CITRUS, AS WE SAW IN 2014, IT’S BETTER TO AVOID THE RISK AND NOT SHIP DIRECTLY TO THOSE MARKETS, LIKE SPAIN, FOR EXAMPLE// that market poses too great a risk to the entire European market, then it is better to take a decision not to risk a big part of your crop.

“In order to avoid a ban of SA citrus, as we saw in 2014, it’s better to avoid the risk and not ship directly to those markets, like Spain, for example,” Hoffmann said.

FARMER OF THE YEAR In November 2014, the work that Bosveld had done to maintain and grow its position as one of the industry’s leading organisations was recognised

by Agricultural Writers SA after the association named Bosveld ‘National Farmer of the Year’.

Agricultural Writers SA was founded in 1977 and today has some 180 members across the country.

These members collectively voted Bosveld as the winner ahead of some tough competition. Away from the outstanding work the business has done in maintaining quality standards and yielding excellent crops, the association was also impressed with Bosveld’s work in transformation activities.

This is a company that is at the

forefront of the industry, solving problems and overcoming challenges at every juncture. As we move into 2016, there is no doubt that Bosveld Sitrus and the Bosveld Group will continue to shape the citrus sector and stamp SA’s position as one of the world’s premier fruit exporters.

BOSVELD SITRUS +27 15 345 8500 www.bosveldsitrus.co.za

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2015/12/14 5:30 PM

HYPROP INVESTMENTS LIMITED

Standing Strong

in Tough Times PRODUCTION: David Napier

Hyprop Investments is one company that is showing positive signs as we move into a 2016 that is set to be a difficult year for financial organisations. The shopping centre heavyweight is investing in its portfolio, bringing down vacancies, and it is also growing its presence in sub-Saharan Africa.

66 / December 2015 / www.enterprise-africa.net

//

Expanding into Africa is now not only attractive to South African companies of a certain size; in many cases it has become essential.

Spreading risk and accessing high-growth markets is not just desirable, it is required for companies that have grand ambitions.

The South African economy is showing no sign of shaking its sluggish performance and Finance Minister Nhlanhla Nene recently revised the National Treasury’s economic growth outlook down from 2% to just 1.5%. Adding to the negativity, the IMF announced in October that it projected SA’s GDP to grow by only 1.3% in 2016 – the slowest rate of growth since the crippling global recession of 2009.

Because of this weak performance, SA companies that are expanding into Africa have to make sure they have their local operations in check before they cross the borders with hopes and dreams. Often, similar problems will be found in other African countries and it’s important to know how to deal with these issues.

One company that has accelerated its growth into Africa in recent times is Hyprop Investments.

Importantly, Hyprop has a hugely successful business model in operation in SA and this has provided the springboard for the company’s movement into foreign markets.

Hyprop describes itself as ‘Africa’s leading specialist shopping centre Real Estate Investment Trust (REIT), which operates an internally managed portfolio of shopping centres in major metropolitan areas across South Africa’.

At home in South Africa, Hyprop owns some of the country’s most recognisable shopping destinations including super regional centre Canal Walk, large regional centres Clearwater Mall, The Glen Shopping Centre, Woodlands Boulevard, CapeGate Shopping Centre, Somerset

//WE SPENT ABOUT R900M ON THE REVAMP OF THE MALL OF ROSEBANK AND WE BELIEVE THIS WAS MONEY WELL SPENT// and Rosebank Malls, and regional centre Hyde Park Corner.

The company is now growing its presence in sub-Saharan Africa, in part through a joint venture with Attacq Limited (Attacq) and the Atterbury Group.

NIGERIA Just last month, Hyprop made its first move into Nigeria. In a deal that cost the company a reported $68 million, Hyprop purchased a 75% stake in the Ikeja City Mall with partner Attacq taking the remaining 25% for a reported $23 million.

The Ikeja City Mall fits into Hyprop’s portfolio and is the biggest shopping mall in Lagos. It is anchored

by South African multinationals such as Shoprite, Mr Price, Spur, MTN and Markham. The 22,000 m2 centre was purchased from Actis, RMB Westport and Paragon Holdings and attracts 800,000 visitors each month.

Hyprop CEO Pieter Prinsloo said: “Hyprop is well‐placed to capitalise on opportunities across sub-Saharan Africa, due to its partnership with the Atterbury Group and Attacq, whose combined expertise facilitates exploiting opportunities as they arise.”

Morné Wilken, CEO of Attacq, said: “Our strategic investment in Ikeja City Mall forms part of Attacq’s larger African investment strategy and was executed with the assistance of the experienced AttAfrica team. It is our first investment

in Nigeria, an African market with fantastic growth prospects. It adds to our investment in the growing portfolio of dominant, quality retail malls in subSaharan Africa.”

David Morley, Head of Real Estate at Actis, commented: “This sale reflects the strong retail opportunity in West Africa and the interest of quality institutional investors in sub-Saharan real estate assets.”

Prior to the announcement of the Ikeja acquisition, African business accounted for around 8% of the Hyprop portfolio and Prinsloo is reported to be keen to grow this to 20% in the future according to IOL’s Business Report.

“In Africa, it (acquisitions) can take a long time. If we find the right asset, we will do an acquisition,” he said.

“There are nice centres being built at the moment that are under construction in Lagos and Abuja. We will only go to the major centres.

“It must be logical. We’re not going to go into Russia or China. If we can

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BUSINESS PROFILE

find a good opportunity and we can establish a base there then we will look at it,” he added.

Hyprop’s other investments in Africa include: Accra Mall, West Hills Mall and the Achimoto Centre in Ghana and Manda Hill in Zambia.

ADDING VALUE With the aforementioned economic challenges reducing the amount of investment in South Africa’s commercial property sector, there are now limited opportunities for acquisition in the Rainbow Nation and this has resulted in Hyprop looking at increasing revenues from its existing portfolio to back up growth in its revenues from new investments.

Revamps and extensions to larger malls, including Rose Bank, over the past couple of years have seen improved performance with BDlive

68 / December 2015 / www.enterprise-africa.net

HYPROP INVESTMENTS LIMITED

reporting a 15% growth in distributions for the year to June.

“We spent about R900m on the revamp of The Mall of Rosebank and we believe this was money well spent,” Prinsloo told Business Day. “Now valued at R2.4bn, it is our third-largest after Clearwater Mall and Canal Walk. It immediately contributed to distribution growth.”

Upgrades to Clearwater Mall and Hyde Park, with its Cortina Court development, will see Hyprop’s performance boosted further – not only financially but also in terms of reliance on SA’s unpredictable power grid. Hyprop completed Phase 2 of Clearwater Mall’s solar photovoltaic plant in August and the system now has a generating capacity of 2,5GWh per annum. The group also installed additional back-up generators at Hyde Park Corner.

“Our portfolio has substantial back-up power and the effect of load shedding has not been material,” Prinsloo commented. “The additional 1000kWp at Clearwater from Phase 2 will help mitigate the impact of continuously rising electricity costs, as well as shrinking Hyprop’s carbon footprint, in line with the primary objectives of our environmental strategy.”

The fact that Hyprop has the ability to make investments like this is promising for investors. In September, Hyprop reported ‘exceptional returns for shareholders’ and the Integrated Annual Report for the year ending 30 June 2015, which was released in October, confirmed this success.

“Hyprop delivered excellent investment returns to shareholders for the year to 30 June 2015, despite the low GDP growth in South Africa.

“In line with our guidance to the

market of a 12% to 15% increase in distributable earnings, 2015 earnings came in at the upper end at 543 cents a share.

“Underpinning this higher return to shareholders was a solid operating performance from the core shopping centre portfolio.

“Ongoing strong demand for retail space in our shopping malls is reflected in our low vacancies of 1.3%,” said Prinsloo.

Looking to the future, the CEO is optimistic and says that distributions will likely increase despite the grim economic outlook.

“Our focus on owning quality shopping centres, catering for middle to higher-income consumers, is demonstrating the resilience of our growth strategies.

“Against low forecasts for economic growth in South Africa, trading conditions are expected to remain constrained in the new financial year.

//WE FORECAST GROWTH IN DISTRIBUTIONS OF AROUND 10% FOR THE FINANCIAL YEAR AHEAD//

In line with a proven strategy, Hyprop will maintain its leading position by focusing on the quality of its core portfolio, disposing of non-core assets and maintaining our prudent debt management. Given the maturity of the shopping centre market in South Africa, we will also continue to explore emerging market opportunities to strengthen our solid pipeline.

“Against this background, we forecast growth in distributions of around 10% for the financial year ahead,” he said.

HYPROP INVESTMENTS LIMITED +27 (0) 11 447 0090 info@hyprop.co.za www.hyprop.co.za

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www.enterprise-africa.net / December 2015 / 69

CASTROL SOUTH AFRICA

Slick Marketing

Cements Castrol as Industry Leader PRODUCTION: David Napier

Castrol South Africa is preparing to supply its world class products to one of the world’s most ambitious engineering products, set to take place in SA in 2016. It has also recently invested in a product that could improve the safety of the thousands of drivers who enjoy live sports events around SA.

70 / December 2015 / www.enterprise-africa.net

//

Castrol South Africa is on the cusp of a very exciting time.

The global oil and lubricant giant is a company whose work often goes unnoticed but its presence certainly does not. With a number of very important projects under way, Castrol is ensuring that its name is not one that is overlooked.

The British company opened its doors in SA in 1929 in Jo’burg, Durban and Cape Town before moving into Zimbabwe in 1939. A blending plant and more branches followed in 1945 and by 1946 SA was the third largest of Castrol’s overseas markets after Australia and India. The mining industry was a big consumer of Castrol’s products and over the years, the brand continued to grow adding more product lines, more facilities and more advanced technology.

Today, the company is the country’s leading oil and lubricant supplier and is well-known because of its conspicuous marketing strategy. Castrol sponsors and supplies racing teams, sports events, aerial challenges, and many more widely-viewed public spectacles.

One of the biggest and most important of these spectacles is set to take place soon in Hakskeen Pan, Northern Cape where the Bloodhound supersonic (SSC) rocket car will attempt to break the world land speed record by 33% and reach a top speed of 1050mph.

Castrol has been named as the provider

//THIS PARTNERSHIP GIVES US THE CHANCE TO SHOWCASE HOW OUR HIGH PERFORMANCE PRODUCTS SET NEW STANDARDS AND PUSH BOUNDARIES// of high performance lubricants, brake and hydraulic fluids, drawing on its historic achievements where the land speed record has been broken 21 times using Castrol products.

The company says: “Man has always dreamed of going faster, pushing boundaries to break the land speed record. Castrol’s pioneering spirit helps to achieve the impossible - driven by restless ambition for innovation and technology. Going faster and faster with almost a century of land speed records, to reach 1000mph in 2016, Castrol has been at the heart of all of this – fuelling the dreams of pioneers.”

Paul Waterman, Global Chief Executive of Castrol said: “We are delighted to support the Bloodhound project. At Castrol, we have a proud history of fuelling

pioneers and this partnership gives us the chance to showcase how our high performance products set new standards and push boundaries.”

Bloodhound Project Director, Richard Noble said: “We are delighted that Castrol has joined the team. Their brand is synonymous with racing at the highest levels and, of course, with many pioneering achievements in Land Speed Racing – I am happy to continue a 30 years relationship with Castrol having worked with them on both Thrust 2 and Thrust SSC projects. They are a great brand and will not only work with us on the technical side, they will help us share this engineering adventure with a global audience.”

Obviously, the Bloodhound SSC is a highly complex vehicle that needs the most advanced care

possible. It has been developed with industry-leading expertise from all over the globe at the Bloodhound headquarters in Bristol, UK. The car is named after the Bristol Bloodhound 2 missile that could accelerate from standstill to Mach 1 in 2.5 seconds.

Hakskeen Pan was chosen as the location for the record attempt after a detailed research programme undertaken by the Bloodhound team and the University of Swansea. The desert fit the criteria of having no vegetation and having at least a 10 mile space for a track. The strip is also flat and quite smooth, although it has needed work, and under the surface it is hard meaning that it won’t break up easily under pressure.

A 12 mile long, 1500 metre wide track was needed and has been built, with a lot of hard work from the local community, and the area is almost ready for testing to begin.

The team in the Northern Cape had to shift 16,000 tonnes of stone by hand in order to smooth the surface.

However, the surface is still not perfect and special suspension has

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BUSINESS PROFILE

© FLOCK AND SIEMEN

//TOP SCIENTISTS AND ENGINEERS HAVE WORKED ON THE DEVELOPMENT OF THE MOTOR OIL AND IT HAS UNDERGONE RIGOROUS TESTING IN HUNDREDS OF INDIVIDUAL CAR ENGINE TESTS, EQUIVALENT TO COMPLETING NEARLY 1.9 MILLION MILES, OR MORE THAN THREE MILLION KILOMETRES// been designed to keep the car and people safe when testing begins.

Castrol will be supplying a number of advanced products during testing, qualifying and for the record attempts.

One of the main products will be Castrol EDGE, the company’s strongest ever engine oil. The 135,000 thrust hp car will also use motorsport formula brake fluid - Castrol React SRF and Castrol hydraulic fluids previously used by NASA.

Castrol EDGE, boosted with TITANIUM Fluid Strength Technology (FST), was introduced to South Africa in June 2014 amid much fanfare.

TITANIUM FST was developed at the Castrol Technology Centrein the UK and is designed to double the film strength of motor oil, prevent oil film breakdown and reduce friction. It physically changes the way oil behaves under extreme pressure and helps form

72 / December 2015 / www.enterprise-africa.net

a protective shock-absorbing film that prevents damaging metal-to-metal contact. The oil has been developed in response to car manufacturers’ downsizing, turbocharging and advanced engine designs, such as direct fuel injection and variable valve timing. This has resulted in engine pressures tripling in the last 20 years, causing greater stress on the oil. Advances in engine designs and technologies being developed by car manufacturers aim to deliver greater efficiency, but also mean that engines are working harder and under higher pressures than ever before.

The only thing keeping metal engine components apart is the oil, so it needs to be strong and remain strong.

The launch of Castrol EDGE saw experienced racing drivers from various manufacturers drive cars at high speeds around courses in total

CASTROL SOUTH AFRICA

darkness, illuminated only by beams of light from the edge of the track. The drivers raced against the lights which quickly flashed on and off, revealing the twists and turns for just a few seconds. South African driver and competitor in the Super Trofeo Series, Adrain Zaugg, took part in the local trial in a Lamborghini Aventador. This type of promotion is typical of Castrol’s energetic marketing strategy.

Castrol technology manager for Africa, Rob Bowen said of the oil: “Top scientists and engineers have worked on the development of the motor oil and it has undergone rigorous testing in hundreds of individual car engine tests, equivalent to completing nearly 1.9 million miles, or more than three million kilometres.”

Away from oils and engines, Castrol South Africa has been looking out for its end users in a safety campaign that is focussed on drivers who attend sporting events. As a big sponsorship partner of some major sporting occasions, Castrol has invested in an innovation that could mean the difference between life, death or prison for drivers who head to the game and like to have a drink.

The Vuvu-Lyza is a type of breathalyser developed by Castrol and Ogilvy Cape Town which indicates whether or not consumers are over the legal blood-alcohol driving limit. Shaped and designed to work exactly like a functioning vuvuzela, you simply blow and receive a greenlight if you’re safe and a red light if you’re over the limit.

Brand Manager of Castrol South Africa, Pooja Desai said: “We are so proud of this safety initiative inspired by something so synonymous with our local football culture. We are sure the

Vuvu-Lyza will be a hit once it becomes available to public.”

In a promotional video, Castrol explains the technology behind the innovation: “Whenever there’s a big match, thousands of drivers make their way to stadiums and sports bars. While many of them choose Castrol to take care of their engines, they forget about other dangers on the road, like when they’re driving back home, unaware that they might be over the legal alcohol limit.

“So how can we give soccer fans a safer experience through innovation and protect them just like we protect their engines? The breathalyser test is the most common method for alcohol testing but it’s invasive so we combined the vuvuzela that everybody loves, with the breathalyser that everybody hates and created the Castrol Vuvu-Lyza. We placed a

//WE ARE SO PROUD OF THIS SAFETY INITIATIVE INSPIRED BY SOMETHING SO SYNONYMOUS WITH OUR LOCAL FOOTBALL CULTURE//

circuit board with an ethanol sensor and LED lights that run off a nine volt battery inside a vuvuzela and piloted the technology at soccer matches and sports bars. For the first time ever, drivers could use vuvuzelas to enjoy the game and to arrive home safely.”

This fantastic innovation proves that Castrol is committed to its customers in South Africa and as it continues to innovate and offer world class products, it is certain to remain at the forefront of the industry, leading the way in lubricants and motor oils.

CASTROL SOUTH AFRICA +27 11 488 5111 infosa@za.bp.com www.castrol.com

Wishing you safe travels this festive season!

Special thanks to CASTROL SA Proud Oil and Lubricant Supplier to the Fury Motor Group for over 20 years!

Fury Motor Group Proud Retailers of SA’s Leading Motor Brands

www.fury.co.za

www.enterprise-africa.net / December 2015 / 73

DB SCHENKER SOUTH AFRICA

A Growing Presence in

African Logistics PRODUCTION: Timothy Reeder

Since its establishment in 1962, DB Schenker has grown to become one of the leading transport and logistics companies in South Africa. With success particularly over the last decade, it now boasts operations at each of South Africa’s major ports, with nearly 900 employees providing solutions at its branches nationwide.

//

DB Schenker represents the transportation and logistics activities of Deutsche Bahn, whose logistics sector is the world’s second largest. It holds top spots in global air and ocean freight, alongside Europe’s densest land transport network, achieved through a combination of rich heritage, decades of experience and the delivery of superior service. Schenker South Africa’s employees, meanwhile, are divided between the company’s bases in Johannesburg, Pretoria, Durban, Cape Town, Port Elizabeth and East London.

South Africa today boasts one of the largest economies in Africa and is in the most developed country within subSaharan Africa. It has been pinpointed and placed among the BRICS countries, an association of five major emerging market economies alongside Brazil, Russia, India and China. There are several central facets underpinning

South Africa’s position, among which is its well-developed financial, legal, communications and transport sectors, as well as an open trade policy and a strong domestic market. It is also the best performer in Africa when it comes to trade facilitation logistics, and is among the best in terms of its transport infrastructure.

Whilst its logistics services within South Africa are highly diversified, DB Schenker focusses its attention on selected key industries. Its Ocean arm comprises hi-tech vessels with the capacity to transport up to 12,000 twenty-foot equivalent units (TEUs) in one shipment. The movement of close to 1.8 million TEUs per annum positions DB Schenker among the world’s leading ocean logistics providers. Its core products offer highly advanced standard services, while its industry solutions are tailored specifically to allow certain industries to maximise the effectiveness of their supply chain,

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whether this be shipping wine, sensitive goods or the transport of recyclables.

Under its DB Schenker Air umbrella, meanwhile, Schenkersky’s global approach ensures the delivery of perfectly scheduled and coordinated air freight solutions. These tailormade air cargo concepts take into account the full spectrum of logistics planning, from customs clearance through warehousing, distribution and transportation. Distribution concerns are handled by Schenker Freight Express (SFX), which integrates South Africa’s national land and logistics network with world-class infrastructure, logistics capabilities and global experience to service customers in 5500 destinations across South Africa & into Sub-Saharan Africa.

Completing an extensive portfolio of service offerings is the crucial arm of Logistics solutions, which sees Schenker Warehousing fulfil outsourced storage requirements through flexible and

BUSINESS PROFILE

//IN LINE WITH OUR GROWTH STRATEGY, WE CONTINUE TO INTENSIFY OUR OWN PRESENCE IN INTERESTING MARKETS// reliable warehousing in all major centres of South Africa. Not limited merely to storage, contract logistics requires an understanding and the designing of processes, only becoming optimal when a solution is found that contributes to added value and gives the customer a competitive edge. All warehousing processes are thus aligned with and integrated into the business strategies of its many customers to do just this.

Having established such an industry leading set of service offerings,

DB Schenker is looking now to further strengthen its ever-growing presence in Africa, in no small part through its new set-up in Angola and a first branch office in Mozambique. Located in Maputo and established midway through last year, Dr Thomas Lieb, Chairman of the Schenker AG Board of Management and responsible for the worldwide business of DB Schenker Logistics, explains that: “In line with our growth strategy, we continue to intensify our own presence in interesting markets. We are convinced

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that future growth in the global economy will also come from Africa.”

DB Schenker’s acquisition of partner Desert Logistics in Namibia is again geared toward further improving service levels and extending its global reach. Schenker Namibia (Pty) Ltd. is now the global firm’s representative, and Peter Glatz, Regional Director NME/ Africa, explains how this will facilitate an increased footprint for the firm.

“The focus of the activities is on looking forward to exponential growth in the Namibian market whilst maintaining good relations with existing customers by providing reliable and cost efficient world class logistics services,” he says.

Among its most significant

DB SCHENKER SOUTH AFRICA

//OUR SUCCESS SHOWS THAT GOOD PERFORMANCE AND A HIGH COMMITMENT MAKES IT POSSIBLE TO WIN AND KEEP CUSTOMERS// expansions in recent years has been a strategically located centre in Kenya, five kilometres from the Jomo Kenyatta International Airport, serving to combine convenience and growth prospects by connecting the port of Mombasa and the East African hinterland. This has been vital in achieving its notable successes in the area, as DB Schenker’s Regional Product Manager Logistics, Near Middle East & East Africa Ako Djaf states: “It is through our quality services and excellent work that we have been able to get big clients like GlaxoSmithKline and Organo Gold, who have transferred all their storage

and transport business within Kenya as well as other markets in Eastern and Central Africa to DB Schenker.”

With DB Schenker Logistics recently marking its 50th year of business in South Africa, expansion continues to be the key word for the company. Its new corporate offices, on which construction began earlier in the year, will include a Shared Logistics Centre that will expand its storage capacity by more than 50%. This 40,000 square-meter facility will include 4,300 square meters of offices for both its regional main office and Johannesburg branch, as well as 35,000 square meters

of warehouse. These new buildings are being constructed along a new access road for Johannesburg’s Oliver Tambo International Airport, to ensure quicker deliveries and easy employee commutes. Dr Lieb sums up how DB Schenker South Africa’s approach has enabled it to carve out a sector leading position in the country: “Our success shows that good performance and a high commitment makes it possible to win and keep customers, even in an environment that is not always an easy one.”

DB SCHENKER SOUTH AFRICA +27 11 971-8400/9 info@dbschenker.co.za www.dbschenker.co.za

THE SMART SOLUTION At Phakisa Holdings, we pride ourselves in the fact that we do not simply provide a service, we supply a full function staffing solution by actively engaging and partnering with our clients at their businesses’ core functionality.

Phakisa Holdings is people driven, resulting in a customer focused commitment, allowing us to become a leading brand in reliability as a business partner for turnkey human resources and strategic labour logistics intervention solutions.

Services include: • Payroll Administration • Staff Loan Administration • Permanent & Executive Placements • Comprehensive Labour Outsourcing

• Contract Co-ordination • Handling of Industrial Relations • Training, Inductions and Medicals • Industrial Action Solutions

Tel: 011 916 1737 | Fax: 011 916 2905 | Toll Free Number: 0800 745 745 17 Robin Street, Elspark, Germiston, 1459 www.phakisahldg.co.za *Phakisa Holdings was recently evaluated by Empowerdex as an AAA – Level 2 Contributor

www.enterprise-africa.net / December 2015 / 77

ICASA

Studying Pricing //

in South Africa PRODUCTION: Timothy Reeder

Prices continue to form the basis of discussion for ICASA. The price of data, the price of calling and the price of technology that allows us to do so much is always under review by South Africa’s communications industry governing body…

ICASA CEO PAKAMILE PONGWANA

78 / December 2015 / www.enterprise-africa.net

Africa is often labelled ‘the mobile continent’ thanks to its movement towards, and reliance on, mobile phones for all forms of communication. Whether its email, text messaging or voice calling, mobile phones are the preferred technology for almost all types of African consumer, across almost all African markets.

In a report published last year

by Swedish tech company Ericsson, figures suggested that internet use on mobile phones will increase 20-fold in the next five years – double the rate of growth in the rest of the world.

The report found that people in Africa use mobiles for online activities that others normally perform on laptops or desktop computers as the technology overcomes weak or non-existent landline infrastructure.

But it’s not just with internet usage where mobile phones are strong on the continent. It’s also with voice calls, thanks to the declining cost of smartphones and also the increasing network infrastructure that make even the most rural areas of the continent now more contactable than ever.

In South Africa, one of the continent’s most technologically advanced nations, access to mobile communication technology has become widespread since the dawn of democracy and in a recent report, the Independent Communications Authority of South Africa (ICASA), the regulator for the South African communications, broadcasting and postal services sector, found that Cell C now offers the cheapest rates for prepaid call tariffs as well as outof-bundle data.

ICASA’s Retail Tariff Analysis Report 2015 aimed to provide consumers with an analysis of the tariffs charged by the different mobile operators between 1 April 2015 and 30 September 2015.

According to the report, Vodacom was the most expensive, charging R1.20 per minute on flat-rate tariffs. The second most expensive was MTN, which charges R0.79; Telkom charges R0.75; and Cell C was the cheapest at R0.66.

//THE PRICE OF THE INTERNET IS THE MOST FUNDAMENTAL ISSUE THAT HAS NOT BEEN ADDRESSED// On the data side, Vodacom, at R2/ MB, was double the cost of the out-ofbundle rates of MTN and Cell C, at 99c/ MB each. Telkom is by far the cheapest, at 29c/MB. The most expensive 100MB data bundle is from MTN, at R35, followed by Vodacom and Telkom at R29, with Cell C at R19.

However, despite these findings, Vodacom still represents the biggest network in terms of customer base, with about 31.4 million users in South Africa.

PRICE NOT EVERYTHING Considering the results of ICASAs survey, you might think that the first thing everyone now does is immediately cancel their contracts and move over the cheaper providers but that is just not the case.

According to ICT expert Adrian

Schofield, quality of service and investments into marketing campaigns can drive customer loyalty more than ever.

“It is becoming the norm that consumers have more than one phone and many will have at least two different service providers. The one that gets the most business will be the one with the best quality and extent of coverage, with price coming second in the purchase decision.

“In the property business, the mantra is ‘location, location, location’ and in the mobile game, it has to be ‘coverage, coverage, coverage’. Vodacom and MTN have used their critical mass to ensure that they invest in the network – to reach as much of the population as possible and to provide the higher speeds demanded by smartphone users,” he said.

PRICE COULD BE BETTER FOR DATA In November, prior to the release of the Retail Tariff Analysis Report 2015, ICASA CEO, Pakamile Pongwana was speaking at AfricaCom 2015, one of the largest tech conferences in Africa. He spoke of the ongoing need to reduce the prices of data so that everyone can have easy, sustainable access to online services.

“The price of the Internet is the most fundamental issue that has not been addressed,” he said. “It’s not just access to submarine cable infrastructure, it’s not just access to satellite capacity; but it’s also how we interact with industry and how we enable industry to do what it needs to do in order to make sure the prices are at the right level.”

He said that ICASA was active in trying to bring prices to the most affordable levels by investing in infrastructure and allocating spectrum correctly.

“If you want to attain the type of speeds that you require, you need to deploy more and more infrastructure.

“We need to make sure that more

www.enterprise-africa.net / December 2015 / 79

ICASA

//THE ONE THAT GETS THE MOST BUSINESS WILL BE THE ONE WITH THE BEST QUALITY AND EXTENT OF COVERAGE// and more spectrum is available because that’s what reduces costs to operators.”

Toby Shapshak, publisher and editor of South Africa’s Stuff magazine, said in a TED talk last year: “Better and faster internet access (which is still too high despite data cost reductions) mean people can consume the news via their mobiles – something that is especially important because so many African countries still control the major media outlets.”

South Africa, like many other African nations, has developed a National Broadband Plan (NBP), which aims to ensure universal access to reliable, affordable and secure

broadband infrastructure and services by 2020 but Pongwana admits that the NBP needs to be flexible and able to adapt.

“The problem that tends to happen for almost every country that develops a NBP is that it has a good plan; however, most of us do not have the flexibility to revise the plan, rework it, make sure that it is implementable and then follow through. That is the main challenge,” he said.

Considering the general consensus, that a more developed mobile data infrastructure is needed, and the general desire of all to reduce to cost to consumers, it looks like we can expect

80 / December 2015 / www.enterprise-africa.net

faster, cheaper data in the future.

“Africa is a mobile-only continent,” Shapshak said. “There never was a landline infrastructure to begin with, apart from urban areas. Mobile has allowed anyone to have a phone in places that were previously impassable and uncontactable. It has also been enabled, from a business perspective, by prepaid payments that handily remove the equally widespread legacy problem in that very few people have banks accounts. It really is that technology leapfrog the industry likes to talk about.”

ICASA +27 11 566 3000 info@icasa.org.za www.icasa.org.za

THE NETWORK REGULATOR JUST CONFIRMED WHAT WE ALREADY KNOW

– WE OFFER THE LOWEST PRICE

Terms and Conditions apply. One recharge required every 30 days or a positive airtime balance. Free Facebook excluding pictures, videos and content not hosted on Facebook. Available on Cell C contracts and prepaid packages. Free use of Internet.org and access to other websites are not available in Wi-Fi zones. *A fair usage limit of 1GB applies. WhatsApp calling and international roaming are not included in the usage. Usage only for WhatsApp, other Internet usage will be billed from customers’ normal data bundle or airtime. For full Terms and Conditions visit cellc.co.za or ask in store.

10004641

This week ICASA, the network regulator, conducted an analysis on prepaid cellular pricing in SA. And it comes as no surprise that Cell C still offers the lowest guaranteed flat voice call rate.

We’re also still the only network to offer free Facebook via internet.org and for just R5 a month, unlimited* WhatsApp usage. So if you’re not with us, ask yourself if you are still happy to be paying more, and getting less?

ZEISS PRESIDENT & CEO - DR MICHAEL KASCHKE

ZEISS SOUTH AFRICA

An Innovative

Vision PRODUCTION: Timothy Reeder

Zeiss has been represented on the African continent for the past 75 years, as part of the renowned global organisation. With branches in the Western Cape and Kwa-Zulu Natal, the South African company headquarters is situated in Randburg, Gauteng and today houses the sectors of Industrial Metrology, Medical Technology, Microscopy and Sports Optics.

//

Zeiss as whole is an international leader in the fields of optics and optoelectronics, having been contributing to technological progress for more than 165 years. It produces solutions for the semiconductor, automotive and mechanical engineering industries, biomedical research and medical technology, as well as eyeglass lenses, camera and cine lenses, binoculars and planetariums. The South African arm of the company, a wholly-owned subsidiary of Carl Zeiss Germany since 1974, focuses on several key aspects of the Zeiss portfolio. As the leading manufacturer of microscope systems, complete solutions are on offer for biomedical research, the healthcare sector and high-tech industries, constantly enabling new standards of care. These solutions span dentistry, oncology, even neurosurgery, and retain a special focus on ophthalmology, ophthalmic surgery and visualisation systems in the field of microsurgery.

With its experience in lithography optics and other optical systems, Zeiss enables its customers across the world to produce extremely powerful

microchips via its Semiconductor Manufacturing Technology.

Crucial to the technologies at the heart of the modern world, the semiconductor equipment developed and manufactured by Zeiss forms the basis of the microchips used in nearly every technical device today.

A diverse product portfolio covers a wide range of key processes in microchip manufacturing, including optical lithography and mask optimisation. Technologies advancing the miniaturisation of the structures on microchips enable chip manufacturers to produce microchips that are increasingly smaller, faster and more energy-efficient per functional unit.

Research and development both play primary roles for Zeiss, an approach exemplified by a plant in Oberkochen which is unique worldwide with regards research opportunities in semiconductor technology.

Metrology, meanwhile, refers to the science of measurement, and Carl Zeiss solutions are employed by near every industry conceivable - among them automotive, aerospace and energy.

Perhaps most illustrative of this is the

www.enterprise-africa.net / December 2015 / 83

BUSINESS PROFILE

//ZEISS’S SPECTROSCOPY SOLUTIONS ARE AGAIN FOUND IN NUMEROUS INDUSTRIES, BE THIS AGRICULTURE, FOOD, GLASS, SOLAR OR THE CHEMICAL BRANCH// newly conceived Zeiss O-SELECT digital measuring projector which is able to eliminate measuring errors due to operator influence, thanks to fully automatic setting of both illumination and focus. This is becoming ever more important, as optical and contact coordinate measuring machines continue to replace manual equipment such as goniometers, gauges and profile projectors in production environments. With these manual tools, the potential influence of the operator is significant, an influence which O-SELECT is reducing to a minimum, and complex measurements can be completed quickly, traceably and reproducibly.

Zeiss’s spectroscopy solutions are again found in numerous industries, be this agriculture, food, glass, solar or the chemical branch. From Ultraviolet (UV) to Near-infrared (NIR), among its principal applications are in colour management, where a spectrophotometer is used to take measurements in the visible region of the wavelength range. The use of white light interference is a proven excellent method for measuring layer thickness, while NIR spectroscopy is a wellestablished technology for achieving accurate online moisture measurement.

Among such a wealth of diverse product spheres, perhaps most synonymous with the Carl Zeiss

84 / December 2015 / www.enterprise-africa.net

name, certainly in recent years, is the company’s expertise on camera lenses, used by millions of photographers all over the world. This might be in SLR or rangefinder cameras, in Sony compact cameras or in Nokia smartphones.

Zeiss’s cinematography lenses have captured era-defining images in some huge films, and have already been on the receiving end of three Technical Academy Awards, offering a host of options to enable shots that would have been considered impossible before. Zeiss lenses also have technical applications, assisting scientists and engineers in a range of situations, from quality assurance to satellite optics.

Boasting a comprehensive spectacle lens and diagnostic instruments portfolio, vision care is among Zeiss South Africa’s primary focusses. Vision in the digital age is increasingly affected by digital devices such as smartphones and tablet computers, with a typical user looking

ZEISS SOUTH AFRICA

//INNOVATION IS A WAY OF LIFE AT ZEISS. YOU MIGHT EVEN SAY IT IS IN THE COMPANY’S GENES// at a digital display between 60 and 80 times a day. As a direct result, we are using our close-up vision more than we used to, and generally in a highly focused way. Zeiss’s progressive lenses offer smooth vision from near to far, and provide natural, comfortable vision, its 100 years of experience in the production of precision spectacle lenses creating four different types. The Zeiss progressive lens portfolio offers four performance levels and seven technologies, some of which are the first of their kind anywhere in the world, providing clear vision at any distance.

Underpinning the entirety of

Headline Proud to be the Headline

Zeiss’s vision is an unbending policy of innovation at every step, allowing the kind of progress and remarkable development in evidence across its product range. Dr Michael Kaschke, President and CEO of Zeiss, makes this most explicit as he states: “Innovation is a way of life at Zeiss. You might even say it is in the company’s genes. Optical technologies are key technologies for our future. Their technological and scientific applications will increasingly appear in our daily lives.”

Due for launch in January 2016, Zeiss’s new DriveSafe lenses are specifically designed to meet the

vision needs of people who want to feel safer and more comfortable when driving with their everyday lenses.

It is no secret that many people feel uncomfortable and stressed when driving, especially in conditions such as rain and mist, or at dusk or night, and thus Zeiss has combined its Luminance Design® Technology, DuraVision DriveSafe Coating and DriveSafe Lens Design to afford better vision in low light and reduced glare at night, giving the user full command of the road and the visibility they have come to expect from Zeiss.

ZEISS SOUTH AFRICA +27 21 551 9202 info.za@zeiss.com www.zeiss.co.za

global partner in Southern Africa

With over thirty years of presence in the local market, with four offices strategically located in With a 35 year in the local market, with own four offices offices worldwide, strategicallya.located the Africa the country, an presence international network of over 120 hartrodtinSouth country, an international network of over 120 own offices worldwide, a. hartrodt South Africa partners with customers for their local, regional and global freight forwarding and logistic needs. partners with customers for their local, regional and global freight forwarding and logistic needs. a. hartrodt South Africa (Pty) Ltd a. hartrodt (Pty) Ltd Johannesburg Phone (+27 11)South 929 49Africa 00 I johannesburg@hartrodt.co.za Johannesburg Phone (+27 11) 929 49 00 I johannesburg@hartrodt.co.za

www.hartrodt.com www.hartrodt.com

www.enterprise-africa.net / December 2015 / 85

EXHIBITION CALENDAR

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

MAFSEC CAIRO 06-08 DECEMBER 2015 Mefsec provides an overview of current fire, safety, and security and counter terror equipment for the first time this year. The event will introduce new sectors in the field of safety, security and counter terror.

Mefsec is expanding this year and will be present in a bigger and better way due to the increasing demand and expansion in the Egyptian market.

An important objective of this event is the establishment of business contacts to promote the Middle East.

BET EXPERIENCE AFRICA 12 DECEMBER 2015 For the first time in Africa, BET (DSTV channel 129) presents BET EXPERIENCE AFRICA, an electrifying urban entertainment and lifestyle extravaganza at the Ticketpro Dome.

This non-stop 12-hour jam-packed entertainment fest features some of the world’s best music performers.

Attractions on the day include a funpacked Celebrity Basketball Game, a hilarious Comedy Stage, a series of uplifting and informative Genius Talks, a Fashion, Beauty & Health Expo showcasing the hottest brands and trends, a Sneaker Con and a daytime Sound Stage with performances by top African artists. The day is rounded off with this year’s spectacular concert with a stellar international line-up.

AL-ANSAAR SOUK 24 DEC – 03 JAN Durban’s most exciting attraction is now 17 years old. The Al-Ansaar Souk started off as a central meeting point for small and medium enterprises to trade side by side with the larger corporates and entertainment stores that attract locals, tourists and holidaymakers. Over the past years, the Al-Ansaar Souk has grown into a star attraction locally and abroad recording in excess of 100,000 visitors over a week.

86 / December 2015 / www.enterprise-africa.net

//TABLE OF ALL EVENTS: AGROFOOD WEST AFRICA Accra International Convention Centre 01-03 December MAFSEC CAIRO Cairo International Convention Centre 06-08 December BET EXPERIENCE AFRICA TicketPro Dome 12 December CAIRO ICT Cairo Town International Convention Centre 13-16 December AL-ANSAAR SOUK Durban ICC 24 Dec – 03 Jan PLASTEX CAIRO Cairo International Convention Centre 14-17 January DIGI SIGN AFRICA Cairo International Conference Centre 28-31 January 16 EAST AFRICA OIL AND GAS SUMMIT & EXHIBITION Kenyatta International Conference Centre 10-12 February

INNOVATING WITH PATIENTS AND PROVIDERS IN MIND Helping patients get healthy, feel better, live longer is all in a day’s work at Medtronic. Helping healthcare systems be more efficient is, too.

Learn about how we’re taking healthcare Further, Together by visiting Medtronic.com.

UC201602143c EN © 2015 Medtronic All Rights Reserved

STOCKHOLM

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First Telecommunications and Internet Service Provider in Africa to: / provide international sub-sea optical fibre connectivity to the east coast of the continent / significantly lower communications costs through an open-access network model / remove national and international infrastructure bottlenecks by providing city-to-city bundled pricing / facilitate research & education through sub-cost bandwidth

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