Enterprise Africa May 2018

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

May 2018

www.enterprise-africa.net

Tour de Force

Exclusive Interview with Dimension Data MEA CEO Grant Bodley ALSO IN THIS ISSUE:

Sorbet / Stangen / Letšeng Diamonds / Tiber Construction

EDITOR’S LETTER EDITOR Joe Forshaw  joe@enterprise-africa.co.za SENIOR PROJECT MANAGER Sam Hendricks  sam@enterprise-africa.co.za PROJECT MANAGER Shannon James  shannon@enterprise-africa.co.za PROJECT MANAGER James Davey  jamesd@enterprise-africa.co.za PROJECT MANAGER Jake Megeary  jake@enterprise-africa.co.za PROJECT MANAGER Alex Williams  alex@enterprise-africa.co.za PROJECT MANAGER James Redwell  james@enterprise-africa.co.za FINANCE MANAGER Emily Taylor  finance@enterprise-africa.co.za SENIOR DESIGNER Liam Woodbine  liam@enterprise-africa.co.za CONTRIBUTOR Manelesi Dumasi CONTRIBUTOR Karl Pietersen CONTRIBUTOR David Napier CONTRIBUTOR Timothy Reeder CONTRIBUTOR Colin Chinery

Published by Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU Administration & Finance +44 (0)20 7193 0419 Advertising & Feature Sales +44 (0)20 8123 7859

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The past month was another where President Ramaphosa has been firmly under the spotlight. His trip to London to attend the Commonwealth Heads of Government Meeting was where he chose to promote South Africa as a perfect investment destination.

He told his counterparts that South Africa was far down the road to economic recovery and his government’s initiatives were already starting to yield results, with confidence, sentiment and growth forecasts all being revised upwards.

And those in business are feeling the ‘Ramaphosa effect’.

Every single organisation that we speak to in this edition has referred to the positivity they have realised since the new President took office. And we are speaking to some big businesses. Our lead feature comes from Dimension Data, one of the world’s foremost IT and technology businesses.

Middle East and Africa CEO, Grant Bodley tells us that he is positive about the future of South Africa under Ramaphosa.

Tiber Construction Managing Director, Jose Correia says that the change in feeling was almost instant. The same message comes from insurance specialist Stangen and franchise retail operations Oasis Water and Sorbet. Everyone seems to be excited about the future, and it’s about time. Negative sentiment, uncertainty and struggle have been unwelcome for too long.

This month you can read about how big retailers are planning to open new stores, how construction firms are discovering new projects, why big IT firms are investing in their people like never before, and how miners and manufacturers are becoming more efficient and effective.

Get in touch and tell is now you’re feeling under the leadership of Ramaphosa. We’re yet to hear of any who have suffered since his taking of office. We’re always online @EnterpriseAfri1

Joe Forshaw EDITOR

Editorial & Design +44 (0)20 7193 2735 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Media Group Ltd 2018

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

110/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/DIMENSION DATA Tour De Force For Top Ten South African employer Dimension Data, leadership and team ethos are at the heart of both its success and the sport it sponsors. “We don’t just talk about our people being an asset; we truly act on it,” says Grant Bodley, CEO of Dimension Data’s Middle East and Africa region.

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CONTENTS

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INDUSTRY FOCUS: HEALTH 14/SORBET Buoyant Sorbet Sitting Pretty With Long4Life 21/ROLFE LABORATORIES Rolfe Labs Expecting Beautiful Growth With Prominent Principles INDUSTRY FOCUS: FASHION 29/JOHN CRAIG John Craig Fashions New Product Ensemble INDUSTRY FOCUS: INSURANCE 34/STANGEN Stangen Operating As A Start-Up After Painful Past 43/CONSTANTIA INSURANCE Caring to Its Core INDUSTRY FOCUS: MINING 46/LETŠENG DIAMONDS New Letšeng CEO Celebrates 910 Find 52/EXXARO Coal Fuels Exxaro Success INDUSTRY FOCUS: CONSTRUCTION 59/TIBER CONSTRUCTION Tiber SitsSky HighIn Sandton

46/ 64/ARCELORMITTAL Positive Outlook for Africa’s Leading Steel Producer 71/MACNEIL PLASTICS Long Lasting, Superior Quality From MacNeil Plastics 76/TRENCON CONSTRUCTION Capitalising On Renewed Prosperity INDUSTRY FOCUS: HOME 80/SUPREME MOULDINGS Decor and Mouldings Developed with Integrity INDUSTRY FOCUS: RETAIL 85/OASIS WATER Taking Finest Quality Purified And Oxygenated Water Where It Is Needed Most INDUSTRY FOCUS: AGRICULTURE 92/RUSSELLSTONE GROUP Agricultural Investment House Aims for 5000 Employed by 2023 INDUSTRY FOCUS: LOGISTICS 101/TRANSTECH LOGISTICS Logistics Solutions to Connect Southern Africa INDUSTRY FOCUS: SCIENCE 105/CSIR Bioscience toCatalyse African Development www.enterprise-africa.net / 5

INITIATIVE TO REVIVE MINING SECTOR Minister of Science and Technology Mmamoloko Kubayi-Ngubane has launched a mining initiative aimed at reviving South Africa’s flagging mining sector.

The Mandela Mining Precinct has been launched at the CSIR in Jo’burg.

“The Mandela Mining Precinct aims to support local innovations to provide solutions to the challenges faced by the mining industry in South Africa. Other issues to be addressed by this precinct include the health and safety of mineworkers,” the Department of Science and Technology said in a statement.

The department said the institution, named after the world icon and former President Nelson Mandela, will help to position mining as a core driver of world-class technological and manufacturing capabilities and solutions for the development of the economy.

“The event will also see the launch of the Mining Equipment Manufacturers of South Africa (MEMSA), an equipment-focused organisation to position South Africa’s mining capital goods manufacturers as world-class competitive, innovative, dynamic and transformative,” the department said.

An exhibition will be held to showcase some of the equipment.

In addition, SiMINE, specializing in the future of mining, will also demonstrate some of its technology, which includes drones and robotics.

The Mining Precinct is a collaboration between the department, through its entity the CSIR, the Chamber of Mines and the Universities of Johannesburg, Pretoria and Witwatersrand.

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RAMAPHOSA PROMISES ECONOMIC RECOVERY

South Africa is on the road to economic recovery and government is creating an enabling environment to boost investor confidence - this was an assurance given

by President Cyril Ramaphosa to investors and business leaders in London during the Commonwealth Heads of Government meeting.

The President held various engagements including attending the Commonwealth Business Forum’s African Leaders’ Roundtable, a working lunch with senior international investors and business leaders hosted by Bloomberg and the Commonwealth Business Forum Heads of Government Roundtable with senior Business leaders.

President Ramaphosa told the investors that the creation of an enabling environment for investment included the effective management of the leadership transition in government; ushering in a new era of hope and confidence.

In this regard, he indicated that such efforts are already yielding positive results as business confidence and investor sentiment are showing signs of improvement and growth forecasts being revised upwards.

“Government is initiating measures to set the economy on a new path of growth, employment and transformation. We are moving swiftly to restore the credibility, stabilise the finances and improve the operational performance and governance at state owned companies,” said the President.

The President further said although

under difficult fiscal conditions, “government is working to consolidate fiscal debt and rein in public expenditure”.

He used a keynote address while in London to punt his newly-appointed investment envoys, while calling on Commonwealth countries to pledge towards investment in South Africa.

“This week we announced an ambitious investment drive that aims to generate at least $100 billion in new investment over the next five years. I have appointed four investment envoys to go right across the world, to go and campaign for investments for our country because once again South Africa is truly open for investment.”

The Special Envoys are former Finance Minister Trevor Manuel, former Finance Deputy Minister Mcebisi Jonas, Executive Chairperson of Afropulse Group Phumzile Langeni and Chairman of Liberty Group and former CEO of Standard Bank Jacko Maree.

“As the President of South Africa I am here to do good business deals to attract investment to South Africa and indeed to Africa our continent,” said the President.

He assured potential investors that South Africa is open for business and the country is putting measures in place to make it conducive and attractive to investors.

“We are improving the investment environment by, among other things, ensuring policy certainty and consistency, improving the performance of state-owned enterprises and consolidating fiscal debt,” said the President.

NEWS SNAPSHOT CAPE TOWN AIRPORT RENAMING PROCESS IN FULL SWING President Nelson Mandela’s name is among the top names recommended for the renaming of Cape Town’s International Airport, according to Transport Minister Blade Nzimande and ACSA. “There are a number of names that have been put forward around the renaming of Cape Town International Airport. Some officially, others in the media or in public. I must just admit that we have started with consultations and the name that’s high up there is the name of Nelson Mandela but we will have to consider other proposals as well,” said the Minister.

There were proposals that included the name of liberation hero Robert Sobukwe and “then for the first time there was also the name of uMam’ Winnie Madikizela-Mandela so we will have to embark on a process of consultation and we will see what comes out of it”.

PHUTHADITJHABA INDUSTRIAL PARK UNDERGOING MULTI-MILLION RAND UPGRADE The dti has completed the first phase of the revitalisation of the Phuthaditjhaba Industrial Park in the Free State.

At a cost of R50 million, the revitalisation included the upgrading of security infrastructure including fencing, street lighting, installation of boom gates, pedestrian gates, installation of CCTV cameras and control room, as well as the refurbishment of high mast lights.

This initiative is part of the dti’s Revitalisation of Industrial Parks Programme, which aims to revitalise State-owned industrial parks across the country in order to promote industrialisation and increase their contribution to job creation and the country’s economic growth.

According to the dti, the programme is also in line with the department’s economic transformation initiatives aimed at ensuring that all regions of the country and enterprises based there participate meaningfully in the mainstream economy.

The Deputy Director-General of the Special Economic Zones and Economic Transformation division at the dti, Sipho Zikode, said the handover marks an important milestone in the implementation of the revitalisation programme.

“We are witnessing the fruits of the importance of collaboration and using the expertise available in government and its affiliates. The Industrial Parks and the dti have collaborated with the

Development Bank of Southern Africa, who are our technical partners, the Free State Provincial government as well as the Maluti-a-Phofung Local Municipality.

“We are looking forward to the next milestone when the national and provincial political leaders launch the park officially. Thereafter, we will be embarking on the second phase of the revitalisation programme,” said Zikode.

Currently, the park, which was built more than 40 years ago, has 296 factories located in it.

The companies manufacture various products including textile and clothing, paper bags, furniture, leather goods including bags and belts, as well as aluminium and glass products.

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DIMENSION DATA

Tour de

Force PRODUCTION: Colin Chinery

For Top Ten South African employer Dimension Data, leadership and team ethos are at the heart of both its success and the sport it sponsors. “We don’t just talk about our people being an asset; we truly act on it,” says Grant Bodley, CEO of Dimension Data’s Middle East and Africa region.

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INDUSTRY FOCUS: IT

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At a time of enormous change in the workplace, many South African businesses are struggling with managing talent, cultivating leadership, encouraging learning, and understanding their employees.

Despite this disquieting conclusion of the Oxford Economics Workforce 2020 study, a record number of South African organisations have achieved the prestigious Top Employers Certificate, awarded by Top Employer Institute, which for the past 27 years has been recognising the best employers in over 100 countries across the world.

Among South Africa’s recently named Top Ten for 2018 is Johannesburg-headquartered Dimension Data, global leader in the provision and management of specialist IT infrastructure solutions and services.

The Netherland’s based Institute’s comprehensive independent research report shows that Dimension Data 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.”

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// EAST AFRICA IS A MAJOR CONTRIBUTOR, A REALLY SIGNIFICANT AND EXCITING PART OF OUR BUSINESS // For Grant Bodley, CEO of Dimension Data’s Middle East and Africa region, the Top Ten award is a eloquent certification of walking the talk. “It’s a validation of the fact that we don’t just talk about our people being an asset; we truly act on it.

“By creating an attractive work environment, respecting diversity and investing heavily in all related aspects, we try to ensure that we develop our people and give them a career path. It’s a very critical aspect of our business, and one that’s top of mind for me.”

WORKSPACES FOR TOMORROW Owned by Nippon Telegraph and Telephone Corporation (NTT), one of the worlds largest telecommunications service providers, Dimension Data is a market leader in the IT industry, founded in 1983 and still headquartered in South Africa.

Using the power of technology, it helps organisations achieve through digital infrastructure, hybrid cloud, and

workspaces for tomorrow, and cyber security.

With a turnover of $7.5b, offices in 52 countries, and 30,000 employees, “globally and regionally, we deliver wherever our clients are, at every stage of their technology journey,” says Bodley, Chief Executive Officer of its Middle East and Africa Operations since October 2015.

Unsurprisingly South Africa is the territory’s biggest market, with East Africa and the Middle East fast growing.

“South Africa is still by far and away the largest contributor, accounting for some 60% of our portfolio, and where we have the most mature capabilities.

“East Africa is a major contributor, a really significant and exciting part of our business, and where we are expecting more aggressive growth.

The Middle East is also proving to be exciting geography for us.

“Each of these areas has its own nuances and challenges of course, but we are expecting significant growth rate out of both. Our objective is to have a balanced contribution across the region.”

THE MIDDLE EAST MAGNET With many South African companies in sectors such as retail and health care expanding into the Middle East, Information Technology is also exerting its pull. The prizes are clear, with world leading research and advisory company Gartner projecting 2018 IT spending in the Middle East and North Africa (MENA) region hitting $155b, a 3.4% increase on last year.

“Our initial expansions were into places such as Australia, the UK, Asia and the whole of Europe, and the USA; and Asia, Europe and the USA are obviously massive contributors to our overall numbers. However, the Middle East, along with Africa, is an area in which we have been operating for the past eight or nine years, and with a lot of investment - significantly so in the case of Dubai for example.

“Research from the International

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INDUSTRY FOCUS: IT

// WITHOUT BUSINESS BEING SUCCESSFUL WE WILL NOT BE ABLE TO ADDRESS CHALLENGES SUCH AS UNEMPLOYMENT AND THE LIKE // Business Council (IBC) show South Africa has the biggest opportunity for information and Communications Technology at $10m, Saudi Arabia at $7m and the UAE at $5m. Then you have Egypt and Nigeria at a very significant mark.

“So these are markets that are hard to ignore. That being said, you need to tread cautiously, and understand the dynamics of their economies and business culture. This is essential to ensure you can create and build a good and stable business.”

Skills – or the lack of them – are a key part of a business and cultural environment, and Bodley, who recently attended a global strategy conference, stresses the universality of the problem.

“It’s undeniable that in certain areas there’s a skills gap in Europe, America and Asia. Africa and South Africa are no different, which is why we

GRANT BODLEY- DIMENSION DATA MEA CEO

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DIMENSION DATA

at Dimension Data have internship and graduate programmes, and spend tens of millions of Rands on learning and development to try and close this gap.

“But the reality is as that as the world gets fundamentally disrupted, there are just not enough highly skilled people to meet the demand out there.

It’s not a skills gap across the board, but in specific areas. But that’s just the nature of the business. If you have a new demand coming on stream, it takes a while to catch up on the supply side of the equation.

“Overall it’s a real challenge, but one where we can try to mitigate through our own investment from ground roots level right through to the re-skilling or cross-skilling of those who have been with us for many years.”

TOP TEN MINDSET This is the mindset of a Top Ten employer. But does the award act as a recruiter? “Well, it’s a reflection of the effort and investment we put in, but it’s difficult to quantify the impact.

“Our ambition is not to win an employer major award, gratifying though this is. Our ambition is to make sure we create a really healthy and attractive environment, one which makes people enjoy coming to work, and where they are valued. Our people are our biggest asset and differentiator, and we hold them close to our hearts.”

The leadership factor, recognised in the Top Employer Institute award citation, is part of the Dimension Data DNA. And it is no co-incidence that the company has chosen the sport of cycling for high-profile sponsorships; first the Tour de France, and then Team Dimension Data for Qhubeka Africa’s first ever UCI (Union Cycliste Internationale, sports cycling’s world governing body) World Tour team.

“Dimension Data has always been a supporter of sports, in the past cricket and golf for example, and it’s an area where as a brand we have always been associated. The organisers of the Tour de France approached us in

2015 to become the official technology partner of choice, and from there we expanded to Team Dimension Data for Qhubeka.”

Qhubeka is the South African not-for-profit organisation which since 2005 has supplied 75,000 cycles to improve access to schools, clinics and jobs.

A bicycle is a tool that helps people move forward (Qhubeka is a Nguni word meaning ‘to progress’) and one particularly effective in meeting the needs of school children in South Africa, where more than half a million walk more than two hours to school and two hours back. With a Qhubeka Bicycle, a child’s commute time is

// I AM CONFIDENT THAT WITH OUR ENGAGED WORKFORCE, WE WILL CONTINUE TO GROW FROM STRENGTH TO STRENGTH // reduced by as much as 75%.

“Team Dimension Data for Qhubeka was a new and unique angle, and a cause very dear to us, one where we have this ability to make a difference to peoples’ lives.

“Dimension Data is very well known in South Africa but less so in parts of Europe, and with the Tour de France being one of the world’s most watched events it was a great opportunity for us for brand exposure and showcase our technology, taking what we do and putting it on the world stage.”

This same world stage has been upbeat since the appointment of Cyril Ramaphosa as South Africa’s President, with business confidence in the first quarter of 2018 the highest

for three years. Grant Bodley shares the cautious optimism.

“The key is for the Government to support business and make South Africa foreign investment friendly, and with the new political leadership business confidence seems to be up, and people more willing to invest.

Without business being successful we will not be able to address challenges such as unemployment and the like.

“Mr Ramaphosa has addressed concerns that were certainly up there, and while the journey is far from complete, there is now a greater sense of optimism in South Africa and in world opinion.”

Operating in the hyper-changing and competitive Information Technology sector, Bodley, who joined the company in 2000, points to the strength of Dimension Data’s powerful global parent organisation, now spending $2.0m to $2.5m on R&D alone.

MAKING A DIFFERENCE “Obviously one cannot be all things to all people and you have to pick your audience to make a difference and a contribution.

“We continue to show a strong double-digit growth and achieved our financial objectives. We are on an aggressive growth strategy and we are committed to achieve.”

Parameters have been for 2020, after which he will re-asses his sights.

“The journey is never over. There’s a lot of opportunity out there as well as challenges we need to overcome.

But we have robust plans in place, and we are excited by the future. I am confident that with our engaged workforce, we will continue to grow from strength to strength. It’s our intention to stay at the forefront.”

WWW.DIMENSIONDATA.COM

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SORBET

Buoyant Sorbet

Sitting Pretty With Long4Life PRODUCTION: Manelesi Dumasi

South Africa’s leading beauty chain, Sorbet, is in the middle of a purple patch following its acquisition by Long4Life. The company has released a new make-up range, it is growing in the UK, and it is experiencing significant success with its sub-brands. This beautiful business is a shining example of what is possible when strong entrepreneurialism meets a gap in the market.

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IAN FUHR - SORBET CEO

INDUSTRY FOCUS: HEALTH

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When serial South African entrepreneur, Ian Fuhr, was getting a massage back in 2004, his masseuse complained of the non-existence of a national chain of beauty therapy outlets. This sparked an idea in the business mind of Fuhr, who had previously been successful with Super Mart among other ventures. He went about setting up a network of beauty outlets, delivering a first-class product and service range, from moisturisers and shampoos through to massages and waxing.

The beautiful business idea was launched in 2005 and the company quickly grew, becoming a four store network. After a sustained period of growth, Sorbet became the outright industry leader in South Africa’s beautification industry, and Fuhr’s business rode the wave which saw big-name international product ranges spending big money on

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// SORBET MAN IS TAKING OFF VERY WELL. WE ALREADY HAVE 14 STORES IN SOUTH AFRICA AND THERE’S ANOTHER 10 COMING THIS YEAR // advertising to unlock growth in SA. Sorbet also profited from the rapid rise in the appearance conscious male.

In 2017, Enterprise Africa spoke to Fuhr about the development of Sorbet and how the company had boomed. He spoke of ambitions beyond South Africa after opening four branches in London. And, one year on, he is just as positive about the company’s prospects following several recent developments.

In July 2017, the Sorbet group of companies was acquired by Long4Life, a JSE-listed investment holding company owned by Brian Joffe. The deal was reportedly worth

around R116 million and will allow Fuhr and his management team to stay onboard, guiding Sorbet through its next growth phase.

“We are now part of a new listed entity in South Africa called Long4Life,” he tells Enterprise Africa.

“It’s a relatively new company and the person who started this company is the same man who started Bidvest in South Africa. He resigned as CEO around 18 months ago, and in April last year listed Long4Life with Sorbet its first acquisition. The acquisition was finalised in October last year.”

Brian Joffe said of the acquisition: “It has been our stated intention to pursue investments predominantly

SORBET

with a lifestyle focus and Sorbet certainly fits neatly into our criteria.

It is a company that has attractive growth prospects and has many of the characteristics we consider in our investment decision making.”

Fuhr continued: “We are excited about joining Long4Life and the opportunity to work alongside and under the guidance and experience of industry giants, Brian Joffe and Kevin Hedderwick. We look forward to building Sorbet into a significant health and beauty conglomerate. With the financial backing of Long4Life we will now be able to make acquisitions of other

businesses in the sector, while also continuing to launch new formats of the Sorbet brand.”

SORBET MAKE UP Further efforts to bolster Sorbet’s already far-reaching appeal came in March when the company announced that it was launching its own brand of make-up products. Sorbet already promotes a range of nail care and skincare products and make-up was the logical next step.

The range includes face primer, undereye concealer, foundations, bronzer, pen eyeliner, mascara, lip colour, and many more.

// WE ARE STILL EXPERIENCING LOTS OF CHALLENGES, HAVING TO DEAL WITH LOTS OF CULTURE DIFFERENCES AND OTHER ISSUES, BUT WE ARE POSITIVE ABOUT THE FUTURE //

“After listening to our guests we realised that when it comes to makeup, there are some basic needs that get in the way of feeling good, like finding the right foundation shade, so we set about addressing these needs from the get go.

“We decided that we should enlist the help of the women of South Africa, so together with Clicks we launched The Skin Tone Project.

This nationwide project got us up close and personal with nearly 3000 women so that we could create a foundation range that would match to all skin tones. We found that 28 shades were needed to offer a match for all, giving Sorbet one of the most extensive ranges in South Africa,” the company states.

The range is now available across selected Clicks stores and Sorbet Salons, and can be administered by Sorbet professionals in store, so that everyone gets the perfect product to

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INDUSTRY FOCUS: HEALTH

suit their needs.

The launch of the make-up range came at the perfect time for Sorbet as major multinationals including Unilever, Procter & Gamble, Avon, Colgate-Palmolive and L’Oréal have

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all realised tough trading conditions on the back of South Africa’s weak economic performance of the past two years. This has put pressure on consumers wallets and has resulted in a switch towards local produced,

more affordable, but high-quality products.

Clicks has already announced that it is investing heavily in its store network (R700 million) and will be adding new products (including 300 Sorbet lines) to increase volumes.

Away from make-up, Sorbet has also seen major success with its sub-brands and this is where the company’s local growth will be found in the future.

“There are ongoing developments on the product-side and ongoing developments with new formats,” says Fuhr. “We discussed Sorbet Man last year and that is taking off very well. We already have 14 stores in South Africa and there’s another 10 coming this year. We expect that to become a significant brand over the next five years.

“Candi & Co, our ethnic hair brand, is looking very exciting; the

SORBET

Dry Bar concept, the express hair salon, is growing and there is a lot of activity at the moment,” he adds.

SA TO LONDON Away from Sorbet’s home, the South African brand continues to grow in size and reputation in its first geographic expansion outside of Africa – London. Last year, Fuhr told Enterprise Africa of his surprise at the lack of a national beauty chain in the UK and quickly set about researching London as an opportunity. After opening up in the city’s northern suburbs, Sorbet now has five London locations and is a key focus area for Fuhr and his team.

“We have five stores there now, all in north London,” he says.

“We are still experiencing lots of challenges, having to deal with lots

of culture differences and other issues, but we are positive about the future – we see it as a long journey, it’s not something that will happen overnight; we hope to get more traction there over the course of this year.”

The five stores in London bring Sorbet’s total network to 200 (195 in South Africa and five in the UK). Last year, Fuhr identified South Africa’s neighbouring countries as some with potential for further expansion. He also suggested Australia and Dubai as prospective markets, and maybe the USA in the longer-term. But for now, his attention lays in London. “We are going to focus on London for some time, getting that right, before we enter and more new markets,” he says.

As for Sorbet in South Africa, now is an exciting time. With the rise

of Ramaphosa bringing optimism for many in business, there is an expectation that the next two years will be full of opportunity as meaningful economic development returns. The hope is that consumers will have more money to spend and confidence will flow in markets. Ian Fuhr is hopeful.

“We are very optimistic,” he says. “Considering where we were, this is a major boost for confidence and everyone in the business environment is extremely positive about the changes.”

WWW.SORBET.CO.ZA

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ROLFE LABORATORIES

Rolfe Labs Expecting

Beautiful Growth

With Prominent Principles PRODUCTION: Manelesi Dumasi

Chances are that some of the cosmetic, beauty and household products in your cupboards are manufactured by Rolfe Laboratories in the Eastern Cape. This history of this South African contract packer goes back a long way, but has always been entrenched in Middelburg. The Rolfe family is looking to continue producing high-quality products for its big-name customers while always protecting local jobs and upskilling local people. CEO, Brad Rolfe tells us more‌ www.enterprise-africa.net / 21

INDUSTRY FOCUS: HEALTH

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South Africa’s manufacturing sector, one often identified as holding major opportunities for growth and job creation, has not been utilised to its full potential. Famous for food, automotive, pharmaceuticals, chemicals, and metals and minerals, South Africa’s manufactured goods, especially in export markets, are known for quality and reliability.

But as imported goods become cheaper than ever, South African consumers and businesses have started to move away from locally produced goods in favour of inexpensive alternatives from other sources.

Then there’s technology, which has also had an impact on how the country manufactures. Jobs are being lost to machines and robots, but this is not something new.

Enterprise Africa speaks to one of the country’s most prominent manufacturing specialists - Rolfe Laboratories, a Middelburg-based producer of branded and mass-

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// IN TOTAL, WE HAVE 21 DIFFERENT PRINCIPALS ON OUR BOOKS RIGHT NOW, AND THAT IS VERY HEALTHY // market home and personal care products – about the industry and how the company is managing to thrive in an ever-changing environment.

“We currently have around 650 people employed, down from around 1000 in peak time four years ago,” explains CEO, Brad Rolfe.

“We have dropped the numbers in the plant as we were producing Sanex and the volumes were massive, running with more than one shift, but we no longer have that brand. Ideally, our efforts are focussed around running a single shift from Monday to Friday and if needed we can run an extended or additional shift to meet the needs of the month.”

Sanex, a skincare product

range owned by Colgate Palmolive, moved its production to Europe to take advantage of economies of scale through a centralised manufacturing process. Rolfe was happy that the business was not lost to a competing contract packer in South Africa and says that some of the business was quickly replaced.

“Tiger Brands is still an ongoing principle and one of our bigger clients. We still do business for Unilever. We still for work for SC Johnson – we’ve been working for them for a number of years.

We are working for Avroy Shlain, which is now owned by Tupperware Brand Corporation, they are a big principal. In total, we have 21 different principles on our books right now, and that is very healthy.”

ROLFE LABORATORIES

Proud supplier to

Rolfe Laboratories for over 20 years

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MIDDELBURG… THE MIDDLE OF NOWHERE? Located in the Eastern Cape, in the Chris Hani District Municipality’s Upper Karoo, Rolfe Laboratories home in Middelburg is remote. It is almost seven hours drive to Jo’burg and more than 750 km from Cape Town. Nestled neatly between Port Elizabeth and Bloemfontein, Middelburg is a small town that has the cosmetic manufacturing industry at its heart.

The business was founded as a small pharmacy shop more than 100 years ago. It grew to become a chemist, serving the local region, before gaining investment from local farming businesses and bringing in a larger product range, and then manufacturing its own ranges. In the ensuing years, the company looked for growth opportunities and Brad’s father, Phillip found it. The company owned the rights to the Playboy trademark in South Africa but had never used it. He quickly realised this potential, bought the company

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INDUSTRY FOCUS: HEALTH

and launched the Playboy range of cosmetics. Playboy deodorant became the number one male deodorant in the country and catapulted Rolfe Laboratories into an industry leading position. The Playboy brand was sold and new brands launched as the company became a contract packaging specialist, servicing international brands from the same base in Middelburg.

The company makes it clear that it is at home in Middelburg and has no intention of leaving.

It has become home to a strong and skilled workforce and the business is entrenched in the local community. Today, Rolfe Laboratories is one of the largest employers in the region and supports the lives of many

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families.

“We are entrenched in Middelburg,” says Brad Rolfe. “It’s in a difficult location because of it’s in the middle of nowhere. The services that we have in the nearby area are very limited so any skills that we have in the plant are there because we have put them there.

Generally speaking, we love the town, we love the area, we love the people – they are good, honest people and there’s a massive pool of labour available for us to tap into and we continue to support.

“We’ve got a situation now where we are employing three generations from the same family,” he adds. “It is not uncommon for us to employ brothers and sisters and mothers and fathers from the same family. The town doesn’t offer

opportunities for many people to move away from Middelburg, it’s a relatively poor area and people grow up here with this work being all they know. When they already have family working here, it gives them a step up into the business.”

The company is very keen on job creation and Brad Rolfe wants to stir economic growth in the region - he wants Middelburg to share in the success of the business. This is why he will not automate the factory like many other cosmetic manufacturers.

“It’s a manual manufacturing plant and is not fully automated,” he says. “It’s semi-automated in certain areas and when the equipment gets old we need to replace it and we try and replace with similar equipment because

ROLFE LABORATORIES

// WE LOVE THE TOWN, WE LOVE THE AREA, WE LOVE THE PEOPLE – THEY ARE GOOD, HONEST PEOPLE // the last thing we want is to replace jobs with machines – that wouldn’t go down well with our labour force.

“We are continually improving and when we outgrow certain parts of our facility, we install new machinery to increase our capacity.

We have just installed another powder line to increase our output.

On fragrances and perfumes, we have just installed more capacity but we’re always taking into account that we have access to a lot of labour, especially on the packing side.”

GROWING, OR NOT? After losing Colgate Palmolive as a customer, Rolfe had no trouble replacing that business and is now booming with its 21 principals. In particular, local brands from Avroy Shlain and Signature Cosmetics have kept Rolfe’s facilities busy.

“We’ve got to a situation where the challenge is not getting business into the manufacturing facility. It’s operational things that become a challenge such as supply chain. To be honest, we are happy with our size and we’re not looking to get too much bigger right now,” says Rolfe.

“Our biggest growth right now is coming from two principals: Avroy Shlain and Signature Cosmetics. The growth that we are seeing there is unprecedented and both are making huge investments which we are benefitting from.

One has a large store network across South Africa and is planning further growth in the future. The

product range is toiletries and cosmetics and they are showing excellent growth.

“When we lose a principal and have spare capacity, we go out and look to replace that with a similar product from a new principal.”

The company’s growth in the past two years has been modest, and work patterns and throughput is now very regular and reliable.

Rolfe Laboratories calls on its vast experience to offer unique insights into the consumer space, helping its clients to delight their own customers.

“The industry is not in the best place and everyone is battling for volume and for margin protection.

“We have built line extensions on existing brands, we haven’t acquired any new brands but we

have recently released a bigger brand which we purchased from Boots Healthcare - Mylol Mosquito Repellent. Subsequently, we sold that brand to part of the Cavi Group.”

Asked what separates Rolfe Laboratories from its competitors, both local and international, the Director is clear is his reply – financial stability, strong relationships with clients and suppliers and, of course, its workforce.

“We have a slightly different model as we have been around for a long time and a lot of our equipment and our buildings are all owned – we don’t owe any money,” he says. “We’re at a different level to others and we’re happy with the size of the business. The volume

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INDUSTRY FOCUS: HEALTH

that we’re doing will grow with our existing customer base and I don’t believe that would be successful if we went out looking for more substantial contracts, at least not in the near future.”

2018 FUTURE STRATEGY The future looks extremely bright for Rolfe Laboratories. With its brands and principals promising ongoing growth, and with a growing middle-class becoming more influenced than ever by innovative cosmetic advertising campaigns (especially men), now is a good time to have an established and reputable operation.

Rolfe sees opportunities on the continent for future expansion and he is buoyed by the positivity surrounding the appointment of a new President.

“Not only locally but internationally there has been a lot more interest in looking to South Africa for opportunities.

Ramaphosa has reshuffled the government and there is a good

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ROLFE LABORATORIES

// OUR ORDER BOOK IS NICE AND FULL AND WE’RE ALWAYS RUNNING OUR CONTINUOUS IMPROVEMENT PROGRAMME ACROSS ALL PARTS OF OUR BUSINESS // team involved. I’m very positive about the future for this country,” he says.

“At this stage, we do supply some of the SADC countries including Mozambique, Namibia, Botswana and Zimbabwe but we do see a huge opportunity further north. We are in discussions with certain key players but we’re not doing volumes into North Africa.

It is very exciting for us as the Rand has strengthened in recent times and since Zuma left office it has strengthened further. Africa is always an opportunity for us but it’s not our focus; we look at local supply first.”

Of course, economic development, government policy and living standards will impact on demand for Rolfe Laboratories’ clients, and this could filter

through to the Middelburg business. But the fourth quarter in 2017 saw the country finish strongly, growing by 3.1% according to Stats SA. Brad Rolfe is understandably confident, stating that South Africa is perfectly positioned to become a global exporter to rival those that have built their mega-economies on export.

“Our order book is nice and full and we’re always running our continuous improvement programme across all parts of our business,” he says. “Our hope is that what you see in five years’ time will not be the same as you see today.

We want to be improving our systems, facilities and capabilities every year and that is our commitment to the industry. We need it in South Africa; there’s so

many opportunities to manufacture here for export markets. There’s no reason why South Africa cannot become a serious contender with China and India as a manufacturing destination of choice.”

So, Rolfe is in Middelburg for the long-term. And despite the location of this somewhat remote operation, things continue to go from strength to strength. This is ethical South Africa at its best – an example to follow for those looking to create jobs and empower communities.

TELEPHONE: 031 502 3301

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JOHN CRAIG

John Craig Fashions

New Product Ensemble PRODUCTION: Colin Chinery

In an effort to gain market share and reposition the company for future growth, leading men’s fashion retailer John Craig has completely overhauled its product range and reorganised its marketing efforts. The result has been the capture of new customers and an increase in overall sales. Managing Director, Lily Moreira tells us more‌ www.enterprise-africa.net / 29

INDUSTRY FOCUS: FASHION

//

‘‘Man at his best’ has received a complete transformation.

Leading South African men’s retailer, John Craig, has been serving its loyal customer base since 1947, but facing a generational switch in fashion trends and a demand for more affordable quality, the company has had to rethink its strategy and come up with a whole new offering in an effort to reach “young, smart, modern customers.” The decision to move from formal to a smart offering is in line with customers fashion needs.

By condensing its brand portfolio, encouraging more traffic through stores, and attracting new customers, John Craig is making itself standout in an extremely competitive environment.

This at a difficult time in the current retail landscape, the bold and brave strategy, has led to outperforming against the odds.

Perhaps one of the most successful turnaround strategies implemented in a retail environment in recent times, John Craig’s exciting new product range and effective marketing plan has seen the company boost sales and get back on the growth path.

“I cannot believe the success we’ve had in the past six months – it’s amazing. The credibility of the name and our heritage have been

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the backbone of our success,” says Managing Director, Lily Moreira.

“Average spend has come down, as we have reduced our prices. Customers are spending less but shopping more frequently. Additionally we have attracted new customers hence why our turnover has grown by more than 20%.”

In January 2016, Moreira told Enterprise Africa that John Craig’s new store growth in SA had slowed and the company was looking to Africa for further opportunity. But today, she says that while Africa is still a target, there are major untapped opportunities in South Africa.

// IF YOU BUY A SHIRT FROM US, IT WILL GIVE YOU 20-30% MORE VALUE COMPARED TO OTHER RETAILERS // “Part of what we want to do in the coming months is review the successes we’ve had and where we could potentially positon stores. We have a lot more opportunity to enter malls that in the past we would have been cautious about because they wouldn’t suit the

product. Primarily we will be looking at South Africa as there is still a lot that we haven’t exhausted yet,” she says.

“We’re in Namibia and after changing our product profile there, we are flying. It’s encouraging us to think about Botswana, and about the rest of Africa.

“With the excitement in the market for our exclusive branded offering, the Muratti brand is gaining a new customer who is proud to wear and show the brand. The brand recall is growing and we are seeing more customers proudly wearing the brand.”

OUT WITH THE OLD… As part of the company’s revitalisation strategy, Moreira commissioned a research project in which John Craig’s customers and offerings were evaluated.

The findings made for a difficult read.

Moreira and the company’s seniors realised that younger customers were being lost to competitors, the product mix was not right, pricing was an issue, and marketing was not bringing results. They also found that certain old fashioned connotations regarding John Craig as a brand still existed. After telling Enterprise Africa about the company’s success through 2015, Moreira was not about to let hard work and a strong market position go to waste. She quickly began planning a new strategy to future proof the business.

“Our research from the last two or three years shows that the reason we were not attracting enough of the younger, more modern customer is that the customer perception was that our product was too old and too expensive.

When you take that into consideration, you have to reposition your product and price, and that is what we did.

“Over the last few years, John Craig has been on a journey to try and modernise its product assortment.

We’ve always been primarily quite niched in a more conservative market from a customer profile point of view.

The basis of the John Craig heritage has always been to offer top brands

JOHN CRAIG

// OVER THE LAST FEW YEARS, JOHN CRAIG HAS BEEN ON A JOURNEY MODERNISE ITS PRODUCT ASSORTMENT // but over the years we’ve been doing a lot of development with the Muratti brand. As we’ve been moving towards the Muratti brand, we realised we need to modernise the product assortment.

Instead of having quite traditional products, we’re going into having more on-trend and fashionable products, but still with the smart look. Around six months ago, we were still very branded, with major international brands like Polo, Pringle, Florsheim and Crockett & Jones which are all applicable to the SA market. Having this massive brand assortment created some concerns.

Our stores are quite small, only around 200 m2 and we were struggling to balance all of the product between all the different brands. Internationally, the development and demand for private label brands is a continuing/growing trend.”

After careful consideration and indepth internal discussion, the decision was made to remove some brands and revamp the product range to focus on fashion, quality and value. The need to encourage more regular purchasing was also a factor and so some formal brands were dropped. This decision took some courage because when you remove some sales you have to be very confident in the value offering behind your product to replace those sales.

“We are a male business, and quality is our number one purpose, we relooked at our product assortment and said ‘we understand that a lot of our brands attract a middle aged consumer, we want to position our business so that it is more attractive to a smart, modern, young customer, that would buy on a more regular basis’. In order to do that, we had to drop some brands, and we dropped quite a significant number of big brands, so that we could reinvest into our product range which we felt was very much designed to suit our modern smart customer.

“We had to drop some formal brands because, how often does a guy need a suit? once every year? or once every five years? But he might buy a jacket more often. We looked at it very closely to work out what Is relevant to that customer base and we’ve built the range around that, always being cognisant of the fact we need to be price sensitive and price competitive in order to claim market share and entice customers.”

A catalyst of this product transition has been the South African economy.

While there is renewed optimism following the appointment of a new President, previous years have witnessed lacklustre economic performance and

GDP growth which leaves much to be desired. A result of this has been a tightening of consumer purse strings and an attitude of purchasing less often and making items last longer. “The consumer in South Africa is looking for value – not cheap, but value,” says Moreira.

“We are saying to our customers, if you buy a shirt from us, it will give you 20-30% more value compared to other retailers. It will have extra buttons, better stitching, and other elements that make it stand out.

“Being on trend means that a customer is looking for a product but wants to update more regularly. We are not talking about high-fashion, we’re

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INDUSTRY FOCUS: FASHION

// WE HAVE NEVER BEEN ABOUT GOING CHEAP – THIS BUSINESS DOES NOT UNDERSTAND THAT WORD // talking about good quality and very smart. We have never been about going cheap – this business does not understand that word, but it’s about value.”

THE SHOP WINDOW After overhauling the product mix and focussing efforts on attracting a new customer demographic, the next stage in the fresh John Craig growth strategy was to market effectively. The message is clear: This is a South African brand, with more than 70 years of history, with a large store network, that understands

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its customers and provides quality, value and on-trend fashion.

“Once we had the product, we had to align marketing and that was about getting feet into the stores. In the last six months, that has been a huge success.

We did a lot of work with the Retail Studio and our own agency, and we have almost reinvented the business.

“Our marketing was about maximising our resources in stores and in windows. We completed a brand wrap in our stores, ensuring that the imagery had the same brand tone throughout – modern-smart. We weren’t scared to call out categories that we felt we were really well priced in, and that we wanted to be famous for. We wanted people to walk in and be pleasantly surprised about prices they were going to pay,” Moreira explains.

The company’s marketing budget was strict and there was no direct advertising but the company did utilise its own window displays to attract

passers-by.

“We needed to grow quite significant volumes and bring in a lot of new feet and we could only do that through our shops. Windows are often under-appreciated as a media channel.

We had a lot of feet walking past but not walking in. Once people started coming in and seeing the prices, it was an easy conversion.”

When asked if installation of the new product mix and the new marketing efforts have been successful, Moreira is clear in saying that new customers have been added: “We were concerned that we might lose some existing customers because the product range was changing but the reality is a lot of our customers have returned.

They are happy to pay less but be more fashionable. We did lose a small number of customers because we no longer carry the products they buy, but for every customer we lost we gained another three.”

JOHN CRAIG

// WE DID LOSE A SMALL NUMBER OF CUSTOMERS BECAUSE WE NO LONGER CARRY THE PRODUCTS THEY BUY, BUT FOR EVERY CUSTOMER WE LOST WE GAINED ANOTHER THREE // DRESSED FOR SUCCESS With the new product mix, new marketing strategy, and renewed focus on quality and value, the John Craig business finds itself in an extremely strong position and is ready for an exciting period of new growth.

“The exciting thing for me is that we have attracted more customers and also crossed over that racial connotation about John Craig being a black brand,” says Moreira. “Our white and Indian customers have always been there but more as a minority. Now, we have crossed the line and if you’re a modern, smart man looking for a certain product, irrespective of race, you

will be able to buy from John Craig.”

The wider-retail environment has been under scrutiny for some time as many customers, especially the ‘younger, modern, smart’ demographic, are choosing to shop online. Questions about the future of physical outlets have been asked, and only those that are prepared to change have been identified as businesses that will thrive.

But, after its successful product range facelift, John Craig is thinking about the potential of new stores.

“We needed complete alignment between our product, marketing and our sales force. We’ve cleaned up our stores, we’ve changed our imagery,

we’ve brought out new offerings, and by fixing all of that we have the confidence to possibly open new stores after keeping that on hold for the past two years,” details the MD. Now with almost 100 stores in Southern Africa, and with a commitment to ensure that customers remain ‘man at his best’, John Craig is perfectly placed to challenge for the industries top spot, always taking new market share, and building on an already sterling heritage and reputation.

“In a 200 m2 store, you get a boutique feel but with unbelievable value. You get attention from staff, you get quality service, and you get our brilliant credit offering,” concludes Moreira.

WWW.JOHNCRAIG.CO.ZA

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STANGEN

Stangen Operating

As A Start-Up After Painful Past PRODUCTION: David Napier

One of South Africa’s leading insurers, Stangen, is enjoying a new life as a “startup” organisation. After separating from African Bank, and at the same time losing its sole physical distribution channel, Stangen is now carving out a niche for itself and pursuing a growth strategy as direct life insurer in a competitive market.

CEO, Marius Botha tells Enterprise Africa more about the Stangen of the future.

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INDUSTRY FOCUS: INSURANCE

//

In August 2014, African Bank was placed into curatorship by the South African Reserve Bank. “This case stands out as one of South Africa’s most high profile corporate failures,” says UCT Graduate School of Business Associate Professor, Dr Stephanie Giamporcaro.

The bank severely underestimated its bad debts, and it paid the price. But this period of pain was the beginning of something exciting, although it could not have felt positive for those involved at the time.

Its insurance sister company, The Standard General Insurance Company Ltd., was separated and subsequently re-branded “Stangen”. The company had mainly been selling credit life insurance products and funeral cover to African Bank customers. But when the bank went, Stangen’s link to its customers was severed and without a supply of clients, Stangen was left in limbo.

“It was painful,” admits CEO, Marius Botha. “It was a significant period of uncertainty, requiring sudden adjustments and change. We went from around 80 back-office and sales call centre staff down to only 15 as the impact of systemic risks in the group emerged and resulted in the collapse of the other subsidiaries and the business rescue of the holding company. We had great difficulty – staff retention was our biggest challenge.”

Although Stangen was formed in 1948 (making 2018 its 70th anniversary year), Botha is keen to

// STRATEGICALLY, WE ARE TRYING TO POSITION OURSELVES AS BEING RELEVANT TO A BLACK EMERGING MIDDLE-CLASS IN TERMS OF BRAND, PRODUCT, PRICING ETC // point out that the business is now viewed and managed as a “start-up” as it begins a brand new journey since its African Bank divorce.

“We haven’t focussed on the 70-year landmark as a company simply because we’ve been trying to build a new brand from scratch,” he says. “I intentionally wanted to build a new brand to reinforce the new journey that we are on, especially at junior levels in the organisation.

The separation process from African Bank took time from a regulatory perspective and was operationally very disruptive. We had to move off African Bank’s premises and sold the credit life portfolio under that brand, and moving to our independent operations where we are today. It has been tough for people that have stayed with us and I have been reluctant to focus too much on history as it takes people back to a painful period.

“We are much more focussed on installing a ‘start-up’ mind-set and culture. The external shocks required innovation through necessity. We now need innovation by design. We are building a new brand, with new products, through new distribution channels and that is a culture change that I want to drive. We are a start-up and we need to act like one with a

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team that realises you can never restassured and who have the right energy to drive change.”

CHANGE = OPPORTUNITY As African Bank faltered, African Phoenix Investments Ltd rose from the ashes. Stangen is a 100% owned subsidiary of African Phoenix Investments and the new entity, which resumed trading Abil shares on the Johannesburg Stock Exchange in Feb 2017 following a period of suspension, is firmly focussed on the creation of sustainable, long-term economic value. Stangen, as the only operating subsidiary of the group, was forced to quickly change and reinvent itself whist paying enough dividends to get African Phoenix Investments out of business rescue.

“Strategically, we are trying to position ourselves as being relevant to a black emerging middle-class in terms of brand, product, pricing etc,” explains Botha. “And we need to maintain a strong financial soundness position to instil confidence in our customer base.

“We’ve built back up to around 60 people and we are actively looking to grow and appoint more qualified sales staff as we reduce dependence on outsourced sales engagements.”

STANGEN

Stangen is targeting ‘responsible insurance for responsible people’. Its products are not aimed at the top end of the market and the company has been designed to deliver a service proposition that speaks to the needs of low-and middle income consumers.

“We are trying to push back on certain industry practices that have developed and get back to fairer value for customers. We are cutting back on value-added products that aren’t utilised and ‘bells and whistles’ that don’t fundamentally put consumers in

a better financial position. We started this journey by saying we believe there is an opportunity to disrupt in the direct distribution space by specifically disrupting distribution costs. If we can get that lower and still make a reasonable margin then the outcome for customers will be a lower premium product with much better value for money,” says Botha.

For most South Africans, disposable income at the end of each month remains a challenge. Cheaper, but still good-quality life insurance, will go

a long way in assisting customers to restructure their finances.

PRODUCT INNOVATION One of the recent additions to the Stangen product stable is a unique and innovative Crime Injury Cover, designed to protect against the financial impact of violent crimes.

The Crime Injury Cover pays out a cash benefit if assured lives are lost or assured people are seriously injured through specified violent crime related incidents.

// WE ARE MUCH MORE FOCUSSED ON INSTALLING A ‘START-UP’ MINDSET. WE ARE BUILDING A NEW BRAND, WITH NEW PRODUCTS, THROUGH NEW DISTRIBUTION CHANNELS AND THAT IS A CULTURE CHANGE THAT I WANT TO DRIVE // www.silverbridge.co.za | info@silverbridge.co.za Tel: +27 12 360 0100 With 34 clients in 14 African countries, we have world-class business solutions for the financial services industry.

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Brett van Aswegen - CEO William Harris - Head of Operations, Stangen

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INDUSTRY FOCUS: INSURANCE

STANGEN CEO, MARIUS BOTHA

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STANGEN

// WE’RE LOOKING AT PRODUCT INNOVATIONS THAT ARE RELEVANT TO THE EMERGING BLACK MIDDLE CLASS IN SOUTH AFRICA // “Crime Injury is an example of what we’re trying to do with product innovation. South Africa has a high crime rate and a large part of our customer-base uses public transport.

They are exposed from a crime perspective whilst commuting. People can be attacked while walking from home to a taxi-rank or bus stop. In the winter, when it’s dark, people have to walk from a transport hub to their home and it can be dangerous.

People are continuously exposed to crime-related activity. Our product is specifically designed to give a cash payment in the event of a violent crime related incident that results in death or physical injury of a particular threshold.

An example is a stab wound or gunshot wound that results in hospitalisation.

“Broadly speaking, the policy covers murder, culpable homicide, attempted murder, assault with grievous bodily harm, sexual assault and rape. We have designed it in-line with South Africa’s Criminal Procedures Act and we have included steps to ensure that it’s not only physical injury evidence that is taken into account,” details Botha.

While there are many players in the life and health insurance space, this product is unique to Stangen.

The country’s crime statistics for 2016/17 paint an uninviting picture.

19,016 murders, 18,205 attempted murders, 49,660 sexual offences, 39,828 rapes, 156,450 common assaults, 170,616 assaults with the intent to inflict grievous bodily harm, and 140,956 robberies with aggravating circumstances were recorded by SAPS during the period. In a recent World Bank report, South Africa was listed as the world’s most unequal country, and in April an Australian travel advisory warned citizens visiting SA to exercise a ‘high degree of caution’ because of the

threat of serious crime.

“There are personal accident policies in the market but there aren’t any that are specifically linked to a criminal act by definition. Most other products on the market would also offer a counselling benefit as part of another life policy in the event of rape. So as far as we know the product positioning is unique. It’s specifically aimed at female customers, as rape is a real issue in a South African context.

“It allows people to get private healthcare if they are reliant on public healthcare systems, and get lawyers involved if required. Our principle is to pay a cash benefit and empower

customers to choose the best way to use that money,” says Botha.

While this product is new to the market, it is not new to Stangen. The company had previously trialled Crime Injury Cover when it still had access to African Bank’s customer base, piloting it across 40 branches but being halted by the bank’s demise. Relaunched on a direct model basis at the end of last year, the product is starting to gain traction in the market.

“We have rebranded in a postAfrican Bank world but there are still customers who say ‘who is Stangen’ because we were trading as Standard General with white labelled African

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INDUSTRY FOCUS: INSURANCE

Bank products. People hadn’t seen a product like this before so there was a little distrust in the beginning but our call centre agents are now working hard to market it the right way and we are starting to see an uptick in sales.”

Stangen’s other core products include family funeral cover, life cover, critical illness, salary protection and personal accident policies. And Botha is keen to see the product portfolio grow as the company’s name and reputation develops.

“We’re looking at product and process innovations that are relevant to the emerging black middle class in South Africa. A lot of our products are similar to the rest of the market, but in which process innovation can still play a role by, for example, cutting out medical underwriting. So we try and keep it simple during an individually underwritten product sale where we differentiate by risk class; or charging competitive flat premium rates for all customers as part of a speedy non-underwritten product sale. The crime injury product falls into our non-underwritten product range so it’s low premium, low sums assured, mass marketed, and charged at the same rate, irrespective of personal circumstances.”

Currently, other new products remain closely guarded. Botha is not keen to give away any competitive advantage. “Most of them are still in the research and development stages simply because of capacity constraints,” he suggests.

“We are on a new journey and so we have a lot of improvements to

make. We’ve added a commuter cover product, and we are always looking for feedback from customers so that we can improve. There are new products in the pipeline but they are still very much in the development stages,” he adds.

TAKING MARKET SHARE In the future, Stangen’s growth strategy will revolve around delivering quality service and taking market share from rivals. The company has a wealth of experience and a big target to aim at.

But Botha will ensure the company only targets identified segments.

“We are definitely not trying to compete with the large established players in the high-income market, broker space. We are also reluctant to compare ourselves to some of the mass-market players in the low-income space,” he says.

“We rather want to look at ourselves as a new entrant in terms of digital disruption. We don’t have legacy constraints in systems and we have an opportunity to come in as a new entrant, with brand new systems using cloud based technology and open source software to manage our operations on a much lower cost scale. I’d rather want to compete in the fintech space rather than calling ourselves a traditional insurer. We are continuously trying to build capability that makes us a modern, digital insurer.

We’re not there yet but we are far along that journey.”

Stangen is poised for growth having built most of the core capabilities to deliver bespoke

life insurance through different channels. Its revenue, staff count and product portfolio is growing and Botha is hoping that a turnaround in national business confidence and economic activity could further catalyse positivity. At the recent Commonwealth Heads of Government Meeting in London, President Ramaphosa said that the country was on the road to economic recovery and continues to create a thriving space for FDI. But consumers are still financially under pressure and that could hamper Stangen’s progress.

“We have had decent growth but that comes off the back of a low base.

There is more optimism in terms of potential growth in the economy. But I still hold the view that the South African customer is under pressure in terms of disposable income. Our growth in the short-term is still premised on disrupting and taking market share from other established players. We want to convince customers to join us and ride the cycle until we see a genuine turnaround in the economy,” explains Botha.

A driver of Stangen’s growth will without doubt be tech. Technology has kickstarted the industry globally and is allowing providers to operate more efficiently, passing savings to clients.

Tech is also allowing distribution to become far more widespread.

In South Africa, the smartphone revolution is extensive with 21 million internet connected users registered in 2017, mostly through smartphones.

However, the cost and availability of

No more premiums after you retire* STANGEN FUNERAL PLAN

kasi 5

*Terms and conditions apply. Standard SMS and call rates apply. Policy underwritten by The Standard General Insurance Company Limited “Stangen”, an authorised long-term insurer licensed in terms of the Long-term Insurance Act, 1998. Registration Number 1948/029011/06 (Authorised FSP: No 47235)

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STANGEN

Dumela

SENATLA I am, because of you !

QHAWE 200 to 44291 for information sms

www.stangenlife.co.za

The Standard and General Insurance Company Limited “Stangen”, is an authorised long-term insurer licensed in terms of the Long-term Insurance Act,1998. Registration Number 1948/029011/06 (Authorised FSP: No 47235)

data is a sticking point and this is why Stangen will maintain its traditional communication infrastructure while building strong digital capabilities.

“You still have to rely on traditional intermediation models to engage with customers,” admits Botha. “My view of the SA market is that, for short-term insurance, customers move to direct online a lot faster than in the life space.

In the life space, the lag is due to the complexity of the product including the medical underwriting process.

It’s a more difficult sales process and a less tangible one. There has been a much slower adoption of life risk sales in the digital space and so we need to build digital for the future but at the same time allow for traditional modes of communication with customers,” he says.

START OF THE JOURNEY Although Stangen’s history dates back across eight decades, the company is now in the early stages of its new journey. Building distribution, embracing digital transformation, innovating the product mix and building its presence in a saturated

market are all activities that a start-up must get right, and so far Stangen has been successful.

“There is certainly evidence that customers appreciate the value of life insurance. We have a combination of first and third world economies, with mass unemployment. People are consciously aware of threats like the loss of a bread-winner in a broader family construct and that is why a traditional funeral or life cover policy in the SA market is not so much of a hard sell. Disability cover may still be a hard sell but there are pockets in that space where things are quickly changing,” explains the CEO. Now is a challenging time for Stangen. The South African insurance sector is the most advanced in Africa, and one of the most sophisticated in the world, and this means that competition is fierce in almost all categories. For a business starting afresh, with the remanence of economic sloth plaguing growth figures, installation of a positive mindset is vital, and that is exactly what Botha and the management team are doing.

“We are thinly spread and forced to deal with a wide range of issues but you need to make sure you prioritise correctly and continuously adapt. You need resilience and that is one of our biggest assets as a management team.

“Ours is a journey of a company that has survived for many years through many different shapes, sizes and strategies, says Botha. “Some of it has been by design and some of it has been because of external threats and disruption that we have had to respond to. The most recent one is of course the split from African Bank, which was never anticipated. We had to respond to that unexpected event and we have done well in terms of repositioning the company over the past three years,” he concludes.

The African Bank saga is now behind Stangen, and this is a business looking forward to a bright future where customers can be confident that Stangen lives by its mantra of “Insurance. For Life.”

WWW.STANGEN.CO.ZA

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CONSTANTIA INSURANCE

Caring to Its Core PRODUCTION: Timothy Reeder

Constantia Insurance Company Limited (CICL) recently celebrated reaching the milestone of its 65th birthday. To get there, it has consistently taken great care over even the smallest detail, setting it apart from a vast sea of competitors by truly caring about those who entrust it with their business.

//

Constantia Insurance abides strongly by its enduring mantra of ‘Insurance Made Personal’. It has been the one constant in an ever-changing industry throughout its near-seven decades of operations. Its capabilities stretch across a plethora of cover, among them business, legal, personal asset and health. Constantia has long been known as a company of people who

seek out new ways of doing things, while at the same time not losing sight of the old, combining more than six decades of wisdom with a constant hunger for new knowledge.

KEY PRINCIPLES To continually achieve this, the company focuses specifically on some crucial areas where it is always striving for excellence. Paramount to

driving forward the business, firstly, is the quality of its people, whose commitment, skills and vision that set it apart in such a service-centric industry. The company boasts a highly experienced and innovative team that brings to the table its deep insurance knowledge and understanding.

The company also spends considerable time and effort ensuring what might be termed a continued

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INDUSTRY FOCUS: INSURANCE

agility. This is a market which moves at a pace unlike many others, meaning that only those companies most able to adapt to the constant change are capable of remaining ahead of the chasing pack. Put simply, Constantia Insurance succeeds again and again because it is able to swiftly develop unique services and tailor-made innovation.

Twinned with this is an unerring belief in simplicity, and as such the company’s systems have been created with efficiency in mind. Rather than unnecessarily complicate what should, by nature, be the most hassle-free process possible, Constantia’s actually work, both fast and well. This has been particularly important in staying within the bounds of the insurance industry’s increasingly tight regulatory

framework, allowing the company to focus on forever perfecting its craft.

TIMELY ACQUISITION It comes as no surprise, given the foundations that have been put in place over a long and distinguished lifetime, that Randall & Quilter Investment Holdings Ltd, founded

by Ken Randall and Alan Quilter in 1991, was effusive in its hope for Constantia’s future as it announced its acquisition of the company in January.

R&Q has a proven track record itself over three decades of acquiring both the discontinued books of non-life business and non-life (re)insurance companies and captives in run-off, coupled with access to capital and a wealth of experience.

Commenting on the

Ambledown is the largest administrator of gap cover in South Africa

announcement, Ken Randall, Chairman and Chief Executive Officer of R&Q, said: “We are delighted to have acquired Constantia and this continues to demonstrate the ability of R&Q to provide exit solutions for end of life captive insurance companies. This continues our excellent track record of acquiring captive insurance companies and we remain excited about our legacy acquisition pipeline.”

PAIRING IS CARING The Knysna Bull is renowned as a three-day mountain bike experience like no other in South Africa, which makes it an excellent fit for a sponsor like Constantia Insurance. As a result, for the next three years at least the event will be known as Knynsa

Since the beginning, we’ve focused on providing the best gap cover possible. We have more than 500 brokers ranging from sole proprietors to corporate brokers trusting us with their business. We take great care to service more than 150,000 members.

Ambledown’s Gap Cover Series is a range of insurance products which provide cover for you and your immediate family for the shortfall (Gap) resulting from any medical practitioner charging above the medical scheme tariff for incidents that necessitate hospitalisation.

The Gap Cover Series has been extended to include in-hospital co-payments, co-payments for MRI and CT scans as well as shortfalls due to medical scheme sub-limitations.

For more information you may contact us on: 0861 262 533 www.ambledown.co.za info@ambledown.co.za

Ambledown Financial Services is an authorised financial services provider: FSP: 10287 This is not a medical scheme and the cover is not the same as that of a medical scheme. This is not a substitute for medical scheme membership.

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Ambledown Financial Services’ gap cover products are underwritten by Constantia Insurance Company Limited (Registration Number: 1952/001514/06/ FSP: 31111)

CONSTANTIA INSURANCE

// CONSTANTIA INSURANCE IS A TRUSTED BRAND WHOSE RESPONSIVE TEAMS PROVIDE INNOVATIVE RISK AND INSURANCE SOLUTIONS IN NICHE MARKETS // Bull made personal by Constantia Insurance. “We are thrilled that such a forward-thinking and innovative company has joined the Knysna Bull family,” says Pax Mosterd, the event’s Race Director. “Constantia Insurance prides itself on finding personal solutions and creating innovative products, which is really what the Knysna Bull is all about too. We’ve taken the best trails of the region and crafted something that we think is a unique ‘three-day’ event unlike any other in South Africa.”

Of the new pairing, Volker Von Widdern, Group CEO of Constantia Insurance Group says that this represents a perfect fit with the core philosophy of Constantia Insurance.

“Constantia Insurance is a trusted brand whose responsive teams provide innovative risk and insurance

solutions in niche markets,” he explains. “We are a provider whose business principles lie firmly in making personal insurance, more personal. By partnering with the Knysna Bull we aim to speak directly to the cycling market, and help mountain bikers make insurance decisions that suit them and their needs.”

EYE ON THE FUTURE Through its risk-tailored solutions spanning commercial and personal products, Constantia Insurance believes that it will positively impact the insurance landscape of South Africa as it continues to cement itself as a central market player. Driving a service excellence that is supported by the vast experience of executive members and talented support staff von Widdern, sums up with his

thoughts on what the next few years will bring.

“We believe that we will be one of the leading providers of holistic, integrated and inclusive insurance and risk management solutions in each of our target sectors through innovative product design with our highly responsive and collaborative team.

“A key factor in our success over this long period has been the focus and expertise developed in selected markets. Another factor in our success is having the capability to be responsive to changing business environments. We want to capitalise on our foundations in health, motor and property and guarantee sectors,” he concludes.

WWW.CONSTANTIAGROUP.CO.ZA

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LETŠENG DIAMONDS

New Letšeng CEO Celebrates

910 Find PRODUCTION: Karl Pietersen

In February, Letšeng Diamonds welcomed its new CEO, Mr Kelebone Leisanyane. This experienced leader is excited about the future at the world’s highest dollar per carat kimberlite diamond mine. He talks to Enterprise Africa about large stones and new technology.

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INDUSTRY FOCUS: MINING

//

When Letšeng Diamonds new CEO, Kelebone Leisanyane started in his new role, he could not have dreamt of a more positive beginning to his new career.

Letšeng’s part-owner, Gem Diamonds, released a strong set of annual results for 2017, detailing a 12.9% increase in revenue. Letšeng had just discovered one of the largest stones in its history. It’s mining complex relocation was nearing completion, and the mine was starting 2018 off the back of a strong 2017 with several large stone recoveries.

“I joined the organisation on Feb 12th and it has been very hectic,” he tells Enterprise Africa. “It has been very exciting because its new – it’s like a breath of fresh air.”

Leisanyane was previously in charge at Lesotho’s National

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// THE 910 HAS REALLY BEEN A SOURCE OF EXCITEMENT FOR LETŠENG. WE SOLD THE DIAMOND IN BELGIUM AND ACHIEVED US $40 MILLION // Development Corporation and is well-experienced in the investment promotion environment. He is an industrial engineer by training, having graduated from University College in Galway, Ireland. After returning to Lesotho, he worked in the flour milling and brick manufacturing industries before joining the investment promotion environment. He has also held directorship positions at large organisations including Standard Lesotho Bank, Lesotho Revenue Authority, Econet, and the Centre for Accounting Studies.

CELEBRATING 910 In January, the Lesotho Legend was discovered at Letšeng – the latest in a string of major discoveries, reinstating the reputation of Letšeng diamond mine as one of the world’s most significant mining operations.

The 910 carat Lesotho Legend is a high-quality 910 carat, D colour Type IIa diamond, believed to be one of the largest found in history.

“The 910 has really been a source of excitement for Letšeng,” explains Leisanyane. “We sold the diamond in Belgium and achieved US $40 million. We are starting a project, named the 910, as

LETŠENG DIAMONDS

a social responsibility initiative and we are very excited – it was a really great find for Letšeng as the fifth largest diamond in the world.

“This has been an incredible year for Letšeng because, following the 910, there was a 69 and a 51, and we have also seen a number of other large finds. This could be the best year of the company yet.”

Gem Diamonds CEO, Clifford Elphick said: “This is a landmark recovery for all of Gem Diamonds’ stakeholders, including our employees, shareholders and the Government of Lesotho, our partner in the Letšeng mine.”

Back in June 2017, Enterprise Africa spoke to Leisanyane’s predecessor, Jeff Leaver (who remains an advisor to the CEO) about earlier fantastic large discoveries. “Every large stone is significant,” he reminded. In 2017,

25yrs_AD_Print_Letseng2.indd 1

Letšeng unearthed a 104.73 carat diamond, a 151.52 carat Type I yellow diamond, a 80.58 carat stone, a 98.42 carat diamond, and a 114 carat gem.

“With the major discoveries of the past year, the expectation is that more big stones might come up before financial year-end, but the nature of the industry shows that you cannot just extrapolate so I cannot suggest that we expect more big finds. But we do have high hopes,” admits Leisanyane.

The result of big stone discoveries is major for Lesotho. Diamond mining is one of the largest contributors to government tax revenue, and the industry is a major employer. But it is success in the CSR space that really highlights the value of stones like the Legend.

“We contribute regularly to CSR projects and we regularly carry

different focus areas, but following that exceptional find, we felt we must dedicate some of the proceeds to the development of projects that will assist our communities. The 910 project will receive approximately LSL 5 million,” says Leisanyane.

The Letšeng mine is famous for the production of large, top colour, exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world. Since Gem Diamonds’ acquisition of Letšeng in 2006, the mine has produced four of the 20 largest white gem quality diamonds ever recorded. Its CSR spend is focussed around five key areas – education, health, infrastructure, development of sustainable SMMEs, and regional and environmental initiatives.

Letšeng is one of the highest diamond mines in the world, at an

27/02/2018 16:29

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INDUSTRY FOCUS: MINING

altitude of over 3100 metres high in Lesotho’s Maluti Mountains. Often, expert climbers start to feel the effects of altitude sickness at 1500 to 3500 metres, and when the eye-watering price of the 910 Legend was announced at US 40 million, no doubt some of the auctioneers felt queasy with happiness.

“We use Antwerp as our selling office and certain clients are invited to bid. You can view the diamond prior to bidding but only a selected, verified, reputable group would be invited to view. Then, obviously, the highest bid takes the stone home and that is exactly what happened with the 910. We are delighted with the entire process,” says Leisanyane.

SPARKLING FUTURE At the start of 2017, Letšeng began the process of relocating its mining complex so that pit mining space could be maximised. Mining workshops, offices and related service buildings were all moved so that larger mining equipment

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could access the pit to carry out a revised mining plan, which started in February 2017. This expensive but necessary programme is now all but complete and Leisanyane is satisfied with this futureproofing strategy.

“It’s practically complete - more than

200 million has been spent. I was recently at the mine and toured the complex.

Everything is almost complete and our people will soon begin taking occupancy.”

He is keen to point out that his staff are the reason for the recent upturn in fortunes and discovery of large,

LETŠENG DIAMONDS

// IT IS THE TECHNICAL EXCELLENCE OF OUR FACILITY AND THE HARD WORK OF OUR PEOPLE THAT BRINGS US LUCK // significant diamonds.

“Luck does not come into play,” he laughs. “We have a kimberlite deposit which is expected to have diamonds in it. We are looking in an area that is designated as a diamond area; it is the technical excellence of our facility and the hard work of our people that brings us luck.”

In the future, Letšeng has a plan to further improve the technology it uses during processing so that value from diamonds is maximised. Currently, the value of some diamonds can be reduced when they are broken during sorting as Leisanyane explains.

“The biggest success for a mine like ours is not to break diamonds,” he says “Breaking diamonds destroys quality so looking forwards, we are exploring a technology through which we should be able to see if a rock contains diamonds

before we crush the rock. If we can see a diamond, we can isolate the rock and use a different technology to dislodge the diamond. I think this is the future for Letšeng as right now we reduce the rock by breaking it and that can result in broken diamonds which destroys a lot of value. We have the process where we can feed mined ore through x-ray technology to see which rocks have diamonds and I think this will be helpful for our future.”

Last month, the government of Lesotho announced plans to renew the mining license currently held by Gem Diamonds at Letšeng. The new license would take the miners agreement to 2034 and could potentially go even further if additional underground resources are deemed economically viable.

“The Lesotho government’s announcement that they intend to renew the Letšeng mining lease until

2034 is welcomed as a demonstration of the positive partnership which exists between Gem Diamonds and the government,” said Elphick.

“I would like to thank the government of Lesotho for their ongoing support which will allow Gem Diamonds to continue to extract some of the world’s largest and most valuable diamonds from this remarkable resource.”

Inextricably linked to the future of the industry in Lesotho and the future of the nation, the Letšeng diamond mine is truly an example to follow for others around the world. And if the new CEO has anything to do with it, Letšeng’s success will continue and grow, helping the mine to achieve its goal of pioneering mining in the Kingdom.

WWW.LETSENGDIAMONDS.CO.LS

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EXXARO

Coal Fuels

Exxaro Success PRODUCTION: Manelesi Dumasi

After releasing a very strong set of results for 2017, Exxaro is a South African mining company that is enjoying a positive period in its relatively short history. Coal remains at the heart of Exxaro’s operations, but the company is also thinking about its future…

//

“This year, we will intensify engagements with all stakeholders on the Mining Charter to ensure that it is truly an effective instrument to sustainably transform the face of mining in South Africa,” said President Ramaphosa during his State of the Nation Address in February.

His appointment has been widely welcomed by the mining industry. He is seen as a supporter of the industry, in which he started the National Union of Mineworkers (NUM) in 1982.

“We need to see mining as a sunrise industry,” said the President.

“With the revival in commodity prices, we are determined to work with mining

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companies, unions and communities to grow the sector, attract new investment, create jobs and set the industry on a new path of transformation and sustainability.”

And his positivity seems to have been welcomed, both by the industry and the wider economy. The Chamber of Mines has suspended its legal action against the Mining Charter III, and economic indicators such as currency price and business confidence have surged since Ramaphosa took office.

One of the country’s biggest and most important mining companies, Exxaro, is certainly looking forward to a positive future for the industry and the country.

Active mainly with coal, Exxaro

was founded in 2006 following the unbundling of Kumba Resources coal operation and merging that business with Eyesizwe Coal. Today, Exxaro owns assets all over the world and is active in many mineral and energy sectors. The company is a JSE-listed mining giant, and CEO Mxolisi Mgojo is a mining industry stalwart. He also holds the Presidency position at South Africa’s Chamber of Mines which received Ramaphosa with open arms.

“The mining industry supports and commends the President’s commitment to renewal and revitalisation and progress. The industry will play its part in building our nation,” the organisation said.

INDUSTRY FOCUS: MINING

Ramaphosa’s appointment of Gwede Mantashe as the Minister of Mineral Resources was also welcomed by the COM, and following Mantashe’s calling of a meeting to discuss the Mining Charter, the COM said: “The industry is appreciative of the real engagement that Minister Mantashe began at the weekend, after an absence of such processes over the last few years.

“We are aligned with the Minister’s thinking that transformation, competitiveness and growth are and should be mutually reinforcing goals.”

And, riding the positive waves since Ramaphosa’s appointment, the mining industry and Exxaro in particular have had much to celebrate, while acknowledging that many sizeable challenges still exist.

In March, Exxaro released a fantastic set of financial results for the year ending 31 December 2017.

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BOOMING Exxaro saw net operating profit and revenue increase, and Mgojo was happy with what he described as a “great set of results”.

“The Group’s net operating profit increased by 17% to R6 billion. The coal business benefitted from higher selling prices and volumes, while the Group’s results were impacted by various once-off transactions, namely the cost associated with the implementation of the replacement BEE transaction and a net gain realised on the partial disposal of our shareholding in Tronox.

“Our revenue was 9% higher at R22.8 billion mainly due to higher coal selling prices as well as higher Eskom commercial volumes at Grootegeluk based on demand from the Medupi Power Station.

“Operating profit was 18% higher at R5.8 billion. The good operating performance translated in an improved core HEPS of R20.11, an increase of 38%,” said the CEO.

// WE ARE AN AGILE AND PURPOSEDRIVEN BUSINESS; WE AIM TO SEEK, DEVELOP, PRIORITISE, FUND AND COMMERCIALISE NEW BUSINESS OPPORTUNITIES // In October last year, Exxaro sold 22.4 million shares in Tronox (a USbased titanium products company) with net proceeds of $474 million (R6.5 billion). The replacement BEE transaction has also been highlighted

by Mgojo as a success.

“We are pleased to have delivered on our goal of a replacement 30% BEE transaction and we must thank our shareholders for their support in

INDUSTRY FOCUS: MINING

// THE GROUP’S NET OPERATING PROFIT INCREASED BY 17% TO R6 BILLION // achieving this goal. We have started the work to implement the community and employee ownership schemes.”

There was however one important area identified by President Ramaphosa in his SONA and by Mgojo in his results presentation that needs constant and ongoing attention – safety.

“We are extremely concerned about the rise in mining fatalities last year,” said Ramaphosa. “We call on mining companies to work together with all stakeholders to ensure that mine accidents are dramatically reduced. One mining fatality is one too many.”

Mgojo agreed, saying: “Safety remains a priority for our sustainability.

Whilst we have reduced our LTIFR

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from 0.29 to 0.12 over the past years, it remains above our target of 0.11, therefore much work remains ahead to reach our goal of zero harm.”

One stakeholder group that came away from the results presentation in a good mood was the shareholders.

Thanks to the Tronox deal and the strong performance of the company, especially with coal, shareholders were rewarded.

“From the proceeds of the Tronox disposal, the Board declared a special dividend of R12.55 amounting to some R4.5 billion which was paid to shareholders on the 5th of March 2018.

“Taking into account the cash generation of the business, as well as the strong balance sheet, the Board has resolved to pay a final dividend of R4 per share. Relatively stable internationally core markets are anticipated in 2018 with China’s domestic policy continuing to be instrumental in seaborne price determination and direction of change,” said Mgojo.

Overall, the mood was one of positivity and forward thinking.

“The results reflect our strict forecast on delivering a solid performance from the coal business whilst maintaining organisational excellence and improving prospects for the future.

“I would like to thank all of our employees who have helped to make these results possible. We look forward to powering better lives for South Africans,” said Mgojo.

2018 AND BEYOND Exxaro’s Executive Head: Stakeholder Affairs, Mzila Mthenjane said earlier in the year that the focus on the Mining Charter III remains as hot as ever, and the result of any discussion here will shape the industry going forward.

“As it currently stands, mining in South Africa is in a precarious position,” he started. “It exists in a changing political landscape, which is creating uncertainty for the industry. The primary

EXXARO

// OUR RESOLUTION IS THAT IT IS THE FUEL THE ORGANISATION WILL CONTINUE TO USE TO POWER ITSELF, AND THE COUNTRY, FOR THE FORESEEABLE FUTURE // goal of 2018, it seems, is for the mining industry and government to work together to provide certainty. Right now, high levels of uncertainty, paired with record lows in sentiment, has resulted in poor levels of investment.

Tackling this issue head-on rests largely on the shoulders of the MPRDA’s Mining Charter, which comes up for review in the coming months.”

Mthenjane, like Ramaphosa, was keen to remind of the importance of the industry which has long been the backbone of South Africa, and Africa.

“The mining industry is a large part of South Africa’s economy, and it plays a role in uplifting several other sectors. All will be affected if exports are severely affected due to the weaker US Dollar and resulting stronger ZAR.” He said that, with a slightly strong ZAR against the Dollar, Exxaro’s export revenues could be hit, and a reasonable price is what is needed.

“In recent weeks, the US Dollar has weakened, while this poses several benefits for South African citizens, such as potentially lower fuel costs and cheaper imported goods, it affects

mining in the form of lower export revenues. An optimal and fairly-priced currency, amongst others, is what is required for sustainable growth of the industry.”

STICKING WITH COAL While Exxaro has quite rightly looked to expand its reach beyond just coal mining in recent years, there is no doubt that coal will remain at the heart of the business for a long time to come. The company has excellent contracts with Eskom and is the biggest coal supplier to the nation’s power utility.

The company has started a spending programme on seven coal projects to protect the future of supply.

At Grootegeluk, the GG6 project is underway to add 1700 tons per year of soft coking coal - this is a R4.8 billion project. At Belfast in Mpumalanga, a R3.3 billion project is underway to deliver high quality coal for the export market.

“Coal remains a key commodity for the group,” said Mthenjane. “We have looked at the resource from every angle and considered all its possibilities.

Our resolution is that it is the fuel the organisation will continue to use to power itself, and the country, for the foreseeable future – in a consciously sustainable manner.”

But this does not mean the company is going for a ‘one commodity’ approach. It is using its global expertise to ensure that its portfolio is diverse.

Exxaro is keen to get involved early in the fourth industrial revolution and is investigating many other opportunities.

“Though coal remains our primary business commodity (with more than R10 billion of expansion capital planned over the next four to five years), that’s not to say that other opportunities aren’t being explored,” reminds Mthenjane. “We are an agile and purpose-driven business; we aim to seek, develop, prioritise, fund and commercialise new business opportunities within a rapid stagegate governed process, that will impact positively on people’s lives. In anticipation of potential threats to coal mining, we are looking at renewable energy solutions, in addition to our Cennergi investment, to find new ways to generate and supply energy and manage energy consumption.”

Of course, resolution of the ongoing Mining Charter debate will bring certainty and direction to the industry and, with Mantashe and Ramaphosa keen on resolving the issue sooner rather than later, and with Mgojo at the helm of Exxaro and the COM, delivering this much-needed certainty should be now just a matter of time.

“Mining is an area that has massive unrealised potential for growth and job creation,” said Ramaphosa. There is no doubt that mining remains the continent’s backbone, and there is no doubt that Exxaro remains one of the most exciting businesses within the industry. This is a company that is truly powering possibility.

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DISCOVERY PLACE

TIBER CONSTRUCTION

Tiber Sits

Sky High In Sandton PRODUCTION: David Napier

Taking advantage of the extraordinary growth happening in Sandton, Africa’s financial CBD, Tiber Construction is firming up its grip on the local industry’s top spot. Managing Director, Jose Correia tells Enterprise Africa that after a difficult 2017, the industry is now showing signs of revival and Tiber is well placed to prosper.

//

Last year, amidst a backdrop of economic and political uncertainty, South Africa’s construction industry began to flag.

Investment was drying up, money was not as fluid, and projects were being shelved until a level of certainty returned to the market.

However, Tiber Construction was deep into a mega project, building the Discovery Building in Sandton.

At the same time, the Johannesburgbased construction and development

specialist was busy with the magnificent 140 West project. Where others were dropping tools, Tiber was building nicely. Managing Director, Jose Correia was “cautiously optimistic”.

Today, his feeling is much more positive, and a year on from when Enterprise Africa last questioned Correia, he says Tiber remains strong and stable.

“In May 2017, the industry was in a tough place and to be honest, it got more difficult throughout the year.

We were very fortunate that we had

two very big projects which carried us throughout that period. We secured those projects at the margins of two years before and that was very fortunate from our side. The industry took a massive dip towards the end of the year.”

But not all have been so fortunate.

“We have experienced a big increase in the number of sub-contractors going into business rescue and liquidation, and the worrying aspect of this is that many of them were reputable business with an established track record in

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INDUSTRY FOCUS: CONSTRUCTION

the industry. There have also been a number of main contractors which have suffered the same fate, which is of major concern, as it reflects the overall weakness of the market.

“Towards the end of 2017, there was a lot of negativity in the country from a growth perspective. Overall leadership and accountability has largely been missing as everyone is well-aware, and so new investment into property developments was held back, due to lack of growth prospects and uncertainty. Consequently, projects that we were hoping to start at the end of the year were postponed and that hurt us a little as we had an expectation of turnover which did not materialise,” says Correia.

“Fortunately, since Cyril Ramaphosa was elected to the Presidency, there has been a change in sentiment. Since January, we’ve had a positivity that we all last felt in the pre- 2010 World Cup days. Sentiment has improved and this was felt in our market. Some of those projects that were put on hold suddenly started moving again and we have managed to get all of those projects that were looking at last year moving now. It’s an exciting time.”

So, business is good for Tiber

// FROM JANUARY, I’VE NOT BEEN IN A SITUATION WITH SUCH POSITIVITY SINCE THE WORLD CUP // but surely this change in feeling is not just down to Ramaphosa?

“Strangely enough, it is,” says Correia.

“It’s not so much because of the man that is coming in, even though he is pro-business, it’s more about the decay and damage that was being done previously. When the change happened, there was euphoria everywhere; sentiment shot up, confidence shot up, but there was a realisation that he faces several major challenges. I remain positive; everyone is cautiously optimistic. However, with all the positive sentiment, it will take a year or two before it is converted into opportunity.”

Correia’s optimism is being repaid.

By positioning the 67-year old business as one which can handle projects of any size, but not over estimating its capabilities, management has created a fast moving, approachable, efficient

VIVA Formwork & Scaffolding has over 22 years in the industry. We specialise in the supply, errect and dismantle of formwork and scaffolding in and around GAUTENG. Our onsite management, engineering and safety teams have completed many successful jobs with the toughest structures and tightest of programs.

140 West Street is testament to VIVA Formwork and scaffolding’s capabilities. Teaming up with Tiber & WBHO lead to the successful completion of the super structure ahead of the program.

140 West Street • • • •

70 000 square meters of slabs 8 basements 15 Upper floors (Northern Tower) 16 months

“FORMING YOUR FUTURE”

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builder and developer, located in the heart of South Africa’s business hub.

“There are more enquiries, people are sending us more tenders to consider, and there is notably more activity – especially in the Gauteng area. People are still cautious and the market is still cut-throat but he is pro-business and that is good.”

POSITIVE 2018 With Tiber’s two major projects from 2017 now all but complete, getting new work underway has been key. Five new projects, all in Gauteng, are particularly exciting for Correia.

“Our biggest project right now is a JV with WBHO and that is 144 Oxford. It’s a 33,000m2 commercial, lettable space with fully unitised glass facades – it’s a striking building. We will be commencing with Illovo 96, a 7000m2 gross lettable area commercial building in Oxford Road in May 2018.

We are currently busy with a new office development for Abland in Constantia, which will be occupied by Nedbank.

That’s a 12,000m2 gross lettable area building, which we are scheduled to complete by November 2018.

“We are also breaking ground on the first phase of the 110,000 m2 precinct mixed-use development called Sandton Gate, which is a JV development being undertaken by Tiber and Abland. The first phase is a 15,000m2 P-Grade office development which will incorporate a flagship Planet Fitness gym. The second phase of the development which is a residential component consisting of 142 units, mostly two bedroom apartments, will commence in the latter part of 2018.

“This development will take five to seven years to roll-out and provides us with a strong base for our order book going forward. Reliance on the open tender market in today’s times is a sure formula for failure so we continue to focus on ensuring that we continue to build a pipeline of projects through expansion of current relationships with developers and clients.”

TIBER CONSTRUCTION

Sandton Gate is in Tiber heartland, where the company is famous for delivering excellence. This is also an area that in insulated from economic turmoil experienced in other corners

// THERE ARE MORE ENQUIRIES, PEOPLE ARE SENDING US MORE TENDERS TO CONSIDER, AND THERE IS NOTABLY MORE ACTIVITY – ESPECIALLY IN THE GAUTENG AREA // of the country. “The growth forecast for the country is something like 1.5-2% but that is diluted growth for the country,” says Correia. “If we look at Sandton, it’s growing consistently at 4-5% and that is the market we are interested in. We don’t deal in negative and subdued growth – there is growth in Jo’burg and that is the market for us.”

REDEVELOPMENT WITH REDEFINE Another key aspect of the Tiber strategy, one that helped it through the bleak 2017, is the company’s ability to perform ‘redevelopment projects’, where a retail centre requires modernising but continues to operate during the refurbishment process. These challenging and unpredictable projects are difficult, but rewarding. Currently, Tiber is at work on phase 3 of the Centurion Mall, south of Pretoria, and the Benmore Gardens Shopping Centre in Sandton.

“The challenging thing with these types of project is that you have to work in a live environment and access is very limited, varying from day to day,” explains Correia. “Invariably, these projects get prolonged mainly because of access. Benmore is almost done, we are closing out for the official

completion date of July 18th. We have recently been appointed for the third phase of a multi-million upgrade that is being undertaken by Redefine Properties, the Centurion Mall owner.

The current phase runs until February 2019 and it’s incredibly challenging. The challenge is to manage the program in such a way that the stores can continue trading as well as possible in the circumstances. Safety management is also a substantial challenge especially with regard to the public interface with our site activities.

As many hurdles as these projects throw up, if managed correctly, they can offer substantial ongoing business. And developing strong relationships with owners of existing retail centres bodes well for long-term strategy.

“If you manage these contracts properly, both financially and from an

operations perspective, there are just rewards,” suggest Correia. “We have developed the necessary experience and knowledge during the past few years of being exposed to this type of work with our team going through the previous phases, strengthening our ability to tackle this type of work very efficiently and cost effectively and we will continue to seek out opportunities in this market sector as we anticipate that the trend to refurbish and extend existing successful shopping centres ahead of development of new shopping centres, will continue, given the constraints of the consumer and current trading conditions.

“We have developed a strong relationship with Developers in this sector with a substantial amount of work being undertaken for Redefine Properties and we hope that this trend will continue.”

CONGRATULATIONS TO TIBER CONSTRUCTION FROM

FACADE/DIRI JOINT VENTURE Facade Solutions 5 Border Lane, Benrose Johannesburg, 2094 info@facadesolutions.co.za

Diri Aluminium (PTY) Ltd. 145 Van Tonder Street, Sunderland Ridge, Centurion, Pretoria, 0157 info@diri.co.za

www.enterprise-africa.net / 61

INDUSTRY FOCUS: CONSTRUCTION

// THE RETAIL BUBBLE IN OUR COUNTRY IS AT A PEAK, A LOT OF THE STORES ARE TRADING WELL ABOVE REALISTIC VALUES, AND THE DAYS OF MANY NEW CENTRES GOING UP ARE BEHIND US // Combine the ongoing projects for Discovery and 140 West with the retail refurbs and it makes for an extremely busy time for Tiber, which is not a listed construction firm and remains a self-proclaimed medium-sized business. But the two mega projects have both been delivered very successfully and Correia is proud.

“We completed Discovery Phase 2 in February 2018 and it has been a very successful project. We handed over Phase 1 a couple of weeks early, to the great satisfaction of the Developers, Growthpoint Properties and Zenprop, as well as the tenant,

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Discovery Life. Phase 2 was delivered on time and the tenants have moved in; it couldn’t have gone any better for us.

“The closing out of the project and picking up on defects for a project of this size is a whole new project in itself. We have to keep experienced resources behind to close out the project and there’s no revenue for that. 140 West also ended up very well – it’s an incredibly beautiful building.

Discovery is a massive building with cutting edge technology but whilst 140 West is a smaller development, it was a more complex and challenging

build. They’re two great projects, that we are very proud to be associated with, both landmark projects in the Sandton CBD.” WHEN ONE DOOR CLOSES Founded in 1951, Tiber’s roots are in both construction and property development.

This knowledge has been extremely valuable for clients, and the company’s ability to offer a turnkey service while providing important advice has proved very successful. This is why management has made the conscious decision to not grow into a faceless corporate giant and remain nimble and lean.

TIBER CONSTRUCTION

// IF DOORS ARE CLOSING FOR OTHER COMPANIES, THEY WILL OPEN FOR US // “If you look at the results of the big listed entities in this country, they tell a very sad story. Apart from WBHO, they’re all in trouble,” highlights Correia. “What keeps them afloat is group activity in other areas and in other countries. Their SA building divisions are all struggling. One of the bigger privately-owned businesses liquidated recently and that has flooded the market with employees, so it is a real struggle.

“We’ve always believed that

growth in turnover is not growth in profit and some companies have grown to a point that is not sustainable and not profitable. Our strategy has always been to remain lean and mean so that we can handle projects of significant size, but limited to what we can deliver with excellence. We can move quickly, we can make fast decisions, and we can operate more effectively and efficiently because of our size – we are an athletic-sized company.”

Because of this type of structure and strategy, Tiber and Correia remain full of positivity, and the business is stronger than ever.

“Challenges come and go and you have to filter out a lot of the negativity,” he says. “There are always opportunities.

When we finish a building and drive

past it, I love that there is a story there that we have been a part of. We have helped create work for people and created a long-term product that employs people. I love what I do and I believe that where one door closes, another opens. If doors are closing for other companies, they will open for us.

“As long as we have the right structure, the right type of clients, and we produce quality at the right price, there will always be opportunities. You are always remembered for the last mess that you made so we make sure we don’t,” he concludes.

WWW.TIBER.CO.ZA

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ARCELORMITTAL

Positive Outlook for Africa’s Leading Steel Producer PRODUCTION: Karl Pietersen

These are challenging times for South Africa’s steel industry, but the unrivalled industry-leader, ArcelorMittal, is promising that change is coming and a return to positivity is close. A new CEO, a strong history, and a significant share of the local market make for a positive outlook for this South African powerhouse.

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INDUSTRY FOCUS: CONSTRUCTION

//

While there is no doubt about the quality of work coming from ArcelorMittal’s South African operation, uncertainty about the long-term future of the business continues.

The company has faced fines, fires and financial losses. There have been strikes, stalemates and now steel tariffs as the US and China enter a cold trade war, but the company has always managed to come out the other side, displaying a resilience comparable to that of its enduring products.

Starting life in South Africa in 1928 as Iscor, the country’s steel parastatal, back then steel was seen as a creator of jobs, and a much needed tool for the war effort. Over the following decades, the company’s reputation and reach grew, obtaining new locations and extra skills. By 2001, the decision had

been taken to unbundle Iscor from its mining operation and Kumba Resources was established, listing separately on the JSE. In 2003, LNM Holdings took the controlling stake in Iscor and the company’s name was changed to Ispat Iscor Limited. By 2005, the company was known as Mittal Steel South Africa Limited after a subsequent acquisition, the following year saw the company become ArcelorMittal South Africa.

Today, the ArcelorMittal group is headquartered in Luxembourg and is one of the world’s most powerful and influential steel producers with reach across the globe, employing some 220,000 people.

In South Africa, activity is overseen by the Vanderbijlpark HQ and the company supplies the South African market with more than 61% of its steel

requirements. The production balance is sent for export into sub-Saharan Africa or elsewhere in the world.

In December 2017, ArcelorMittal South Africa announced that Kobus Verster would take the reins from retiring Wim de Klerk. During his time at the top, de Klerk was known for implementing several cost cutting measures in an effort to halt loss making. Verster, former head of Aveng who has also previously been a senior at ArcelorMittal SA, is tasked with continuing momentum and restoring the company back to profitability and sustainable performance.

On the resignation of de Klerk, the company said: “Challenges remain and we will commence with a search to appoint a new CEO who can continue to implement our strategy and structurally improve the performance of the business.”

// DEMAG’S NEW DOUBLE V-GIRDER QUADRUPLES LIFTING CAPACITY Demag, one of the oldest crane manufacturers in the world established almost 200 years ago, has developed a new Double V-Girder crane which is capable of a 50T lifting capacity – four times that of the Single Girder.

The double-girder overhead travelling cranes offer exceptional load capacity for a low deadweight. Their outstanding crane geometry also provides for extremely good travel characteristics, which minimises wear on the end carriages and crane runway. The load hook can be raised between the two crane girders, which allow large lifting heights to be achieved.

The crane offers high long and cross-travel speeds thanks to high-performance double-girder design. The girders can be adapted to building structure requirements and has minimum approach dimensions thanks to the compact travelling hoist design.

“Since the launch of the V-Girder in 2016, 60% of all our single girder cranes produced locally are now V-Girders”, said Richard Roughly, Senior Manager: Sales & Marketing at Demag South Africa. “They have revolutionised load handling”.

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ARCELORMITTAL SOUTH AFRICA

// INTERNATIONAL STEEL PRICES ARE STRONG AND WE ANTICIPATE THAT THEY WILL REMAIN STRONG SO EVEN AT THESE LEVELS, WE SHOULD BE ABLE TO INCREASE OUR EXPORT SALES // On his appointment (starting in February), Verster said to Business Day TV: “We have some initiatives and plans to being the cost base down… we are looking at alternative

raw material suppliers and, where we are totally uncompetitive is with electricity and rail, so we are planning to engage authorities to see how we can get better dispensation for steel production.

“International steel prices are strong and we anticipate that they will remain strong so even at these levels, we should be able to increase our export sales.”

OPTIMISTIC FINANCIALS His comments came after ArcelorMittal SA released its annual results for the year ending 31 December 2017. A mixed presentation saw an increase in revenue, a decrease in headline loss, positive EBITDA, improvement in B-BBEE status, but all of this was framed by volatility with the Rand against the Dollar which

significantly impacted the business.

The results also stated that ‘poor economic conditions’ both locally and globally were big contributors to slow demand. But, since then, the economic picture in South Africa has changed dramatically following the installation of President Ramaphosa. Business confidence and investment sentiment are up compared to last year, and feeling in markets is of positivity following the new President’s pledge to root out corruption in South Africa.

Interesting points from the 2017 results include a 19% increase in revenue, following a 15% increase in average net steel prices. Headline loss decreased from R2,589 million to R2,518 million. Positive EBITDA of R650 million was achieved in the final quarter of the year, the

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INDUSTRY FOCUS: CONSTRUCTION

// IN TERMS OF OUR IMMEDIATE FUTURE, I AM OPTIMISTIC ABOUT THE MARKET OUTLOOK FOR 2018 // first time a positive figure has been recorded since 2016’s third quarter.

Steel imports declined by 195,000 tonnes for the year following the implementation of various safeguard duties in the middle of 2017. The company’s market share for flat steel products increased to 75%.

Globally, the company performed

SALDANHA WORKS

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well, despite a number of challenges.

“Global steel demand in 2017 saw the strongest growth since 2013, and with structural supply side reform, this drove higher utilisation rates and improved steel prices and spreads,” said Chairman and CEO, Lakshmi Mittal.

“In terms of our immediate future, I am optimistic about the market outlook for 2018. Global steel market conditions remain healthy and we anticipate an increase in demand in our markets. Financially, ArcelorMittal has never been stronger. Looking to the future, we are taking positive action to ensure we adapt to long-term trends and identify opportunities for our business,” he said.

CAUGHT IN TRADE WARS ArcelorMittal SA produces a wide range of high-quality flat and long steel products. Hot and cold rolled plate, galvanised coil, various bars, rails and rods, and other structural and specialist products are all manufactured across the company’s various South African sites.

For ArcelorMittal, exporting some of these products has been an important earner for the company, but the company’s ability to export has been threatened recently after US President Donald Trump slapped universal trade tariffs on imported steel and aluminium products in April – 25% on steel and 10% on aluminium. The

ARCELORMITTAL SOUTH AFRICA

South African government, specifically, Trade and Industry Minister Rob Davies, has written to President Trump to ask that South Africa is exempted from the tariffs but his efforts have so far been in vain.

The thought is that South Africans could lose their jobs, and big steel producers like ArcelorMittal could be forced to hold back on investments until the future is clear. South Africa has called the tariffs unfair and has stated that it is being unnecessarily caught up in a trade dispute between the US and China.

“South Africa remains open to engage US authorities towards finding a mutually acceptable outcome,” said the DTI.

But ArcelorMittal remains South Africa’s largest steel contributor and comfortably controls significant market share, producing approximately 4.8 million tonnes of saleable steel.

The company continues to use its relationship with the global group to access leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks.

“The company’s ability to generate profits and cash throughout the fluctuations of the steel cycle is testimony to the success of years of intensive business re-engineering and the cultivation of a continuous improvement culture that has embedded ArcelorMittal South Africa’s

position among the world’s lowest cash cost producers of steel,” the company says.

So while challenges remain for ArcelorMittal in South Africa, and its new CEO has certainly had to hit the ground running, this is an enduring business that has ridden the many highs and lows of the past nine decades and will likely do the same in the future. Expect improvements through 2018, but the focus will very much be on cost cutting and returning the business, in the long-term, to sustainable profitability.

WWW.ARCELORMITTALSA.COM

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MACNEIL PLASTICS

Long Lasting, Superior Quality From MacNeil Plastics PRODUCTION: Manelesi Dumasi

Cape Town’s MacNeil Plastics is looking to capture market share with new products and superior quality. The company has partnered with a European specialist to bring the very best to its South African customers. Managing Director, Derek Faulds talks to Enterprise Africa about the company’s strong position. www.enterprise-africa.net / 71

INDUSTRY FOCUS: CONSTRUCTION

//

“It’s a very exciting time at the moment,” says MacNeil Plastics Managing Director, Derek Faulds.

Since separating from the MacNeil Group, which handles wholesale and distribution of a range of building supplies, MacNeil plastics has forged new relationships with international partners in order to bring first class quality and service to clients in Southern Africa.

Founded in 1993 as part of the MacNeil stable, MacNeil Plastics has built its reputation over the years, becoming known as a leading manufacturer of plastic pipes and fittings within the PVC (polymerizing vinyl chloride) civils and merchant industries. Headquartered in Somerset West, Cape Town, MacNeil Plastics works from a large, ISO-certified

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manufacturing facility that operates 24 hours a day, throughout the entire year.

The company’s more than 300 people are highly experienced and knowledgeable with the product portfolio and have managed to develop market share in regions all over Southern Africa.

“We export around 5% of our product to other African countries including Namibia, Botswana, Mozambique, Zimbabwe but the majority of our production is for the local South African market,” says Faulds.

But, while he is keen on developing the company’s exposure to the export market, Faulds explains that MacNeil Plastics has developed a partnership with European manufacture to bolster its already impressive product range.

“Technology in the industry is developing,” he says. “Companies in

Europe have made great strides in terms of oriented PVC (OPVC) and we have a partnership with a Spanish company called Adequa with whom we import OPVC. The development of polymer plastic is obviously trying to improve the image and make plastics more acceptable considering the current environmental challenges in packaging. From a plastic pipe point of view, we manufacture a product that is 100% recyclable and we want to make plastic a completely viable alternative to concrete or steel or other products. Technological development continues but there are limitations to the amount of innovation that you can achieve – a pipe is a pipe – but longevity, resistance to corrosion, ability to resist elemental and chemical attack which effects flow, and other factors are all things that we work on continually with our partners in the market.

MACNEIL PLASTICS

// WE WORK WITH OUR CLIENTS ALL THE WAY UP UNTIL THE POINT THAT WE PASS THE PIPE OVER TO THE CONTRACTOR FOR INSTALLATION // “We have only been working with Adequa for a few months and we are now their preferred distributor into Southern Africa for OPVC. OPVC is the top of the range and you can make a pipe that can hold an equal amount of water but using less plastic. Adequa have got the machinery and technology to make OPVC and we hope to gain that ability in time.”

LONG LASTING QUALITY At the end of 2017, South Africa’s struggling economy was at breaking point. Viewed by international investment houses as a risk, and

downgraded by credit agencies, the country was in something of a rut. But, following the appointment of President Ramaphosa, business confidence has improved and the landscape for commercial activity has improved.

But Faulds says that the quality of MacNeil Plastics products and services has moulded the company into an industry leader, irrespective of economic plight.

“We differentiate ourselves by quality,” he says. “There are a number of pipe manufacturers in South Africa but we are members of SAPPMA (Southern African Plastic Pipe Manufacturers

Association) and I serve on the Board of that association. Our adherence to quality standards and specifications is absolutely non-negotiable. Our customer service and our delivery to site is first class. We work with our clients all the way up until the point that we pass the pipe over to the contractor for installation. Where possible, we try to give advice on the appropriate pipe for use in the project. We are not simply a manufacturer who makes the pipe, hands it over and washes our hands of it; we want to see things through until completion.”

The company ensures quality throughout its product range by sourcing the best raw materials and components from all corners of the world. Where a leading material is not available in South Africa, reducing quality is not considered. The company

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INDUSTRY FOCUS: CONSTRUCTION

searches out exactly what is required.

“We get a lot of raw materials from Sasol – our local manufacturer, but we’re also importing raw materials from a variety of locations around the world. We stay away

28

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from China but we do import from Thailand, Malaysia, the Middle East, Europe, and North America as long as they can deliver quality,” explains Faulds.

Providing products of the highest

// WE ARE LOOKING TO INCREASE OUR OUTPUT CAPACITY BY 30-50%. WE’D ALSO LIKE TO CREATE 10% MORE JOBS // possible quality does not only bring benefits to MacNeil Plastics and its clients; it is also advantageous to the wider community in which the products are utilised.

“We are based in the Western Cape and we are going through one of the worst droughts we have faced in the past hundred years,” details Faulds. “We are very dedicated to responsible water usage and responsible purchasing of water management systems, which includes pipes, so we try to differentiate ourselves through quality of service.

When the quality is there, less water is lost through inefficient piping.”

MACNEIL PLASTICS

MANUFACTURING A STRONG FUTURE MacNeil Plastics is a now standalone pipe manufacturer and thanks to its frequent and sustained delivery of quality products and services, it is now positioned perfectly to grow.

Faulds, who has been with MacNeil Plastics for three years and was previously with the MacNeil group since 2009, sees increases in export and manufacturing capacity as key focus areas for the future.

“We are looking to increase our output capacity by 30-50%. We’d also like to create 10% more jobs on top of what we offer the local community. We want to upskill our staff and address the skills shortage in the industry. We also want to serve the South African mining, construction and agricultural sector by providing them with quality piping, ensuring water security.”

He adds that excess capability in the factory is likely to be taken by export demand, saying: “We are aiming to grow our export market. We have

// OUR ADHERENCE TO QUALITY STANDARDS AND SPECIFICATIONS IS ABSOLUTELY NON-NEGOTIABLE // just appointed a new Sales Director and exports will be one the major focuses.

We have excess capacity in the plant so we are hoping that exports will become around 20% of our sales by the end of the year.”

And new product development is always a focus. New products for this year include a range of microcellular polyvinyl chloride (mPVC) goods.

“We are involved in the supply of all of the pipe for a development in the Hex River Valley. We’ve also just launched our MPVC range of pipes for the market.

Previously, we only made UPVC and so adding the MPVC means we cover both ranges, in all sizes from 50-400mm,” explains Faulds.

Going forward, the future looks strong for MacNeil Plastics. The company is facing its challenges head on and investing in training and selfsustainability to ensure it overcomes

any unpredictable hurdles.

“The biggest challenges we have faced is managing the procurement of appropriate raw materials. In South Africa, we had a period where we experienced major load-shedding and that was a big challenge for us. We are also faced with a major skills shortage in terms of working with polymer plastics,” says Faulds.

The company’s reputation and undoubted skill set will stand it apart from the crowd, and with ever-growing demand for products showing no sign of abating, MacNeil Plastics is perfectly placed to continue its flow across the entire South African market.

WWW.MACNEIL.CO.ZA

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TRENCON CONSTRUCTION

Capitalising On

Renewed Prosperity PRODUCTION: William Denstone

Having ridden the storm of South Africa’s construction industry in recent years, Trencon Construction is seeing the benefits of its more than 22 years of carefully crafted expertise.

Adept at tackling briefs across many different industry segments, progress is now taking the form of several new, ambitious and noteworthy projects.

//

2017 was, by all measures, a particularly challenging year for the construction industry. Whether due to a reduction of skills, budget constraints or the division of projects into smaller components in support of emerging black empowerment-based SMMEs, we witnessed a dramatic

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rationalisation of the industry.

By September of last year, confidence was at its lowest level since the third quarter of 2000. Weak growth in construction activity standing at just 3% year-on-year - and a contraction in the value of spending contributed to poor growth. However, even in the midst of such a trying

environment, the past two years have been building toward a far more optimistic outlook. According to a report by Statistics South Africa, for instance, the number of building plans passed in 2016 rose by 6% compared to the previous year, alongside an increase of 8.3% in the total value of newly constructed buildings.

WOMENS LIVING HERITAGE DEVELOPMENT

INDUSTRY FOCUS: CONSTRUCTION

POSITIVE SIGNS Emerging from such a tough, lean period largely unscathed, the state of South Africa’ construction industry is finally looking up. In value terms, the construction industry is expected to record a compound annual growth rate (CAGR) of 14.9%, to reach US$ 41 billion, by 2022. The residential construction industry increased at a CAGR of 17.6% during 2013-2017, while the commercial building construction sector in value terms is expected to record a CAGR of 13.1% by the end of the forecast period.

Growth is expected to be supported in the coming years by investment in transport and logistics infrastructure and energy construction projects, as well as the expansion of low-cost residential buildings. In addition, government efforts to balance supply and demand for social housing will

drive a need of the construction of new residential units, while urbanisation will continue its recent generation of demand for residential and infrastructure development. Government’s plan to spend more than R940 billion on infrastructure development will also help matters greatly.

For Trencon Construction, formed in 1995, this is good news. The company services the commercial, industrial and residential markets of South Africa and has become one of the country’s most prominent contractors today because of its unique approach to doing business. A 100% black-owned and 55% black woman-owned entity, it is famed for its ability to deliver projects of high complexity on time and within budget, all while contributing to the social environment in which it operates.

Rarely achieved Construction Industry

Development Board (CIDB) rating of 9GB standing as testament to the calibre of work delivered up to this point.

THE RIGHT EXPERTISE A fully integrated and diversified construction body, Trencon Construction has the ability to execute traditional building and civil contracts, as well as concession projects; perhaps most notable among these latter have been the Department of International Relations and Cooperation and the City of Tshwane Head Office developments.

Trencon is supported by significant resources and, thanks to these, is well placed to effectively tackle projects of any size and complexity.

// THE AWARD OF THE CONTRACT TO THE TRENCON BLACK JILLS JV REFLECTS GIBELA’S COMMITMENT TO TRANSFORMATION IN SOUTH AFRICA //

WE SPECIALISE IN BUILDING TOP OF THE RANGE, MODERN AND SOPHISTICATED KITCHENS, BUILT-IN CUPBOARDS, ALUMINIUM WINDOWS & DOORS, BARS & BATHROOMS, AS WELL AS FURNITURE & COUNTER TOPS DESIGNED AND MANUFACTURED TO SPECIFICATION!

Its expertise ranges from industrial developments and office blocks to shopping centres, residential developments, parkades, airports and schools. This makes it perfectly placed to take full advantage of what look to be the important trends for the future of South African construction, with urbanisation and semi-migration pinpointed within the industry as some of the key drivers of growth in the three years to come.

Trencon will be able to profit further as the demand for middle and high-income housing continues unabated, while densification policies in cities like Cape Town are also manifesting in something of a building boom at present.

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STUNNING PORTFOLIO Trencon Construction is already seeing real evidence of this upturn. Of its extensive list of ongoing and completed

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TRENCON CONSTRUCTION

PRAN BOULEVARD OFFICES, RIDGESIDE, UMHLANGA

projects, among the most noteworthy is the Katherine Towers development in Sandton. This 21,000m² GLA, P-Grade Development is within walking distance of Sandton City and the Gautrain Station, and is set to become the New Head Office for Bidvest Bank and many other tenants seeking a lucrative location. The construction of the Mbombela Square Office Park in Nelspruit, meanwhile, will result in two nine storey office blocks, a triple story restaurant block and a double storey restaurant block, with a total construction area of 15,100 m2.

To this catalogue can now be added perhaps Trencon’s most impressive undertaking to date. Gibela Rail Transport Consortium is a new empowered South African rail company, tasked with the revitalisation of rail transport in South African metro areas, and in 2016 announced that it had

awarded the Trencon Black Jills JV the R400-million contract to build the main site buildings at its Dunnottar train manufacturing plant, on the East Rand.

RAIL REVITALISATION According to Gibela Rail Transport Consortium CEO Thierry Darthout, construction remains on track for completion in March next year. “We are in the process of commissioning the industrial equipment at the plant,” he explained, “and the first locally built train should be delivered to the client in December 2018.”

Trencon is reported to have a 70% share in the JV, and Black Jills, an engineering and project management firm which specializes in Civil Engineering, facilities and property management, renewable energy and project management, the remaining

30%. It is not the first time that the two have joined forces; the companies also worked together on the construction of the Lillian Ngoyi Women’s Living Heritage Monument, in Pretoria.

“The award of the contract to the Trencon Black Jills JV reflects Gibela’s commitment to transformation in South Africa,” summed up Gibela CEO Marc Granger. “The Trencon Black Jills JV was selected from seven entities that tendered for the main site buildings package. All tenders were adjudicated on the basis of empowerment credentials, price and, most importantly, contribution to economic development – a critical component of the overall rolling stock project.”

WWW.TRENCON.CO.ZA

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SUPREME MOULDINGS

Decor and Mouldings

Developed with Integrity PRODUCTION: Timothy Reeder

Supreme Mouldings is a South African manufacturer and distributor of products to a wealth of industries including flooring, shop-fitting and construction. The company is today the principal supplier to the local market, and exports additionally to North America, Europe and Africa.

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Supreme Mouldings began life as Quality Kraft in 1972, switching to its present identity in 1981 when the manufacturing arm of the company was added in order to supply product for the distribution side. It is a South African-based and owned manufacturer and distributor of products to industries spanning picture framing, dĂŠcor, flooring, shop-fitting and construction. Supreme Mouldings is backed by a vast catalogue of

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products, among them picture frame mouldings and accessories, wall dĂŠcor products and laminate flooring profiles, and governed by strict principles to ensure that it does its business with integrity at the forefront.

FLAUNTING ITS WARES Thanks in large part to such a wide product offering, twinned with the renowned quality with which it has become synonymous, Supreme Mouldings is able to benefit from the

invaluable exposure afforded each year by the SARCDA Trade Exhibitions.

These have been pivotal to helping businesses grow for more than 50 years, offering all exhibitors the benefits of two highly professional, well-organised and cost-effective trade exhibitions.

They are held at Gallagher Convention Centre in Midrand, Johannesburg, and it is the largest and only trade exhibition of its kind in the Southern Hemisphere, attracting as many as 700 Exhibitors and close to 15,000 trade visitors annually.

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INDUSTRY FOCUS: HOME

// THE ENVIROLINE PRODUCT RANGE IS ONE OF THE GREENEST OF ITS TYPE FOUND WITHIN ALL OF SOUTH AFRICA // This is a world-class retail, gift, toy, decor and design trade show that attracts quality buyers from across the sector, including hotel chains, curio and gift shops, interior decorators/ designers, and garden centres and retail stores. The heritage of SARCDA includes its experience, knowledge and traditions, and this year was no different as Supreme Mouldings took the opportunity to display the full extent of its new products at the latest iteration in March this year, giving it the privileged status as one of the select exhibitors enjoying this highly profitable association.

IMPRESSIVE FOOTPRINT Supreme Mouldings has at its disposal locations dotted across South Africa.

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The Johannesburg distribution centre is located in Robertville, Roodepoort on the western outskirts of South Africa’s largest city, and serves as the company’s head office. This facility supplies the Gauteng, Mpumalanga, Free State, Northwest, and Limpopo regions, benefitting from a warehouse and office block totalling 6,800 m2 and the skills of a staff compliment of more than 140 people.

In addition, two distribution centres, in Cape Town and Durban, employ 27 and 11 staff respectively. The former is centrally located in Old Mutual Office Park, Maitland, and services the Western Cape, Eastern Cape, and Northern Cape regions, as well as Namibia, while the 1000 m2 warehouse in Durban takes care of the KwaZulu-Natal market.

Wilsonia Industrial Township in

East London, meanwhile, is home to Supreme Mouldings’s manufacturing facility, where its products are manufactured, quality checked and packed before being transported to any of its three distribution centres, or alternatively placed into containers ready for export. The 8,400 m2 factory is operated by a team of more than 100, and houses a state-of-the-art extrusion plant which makes possible the high volume output of quality product.

The continual growth of Supreme Mouldings is underpinned by a fully staffed research and development department, which is charged with ensuring the product range remains constantly updated. This is crucial to keep Supreme Mouldings in line with the rapidly changing fashions and colour trends in the industry, as well as developing special products tailored to customer requirements. It also houses a state-of-the-art recycling plant, where various polymers are recycled into

SUPREME MOULDINGS

pellet form for raw material from which the Enviroline range of High Density Polystyrene products are produced.

ENVIRONMENTAL PRIORITIES Placing almost as much focus on implementing green initiatives as on the renowned quality of its product range, Supreme Mouldings has developed the Enviroline Series of environmentally friendly coatings and linings, a range which is billed as “100% South African, made by South Africans for South Africans”. The Enviroline brand composed of high density polystyrene based picture frame mouldings, architectural mouldings and curtain rods.

Enviroline is manufactured from recycled material and is also recyclable itself, meaning that the product range is one of the greenest of its type found within all of South Africa. All Enviroline and synthetic products manufactured

by Supreme Mouldings are made up of 80-100% recycled material, an impressive feat which has only been made possible by setting up its own collection and recycling facilities across South Africa. At these sites the company currently processes about 10,000 m3 of material a month that would otherwise have finished life in landfill.

Within the Enviroline brand are found such other significant subgroups as ‘Enviro Veneer’, ‘Enviro Wood’, ‘Eco skirt’ and ‘Villa Elegante’, all of which have been developed to protect and negate waste of wood, one of the world’s most precious commodities. Supreme Mouldings were the first company in the world to apply real wood veneer to a synthetic substrate and the “Enviro Veneers” are sourced from renewable forests, hugely reducing the number of trees felled to facilitate its production.

PROUD TO BE ASSOCIATED WITH SUPREME MOULDINGS

WWW.SUPREMEMOULDINGS.CO.ZA

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OASIS WATER

Taking Finest Quality Purified And Oxygenated Water

Where It Is Needed Most PRODUCTION: Karl Pietersen

It may sound ironic that Oasis Water, South Africa’s water franchising specialist, continues to expand and grow in a time when the country’s supply of water is at an all-time low. Strict water saving measures are in force but Oasis Water is thriving. With more and more enquiries for franchise opportunities coming every day, it is clear that Oasis Water has become a trusted name when it comes to delivering water where it is desperately needed.

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“If there was ever a time when we should be working together as a people, this water crisis is the time when we should all join hands and make sure that we address this water challenge that we now face,” stated Cyril Ramaphosa as he addressed a Cape Town crowd while commemorating Nelson Mandela’s release from prison in February.

The ongoing water crisis has

received international attention thanks to its severity, with the local government threatening that the taps would run dry if extreme water saving measures are not taken up by all. ‘Day Zero’ is the rather apocalyptic term used to describe the date when reserves in the regions six-dam reservoir system reach 13.5%. The effects on the city if Day Zero arrives will be undeniably catastrophic. Water shortages,

sanitation failures, disease outbreaks and anarchy due to competition for scarce resources have been outlined by Cape Town’s head of disaster operations as major concerns.

But, following a major public and private water savings drive, Day Zero has been pushed out to August 2018 with some residents claiming that, with ongoing hard work, the city will not reach

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the dreaded dry out.

Should Day Zero arrive, Capetonians will only be entitled to 25 litres per day and the taps, which have already been depressurised, will be turned off completely.

This has led to a run on the stores for bottled water and fill ups of storage tanks.

While the big retailers have struggled to meet this demand, and specialist water outlets have quickly become overwhelmed, there is one company that has continued to serve the needs of South Africans by bringing clean, high-quality, environmentally friendly, sustainable water to communities all over the country. That company is Oasis Water, the specialist franchising operation that sells purified water through a network of more than 280 stores.

Managing Director, Mynhardt Oosthuizen tells Enterprise Africa that

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wherever people need water, Oasis Water can help.

“Water is now more recognised as a valuable commodity and people are starting to treat it with an increased level of respect,” he says.

“All of our franchise stores are still in operation whereas competitors have been closing down because of various operational factors and their dependency on one specific water source. We can bring in water from different water sources and our decentralised model has served us very well in the current situation.”

RESPONSIBLE BUSINESS Oasis Water has displayed its responsible mantra since its founding in 2003.

One of the key elements in its strategy has been using packaging that is environmentally friendly and easily

// WATER IS NOW MORE RECOGNISED AS A VALUABLE COMMODITY AND PEOPLE ARE STARTING TO TREAT IT WITH AN INCREASED LEVEL OF RESPECT // recycled, but Oosthuizen says that overall company culture is now in the spotlight as consumers look for organisations that are trustworthy in all aspects of business.

“Society holds companies responsible for the policies on water and we’ve seen that specifically with waste and recycling policies – people actually

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want to know what you are doing as a responsible company to protect this rare commodity.

“What we see at global level is corporate governance becoming more inclusive at the public level. It’s something that you have to be transparent with.

Companies that produce products and remain quiet on the waste that they produce are now being held to account.

Accountability is pushing business forward in a new direction that we have not seen before.”

Oasis Water’s core business revolves around a refill model which sees customers bring large containers into stores to be refilled with purified water – keeping more than 150 million bottles out of landfill. The company creates sustainable jobs and invests in local community development projects. It’s also committed to having products and packaging tested by accredited bodies to ensure adherence and quality.

But what is driving this intense focus on business ethics and responsibility?

Oosthuizen suggests that it could be down to competition for scarce resources and a mind-set of everyone being a part of the problem and the solution and the feeling of ‘if we have to be responsible with water, so should the companies that serve us’.

“Globalisation and urbanisation means people are moving to the cities and what tends to happen is that there is more people compared to the available water resources and people start to compete for availability of water,” he says.

“Because there are many different spheres in our society, those spheres all compete and if you ask the poorer, they will say water is a basic right and they need uninterrupted access but if you ask a company that is producing, they will say they need water to continually produce products and secure jobs, so we must find a balance. What we’ve seen over the last few years is that Cape Town has managed to reduce its daily consumption by around 50% and even at that level, there isn’t sufficient levels to address the needs of all of these spheres of society.

“I think there is enough water available but it’s the share of water that people are asking questions about.”

FLOWING DEMAND Oosthuizen was quick to explain that Oasis Water does not see the country’s water crisis as a business opportunity and that the company would never look to increase prices or drive demand off the back of the situation. But he did admit that the current problem has had an impact on sales.

“Because of the other water companies closing down, there is demand for clean drinking water and we have had to upgrade our infrastructure and water availability to ensure that we can serve these additional customers.

In some instances, we have seen 100% growth rates but the average is around 50-55% increase in sales.”

MANAGING DIRECTOR, MYNHARDT OOSTHUIZEN

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The company is careful with its resources and does not push resources where they are not necessary; it listens to the feedback from its franchisees and delivers the products that are demanded by a specific community.

“We follow a process in the franchise business called cluster management where we rely on specific knowledge that comes out of communities. We can quickly see that demand in one area is such that availability of water is more important than absolute quality,” details Oosthuizen. “We can then adjust our processes around a specific situation.

In other instances, we hear that certain areas want water but they don’t want it in plastic containers as that is not environmentally friendly. They prefer to refill water in big containers and reuse those containers. Cluster management allows us to tailor make our offerings to customers depending on the knowledge that is available in that community.

“There is no more one size fits all customer requirement, you have to adapt and listen to what customers are saying and what they value. If there is a big push towards a green environment,

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// IN BOTSWANA, WE’VE BEEN VERY SUCCESSFUL AND WE ARE IN THE PROCESS OF ROLLING OUT ANOTHER 10 FRANCHISES THIS YEAR // we must respond to that, and that is exactly what we are doing in the Western Cape,” he adds.

The Pretoria-headquartered company stated last year that it held 23% market share and covered 80% of South Africa while also creeping up into subSaharan Africa. This is still the case in 2018 but the Managing Director expects figures to increase as the company’s store roll-out continues and while the country’s water shortage lingers.

“We still cover 80% of South Africa but we have increased our coverage in Botswana. We will definitely increase

our market share thanks to our brand receiving such a favourable response in the Western Cape.”

MAKING A SPLASH According to a 2013 World Bank report, southern Africa could be set for an increase of two to four degrees Celsius on average temperatures and significantly decreasing average rainfall.

Of course, this would be a major blow for the region’s food producers and a worry for local governments.

Oasis Water has already started its movement into Africa and is now active in Namibia and Botswana and has eyes on Zambia, Zimbabwe, Lesotho, Swaziland and Mozambique. This expansion is good news for the host communities as the Oasis model brings high-quality drinking water and other products, jobs, and community support.

Movement into Africa is often one step too far for SA businesses looking for the next growth frontier but the franchise model operated by Oasis minimises risk.

Botswana and Namibia remain key focus markets for future growth.

“We are still trying to attract the

OASIS WATER

right candidates in Windhoek,” explains Oosthuizen. “In Botswana, we’ve been very successful and we are in the process of rolling out another 10 franchises this year. Candidates have been selected, store sites have been identified, supply chains are gearing up to supply there and training is taking place so Botswana remains a high growth area for us.”

Botswana, like South Africa, is a large country with an irregular spread of large centres and so site positioning is important, alongside carefully planned logistics and supply infrastructure.

“We need to make sure the supply chain is able to deliver products to those new stores,” highlights Oosthuizen. “We work very closely with our suppliers on those projects to develop new transport routes and warehouses to store our products. That happens in the background but on the frontline, we need to ensure we have the right people to operate the franchise in an environment that hasn’t experienced franchising before – we operate in some towns where we are the first and only franchise. It’s a different approach to opening up a standalone store. Those stores we open in Botswana

Victor Costa - National Sales Manager Cell: 0828507682 | Email: victor@petcan.co.za 20 Botha Street, Alrode Alberton, Gauteng South Africa, 1451 | Tel: 011 908 3604

Proud Partners of Oasis Water

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INDUSTRY FOCUS: RETAIL

have to receive the same benefits that we offer local franchisees. Our products and quality and our offering that we take to market, even in the rural areas, are the same as you would receive in a CBD market in the major cities.

“Customers appreciate the quality that we offer and franchisees in Botswana are definitely benefitting from the economies of scale that our business operates. They can go to market a lot faster, they can open stores with or without support, and we regularly travel across the border to facilitate training. The community of franchisees support each other and that local flavour is important.”

STRONG CURRENT IN 2018 Oasis Water’s predicted growth statistics for 2018 are impressive. The company’s extremely strong history, experienced leadership team and exciting product portfolio have resulted in a positive outlook – especially considering that the country’s GDP growth rate remains low.

“We pay a lot of attention to our national growth rate year-on-year and that is sitting at around 9%,” says Oosthuizen.

“Our growth has been very consistent over the past 12 years with around 30 franchise stores opening every year. In the past year, we‘ve had more stores opening up outside of Cape Town so it is not just localised to Cape Town or the Western Cape - Cape Town only

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represents around 8% of our business.”

Another target that the company is successfully achieving is a seven-year plan set out in 2016 to sell one billion litres of water. While ambitious, Oosthuizen is optimistic about the company’s chances of reaching this goal on schedule.

“That was part of our seven year plan and we are now in the second year of that plan but on target to achieve it and everything is going to plan.”

Since last year, the company’s product mix has remained almost the

// WE ARE KEEPING OUR EXISTING CUSTOMER BASE AND ADDING NEW CUSTOMERS EVERY MONTH // same with food products and fruit juices still growing but representing a small portion of revenue. Energy drinks have been a successful growth product for the company.

“We’ve introduced our alternative products on a national scale and energy drinks are where the strong growth is coming from. With small snacks and foods, we’ve found that people are not

associating our brand with those kind of products. They are buying water and energy drinks as they associate us with drinks only.”

The company groups its products two categories: happy and healthy.

Happy includes sugary drinks, carbonated products, energy drinks and all things that ‘make you feel good’. Healthy includes all water-based beverages. “We give our franchisees freedom of choice to stock which types of product suits their community,” explains Oosthuizen.

“What we’ve seen is that there has been an increase in bottled water sales because of our new rebranding exercise.

We followed environmental guidelines with the design and there’s no colourants or anything harmful used in our bottles, they are easy to recycle and appeal to the modern consumer.

“Our refill business remains strong, between 65% and 70% of our business on average. Previously, the division between our bottled and refill business was 70-30 but now that is more like 65-35. We think the reason behind this is customer convenience – people are moving and travelling a lot and bottled water is so convenient.”

The immediate growth focus for Oasis Water in 2018’s second quarter will be on new store openings. Intriguingly, interest in new stores is coming from areas where drought is prominent and this may seem counterintuitive considering the situation – selling water although there is no water supply. But the decentralised supply model operated by Oasis Water is effective across all areas, regardless of water supply issues.

“We are seeing an increase in franchise enquiries in areas where there are water shortages. The stores will open where communities feel there is a requirement for clean drinking water. We will always have our consistent growth but we expect exponential growth in the drought-stricken areas.

“As dam levels drop, the municipal water treatment plants come under pressure to produce water of consistent quality and so consumers turn to the

OASIS WATER

private sector to supplement their water supply with purified clean drinking water.

“We are busy with the roll out in Botswana and then there are some stores opening in the large metros in South Africa.”

LIQUID ECONOMY Oasis Water, like many companies, is one that is seeing an improvement in the business environment of South Africa since the appointment of Cyril Ramaphosa as President of the Republic.

We have previously reported on many intangible feelings since the new President took office but Oasis is seeing actual business confidence numbers improving.

“We definitely see an upswing following his appointment. In general, business confidence is climbing and we are seeing a return to levels that we had before the 2008 financial crisis,” says Oosthuizen.

“We are seeing that right now people are not investing into new projects. People are nervous about their return on investment and the risks involved with big spends. The way that the government views big investment

and the appetite of the private sector is misaligned in terms of time scales.

Political instability has held the country back when it comes to investing into the fourth industrial revolution but when we get the sense that things have stabilised in the political environment for the long-term, you’ll start to see companies invest again.”

But, despite the slow return to regular and significant GDP growth, Oasis Water remains positive about its own development and about the fortunes of South Africa.

“Drought and water scarcity is a reality,” Oosthuizen admits, “but drought is not new to us - it is a country-wide issue and we continue to adapt and find solutions.

“We have changed our marketing and there has been a lot of activity going on and it has been received very well.

We measure it by looking at feedback from franchisees about how many new customers they are receiving. We are keeping our existing customer base and adding new customers every month.

“We are very confident about the

next few years ahead. We have a good plan, good leadership, and we know what we want to do in the technology field. Our customers see value in our products and we have a low turnover on the franchisee side, indicating confidence in the system. We are very positive about new opportunities and there is a real sense of optimism within the leadership team right now,” he concludes.

Indeed, the future for this franchising success story looks bright. It continues to flow across borders into Africa, it continues to deliver a stream of innovative products to customers all over South Africa, and it continues to bring high-quality drinking water to those who need it during these times of shortage.

With new stores opening regularly and growth being achieved every year, this is one business that will not be drying up anytime soon.

WWW.OASISWATER.CO.ZA

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RUSSELLSTONE GROUP

Agricultural Investment House Aims for

5000 Employed by 2023 PRODUCTION: Karl Pietersen

With operations spanning six countries and 26 companies, the growth of the RussellStone Group over the past 15 years has been nothing short of remarkable. This is a seed to shelf, farm to fork agricultural sector leader that acts as an example to the wider industry. CEO, Russell du Preez tells us more about the organisation’s plans for further African expansion.

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Agriculture is one of the oldest industry sectors in the world and farming is widely regarded as one of the oldest occupations. But there is a new wave of technology and innovation that is turning this age old profession into a modern goliath of an industry – especially

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in Africa where a major portion of the world’s population sits, and where a major amount of consumption is happening.

The World Bank reports that agriculture is responsible for 65% of the continent’s work force and 32% of GDP. By 2030, the agricultural market will be

worth a reported $1 trillion and the ability of Africa’s farmers to meet demand for food will be vital in ensuring economic development continues.

The large farming and agriculture companies are often closely scrutinised as stakeholders look to

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INDUSTRY FOCUS: AGRICULTURE

ensure that food production and job creation is maximised but ethical principles are also strictly adhered to.

One of those large businesses is the Pretoria-based RussellStone Group. Founded 15 years ago, this agri-focussed, total-value chain expert is looking forward to a connected future that is sustainable and steeped in technology.

“The growth of technology is one thing that makes me so excited about Africa - there is no legacy of bad technology here,” CEO, Russell du Preez tells Enterprise Africa. “We have seen that people can transform. We will be a wireless continent; we will not have electricity travelling over thousands of kilometres, we will be using sustainable electricity without a grid. Now, Africa has one billion of the world’s seven billion total. In the next 50 years, Africa will have four billion of the world’s 10 billion people. This will make for a totally different future for the continent.

“We believe technology will gain exponentially in Africa. People are the biggest asset of any community and when every single person has a wireless phone that is constantly connected – that will have a huge impact,” he adds.

One of the key results of an increase in the use of technology is the amount of specialist information now available to farmers. Cloud computing, open-source software and digital tools have helped to smooth operations, and aerial imagery from drones or satellites, weather forecasts and soil sensors are allowing for planning like never before. Financial service providers are also coming with tools that help even the smallest of agricultural businesses – money transfer, communication services, savings and investment opportunities, and general financial inclusion have helped farmers and farming communities to become increasingly involved with a wider audience.

The RussellStone Group owns

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more than 25 companies across six countries, and employs more than 1000 people. The group touches the entire value chain, moving with product from seed to shelf, and often even further. In a time where ‘farm to fork’ is a trend for consumers, this is one of the only businesses that can truly claim to be vertically integrated in such a way.

“We are an agricultural value chain player and we’ve been around since 2003,” confirms du Preez. “Myself and a partner started the business; we started out with just a handful of people and today we’re up to 1000 + people. We do everything from genetics right through to retail. That’s animal genetics and plant genetics, and includes trading, planting, logistics, processing, crushing, refining of oil, bottling and retailing. On the animal side, we do genetics, we do farming and we do the trading. We are fully equipped with an abattoir and a processing plant which produces bacon, ham and other meats, and we sell to retailers and directly to customers.”

RussellStone Group is an investment house and centres its drive around a ‘commitment to uplifting all people and their communities by encouraging them to make career choices based on passion and commitment’.

The group brings scale, finance, experience and motivation when it makes acquisitions, and this is what has helped the business to grow across not just Africa but also as far as the USA, Argentina and Australia.

Technology helps this mammoth business stay connected. “We work across the total value chain across the entire SADC region,” details du Preez. “We have farms in Mozambique, Swaziland, South Africa, Zimbabwe, Zambia and we grow all kinds of crops.

“We have chickens in Australia, pigs in South Africa, we have big processing capacity in SADC, we have capacity for crushing of soya beans –

around 250-260,000 tons per year, we crush around 60,000 tons of sunflower seeds per year, and we trade around one million tons of grain.

“We’re very excited about the demographics of Africa, it’s not going to be easy to grow as it’s not an easy place to operate. The political instability and stupidity is unbelievable sometimes and this makes for a volatile environment but we can’t control that. The continent’s demographics mean there is large demand for foods and we have plans for the long-term. We are not building a one generation family business, we are building as a company that can make a difference in society by creating sustainable jobs,” he adds.

// RussellStone Group companies include: Primary Agriculture • Willow Creek • Southern Hemisphere Seeds • IBIS Piggery • Grainvest Farming • Donnybrook Poultry • Granary Normandien • KMF Sugar Risk Management • RussellStone International • RussellStone Treasury • Dalevest • Coalvest • Grainvest Livestock • Grainvest Futures • Grainvest Physicals • In2Fresh • iMPAC • Smoke and Wild Agro-Processing & Logistics • United Refineries Ltd • RussellStone Protein • Ingogo Mills Group • Grainvest Oil • Elangeni

INDUSTRY FOCUS: AGRICULTURE

// THERE ARE CERTAIN CROPS THAT ARE ‘NO BRAINERS’ FOR THE FUTURE SUCH AS AVOCADOS WHERE WE ARE SEEING CONSTANT GROWTH IN CONSUMPTION // MEETING DEMAND WITH SUPPLY South Africa itself has a population that is growing at around 2% each year according to the WWF. And within this population, consumption trends are ever-evolving. One of the latest foodtypes that is gaining huge momentum, both locally and internationally, is the avocado. Recognised as being a fantastic source of fibre, healthy fats, antioxidants, potassium, and many nutrients and vitamins, the avocado has become a symbol of the modern healthy-eating lifestyle. Thought to have originated in Mexico, the avocado comes from the Lauraceae flowering plant family. Conditions in certain areas of South Africa are ideal for growing this in-demand fruit.

“We definitely think that there are certain crops that are ‘no brainers’ for the future such as avocados where

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we are seeing constant growth in consumption,” says du Preez while discussing plans for increasing the group’s crop portfolio. “We really believe this is an interesting crop that we would like to expand over the coming years.

“We have migrated towards more intensive farming of wheat, maize, soya bean, pecans, sugar and we are now starting to plant avocados.”

RussellStone Group companies will also be tasked with developing the company’s protein business.

Already a strong supplier of plant-based proteins, du Preez is keen to bolster the group’s meat contribution of this vital foodstuff.

“With pork, we believe this is a very cheap protein for Africa and the potential is huge,” he says.

“We are reshuffling the portfolio and moving more towards protein.

We have always been big in plant proteins but we will be moving more into animal protein. We are developing our pork business, especially north of South Africa.”

The group’s geographic spread will help it with this reshuffle as South Africa’s regional soil types are vastly different. Just 12% of the country’s land is classed as fertile – suitable for rain-fed crop production - and only 3% is regarded as land with high potential.

However, more than 50% of land is suitable for grazing and livestock farming is a large and established part of the industry. A Trade Probe in 2015 found that South Africa is consuming more pork than it produces meaning the opportunities detailed by du Preez are real.

When it comes to fruit and vegetable farming, the current concern for South Africa is water. The country’s water crisis has had a major impact on the ability of agricultural companies to operate at full capacity. But, following ‘Day Zero’ in the Western Cape being

RUSSELLSTONE GROUP

pushed back, du Preez looks beyond the short-term and is planning the next fruits to add to the portfolio.

“There are many crops that we are looking at but it is regionally based and dependent on micro climates. Right now, we are excited about macadamia nuts; it’s a growing product in the nut group and is relatively unknown in Africa compared to cashews and almonds. It’s an easy transport, highvalue crop and we believe it is an exciting product.

“Obviously, we see a growth in apples into the region. It’s a very healthy meal that can be eaten in the street so we think there is potential as there are only a limited number of varieties that can be grown in Africa. However, you need cold units and infrastructure to

// WITH PORK, WE BELIEVE THIS IS A VERY CHEAP PROTEIN FOR AFRICA AND THE POTENTIAL IS HUGE //

Victor Costa - National Sales Manager Cell: 0828507682 | Email: victor@petcan.co.za 20 Botha Street, Alrode Alberton, Gauteng South Africa, 1451 | Tel: 011 908 3604

Proud Partners of RussellStone Group

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// WE WANT TO DOUBLE THE BUSINESS IN THE NEXT FIVE YEARS. WE’D LIKE TO HAVE 5000 PEOPLE BY 2023 // succeed with apple production.

“We see big growth in mandarins or easy peelers. Seedless grapes are also growing; the trends come and go so quickly and we have to be swift with our varieties. We see a lot of blueberries being planted all over the region, mainly for export, and there are so many other crop varieties being successful.”

AFRICAN EXPANSION Already with a presence across a number of African markets, the RussellStone Group is keen to exploit opportunities in the various very fertile, and quickly growing markets. Without doubt, any chance that could add value to the group’s operation will be

explored and, where suitable, land and business will be acquired.

“We believe agricultural land should be a part of our portfolio and we like to keep 20-25% of our portfolio as land. We buy land on a freehold basis and look to benefit from capital gains while understanding that our revenue comes from a combination of sources,” explains du Preez.

“The one country that excites us, and that will be a big turning point for us, is Zimbabwe. It’s exciting politically and it has fantastic micro climates. I definitely see that country as one that now has brilliant opportunities to rejuvenate its agriculture area.

“Tanzania has opportunities but is

not a place where we would invest right now because of politics. Country’s like Uganda and Ethiopia are interesting. We are focussed on Southern and Eastern Africa and don’t go to Western or Central Africa because of the language barrier.”

These ideas are exciting, particularly in Zimbabwe where RussellStone is active through United Refineries, as investment from the group can result in fast creation of large numbers of sustainable jobs, which in turn feeds consumption. Previously, new President Emmerson Mnangagwa has singled out agriculture as an industry with the ability to turn around this ailing economy.

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RUSSELLSTONE GROUP

“In Zimbabwe, there is 90% unemployment and we are part of the 10% supplying jobs and paying people on time, every month. We are also contributing to taxes and economic activity,” reminds du Preez.

How has RussellStone managed to excel in Africa, especially across a number of different countries with different cultures, regulations, laws and land types? du Preez puts it down to a philosophy of always solving the problem of the customer or consumer.

“Our attitude of service separates us from the limited competition we face in Africa. We subscribe to several industry best-practice philosophies such as Blue Oceans and Purple Cows.

Our attitude and approach is all about the customer being key – he isn’t always right but he is key.

“We only care about what the customer and consumer wants.

Throughout history, you’ll see that successful companies work to solve problem of their customers rather than push their own agenda – even in the bible it says you must give before you receive,” he says.

AMBITIOUS BUSINESS With many South African businesses buoyant following the appointment of a new president – a man who is business friendly, keen on job creation and rooting out corruption – now seems to be a time when businesses are considering their future growth strategy, rather than looking over the shoulder.

RussellStone has always been an ambitious, forward thinking business and du Preez says that several growth options are now under consideration.

“We have two models,” he starts.

“We are not scared to do greenfields and we have completed a number of greenfield projects through our history. We are not a normal private equity investor. We run what we call a managed private equity model.

We don’t buy a company and sit on the board and only worry about

compliance and finance – we go in and buy and then manage. We grow organically but you cannot double the size of a business without mergers and acquisition.

“We believe we have a superior culture to any other business and so we would not merge unless we could spread that culture.”

In the period October to December of 2017, Stats SA reported that the country’s economy grew by 3.1% - a marked improvement on previous quarters since 2016. Agriculture registered the highest growth at 37.5% quarter-on-quarter, although the expansion was slower than in July to September when the sector expanded 41.1%. Perhaps now is the time for agricultural businesses with scale and experience to come to the fore and lead the country, and region,

on a path back towards meaningful economic growth.

And proving the ambition of this determined and aspiring CEO, du Preez details his goals for the next five years: “We want to double the business in the next five years. We’d like to have 5000 people by 2023. We enjoy what we do, it gives us a real kick to contribute to society and pay people’s salaries.”

The RussellStone Group is passionate about building world class companies and is actively seeking growth opportunities. Find out more about how to get involved: www.russellstone.co.za

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TRANSTECH LOGISTICS

Logistics Solutions to Connect

Southern Africa PRODUCTION: William Denstone

Founded in 1997, Transtech Logistics is Southern Africa’s freight specialist and offers comprehensive and integrated solutions throughout South Africa, Zimbabwe, Zambia, Mozambique and its country of origin, Malawi.

//

Having perfected its comprehensive, integrated and total freight transportation solutions over the past 20 years, Transtech Logistics stands as Southern Africa’s freight specialist.

Its services span collection, clearance and delivery, with the company having honed the craft of conveying all kinds of cargo. This can include break bulk, containerised, hazchem and abnormal freight, in addition to its regular

transportation of a vast assortment of other commodities, as Managing Director Ufulu John Loga sums up with an insight into the exhaustive list of products Transtech carries.

“We move food, agricultural chemicals, farming implements, steel, fertilizer, maize, groceries, cotton, tobacco, timber, paper, grain and many other goods,” he explains. “Our product portfolio is diverse and that helps us gain new business and spread risk.”

AN EYE ON EXPANSION Since its founding, Transtech has achieved rapid and sustained growth, overseen in recent years by Loga, who gives an idea of the operational scope now at the company’s disposal.

“We have around 140 people and 100 trucks in our fleet,” he outlines. “We do have plans to expand this further, but this is of course dependent on how the economic situation develops.

Although we have seen reductions in

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INDUSTRY FOCUS: LOGISTICS

spending from some customers due to the current uncertainty, we have managed to remain successful thanks to our versatility, operating in different countries and different industries.

“We don’t look at ourselves as simply a transporter or a logistics firm; we are a complete service provider,” is how Transtech Logistics’ business manager Chokani Mhango sums up the company’s approach to this diverse scope of capabilities. Transtech’s wish to facilitate its customers’ entire supply chain - meeting the demand for both manufactured products from South Africa and beyond, as well as various raw materials and agricultural products from southern Africa - is one of the central pillars underpinning its enduring success.

As Mhango himself underlines: “We are positioning ourselves in this very exciting space, where we are able to connect our southern African clientèle, with both SA and international manufacturers, and at the same time connecting agricultural exporters in

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// WE HAVE MANAGED TO REMAIN SUCCESSFUL THANKS TO OUR VERSATILITY, OPERATING IN DIFFERENT COUNTRIES AND DIFFERENT INDUSTRIES // Malawi, Zimbabwe and so on with our international customers.

“That’s why our slogan is ‘Connecting the African Continent’.”

AMPLE OPPORTUNITY The transport logistics industry in Africa, and particularly in South Africa, is developing quickly, which brings with it numerous new opportunities for companies like Transtech to turn into profitable business streams. On the flipside, it is positioned to employ its skills and experience to overcome the inevitable challenges which accompany any such opening. In its ‘Addressing the Challenges of Transport Logistics in South Africa’ publication, Belfreight underlines the

critical importance of this sector to a country’s prosperity.

“It’s no exaggeration to say that cargo logistics is the backbone of any country,” it concludes. “Logistics services are responsible for bringing our food, drinks and other consumer goods to supermarket shelves.

Logistics is also how we get the petrol that goes in our cars, and how South Africa as a growing economy is able to participate in the world economy through imports and exports.” This is good news for Southern Africa as a whole, but South Africa in particular, which tops the list of the most developed transport and logistics sectors in Sub-Saharan Africa, placing it on a par with some of the world’s leading industrialised countries.

TRANSTECH LOGISTICS

SOUTH AFRICA’S STRENGTHS Other findings of PwC’s ‘Africa gearing up: Future prospects in Africa for the transportation & logistics industry’ report revealed South Africa to be regarded as the best performer in Africa when it comes to trade facilitation logistics, and among the best in terms of its transport infrastructure. “As Africa has risen to prominence as an investment destination over the past few years, so the role of transportation and logistics has taken on greater significance,” asserts Klaus-Dieter Ruske, PwC Transportation & Logistics Global Leader.

“Whether moving resources off the continent or bringing goods and services into its burgeoning economies, Africa’s future growth and development will depend on the quality of its infrastructure and the efficiency of its transport networks.

“There is a fast growing demand for the vast raw commodities available on the African continent.

Africa has an abundance of oil, gas, and mineral resources and significant opportunities for agricultural expansion. For logistics companies prospects in the retail and manufacturing sectors are also significant and lead from a period of sustained growth experienced by many African countries,” adds Andrew Shaw, PwC Transport & Logistics Leader for South Africa.

PERSONNEL IS KEY “Today, we have one of the largest and most advanced fleets in Malawi.

Because of this, we take a large share of the market,” Loga begins by way of conclusion, as expansion moves closer to the forefront of Transtech’s thoughts. This is all meaningless, of course, if a company’s staff does not possess the skills required to maximise the resources at its disposal, which is why attracting the right people forms such a key element of the company’s strategy.

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// IT’S NO EXAGGERATION TO SAY THAT CARGO LOGISTICS IS THE BACKBONE OF ANY COUNTRY // It is particularly important with the logistics industry’s reputation for being so labour intensive.

“As management, we strive to create a corporate work environment that is second to none,” explains Chokani Mhango. “Our recruitment policy endeavours to attract highly qualified individuals with a passion for this industry and we, in turn, strive to provide our personnel with a very exciting and challenging corporate environment that promotes free thinking, career growth and selfimprovement.

“As a very wise person once told me, a person who graduates today and stops learning tomorrow

is uneducated the day after,” Mhango says, of the need to ensure that employees feel engaged and satisfied beyond the simple receipt of a salary. “In the global economy that we’re in today, we’re faced with new ways of conducting business on a daily basis and it is therefore critical that our teams are up-todate with latest systems, the new procedures, the different regulations and all the new opportunities that business of today demands.”

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CSIR

Bioscience to

Catalyse African Development PRODUCTION: Karl Pietersen

The Council for Scientific and Industrial Research (CSIR) is South Africa’s preeminent science and technology organisation. Working to develop the uses of modern sciencebased projects throughout the South African economy, the CSIR also reaches into Africa.

Bioscience is a key focus and primary strength for this industry-shaping organisation. www.enterprise-africa.net / 105

INDUSTRY FOCUS: SCIENCE & TECHNOLOGY

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It has been a stellar year for South Africa’s CSIR (Council for Scientific and Industrial Research). Back in February 2017, the organisation welcomed its new CEO, Dr Thulani Dlamini who took the reins from long-serving Dr Sibusiso Sibisi.

Thulani’s short tenure has so far been a success and the reputation and results delivered by the organisation have been positive. Dlamini had previously been employed by the CSIR before leaving to head up Sasol in 2011. On his return, he said: “I am excited about my return to the CSIR to take forward the excellent work of my predecessors. I look forward to working with our partners and the brilliant minds in the organisation.

“The CSIR is well positioned to have an impact beyond South African borders and it is my hope that together with our global partners, we can deliver on the mandate of the CSIR to use science, engineering and technology to advance society and industry.”

And the future looks bright for the CSIR – this is a science and technology player with no rival in Africa, and a world-class operational set-up that delivers like no other.

Perfect examples of South Africa’s science and tech leadership

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// THE CSIR IS USING INNOVATION TO CONTRIBUTE TO ECONOMIC GROWTH AND THUS ASSISTING IN THE FIGHT AGAINST POVERTY, INEQUALITY AND UNEMPLOYMENT // credentials come in the form of the SKA project, the Robben Island Microgrid, the Lodox full body scanner, and the Cape Ray Medical Aceso system. Today, there is no doubt that the Rainbow Nation is among the world’s prominent scientific contributors.

Bio-science has been in the spotlight recently at the CSIR, as the organisation is keen on cementing its position as a key contributor to three very important industry sectors: health, agriculture and industrial environment.

On the development of the country’s Bio-economy strategy (a DST and wider South African policy strategy), former-Science and Technology Minister, Derek Hanekom said in 2013 that ‘science and technology are crucial to South Africa’s development’.

‘We developed the National Biotechnology Strategy (2001) to initiate the development of

technologies and associated products and services that would address the science-based innovation needs in the health, industrial and agricultural sectors of the economy.’

The Bio-economy strategy outlines key mechanisms for coordinating innovation efforts, ensuring that role players can contribute – rather than compete – for opportunities, resources and outcomes.

The most recent expansion of the country’s bio-focus is the BioManufacturing Industry Development Centre – a Pretoria-based operation tasked with supporting small, medium and micro enterprises (SMMEs) involved in bio-manufacturing in meeting their customer needs within short time-frames and be able to exploit market opportunities. the centre was opened by then-Science and Technology Minister Naledi Pandor in 2016.

Dr Boitumelo SemeteMakokotlela outlined the involvement of the CSIR division that she heads up, Biosciences. “The Bio-economy strategy speaks of three very important pillars of R&D, that is the health sector, agriculture, and the industrial environment,” she said.

“At CSIR biosciences, we play a role in each of these areas and what the BIDC programme enables us to do is to package our knowhow and proprietary technologies under this programme and avail it to the broader NSI (National System of Innovation).”

Biosciences is a significant CSIR division and is tasked with developing innovative and cutting-edge tools and products for the life sciences sector that deliver socio-economic benefits.

CSIR

EVIDENCED SUCCESS The CSIR was formed in 1945 and was originally focussed on radar, electronic warfare measurement, test and evaluation processes. Dr Basil Schonland was the organisations first President. In 1954, the CSIR developed the tellurometer, a land-surveying tool, which revolutionised the industry around the world, making South Africa a manufacturing hub for the next quarter century. In 1965, the Heavy Vehicle Simulator was developed by the SA team, helping organisations around the world to determine the effects of heavy traffic on road surfaces and earning SA hundreds of millions of FDI. Through the 60s and 80s, the CSIR contributed heavily to ocean research and played a major role in the development of modern lithium ion batteries. By the

early 80s, despite the country’s tense political situation, the CSIR remained a big-name science player offering solutions in healthcare (specifically in the development of the bollard – used to help repair cruciate ligaments in the knee) and aerodynamics (developing the medium speed wind tunnel). In 1997, the CSIR was involved in bringing commercial internet services to South Africa after it sold its Worldnet Africa and Compuserve divisions to MIH, forming MWEB. From the turn of the century through to today, the CSIR has developed a number of technological solutions that have gone on to enter countries all over the world, solving everyday problems and advancing industrial processes, health care, education, food and agriculture sectors.

Now, the organisation employs

more than 2700 people and is a worldrenowned contributor to research journals. It’s six offices around the country (Pretoria, Johannesburg, Durban, Cape Town, Stellenbosch and Port Elizabeth) help to generate more than R2.7 billion in total operating income.

In March, the DST and CSIR announced the launch of its latest asset designed to help deal with biomass waste challenges. A R37.5 million biorefinery facility at the CSIR’s site in Durban, which is the first of its kind in South Africa, is set to extract maximum value from biomass waste. Once again, the CSIR and the country demonstrated its science and technology leadership status following the release of a ministerial review report which highlighted several challenges for the NSI. New

Brett van Aswegen - CEO

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// THE CSIR BELIEVES THAT IT CAN CONTRIBUTE TO INNOVATION IN AFRICA AND JOINTLY TACKLE CONTINENTAL SOCIETAL CHALLENGES THROUGH COOPERATION IN SCIENCE, ENGINEERING AND TECHNOLOGY // Science and Technology Minister, Mmamoloko Kubayi-Ngubane opened the Biorefinery Industry Development Facility (BIDF) and said: “A key recommendation of the report was for government to put in place effective measures and mechanisms to attract the private sector to invest in R&D and innovation.”

Thulani Dlamini added: “The BIDF is accessible to large industry and SMMEs for their research and development, analytical and pilot scale testing, evaluation, processing and development of technologies for processing biomass. Some of the

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equipment at the BIDF is unique in South Africa. The facility is home to highly-skilled chemists, engineers and biologists who are well-versed in technologies for beneficiation and valorisation of biomass.

“Our mandate requires us to use science and technology to contribute to scientific and industrial development, which will improve the competitiveness of the South African industry and also create new industries. The CSIR is using innovation to contribute to economic growth and thus assisting in the fight against poverty, inequality and unemployment,” he said.

BIO FUTURE In 2016, the importance of the biosciences industry in Africa was highlighted in a report by SciDev. Net, a leading news and analysis source, which reports in no doubt that biosciences are key to sustainable growth and development on the continent.

While covering the International Livestock Research Institute’s Biosciences eastern and central Africa Hub (ILRI) 15th meeting in Kenya, SciDev.Net found a clear message emanating from all sources: ‘Africa’s growth requires increased investments to harness biosciences as a tool for

CSIR

MINISTER SCIENCE & TECHNOLOGY, MMAMOKOLO KUBAYI-NGUBANE - PHOTO (GCIS)

sustainable development’.

The CSIR reaches into Africa, and its biosciences department continues to play a role, especially in the agriculture industry, helping to create a food-secure continent.

“The CSIR believes that it can contribute to innovation in Africa and jointly tackle continental societal challenges through cooperation in science, engineering and technology,” said Thulani Dlamini. “We continue to work with our partners in countries such as Mozambique, Namibia, Rwanda, Tanzania and Zambia, just to name a few. The projects include point-of-care diagnostics to speed up the control of infectious diseases in livestock, adaptation strategies to ensure that road systems are more resilient in the face of climate change and the use of laser technology in a multitude of fields.”

These areas of development form just one driver behind the growth if the BIDC programme.

Since inception, the BIDC has supported a number of start-up businesses and is incubating others, in an effort to be the leading centre that translates biosciences discoveries into products and technologies with impact to industry and society.

In partnership with the DST and South Africa’s Jobs Fund, the CSIR has helped companies including OptimusBio, ConnectMe, ReSyn Biosciences, Linda Aromas, Bio-One, Phepisa and many more to grow an create jobs, furthering the influence of biosciences in South Africa.

This vital sector is going to shoulder more responsibility in the future, and as such it is always on the lookout for people who can add to its already sterling reputation. The

impact of the CSIR, and its biosciences division, over the years is undeniable, and now is the time to support the efforts being made across its many competency areas.

“The CSIR is built on a heritage of research excellence,” detailed Thulani. “Through our work, we have demonstrated a commitment to pushing boundaries in our quest for excellent research and technological innovation leading to industrial and scientific development. Ultimately, all this should contribute to improving the quality of lives of the people of South Africa, our main stakeholder.”

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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.

INDABA 2018 MAY 08 | DURBAN Africa’s Travel Indaba is one of the largest tourism marketing events on the African calendar and one of the top three ‘must visit’ events of its kind on the global calendar.

It showcases the widest variety of Southern Africa’s best tourism products and attracts international buyers and media from across the world. Africa’s Travel Indaba is owned by South African Tourism and organised by Synergy Business Events (Pty) Ltd. Africa’s Travel Indaba has won the awards for Africa’s best travel and tourism show. This award was presented by the Association of World Travel Awards.

FOOD & HOSPITALITY HOSTEX AFRICA 2018 MAY 06 | JOHANNESBURG In today’s foodservice, retail and wholesale space, Food & Hospitality Africa Is a gateway to the African market. With a footfall of over 6 600 of visitors over three days in 2017 – more than 80% of whom make or influence decisions – innovation is at the top of the shopping list.

Booking a stand at Food & Hospitality

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Africa powered by Hostex is an opportunity to tap into Africa’s potential through five shows under one roof where thousands of innovative products are showcased.

Make sure yours is one of the hundreds of brands they connect with at Food & Hospitality Africa 2018 taking place at Gallagher Convention Centre from 6 to 8 May 2018.

BUILDEXPO AFRICA - KENYA 2018 MAY 03 | NAIROBI Buildexpo Africa is the only show with the widest range of the latest technology in building material, mining machines, construction machinery and heavy equipment. At the 21st edition of Buildexpo, East Africa’s largest building and construction fair, we bring you exhibitors from over 40 countries who are the finest in infrastructure development.

Find what suits you best from about 14.3 million business prospects during the three-day event, with over 10,000 products, equipment and machinery on display across an expanse of more than 10,000 square meters. Last year’s event witnessed international pavilion participation from India, Turkey, China, Italy, Malaysia and Germany.

BUILDEXPO AFRICA - KENYA 2018 Kenyatta International Conference Center MAY 03 – 05 FOOD & HOSPITALITY – HOSTEX AFRICA 2018 Gallagher Convention Centre MAY 06 – 08 LAGOS MOTOR FAIR 2018 Federal Palace Hotel MAY 07 - 12 INDABA 2018 Durban ICC MAY 08 – 10 AFRICAN UTILITY WEEK 2018 Cape Town International Convention Centre MAY 15 – 17 AUTOEXPO AFRICA – KENYA 2018 Kenyatta International Conference Center MAY 17 - 19 SECUREX SOUTH AFRICA 2018 Gallagher Convention Centre MAY 22 - 24 AFRICA HEALTH 2018 Gallagher Convention Centre MAY 29 - 31 EAST AFRICA OIL & GAS – KENYA 2018 Kenyatta International Conference Center MAY 29 – 31

connect your future

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Plessey is a company with a distinguished heritage and an exciting future. Founded almost a century ago in 1917, Plessey has been operating in Africa for over 50 years and continues to thrive in a rapidly changing industry by anticipating trends, evolving and expanding its service offerings to meet client needs.

Plessey offers a broad range of end-to-end integrated solutions to connect you to the future.

Our Mission To connect Africa through solutions that demonstrates Innovative thinking and best practice, that reflects in the structures we build, the technology we provide and the way we support and manage it for our clients.

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Tel:+27 (0)11 655 1700 | Fax:+27 (0)11 655 1700 | Email: Info@plessey.co.za | Web: www.plessey.co.za