Enterprise Africa December 2017

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

December 2017

www.enterprise-africa.net

ALEXANDER FORBES

Journey of a

Lifetime

Exclusive interview with CEO Andrew Darfoor ALSO IN THIS ISSUE:

Buffalo Coal / Nautic Africa / Grindrod / SAOTA

EDITOR’S LETTER EDITOR Joe Forshaw joe@enterprise-africa.co.za SALES MANAGER Hal Hutchison hal@enterprise-africa.co.za SALES ADMINISTRATOR Emma Neethling sales@enterprise-africa.co.za SENIOR PROJECT MANAGER Sam Hendricks sam@enterprise-africa.co.za PROJECT MANAGER Shaun Cousins shaun@enterprise-africa.co.za PROJECT MANAGER Shannon James shannon@enterprise-africa.co.za PROJECT MANAGER Aarron Chapman aarron@enterprise-africa.co.za PROJECT MANAGER Emily Taylor emily@enterprise-africa.co.za FINANCE MANAGER Emma Smith finance@enterprise-africa.co.za SENIOR DESIGNER Liam Woodbine liam@enterprise-africa.co.za DESIGNER Harvey Tarlton harvey@enterprise-africa.co.za CONTRIBUTOR Manelesi Dumasi CONTRIBUTOR Karl Pietersen CONTRIBUTOR David Napier CONTRIBUTOR Timothy Reeder CONTRIBUTOR Colin Chinery CONTRIBUTOR Djamil Benmehidi

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//

Welcome to the December/January bumper edition of Enterprise Africa, which is the biggest and best magazine we have ever produced! With more stories, more interviews, more leading companies, more exclusives and more reach, Enterprise Africa continues to set the pace when it comes to profiling successful African businesses.

Through this festive season, we look at stories of growth and development over what has been a challenging year. In June, the country was in technical recession and its international credit rating with some of the world’s major agencies was downgraded to junk. With unemployment remaining high and GDP growth low, opportunities for businesses to grow have been few and far between, but innovative companies have still managed to shine.

This month we look at powerhouse financial services company, Alexander Forbes. CEO Andrew Darfoor is taking the business in an all new direction, looking to talk to clients like never before. He hopes that this will further increase market share and grow a “pan-African” business.

Grindrod Freight Services is investing heavily in South Africa shunning the negativity brought about by a slow economy; CEO Bongiwe Ntuli tells us more about becoming a global player.

Nautic Africa is now recognised across the continent as a company that supplies internationally recognised first-class maritime vessels; quite the achievement for a business that started out with a handful of people in a small yard in Hout Bay. Dundee’s Buffalo Coal was in a precarious position just 12-months ago but today, after a strong turnaround strategy delivered by new CEO Rowan Karstel, the business is profitable and on track for growth. A major planned expansion project of its Aviemore mine demonstrates just how far this very local business has come.

Genius architectural and design agency, SAOTA is looking at further building its international project portfolio and is celebrating success in Clifton; Director Greg Truen tells us more about staying ahead of the curve in an everevolving industry.

The fact that all of these businesses, and more, continue to defy the economic situation and grow regardless of lacking confidence is testament to the business acumen, innovation and strength that continues to flow throughout Southern Africa’s commercial markets. Let’s hope this can continue into 2018 and beyond.

We’re always online and would love to hear how your business has progressed, or not, in 2017 – get in touch @EnterpriseAfri1

Joe Forshaw EDITOR

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

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06/NEWS: The News Snapshot A round up of some of the latest news stories from around the country

152/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

8/ALEXANDER FORBES SA: Journey of a Lifetime Group Chief Executive, Andrew Darfoor is transforming diversified financial services giant Alexander Forbes with a radical new pan-Africa business model. “A lot has happened in my relatively short tenure at Alexander Forbes and I believe we are making progress in addressing the issues and positioning the company for growth on a pan-African basis,” says the man recognised

by CEO Today - Africa as a winning CEO.

8/ 4 / www.enterprise-africa.net

CONTENTS INDUSTRY FOCUS: FINANCIAL SERVICES 14/ARGON ASSET MANAGEMENT: A Proudly African Approach to Investment 20/NEDBANK: Taking Its Seat at SA Banking’s Top Table 26/AVBOB: 99 Years Strong for AVBOB

90/SPAR SA Reach for the SPARs 94/HALEWOOD INTERNATIONAL ZA Capitalising on Nationwide Good Cheer INDUSTRY FOCUS: TECHNOLOGY

INDUSTRY FOCUS: MARINE

98/PLATCO Heading for the Summit of Digital Entertainment Business

32/NAUTIC AFRICA: Nautic to Provide Better, Stronger, Tougher Ocean Solutions

106/DATACENTRIX Delivering Success In An EverChanging Business Environment

INDUSTRY FOCUS: LOGISTICS

110/SKA Taking Our Understanding of the Universe to New Heights

40/GRINDROD: Perpetual Motion INDUSTRY FOCUS: MINING 46/BUFFALO COAL: Buffalo: Up and Charging

INDUSTRY FOCUS: CONSTRUCTION 116/CASHBUILD Building On Strong Foundations

52/KOFFIEFONTEIN DIAMOND MINE: Petra’s Decade at Koffiefontein

122/ISOWALL Dominant Panel and Polystyrene Production

58/FOSKOR: A Vital Cog In South African Agriculture

128/SOUTHEY CONTRACTING Prolonging the Lifetime of Industrial Assets

INDUSTRY FOCUS: PROPERTY 62/SAOTA: SA’s SAOTA International 70/TSEBO FACILITIES SOLUTIONS: Happy New Year Africa 76/KONE ELEVATORS: Keeping Urban Life On An Upward Trend INDUSTRY FOCUS: FOOD & DRINK 80/PHILAFRICA FOODS Empowering Africa 86/SHOPRITE The Price is Right

INDUSTRY FOCUS: ENERGY 132/SASOL Strong Foundations Pave the Way to Sustained Growth INDUSTRY FOCUS: SECURITY 138/G4S G4S Secures Future Through People INDUSTRY FOCUS: AUTOMOTIVE 146/BAW SA The Road to Success

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R1 billion to be allocated to new SME Fund Deputy President Cyril Ramaphosa says R1 billion will be allocated to the newly announced fund for Small and Medium Enterprises (SMEs) as government makes a push to empower small businesses, especially those in the townships.

The Deputy President said this when he fielded oral questions in the National Council of Provinces in Cape Town earlier this month.

“As was announced in the [Medium Term Budget Policy Statement] by the Minister of Finance last week, a new fund for small business and innovation will be established which will be allocated R1 billion in 2019/20.

“The National Informal Business Upliftment Strategy is also available to help township enterprises upgrade their business activities,” he said.

Answering a question about empowering the youth through business initiatives, Ramaphosa said: “Last year, SEFA reported that it approved funding of R222 million to over 10 000 youth-owned businesses showing that the focus is on helping to empower youth-owned businesses.

“Much is being done to empower the youth and also to develop township enterprises.

“However, given the legacy of apartheid planning and the dire extent of youth unemployment, there is still much that needs to be done and what also needs to be done is to improve the business skills, the entrepreneurial knowledge of young people in the townships, in the rural areas and we are embarking on a number of other initiatives of setting up incubation centres that are going to help young people to become more proficient,” he said.

SKA to bring business, jobs to the Northern Cape Science and Technology Minister Naledi Pandor says the Square Kilometre Array (SKA) radio telescope will bring major development to Carnarvon when scientists and researchers from around the world flock to the small Karoo town.

The Minister said this when she addressed a community imbizo at the Carnarvon Town Hall.

“Hundreds of scientists are going to come to use the telescope and they will need to be supported, to be accommodated, to be looked after and we are going to need appropriate facilities for them in these towns so there is immense opportunity,” she said.

The Minister visited Carnarvon to open a road and a training centre as well as hold a community imbizo to engage residents on issues relating to science and technology and the socio-economic challenges faced by residents.

She said Carnarvon, Williston and other surrounding towns would benefit from educational and economic opportunities once research commences at the radio telescope.

The SKA is supported by 10 member countries – Australia, Canada, China, India, Italy, New Zealand, South Africa, Sweden, the Netherlands and the United Kingdom.

The project has brought together some of the world’s finest scientists, engineers and policy makers and more than 100 companies and research institutions from across 20 countries in the design and development of the telescope, the Minister said.

The construction of the SKA is set to start in 2018, with early science observations in 2020.

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NEWS SNAPSHOT

Dti, CIPC to investigate Steinhoff

GDP grows by 2% in third quarter

The Department of Trade and Industry and the Companies and Intellectual Property Commission (CIPC) are to launch an investigation into allegations against retail holding company, Steinhoff International.

The dti and the CIPC (which is an agency of the department) expressed concern at allegations of governance failures and financial irregularities at the South African retailer that led to the resignation of its Chief Executive Officer, Markus Jooste.

“The dti and CIPC will be launching an investigation into the allegations in so far as they relate to non-compliance with the Companies Act and Regulations. The dti will further suggest that the Independent Regulatory Board for Auditors (IRBA) also consider the circumstance with regard to the role of auditors in this instance,” it said.

Finance Minister Malusi Gigaba called on corporates to maintain a high standard of good corporate governance.

“The Minister wishes to reiterate his call on all South African corporations to maintain the highest practices of corporate good governance, reflecting that South Africans have entrusted them with their pension savings,” said the Ministry of Finance.

Minister Gigaba further announced that he supports the decision by the Financial Services Board (FSB) to institute an independent investigation into Steinhoff.

South Africa’s Gross Domestic Product (GDP) grew by 2% in the third quarter of 2017.

“In quarter three of 2017, the economy grew by 2% and we can see that year-on-year [it came in at] 0.8% and on a ninemonth to nine-month basis, it came in at 1%,” said Statistician General Risenga Maluleke.

Maluleke addressed his first GDP media briefing as Statistician General earlier this month since taking over from his predecessor Pali Lehohla on 1 November.

“Looking at growth rates over time, from quarter four of 2016 there was some negative growth in two quarters, including quarter one of 2017 but there was a [revised] 2.8% growth in quarter two of 2017,” Maluleke said in Tshwane.

Second quarter GDP growth, which pulled the South African economy from a technical recession, was revised from 2.5% to 2.8% after the incorporation of revised data sources.

In the third quarter, the primary sector leveraged the highest growth at 14.9%, while the secondary sector had growth of 2.1%, followed by the tertiary sector with 0.3%.

The agriculture, forestry and fishing industry was the largest contributor to growth in GDP at 44.2% and contributing 0.9% to GDP. The increase in agriculture was driven by increased production of field crops and horticultural products.

Mining and quarrying increased by 6.6% and contributed 0.5% to GDP growth, while manufacturing increased by 4.3%, contributing 0.5% to GDP growth. Growth in mining was mostly due to increased production for gold and platinum group metals.

Small business benefits from training programmes

Government agencies, put in place to provide business advisory services to small, medium and micro-sized enterprises (SMMEs), are making an impact in assisting them to grow.

“The Small Enterprise Development Agency (Seda) ran a coaching and mentorship programme at three locations in KwaZulu-Natal assisting 90 businesses, which resulted in an overall increase in turnover of R1 829 502 260 for companies in this programme and 1281 new jobs created,” Minister of Small Business Development Lindiwe Zulu said.

“The coaching intervention resulted in 220 new jobs created and an aggregated turnover improvement of 282%.

Sefa has supported almost 37,000 SMMEs and co-operatives for the period under review, resulting in over 42,000 jobs aided and sustained.

“Compared to the performance expected for the 2017/18 financial year, Sefa has already funded 96% of the targeted SMMEs and achieved 72% of the expected job facilitation and strengthening,” Minister Zulu said.

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ALEXANDER FORBES SA

Journey of a

Lifetime

PRODUCTION: Colin Chinery

Group Chief Executive, Andrew Darfoor is transforming diversified financial services giant Alexander Forbes with a radical new pan-Africa business model. “A lot has happened in my relatively short tenure at Alexander Forbes and I believe we are making progress in addressing the issues and positioning the company for growth on a panAfrican basis,” says the man recognised by CEO Today - Africa as a winning CEO.

//

Powered by a nine-decade heritage and circa R9b market capitalisation, South Africa’s largest retirements fund administrator and asset multi-manager is on a life-changing journey; in its sights, the prudent citizen and the multiple opportunities across the African continent.

Traditionally operating a business-to-business model centred on providing companies with consulting, asset management and retirement fund solutions, Johannesburg-based Alexander Forbes has moved to sell retail products to individuals within these funds.

It’s a radical strategy with a potentially massive unlocking of client base numerical assets. And heading it since his arrival 15 months ago, is Group Chief Executive, Andrew Darfoor, a dynamic CEO with a 20-year plus record in strategic planning, turn-arounds, and

next-stage business growth.

“When I arrived, I found a largely institutional focused B2B business with a range of chiefly retirement, employee benefit and investment manager solutions to the corporate sector. We are now on a journey, part of which is a shift from business-to-business to businessto-business-to-customer.

“We find ourselves sitting on about 1.5 million customers across Africa, yet we only touch less than 5% on a proactive basis. So there’s a huge opportunity for us to better penetrate our client base on the individual side.

LIFE CHOICES “Our true customer is the individual, and we want to help the individual make smarter financial choices throughout their lifetime.”

Consumer need could not be more explicit. For 35 years South Africans have borrowed more than they save,

and a study by Forbes shows only 6% of its working people will be able to retire comfortably at their current pension contribution rate.

This is the Sandton-company’s designated heartland, and at the core of its re-positioning is ‘Ambition 2022’, a strategy to help its customers on what Darfoor calls a life-time journey of financial security and well-being.

“Our philosophy is very simple,” he begins. “We believe every human being goes through three phases of life; accumulating assets, wanting to protect those assets through home and car insurance and protection solutions, and moving towards retirement with enough to secure a level of comfort and dignity.

“Now we know that not many people can do this, and it’s largely a result of bad financial decisions and bad financial planning. What we want to do is to work with our 1.5 million

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INDUSTRY FOCUS: FINANCIAL SERVICES

consumers throughout their lifetime around appropriate interventions, advice, making sure they have a goal, and giving them a better certainty in meeting it.”

DOMINANCE DEPLOYED This is the rationale behind the switch from B2B to B2B2C. “We are using our dominance in the corporate sector where we have access and strong relationships with corporates to better access individuals in the work site to build a stronger consumer business.

It’s a vertically integrated model around accumulation, protection and retirement.”

But while Forbes has achieved vertical integration in South Africa, it has yet to emerge in many other markets, a factor in another element in

10 / www.enterprise-africa.net

its Grand Design.

“We are going on a journey to build a globally distinctive pan-African financial services leadership; globally distinctive in the sense that we are trying to apply global best practice and standards localised for the African market.

“As for pan-Africa, we have made a clear portfolio decision in terms of which countries in the world we want to be in. We have therefore narrowed our ambition - to become a pan-African leader within financial services.

“We looked around some of the 54 countries in Africa - you can’t be in all of them – so we made some clear choices. We assessed countries, looked at GDP growth, and whether there was an emerging middle-class and structural reform around pensions and savings.

AFRICAN HUB “We prioritised a number of countries into what we call a four-hub strategy.

There is Southern Africa - largely Namibia, Botswana, Uganda, Zambia and Zimbabwe - and here our strategy is organic growth with selective bolt-on acquisitions so that we can offer that vertical integration across accumulation, protection and retirement.”

In East Africa, Alexander Forbes is active in Kenya, while across in West Africa Ghana and Nigeria are being prioritised. The fourth geo-hub is francophone Africa.

“It’s a region which very few companies have targeted because of the perceived language and cultural differences. But we feel there is a strong demand there for the solutions I have talked about, with Morocco being the

ALEXANDER FORBES SA

// WE ARE GOING ON A JOURNEY TO BUILD A GLOBALLY DISTINCTIVE PAN-AFRICAN FINANCIAL SERVICES LEADERSHIP // best market, and one that we believe will give us access to countries such as Côte d’Ivoire.”

Darfoor acknowledges that most companies leave with burnt hands when entering a new market without local knowledge and an understanding of the culture. “Yes it’s a risk” he says, “so the approach we are likely to take in many markets is to come in with a significant minority stake, get to know the country and culture better, assess and support the management team, offer our expertise, and then overtime move to majority.”

DOOR OPENER The expansion strategy is predicated on start-off corporate entrenchment, seen as door opener to employees and hence consumer solutions. “Our employee benefit capability, particularly in southern Africa, is fairly fragmented, with the markets served from a fly-in-flyout model from South Africa, which is frankly inefficient.”

But with 94% of revenue generated south of the Limpopo, Darfoor says South Africa will always be dominant.

“However, over the five-year cycle we certainly want the rest of Africa’s emerging markets to be in double digits

as a component of the group.”

If African markets are currently economically challenged, Darfoor is unfazed. “I look through the currents.

We don’t manage the business for the cycle but through the cycle, and I look at structural trends.”

“Take a country like Nigeria; 85 million people in work but with just seven million or so having access to savings and pensions, and that number was virtually zero five years ago.

“So despite the political and GDP challenges, that figure has grown at 1520% CAGR, and we see that penetration rising from sub 10% to between 20 and 30% over the next five to ten years.

Taking a longer term structural view, Nigeria is certainly a good market for us to be in because of our business model.”

South Africa too fits into this matrix;

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12 / Issue No.48 / www.enterprise-africa.net

ALEXANDER FORBES SA

seven million with access to pensions in a workforce of 15 million. “We are clearly the market leader in South Africa when it comes to retirement and pensions, but again, we are only talking to 5% of our actual individuals around their accumulation and protection needs.

GREAT OPPORTUNITY “This represents great opportunity, with strong structural growth within our existing business, improving cross-sell, getting the basics right, and by delivering on this big shift from B2B to B2B2C. So, while the economic indicators and political factors may not be favourable in the near term, we look beyond that, focusing on our strong customer value proposition, supported by excellence service and competitive pricing.”

Sorting out the basics was an early

ensure that we were bulletproof in the future, while at the same time promoting from within some of our bright talents.”

RECOVERY Just nine months after arriving at his desk, Darfoor was reporting significant recovery. “We had moved into positive leverage, growing revenue faster than expenses for the first time in three years, group margins were up by 50 basis points - the first time in five years expenses had been reduced significantly in excess of our target, and we delivered more profit and dividend.”

There were portfolio changes, including the sale of the UK business and using the proceeds to reinvest and fuel expansion in Africa including a significant stake in Zimbabwe-based African Actuarial Consultants, a promising

// BUT CAN YOU RUN AN ORGANISATION WHEN BUSINESS AND CONSUMER CONFIDENCE IS LOW, WHERE GDP IS LOW, AND WHERE THERE IS POLITICAL UNCERTAINTY - THIS IS WHERE YOU SORT OUT THE MEN FROM THE BOYS // agenda-topper. “The cost income ratio I inherited when I joined the business was too high - roughly in the 80s. I was unhappy that we grew expenses faster than revenue, unhappy about the margins, unhappy we didn’t have a clear strategy or portfolio choices.

“I was clearly dissatisfied with the financial performance over the previous five years. I think the definition of insanity is trying to do the same things over and over again and expecting a different outcome.

“It became clear to me that we needed a fresh perspective in terms of leadership and management, so of my group executive it is fair to say that of the 11 members of the group executive, eight are new.

“We have gone outside and gone for the best, bringing in both local and international skills in specific roles to

new leads–led partnership model with a group of South African financial advisers, and a $60m investment in the technology platform - the largest such investment in Forbes’ history.

“All this has been reflected in our share price, which has moved north, but not even close to the intrinsic value of the organisation if we can deliver on ‘Ambition 2022’.

“So while the progress we are making is satisfactory, in terms of our potential it’s barely adequate. When I look at the cross-sell into our end consumer base it’s still subscale. We are probably about six-months ahead of where I thought we would be at this stage, but there is a lot more we can and need to do.”

A graduate from the University of London and a qualified chartered accountant with an MBA from Cranfield

School of Management in Britain, Darfoor’s first job was serving drinks at the Artists’ Bar at the Royal Albert Hall – “I can still make a mean Pimm’s and lemonade,” he jokes.

With a 20-year track backdrop in bringing vision and all-encompassing strategic planning to international nextstage business, he headed Canadian insurer Sun Life Financial’s international arm before joining Forbes.

JURY OUT As a relative newcomer on the South African financial scene, he says that while the country’s short-term economic outlook is fragile, business and consumer confidence low, and the jury is still out on whether South Africa will experience further credit downgrades, much will depend on the mid-term budget and outcome of the ANC’s party conference.

“But here’s what we say. We are proud and honoured that our clients are loyal to us, with 85% of our business on the corporate side recurring in revenue nature and client retentions at over 95%.

That’s a good starting point.

“So in a tough economic cycle we believe we can be resilient as we become far more efficient, deliver the integrated model, and focus on strong client value proposition while waiting for the environment to improve.

“It’s all about resilience. When everything is going well anybody can look like a hero. But can you run an organisation when business and consumer confidence is low, where GDP is low, and where there is political uncertainty - this is where you sort out the men from the boys.”

ALEXANDER FORBES SA +27 11 269 0000 info@aforbes.co.za www.alexanderforbes.co.za

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ARGON ASSET MANAGEMENT

A Proudly African

Approach to Investments

PRODUCTION: Timothy Reeder

From offices in Cape Town and Johannesburg, Argon Asset Management has grown to become a leading owner-managed investment management company, focussed on providing investment management services for institutional investors.

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INDUSTRY FOCUS: FINANCIAL SERVICES

//

Argon Asset Management prides itself on being an active, research-driven investment management company, committed to crafting a trusted partnership built on mutual understanding. Its belief is that value unfolds over the medium- to long-term, and Argon therefore aims to build partnerships with its clients designed to be long lasting.

Africa is, after all, rife with opportunity to be capitalised on by an insightful, able company such as Argon. The continent currently represents some 15% of the world’s population, but contributes just 3% of the world’s GDP and less than 1% of the world’s stock market capitalisation. However, the situation is changing and what is being observed is a constant

// ARGON ASSET MANAGEMENT IS AN AFRICAN INVESTMENT MANAGEMENT FIRM WITH GLOBAL STANDARDS // In large part, its success has been its ability to straddle being both a proudly African company and having benchmarks recognised worldwide.

16 / www.enterprise-africa.net

increase in demand for goods and services. The need of financing in the real economy is therefore becoming increasingly necessary with sound financial sectors and

fund industries developing across the continent. Although some of these are still in their infancy, this is a tangible sign that these new needs are beginning to be met.

Africa presents an exciting opportunity and as wealth continues to increase, more domestic investors naturally emerge. Improvements in regulatory frameworks are also enticing foreign investment and distribution, and it is predicted that traditional asset management will grow at a compound annual growth rate (CAGR) of 9.6% across a number of those African nations termed ‘more developed.’ Founder, Mothobi Seseli sums up how Argon has set about differentiating itself from the completion to take full advantage of these developments.

“Argon Asset Management is

ARGON ASSET MANAGEMENT

an African investment management firm with global standards. Since we started operating in April 2005, we have been crystal clear on what it is we want to achieve: investment success on behalf of our clients,” he explains. “There were a number of us that came into this business together, all essentially black investment professionals who have been in the industry for many years and had built certain profiles and reputations, seeing the opportunity to participate in this space. We believe that in a dynamic environment such as this, diversity is key and that it can be a source of advantage. We have certainly embraced this as a firm.”

As Seseli continues, Argons’ progress has been guided by a firm set of principles designed to guarantee success at every turn.

“There are a number of pillars that uphold what we do, foremost among which are our global standards to which we always adhere. In addition, we strive to deliver beyond the benchmark; we are a wealth generating power. The third key element is recognising the value of the relationships we have with clients and the broader stakeholder community.

“Without the trust we have, those relationships cannot exist, and so we continue to spend a significant amount of time and effort developing them and only then comes this trust. Finally, transformation is the all-important ability to recognise that our environment is increasingly a fastmoving and global one, and so we have to be adaptable and able to transform rapidly.”

We spoke with Investment Management CEO Manas Bapela, who began by taking us through the steps that have led him to his current position. “My background is as a mathematician, primarily at the University of Pretoria having returned from the USA from my undergraduate studies,” he says.

“After some years of teaching at this institution I moved to Standard Bank Treasury as a Quantative Analyst, and then spent about eight years with a different asset management firm before being recruited by Argon Asset Management, initially as Head of Multi Asset Class. I went on to become their Chief Investment Officer, and this April I was made CEO while retaining my position as CFO.” Bapela details that, while

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INDUSTRY FOCUS: FINANCIAL SERVICES

Manas Bapela - CEO

the past 12 months have held challenges for Argon familiar to all those operating within this space, crucially, this company knows exactly what to do to keep building far into the future. “2017 has been a challenge for Argon in terms of increasing assets under management,” he says, “but in response we have been beefing up on other strategies, such as

retail, to grow these assets. From a product performance point of view it has been relatively good, in relation to client benchmarks.”

The retail sphere is going to be central to Argon’s growth over the coming year, Bapela explains.

“We are looking into firming up on our retail strategy so that we can attract retail investors into our asset management; it’s an area where we

// WE REALLY ARE INVOLVING OURSELVES AS MUCH AS WE CAN IN COMMUNITIES TO UPLIFT OUR YOUNGSTERS IN A VARIETY OF WAYS // 18 / www.enterprise-africa.net

want to see ourselves doing well so that we do not rely heavily on asset flows from institutions only.

We will be looking to offer retail products for others to invest in, to grow our assets under management by attracting people who wish to invest in it. We are looking to get on board individuals rather than large companies, by which I mean people coming to us through an investor who have been nudged our way by an advisor who themselves have money to invest.

“We also hope to see reasonable growth coming from institutional investors, which is currently the

ARGON ASSET MANAGEMENT

largest part of our book; we have seen asset consultants starting to upgrade us to mainstream, and so we hope that 2018 will bring even better results in terms of our allocation of larger assets.”

This bid for growth is already being bolstered by a commitment to ensuring that Argon has the correct personnel on board, according to Bapela, although perhaps not in the traditional way. “The bulk of investment or resources needed to run a retail product is taken up by a Management Committee” he tells us. “In our case, we are achieving this by using what we call cobranding. As such, we approach a company who can offer a MANCO, and pay them a fee to perform this role. That way, we avoid having to

invest heavily into the staff that runs the Management Company; we are a small firm that is not ready to have its own MANCO, but we can still use these partnerships to achieve the same effect. Plus, these can be long-term relationships, which is even more advantageous.”

It is abundantly clear that solid, lasting relationships have been a mainstay in Argon’s history. Bapela concludes by giving us some detail as to the company’s commitment to giving back, through investing into the youth of the country and beyond. “We believe that as responsible citizens we want to give back as much as we can,” he starts, “so social impact investing is one thing we will look to streamline amidst our growth plans.

“The aim will be to get more

entrepreneurial spirits coming through, so that we help grow the economy and create jobs - we aspire to give hope and opportunities to these people. We really are involving ourselves as much as we can in the communities in which we exist to uplift our youngsters in a variety of ways.”

ARGON ASSET MANAGEMENT 021 670 6570 www.argonassetmanagement.co.za

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NEDBANK

Taking Its Seat

at SA Banking’s Top Table PRODUCTION: Timothy Reeder

The Nedbank Group is one of South Africa’s four largest banks, and Nedbank Limited stands as its principal banking subsidiary. It specialises in a wide range of wholesale and retail banking services which combine with a growing insurance, asset management and wealth management offering has seen it recently named among South Africa’s most elite brands.

//

It is arguably Nedbank’s spirit of innovation, that ability to foresee what it is that will facilitate its customers’ lives with regards banking and beyond, that has remained the most reliable constant across its lifetime. Nedbank’s is a history can be traced back to the early 19th century - 1831 to be precise - with the establishment of the Cape of Good Hope Bank. A number of successive branding and structural changes ensued to allow it to arrive in the position it enjoys today, not least the shift from The Nederlandsche Bank voor Zuid-Africa to the Netherlands

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Bank of South Africa (NBSA) in 1951 to mark its establishment as a South African banking company.

The ensuing years have been punctuated by a raft of firsts, whether embodied in NBSA’s introduction of computerised banking services in 1964, or indeed its landmark move to pay interest on current accounts in 1983.

The adoption of the Nedcor Group name in 1989 catalysed a subsequent flurry of activity before the new Nedcor Group was formed in 2003, to combine Nedcor, BoE, Nedcor Investment Bank (NIB) and Cape of Good Hope Bank under this single umbrella. 2004 proved

INDUSTRY FOCUS: XXXXXXXXXX

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NEDBANK

to be a watershed year for the group as both structural and strategic changes were implemented, to restore the performance of the group and also lay the foundations for sustainable future growth; not coincidentally, the following year brought with it the rebrand to Nedbank Group Limited.

A commitment to innovation and an unerring desire to keep itself ahead of the pack has remained with Nedbank throughout its lifetime and

its many guises along the way, and the Group has long been known for an unfailing ability to embrace the digital and physical sides of the marketplace.

It has been crucial for it to direct its policy of innovation toward controlling both of these spheres, in order to meet the demands of a population for which digital services are becoming ever-more important in accomplishing what were once laborious tasks, but which also requires a strong network of branches

in order to benefit from the full banking experience.

In recent years, this approach has been embodied at Nedbank by the launch of innovations which have included Nedbank Approve-it™, an interactive secure transaction authentication system and MyFinancialLife™, a free online financial management tool. Small Business Friday™ is an initiative which encourages all South Africans to go

//Be more innovative with Entersekt Entersekt challenges the widely-held assumption that banking-grade security and convenient access stand in opposition to each other.

The South African founded global fintech company designs mobile security and user authentication solutions that comply with the most stringent regulations anywhere in the world while making it a lot easier for consumers to protect their accounts and personal information.

Digital security is often considered a grudge purchase, a complex and unprofitable prerequisite for doing business online.

Service providers fear that it will inhibit their customers rather than improve their experience of on-the-go sharing, shopping and banking. Entersekt reimagines online and mobile security as an enabler, empowering its clients to meet business and regulatory challenges with confidence.

Companies that use Entersekt’s products have increased their revenue significantly by expanding their online and mobile services and increasing daily interactions with more convenient and engaging experiences, especially on mobile. Fraud has been effectively eliminated on Entersekt-protected digital channels, even as false declines and abandoned online shopping carts have declined.

9-March 2012

73 Attempts 4 Breaches 18-February 2012

N U M B E R O F C Y B E R AT T A C K S

A proud technology provider to Nedbank Nedbank was the first financial institution to deploy Entersekt’s technology back in 2012.

It aimed to expand its digital banking offering and improve its usability without exposing its customers to additional risk of fraud. Entersekt built the bank a world-first interactive transaction authentication system, branded Approve-It, that replaced clumsy one-time passwords with an app-based one-touch process. In doing so, it reduced successful phishing attacks by over 99 percent overnight.

59 Attempts 20 Breaches

4-March 2012

60 Attempts 12 Breaches

Transakt go-live

70 60 50 40 30 20 10 0

Attempts

Fraud

Entersekt’s technology later formed the security platform for the award-winning Nedbank App Suite, which provided a market-leading range of mobile services, from retail and business banking to personal finance management and online stock trading. And, today, Entersekt continues its journey with Nedbank, having secured the bank’s all-new Money app.

Learn more about Entersekt’s solutions for strong authentication, transaction signing, mobile app security, biometrics enablement, payments enablement and regulatory compliance. Visit the company’s relaunched website at www.entersekt.com.

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INDUSTRY FOCUS: FINANCIAL SERVICES

out and support local small businesses in association with the National Small Business Chamber, and Nedbank has acted as one of its few platinum sponsors to show its full support of the project. The idea is to prompt what will be a lasting difference in these communities, and across South Africa as a whole, by supporting small businesses and thus reduce rates of unemployment and harvest the entrepreneurial spirit in abundance across the country.

More recently, however, the Nedbank thirst for positive change has manifested in the launch of an overhauled banking app with a number of new features, to respond to what is a growing desire on the part of its customers for both convenience and financial peace of mind. The aptly termed Nedbank Money allows

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customers to make instant payments to anyone on their smartphone’s contact list, regardless of whether the recipient is a Nedbank customer, and all while managing their accounts, making payments and changing their credit or debit card settings directly from their smartphone.

It is available for both Android and iOS to again provide for the full spectrum of its clients, and sees debit orders, card cancellations, beneficiary payments and much more able to be managed from the app. Nedbank Money also features an interface which monitors spending, debit orders and transactions across all linked cards and accounts, to give customers an overview of their finances and quickly spot and manage any negative habits which may creep in. As

ever, safety is at the forefront of thinking here, and Nedbank customers who download the app will be required to register with either their online banking or credit card details, after which they can activate the notoriously reliable Touch ID or PIN logins in order to protect their valuable data.

With this application the latest in a long line of predecessors, and with doubtless more to follow suit, Dave Woolnough, Head: Retail Digital & Mobile at Nedbank explains the clear financial and practical benefits that the quest for digitisation can bring to both bank and customer. “There is a big drive towards digital for a number of reasons,” he begins. “Firstly, it’s about convenience for the client and secondly, it’s about driving down cost for the bank.

NEDBANK

“There is enough investment across the financial industry to acquire more digital technology in a servicing capacity so that customers can almost service themselves. At Nedbank, though, we do still see the branch network as a key part of our strategy in the future but we will be moving more and more towards digital to improve the client experience and client engagement.”

This forward-thinking Group reported in September this year the launch of what it it claimed to be South Africa’s first solar branch in Mncwasa, 60km from Mthatha in the Eastern Cape.

It aims to provide convenient banking solutions to a community without banking facilities through SolarTurtle, a mobile service provider owned by members of the Mncwasa community, where more than 69% of inhabitants are currently economically inactive, with employment concentrated among teachers and small-scale entrepreneurs.

The solar branch will look to enable community members to access financial services such as cashless banking, and make use of digital-payment solutions through Masterpass – another of Nedbank’s digital payment apps which enables faster and safer transactions through its saving of client payment information in a secure digital storage facility. The are no costs associated with using this application, and with over 50,000 businesses set up to accept the payment method, its benefits go without saying.

The African Development Bank Group’s overarching mission is to fight poverty and to improve living conditions on the continent, doing so by promoting the investment of public and private capital in projects and programs that are likely to contribute to the economic and social development of the region. The AfDB is a multilateral development finance institution, founded in 1964 and which comprises three entities: The African Development Bank, the African Development Fund and the Nigeria Trust Fund.

The AfDB is a financial provider to African governments and private companies which invests in the regional member countries (RMC), and it recently approved a $172 million financial package for Nedbank Group to be put toward infrastructure, banking and housing projects. The package comprises a R2 billion subordinated loan, and a $30 million unfunded Risk Participating Agreement facility that

// THERE IS ENOUGH INVESTMENT ACROSS THE FINANCIAL INDUSTRY TO ACQUIRE MORE DIGITAL TECHNOLOGY IN A SERVICING CAPACITY // will benefit African issuing banks in 20 of these regional member countries.

According to Nedbank, “the sub-debt will strengthen Nedbank’s balance sheet and contribute towards the realisation of its strategy to finance among other sectors, infrastructure… digital banking and affordable housing.” This news is rather timely, as it will enable Nedbank to grow its asset book as well as increase its visibility as a credible confirming bank for African trade transactions.

A research project coordinated

by Brand Finance and Brand Africa, in partnership with Brand South Africa, the results of the South African Top 50 most valuable brands were presented this year at the Nelson Mandela Foundation in Johannesburg in July.

The most valuable brands on the list are measured by their financial value and consumer perception, with the top spots dominated by financial and telecommunications brands.

Nedbank celebrated the significant achievement of cracking this year’s top 10, positioning the company alongside such industry leading names as Standard Bank, FNB and Investec.

Despite the ever-present menaces

of recession, political instability and a higher unemployment rate, the total value of the top 50 brands increased 3% year-on-year from R384 billion in 2016 to R395 billion in 2017, according to Brand Finance. Jeremy Sampson, director of Brand Finance Africa, explained that, “[overall in 2016/17], the top 10 South African brands have grown in value by 3%. What did the economy grow by? [Approximately] 1%, maybe less. Brands are out-performing the economy. That is why brands are so important.

“South Africa is in many ways typical of an emerging market with an economy founded on natural resources and mining, underpinned by banking and telecommunications. However, when a country is struggling to grow at 1% whilst its brands grow by 3% it says much about the future potential if not interfered with,” Sampson finished, boding exceptionally well for Nedbank’s continued fortunes.

NEDBANK  @nedbank www.nedbank.co.za

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AVBOB

99 Years Strong for AVBOB PRODUCTION: Manelesi Dumasi

In August next year, AVBOB will celebrate its 100-year anniversary. To mark its centenary, the company will invest heavily in projects that will benefit South Africa’s youth. This is a company that is thinking about the past but has its eyes firmly fixed on the future.

//

As AVBOB approaches its centenary year, in an economic climate which is not conducive to sustainable growth, this old and proudly South African company continues to post excellent results. Frik Rademan, CEO since 2011, tells Enterprise Africa that his experiences over the past six years at the helm have been largely positive and AVBOB is now a different organisation to what it was when he took over.

“I was appointed as CEO six years ago, at a time when things were not going terribly well for AVBOB. We had negative growth in more or less all sectors, but a focus on our strategies and our plan meant that we were able to turn things around, and at board level it is vital that we continue to apply these strategies and our

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differentiators.”

The company held its AGM in November and announced healthy results. Rademan detailed a net income of R1.1 billion before tax, new business growth of 14.8% (156.3% over the past six years), total assets increased by 8.5% for the year, funerals conducted increased by 6.8%, and the surplus allocated for the improvement of policy holder benefits over the past decade amounted to R8 billion.

On top of all of this, AVBOB was certified as a Top Employer, further entrenching its name amongst Southern Africa’s elite organisations.

“I am very proud of what we have achieved, and of having become a top employer which would have seemed impossible six years ago,” says Rademan. “I cannot do anything

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Knowing where to look

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Congratulations and best wishes to Avbob on its 100th anniversary.

We wish you everything of the best with your future growth strategies and look forward to supporting you on this journey.

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AVBOB

// THE GROUP IS WELL POSITIONED TO WEATHER THE CURRENT ECONOMIC CHALLENGES AND HELP OUR STAKEHOLDERS TO DO THE SAME // without the right people, however, and it has been invaluable to have them behind me and have their support, which allowed us to make this transformation so successfully and position us where we are now.”

AVBOB has made its name as South Africa’s leading mutual assurance society, focussing on the funeral industry. The AVBOB Group, consisting of AVBOB Insurance, AVBOB Funeral Service and AVBOB Industries is South Africa’s only

mutual society that provides a onestop funeral insurance and burial service solution.

What has propelled the company from a small group of related businesses operating during the early 1900s to become a multi-national industry leader? “We believe that we can offer a one-stop service, and this, together with our mutual status, gives us the edge over our competitors,” explains Rademan.

“There is huge competition around every corner, and so in a niche market it is imperative to be the market leader, which is where our mutual status yet again keeps us ahead of the rest,” he adds.

2017: YEAR OF SUCCESS AVBOB’s Chairman, Piet Delport said in the company’s 2017 Integrated Annual Report that mutual status is what continues to set it apart from the chasing pack.

“Net new business increased by 14.8% and policyholder benefits by 25.4%. Our policyholders benefit directly from our growth and that is why our unique mutual status is and will remain our biggest competitive advantage,” he said.

“As we continue our pattern of consistent growth we remain firmly committed to our vision, mission, values and mutual model. Our relentless focus on the needs of our policyholders will continue to create long-term value and entrench AVBOB as the leader in the funeral industry.

“The Group is well positioned to weather the current economic challenges and help our stakeholders to do the same. Our corporate slogan ‘We’re here for you’ goes to the heart of the way we do business. Making this positive difference is where we will need to focus much of our attention in the coming years.”

In the same report, Rademan proudly delivered positive comments

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INDUSTRY FOCUS: FINANCIAL SERVICES

surrounding financial and HR performance.

“The Group has delivered excellent results for the year,” he said.

“All three South African businesses once again achieved growth and positive operating results. AVBOB Funeral Service achieved its best ever operating profit as a result of unit growth.

“We continue to demonstrate to the AVBOB family and South Africa, that our mutual status sets us apart and represents an opportunity to create policyholder value.”

Now certified by Amsterdambased Top Employers Institute as one of the world’s premier employers, AVBOB is continuously investing in its more than 7000 people.

“We have expended considerable

resources to improve the quality, skills and knowledge of the Society’s representatives. The claims turnaround time has reduced with a further 7% during the year under review,” said Rademan.

“I am proud to report that the Group has been certified as a Top Employer, and that the Society was ranked third in the long-term insurer category in the Sunday Times Top Brand Survey, was voted the winner of the Financial: Funeral Cover Category Award for the second year running in the 2016/17 Icon Brands Survey and also received a total of seven awards for results-driven advertising campaigns.”

The Top Employers Institute said of AVBOB: “Our comprehensive independent research revealed

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// THE PROJECT’S OBJECTIVE IS TO RENOVATE AND UPGRADE NINE SCHOOLS THROUGHOUT SOUTH AFRICA, COMMENCING WITH THE JOE SOLOMONS PRIMARY SCHOOL IN BLOEMFONTEIN // that AVBOB provides exceptional employee conditions, nurtures and develops talent throughout all levels of the organisation and has demonstrated its leadership status in the HR environment, always striving to optimise its employment practices and to develop its employees.”

CENTENARY APPROACHING On 15th August 2018, AVBOB will reach a major milestone – its 100th birthday. Internally, the company will celebrate with staff and partners but it is the external projects that the company has started with that will be remembered in the future.

Partnering with the Department of Basic Education, AVBOB is contributing to the upskilling of young South Africans in a major way. R150 million modernisations and refurbishment of schools, the supply of container libraries complete with books, and various other competitions and projects all aimed at youth are rightly garnering a lot of attention.

“The project’s objective is to renovate and upgrade nine schools throughout South Africa, commencing with the Joe Solomons Primary School in Bloemfontein,” says Rademan.

AVBOB

“It is a historic moment for AVBOB to be launching this project in Bloemfontein, because the Society was established here in Mangaung on 15 August 1918.” Assistant General Manager, Kebo Mosweusweu, added: “We at AVBOB strongly believe in uplifting the community and making sure that we equip it with the necessary facilities to succeed.”

Now approaching its end, the container library project is something of which Rademan is proud.

“Currently we are running a flagship project which sees us donating container libraries to underprivileged schools all around South Africa.”

This project has been hailed by the government with Minister of Basic Education, Angie Motshekga labelling AVBOB “the single largest contributor of fully functional container libraries given to primary schools in South Africa, each of which is worth approximately R500,000 and comes with 2500 books, to benefit

thousands of learners.”

To date, 45 container libraries have been delivered and the final five will be delivered by August 2018. The investment goes hand in hand with the National Development Plan that aims to eliminate poverty and reduce inequality by 2030.

Of course, for the company to continue investing in projects like this, sustainability and future proofing are vital. The CEO has no doubt that AVBOB’s future is bright.

“Without wishing to sound arrogant, I believe we are the market leader but there is still room for us to do things better and more effectively. I do think that most people regard us as the leader in this industry, which ultimately is integral to our strategy.

“Within the next two years we want to open another 100 branches, mostly in the rural areas, to get closer to our policyholders and provide them with an even better service.”

Piet Delport reiterates this

optimism. “South Africa is a country of opportunity,” he said. “AVBOB is a strong South African brand and we have a robust ONE AVBOB strategy that we will build on to allow us to remain a leader in the funeral industry.”

AVBOB 012 303 1000 info@AVBOB.co.za www.avbob.co.za

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NAUTIC AFRICA

Nautic to Provide

Better, Stronger, Tougher Ocean Solutions PRODUCTION: David Napier

Energy Focus talks to Nautic Africa CEO, Greg Wessels, about how this Cape Town-based shipyard is positioning itself at the peak of the African shipbuilding industry through constant innovation which earns it the reputation as the leader in its craft.

//

In late September, a 35m sentinel patrol vessel, designed and built by Cape Town shipyard Nautic Africa, was working in Nigerian waters. The vessel’s captain noticed a small fast-approaching the vessel on radar, expecting pirates, he hastily made the move to top speed.

Nigerian waters are regarded as some of the world’s most dangerous and Gulf of Guinea is seeing an increase in piracy, according to the International Maritime Bureau. In the first half of 2017 alone, there were 87 reported cases of piracy in the region according to the International Chambers of Commerce,

and many expect the real figure is much higher with many incidents going unreported. As the pirate vessel approached the patrol boat, heavily armed bandits instructed the Captain to slow or risk being fired upon. Confident in his vessel, he chose not to slow and the pirates stuck to their promise.

“This wasn’t a couple of guys taking a couple of pots shots. This was a situation where the ship was under sustained attack for over an hour,” explains Nautic Africa CEO, Greg Wessels.

“A fast skiff with outboards had crew with AK47s and a high-calibre

general-purpose machine gun. When the Captain didn’t stop, they targeted the bridge with a hail of bullets.

Eventually, they began to retreat, perhaps due to a lack of ammunition or fuel, or possibly getting too close to other security vessels.”

Importantly, the crew were unharmed and the patrol vessel escaped largely unscathed, proving the design and capability of Nautic Africa in a live and very real environment.

“With all of these shots, there was no penetration,” says Wessels. “We took a lot of care during design of Nautic’s Patented SuperShield Ballistic Structure

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INDUSTRY FOCUS: MARINE

to ensure there was a lot of overlap of ballistic material so there were no weak spots. Clearly, that paid off as there was no penetration and the crew are very thankful. Our team met with the crew and we’ve now shipped replacement glass and ceramics to ensure the vessel is ready to re-engage in security operations.”

Nautic Africa (a Paramount Group company) has grown to become one of the most trusted names in the African shipyard business.

“We have an international customer that spot hires our vessels and they’ve been very happy with the vessels service delivery but now that this incident has happened and

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the vessel protection stood up to the test, their customers have seen the capability. It’s good brand building for Nautic Africa and it proves that our vessels stand up to the test. It also gives additional confidence to customers knowing that their staff and cargo will be safe no matter the situation,” says Wessels.

The economic impact of piracy in Africa is large, hampering growth of the maritime industry and increasing the cost of shipping and offshore oil and gas production. This is why patrol vessels and modern ships are required, and where Nautic Africa has managed to carve a niche in the market.

HISTORY ON WATER Founded in 2008 by James Fisher, Nautic Africa started in Hout Bay before moving to the SA Naval Base in Simon’s Town. Just a small group grew into a staff compliment of more than 300 across three Cape Town harbour facilities. Today, the company is focussed on providing solutions for its clients.

“We started from very humble beginnings, where the company was renting a small office in Hout Bay. We then moved into the Simonstown naval dockyard where we grew a small but dedicated team, many of whom are still with us today,” explains Wessels.

“We forged ahead with our first vessel

NAUTIC AFRICA

which turned out to be a huge success.

While we were building that vessel, we secured another contract from the same client. Then there was a period where we didn’t know if we’d survive, but we really enjoyed creating vessels and put our passion into designing great products. We were relatively young in our careers and not too stressed about sales, so with our positive mind-set we forged ahead with our innovation in design and mantra of building relationSHIPS build to last, we developed our reputation and gained contracts for new vessels for new clients.”

Nautic’s next move was not out of the traditional business growth playbook. The business decided to

move forward with a risky strategy of designing a vessel without a confirmed client. “We took the market knowledge we had and created something that we thought would fit the market, a 35m Sentinel. We gained a number of orders while the oil price was booming,” explains Wessels. “We then used our drive to constantly improve that product for the environment that it was operating in, and our customers really appreciated that approach. in 2012, Nautic Africa teamed up with Paramount Group, the African-based global defence company. This strategic partnership quickly went about securing more international and naval clients. “Locally, we’ve worked with Armscor and the SA Navy and we’re quite involved with future projects for the Navy, specifically with smaller vessels and electronics. There’s are a number of exciting opportunities that have transpired since Paramount’s involvement says Wessels.

We started to win more sophisticated customers but as the oil price crashed we had to move fast, so we developed products for the ferry market and diversified our capabilities by investing in Veecraft and Southern Power. These businesses increased our product offering and value proposition by leveraging off vertical integration.

By striving for continuous improvement and a result focused approach, Nautic was awarded ISO 9001 2008 accreditation in 2014 and was one of the first shipyards worldwide to be accredited the ISO 9001 2015 standard.

// NAUTIC’S NEW, MODERN VESSELS WILL BE A GAMECHANGER FOR THIS BEAUTIFUL CITY. // An engineer by training, Wessels has been with Nautic Africa since joining as a Project Manager in 2009. He still holds the first vessel

ever completed as a flagship for the business: “Our first vessel is one that I’m very proud of because it’s still in operation now and our customer is ecstatic with it. I’ve got a soft spot for that vessel because I was intimately involved in design as a Project Manager and organising subcontractors that we still use today,” he says. “It’s been such a successful vessel in Nigeria which is a particularly tough market.

Secondly, there’s the first sentinel that we launched that was a real milestone for us as it was fully designed in SA, it was the first of its class in that space, and we’ve gone on to build 10 of those vessels.”

Since inception, Nautic Africa has designed and developed vessels and technology that has gone on to set the standard in its international sector, and the 35m sentinel with SuperShield Ballistic protection is the perfect example.

RECENT SUCCESSES Over the past 12-months, Nautic has realised significant success with a number of its different products. The company has delivered differing vessels to some big-name clients around Africa.

Just last month, Nautic Africa delivered four new passenger transfer ferries to MSC Cruises, one of the global leaders in the cruise liner industry.

Nautic’s 15m passenger ferries are capable of carrying 87 passengers and two crew. The vessels will be used to carry passengers from cruise ships to beach locations including Pomene and Portuguese Island in Mozambique.

“MSC Cruises required a very specific design that’s economic to run and can carry a high volume of passengers safely,” explains Wessels.

“MSC has two cruise liners in East Africa and they need to transfer passengers onshore from the main ship for various activities and back again – it’s essentially a water borne bus service.

Four of our ferries take 87 passengers each from a boarding platform on the main ship to the beach. We worked

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INDUSTRY FOCUS: MARINE

closely with MSC to develop this product. It was essential to understand the environment and operational requirements in order to deliver a successful solution. Our Nautic Marine Services team have further supported MSC operations with local skipper training and maintenance support.

“It has been an exciting project for us, our staff and suppliers are MSC Cruise customers and many of them have been on the Mozambique cruise holiday. Our people are proud when out there enjoying their vacation cruising to the beach on a product they have been part of creating. MSC have ordered ten vessels to date the final two are in production which will provide increase transfer capacity for the 2018 cruise season. The first four vessels, built three years ago, returned to the yard for refits and we’ve upgraded them significantly because continuous improvement is one of our core values.”

Wessels hopes that partnering with global names like MSC will enable Nautic to grow internationally,

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alongside its clients, into new geographic markets.

“We hope MSC’s operations in East Africa go from strength to strength” he says “and they are expanding into new regions such as the Caribbean so if they decide to roll out this concept in other regions it would be fantastic to continue to supply vessels. It’s important for us, with all our customers, to build relationships that last on a personal and commercial level.”

Earlier this year, Nautic was successful in supplying ferries to the Ivory Coast. In a R347 million deal with CITRANS, Nautic needed to deliver firstclass 27m composite catamaran ferries with large passenger capacity and robust Volvo Penta power solutions.

The first of these ferries, bound for action in Abidjan, was launched in Cape Town in December 2016 with much fanfare. Wessels is particularly excited about opportunities in Abidjan, a growing capital city.

“They are still building terminals due for completion by the end of the

year/early New Year so it’s a very active and exciting project. The old ferries are antiquated, slow and inefficient.

Nautic’s new, modern equipment will be a game-changer for this beautiful city. This project is about social upliftment and that’s motivation for our team.

“We delivered six vessels earlier this year and they’re all in operation now. There are four more in production for delivery in the New Year. We’ve been working closely with the operator and we have our own team on the ground in Abidjan. Local content and knowledge transfer in Africa is vital and so we aim to support development of those local operations as much as we can in a collaborative way,” he says.

IMMEDIATE FOCUS Right now, in Cape Town, Nautic Africa and its partners continue to move forward with the building of some of the most innovative ideas and exciting vessels, continuously striving to provide solutions to our client’s challenges.

NAUTIC AFRICA

“We have two 35m patrol vessels on the water now, fully commissioned, and we will deliver before the close of the year,” says Wessels of the company’s current focus. “. We are working on new projects with our sentinel range, that we’re very passionate about. We are developing new products with our in-house R&D department, using our proven Sentinel range we have implemented Hybrid propulsion systems. This will provide significant operational savings for our customers in furl and maintenance. With ease of product operation and efficient cost management Nautic has developed IntelliShip, an innovation in terms of remote monitoring of equipment for maintenance purposes through IT, on board Wi-Fi, satellite link and 3G networks when close to port, this will all be part of our new 38m defender range.”

The focus for Nautic will be an African one, ensuring that value and quality are top of the agenda resulting in long-lasting relationships with customers.

“We’re taking all the lessons we’ve learnt and all of the interactions we have with our customers on a daily

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INDUSTRY FOCUS: MARINE

GREG WESSELS - CEO basis and implementing them into the next generation of vessel which is fit for purpose in the African context. We want owners to feel they are getting the most cost-effective product that will provide an exceptional ROI,” Wessels adds.

SINKING ECONOMY? An industry that requires significant capital investment for product development and expansion strategies, ship building, and many shipyards, are dependent on a buoyant economy to create a preferable trading environment. But in South Africa, economic stability has, in recent years, become more of a dream than a reality. International credit agency downgrades, constant currency price fluctuations, high unemployment, low GDP growth, and an uncertain political landscape can make future planning challenging. Combine this with the commodity price instability in African markets in 2014/15 and things become increasingly difficult. “It’s been tough,” admits Wessels.

“Customers struggle to raise cash when the oil price is depressed. The amount of deals closing now and how

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competitive the pricing is, is vastly different to what it was two years ago.

The market is more buoyant now with the strengthening of the oil price but it’s a tough environment. We don’t feel too much of an impact from weakness in the local economy as not much of our business comes directly through South Africa but we do see a lot of our subcontractors struggling. The volatile Rand is challenging and a lot of other countries don’t have to deal with that – unfortunately that’s a risk we have to mitigate and discuss regularly.”

But, with a strong project pipeline and superior intellectual property, Nautic Africa has a competitive edge that it builds on. The company and everyone involved is instilled with a positive mind-set and optimistic culture, and this comes right from the top.

“One of our real strengths as a team is the ability to maintain our optimism when things aren’t going swimmingly. You have to be positive around the opportunities you are active with – it’s a project based business and one project can make all the difference.

We know there’s opportunity out there and we stay focussed on that,” enthuses Wessels.

He is confident that South Africa and South African businesses have much to offer. “The banks are keen to do deals,” he says. “Our Export Credit Insurance Corporation (ECIC) is very hungry to back SA export deals, so we are able to put great term sheets together for our customers; the desire is there, the opportunity is there but the financing is the constraint for many of these deals and we are able to facilitate the required financing solutions.”

A specific focus has been developed by the SA government – the Operation Phakisa Oceans Economy Initiative – aimed at growing and maximising potential from the country’s marine, maritime, offshore energy, fishing, tourism and related industries.

The hope is that this will stimulate

maritime activity and Nautic will be perfectly positioned to assist.

“There’s a big drive for it and the government is backing it. We want to drive innovation in the maritime space and we have a world class facility we’ve just put up and moved into this year.

We are talking to potential partners to take up part of the surplus office space, our vision is to build a Cape Town maritime innovation hub - and that’s gaining momentum,” details Wessels.

// WE’RE TAKING ALL THE LESSONS WE’VE LEARNT AND ALL OF THE INTERACTIONS WE HAVE WITH OUR CUSTOMERS ON A DAILY BASIS AND IMPLEMENTING THEM INTO THE NEXT GENERATION OF VESSEL // SAILING FORWARD Looking to the future, Greg Wessels is confident. Now approaching its 10-year anniversary, Nautic Africa has developed expertise across such a wide spread of products and services, it is undoubtedly recognised as an industry leader.

“We’re very broad with our focus.

We’re doing composite work in the ferry space, we’re doing aluminium work in the patrol space, we’re doing steelwork in the workboat space. We have had to be quite diverse because there are so few shipyards around Africa.

For me, becoming an internationally well-recognised aluminium shipyard with innovative design capability is at the heart of what we’re doing,” he says.

“We have some of the best welders, product leading designs and we’re just

NAUTIC AFRICA

// BECOMING AN INTERNATIONALLY WELL-RECOGNISED ALUMINIUM SHIPYARD WITH INNOVATIVE DESIGN CAPABILITY IS AT THE HEART OF WHAT WE’RE DOING // good at it. There’s a lot of excess steel capacity all over the world and in that space, we’re well-positioned so we will continue partnering with large steel yards to deliver larger, more complex vessels.”

Currently, the mission for Nautic

Africa is to ‘actively partner with customers by providing quality, customised and innovative maritime solutions’, but when questioned on whether this has already been achieved, Wessels says: “Instilled in the Nautic Leadership Principles of Trust, Empowerment, Extreme Ownership, Engagement, Innovation, Winning and Fun. Our people nurture trust by empowering their teams to achieve success through extreme ownership, by being engaged and actively seeking to build stronger relationships. Results matter, process and product innovation are part of our DNA, by doing so we stretch our limits to deliver superior results. We acknowledge these successes and celebrate them as a family.

“Vision-wise, we want to build a

sustainable business that positively touches the lives of our people by moving to the next tier of complexity on vessels. A large portion of our work has come from the 25-35m vessel space and the natural progression is to move into the installation of more sophisticated electronic and mission systems and building larger vessels which continue to exceed our customers’ expectations,” he concludes.

NAUTIC AFRICA +27 21 200 0601 info@nauticafrica.com www.nauticafrica.com

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GRINDROD FREIGHT SERVICES

Perpetual

Motion PRODUCTION: Colin Chinery

Grindrod is synonymous with moving cargo - by road, rail, sea and air. And while its grasp of transportation’s complexities is total and unsurpassed, the Durbanheadquartered group is constantly looking at sector diversification as well as geoexpansion. A dynamic organisation with more than 100 years’ experience in South Africa’s freight movement and related industries, Grindrod is all about serving the SA customer by moving cargo - by road, rail, sea and air - along with inter-related integrated logistical and specialised services.

A global business with a footprint in more than 34 countries, the Durbanheadquartered group is uniquely positioned to service Africa trade flows through its four divisions; Freight, Trading, Shipping and Financial Services.

“We use our strategically positioned infrastructure and well-established network to facilitate the movement of freight inbound and outbound for our customers,” says Bongiwe Ntuli, CEO of Grindrod Freight Services.

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INDUSTRY FOCUS: LOGISTICS

// WE ARE VERY WELL ENTRENCHED IN ALL THE LOGISTIC SPHERES, SPREAD ACROSS AND INTEGRATED BETWEEN PORTS, WAREHOUSING AND ROADS //

//

For a country where stocks of crude oil can fall disturbingly low, the creation of a new world-class independent petroleum bulk storage hub in the Port Elizabeth area is a notable strategic gain.

60% of South Africa’s domestic fuel requirements is met by imported crude oil, with half refined locally. Against this backdrop, the construction starting in January 2018, of the new storage facilities and marine infrastructure at Port Elizabeth’s adjoining Mandela Bay Port of Ngqura is set to support national petroleum demand projections calling for significant investments in tank storage facilities.

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The new Oiltanking Grindrod Calulo tank farm terminal is expected to begin operations at the end of 2019, reinforcing South Africa’s fuel security as well as delivering increased fuel management.

Annual distribution capacity will also increase – up one third to three million tons compared with the beach front tank farm in Port Elizabeth Harbour, whose long-awaited decommissioning and removal is a key in a refurbishment project that will see the establishment of an attractive waterfront.

“We have been working on this project for the past seven years, and to have now reached this point is very exciting,” says Bongiwe Ntuli, CEO of Grindrod Freight Services.

COEGA LIQUID BULK FACILITY “It’s the first BOOT project of its kind that Transnet National Ports Authority (TNPA) has undertaken in South Africa, with a private sector operator and it has been an education process for everyone involved.”

Oiltanking Grindrod Calulo (OTGC) is the main driver in the project, appointed as preferred bidder by Transnet National Port Authority (TNPA) to plan, part-fund, construct, maintain and operate the facility.

For Grindrod, the Ngqura liquid storage facility provides further commodity diversification in fuel storage and handling and aligns its broader portfolio of infrastructure based logistics.

The amalgamated Freight Services division, which Ms Ntuli has headed since January 2017, provides services for the integrated movement of dry-bulk, bulk liquid, containerised cargo and vehicles along specific import/export corridors.

Ntuli joined Grindrod Freight Services

GRINDROD FREIGHT SERVICES

early 2008 as Finance Director.

With a focus on these specific cargo types, the division provides road transportation, rail, port operations, terminals, intermodal solutions, warehousing, storage, stevedoring, sea freight, ships agency services and all facets of traditional logistics.

CROSS SPHERES Grindrod’s ability to deliver on the most complex of freight services is underpinned by a vast network of influence, specialised skills, strategic relationships and joint ventures, including successful BEE enterprises.

“We are very well entrenched in all the logistic spheres, spread across and integrated between ports, warehousing and roads. And we are complementary to operations that might seem to be our competitors, a partner with all the BlueChip companies as well as shipping lines and mines.

“We continually work with Transnet

and all the rail resource service providers to ensure that what we are doing is sustainable and measured for the South African economy,” says Ntuli.

Initiatives outside South Africa have secured partnerships in Zambia, Zimbabwe, the DRC, and Mozambique where Grindrod is playing a key role in the development of the port of Maputo.

Maputo benefits increasingly from its proximity to South Africa’s economic and mineral hubs, its relative proximity to the Gauteng industrial hub and South Africa’s main mining regions giving it a geographical advantage over Richards Bay and Durban, the largest and busiest shipping terminal in sub-Saharan Africa.

The last 14 years have seen $800m spent on increasing the capacity and efficiency of the port, the investment coming from the Maputo Port Development Company. A private Mozambican company, MPDC is a partnership involving the state-owned Portos e Caminhos-de-Ferro de Moçambique, and in which Grindrod has a 24.7% share.

The biggest infrastructure milestones were the two channel deepening projects - the first in 2011 and the last in 2016 – which included the dredging of the 76 km long navigational channel that leads to the port.

CAPACITY MULTIPLIED Grindrod Terminals first bought a stake in TCM, a dry-bulk handling terminal customised to handle coal and magnetite in 2005, when its capacity was less than two million tonnes per annum. Since then export throughput capacity has increased to nine million.

Following the dredging of the access channel, works began at TCM. This included, deepening of the berth pocket to accommodate fully-laden Panamax vessels.

Until very recently, these ships had to make double stops, one in Maputo and a second in another port in the region, or even diverted to neighbouring ports.

At the Port of Maputo, the Grindrod name is stamped on a cluster of major

terminal operations, including its Matola Coal Terminal facility which is experiencing spectacular expansion.

Grindrod also owns Maputo Car Terminal Limited, a specialised terminal that began operating in 2007 and has since expanded to a 115,000 cars annual throughput capacity.

Spanning an area of 85,100 m2, facilities include 25 wagon rail sidings, 15 road carrier bays, 28 inspection bays, more than three berths and four automated wash bays. MCTL is ideally situated both as a transhipment hub for the East and West coast of Africa and internationally.

Grindrod also operates a grain terminal in the Port providing a fully integrated support and distribution service for grains destined for home consumption and for the transit of grains to South Africa and Zimbabwe.

TRANSFORMING INVESTMENT Altogether these massive investments have been directed towards transforming the Port of Maputo from an alternative port into what Maputo Port Development Company’s CEO Osório Lucas calls, “a port of choice.”

For Grindrod, Mozambique “is a critical economy, predominantly in the south around Maputo and Matola. And

Bongiwe ntuli

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now our focus over the next months and years is to look at working with partners in the North to achieve the successes similar to Maputo,” says Ntuli, “You have to create capacity a little bit ahead of demand, in-line with your customer plans and then when the demand comes you are ready. If not, you will find yourself even further behind when that demand improves.

“We spend a lot of time on market studies, so while current pricing is probably at its lowest level, we expect it to stabilise.”

Diversification and geo-expansion includes investment in Zimbabwe’s North-South corridor railway, and work at the historic Ivanhoe Kipushi zinc-coppersilver-germanium mine in the Democratic Republic of Congo, an enterprise that could deliver one of the highest-grade major zinc mines worldwide.

Grindrod is exposed to agricultural commodities through the Klerksdorpheadquartered agri-logistics and support businesses Senwes, one of the

leading agricultural companies in South Africa, with retail and grain operations throughout central South Africa and grain trading offices in Mozambique, Malawi and Zambia.

Another high profile agricultural partner is Lichtenburg-based NWK. With business interests in Botswana, Zambia and the Netherlands, NWK trades in agricultural and agri-related products, resources and services including crop farming and the storage, trading and financing of grain and related products.

BEYOND AFRICA In Mozambique, Grindrod has invested in a graphite mining company, the first time the company has handled graphite, so diluting its exposure to coal. Outside Africa, Grindrod is seeing much activity and interest in its services the Eastern part of the world.

“However, we want to protect our name and brand, and do not want to venture into things we don’t understand.

So, whatever we do we exercise due

caution, offering a fully optimised integrated solution. Selection of locations is critical because we are long term players and invest for the future.”

What makes Grindrod successful says Ntuli, is its ability, together with an agility to look at opportunities and rapidly move first. “We are always on the lookout, and always follow cargo; we won’t get into any project unless we can achieve an acceptable return for our shareholders in the long run. And you have to ensure that your cost base is optimised.”

“If there was a crystal ball we would all spend a fortune finding it. And if we knew what tomorrow would be like, right now we would be down at the beach on a houseboat.”

GRINDROD FREIGHT SERVICES 031 304 1451 grindrod@grindrod.co.za www.grindrod.co.za

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BUFFALO COAL

Buffalo:

Up And Charging PRODUCTION: Colin Chinery

Trading profitably but with major technical, safety and inherited financial issues, Buffalo Coal called in mining heavyweight Rowan Karstel to devise and lead a rescue and recovery strategy. Challenges remain says the reforming CEO, “but things are looking ten times better than they were twelve months ago.”

//

Buffalo Coal in the Biggarsberg Mountains of KwaZulu-Natal is caught between seams of rich deposits and the overhang of inherited debt. In between; the hopeful buttress of re-structuring and sharpened efficiencies.

A high quality thermal and metallurgical coal producer, Buffalo Coal’s two operating mines, Magdalena and Aviemore near the town of Dundee supply thermal coal and anthracite to the domestic and export markets.

Although trading profitably, Buffalo Coal is faced with several challenges, some technical, some financial, and largely inherited, which CEO Rowan Karstel is determined to pay off while continuing to drive up operational

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performance and safety standards.

Before his arrival Buffalo had gone through a rebrand in 2014 and away from its previous name Forbes & Manhattan Coal. During the coal price slump, a sizeable amount of debt had been built into the company as it resorted to taking on a loan of some R200 million from Investec and a smaller sum from STA, a mining contractor.

Resource Capital Fund (RCF) had become involved when it acquired Forbes Manhattan and provided convertible loan notes. “Over the last three or four years with coal prices very low, Buffalo was unable to service its loans to RCF and had to convert into equity, which is why today RCF owns 85% of the company.

MEDIUM HORIZON Fast forward to 2018 and the plan “is to repay Investec in the coming years and hopefully add some value to RCF going forward,” says Karstel. “We need to take a medium-term horizon on Buffalo.”

A professional mining engineer with 20 years in the industry in South Africa and globally, Karstel arrived at Buffalo from RSVENCO where he was Executive: Strategic Development, a year ago, parachuted in as Interim CO and fire fighter.

“I came after being asked to step in and help out. At that stage it all looked doom and gloom. I was fortunate that coal prices turned, we managed to focus on a few key core risks, and here we are, still alive today. And things are looking ten times better than they were twelve months

INDUSTRY FOCUS: MINING

Rowan Karstel ago. Some of the key core issues that were resolved were the outstanding tax to SARS, updating the closure and rehab fund, and resolving a legal claim over the Aviemore Mining Rights with a local farmer.”

Aviemore, a drill and blast operation stretching across 5,550 hectares, produces 45,000 tonnes of anthracite coal a month.

But with operational constraints thwarting optimum efficiency, Karstel and his team did a scoping study on new adit and expansion options to increase the life of mine. The new adit will cost R240 million and construction will take about 18 months to complete.

To maximise the process plant capacity, the plan is to increase production from two to four sections with the new adit and increase the NPV value add.

AVIEMORE THE KEY “Aviemore expansion is the key thing at the moment. We have had a bankable feasibility study due to be finished in March 2018, and we have a few months to finalise the funding.”

Buffalo’s other primary asset in Dundee is the Magdalena thermal coal deposit,

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// TAKEN TOGETHER, I WOULD SAY THE WORK WE HAVE CARRIED OUT SO FAR HAS ALREADY INCREASED THE LIFE OF AVIEMORE FROM THREE TO 15 YEARS PROVIDED WE GET THE FUNDING // currently operated by STA Coal Mining Company, and with a monthly capacity of 120,000 tonnes.

“However, the open-cut reserves near Magdalena have depleted, and coal is mined from only underground sections.

The KwaZulu-Natal coal fields are difficult to mine with lots of dykes, sills and bad roof conditions making the risk profile much more complex. The challenge is always to have enough pitroom for the underground sections once geological difficulties is encountered,” says Karstel.

While Magdalena has its own beneficiation plant, coal from Aviemore is processed in a wash plant at Buffalo’s Coalfields site on the outskirts of Dundee, whose potential Karstel is keen to develop. “We are also looking at buy-in opportunities for neighbouring mines to fully utilise the 120,000 tpm wash plant.”

Magdalena’s geological issues will be addressed in due course, but Buffalo is focusing its current efforts on the expansion work at Aviemore.

“The Aviemore anthracite mine is very profitable and our current prime revenue driver.

“It’s all about fully utilising your existing assets, and by keeping the wash plants full it reduces our fixed costs, a key factor in mining. Taken together, I would say the work we have carried out so far has already increased the life of Aviemore from three to 15 years, provided we get the funding.”

Kastel’s restructuring began with the development of a robust marketing model. “Because we are a junior we don’t have the balance sheet to take the risk on the logistics side. We sell the coal FCA or FOR, which means we get a Rand price

BUFFALO COAL

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www.enterprise-africa.net / Issue No.xx / xx

INDUSTRY FOCUS: MINING

for the coal and we don’t take the rail and port risk. And this model has been working very well.

“When I came here, safety, environment and community was a real challenge. On the environmental side, there were a lot of issues, and we drew up an action plan which we slowly worked through and budgeted for.

“Our safety record was not good, and I managed to get a BHP Billiton retired health and safety manager to join us and develop a new safety strategy, and through this we have changed the safety culture.

“The major focus areas are leading indicators and visible felt leadership with the management team.”

OUT IN THE COMMUNITY With two large local towns, Dundee and Dannhauser, Karstel spends time in the communities. “I have good relationships with both mayors, and we make sure we support the communities.”

BUFFALO COAL

Karstel, who has given himself a “five-year window” at Buffalo, knows that as the biggest local employer, the company’s fortunes carry a heavy social and economic impact.

“If something happens to Buffalo, Dundee will take a really big knock.

In South Africa, we have what I call the three ugly triplets; poverty, unemployment, and inequality, and if I can make sure we keep the business alive and the people employed then we have made one big step forward for Dundee and South Africa.

“A CEO can be replaced at any time, but I will feel mission achieved if I know my people working on the mine have job security for the next 10 years and more and can support their families.”

Radical re-structuring such as Karstel has embarked on demands supportive expertise, so how has he set about attracting quality staff in a sector where such recruitment is more than usually challenging?

“Yes, it is a challenge, but I am fortunate that having worked for majors such as BHP Billiton and Xstrata Coal, and juniors so I know the mining and the coal sectors well, and know where to look for people and persuade them to come and work for us.

“My management style has always been to foster a culture of innovation, to give people a bit of freedom, think a little wider, and then learn smart risk taking. Then I will try to remove the obstacles where I can so they can achieve their goals.

“Ultimately you need to empower your teams, and this has always been my management style. And the people I ask to come and help often say they like to work in the environment I have created. For myself I like to be visible and lead from the front. Taken together, it’s all part of creating a step culture change in the company.”

On the technical side Karstel and his team have been developing reserves statements. “We need to understand exactly the geology and what the economic life of the mines are

in difficult mining conditions. Reserve statements are key components when you want to raise funds for expansion for debt and equity funding.

SUSTAINABILITY ““We have done a lot of work on process costing so that we know exactly what levers to pull to maximise values to generate positive cash flow. My approach has always been holistic and to look at the whole value chain and to see how we can generate a sustainable business.”

// I STILL THINK THERE IS AN OPPORTUNITY FOR COAL IN SOUTH AFRICA // Is Buffalo intrinsically a sustainable business? “Yes I believe so. The next challenge is to get the funding for the new Aviemore adit in early 2018 and generate enough cash to repay the Investec loan, I would say we have a solid sustainable business.”

In 2014, South Africa produced $11bn worth of coal, $8bn worth of platinum group metals and $6bn each of gold and iron ore. Coal was king by a mile. But while SA needs a healthy, modern and growing coal industry, economic uncertainties and political indecisions and wild talk, have blighted advancement, and mining groups have become increasingly wary of investing in South Africa.

Karstel is more confident. “I still think there is an opportunity for coal in South Africa. Thermal coal is still the cheapest way to generate baseload power for a third world country.

Anthracite is used by the local smelters and the number of producers the last few years have declined which puts Buffalo Coal in a good position. People should remember that there is clean coal technology which enables thermal coal to be burnt significantly cleaner for the future.

BULLISH AND AMBITIOUS “We supply coal into the thermal market and anthracite markets both for domestic consumption and for exports, and what we produce we sell. I am still very bullish about coal, especially over the next 10 to 15 years.”

But like the mining sector as a whole, the Government’s political agenda for the industry troubles him. “The challenge we have is more with Mining Charter 3 - our biggest risk for growth. Hopefully, with the Chamber of Mines taking the Government to court early in 2018 these issues can be sorted out.

“Personally, I am very positive about South Africa. We are definitely one of the top Third World countries, and with a solid economy with good infrastructure, good banks and a sound legal system, I am very positive about where we sit. The politicians always have their own agenda, and they come and go but I think we must look at the bigger picture and more long term.”

Meantime back at Project Buffalo, Karstel points to “exciting opportunities in the in the short and medium term.

We have done some really good things including best practice implementation in various areas. The first challenge is to secure the funding for the adit, and if we can get it organised the next few months, deliver the project on time, we will move closer to being one of the top junior coal players in South Africa. The second challenge is to deliver consistent production targets so that we have the cash flow to repay back the Investec loan.”

BUFFALO COAL 011 656 3210 info@buffalocoal.co.za www.buffalocoal.co.za

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KOFFIEFONTEIN DIAMOND MINE

Petra’s Decade at

Koffiefontein PRODUCTION: Timothy Reeder

It is 10 years since Petra Diamonds, the London-listed diamond producing organisation, took over at the Free State’s Koffiefontein mine. According to General Manager, Lino Nkuna, the great success of the past decade has been the way in which the mine has propped up the local economy while still producing valuable mineral assets.

//

The Koffiefontein diamond mine, located 140km west of Bloemfontein, and is one of the largest kimberlite diamond mines in the world by average carat value.

Purchased from De Beers in 2007 for R81.9m, current owners Londonbased Petra Diamonds has announced that a mine expansion plan will see production at Koffiefontein increase from 50,500 ctpa in 2017 to 85,000 ctpa by 2019. According to Petra, research into existing resources suggest that the mine could still have in excess of 20 years remaining. According to General Manager Lino Nkuna, this is remarkable for a mine that was first discovered more than 130 years ago and which has been supporting its local population ever since.

“We call it an antique mine” he

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says, “it’s one of those mines that you feel grateful to be associated with. The fact that after 130 years, it’s still going forward and looking strong, it gives you renewed energy to be part of it. There’s not many mines that you can take back to the 1870s – most of the current mines are at oldest from the 1930s. I don’t want to call it an old lady because she doesn’t look old and she’s still going forward.”

// WE ARE A PIONEER OF SLC MINING IN SA // Currently, Koffiefontein uses a Sub-Level Caving (SLC) mining method where all of the ore is fragmented by blasting and the host rock in the hanging wall of the ore body caves.

This advanced mining method is easily mechanised and is usually investigated when open pit mining is no longer economically viable. Petra is keen on SLC and has implemented the strategy across a number of mines, including the Finsch Diamond Mine located some 260km north west of Koffiefontein (featured in the July 17 edition of Enterprise Africa). But Koffiefontein is an expert in SLC and is regarded as an example to follow.

“We are a pioneer of SLC mining in SA, we started before the Finsch mine and we moved from the block cave method. Currently, all of our mining is SLC,” says Nkuna.

The hope is that Petra’s mine plan will see production, through SLC methods, ramp up to 1.1 mtpa by 2019 at an average grade of 8.5 cpht.

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INDUSTRY FOCUS: MINING

// THE REASON THIS OLD LADY IS STILL HERE IS BECAUSE OUR OPERATION IS NOT ABOUT JUST PROFIT – IT’S ALSO ABOUT THE COMMUNITY OF KOFFIEFONTEIN // “The expansion project started the moment Petra bought Koffiefontein,” explains Nkuna. “It’s a small volume mine but we had to go beyond the original depth of 490m and we’ve extended to 620m. We’ve added extra levels which hold seven million tons that we can still mine without expanding further. The only thing we are building is a new crushing plant which should be

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finished by the end of the year.”

Currently, SLC mining is taking place across the 560-580 metre levels and the process is running smoothly.

“It’s exciting I must say.

“The reason this old lady is still here is because our operation is not about just profit – it’s also about the community of Koffiefontein,” reminds Nkuna. “What we like to do is create a

life for the people of the community and look after those people. We will do our level best to make the mine as productive as possible for as long as possible. The pipe is still going and we have put in place studies for the future, but right now we are concentrating on delivering the crush and getting the seven million tons out before we look at digging deeper and going beyond the 620m mark.”

PETRA’S 10 YEARS AT KOFFIEFONTEIN Petra has been running Koffiefontein successfully for a decade. After the company took control in 2007, it quickly

KOFFIEFONTEIN DIAMOND MINE

the month of September with industrial action but we are planning for the end of the year. It’s a big milestone to celebrate. We’re looking to acknowledge the people who have been a part of the project with Petra; remember when we took over the operation it was closed so we started in 2007 and we’re now looking back over ten years and we can’t acknowledge those years without the people who played a part. We hope to include all employees, suppliers, partners and community members in the function we are planning.”

Koffiefontein translates from Afrikaans to ‘coffee fountain’ and is so-named for its position in the country where traders would take a rest break when travelling from the coast to the gold mines of the north. Riders would grind coffee beans by hand before using a nearby spring for water. The town

was established in 1892 following the discovery of diamonds and the start of mining in 1870. Today, the mine is owned by Petra (74%), Kago Diamonds (14%) and Itumeleng Petra Diamonds Employee Trust (12%).

Nkuna highlights the impact of the mine, especially since the Petra purchase, on the local community as the single most important element of the past decade.

“We currently employ around 300 people directly and give chances to many entrepreneurs. We are part of a social labour plan (SLP) that tries to develop local skills for the industry.

“We are committed to various projects through the social labour plan and we are reviewed each year. We have just completed building a new soccer field and stadium, we’ve put in a pipe to supply water to the community, and we

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set about installing efficiencies and boosting productivity at the mine.

Today, the Koffiefontein is known for very high value diamond production, unearthing white stones of exceptional quality and occasionally a fancy pink diamond. To date, the largest discovery came in 1994 when a 232-carat diamond was found. Asked if there will be a celebration to mark 10 years of Petra involvement, and a successful turnaround from a mine that Petra started with in a care and maintenance programme, Nkuna says a function is being planned for the end of the year.

“It’s in the pipeline.

“We went through a tough time in

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INDUSTRY FOCUS: MINING

are in the process of building a crushing plant for brick making. We also donate money to the schools depending on their needs. We don’t just wake up in the morning and decide to do these things – we engage with the community on what they need and do our best to help. The soccer field helps encourage the youth to participate in physical activity; we are in a desert area so the pipe has helped to alleviate drought in the community of Koffiefontein; and with the crusher plant and brick making facilities coming in, we will be creating employment. These are the things that make me proud and look forward to serving the community further.”

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LONG-TERM FUTURE Current economic conditions have the seen the mining industry facing up to a less-than-favourable investment environment. Many miners have had to consolidate, as deposits become deeper and more challenging to extract on shoestring budgets. But at Koffiefontein, the economic impact is not concerning Nkuna and he remains confident about the ability of Petra to see through these tough times.

“For me, there’s not too much impact,” he says. “Yes, it’s concerning because if you produce a mineral that you cannot sell, you quickly decline.

But one thing that is encouraging is our mineral - diamonds don’t dry out or become old. If we can sustain production, even through instability in the economy, there will be a time where we can sell at a higher price. The more precious minerals you have, the better position you are in to negotiate and remember we compete with big companies like De Beers. If the economy is not in our favour, we will simply hold on to the minerals and negotiate a better price in the future.”

As for the feeling surrounding the future of the industry, where many are pessimistic, Nkuna expects positivity going forwards. So many talk of a ‘skills gap’ and a clear distinction between the goals of corporates and those of

KOFFIEFONTEIN DIAMOND MINE

// WE WILL DO OUR LEVEL BEST TO MAKE THE MINE AS PRODUCTIVE AS POSSIBLE FOR AS LONG AS POSSIBLE // the front line but Nkuna says that he is witnessing a constant flow of hot prospects looking to mining as a career.

“People still believe in mining,” he says. “Statistically, safety has been improved across all mining houses and there are many mining students who are very interested in coming into the industry. Every day, we get CVs of graduates who want to get involved in the industry and be trained by the industry, so for me it’s still the core

business for many young people in South Africa. With technology coming in further improving safety, we are seeing quality, intelligent people coming into the business. I’m confident that South Africans still believe in mining as a career to follow.”

The General Manager has been at Koffiefontein for 12-months but his career spans more than 22 years in the industry, having previously worked for Goldfields before joining the diamond mining industry in 2012.

With the mine expansion plan, active community involvement, support from government, and research that suggests many more carats to come, the future looks extremely exciting for Koffiefontein and Nkuna is looking forward.

“There’s nothing more encouraging for the people than hearing that the

mine life will be extended for another 10 years. The people of Koffiefontein have no other choice apart from working with this mine so their main concern is how long can we continue mining for and we have confirmed that there is potential for going deeper and that brings good vibes. It is an exciting time and we are always looking forward,” he concludes.

KOFFIEFONTEIN DIAMOND MINE +27 11 702 6900 info@petradiamonds.com www.petradiamonds.com

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FOSKOR

A Vital Cog

In South African Agriculture PRODUCTION: Timothy Reeder

Foskor is one of the world’s largest producers of phosphates and phosphoric acid, a proudly South African company with international exposure founded over 60 years ago as a crucial supplier to South Africa’s agricultural sector.

//

Foskor was founded with a £1 million loan from the Industrial Development Corporation (IDC) in 1951 to produce phosphates for South Africa ’s agricultural sector, and is the only vertically integrated phosphate producer in South Africa operating today.

The Group’s core activities are the mining of phosphate rock and the production of phosphoric acid and phosphate-based fertilisers. Foskor mines and beneficiates phosphate rock at Phalaborwa in South Africa’s Limpopo Province, from where it is carried by rail to the production facility in Richards Bay in KwaZulu-Natal.

About 84% of Mining Division’s phosphate rock concentrate is railed to Acid Division and the rest is sold externally. The Acid Division exports phosphoric acid to India, Japan, Bangladesh, the Netherlands, Mexico and Dubai, where it has a

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variety of agricultural, industrial, medical and retail applications.

Products made from the phosphoric acid include catalysts, rust proofing materials, chemical reagents, latex, dental cements, tooth whiteners, toothpaste, disinfectants, food supplements, carbonated beverages, waxes, polishes and animal feeds, among others.

Phosphorus is an essential element for plant and animal growth, and one of the key essential elements in modern agriculture; it is one of 17 nutrients essential for plant growth, whose functions cannot be performed by any other nutrient. It is therefore a vital cog in maintaining profitable crop and livestock production, and is required by crops in relatively large amounts. In addition, it can increase

the biological productivity of surface waters by accelerating eutrophication, which describes the natural ageing of lakes or streams brought on by nutrient enrichment.

Fertilisation of crops, by a long way, makes up the largest proportion of Phosphorus used in agriculture.

Its use has become increasingly prevalent during recent decades due to its depletion in soils used for crop and hay production. The importance of Phosphorus to crop production systems is illustrated by the amount of fertiliser being used during the last 35 years, which has doubled since 1960, and stabilised at slightly under two million tons per year over the last decade. Phosphorus has many important functions in plants, the primary one being the storage and transfer of energy through the plant,

while certain high-energy phosphate compounds control the majority of processes in plants including photosynthesis, respiration, protein and nucleic acid synthesis, and nutrient transport through the plant’s cells Foskor is the leading South African supplier of granular fertilisers, which are the core ingredient in the ubiquitous nitrogen, phosphate and potassium fertiliser products known as NPKs. NPK fertilisers are comprised primarily of the three primary nutrients required for healthy plant growth, and the agriculture industry is heavily reliant on their use to meet global food supply and ensure healthy crops. Indeed, according to the International Fertilizer Development Centre (IFDC), about half of the global population is alive today as a result of the increased food production

provided by the use of mineral fertilisers. IFDC has, since 1974, focused on increasing and sustaining food security and agricultural productivity in over 100 developing countries, primarily through the development and transfer of effective and environmentally sound crop nutrient technology and agribusiness expertise.

Additionally to its leading work with fertilisers, Foskor is also known as a commercial producer of phosphoric and sulphuric acids, and magnetite, a by-product of the phosphate beneficiation process, all of which which are sold both locally and abroad. From phosphate-bearing ores, the operations in the Foskor Mining Division process phosphate rock concentrate, which is a crucial ingredient for stimulating and raising crop yields. The Acid Division Plant,

meanwhile, manufactures sulphuric acid, phosphoric acid and phosphatebased granular fertilisers (MAP and DAP) by using phosphate rock as a raw material. Foskor seeks to unlock shareholder value through the profitable, responsible and sustainable beneficiation of phosphate rock into either phosphoric acid or phosphatebased granular fertilisers, which go on to be sold globally.

With an employee base numbering more than 2000, Foskor was this year awarded the Top Employers South Africa 2017 certification, with comprehensive independent research revealing its provision of exceptional employee conditions and a commitment to nurturing and developing talent throughout all levels of the organisation. It has also demonstrated its leadership status

www.enterprise-africa.net / 59

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in the HR environment, continually striving to optimise its employment practices and to develop its employees.

Such an approach has also been evident in Foskor’s Agricultural Training Learnership Programme, which has seen ten Madlanzini youths benefitting from an agricultural training learnership programme rolled out by the community skills development initiative, Beautiful Pillars Projects. The project is driven by local businesswoman Nonhlanhla Ngonyama, who has earmarked a site in Madlanzini, in Ubombo, to erect a community skills centre which will provide learnership opportunities in plumbing, catering, agriculture and welding. Foskor Richards Bay donated gardening equipment and tools, while Umfolozi Technical Vocational Education and Training (TVET), one of nine FET Colleges in the province of KwaZulu-Natal, pledged its support and expertise to the skills centre.

Foskor’s Senior Manager Project and Strategy, Shivaji Gadhave, neatly condenses how hard Foskor has striven to make these commitments a core tenet of its mission. “Foskor offers fantastic career development opportunities and shows confidence in its staff,” he expands, illustrating that

// WE HAVE LONG-TERM RELATIONSHIPS AND ESTABLISHED LOGISTICS SO WE ARE WELL POSITIONED IN LOCAL AND INTERNATIONAL MARKETS // development of staff forms one of the pillars of Foskor’s strategy, rather than purely concerning itself with thoughts of profits, “while we have a mechanism in place where we engage with not only employees but also the local community.”

While the difficulties of the mining and commodities market at present are well documented, Foskor has opted to act positively and decisively, recently announcing large-scale investment into its equipment and plant with the aim of revitalising the business and improving reliability, availability and efficiency. Following the successful installation of the company’s new plant and the upgrades of machinery, Foskor will turn its attentions to growing in terms of profits and markets served. “We always think about our country and our continent so one of the initiatives from our side is to contribute to the SADC market and grow our business there while looking for strategic alliances where possible so

that we can penetrate those markets,” says Gadhave.

“We also have strategies to increase our product basket. We want to add value and move into downstream products and we are planning to diversify our business to reduce risk and ensure everything is financially sustainable.

“We are still focussing on our South African market and there are advantages here for us. We have longterm relationships and established logistics so we are well positioned in local and international markets.”

FOSKOR 011 347 0600 info@foskor.co.za www.foskor.co.za

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62 / Issue No.14 / www.emea-energy.net

SAOTA

SA’s SAOTA International

Industry Leader PRODUCTION: Karl Pietersen

In its 30th year, SAOTA is now a major player in the international highend architectural and design industry. Completing projects all over the world, and gaining new contracts for future business, this is a company that is always moving forwards. Director Greg Truen tells Enterprise Africa more about politics, Africa, Europe and virtual reality.

//

As one of the shining lights in South Africa’s strong architectural industry, SAOTA continues to broaden its international exposure, taking on projects in distant locations including Mexico, Nigeria, the UK, and the USA. Since being established by Stefan Antoni in 1987 (then known as Stefan Antoni Architects), the business has grown significantly and is now home to around 200 people including architects, designers, technologists, marketing and support staff. Headed

by Stefan Antoni, Philip Olmesdahl, Greg Truen, Phillippe Fouché and Mark Bullivant, SAOTA calls some of

the country’s greatest design and architectural minds its leaders.

Starting out as a specialist in villastyle single residence buildings, over the past 30 years SAOTA has grown in ambition and reputation, taking on major projects including hotels, multi-residence apartment buildings, government buildings, infrastructural planning, and much more. Its footprint covers five continents and its people is a group that drives innovation in the design space, constantly looking to stay aligned with an ever-evolving industry.

With many flagship projects to list, SAOTA recently added to its

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INDUSTRY FOCUS: PROPERTY

portfolio with the completion of the Clifton Terraces development, a luxury apartment building in Cape Town’s wealthy Clifton suburb. Discussed in Enterprise Africa in November 2016, Clifton Terraces has been exciting for SAOTA and Director Greg Truen says that commercial success has capped a brilliant experience for the business.

“It’s largely complete at this point, and it’s largely been sold,” he says. “It’s looking amazing and we are very happy with the way the whole thing has turned out. It’s a fantastic building from an architectural point of view and it’s been pretty successful commercially as well.

“It shows that there is still resilience in the Cape Town market and the city continues to have a lot of opportunities at the top-end of the market. Hopefully the politics will hold

together through the next year and things will ease up as that has been a major challenge for us going forward.”

UGLY ECONOMY? Even though SAOTA has established itself as an industry leading business, it remains exposed to the volatility of the local and international economies.

In the past 12-months, the uncertain South African economy has lived up to its reputation, proving to be more unpredictable than ever. This has, of course, resulted in lacking confidence from construction, development, and investors. And this has impacted on the architecture industry. But Truen and SAOTA remain resolute.

“Our market has largely shifted out of South Africa, somewhere between 10 and 15% of our work is here and the rest is now elsewhere.

Currently, we are working in more than 50 cities around the world so we have quite a nice spread which is great as it insulates us from isolated issues in certain countries. For example, with a country like Nigeria which was very active for us five years ago but went completely flat, our spread allowed us to pick up work and compensate for that,” he says.

In the longer-term, if FDI in South Africa is to fall and confidence in the market is to remain edgy, SAOTA could see more of its work coming from markets that are not its home.

Fortunately, over the past three decades, the architects leading the company have grown into astute businessmen with an eye for such cyclical hurdles. Regarding a solution, Truen thinks the government could do more.

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SAOTA

// NIGERIA SEEMS TO BE WAKING UP AGAIN AND THAT IS EXCITING FOR US AND REMAINS THE MOST IMPORTANT MARKET IN AFRICA, WITH HUGE POTENTIAL // “What worries us relates to policy issues and the government’s inability to make the right decisions. A good example is mining. We’ve got such potential and given that the global economy has picked up, we should see a pick-up in mining activity but we’re not seeing it because exploration licenses are not being issued and that just makes no sense. There should be more of a focus on building business and building the tax base.

“I don’t think there has ever been meaningful investment into our side of things. We see investment into

things like tourism which then has a knock-on effect into development and construction but for us, we’re not heavily involved in infrastructure-type projects so there’s very little direct impact from policy. The bright spot in the economy is that tourism continues to grow at rates of more than 10% per annum and that has been great for us.

“It’s been a strange year because the Rand spent much of the last 18-months being one of the best performers in the Forex markets but it’s now the worst. It’s been working against us and that has put a bit of

pressure into our systems which we hope will be relieved soon,” he says.

INTERNATIONAL EXPOSURE With a strong project pipeline setting up an exciting 2018, Truen says that SAOTA’s book for international work is looking strong. The company is busy in regions including Sydney, Barcelona, Miami, Ahmedabad, St Tropez and Jakarta among others, but the African continent is particularly interesting.

“Nigeria seems to be waking up again and that is exciting for us and remains the most important market in Africa, with huge potential. The Ivory Coast and Kenya are positive countries for us and we’re feeling bullish about those markets. We’ve recently started working in Rwanda which has been quite interesting for us. Elsewhere,

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SAOTA

Mexico is looking promising despite any worry from the Trump situation.

“A market we’ve always been keen on is Ethiopia which is very interesting but difficult to open up.

It’s a huge market with more than 70 million people and strong growth.

We’re exposed to most of sub-Saharan Africa and some of North Africa. Egypt is another place that is still of interest but we’re in all of the markets that we’re most interested in which is Ivory Coast, Nigeria and Kenya,” he says.

Rob Green, CEO of executive search, market entry, board advisory and leadership consulting firm, GRM, said in a recent article for Business Day that South African firms, particularly those with tech expertise, should take advantage of expansion opportunities in international markets. “It might seem contradictory to suggest

expansion after listing the many problems facing SA, but when the economy is not fruitful or performing well, you have to look a decade ahead to see what will potentially bring success and looking overseas could very well be the answer.”

Of course, SAOTA has already made the jump, and its international clientele is only growing. “Another interesting market for us, which is growing and has a high conversion rate, is Europe,” details Truen.

“Particularly Spain, France, Switzerland and Germany have been very active we have around six projects underway in Switzerland but we’re finding that things are also picking up in Sweden and Finland, and it’s unusual for South African companies to be working that much in Europe. It’s exciting for us and we see a lot of potential there. Spain

was absolutely dead but has recently came back to life and the phone is definitely ringing.”

SA PARTNERS A further challenge that can be exacerbated by a slow economy is sub-contractors being negatively affected and the value chain being impacted. But, despite the South African situation, SAOTA’s carefully selected partners and contractors continue to deliver first-class work, worthy of the magnificent buildings that they support.

“Our suppliers are quality suppliers with quality products,” says Truen. “They’re the kind of suppliers that allow us to do special work in Cape Town that really stands out.

They’ve given us more options.

“I think we lean towards being

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INDUSTRY FOCUS: PROPERTY

contemporary and I think we’re quite focused on unpacking and how people actually live in buildings; we’re quite conscious of designing buildings that give people a better quality of life. We’re very conscious of how buildings engage with the environments they sit it and we specialise in extending space from inside to out. One of the reasons that people call us from all over the world is that they recognise a set of qualities that are of interest to them and they struggle to find in their local market,” he adds.

SAOTA is also leading the way with the use of technology in architecture and design. While many architectural businesses are at the forefront of technological advances, SAOTA has made cutting edge technology its go to partner, and this

has helped with the development of international business. Advances in virtual reality (VR) software in particular have been hugely successful for SAOTA.

// WE’RE QUITE CONSCIOUS OF DESIGNING BUILDINGS THAT GIVE PEOPLE A BETTER QUALITY OF LIFE // “We’ve historically always worked in Cape Town on steeped sites with mountain and sea views and that’s what opened the door for us in places like Switzerland. We’ve also developed

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a way of working with local architects and local consultants and we have a model that allows us to work remotely.

We built a company, Tenebris Lab, to devolve VR software and we’ve also developed a piece of VR software, which we completed recently, called LUX Walker and we are putting that to market now. It allows us to design in VR and work remotely with clients and consultants. For example, with one of the jobs we’re doing in Switzerland, Phillipe will sit in Cape Town with VR goggles on and our client in Lucerne will sit with his goggles on and the two can see each other and talk to each other while working around the model.”

VR software has the potential to be a real game changer in the architectural industry and is already being used by many practices around the world. It changes the visualisation process and can bring formerly flat and difficult to understand designs to life.

“It helps us make design decisions quicker, it helps us coordinate engineering into the plan a lot quicker, and it helps the client engage with the design itself much quicker,” explains Truen. “Whether they’re sitting at their computer looking at 360 VR renders or are in a live model, we always model the landscape around the design so you can see the sight lines and sun movement; it’s pretty amazing. I think it will be a game changer in the industry going forward.”

This approach to business future-planning and encouraging innovation - is what has resulted in an award-winning culture within SAOTA. Picking up a host of high-profile awards over the past few years alone, this is a business that consistently achieves excellence and Truen puts this down to world-class employees.

“It can be demanding to work here,” he admits, “but we have an amazing set of people.

“It’s a different skill set to what

SAOTA

// WE’VE HISTORICALLY ALWAYS WORKED IN CAPE TOWN ON STEEPED SITES WITH MOUNTAIN AND SEA VIEWS AND THAT’S WHAT OPENED THE DOOR FOR US IN PLACES LIKE SWITZERLAND // one would find in other companies so there’s definitely a learning curve that people need to go through.

For somebody who’s interested in design and interested in connecting with other parts of the world, it’s a very unique opportunity. Because we have a design focus, we have a much higher turnover of projects, people are exposed to much more design than they would be when tracking projects right through their life cycle.”

Talking about growing the team in the future, Truen is clear that qualified people will be given the chance: “We

give our staff a lot of creative freedom,” he says. “The model is built on trying to build a broader design skillset in the office. We have four primary architectural teams that all have subteams and there’s a level of design decision making that devolves all the way down – if someone can contribute then they can contribute.”

Going forward, as the economic picture in Southern Africa remains unclear (political situations in South Africa and Zimbabwe causing uncertainty), organisations that are exposed to multiple international

markets with a spread of risk are those that are likely to realise security. SAOTA is perfectly positioned to grow its market share and continue producing work of the highest order.

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“I graduated in Durban in the early 90s and then worked in a small practice with a friend for two or three years in Durban but that wasn’t really going anywhere so I moved to Cape Town and had an interview with Stephan, joining in 1995 and I’ve been here ever since, going through all the cycles that followed.

“When I started there was about 15 of us. It’s been absolutely amazing to watch us grow. It’s been a process since the beginning of our careers. It’s been a difficult learning curve and the first three of us never really worked for anyone else so we don’t have any institutional knowledge that we picked up and so we’ve learned on the run. There has been a lot of pressure and we’ve never had the chance to stand back and consider what’s happened here but it’s not something one would have imagined when we first started out.”

GREG TRUEN - DIRECTOR SAOTA www.enterprise-africa.net / 69

TSEBO FACILITIES SOLUTIONS

Happy New Year Africa PRODUCTION: Colin Chinery

New ownership is propelling Africa’s leading integrated facilities management provider, Tsebo Facilities Solutions, towards major Continental expansion. “As an African company with African solutions, we have something unique that appeals to the African Market,” says Director of Projects, Andrew Mason.

//

Led by heavyweights South Africa and Nigeria, and with ongoing growth from rising top performers such as Côte d’Ivoire and Ghana, 2018 is set to be the year that gives African growth a new boost, says Ecobank Group Research.

It’s a regional hot list that could double as the expansion strategy roll-out map of Tsebo Facilities Solutions, Africa’s leading integrated facilities management provider.

Serving some of the biggest clients in the industry such as Barclays Africa Group, and currently managing more than 4000 sites across the continent in sectors including leisure, retail, banking

and commercial, the Johannesburgheadquartered company is delivering African expertise with global standards.

“As an African company with African solutions, we believe we have got something unique that appeals to the African Market,” says Director of Projects, Andrew Mason.

FORCE FOR AFRO-EXPANSION And not only Africa. Early this year the French group Wendel, specialists in investing in African businesses, moved in to acquire Tsebo Facilities Solutions.

Impressed by its 47-year credentials and potential as a force for geo-expansion, the Morocco-headquartered business

wasted little time unfolding its ambitions.

In what Mason calls “a very in-depth strategic exercise,” Tsebo is looking at expansion into North and Mid Africa as well as sub-Sahara. Egypt has been identified as a likely market - Tsebo is already established in Saudi Arabia - with Nigeria, Ghana and Côte d’Ivoire marked for further growth, and countries such as Mali, Niger, Rwanda and Senegal in its sights. “This will be a new adventure for us and one predominantly guided by our shareholder.”

It’s a strategy that combines ambition with sensitivity towards national, cultural and economic nuances.

“We see Africa as a huge growth

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INDUSTRY FOCUS: PROPERTY

potential, and being a South African born and bred company, we feel we have some insight into what goes on in Africa, although that is always dangerous to overstate.

“We in South Africa – I speak as a Brit who has lived here for 20 years – have a tendency to parachute in and tell the locals what we know, what we are doing, and then - probably not having understood the indigenisation and localisation requirement - promptly go and stuff it up. And this comes across as a very arrogant attitude.”

FAULT LINE Recognising the fault line, Tsebo held back. “We saw a lot of our competitors trying to parachute solutions and people into those countries and come away with their tail between their legs. So, we took a very different, much more slowly-slowly approach, and went in and bought companies in those locales.

“As the South African economy

72 / www.enterprise-africa.net

was slowing down we saw the growth potential in some African countries was in double figures. It has slowed down a little since, but in certain cases you are seeing growth in high single figures that makes our 1% in South Africa look pretty sick.”

Commercial arguments for African penetration are sound and Tsebo is best placed to drive it, says Mason. “We are seeing America-centric and Euro-centric based companies coming in trying to conquer Africa and finding it difficult.

So, we feel there’s a place for an African provider to go in and provide African solutions.”

But for African countries, facilities management is a “brand new term they are still getting to grips with. However, they do understand asset management, and the maintenance cycle within an FM environment aligns itself very much with asset management. So, we are looking to improve our hard services in terms of the products we offer - we still offer

this through a supply chain - but we are looking to bring this closer and closer into our core business.”

INCREASING SOPHISTICATION And facility management solutions are expanding both in reach and sophistication. Initially a starting point of single-purpose contracts - typically maintenance, cleaning or security facilities management has broadened to encompass an assortment of services outsourced to a multi-discipline contractor.

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“Turn that around and look at the

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healthcare market, and cleaning is actually a core business. It’s the same in the hospitality market – walk into a hotel and you will see this - so while the same services, you have to focus them differently in those different verticals.

There’s nothing new under the sun, but each vertical you go into offers a different context and focus.”

According to a study in which he was closely involved, a mere 13% of companies are outsourcing their FM. “We have a scenario where the majority of companies will outsource cleaning, security and catering, but keeping the management in-house.

“So, in looking to grow we have to produce a bid that talks to the people in that business, and this is one of the areas we are very highly focused on.”

MORE THAN A MOP And technology is improving delivery.

“South Africa has just been through a drought, and we have implemented new mop technology in KwaZulu-Natal’s health care environment that has produced significant water savings. So, whilst cleaning is cleaning is cleaning is cleaning, it’s really a case of context, differing wherever you deliver it.”

One potentially rewarding new sector entry is oil and gas. “Certainly in West Africa it’s one of the areas we want to get into. This brings with it a whole new context around health and safety, compliance – an increasingly significant issue - and probably industrial-type cleaning, which we probably haven’t yet fully grasp.

“We operate the oil and gas market in Saudi, but predominantly from a catering perspective not FM services and we will probably try and cut our teeth in that environment and then use that expertise to sell into West Africa.

“We are not yet there, but are looking at opportunities, and have just purchased an FM company in Nigeria with contacts in the oil and gas market and we are busy incubating these.”

In a highly diverse continent, local knowledge can be best gained through

TSEBO FACILITIES SOLUTIONS

acquisition. “Nigeria for example is a seven-hour flight from here, so the idea of trying to export South Africans and South African technology to a very proudly West African country is just nonsensical. You have got to go in and acquire. It’s the only way to do it.”

Close to home however, and selfbuild becomes attractive. “I am looking to build up operations in Botswana, very akin to South Africa but with cultural nuances, and with the government there controlling much of the infrastructure you have to go in with open eyes and see what is required. So we are not buying a business but building one from scratch.”

BOTSWANA SHOWS THE WAY Mason sees Botswana not only as an opportunity but also a realistic business savvy model in bleak contrast to South Africa’s ruling political orthodoxy. “Here we have a very labour focused left-wing government that sees outsourcing as a threat to organised labour, almost a dirty word, with a lot of politicians running on a ticket to re-insource or kill it off.

“In Botswana, a strategy is being implemented in which all government buildings will be outsourced to private facilities management companies by 2026. I am currently involved with the Ministry of Health where we are looking to kick off a big FM operation in health care facilities. So here we have two governments which share a border, but with two diametrically opposed views on outsourcing.

“And from a South African perspective this is why we started moving out into Africa. There, it’s very much more business friendly compared with what is seen in this country as a very business unfriendly government, particularly around outsourcing.”

And for Tsebo, the troubled South African economy brings a paradox.

“Because people are looking for cost savings, outsourcing is one of those industries that tends to do quite well in a falling economy. But there’s a sting in the tail, for while we are probably busier than we have ever been in terms of answering

Andrew Mason

tendering and other enquires, these are very very cost focused, many of them unrealistically so.

“I have one sitting on my desk at the moment where they effectively don’t know what assets they have or what they are. And yet they want us to give them a fixed price that will save them 15% on the bottom line. It’s very much an immaturely led cost-savings procurement pick box bidding war out there, and quite frankly we are not in that business.”

Tsebo’s backdrop year-on-year near-20% growth is outstanding and the pressure is on to maintain that, says Mason. “Not always easy to achieve in this environment, but we are certainly very positive that we can.”

AFRICAN BANDWAGON He had just come off a phone call from a major European telecoms company with global ambitions. “They can’t find a provider that wants to provide for them in Africa. There are a lot of European,

American and Far-Eastern companies looking to get on the Africa growth bandwagon of growth in Africa in all sorts of industries.

“They want to export their ex-pats into Africa, but knowing they will still have to provide them with services and support, they are looking to the likes of us. And compared with some of our competitors I think we have something unique; an African company with African solutions delivering to world class standards. Yes, the future is very exciting.”

TSEBO FACILITIES SOLUTIONS 011 441 5300 southafrica@tsebo.com www.tsebo.com

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KONE ELEVATORS

Keeping Urban Life On An

Upward Trend PRODUCTION: Timothy Reeder

Urban life moves at a faster pace than ever before, and shows no signs of slowing any time soon. In steps KONE, to continually improve its flow, providing industry-leading elevators, escalators and auto walks, alongside innovative solutions for maintenance and modernisation.

//

The exponential growth of urbanisation has brought with it a need to manage ‘people flow’ in cities. As of 2005, more than 50% of global population lived in cities, a process which is only expected to continue and become more prevalent.

As the population in cities increases, and the subsequent environmental challenges need to be taken care of, cities are forced to grow tighter and upwards. A variety of challenges arise from this trend, not least the congestion and crowding of cities. It is necessary to tackle such challenges head-on, however, as history records show that successful urbanisation is a prerequisite for tangible economic growth.

Buildings used by many people therefore need to be designed with people flow in mind. For professionals involved in planning and renovating

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buildings, including architects and, of course, elevator and escalator companies, this creates a particular challenge. By understanding user needs and coming up with new ways of solving the challenges of people flow, though, these professionals can create solutions that enable people to move smoothly, safely, comfortably and without waiting from one place to another.

In 2016, KONE had annual net sales of of EUR 8.8 billion, and at the end of the year close to 52,000 employees, with its class B shares listed on the Nasdaq Helsinki Ltd in Finland. Over half of its staff compliment is in the field every day, serving customers in over 60 countries. To reach its current standing has necessitated on KONE’s part an unparalleled understanding of people flow, the and specifically in applying this to the movements of a city’s inhabitants in and between buildings, serving to

make their journeys safe, convenient and reliable, and ultimately, making cities better places to live. This is a global leader in the elevator and escalator industry, who takes it upon itself to make the very best of cities the world over.

KONE was established in South Africa in 1996, and currently has six branches and 250 employees across the territory.

With the Smart Elevator Global Market predicted to grow at a CAGR of 15% by 2021, we asked Roland van Gameren, MD of KONE South Africa, to explain how the aims of this arm of the company closely mirror the overall objectives; namely, to deliver the ultimate people flow experience, and how it is meeting them at every turn.

“In terms of image, product innovation and partnerships customers, I would say we have emerged as one of the industry leaders,” is his assessment. “When it comes to providing solutions, we are at

INDUSTRY FOCUS: PROPERTY

// WHEN IT COMES TO PROVIDING SOLUTIONS, WE ARE AT THE INTERNATIONAL LEVEL, WHERE KONE IS THE MARKET LEADER WITH NEW EQUIPMENT AROUND THE WORLD // the international level, where KONE is the market leader with new equipment around the world.”

The global increase in urban living is another trait that is also true of van Gameren and team’s operational area, he continues. “Typically in South Africa, we see a lot of urbanisation and there’s a lot of new developments. This presents opportunities for our people flow solutions as we are continuously growing with new equipment for our elevators and escalators. We are working on some big projects where we are installing

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destination controls, and have seen that people flow is extremely well managed by this new system; it’s not just pressing a button at a certain elevator, instead it directs you to the most convenient route, whether you’re one person or a group, and brings you to your destination quickly.”

Most recently, KONE has shown its spirit of enterprise and innovation in the opening of its renewed highrise elevator test laboratory in Tytyri, Finland, which was inaugurated in 1997. The test lab is an integral part of a working limestone mine and, following extensive renovations, it is now capable of reaching a depth of 350 metres, making it the deepest of its kind in the world. This enables KONE to develop and test the ultimate in high-rise innovations and technologies, such as the revolutionary carbon fibre hoisting technology, KONE UltraRope®.

At the site, KONE can carry out tests under extreme conditions which are much harsher than in regular buildings, and the depth of the shafts means KONE can test elevator speeds of up to 70 km/hour. In total, the transformed site at Tytyri is made up of 11 elevator

shafts with a combined length of 1.6 kilometres. Seven shafts are dedicated for super-tall and mega-tall testing, with the remaining four shafts available for mid- and low-rise testing. In addition to sophisticated analysis of ride comfort and aerodynamics, KONE can advance other cutting-edge innovations, such as robot-aided solutions for precision installation, resulting in faster installation times and better ride comfort.

“At Tytyri we can push the limits of elevator physics like at no other place in the world. With the extreme tests such as the free-fall test, we can drop an elevator frame weighing 10,000 kilograms into a 200 meter shaft and test safety gear performance, bringing the elevator to a controlled stop,” says Tomio Pihkala, Chief Technology Officer, KONE Corporation. “At KONE, we have introduced technological breakthroughs which have changed the face of the industry. As plans for tall and mega-tall buildings reach new heights, we will be able to use new materials to simulate the demands of tomorrow’s buildings, today. With the deepest and tallest facility of its kind in the world,

KONE ELEVATORS

// AT KONE, WE HAVE INTRODUCED TECHNOLOGICAL BREAKTHROUGHS WHICH HAVE CHANGED THE FACE OF THE INDUSTRY // we are excited to bring together design, engineering and technology, specifically to meet and exceed the needs of our customers.”

In 2017, KONE was once again listed as one of the top employers in the world by business magazine Forbes, ranking as 73rd in the Global 2000: World’s Best Employers list. “We are proud to be recognised as one of the best employers

in the world by Forbes,” states Susanne Skippari, Executive Vice President for Human Resources. “We want KONE to be a great place work, and that is why we strive to inspire and develop our employees to deliver great results.

This listing shows that our continued commitment to our employees’ wellbeing and professional development is appreciated by both current and potential employees.”

It is fair to say that KONE really is all about people, and this is exactly the impression van Gameren transmits in his closing remarks. “Acquiring, hiring and training the right calibre of people can be difficult in this market,” he acknowledges.

“But because we offer international knowledge through our training programme we can afford to take apprentices who we can continuously train to get them to the internationally

recognised level that we require.

“We give them education and experience and because they are on the frontline with our customers, it’s important that we invest a lot into this area of our service development. In addition to this,” van Gameren finishes, “we are proud to promote diversity in our organisation by actively recruiting learners from previously disadvantaged communities and partnering with specific community projects; we believe that these are vital in adding social value in African committees.”

KONE ELEVATORS +27 11 997 4000 konesa@kone.com www.kone.co.za

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PHILAFRICA FOODS

Empowering Africa PRODUCTION: Djamil Benmehidi

With its varied climates and vast tracts of rich arable land, perfect for growing almost every kind of produce imaginable, combined with the fact that 65% of all such land is as of yet unutilised, Africa’s agricultural growth potential is quite incredible. For this reason alone, it is easy to see why Philafrica Food’s CEO and founder-ofsorts, Roland Decorvet, is utterly determined to turn the company into a market leader.

However, there is much more to the Philafrica story than this - Roland is not your average ex-Nestle CEO of 23-years, and Philafrica Food’s is by no means your average food processing company. We spoke to him to find out more, and to learn about how both man and company have succeeded in achieving a goal that many in the business community believe unachievable: creating a contemporary business with a primary commitment to social empowerment and ethical practice, that is yet dominant as a driver of growth in a traditional corporate capacity.

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INDUSTRY FOCUS: FOOD & DRINK

//

Just ask any investor worth their salt where the next region is that offers massive growth potential and opportunity, in terms of return on investment, and you will hear only one answer: Africa.

More than any other developing region in the world today, increasingly stable and capable governance and soaring demand for commodities means that Africa has become a top-two global hotspot for foreign investment.

And make no mistake about it – in spite of economic wobbles in some countries, the continent is booming. Across its length and breadth, all industries, from banking and telecommunications to IT and retail, are flourishing, thanks to the newly acquired wealth of hundreds of millions of Africans who have entered the consumer goods market. And yet as impressive as such industries are in terms of wealth generation and performance, agriculture undoubtedly remains the regions’ primary engine of growth.

Accounting for 65% of employment across the continent, 75% of domestic trade, and 15% of total GDP, agriculture

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is at the vanguard of the continent’s development drive. This being so, it should come as little surprise that the industry is itself undergoing a radical transformation no less dramatic than that of the wider African economy.

Modernisation is at the heart of this reformation, of course, but, more than this, companies like Philafrica Foods are emerging that are tearing up the traditional agri-business rulebook. And as the company’s CEO Roland Decorvet explains, they are not solely motivated by growth and profit, they are driven by a goal to create an Africa-centric company that will empower and enrich Africa and its people.

“We like to believe we are different because we believe in the future of

replacement. We are only focused on Africa, on food processing, more specifically the food processing of African raw materials. We’re not interested in importing crude palm oils from locations like Indonesia, for example.

He continues: “The mission of Philafrica Foods has a very strong social objective; it was this opportunity to create a positive social impact that inspired me to return to the corporate world after being Managing Director of NGO, Mercy Ships. I believe the only two industries that can truly rescue Africa, really help its people and transform the continent is indeed agriculture and food processing. It’s only these two industries that have the capability to impact

// WE LIKE TO BELIEVE WE ARE DIFFERENT BECAUSE WE BELIEVE IN THE FUTURE OF AFRICA// Africa. We are committed to developing, processing, and adding value to locally grown crops; on building up supply from smallholders and on import

millions upon millions of people.

“Having built a relationship with the owners of AFGRI, one of the agriservice sector’s leaders in the region,

PHILAFRICA FOODS

and their backers and partner, Fairfax, a Canadian-financier, we realised after talking that we all shared the same vision: helping the continent, and more specifically the people and its farmers take control of their own destiny.”

Headquartered in South Africa, Philafrica is a food-processing company that has very much made a statement of intent over the six months since it was established. As a US$350 million company with assets including seven feed factories, four grain mills, and an oil seed crushing and extraction plant spanning the continent, Philafrica is utilising the considerable resources and reach of AFGRI Group. However, whilst Philafrica Foods is a subsidiary member of the group, it was decided

by Decorvet and AFGRI Group’s owners and Group CEO that the company would be a separate entity, so as to enable it to focus specifically on its long-term mission, “to unlock the potential of African agriculture in order for the continent to become a net food exporter.”

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INDUSTRY FOCUS: FOOD & DRINK

Roland Decorvet

food products, even though this imported is largely African in origin.

Using cashew nut exports as a key example, West Africa alone is estimated to have produced 1.5 million tons of unprocessed cashew nuts last year, 90% of which was exported to India where it was processed. Following this, the processed buts are exported back to the countries in Africa where they were grown, as well as markets in Europe, the Middle East, and so on.

By adding value to crops at home in Africa, by for example buying a cashew nut processing company in Kenya – something which Philafrica Foods is currently looking at, the company can invest locally in order to add value locally to the benefit of local farmers and their communities.

As can be seen by the company’s entry into a 50/50 joint venture with Novos Horizontes, a vertically integrated poultry company in north Mozambique, and its acquisition of DADTCO, an innovative Dutch company that has

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which has pioneered a mobile cassava processing facility, Philafrica Foods is fully committed to overturning such business practice that has long taken place to the detriment of African farmers.

“We’re really interested in how to process local crops which could and should replace imported products. For example, wheat; most African countries import a lot of wheat, flour, and so on, so we just bought this interesting startup processing company called DADTCO, which has developed an interesting mobile factory container that goes from village to village and processes cassava grains into flour. In turn, this flour is able to replace wheat flour, not on a small scale but a large scale.

“The same principle can be applied

to building a tomato-based plant in Zimbabwe. Almost 90% of tomatoes consumed in Africa are imported from China. So again, why not have growers work with the hundreds and hundreds of local farmers who can grow local tomatoes? We can build a factory to create a pull for these farmers, which once again would take place on a large scale.

“I think the biggest issue in Africa is not to build a factory; rather, the biggest issue is to get your supply into your factory. Therefore, I strongly believe we need to, if not own our supply chain, certainly control our supply chain. By basically investing into the supply, investing into training small farmers, and uniquely focus on them, we have thousands upon thousands of

// WE’RE REALLY INTERESTED IN HOW TO PROCESS LOCAL CROPS WHICH COULD AND SHOULD REPLACE IMPORTED PRODUCTS //

PHILAFRICA FOODS

suppliers who are able to supply goods to the benefit of all.

“The same goes for services where we work with some amazing partners to achieve great things. For example, local design agency Rokkitboy has been a fantastic collaborator with many of our design needs over the past 12 months and they have helped to significantly develop our brand.”

// I STRONGLY BELIEVE WE NEED TO, IF NOT OWN OUR SUPPLY CHAIN, CERTAINLY CONTROL OUR SUPPLY CHAIN // With the backing of the AFGRI board and Fairfax, who have absolute buy-in into Roland’s vision and belief in his ability to deliver it, not to mention the backing of Philafrica’s 1,300-strong team of employees – a professional workforce comprised of men and women from across Africa, and indeed the world, the pieces are in place for the company to change the face of agriculture and food processing continent-wide.

In Roland’s words, Philafrica Food’s horizon is the difference. He elaborates on this, saying: “When you invest into Africa in food processing, you’ve got to have a very, very long-term horizon.

We’re very glad to have the support of our friends from Fairfax who are investing, in this regard.

“When we invest in a company, we don’t have an exit plan – it’s not like we have a long-term exit plan, we have no exit plan. We come in to invest and we come in to grow the business, and we’ll be there way after I retire. That’s the idea. So, when you’re not obsessed with yearly results and quarterly results, it changes the way that you can do business. Not that there’s no pressure, of course, but it means you

can take a more long-term approach to decision making which allows you to do things you couldn’t ordinarily do.

“Ultimately, we believe that getting supply from small holders when we will be able to tell the story, hopefully soon, the story will be relayed to consumers about these hundreds, thousands, even, of villages and their farmers, and that things are being purchased differently, and that people are being treated differently.

Being treated far better than before.

You then have the case where you can argue for a higher margin.

“Initially, there will be a higher cost to do this kind of work – again, there is a longer horizon. But long-term, you get better margins.”

In spite of the challenges facing some of Africa’s economies

at present, not least South Africa, its macroeconomics give cause for optimism over both the short and longterm. Increasingly stable leadership is leading to economic development, and the steady growth of the middle class means the foundations are in place for the region to finally start to realise its immeasurable potential. These are exciting times for the region, and as the continent strives to transform, companies like Philafrica Foods will play an integral role in helping to create a better world for its people.

PHILAFRICA FOODS +27 11 063 2224 www.philafricafoods.com

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SHOPRITE

The Price is

Right

PRODUCTION: Emily Ayson

The holiday season is the most important and potentially lucrative time for retailers all over the world. However, in South Africa, political turmoil, low economic growth and a lack of customer faith that merchants can provide value and variety has created an air of uncertainty. Despite these pressures, the country’s largest grocery retailer, Shoprite, is continuing to go from strength to strength. An astute business acumen, combined with a commitment to creating and maintaining symbiotic relationships with suppliers, communities and customers, has resulted in an increasingly pleasing performance within an unpredictable market. Enterprise Africa revisits Shoprite to take a look at some of the company’s most recent highlights.

//

Shoprite currently operates more than 450 stores in South Africa and more than 2600 in 15 African countries and islands in the Indian Ocean. This makes it the largest retailer in the whole of Africa combined and one of the largest retailers in the world. As of this year, 144,000 employees work for the company and its network consists of over 22,000 suppliers from all around the globe. The grocer’s stock surged by 26% this year alone and the chain is currently worth an astonishing R120 billion.

Since 2006, Shoprite has also heavily invested in a variety of social and community initiatives, donating around R18 million to almost 2000 charitable organisations such as soup kitchens and health clinics. As a self-proclaimed ‘business with a heart’, Shoprite also offers platforms for young people, disabled

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people and women to enter the retail sector, by providing skills development training, business opportunities and employment within an often competitive and exclusive environment.

By forging such strong relationships with both individuals and enterprises alike, Shoprite has been able to bring together an impressive network of 16,211 South African suppliers and a further 7202 from wider Africa. Furthermore, their growers can be found as far afield as New Zealand and Turkey, with Shoprite’s suppliers ranging from small, local, independent operations to massive globally recognised brand names. As such, the R1.4 billion that has been used to fund the supply infrastructure appears to be money well spent.

Not only is Shoprite able to offer its own customers a huge variety of

quality, affordable goods, but its allied organisations can also simultaneously find success in terms of market presence, reputation, capital and growth. At the 2017 Supplier of the Year awards, Shoprite was able to publicly laud and thank its most innovative and reliable suppliers.

Many of these companies credited Shoprite for helping their own enterprises flourish and Shoprite has also received multiple awards itself, including South Africa’s number one supermarket.

On the other side of the coin is Shoprite’s dedicated customer base which has had as much a role to play as suppliers for such prosperity. Patrons are viewed as people rather than statistics and are treated with respect and exceptional customer service. Similarly, the main mission has always been to deliver low prices to the everyday consumer,

an undertaking that Shoprite recently reinforced with the introduction of Black Friday to every single one of its South African stores.

The post-Thanksgiving/pre-Christmas retail tradition for selling goods at extensively reduced prices has crossed the ocean from the United States, but there was some initial doubt as to whether the scheme would really be of benefit to the already fragile South African economy.

As Daniel Isaacs, analyst at 36One Asset Management expressed, “the biggest issue with Black Friday last year was that sales sucked out December sales. Last year people spent their Christmas shopping budget on Black Friday and retailers sat with stock. I do not know how they will address the issue this year [as the retail sector] is not healthy”.

Yet, such concerns seem to

have undeterred both shoppers and businesses, as Google search trends showed, ‘Black Friday’ has been one of the most searched terms in South Africa over the last 12 months. Similarly, Brent Curry, Chief Information Officer for retailers The Foschini Group noted that “TFG certainly expects a day of high excitement, great sales, long queues and many satisfied customers who go home with a bargain… we expect to at least double our trade during this shopping event.” Such widespread and burgeoning interest in the initiative thus provided enough impetus for Shoprite and subsidiary chain, Checkers, to join other retailers in attempts to boost spending over the festive period. A company spokesperson stated: “The decision to also introduce Black Friday to Shoprite’s 458 stores, in addition to the 202 Checkers stores,

guarantees the country’s biggest ever Black Friday.”

Shoprite’s Marketing Director Neil Schreuder concurred, asserting that: “In the current difficult economic environment Shoprite understands the pressure ordinary South Africans are under and we will continue to look at ways to give them more affordable options. We listened to our customers and they can expect discounts of up to 50% on household products in all our stores.” He continued to outline some impressive projections: “We’re expecting to sell enough custard to make at least 2.6 million trifles, about five million kilograms of washing powder and enough nappies to keep almost 18,000 babies dry for a full year. Store opening hours will be extended to cater for the increased demand.”

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INDUSTRY FOCUS: FOOD & DRINK

Evidently, such initiatives are affording Shoprite great success, but the rise and fall of the retail market can often be a bittersweet affair. It is inevitable that while some companies thrive, others unfortunately succumb to the mounting and uncontrollable pressures put upon them. Following the bankruptcy of Nakumatt, Kenya’s largest supermarket chain, Shoprite recently announced intentions to acquire a number of newly vacated outlets. According to director Gerhard Fritz: “We are currently in talks with some of the property owners, but nothing has been signed.” According to Fritz, the group are hoping to acquire nine available premises in Kenya and a further two in Uganda. He goes on to say that Shoprite is already a registered company in Kenya, yet that the level of trade and export is rather infrequent.

The potential purchase of empty Nakumatt properties would allow Shoprite to get a more solid foothold in the East African marketplace. Here, the company already faces fierce competition, with US giants Wal-Mart and France’s Carrefour already having a strong presence. However, Shoprite

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// THE DECISION TO ALSO INTRODUCE BLACK FRIDAY TO SHOPRITE’S 458 STORES, IN ADDITION TO THE 202 CHECKERS STORES, GUARANTEES THE COUNTRY’S BIGGEST EVER BLACK FRIDAY // seems unintimidated by these challenges, taking on the expansion project with enthusiasm and positivity. Not only will the move be fantastic for business, but it will also ensure that as many people as possible can benefit from access to Shoprite’s competitively priced goods and philanthropic endeavours.

What all consumers fundamentally desire and deserve is a quality, affordable and accessible shopping experience.

Shoprite goes above and beyond in ensuring that these demands are met without ever losing sight of; or taking for granted; its roots and contributors.

The benefits brought to companies, communities and customers alike speaks volumes about the commitment to conducting ethical, progressive and reliable business. Shoprite has certainly come a very long way since its humble

beginnings in 1979, when it owned and operated just eight small holdings in the Western Cape. Who could have predicted that after some 40 years, Shoprite would bloom into an award-winning, nationally renowned household name. 22 million customers cannot be wrong; it’s more than clear that at Shoprite, the price is always right.

SHOPRITE 0800 01 07 09  @Shoprite_SA www.shoprite.co.za

SPAR SA

Reach for the

SPARs

PRODUCTION: Emily Ayson

SPAR is a globally recognised brand with 12,000 stores in over 40 countries.

Underpinned by the key values of providing fresh, quality, local goods, it has been a stalwart presence for millions of customers since the 1960s. Yet, in data revealed by Chief Executive Graham O’Connor and Chief Financial Officer Mark Godfrey at the SPAR Results Presentation in September 2017, sales performance across South Africa has been disappointing. However, there is a silver lining, as figures also show that in Switzerland and Ireland, business is beginning to boom.

//

Graham O’Connor recently had to reveal some bittersweet news about the current performance of SPAR. Unfortunately for the South African division, there has been a slowdown in sales with year growth sitting at just over 4%.

Operating profit was at R2.6 billion which is only a 0.2% increase on last year’s figures. O’Connor stated that ‘these results reflect the weak state of consumer buying power and confidence, which has been exacerbated by retrenchments, political

uncertainty and climatic challenges in South Africa’.

He also noted how intense competition within the retail marketplace is also having a negative effect on bringing customers through SPAR’s doors. Yet, he continued to note that ‘despite these challenges, the group is encouraged by the strong performances from our business in Ireland and the early positive signs of the turnaround in Switzerland’. For the entire company, income streams from foreign capital equated to 32.4%

turnover and 22.4% operating profit, with deflation abroad considered as a key factor for such significant results.

SPAR has only been a fixture in Switzerland since 2016, but the company currently operates 300 retail stores and 11 cash and carry sites, with a further 44,000m² of property dedicated to warehousing. Statistics presented by Godfrey show that turnover was 94.7% higher than this time last year (in CHF terms), at R10.4 billion. Swiss operating profit was at R69 million. Furthermore, these figures demonstrated a complete

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INDUSTRY FOCUS: FOOD & DRINK

// THESE RESULTS REFLECT THE WEAK STATE OF CONSUMER BUYING POWER AND CONFIDENCE, WHICH HAS BEEN EXACERBATED

BY RETRENCHMENTS, POLITICAL UNCERTAINTY AND CLIMATIC CHALLENGES IN SOUTH AFRICA // reversal of the half year loss SPAR Switzerland was operating at, which has been attributed to efforts in increasing product range and value for money.

Their leading ‘WOW’ advertising scheme was developed to draw attention to SPAR’s competitive pricing on quality everyday groceries, which is of particular significance considering that the country ranks among the most expensive locations in the world to live.

The longer established Irish faction of SPAR consists of 1330 retail premises and warehousing space of 34,560m². It has done notably well this year as Godfrey showed, with an annual turnover of R20.5 billion which translates into an almost 11% increase

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on figures for last year. Furthermore, Ireland closed the end of September with an incredible operating profit of R508.2 billion.

Contributions to such numbers can partially be ascribed to SPAR Ireland’s recognition of growing social trends and consumer demands, in particular the desire to live a healthier lifestyle.

It rolled out an extensive selection of low fat, high protein and gluten free foodstuffs that have been developed in conjunction with leading dieticians.

This range has been very well received by customers. Celebrity endorsements for this ‘Better Choices’ campaign may also have had a positive effect on encouraging customer spending, with

well-known Irish celebrities such as soccer star Seamus Coleman and model Claudine Keane lending their images to the cause. In addition to increased sales here, the wines and spirits section was also highly profitable, with business up by 17.8% on last year.

However, although such significant growth in the foreign marketplace is extremely positive, it should not completely detract from the fact that there has been some progress for the South African chapter of SPAR. O’Connor stated that despite expectations that the economy and political climate were to remain volatile, SPAR is still committed following through on schemes to improve stores and win back customer faith: ‘These initiatives include ongoing, significant investments in the group’s distribution network, competitive pricing and ensuring a comprehensive product range’.

The existing South African network includes 2138 stores and warehousing space of 295,500m². Already this year, 259 stores have been given overhauls

SPAR SA

and the Western Cape and North Rand perishable facilities have been expanded, at a cost of R66.4 million and R34.5 million respectively.

There has also been a growing focus on adapting to the technological shift from conventional advertising to digital platforms to generate footfall into stores. Such initiatives include the My SPAR Rewards scheme which allows customers to receive discount coupons on their smart devices and the Text Me service sends automated SMS messages detailing store promotions.

Registrations for these schemes skyrocketed by 92% in February, with numbers increasing throughout the year. Furthermore, SPAR introduced another 235 products to its collection of competitively priced store-brand groceries, meaning that there are now over 1200 goods in the range. Sales of

these specific items were up 9.7% to R8 billion, making the total range worth an estimated R10.2 billion.

SPAR has also been looking to integrate new revenue streams into its operations with new business schemes, including its own official money transfer service. Similarly, the acquisition of S. Buy wholesalers means that the company will have a dedicated pharmacy division that will supply retail customers, private patients and professional medical establishments. SPAR also recently completed a transaction for a 47.87% shareholding in SPAR Zambia, which was originally put up for sale in 2016 by parent conglomerate Innscor. Similarly, there are plans to add Sri Lanka as the 43rd country of operation, with the first store expected to open in 2018.

Statistics presented by O’Connor also revealed that across the board,

customer perceptions about the competitive pricing of SPAR is undeniably positive. Yet it just goes to show that regardless of good reputation and range, businesses are always at the mercy of political, economic and social conditions. For SPAR South Africa, negotiating through such an uncertain trading environment has not been easy, but nor has it deterred optimism for future growth. Indeed, key plans are in place to renew and improve consumer interest, encouraging customers to reach for the SPARs once more.

SPAR SA 031 719 1900 www.spar.co.za

For any queries please contact our Customer Care Line: 087 940 5100 or visit www.grainfieldchickens.co.za

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HALEWOOD INTERNATIONAL ZA

Capitalising on

Nationwide Good Cheer PRODUCTION: Timothy Reeder

Halewood International has used its humble beginnings as the perfect springboard to quickly become one of the fastest growing alcoholic beverage manufacturers in South Africa, boasting a national distribution network and state-of-the-art production facility.

//

The company as we see it today was established in 1999, initially as a wholly-owned subsidiary of Halewood International UK. Its seismic rise means that it has quickly become a firmly established beverages company which specialises today in the large-scale manufacturing, distribution and marketing of some of the most popular beverages, both alcoholic and non-, in all of South Africa.

Featuring amidst its lineup are such iconic names as Red Square Drinks, Caribbean Twist, Lambrini and Crabbie’s Alcoholic Ginger Beer. Recent additions to the roster have included Red Square 7 times distilled 100% pure grain superior vodka, Caribbean Twist

White and Superior Spiced rums and The Pogues Irish Whiskey, while it also imports and distributes award-winning spirits such as Whitely Neill Gin and West Cork Irish Whiskey. The latter was recently decorated with two gold medals at the eminent Los Angeles International Spirit Awards.

Halewood International has long been known for its ability to analyse market trends, and use this information to respond to customer demand in the most effective, and ultimately profitable, way possible. “Our export expansion policy moving forward will, to quite a large extent, depend on the overall demand of our main products or brands in other African countries as well as finding the most suitable

partners to cooperate with,” Marketing Direct Peter Eaton offers by way of further explanation.

“We will most certainly endeavour to continuously cater to the needs of our respective target markets whether it be local or indeed other African markets, by developing new and innovative products as well as extending our existing product lines.”

Halewood International South Africa prides itself on being one of the most innovate local beverages manufacturers across all of its functional management divisions, and a leader within the industry in general.

It is also at the forefront of developing new and exciting product lines, all traits which have combined to net the

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company an enviable position within the industry; a total of 14 distribution centres in South Africa help to fulfil the needs of a vast operational footprint, with various supporting roles assuring an effective and hassle-free supply chain.

“In terms of general distribution, it is paramount to us that we have a strong local focus which is reinforced by our extensive distribution network covering the entire country,” Eaton underlines. As such, we are wholly capable of almost guaranteeing that all our current products are readily available in all the major city centres and towns.”

To enable of all of this, Halewood International South Africa has at its disposal an experienced countrywide sales and brands ambassador force, ready to and wholly capable of ably servicing liquor wholesalers and retailers on a continuous basis.

This is backed by a very diverse local marketing department which thoroughly grasps their core market, allowing Halewood International to keep a strong grip on its targeted customers. Among its most successful endeavours have been certain carefully selected promotions throughout this sector, as well as sponsorship of some of South Africa’s most well attended

// THE ROUTE TO MARKET IS PARAMOUNT; WITHOUT IT THE BEST IDEAS AND CONCEPTS DO NOT SEE Quarter THE LIGHT // 3:12 PM Flavourome Page.pdf OF 1 DAY 2017/12/07

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Proud flavour and ingredient partner of Halewood International

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59 Roan Crescent, Corporate Park North, Midrand, T: 011 314 0784 E: sales@flavourome.co.za www.flavourome.co.za

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festivals.

“We have recently been sponsoring quite a large number of South Africa’s most popular youth and other related festivals and will continue to do so in the future. These have included the Rage Festival, Rocking the Daisies, Ultra, In the City and the Back to the City Festival to name but a few,” expands Eaton.

It is a shrewd move on the part of Halewood International to be directing such concerted efforts toward conquering these markets, particularly at the present time, when the South African alcohol industry is one of the most profitable of which to be part.

For starters, data from the South African Wine Industry Information & Systems (SAWIS) indicates that South Africans are consuming 13.6% more alcohol than they were a decade ago.

According to this not for gain company, South Africans consumed a combined four billion litres of alcohol in 2015, which equated to a value of R96.5 billion, marking a rise from around 3.5 billion litres in 2006 worth R46.9 billion.

The South African liquor industry, which includes the manufacture, wholesale and retail of beer, wine, spirits and flavoured alcoholic beverages, was then valued at an estimated R106.1 bn the following year. Beer sales dominated the sector, accounting for 56.1% of the value of liquor sales and nearly 80% of the volume. South Africa’s alcohol consumption rate has climbed in recent years to make the country the third-largest consumer of alcohol in Africa and, according to the World Health Organisation (WHO), the 19thbiggest in the world.

The beer statistics really speak for themselves: in 2014, South Africans drank three billion litres. That amounts to roughly 57L of beer per person in South Africa, or 170 330ml beer cans per citizen per year in South Africa.

According to Stats SA’s latest CPI expenditure weights, South Africans spend roughly R6 out of every R100

HALEWOOD INTERNATIONAL ZA

spent on alcoholic beverages and tobacco products, a sum which only appears to be increasing over time. On the spirits front, in terms of number of litres consumed it is a close battle between whiskey and brandy for the top spot; at last count 40.8 million litres of whiskey versus 30.6 million litres of

to get their products to the market. In conclusion, Stewart Hainsworth, Group CEO Halewood Wines and Spirits PLC, delineates the company’s approach to provide the ultimate in choice and variety. “The route to market is paramount; without it the best ideas and concepts do not see the light of

// OFTEN THE GREATEST IDEAS AND TALENT COME FROM THOSE THAT WORK IN THE SMALLEST COMPANIES AND DO NOT HAVE THE FUNDS OR ACCESS TO THE MARKET TO GET THEIR PRODUCTS TO THE END CONSUMER // brandy were currently being sold.

The beer market, then, in terms of both volume and value, is larger than all other alcohol categories combined.

There is a massive opportunity for Halewood International here, where consumers want choice, bartenders want choice, and in response Halewood intends to offer the best distribution solution for craft distillers and brewers

day. All businesses need to innovate and offer the consumer something new. Often the greatest ideas and talent come from those that work in the smallest companies and do not have the funds or access to the market to get their products to the end consumer.

“Distribution companies are consolidating and vertically

integrating, which creates a bottleneck for small and medium size craft distillers and brewers. Halewood has invested extensively in distribution, particularly the on trade, for the UK, South Africa, Romania and China to create access to the market separate from the big companies. We understand that without access to the market, small startups will find it hard to avoid the brand collectors of the world that keep them in the dark.

Halewood can offer finance, marketing, distribution, design, bottling and legal expertise to craft companies in a true partnership.”

HALEWOOD INTERNATIONAL ZA +44 (0)151 480 8800 www.halewood-int.com

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PLATCO

Heading for the Summit of Digital Entertainment Business PRODUCTION: David Napier

Platco Managing Director talks Enterprise Africa through the company’s strategy for competing in a challenging and crowded industry, where uncertainty is certain and innovation is a must.

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South Africa’s digital TV migration, the process of moving from analogue to digital terrestrial television (DTT) signals, has been a debacle from the beginning. Deadlines have been missed, legal battles have been fought, uncertainty has caused slowdowns in the roll out of programming, and the public has been left wondering what the future holds for their TV service.

The DA’s shadow minister of telecommunications and postal services, Marian Shinn has called the DTT migration an ‘appalling state of

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affairs’ and ‘a failed R8.5bn process that must be stopped’. The confusion caused by the splitting of the Department of Communications has fuelled the critics, and disagreements from broadcasters have created an atmosphere of doubt.

But one organisation that is looking through these challenging and unpredictable times towards a bright future is Platco, the independent distribution company which aims to help free TV broadcasters cost-effectively reach audiences. Part of eMedia Investments, Platco was formed

INDUSTRY FOCUS: ENTERTAINMENT

//BETWEEN 2016 AND TODAY, WE’RE SITTING ON 1,050,000 ACTIVATIONS SO WE’VE BEEN ABLE TO GROW THE MARKET SHARE BY ALMOST 700,000 IN A PERIOD OF AROUND 20 MONTHS// in 2013 to offer customers an alternative to ‘paid for’ TV services being offered by large satellite broadcasters like DStv. “The free to air market was quite rapidly migrating across to paid satellite television, particularly DStv which is owned by MultiChoice. What we were seeing in the free-to-air space is that audience numbers were starting to decline, as was revenue, and we couldn’t compete as a single

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free-to-air broadcaster in a multichannel environment against the other three channels which are owned by the public broadcaster. It was decided that, with government not looking like it would get its act together in time to launch a viable DTT service, we would either be swallowed up or have to go it alone in order to secure our future in a multi-channel environment and that was the reason for the launch of Platco,” details Managing

Director, Patrick Conroy.

Through its OpenView HD (OVHD) digital decoder, Platco can bring viewers a range of free-to-air platforms including SABC 1, 2, and 3, e.tv, e Extra, eMovies, Glow TV, Beatlab.tv, BBC World News, eToonz, Trace Sport Stars, Mindset TV, Da Vinci Learning and many radio feeds among others. Customers simply pay a one-off fee (R399) for the decoder, excluding the cost of installation of a satellite dish, should it be needed.

After that there’s no more fees or contracts and you can sit back and enjoy the entertainment.

Despite the DTT migration situation, Platco has realised positivity and reached an important milestone recently, installing one million set top boxes. And Conroy

PLATCO

believes there is more growth to be had yet.

“Platco was launched in a bit of a hurry and the content offering was fairly weak with retail model not being thought through,” he says. “We had a high retail price, poor content and, no surprises, the uptake was low. Between October 2013 and March 2016, we’d only activated 388,000 set top boxes in a country with 15 million TV households, 10 million of which are free-to-air TV viewers. We had to revise price points, subsidise the set top boxes, revisit our relationships with retailers, improve content significantly, and we expanded our marketing. Between 2016 and today, we’re sitting on 1,050,000 activations so we’ve been able to

grow the market share by almost 700,000 in a period of around 20 months.”

Of course, this boom in activations has positioned Platco among the big names in the market and the challenge is now to try and differentiate and innovate in an effort to remain different from the paid for satellite providers while still providing quality programming.

“We are the David against the Goliath that is MultiChoice,” admits Conroy. “DStv has been able to establish itself in the country since the late 90s and they have been able to become the only alternative to free-to-air. They’ve secured movie rights, sports rights, and a bouquet of several hundred channels that they can offer the public,” he says.

“But we’ve seen that, looking at the country’s 15 million TV households, only around five million are linked to satellite television, leaving around 10 million that need to migrate from analogue free-to-air to something else, and they can’t go to DTT because it hasn’t launched yet thanks to the failure of the State.

The alternatives are OpenView HD or DStv and what we’ve been able to do with a low price point is offer an affordable set top box and not charge monthly subscription fees.

Once you’ve bought the box, you then get content for free and we use our advertising model.”

LEADING FREE CONTENT In a bid to strengthen its offering and solidify its market position, Platco, and eMedia Investments, are always on the lookout for new partnerships that can bring the best content to its platform.

“From a content point of view, we have BBC Worldwide News on the platform and we have been talking to Discovery but we’re yet to agree a deal,” explains Conroy.

“Our success has come from our own channels such as eExtra and our two

//ADVERTISERS ARE SEEING IT AS ANOTHER PLATFORM TO REACH THEIR AUDIENCES, PARTICULARLY THE LOWER-MIDDLE CLASS ECONOMIC BRACKETS// movie channels which have been hugely popular. In South Africa, you tend to find that blockbuster Hollywood material does fairly well, but you have to mix that up with local programming that contains our vernacular languages to draw the audiences. We’re now starting to get that balance right with the content offering.”

Going forward, Platco will review the vast range of choices available for expansion and growth, and will chose the correct avenue following extensive research. Conroy is quick to state that any decision relating to potential monetising of the company’s offering in the future will not be taken lightly.

“We’ve been looking at various options” he says, “do we introduce a more advanced set top box, do we introduce video on demand (VOD), do we look at an over-the-top (OTT) player, do we have a tiered payment model – we’re playing with those ideas, but what we see is the growth of OpenView in the past few months has been positive; we’re activating on average 39,000 boxes every month. This means we could activate two million set top boxes by 2019 and what has started to happen is that the market has realised it is possible for another direct-to-home (DTH) operator to work in South Africa with over a

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million activated households. Also, advertisers are seeing it as another platform to reach their audiences, particularly the lower-middle class economic brackets.

“We haven’t committed to a specific strategy in terms of other revenue streams but it’s something we will get to. Right now, it’s about increasing scale and our foothold in the market.”

In terms of the OpenView set top box, Platco is happy with its design and distribution and is looking at further improvements for the benefit of the end user.

“The big thing about innovation is that you must do so much research before you move on your idea,” says Conroy. “You have to be careful about what you want to do.

We’ve been looking at introducing PVR functionality into this market and what the cost would be but all the research suggests that at this point, the market doesn’t want PVR at high price point. We don’t want to slow down our progress; at the rate we’re acquiring households we’re sticking to a ‘if it ain’t broke don’t fix it’ mentality. Clearly, we want to future proof the box as much as we can but we won’t be putting anything into the market that would risk our current growth as that is what is critical to our survival.”

GOOD YIELD GROWTH Talking about geographic growth and the potential of expanding Platco’s operations across the continent, Conroy is wary of too much too soon and says when the company does come to consider Africa as a new frontier, a careful and calculated approach will be taken.

“It’s something that we will look to in the future but, as eMedia Investments, there’s been several ventures into Africa all of which have failed to be successful,” he says. “I think the secret to success in Africa is first to get your home market

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sorted and then be specific about where you base yourself outside of SA, choosing locations with good yield. Nigeria, for example, is a very difficult market to operate in, there’s strong competition in East Africa in Kenya and Tanzania that you’d be respectful of, and so you’d need to think about your model.

Namibia and Botswana are big countries with small populations, Mozambique is a big country but they speak Portuguese – Africa is a very difficult, complex, dynamic market and it’s not homogenous by any stretch.”

With the ever-shifting entertainment market already leagues ahead in some developed markets – thanks to reliable highspeed fibre connections and longestablished digital signals – Conroy hopes to use the experience of the likes of Netflix, NOW TV, Amazon Fire, Apple TV, Hulu, Time Warner and many more to establish the best

offering OTT and VOD services. We should be able to leapfrog some of the hurdles that our contemporaries face in develop markets.”

FUZZY ECONOMY With the health of the South African economy a cause for concern for many companies - after technical recession, slow GDP growth, high unemployment, and ratings agency downgrades – Conroy admits that the negative feeling surrounding the economy has effected the business, mainly through currency pricing.

“The Rand price does affect us as it effects the manufacture of our set top boxes which are built locally.

We do purchase various chips and boards from South Korea but the box is assembled locally and as the currency price moves, it can make things more expensive for us,” he says. “Of course, there’s also the cost of programming which is all Dollar based and it can be difficult to

//I THINK THE SECRET TO SUCCESS IN AFRICA IS FIRST TO GET YOUR HOME MARKET SORTED AND THEN BE SPECIFIC ABOUT WHERE YOU BASE YOURSELF OUTSIDE OF SA, CHOOSING LOCATIONS WITH GOOD YIELD// working model on which to base future growth.

“I think it’s a very exciting time as South Africa is unlike the rest of the developed world in a sense that there’s still a future for traditional media and we’re less likely to be disrupted by new OTT players,” he says. “There’s few fibre connections, most people are still watching analogue free-to-air so we’ll be lucky in the sense that we’ll be able to look at how business models work in markets like Europe and North America and adapt accordingly, offering a blend between being a traditional TV broadcaster and

maintain an affordable price point at R399 with vast currency fluctuations.

It is certainly linked to political instability in South Africa with the President replacing his Finance Minister for unknown reasons and leaving our currency yoyo-ing – it’s like a scary roller coaster ride for us on a daily basis.”

The fiasco that has been the digital switch over has also been a result of economic downturn, falling down the government’s list of priorities. For now at least, Platco and Conroy think that switch over may never be completed.

“There was a point in our corporate

extra

#OurWorldIsRed etvSA

@etvSA

etv.co.za

All Channels available on OpenView HD

INDUSTRY FOCUS: ENTERTAINMENT

history where we desperately wanted digital terrestrial television to succeed but that came undone unfortunately because of a number of factors including opposition from incumbents, our public broadcaster constantly changing its view, and policy uncertainty thanks to the frequent change in Communication Minister,” explains the MD. “We always go back to square one and we feel there is a lack of understanding within government about broadcasting and the future of multichannel entertainment. With all of the challenges that South Africa has, DTT has not been at the top of the agenda. From our point of view, we’re thinking that the DTT ship has sailed and it’s looking increasingly like the SA market will be a DTH market, for which we are well-positioned.”

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LEADING FROM THE TOP Conroy has been with Platco since March 2016 but has been involved with the wider eMedia Group for more than 17 years. He is a journalist by trade and as such has developed a deep understanding of what is required in the media business.

One of his biggest achievements is taking part in a South African-led ascent of Mount Everest in 1996, the memories of which have helped him to write a new book.

“I never intended to write a book – I was a victim of technology,” he recalls. “I realised one evening that it was 20 years to the day since I arrived in Kathmandu to cover the Everest expedition as a journalist, and I was foolish enough to take out my diary and put the first entry onto Facebook. Immediately people

PLATCO

came back to me and asked what happened next so I realised that I would have to blog this in real time and re-tell the story using the diary as the base. It snowballed and people from all over the world started following me so it generated attention. I decided to take all the posts and compile them, and the total came to around 55,000 words and I realised that was book length so I sent it to a publisher and they loved the idea.”

The excursion recounted by Conroy was, at the time, one of the deadliest in the peak’s history, and the has helped to bring new evidence into discussion regarding

the exact happenings during the expedition, much of which still remains in question.

He describes the journey as one of ‘peaks and troughs’ that must be planned for, much like the South African economy. Putting this experience into practice, Conroy and team are always busy planning for the future, and with investments into programming, technology and research, this is a company that we can expect big things from.

With global demand for new content, and new ways of delivering that content, continuing to rise (take a look at the recent Netflix figures, adding 5.3 million users in 2017 and

spending around $8 billion on new content next year), the appetite for VOD, OTT, DTH and digital services remains. This is an important industry for South Africa, and one that Platco will look to summit in the long-term future.

PLATCO 011 537 9300 info@platco.co.za www.platco.co.za

//

My background is in journalism and I started my career working for one of the only independent media outlets in South Africa during the apartheid era – Talk Radio 702. I was lucky enough to be with them during the birth of our new country under the leadership of Nelson Mandela. 702 put a lot of faith in me, sending me to spend time on Everest with the very first South African Everest expedition. I moved through a couple of other positions before joining eMedia Investments and helping them launch the country’s very first 24-hour news channel which I ran for eight years before coming to Platco.

“Both have their peaks and troughs. The lessons that I took from Everest that you can apply in business is that you must plan as well as you can for what lays ahead but there will always be challenges and risks. At times you are going to have to make tough decisions which will take you further away from your goal but you must recalibrate the situation and try a different route. You must blend planning with flexibility in order to get to where you want to be. Everest takes so much time; you don’t just arrive and start making your way up. There’s no straight line to the ultimate goal in life or business.”

MANAGING DIRECTOR

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DATACENTRIX

Delivering Success In An Ever-Changing Business Environment PRODUCTION: Timothy Reeder

Datacentrix is an ICT solutions provider, famed for leveraging technology and services to deliver business value to organisations. A string of recent awards has underpinned its capacity to effectively partner with its customers, equipping them with valuable insight and helping them to align their technology undertakings with their business strategy.

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Datacentrix employs an holistic approach when it comes to its provision of high-performing, secure ICT solutions. At the core of all that it does is the improvement of business processes and networks, which it delivers through its three principal divisions: Managed Services, Technology Solutions and Business Solutions. Datacentrix’s is an all-encompassing value proposition, allowing complex integrations between technologies that help safeguard customer success well into the future.

Through the first of these three arms, namely Managed Services, Datacentrix presents an end-to-end range of support services and outsourcing solutions that allow time to be more effectively allocated to growing a business. It incorporates a vast range of capabilities, among them internet and cloud services, managed networks and printing and document solutions. Via its Technology Solutions,

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meanwhile, Datacentrix offers complete ICT infrastructure solutions, complex system integration and flexible solution design to bring competitiveness and peace of mind to customers, under which umbrella are data centres, storage solutions and security, to name but a few.

Rounding off its service provision, the Business Applications aspect of the Datacentrix trio seeks to maximise the visibility and utilisation of customers’ information assets, while integrating and automating business processes and systems, as a result leading to improved decision making. These are highly professional services designed to enable the conversion of data from multiple applications and systems into meaningful business information, all using a single managed view of customers, processes and business partners.

This heading is then further broken down into a number of key processes, with

two of these standing out in particular due to the multifaceted capabilities they offer. Enterprise Information Management (EIM), firstly, involves structuring and managing information assets to enhance efficiencies, promote transparency and enable business insight, and seeks to enable informed management across an organisation. Alongside EIM, while similar in name, Enterprise Resource Management (ERP) takes care of the integration of disparate applications, systems and business processes to enable seamless information sharing and effective monitoring and control.

Ahmed Mohamed, CEO, neatly summarises how these parts fit together to make up the all-encompassing whole that is Datacentrix today. “We started life essentially as a commodity broker, moving IT equipment from the suppliers and vendors to our customers,” he says of its foundations. “Over the years we have

evolved to become a fully integrated solutions provider. Our departure point is nothing to do with technology; it is about understanding the business, and deciding how we can align the IT infrastructure to meet the needs of each individual customer that we engage with.

“Ours is a long term model, which spans everything from delivering a simple notebook right through to managing an entire datacenter infrastructure or even providing cloud computing capability to organisations. Datacentrix is a trusted, capable organisation that can deliver your ICT requirements over a long-term partnership, to take your organisation to a different level.”

Datacentrix’s 135% procurement recognition has led to its certification as a 52.13% black-owned level one broadbased black economic empowerment (B-BBEE) contributor. Datacentrix is also classified as a designated supplier, which

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means that anyone purchasing from the company will from now on gain additional B-BBEE points on their own scorecard.

Mahomed spoke of the company’s commitment to both maintaining and expanding upon this in its future dealings.

“Datacentrix is pleased that the strategies put in place over a number of years have enabled it to reach a level one status.,” he commented. “As part of our commitment to ongoing transformation, we will continue to foster an environment that will deliver substantively on empowerment objectives, including skills, socioeconomic and enterprise development.”

This has not been the only recognition cast Datacentrix’s way in

recent times. Having attained certification as a Gold Partner with Huawei late last year, Datacentrix has been honoured with the ‘Huawei Energy Partner of the Year’ award in 2017, in large part down to its qualification at 5-star level as a Huawei Certified Service Partner with a specialisation in network energy, seeing it cover the full range of Huawei’s network energy solutions.

Linda Razzino, channel service manager, Huawei Enterprise Business Group, spoke of the high quality of a company which is implicit in such a rating as that given to Datacentrix.

“Rating levels are based on the types of certification, where 3-star is entry level and 5-star denotes high level expertise,”

// OVER THE YEARS WE HAVE EVOLVED TO BECOME A FULLY INTEGRATED SOLUTIONS PROVIDER//

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she explained. “In order to reach the 5-star ranking, Datacentrix had to certify for 3, 4 and 5-star level requirements.

Datacentrix beat out eight other local network energy specialists to take the title of Energy Partner of the Year based on its standing as a Huawei Gold Partner for Sales, as well as for its Network Energy field certifications.”

Brian Lendrum, Datacentrix’s business unit manager added that, “Datacentrix is extremely pleased and proud to further our long-standing relationship with Huawei Enterprise through this acknowledgement. The award, together with our gold level partnership status, is the latest landmark in our joint striving towards satisfied, connected clients.”

Trend Micro is itself a global IT security solutions provider for subSaharan Africa, co-founded in 1988 by Steve Chang, Jenny Chang and Eva Chen

DATACENTRIX

to develop antivirus software. It has spent the last three decades developing into a market leader in hybrid cloud security, network defence, small business security and endpoint security. Earlier this year the security leader was another to award Gold Partner status to Datacentrix, and Wayne Olsen, Datacentrix security business unit manager, spoke of how the agreement acknowledges Datacentrix’s expertise within the security space, and more specifically, its ability to propel the Trend Micro ‘Deep Security’ cloud protection message.

“Datacentrix is constantly reviewing and assessing the sector,” he said, “to ensure that we align ourselves with the industry’s leading vendors and provide clients with solutions that make good business sense. We’ve seen market demand on the increase for Trend Micro’s excellent product offering, and our achievement of gold partnership status reinforces our commitment to this relationship.”

“The appointment of Datacentrix as a Gold Partner is a strategic win for Trend Micro,” continued Anvee Alderton, channel manager at Trend Micro Southern Africa. “It will assist us to better position and drive our portfolio of security offerings among the larger enterprises and data centre customers in the region; an area where we are enjoying phenomenal success globally.” Its position as Gold Partner allows Datacentrix to offer

// THE APPOINTMENT OF DATACENTRIX AS A GOLD PARTNER IS A STRATEGIC WIN FOR TREND MICRO // Trend Micro solutions including Hybrid cloud security, Network security and User protection, with solutions in the portfolio catering for such issues as ransomware, compliance and point-of-sale.

The OpenText Digiruption Indaba awards exist to recognise the incredible breakthroughs in every industry, driven

by disruptive innovation, and the fact that all businesses need the agility and skills to adapt to market conditions. Alongside three of its flagship clients, Datacentrix bagged four of this year’s six awards, to confirm Datacentrix’s unparalleled depth of understanding, not only of OpenText’s Enterprise Information Management (EIM) tools, but also in integrating OpenText into SAP-based enterprise software.

Datacentrix was itself the recipient of the final gong, named the winner of the ‘SAP Solution Enhancement of the Year’ award for its work in transforming business operations within South African oil and gas company, Engen and MediClinic, an international private hospital group with operations in South Africa, Namibia, Switzerland and the United Arab Emirates.

Upon giving the award, Lenore Kerrigan, country sales director: Africa at OpenText, stated that, “Datacentrix has shown tremendous commitment in embracing the OpenText solutions and embarking on extremely challenging implementations, delivering innovative solutions that have helped to solve complex business problems for our customers.” Datacentrix’s head of operations: EIM for the Western Cape, Mike Johnson, explained that its

success stems from the team’s intimate knowledge of OpenText’s technology set, matched with a thorough understanding of the clients’ business. “We’re able to effectively combine the technology, the professional services, the international expertise and the local support, to create a compelling array of EIM services to our clients,” he concluded.

DATACENTRIX +27 87 741 5000 www.datacentrix.co.za

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SKA

Taking Our Understanding of the

Universe to New Heights

PRODUCTION: Timothy Reeder

When completed, the Square Kilometre Array (SKA) will be the largest radio telescope ever built and capable of producing science that changes our understanding of the universe. It is an international effort to build the world’s largest radio telescope across one million square metres of collecting area, with a wealth of the world’s finest scientists, engineers and policy makers bringing the project to fruition.

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INDUSTRY FOCUS: TECHNOLOGY

//

The SKA telescope will be co-located in Africa and in Australia, and the sheer scale of the project marks a huge leap forward in both the research and development and engineering processes of building and delivering a radio telescope. The end result will deliver a fittingly transformational increase in science capability when operational, with the SKA set to offer an unprecedented scope in observations; it will exceed the image resolution quality of the Hubble Space Telescope by a factor of 50 times, and allow us to image huge areas of sky in parallel.

A vast range of other similar large telescopes are due to be built and launched into space over the coming decades, meaning that the SKA will perfectly augment and complement these all while leading the way in scientific discovery. Deploying thousands of radio telescopes, in three unique configurations, it will

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enable astronomers to monitor the sky in unprecedented detail and survey the entire sky thousands of times faster than any system currently in existence. Thousands of SKA antenna dishes will be built in South Africa in the Karoo, with outstations in other parts of South Africa as well as in eight African partner countries.

Lorenzo Raynard is Head of Communications and Stakeholder Relations for SKA SA, and talks in greater depth about the sheer magnitude of the technology underpinning the development: “In South Africa, SKA Phase 1 has entailed the building of the mid-frequency antennas, which will incorporate the MeerKAT radio telescope with its 64 antennas. An additional 150 antennas will be added to that. This represents approximately 10% of the entire SKA project, so we will be looking at somewhere in the region of 2500 antennas at the projects’ completion which will extend across the three

spiral arms spanning the African partner countries.”

AVLBI In total, nine countries of the continent will form what is known as the African Very-Long-Baseline (VLBI) network. While the desert regions of South Africa provide the perfect quiet backdrop for the high and medium frequency arrays that will form a critical part of the SKA’s ground-breaking continent-wide telescope, it is not alone in hosting components for the SKA in Africa.

Eight partner countries around the African continent will also have radio telescopes contributing to the network that will provide scientists with the world’s most advanced radio astronomy array. These include Botswana, Ghana, Kenya, Madagascar, Mauritius, Mozambique, Namibia and Zambia.

Raynard explains the significance of this network to the SKA project.

SKA

“AVLBI is essentially a group of antennas that are set up across a very long baseline that forms an interferometry - a long stretch of antennas that observes as a single unit. There are a number of these already in place, namely the European VLBI and the Merlin telescope, which was one of the first to be formed.”

Interferometry is a type of astronomical interferometry used in radio astronomy whereby a signal from an astronomical radio source is collected at multiple radio telescopes on Earth. The African VLBI Network (AVN), meanwhile, will help to develop the skills, regulations and institutional capacity needed in SKA partner countries to optimise African participation in the array, and enable participation in developing SKA pathfinder technology and science.

The AVN will help to develop the skills, regulations and institutional capacity required to optimise African participation in the SKA and in pathfinder technology development and science.

GOVERNMENT PARTNERSHIPS A ministerial meeting in August this year brought together members of all nine of the SKA African partner countries, each represented by its respective Ministers and Deputy Ministers of Science and Technology.

It was the fourth such occasion, with the purpose of considering progress in the development of human capital initiatives and the formulation of new academic programmes around physics and astronomy, as well as site selection and the rollout of high performance computing capabilities.

“It was also at this meeting that all the ministers from the African partner countries agreed to sign a Memorandum of Understanding (MoU),” Raynard adds, “to establish their commitment in preparation of Phase 2 of the building of this VLBI.” As Raynard explains, for those present the benefits of establishing

the African VLBI were laid out for all to see. “The agreement in question was to do with the partner countries investing in radio astronomy,” he says. “If you are building a VLBI it is simply a case of buying up land in each country and then building the telescope. For this level of investment, however, it is important that each country buys in and, as a result, is able to use the instrument for their own human capital development. In this way, it will be able to build an expertise base not only in telescopy but also in the science of astronomy and cosmology and the related fields.

“Somebody that is trained in astrophysics, for example, is essentially a data scientist and these skills can be applied to many other areas of the economy - such as banking or finance.

“The other primary benefit

of establishing a VLBI is that infrastructure is being established across these African partner countries,” he goes on, “which will help to process the enormous volumes of data that are gleaned from these instruments. That data infrastructure can be made available for other natural science disciplines for conducting research, such as bioinformatics and genome research. The return on the investment in infrastructure is at a multi-lateral level.”

The South African Minister of Science and Technology, the Honourable Grace Naledi Mandisa Pandor, is the Chairperson of the Interministerial Committee of the AVN, and added that, “a vital part of the effort towards building SKA on the African continent over the next decade is to develop the skills, regulations and

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INDUSTRY FOCUS: TECHNOLOGY

institutional capacity needed in SKA partner countries to optimise African participation in the SKA.” Also recognised at the meeting was the progress made in the development of the AVN project, particularly with Ghana’s announcement that it had been the first of the eight partner countries of the AVN to complete the conversion of a communications antenna into a functioning radio telescope. The combination of what are termed ‘first light’ science observations included Methanol Maser detections, VLBI fringe testing and Pulsar observations.

Reaching these three objectives confirm that the instrument can operate as a single dish radio telescope and also as part of global VLBI network observations, and Professor Kwabena FrimpongBoateng, the Ghana Minister of Environment, Science, Technology and Innovation (MESTI), added: “The Ghanaian government warmly embraces the prospect of radio astronomy in the country and our radio astronomy development plan forms part of the broader Ghana Science, Technology and Innovation Development Plan.”

The first light readings have been instrumental in highlighting the capabilities of the finished project, as Raynard explains. “Previously, there had been some trepidation from the African partner countries, with concerns as to exactly what the investment would entail, what benefits it would bring to each country and even whether there would actually be an SKA Phase 2. We noticed a real positive turn following the achievements of Ghana, in the senior officials and at the ministerial level, as people could see tangibly what benefits having a radio telescope in their country would bring, now that the instrument was in place.” Following these initial observations, the research teams from Ghana and South Africa will continue

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to carry out observations and analyse the data, to improve accuracy in experiments moving forward.

MEERKAT PROVES ITS WORTH A precursor to the Square Kilometre Array is South Africa’s MeerKAT radio telescope, currently being built in the Northern Cape. The MeerKAT telescope will be an array of 64 interlinked receptors, a term which refers to the complete antenna structure, with the main reflector, subreflector and all receivers, digitisers and other electronics installed. 48 of the receptors are concentrated in the core area which is approximately 1-km in diameter.

The MeerKAT array has already spotted hundreds of new galaxies, and is on course to be completed next March. Of its 64 dishes, 43 have already been built. Once assembled, the first SKA prototype dish will link to this array and, over the course of the first phase of construction, to 130 more dishes just like it. MeerKAT proved its status as the best radio telescope of its kind in the Southern Hemisphere through its Array Release 1 (AR1), where 16 of the eventual 64 dishes were integrated into a working, fully functional telescope array. In a small patch of sky covering less than 0.01% of the entire celestial sphere, the MeerKAT First Light image identified more than 1300 galaxies in the distant Universe, compared to 70 known in this location prior to its development.

“We have met all of our milestones on this project so far, and the next of these is to have all 64 antennas integrated by the end of March 2018,” Raynard tells us.

“The launch will be soon after that, probably around June or July. As we speak today, all 64 antennas have been lifted, and now the hard work is ongoing to ensure that these are all connected and integrated, and make each of these individuals perform as one single telescope.

“We have continually met the goals that we have set ourselves throughout the timeline of this project to get us to this point today.

The Array release 1 took place in April 2016, when we had 16 of the antennas integrated, which was followed earlier this year by our managing to get 32 antennas integrated from single polarisation.

This keeps us well on track to meeting the ultimate 64 antenna milestone.” MeerKAT is funded by the South African Government and is a South African designed telescope, with 75% of its value sourced locally. MeerKAT also represents a sizeable international research and development investment for South Africa, and will be an integral part of SKA Phase 1.

As these targets have been met and checked off, Raynard explains the visible progress that MeerKAT has been able to measure. “Every time we release an array, we point those antennas to a particular section of the sky and we are thus able to see how the resolution and clarity increase with the augmentation of the number of antennas and the baseline distance between those antennas. We have managed to show the public on each occasion how our observation of the same patch of sky keeps improving.”

The MeerKAT telescope made its debut scientific contribution on an international collaboration and major discovery, as part of an international collaboration of telescopes to detect gravitational waves – ripples in space and time – for the first time, in addition to light from the spectacular collision of two neutron stars. The discovery was made using the US-based Laser Interferometer Gravitational-Wave Observatory (LIGO) alongside the Europe-based Virgo detector, together with some 70 observatories on the ground and in space observing the event at their representative wavelengths.

SKA

“This was the very first time that MeerKAT actually contributed as part of an international collaboration of instruments, and therefore contributed to a better understanding of the neutron star collision and the gravitational wave that resulted from that process,” clarifies Raynard.

“Perhaps most exciting is the fact that, because MeerKAT will be integrated into SKA Phase 1, up until such time as this is built it will exist as the largest radio telescope of its kind in the world,” Raynard continues. “This will attract attention from across the world, which is the other benefit of investing in a large science infrastructure of this kind. Being able to attract that level of intelligentsia from across the globe means that our own talent can begin to be nurtured. This is a huge component of building a knowledge economy.”

PROTOTYPE BUILDING Attention now turns to construction of SKA Phase 1 itself, currently slated to begin in 2018 and integrate both the MeerKAT and Australian Square Kilometre Array Pathfinder (ASKAP) precursor telescopes. The SKA Organisation is moving towards finalising the detailed design of the SKA1 radio telescope which will culminate in Critical Design Reviews (CDR) for all the telescope products and associated infrastructure and power during the course of 2018.

“Prototype construction has already started,” says Raynard, as the SKA begins to take shape as a real entity. “We have finished the process of building the very first prototype foundation and we are currently testing this. Because it is an innovation project, very few of the parts are bought from the shelf. All our next steps are based on the previous one,

which is where the importance of the precursor and pathfinder instruments are so valuable. These all form parts of understanding and optimising the design and understanding of SKA Phase 1, and, eventually, SKA Phase 2.” The SKA is a mega-science project, and is set to push the limits of engineering and scientific endeavour over the coming decades, as the development of cutting edge technology and innovation, including the design of the world’s fastest supercomputers, facilitates its construction.

SKA +27 (0)21 506 7300 enquiries@ska.ac.za www.ska.ac.za

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CASHBUILD

Building On

Strong Foundations PRODUCTION: Timonthy Reeder

Committed to personally servicing its customers throughout South Africa, Namibia, Lesotho, Botswana, Swaziland, Malawi and now Zambia, Cashbuild is the largest retailer of building materials and associated products through its ever-increasing number of uniquely cash-only stores.

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Having been established in 1978 and with its shares listed on the JSE since 1986, Cashbuild today employs in excess of 6000 people, and has come to be known as the first choice retailer in its chosen field in each region in which it currently operates. It achieves this by maintaining a carefully focused, in-depth and quality product range at the most competitive prices, designed to meet the needs of the local market for everyone from homebuilders, home improvers, contractors, farmers and traders; essentially, anyone who is wishing to purchase quality building

materials for cash. These ranges are no-frills and comprehensive, meaning that everything needed to facilitate the construction of a house can be found under its many roofs across the continent, each ideally adapted to the market served.

Cashbuild’s already large operational footprint is always increasing, and has recently been bolstered by the opening of a new store in Zambia to mark its presence in six African countries. There are also plans in place to conquer many of the more rural areas of South Africa, which present huge pockets of opportunity

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BUSINESS PROFILE

www.enterprise-africa.net / Issue No.xx / xx

CASHBUILD

for Cashbuild and its unique service offering. One need only point to the huge leap in the number of Cashbuild stores in existence to get an impression of the further potential on which to capitalise: from a figure of 244 in 2016, the current total now stands in excess of 300, and helps make Cashbuild the largest retailer of building materials in Southern Africa.

Another aspect of Cashbuild’s expansion plans clearly lies within the acquisition of established companies in order to not only secure, but also to grow, its share of the market. This has also fed in to the astonishing growth Cashbuild has seen in both its employee numbers and its holding of stores over the past year.

// WE HAVE THE ASPIRATION TO ACHIEVE 30% MARKET SHARE // Most recently this has taken the form of takeovers of P&L Hardware and Buffalo Timbers. The former is a family business that focuses on the supply of hardware and building materials into mainly rural markets, which has grown from its single store at the outset in 1982 to operate out of 45 at the present time.

Buffalo Timbers, on the other hand, is one-stop hardware shop with branches in Peddie, Queenstown, Butterworth and four in Mthatha. A move in 1991 away from supplying building contractors on credit and instead opting to drive for a more cash-orientated style of business

helps to make it the ideal proposition for Cashbuild, also true of its hardware ranges tailor-made for each area and a clear understanding of targeted customer needs.

Cashbuild CEO Werne de Jager laid out the reasoning behind the company’s chosen methods of expansion. “In the past three or four years we have been much more open to the possibility of acquisitions, and we are looking to acquire all the time. We have the aspiration to achieve 30% market share, and at present we are sitting at half of that. We know that it will be impossible

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INDUSTRY FOCUS: CONSTRUCTION

to do this via pure organic growth, and therefore we have to take on these businesses in order to bridge the gap.”

As the preferred retailer and integrated supplier of building materials, associated products and services across all market segments in selected countries, Cashbuild possesses the unique ability to understand both its customers and its markets, which in turn enables the company to offer a focused range of products and services suited to the specific needs of each of these markets. A mutually beneficial relationship with suppliers, substantial buying power, and ability to control costs then enables Cashbuild to offer quality, best value products and services at convenient locations, to all

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// WE STRIVE TO MAKE CUSTOMERS’ LIVES EASIER AT EVERY TURN // customers.

“We have managed to differentiate ourselves by being present in the townships, we are where our customers need us to be, and ease of access to our shops is crucial to our strategy,” expands de Jager. “Another of our key success factors is the fact that all products are always in stock - our ordering processes ensure this. We strive to make customers’ lives easier at every turn, and therefore take great pride in the ease of shopping we can offer.”

There is another side to the

Cashbuild story, however, arguably as important as the peerless experience its customers enjoy. Eight schools in Diepsloot, a densely populated township in the north of Johannesburg, have been beneficiaries of the Cashbuild Art-at-Heart competition, each receiving a R15,000 Cashbuild building material voucher at its Diepsloot Store Opening Ceremony.

Since the Art-at-Heart campaign was launched 16 years ago, Cashbuild has helped more than 2700 schools in southern Africa via the provision of over R33 million worth of building

CASHBUILD

materials. The schools will use the vouchers for painting, paving, new window handles, fencing and a new classroom, while the children’s artwork submitted to the competition is displayed at the ceremony and remains on display in the Cashbuild store for the next six years. Diepsloot Primary Schools No 4’s principal Johannes Makhafola said, “We are thrilled to have been chosen and so proud of our learners. The vouchers would be used for much-needed paving as the school was originally built on a dump site and is always covered in dust and mud so the paving will make so much difference to the learners.”

Sthiwe Jeke, principal of Akani Metmar School added: “We are

delighted and very grateful to Cashbuild to have been chosen for this.

Our main priority is to erect fencing around the school grounds to keep learners safe. We would also look at painting the outside of the school to make it as beautiful as our learners which is just another one of the muchneeded upgrades we would love to do.”

Even more recently, children at Sunnyside Children’s Orphanage in Gauteng were furnished with toys, sweets, stationery and groceries on Friday, with the orphanage also receiving a new fridge and some brand new tiles. All of these were the result of donations from several local businesses, with CashBuild Centurion at the heart of the project, the total

cost of which amounted to around R25,000. “We are very happy, the donation came at the right time,” said Managing Director Reagan Mashego. “It is Christmas time and the children need presents. We are also thankful for the fridge as it will help a lot.”

CASHBUILD 011 248 1500 www.cashbuild.co.za

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ISOWALL

Dominant Panel and

Polystyrene Production PRODUCTION: Timothy Reeder

Isowall SA is the leading manufacturer and supplier of the Isowall sandwich panel which is today employed in numerous applications worldwide. Isowall also manufactures and supplies expanded polystyrene and moulded products, as well as insulated doors for cold storage and insulated truck bodies.

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A wholly South Africanowned company, Isowall’s main factory in Pretoria is ably backed up by further facilities in Cape Town, East London and Tema, on the Atlantic coast of Ghana.

Isowall conducts operations not only throughout South Africa, but also into the rest of Africa in such territories as Zambia, Ghana, Sudan, Namibia, Angola and Mozambique.

With the group currently standing as the dominant panel and polystyrene producer in Africa, its overall focus is the manufacture of Isowall sandwich panels and Isolite expanded polystyrene (EPS) and expanded polypropylene (EPP) products for the insulation, construction, packaging, agricultural and automotive markets. Thermal insulation has long been known as the most efficient way to maintain cold temperatures, and consists of

minimising the transmission of heat energy between adjacent spaces.

According to the U.S. Department of Agriculture, even way back at the turn of the century there was more than 3.04 billion gross cubic feet of general refrigerated or cold storage capacity in use, and these facilities are essential for the safe handling and storage of food products and other goods.

Without storage areas that provide a consistent environment and sustain its integrity, many products would not be readily available to consumers as the majority of food products are perishable, meaning they deteriorate rapidly when exposed to an ambient temperature.

Historically, the use of cold, whether through freezing or refrigeration, has been one of the most common methods for food preservation over long periods. It was only in the

twentieth century, however, that cold storage began to be implemented on an industrial scale.

Being able to keep food for long periods has a significant impact both socially and economically, and the properties of expanded polystyrene (EPS) insulation board make it an ideal substance for use in walls and roofing systems in the construction of cold storage space, facilities which store food, flowers and other temperature sensitive commodities.

As surface temperatures decrease within these structures, the quality of construction and sustainability required becomes ever more critical, with the performance properties of EPS - constant thermal resistance, dimensional stability, chemical inertness and sustainability making it perfectly suited for use as insulation.

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//RBS IS PROUD TO BE APPOINTED INSURANCE ADVISORS TO ISOWALL. Construction accounts for a major part of the South African economy. Unlike other emerging markets, the South African construction and infrastructure industry has struggled post 2010 FIFA World Cup with depressed growth. It is the time when industry separate wheat from chaff. A time when companies face courage in adversity.

Insurance is generally considered important and indeed when things go wrong, insurance may be the only viable means of ensuring that a project gets back on track.

The implementation of an effective risk management programme will protect assets, improve stability and long term profitability, safeguard business reputations, reduce insurance claims in addition to insurance premiums and will ultimately guard future opportunities.

At times the magnitude of a risk is indeterminate, but we can determine: • • • •

The proportion of real versus perceived risks The monetary quantification of risks The real import and the impact of a type of risk Contractual Risk

Contractual risk management provides a clear structured approach in addressing responsibilities to insure construction projects. Risk transfer using contractual liability is one of the most important risk management tools available to risk managers and yet can be one of the most complicated and complex to understand. The concern in particular rests within the insurance provisions.

Ideally, the parties, in their contract, will assign the risks and liabilities to the party best suited to manage and minimise the risks. It is crucial that the risks and responsibilities associated with specific projects are clearly allocated within the contract. It ultimately serves as a framework of the law between the parties involved and will establish which party has assumed or negated a particular risk in connection with the project.

Type of Risks Broadly speaking, construction projects face the following type of risks: Business Risks - Construction companies face risks to transformation, health, safety and environmental sustainability, followed by growth and expansion, in addition to compliance with laws and regulations.

Financial Risks – A delay in the completion of a project often leads to increased costs and is more often the simple consequence of underestimating what it will take to finish a project.

Technology Risk - New materials and building techniques are emerging to help meet client demands of faster, cheaper and greener construction projects, these same innovations can potentially lead to unintended consequences.

Project Risk – The construction industry inherently has a higher risk of occupational injuries and diseases due to a potentially hazardous and accident-prone working environment.

Political Risk - Labour unrest have caused many headaches for construction companies in South Africa and SASRIA in particular does not cover loss of income without physical loss or damage to the construction project. Insurers’ appetite for risks such as project standstill caused from riot, strike and lock out without physical damage to the works from a global perspective have diminished over the years due to claims increasing year on year, rendering the risk almost un-insurable.

Construction work itself is exposed to significantly higher risk of damage caused by natural perils such as storms, floods and landslip in addition to facing man-made perils represented by the construction operations themselves. The risks of fire, impact, instability and collapse are also intrinsic to the process.

Mitigation of risks is the all en-compassing requirement. For this reason, insurance needs to be an integrated part of the entire risk management process in construction projects in a practical, proactive and systematic way. Insurance provides a whole range of insurance products to negate the risks and it is available to all parties that comply with the terms and conditions of such insurance.

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INSURING CONSTRUCTION RISKS

BY DESIGN. Construction risk can be divided into four sectors, housing, infrastructure, commercial and industrial construction. Within these sectors there is a wealth of different sized businesses from the self-employed plumber through to major infrastructure groups.

All have individual risks associated with their business activities influencing the need for tailor made insurance.

CALL RBS TODAY ON:

0860 072 765 email | george@rbs.co.za web | www.rbs.co.za

An authorised FSP

INDUSTRY FOCUS: CONSTRUCTION

Continued from page 123 century, due to the growing demand for industrial refrigeration chambers and the expansion of technology, sandwich panels came into being.

The utilisation of these panels was a major breakthrough in the construction and insulation sector, as they bring together a number of advantages within the same product.

Among these are modularity, meaning that they are easy to transport and assemble, as well as being available in a range of core thicknesses and sheet metal cladding for facades. While their characteristics depend on the panel usage, they possess excellent mechanical properties, act as a superb vapour barrier, are highly heat resistant and come at a manageable cost.

Of the Isowall Group range of products, it should come as no surprise that perhaps the flagship is the Isowall Sandwich Panel, which consists of an insulation core with

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facings of flexible materials. They are used in many of the most critical insulated applications, including such facilities as coldrooms, classrooms, distribution centres, freezers and abattoirs. The EPS core panel is by far the most economically sound choice of insulation, extensively used not only due to its insulation properties and high strength to weight ratio, but also to a relatively low weight which makes panel installation a far more easily completed process.

The Isolite division of Isowall is another crucial aspect of the Group as a whole, and produces Expanded Polystyrene for a wide range of uses including insulation, lightweight fillers and semi-rigid cushioning. An incredibly versatile substance, here again we see its excellent thermal properties in play as it provides integral characteristics in applications such as cold rooms, deep freeze facilities, refrigeration,

fermentation tanks, vessels and for pipe and duct lagging. EPS is also used for protective packaging in a variety of industries such as industrial, pharmaceutical and retail, to which it lends itself ideally due to its excellent cushioning properties, heat resistance and limitless design possibilities.

In the construction business too, EPS sheets and boards are used for thermal and sound insulation in walls, roofs and on floors, while loose beads are used as an aggregate in lightweight concrete, plasters and renderings. Among its other uses are in under floor heating systems, drainage boards, permanent formwork, foundation and prefabricated wall systems.

Meanwhile, since EPS remains unaffected by micro-organisms in soil, it is ideal for geothermic insulation beneath roads, around foundations and in embankments where it prevents soil break-up which would otherwise occur as a consequence of freezing.

At present count, the Isowall Group turnover is some R300 million per annum, and the replacement cost of the Group’s fixed assets and properties are approximately R340 million. Isowall Pretoria alone operates from premises of 45,000 m2, having commenced business in Silverton in 1973, with the Group employing some 500 people of whom 300 are based in Pretoria. At the heart of all of this success innovation is the Isowall Group’s Chairman, Peter van Duyn, himself having stood as a key member of the industry for the past 29 years.

In addition to leading the Group, he is actively involved in industry matters and has been a significant influence in the establishment of, and regularly participated in, several of its underpinning bodies. The first of these, EPSASA, is the association representing expanded polystyrene manufacturers, raw material

ISOWALL

suppliers and equipment suppliers in South Africa, an integral industry representative whose mission is to promote and grow the expanded polystyrene market.

Meanwhile, equally important is the Thermal Panel Manufacturers Association (TPMA), which exists to represent the lucrative South African sandwich thermal panel industry on technical, regulatory, quality assurance and product acceptance issues. TPMA Members include 12 of the leading manufacturers of polystyrene, polyurethane, polyisocyanurate and rockwool cored panels, and it remains a vital resource for both producers and users of industry products. As standards developer, TPMA also writes and publishes industry product standards.

As with all companies of Isowall’s ilk, thoughts quickly turn to environmental concerns, and particularly the demands EPS

places upon our natural resources.

Fortunately, there is yet more good news for the Group in this regard. Since expanded polystyrene uses oil and petrochemicals in its manufacture, it does by extension call upon the earth’s natural resources, but when compared to other areas of industry this resource consumption is very small indeed. Total plastics packaging manufacture uses no more than 2% of the world’s oil production, with expanded polystyrene packaging using less than 0.1% of this.

For the sake of comparison, over 86% of the oil consumed is used as a fuel for industry transport and in our homes. The current use of plastics in Europe per capita, meanwhile, is about 30-kg a year, meaning that the amount of oil used for plastics manufacture therefore would only be sufficient for a 300-km car journey.

In addition, expanded polystyrene

does not pose any threat to the ozone layer. It uses pentane as its blowing agent during the production process, and due to its chemical relation to methane, it quickly decomposes in the atmosphere.

Expanded polystyrene packaging is being recycled throughout Europe and South Africa and in many other parts of the world too, while meeting the packaging requirements of many products at a highly effective and competitive price.

ISOWALL 012 804 3564 www.isowall.co.za

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SOUTHEY CONTRACTING

Prolonging the Lifetime of Industrial Assets PRODUCTION: Timothy Reeder

Southey Contracting is Africa’s number one industrial and engineering services company, whose industrial solutions are both cost effective and delivered punctually to exceptional quality and safety standards.

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Southey Contracting is possibly best summed up with those adjectives which form its mission statement: Reputable, Responsible, Engaging and Committed.

The company has set about building for itself a reputation founded not only on these key pillars, but also on a long and distinguished history, the beginnings of which came more than three quarters of a century ago in 1939.

At the outset Southey Contracting carved a niche as a painting and insulation contacting company for the mining industry, an offering which has since evolved and broadened to make possible its having branches in Cape Town, Johannesburg, Durban and Richards Bay. Now, its service provision still covers painting and thermal insulation, but these have been joined additionally by capabilities in high-pressure water blasting, thermal spray coatings and scaffolding, all of which it supplies to the heavy industries requiring large equipment and complex processes; typically, we might think of such fields as oil, mining, shipbuilding, steel, chemicals

machinery manufacturing as most representative of them.

Southey Contracting provides multiple services across the power generation industry, such as the maintenance, shutdowns and new build projects it undertakes at various Eskom coal powered facilities and at the Koeberg Nuclear power station, on the west coast of South Africa. The South African petrochemicals industry, meanwhile, is one of Africa’s largest and most advanced, with Southey providing contracting and ongoing maintenance at all SA refineries.

Its footprint and ability in this industry is complete and widely recognised, with a presence including operations at Sapref, Engen, Mossgas, Chevron, Sasol 1 & 2 and many others.

Southey Contracting’s oil and gas footprint stretches beyond the borders of South Africa, with permanent facilities in Walvis Bay (Namibia), Luanda (Angola) and Pointe Noire (Congo) to name but three. Its involvement in this industry dates back to the 1980s, and today it services the upstream, midstream and downstream oil and gas value chain.

Southey Contracting forms part of Southey Holdings, a group known widely as the investors in excellence and a market leader in South Africa. Originally a contracting company servicing South Africa’s mining industry, Southey Holdings has since taken a series of key strategic steps to position it as the driving force behind a diverse network of businesses operating within a variety of industries.

The group represents one of the largest and most respected privately owned groups in Africa, and is a multi-disciplinary business with operations in a broad but complementary range of activities. It owns a diverse range of companies all focussed on servicing the mining, minerals, oil and gas, power generation and general industrial industries.

John Humby, Divisional Managing Director at Southey Contracting, describes the journey the company has taken from being a small business started nearly 80 years ago, to the 3500 employee international organisation we see before us today. “The company was formed in 1939 to provide painting and insulation services to the mining industry

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SOUTHEY CONTRACTING

throughout Southern Africa, particularly the northern regions of South Africa,” he says. “It grew with the development of the gold mining industry in the Free State; that was in the late 70s and early 80s at which point it had been bought by two trusts which decided to expand the field of influence from Johannesburg and branches were opened in Durban and Cape Town.

“The contracting division which started everything has grown to provide a number of other services like scaffolding, high-pressure water-jetting and cleaning as well as aluminium spraying. The services of the contracting division are provided throughout the country as well as into neighbouring countries in Southern Africa such as Namibia, Angola, Zambia, DRC, Kenya, Mozambique, Botswana, Tanzania, Ghana, Cameroon, Guinea etc so we have quite the influence in Southern Africa and beyond. In 2002/03, we bought a company called Tate & Nicholson which is a steel sheeting division who are one of the top companies in the country when it comes to roofing sheeting. The group is now quite big and prides itself on service delivery, fantastic safety records and superior training.”

Southey Contracting is Africa’s top industrial and engineering services company, a collection of project management specialists who are driven by technology, motivated by people

standard-setter. Corrosion protection is among the most vital preventative steps that can be taken, dually because of its significant financial benefits and the industrial disasters, like the MV Erika oil spill in 1999, that can be caused by corrosion failures. These of course present their own exposure to risk in terms of liability exposure and other indirect costs.

Southey Contracting Head of Corrosion Protecting & Coating explains that, “by bundling our scaffolding, insulation and coating services, we can provide the most cost-effective and safe approach.”

Southey Contracting is also positioned to provide the most powerful and environmentally sensitive cleaning techniques available today, in the form of High Power (HP) and Ultra High Power (UHP) water jetting. This is yet another example of the company’s fascination with creating innovative solutions for complex cleaning applications, with specialised cleaning services such as these employed in heavy industrial applications during systematic maintenance cycles, planned shuts and to provide solutions to unexpected waste-related breakdowns and blockages.

Water is used as a preferred alternative to abrasive blasting as it is safer and more environmentally sensitive, and able to be recycled if needed. Working with water jetting, UHP in particular, is a dangerous job that requires the utmost in skill, compliance and equipment,

// IT’S ALL ABOUT RISK MANAGEMENT AND ENSURING THAT THE RISKS ARE AS LOW AS POSSIBLE WHILE MAINTAINING MARKET SHARE AND PROFITABILITY // applications,” says Roddy Mills, HP & UHP Water Jetting Division Manager.

Humby concludes with an insight into how its adaptability, and the ability to continue to diversify, looks set to serve Southey Contracting well into the future. “At the moment, while Southey was founded on the mining industry, our exposure to that business is very small. Oil and gas and power generation is definitely a focus despite its shortterm issues. We are well positioned under current circumstances and that’s through planning and analysis of where we stand and what is out there. It’s all about risk management and ensuring that the risks are as low as possible while maintaining market share and profitability. You can never be entirely negative and you have to take opportunities when they come up.”

// THE GROUP IS NOW QUITE BIG AND PRIDES ITSELF ON SERVICE DELIVERY, FANTASTIC SAFETY RECORDS AND SUPERIOR TRAINING // and focused on performance. More than 77 years’ proven delivery in specialised services across key industries makes Southey experts in prolonging the lifecycle of industrial assets, a singlesource industrial services partner specialising in asset lifecycle extension services.

These are plenty, not least the corrosion protection service Southey offers which is renowned as an industry

both in terms of personal protection and the actual machinery itself. Executed professionally however the techniques offer many benefits that bring about efficiencies in terms of cost, water usage and environmental impact, among others.

“Southey Contracting offers a wide range of high pressure water blasting equipment that brings engineering and customer service together to create innovative solutions for difficult to clean

SOUTHEY CONTRACTING +27 11 579 4600 gauteng@southey.co.za www.southeycontracting.com

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SASOL

Strong Foundations

Pave the Way to Sustained Growth PRODUCTION: Timothy Reeder

Sasol is an international, integrated chemicals and energy company, comprising two upstream business units, three regional operating hubs, and four customer-facing strategic business units. It develops and commercialises technologies and builds and operates worldscale facilities to see it produce a range of high-value product stream, including liquid fuels, chemicals and low-carbon electricity.

//

Formed in 1950 in Sasolburg, Sasol has always been a pioneer of oil-from-coal technology, effectively shifting the petroleum paradigm on a global scale.

Sasol has used the combined weight of its knowledge and experience to become one of the most highly regarded manufacturers of industrial chemicals worldwide, largely thanks to its ability to leverage technologies and by effectively employing the expertise of its more than 30,000 people currently working across 33 countries. By combining this talent with its technological advantage, Sasol

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has been a leader in innovation for over six decades.

In order to continue to deliver longterm shareholder value sustainably, Sasol has had to be especially sensitive to changing market needs and stakeholder expectations, and as such invest heavily into the development and updating of its methods, facilities and products, thus driving progress. As a result, Sasol is frequently spoken of as one of the country’s largest investors in capital projects, skills development and technological research and development.

Recent milestones for the company

have included its listing on the New York Stock Exchange in 2003, that same year that brought construction of a pioneering and environmentallyfriendly gas-to-liquids (GTL) venture outside South Africa at Ras Laffan, Qatar. The following year was marked by the arrival of the first natural gas from Mozambique in Secunda, a town built amidst the coalfields of the Mpumalanga province of South Africa, through the cross border pipeline, as well as a merger with Exel Petroleum and subsequent entry into the South African retail fuel market.

Its Secunda factory truly marked Sasol

INDUSTRY FOCUS: ENERGY

as no stranger to large and complex projects, being as it is the world’s largest petrochemical complex built at one time on a single site.

In 2012, meanwhile, Sasol New Energy constructed a 140 MW electricity generation plant in Sasolburg, a large industrial town within the Metsimaholo Local Municipality, and commenced the front-end engineering and design phase for an integrated gas-to-liquids facility in United States. In short, Sasol has, since the mid-1980s, been increasingly successful in improving its cost base by creating ever more value, through its huge reactors, from the gas it produces from coal; value that has lain in a growing variety of industrial chemicals now numbering more than 200.

It falls to FCB Cape Town’s managing director, Eric d’Oliveira, to

sum up Sasol succinctly: “The Sasol story is an inspirational one firing the imagination of South Africa’s scientists, engineers and forward-thinkers since 1950. We look forward to working again with this world-class, truly South African brand and helping to power it to new heights as one of the country’s favourite brands,” he said, as the advertising agency FCB Africa was appointed to fulfil the above-the-line marketing communication for Sasol.

After all, the main preoccupation underpinning Sasol’s work is the recognition of the growing need on the part of an increasing number of countries to secure their supply of energy and chemicals. For many countries, especially those with abundant hydrocarbons, in-country conversion of these resources into

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liquid fuels and chemicals can be a significant factor in boosting national economies. Sasol has a focused and strong project pipeline, which means that it is actively capitalising on those growth opportunities that play to its strengths in Southern Africa and North America, always focusing on creating value sustainably.

Its core operations are divided into two principal operating business units. Sasol Mining oversees six coal mines that supply feedstock for the Secunda (Sasol Synfuels) and Sasolburg (Sasolburg Operations) complexes in South Africa. The coal supplied to Sasol Synfuels is mainly used as gasification feedstock, while some is used to generate electricity, while at Sasolburg Operations it is used to generate electricity and steam. Coal is also exported from the Twistdraai Export Plant to international power generation customers. Partnership with surrounding communities forms an

SASOL

// THE SASOL STORY IS AN INSPIRATIONAL ONE FIRING THE IMAGINATION OF SOUTH AFRICA’S SCIENTISTS, ENGINEERS AND FORWARD-THINKERS SINCE 1950 // integral part of the division, through the promotion of social and economic development in South Africa by implementing Social Labour Plans (SLPs) and Local Economic Development Projects (LEDs); Sasol Mining is not just about mining coal, but more widely about unearthing opportunities.

Sasol Exploration and Production International (SEPI), on the other hand, develops and manages the

group’s upstream interests in oil and gas exploration and production in Mozambique, South Africa, Canada, Gabon and Australia. SEPI is driving the development of Sasol’s upstream business to allow the group to meet its strategic objective of accelerating the growth of its proprietary GTL technology. In recent years a number of steps have been taken to expand its global upstream portfolio, encouraged by the global abundance of natural gas and the rapid development of the shale gas industry, as well as the lower carbon intensity of natural gas. Much investment has been made in ventures ranging from onshore and offshore conventional and unconventional shale and tight gas.

Sasol’s current work is also attracting positive attention. A survey carried out earlier this year revealed the company to be the purveyors of the most popular petrol stations in South Africa, attracting the most clients per site. The data comes from a joint

venture between researcher Lightstone Explore and Tracker, in which Lightstone analyses around 2.5 million vehicle trips per day, then uses this information to develop a demographic profile of the vehicle owners and their preferences.

“We are, for example, able to determine whether an ATM or a coffee shop or a Woolworths will attract more customers to a service station. We can see which chains are not fully represented in the market and determine which areas are suitable for a new service station,” says Lightstone Explore CEO Trevor Holmes.

Good location is one of the main reasons why Sasol has the highest visit ratio – 4,221 visits to each of its 294 sites over last three months – according to the research. Shell is second with 3,505 visits at 528 service stations.

To profit from such good news, Sasol could acquire as many as 200 outlets to add to its network of 400 stations, according to co-CEOs Steve Cornell and Bongani Nqwababa.

It could also provide branding to

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SASOL

// OUR DELIVERY TRACK RECORD PLACES US IN A STRONG POSITION TO REALISE GREATER VALUE FROM OUR FOUNDATION BUSINESSES // other gas stations, they said. “We feel like we’re giving away margin, not matching our retail capacity closer to our actual production capacity,” Cornell said in an interview at the company’s headquarters in Johannesburg. While the world’s largest maker of fuel from coal produces about 30% of South Africa’s supply, only about a third of that is sold through Sasol retail stations, according to Nqwababa.

In November Sasol unveiled its refined corporate strategy, in which it set out a clear path for sustainable growth and accelerated shareholder returns. Cornell stated: “In developing our strategy, we considered both the opportunities and risks we face, informed by developments in the external environment. It is clear that megatrends influential to our business

will result in greater demand for chemicals and energy products in key markets we serve.” Among those megatrends and assumptions central to Sasol’s strategic choices are global population growth and further urbanisation and sustained volatility in both oil prices and exchange rates.

“Against this backdrop, our value-based growth strategy is premised on further enhancing our foundation businesses, leveraging our core strengths in specialty chemicals, exploration and production (E&P) and retail fuels, underpinned by increased discipline in capital allocation,” said Cornell. Sasol’s foundation businesses provide a robust platform for longterm growth and delivery of ongoing value to shareholders. Nqwababa concluded with an insight into the

value of Sasol’s foundations to its continued prosperity. “Our delivery track record – evidenced in recent years by significant volume improvements at key facilities, our competitive cost position and global portfolio of highly cashgenerative, diversified assets – places us in a strong position to realise greater value from our foundation businesses.

“Here, operational excellence, continuous improvement and digitalisation programmes, as well as rigorous asset reviews, will enable us to become a more resilient, efficient and effective organisation.”

SASOL +27 10 344 5000 @SasolSA www.sasol.com

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G4S

G4S Secures Future Through People

PRODUCTION: Karl Pietersen

For the sixth consecutive year, G4S has been named as one of Africa’s Top Employers. Recognised as a company that offers its employees advancement opportunities and nurtures their development. Through this strategy, the company is managing to realise positive growth and financial strength.

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INDUSTRY FOCUS: SECURITY

//

It’s an old cliché that businesses are built by people, grown through people and made sustainable by people; people are at the heart of business and without the right people business will not be able to thrive.

“Take care of your employees and they’ll take care of your business,” is the famous quote from Richard Branson; he is always quick to point out the benefits of a creating a great place to work, where people are appreciated, engaged, productive and thriving. According to international research company, Gallup, around $550 billion is lost through poor

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productivity as a result of disengaged employees in the US alone. Today, employee engagement is viewed by top performing businesses as a driver of profit and a protector of the bottom line rather than a ‘soft’ benefit that is used more for marketing purposes.

Forbes magazine agrees on the importance of employee engagement, with contributor John Hall stating: “Employees who feel valued and appreciated by their leaders are infinitely more likely to go above and beyond for the company and hold themselves accountable for their part of a project. Employees need to feel that their leader — and the company

— is invested in them.”

And it’s not just about good pay and a smile from the boss. Every aspect of the HR spectrum is now under the spotlight – especially when businesses reach a certain size. Career advancement opportunities, training and development schemes, nurturing, wellbeing, ability to have a voice, trust, recognition, work-life-balance, and many other important ideals are now all vital when building an effective people strategy.

In Africa, many of the big-name businesses have recognised the need for effective HR management and have developed sterling principles

G4S

for care of personnel. Also, many of the small and medium enterprises are committed to helping people develop.

Those that are not are those that you see more often than not falling to the wayside.

If you operate in an industry that is completely reliant on people, and is yet to make the dive into a fully automated strategy, then first-class people management is the key to success. Take the security industry for example; in Africa still largely built on the model of manned guarding. The leading business in this important sector is global business G4S. Known worldwide for its wide-ranging security offerings, G4S has been named as a business that recognises the importance of its large employee base. In Africa, the business has been named as one of the continent’s Top

Employers by the Amsterdam-based Top Employers Institute.

TOP EMPLOYER The Top Employers Institute is the global certification company recognising excellence in the conditions that employers create for their people. The Institute conducts a comprehensive analysis of an organisation’s Human Resources environment before validating accuracy and selecting Top Employers.

These can be organisations from all over the world and once selected, companies can use the title of Top Employer in all correspondence.

G4S was, in October 2017 for the sixth consecutive year, recognised for its HR excellence.

“Our extensive research concluded that G4S Africa forms

// WITH A STAFF COMPLEMENT OF OVER 111,000 PEOPLE IN AFRICA, WE ARE THE LARGEST PRIVATE SECURITY EMPLOYER ON THE CONTINENT // part of a select group of employers that advance employee conditions worldwide,” said David Plink, CEO at Top Employers Institute. “Their people are well taken care of. Now that they have received the Top Employers Africa 2018 certification, they can truly consider themselves at the top of an exclusive group of the world’s best employers.

Reason to celebrate,” he added.

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INDUSTRY FOCUS: SECURITY

Stanley Blyth, Regional HR Director, G4S Africa said: “We are thrilled to again receive Top Employer accreditation in 13 countries – a fantastic acknowledgement of our best people practice efforts, which will only motivate us to reach even further heights of HR excellence in future. With a staff complement of over 111,000 people in Africa, we are the largest private security employer on the continent. G4S therefore takes great pride in the creativity and diversity of our talented people and strive to create a safe and valuedriven environment that provides opportunities for growth, innovation and a sustainable future for all.”

The research found that G4S provides exceptional employee conditions, nurtures and develops talent throughout all levels of the

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// OUR BUSINESS IS DEFINED BY THE HIGH STANDARDS AND EXPERTISE OF OUR PEOPLE, AND OUR CUSTOMERS RELY ON US TO PROVIDE HIGH QUALITY, SCREENED, EFFECTIVE EMPLOYEES TO SECURE THEIR ASSETS AND BUSINESS ACTIVITIES // organisation and has demonstrated its leadership status in the HR environment, always striving to optimise its employment practices and to develop its employees.

Regional President for Africa, Mel Brooks said: “I believe that G4S’s solid people practices, effective training programmes and strong drive towards upskilling and developing its people, and the industry, have resulted in this international award and clearly

set us apart from our competitors.

Our business is defined by the high standards and expertise of our people, and our customers rely on us to provide high quality, screened, effective employees to secure their assets and business activities.”

Around Africa, multiple G4S divisions picked up national accreditation as Top Employers including Botswana, Cameroon, DRC, Côte d’Ivoire, Ghana, Kenya, Malawi,

2017-11-29 12:37:03 PM

G4S

Mozambique, Namibia, Ghana, South Africa, Uganda and Zambia.

When G4S received the accreditation in 2016, Brooks told Enterprise Africa: “We recognise the importance of solid best people practices that support our corporate values and create a safe environment where our employees feel valued, are

given opportunities to grow and in turn shape a brighter and sustainable future for all.”

At its heart, G4S holds a number of values above everything it does, and those values all revolve around people. Integrity, respect, safety, security, service excellence, innovation, and teamwork are

values instilled from the top. “Being a service business, people are at the heart of our business. We rely on them to provide excellent customer service and to behave in line with the company’s values and standards,” the company says.

Brooks is proud of the award as a Top Employer. “It’s not only a measure

//Centurion Systems Centurion Systems manufactures a diverse and award-winning range of products to control the access of people and vehicles into and out of residential, commercial and industrial properties.

Investing considerably in research and development, the company employs a large team of talented engineers that are constantly researching new technologies and innovations, ensuring that they continue to lead the way in security, reliability and performance.

The company has offices throughout South Africa and two international subsidiaries, namely Centurion Systems West Africa Limited, in Nigeria, and CentSys Pacific in Sydney, Australia. Exporting to over 70 countries around the world, Centurion Systems has built a respected reputation of manufacturing reliable and innovative access automation products and, in 2016, became part of the biggest access automation company in the world, FAAC, S.p.A. CENTURION’s product offering includes the following key ranges: Gate Motors CENTURION manufactures gate motors for both swing and sliding gates, with operators available for domestic, lightindustrial and full industrial applications.

The company’s best-known industrial gate operator, the D10 slider, boasts a hardy die-cast aluminium gearbox for maximum efficiency and reliability, a powerful 24V electric motor and, most significantly, an intelligent LCD interface offering a host of selectable features as well as easy setup and advanced diagnostics.

The success and popularity of the D10 led to a high-speed model being developed, and in 2012 the aptly-named D10 Turbo saw the light with a lightning-fast operating speed of 830mm/second.

Traffic barriers and accessories CENTURION’s traffic barriers are designed to handle very heavy traffic, and can happily perform up to 3000 operations every single day, even during power failures. A beefy DC gearbox coupled with a tough-as-nails housing and intelligent and feature-rich controller make CENTURION barriers the automatic choice for access control points with lots of cars going in and out. Roadway spikes and pedestrian barrier fences can also be added for a fully comprehensive access control systems.

Bollards The FAAC bollard range includes solutions for vehicle traffic control in residential, commercial, industrial and urban areas and boasts FAAC’s celebrated hydraulic technology as well as high-quality components ensuring exceptional performance and greatly simplified installation and maintenance.

Biometric access control CENTURION is an authorised distributor of the beautifully advanced ViRDI range of biometric components.

ViRDI currently uses UNIONCOMMUNITY’s patented fake fingerprint detection technology, enabling their readers to differentiate between human fingerprints and those forged from paper, silicon, wax, etc.

Turnstiles Full-height, high-security turnstiles designed for mid- and high-traffic volume areas. They are ideal for controlling movement in medium- to high-security environments.

For more information, please contact CENTURION on +27 11 699 2400 or visit www.centsys.co.za.

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INDUSTRY FOCUS: SECURITY

of how well our values are being adhered to or absorbed” he says, “but it allows us to show to our customer’s what type of organisation we are so it can have commercial value, without a doubt.

“Everything comes down to our core values as an organisation. The reason we’ve obtained Top Employer status is because it’s fundamentally

underpinned by our company values.

We treat our people with respect and we train them well. We pay our people well and they are well looked after.

We aspire to give people a future and career opportunities and that isn’t always the case with organisations across Africa. When talking to our customers, it is also important to them and it’s a meeting of values which

// THE REASON WE’VE OBTAINED TOP EMPLOYER STATUS IS BECAUSE IT’S FUNDAMENTALLY UNDERPINNED BY OUR COMPANY VALUES // 144 / www.enterprise-africa.net

can be hugely important. The Top Employer award allows us to connect with companies that place a similar emphasis on the people they employ.”

Despite the size of the business, clearly G4S manages its people effectively. Globally, the company continues to secure major contracts and this reflects the expertise held within its employee base.

“I think that if you were to approach a security officer irrespective of who they worked for and asked them who they aspired to work for, they would say G4S,” says Brooks.

G4S

GLOBALLY SECURE Displaying the importance of a strong people focus, G4S delivered a positive trading statement for the nine months ending 30 September 2017.

The secure solutions business unit performed particularly well improving from £1.5 billion in 2016 to £1.7 billion in 2017 (annualised revenue). G4S also expanded new product ranges into new geographic markets, including the Retail Cash Solutions, Deposita and CASH360 solutions which were well received across the globe. “With very strong growth in the fourth quarter of 2016, the Group expects full year 2017 organic revenue growth of between 3-4% and good profit growth. We remain focused on cash flow and are on track for the Group’s net debt to EBITDA ratio to be 2.5x

or lower by the end of 2017,” the company stated.

Ashely Almaza, G4S CEO commented: “Trading for the nine months was in line with expectations.

Organic revenue growth was 4.4%, with all regions growing apart from the Middle East and India region.

Organic revenue growth excluding Middle East and India was 6.1% for the first nine months.”

G4S continues to operate in more than 100 countries around the world.

Globally, the company employs more than 580,000 people, and through these people it delivers produts and service that encourages repeat business from some of the world’s largest and most well-known brands.

Listed in London (as the largest employer on the exchange) with a secondary listing in Copenhagen, G4S

is a corporate that has successfully developed its people strategy and translated that into results.

Expectation is that G4S will retain its Top Employer status in the future and continue to grow across Africa and around the world.

If you think creating a working environment that is all about people is not top of the agenda and should take a back seat, take a look at G4S and think again.

G4S +27 (0)10 001 4500 crm@africa.g4s.com www.g4s.co.za

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BEIJING AUTOMOTIVE WORKS SOUTH AFRICA (BAW SA)

The Road to

Success

PRODUCTION: Emily Ayson

At the end of last year, the wheels of change were in motion for Beijing Automotive Works South Africa (BAW SA). A leading supplier of minibus vehicles to the South African taxi market, the company has always had the drive to push for further success and innovation. Now as 2017 draws to a close, progress on the completion of plans to upgrade, extend and increase operations from the main Springs manufacturing plant is occurring at an accelerated rate, with the automotive experts on track to cross the finish line in early 2018.

//

In 2012, Beijing Automotive Works (BAW) and the Industrial Development Corporation (IDC) joined forces to establish a company that would combine and represent the pinnacle of Chinese and South African automotive expertise: BAW SA. From the start, former-CFO Samson Mojalefa wanted to create something ‘especially designed for African conditions’. As a result, the 16-seater Sasuka minibus was introduced as a shining example of the type of multi-person vehicle that South Africa really wanted and needed. The Sasuka offered customers a prestigious driving experience, with a luxury interior, in-car entertainment system and leading mechanical performance.

From the manufacturing base in Springs, 160 Sasukas are produced

each month by more than 200 employees from Semi Knocked Down kits. These minibuses are then mostly supplied to the local market but also in lesser amounts to Mozambique and Namibia.

Speed ahead to now and thanks to an injection of R250 million, extensive plans to upgrade and extend BAW SA’s premises, product line and market reach are well under way. Necessary general improvements will be made to the existing facility, along with the construction of a new body assembly plant, paint plant, trim plant and a larger component warehouse. This will increase the size of the existing site by almost 30% from 25,000m² to a vast 37,840m², allowing more space for both production and storage. According to BAW SA Consultant Tony Godycki,

the expansion will lead to the creation of at least 80 permanent jobs in a variety of roles and BAW SA is already heavily utilising local engineering and construction companies.

The move will increase production output to around 500 vehicles a month, a number which could potentially increase again in the future if a two-shift mode of production is ever introduced.

R80 million is being given directly by the IDC, with CEO Geoffrey Qhena expressing a keen interest in encouraging competition within the local minibus manufacturing industry.

Currently, the Durban-built Toyota Quantum is the leading competitor, but it may not be long before other burgeoning businesses are ready for their turn on the race track to begin.

To secure a head start, BAW SA will

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TM

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TM

TM

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INDUSTRY FOCUS: AUTOMOTIVE

// THE MORE COMPLEX CKD ASSEMBLY PROCESS WOULD INCREASE LOCAL CONTENT ON THE MINIBUS TO AT LEAST 35% // transition over into building Sasukas from Complete Knock Down (CKD) kits.

This will require a higher proportion of automotive components from the domestic industry being used in production. Godycki stated that BAW SA would be adding glass, tyres, radiators and seats to the growing list of locally-supplied parts, which will inject significant capital into the immediate economy. Moreover, he describes the benefits of this: “the more complex CKD assembly process would increase local content on the minibus to at least 35%,

which would see the Sasuka qualify for duty benefits in terms of exports to countries in Southern Africa”. Import duty is also zero-rated on CKDs coming into the country, making the buying and selling of vehicles much more financially efficient for the company.

Lower import and export taxes also means that BAW SA will be able to more easily extend trade far beyond the borders of South Africa, tapping into an already profitable and prosperous means of bringing money into the country. The automotive and component business constitutes the largest faction of South Africa’s manufacturing industry. 33% of the country’s industrial production output derives from this area and in 2016 alone, in excess of 344,000 vehicles were exported. This equates to R171.1 billion being brought into the country’s economy or 15.6% of capital from total exports across all sectors for the whole of South Africa.

Cultivating such a revenue stream will be highly advantageous for all parties and countries concerned.

Godycki stated that “while the initial focus will remain on the South African and southern African market, it will use its status as a manufacturer under the MIDP (Motor Industry Development Programme) medium and heavy commercial vehicle programme to expand BAW’s reach in all countries that have a preferential trade relationship with South Africa”. BAW SA have strong plans to begin exporting automotive parts to China, which could potentially facilitate entry into the lucrative and extensive Chinese marketplace for both themselves and many other South African enterprises.

Lian Zhaoshan from the Economic and Commercial Counsellors Office at the Chinese Embassy has noted how bilateral trade between South Africa and China had reached $9.145 billion in the first three months of this financial year, which was an almost 3%

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BAW SA

increase on the previous year. He added that as of early 2017, approximately 150 medium to large-sized Chinese businesses had invested in South Africa, including The Industrial and Commercial Bank of China and the Hebei Jidong Development Group. These investments have helped to create an estimated 30,000 jobs, a figure subject to increase as the economy improves and consumer demand grows.

Indeed, in the minibus market there is a growing need for a continuous supply of reliable and robust vehicles to withstand the pressures of transporting South Africa’s 16 million daily commuters. BAW SA’s Yao Li Qiang stated that “there was an increasing demand for cost effective diesel options in the local taxi industry, particularly with the constant increase in fuel prices”. As such, Zhang Wei, BAW SA CEO recently announced preliminary plans to develop and build a higher capacity Sasuka when the new premises are up and running. The vehicle will have a 2.8l diesel engine as opposed to its 2.7l

petrol predecessor, with the purpose of increasing fuel economy and ensuring that customers get more miles for their money.

The new Sasukas will also be sold with an unprecedented service plan as standard; a warranty guaranteeing exceptional vehicle performance up to 500,000km coupled with a comprehensive insurance policy to cover both the vehicle and passengers.

Wei noted that there are already Sasukas currently on the road with this many miles on the clock, so it is evident that he has complete faith that BAW SA will be able to live up to their reputation for excellence. Further into the future, plans are in motion to begin production of a panel van and even environmentally friendly electrical vehicles that could be utilised in the busy urban delivery sector.

For BAW SA, it has never been a race to get to the top of their game, although they are certainly gaining positive momentum. The gentle yet impressive cruise into becoming a

leader in the automotive industry is all down to the company providing an exemplary product that customers can easily recognise and rely upon. This quality, coupled with conscientious investment from Chinese and South African partners has allowed BAW SA to shift up a gear in their efforts, undoubtedly putting BAW SA firmly on the road to success.

BEIJING AUTOMOTIVE WORKS SOUTH AFRICA (BAW SA) +27 11 817 8000 www.bawsouthafrica.co.za

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EXHIBITION CALENDAR

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

SWAHILI FASHION WEEK 2017 Hotel Sea Cliff DEC 01 – 03 TOC CONTAINER SUPPLY CHAIN AFRICA 2017 Durban ICC Arena DEC 05 – 06 AGROFOOD WEST AFRICA 2017 Accra International Conference Centre DEC 05 – 07 ADDIS AGROFOOD 2017 Addis Ababa Exhibition Centre DEC 08 - 11 COMPACK KENYA 2017 Kenyatta International Conference Center DEC 13 – 15

TOC CONTAINER SUPPLY CHAIN AFRICA 2017 DEC 05 | DURBAN TOC (originally an abbreviation for Terminal Operations Conference) has long been considered best in class by container terminal operators and their suppliers. Over time, TOC has evolved and whilst we continue to deliver the highest quality technical content in line with our heritage, we also recognise that we must now hear from stakeholders higher up the cargo chain.

Therefore, there are now two distinct elements of the event: The exhibition is a showcase for port and terminal technology and operations and also includes free-to-air seminar content aimed at container terminal professionals and bulk supply chain executives. Local and international suppliers will come together to showcase cutting edge solutions to their clients, the terminal operators and ports.

UGANDA TRADE EXPO 2018 JAN 16 | KAMPALA 4TH UGANDA TRADE EXPO 2018 will be held from 16-18 Janaury 2018

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at the Kampala, Lugogo & Exhibition Ground. This show targeting Uganda’s key economic industry, it will provide international countries a professional international business platform to share industrial information, technologies as well as to prepare business, investments and joint ventures.

4th UGANDA TRADE EXPO 2018 will attract many international exhibiting companies from various countries and regions to showcase a comprehensive array of exhibit products, a wide range exhibit profile includes the latest machineries, technologies etc to the Uganda and the East African market.

The event is targeting the East Africa Region by attracting visitors from all Uganda regions and from South Sudan, Rwanda, Kenya, Tanzania.

SECUREXPO EAST AFRICA 2018 JAN 31 | NAIROBI Securexpo East Africa is the premium security event to attend in 2018 in the region. With up to 100 exhibitors expected in 2018 from all over the world and the chance to see products that has never been in East Africa before, ensure that you attend and don’t miss out.

UGANDA TRADE EXPO 2018 UMA Exhibition Centre Lugogo JAN 16 – 18 SECUREXPO EAST AFRICA 2018 Visa Oshwal Convention Center JAN 31 – FEB 02