AFRICA
THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS
June 2018
www.enterprise-africa.net
AFGRI: Africa’s Agricultural
Partner for Life Exclusive interview with Tinus Prinsloo (CEO) and Jacob de Villiers (CFO)
ALSO IN THIS ISSUE:
SATIB / Tintswalo / Table Charm / Chemprotech
THE JOURNEY TO AGRICULTURAL SUCCESS STARTS WITH A TRUSTED PARTNER
GRAIN MANAGEMENT EQUIPMENT UNIGRO FINANCIAL SERVICES HARVEST TIME INVESTMENTS HINTERLAND
At AFGRI, we strive towards constant progression, growth, innovation and forging our vision for food security in South Africa and the rest of the continent. As your partner in agriculture we provide services across the entire grain production and storage cycle. We offer financial support and solutions as well as inputs and hi-tech equipment, supported by a large retail footprint. With our passion for development we have invested in the development of emerging farmers, through our Harvest Time Investments training programme to foster strong future farmers. AFGRI, a member of the AFGRI Group.
www.afgri.co.za
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 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
//
Last month saw Durban’s Albert Luthuli Convention Centre host Africa’s Travel Indaba. One of the largest tourism marketing events on the African calendar and designed to showcase the widest variety of Southern Africa’s best tourism products, the Indaba focussed the spotlight of travel, tourism and all related industries as drivers of economic growth and job creation. “Africa is indeed open for business, and offers a world of opportunity,” said Tourism Minister, Derek Hannekom. “Tourism growth, and sharing the benefits of tourism, contributes to replacing poverty and despair with prosperity and hope,” he added. His welcoming speech highlighted the sector as one which can change the direction of not only South Africa, but the continent as a whole. “Let’s ensure that tourism makes a positive and meaningful contribution to the lives of all the people of Africa,” he said. So, Enterprise Africa has focussed its June edition around the travel and tourism industry to understand more about how this important industry is growing. We talk to senior figures from SATIB Insurance Brokers, a travel and tourism focussed risk specialist; Tintswalo Lodges, a luxury accommodation business; and Fancourt, a world-class hospitality business on the Garden Route. The message from all is clear, and the same as that given by Hannekom – Africa is open for business. All are unequivocal in their approach; whether it’s domestic or international visitors, all are welcome and all will gain an experience like nothing else on earth. The government is keen to invest in this industry as its potential for creating employment is big. In the past five years, more than 40,000 sustainable tourism-related jobs have been generated, and there is more to come. But, of course, success comes off the back of a stable and attractive political and economic environment, one which President Ramaphosa is trying to install. Tourism is an industry to watch, and one which likely receive more investment in the near future. Tell us about your experiences with travel and tourism in Africa, we’re online @EnterpriseAfri1
Joe Forshaw EDITOR
GET IN TOUCH +44 (0) 20 8123 7859 joe@enterprise-africa.co.za www.enterprise-africa.net
www.enterprise-africa.net / 3
06/NEWS: The News Snapshot A round up of some of the latest news stories from around the country
76/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
10/AFGRI AFGRI: Africa’s Agricultural Partner for Life The journey to agricultural success starts with a trusted partner, and after many years of success on the African continent and further afield, AFGRI has become recognised as a partner that can support all agricultural businesses as they grow. The goal of this sizeable South African business is to drive food security across Africa. CEO, Tinus Prinsloo and CFO, Jacob de Villiers talk to Enterprise Africa about the company’s success.
10/ 4 / www.enterprise-africa.net
CONTENTS
19/
26/
INDUSTRY FOCUS: AGRICULTURE 10/AFGRI AFGRI: Africa’s Agricultural Partner for Life INDUSTRY FOCUS: TRAVEL & TOURISM 19/SATIB INSURANCE BROKERS Booming Tourism Market Boosts SATIB 26/TINTSWALO LODGES Tintswalo Lodges: South Africa’s Hidden Gems 34/FANCOURT Fancourt Targets Families and Adventure Tourists for Growth INDUSTRY FOCUS: DIRECT SELLING 42/TABLE CHARM Table Charm: Making A Difference
42/ INDUSTRY FOCUS: SCIENCE & TECHNOLOGY 51/CHEMICAL PROCESS TECHNOLOGIES (PTY) LTD CPT: A Very Active Ingredient INDUSTRY FOCUS: FOOD & DRINK 58/UNILEVER SOUTH AFRICA Global Brand Continues Delivering Big Brands Into Africa INDUSTRY FOCUS: MANUFACTURING 65/SAPPI Sappi Turns New Page In Vision2020 Strategy INDUSTRY FOCUS: MINING 71/PETRA DIAMONDS Petra Trades Strong In Hard Market
www.enterprise-africa.net / 5
FUTURE GETS BRIGHTER WITH 5G South Africa is preparing for 5G network rollout says Telecommunications and Postal Services Minister Siyabonga Cwele. “The dense and heavy traffic 5G cells will need to be connected to the core network through a backhaul infrastructure, often with extreme requirements in terms of capacity, latency, availability, energy and cost efficiency,” the Minister said while speaking at the 5th Annual 5G Huddle in Durban.
“We’ll use any technology that can give us the requisite speeds and improve access for all. As a country, we are prioritising the rapid deployment policy, where we are harmonising and making it easy for the operators to access the site to deploy ICT infrastructure.” The Minister said SENTECH is exploring a partnership to rollout modern satellite technologies in order to expedite coverage, especially in rural areas.
Earlier this year, 5G trials were conducted successfully during the Pyong Chang Olympics to demonstrate the performance, reliability and use cases for the future wireless technology during a dynamic and high traffic event. 5G will build on the ongoing evolution of 4G technology and will deliver significant technological improvements by enhancing mobile broadband, the massive Internet of Things (IoT) and mission critical services.
R500M INCENTIVE FOR METALS ENGINEERING SECTOR Trade and Industry Minister Rob Davies has announced the establishment of the metals and engineering incentive aimed at stimulating investment in the sector. “This year, we are announcing the sector-specific incentive on the metal and engineering value chain. It will be a R500 million new incentive that will be rolled-out,” he said. The Minister said that in some respects, the department has seen that it gets better value for money in the sector specific programmes. Malebo Mabitje-Thompson, the Deputy Director-General for Incentive Development and Administration, said similarly to the support that is being given to the auto sector, the incentive is aimed at supporting the purchasing of equipment as well as investing in competitiveness enhancing activities of an enterprise. “…and where it also makes sense, we will partner with some of the enterprises for supplier development and the reason we are doing it is that we are looking at the sector more as a value chain rather than just individual companies without looking at the supplier relationships.”
6 / www.enterprise-africa.net
NEWS SNAPSHOT SOUTH AFRICAN WINE CROWNED BEST-BUY AT CHINA INTERNATIONAL FAIR Locally produced Totus Limited Release Pinotage wine was crowned the Best-Buy Award winner in the Still Red Wines category. It was unanimously voted by a panel of Chinese wine experts as the Best-Buy wine in a category of Still Red Wines valued between €4-8 at the 19th edition of the SIAL China International Trade Fair for Food which ended in Shanghai, China. Trajan Wines, producers of the wine, was part of a twenty-threemember business delegation that was taken by the Department of Trade and Industry to China through government’s Export Marketing and Investment Scheme (EMIA) incentive
to showcase local agro-processing products and services. Trajan Wines managing director, Mark van Schalkwyk said the Totus Limited is a Pinotage which is made from a 100% South African grape. “I hope that this vote of confidence from the Chinese will translate into growth in exponential value for this particular wine. This award definitely means we are on the right path if you look at the style of wine we produce for this particular market,” said Van Schalkwyk. He also mentioned that he had since secured a contract with Japanese importer and distributor to export his range of wines to Japan.
ASPEN’S NEW FACILITY TO CREATE MORE JOBS Trade and Industry Minister Rob Davies has launched Aspen’s R1 billion high containment facility that will create over 500 jobs. Launched in Port Elizabeth in the Eastern Cape, the High Potency suite, more correctly called the HCS – High Containment Suite – Unit 4 will lead to the creation of a further 500 jobs. The sterile facility is a partnership between the Department of Trade and Industry (dti) and Aspen. The pharmaceutical company benefited from the dti’s 12I Tax Incentive with a tax credit of about R209 million. Minister Davies said this is a significant investment which is taking South Africa into a new level of manufacturing space and creating the necessary jobs that South Africa needs in the manufacturing sector. “If we look at the pharmaceutical
industry, South Africa’s population is the largest consumer of pharmaceutical products. When we look at some of these statistics, I think we can see that there are huge challenges in that we have a huge trade deficit of around R20 billion. This means we import R20 billion of pharmaceutical products than we export,” said Minister Davies. The Minister said the contribution of manufacturing in the pharmaceutical sector is about 0.48% of South Africa’s Gross Domestic Product (GDP) which plays a small part in the economy and employs about 9,600 people. “I think when we look at the manufacturing value chains in the world, South Africa will be better off if we are involved in the production of value added products, even if it is just basic manufacturing than simply importing.” Group Chief Executive of Aspen,
Stephen Saad, said the company is a serial investor in the South African pharmaceutical industry. He added that the company is pleased that its capital expenditure (Capex) investment into the South African market over the past two years has out-stripped the investments made into the industry over the past decade. “We are pleased that over 90% of the jobs that will be created in the new facility will be local jobs, mostly drawn from surrounding communities such as New Brighton township, these employees go on to become world class, highly skilled people, that can hold their own anywhere and in most facilities, globally. A further aspect of our DNA, particularly in pursuit of creating a better country, is partnering with government where possible,” said Saad.
www.enterprise-africa.net / 7
PLANS TO MERGE SAA, MANGO AND SA EXPRESS South African Airways (SAA), SA Express and Mango are to be merged, Public Enterprises Minister Pravin Gordhan said in May. Briefing media at the Imbizo centre in Parliament on board appointments of State-owned companies (SOCs) in the Department of Public Enterprises (DPE) portfolio, Gordhan said there are plans to merge the three airlines. Gorhan said currently, the three airlines fly to the same destinations. “Bringing the airlines together and rationalising their routes is important. Rationalising the kind of aircraft needed at a particular time and day – that’s the experience we’re beginning to learn from airlines around the world. “Our net guess is that by putting the airlines together, we can go through a transition period where there are going to be difficulties. “If you have something dysfunctional and [you] try to sell it, you will get little for it. The real challenge is putting the right people in the right places both on boards and management teams, and having the right oversight,” he said. The Minister announced the appointment of a new SA Express board, chaired by Mmakeaya Magoro Tryphosa Ramano. He said the new board has a mix of aviation experience, audit and accountancy backgrounds, among others. The Minister said an intervention team at the airline, which has been in “dire straits for some time”, has been put in place. In December 2014, government announced the move of SAA from DPE to National Treasury.
8 / www.enterprise-africa.net
PRESIDENT TO DONATE 50% OF WAGES TO NEW MANDELA FUND
President Cyril Ramaphosa has announced that he will donate half of his Presidential salary towards a soon to be established fund that will be launched on July 18 – the birthday of former President Nelson Mandela. He said the Fund, to be called the Nelson Mandela Thuma Mina Fund, will be administered by the Nelson Mandela Fund. “I have, and this is a private initiative, decided to contribute half of my Presidential salary to a fund that will be managed by the Nelson Mandela Fund. “This is a private, citizen-driven initiative that will ask all of those with the means to contribute a small portion of their salaries to support the many projects to build the nation. “This fund, through discussions that we have had with the Nelson Mandela Foundation, will be launched on the 18th of July to mark the 100th
anniversary of Madiba’s birth,” he said. The President said citizens should put their differences aside and work together in the spirit of nation building. “It is this spirit of Nelson Mandela and Albertina Sisulu, a spirit of solidarity, a spirit of service, a spirit of shared humanity that we should seek to emulate.” The President said, meanwhile, that while there are still challenges, progress has been made in his first 100 days in office to improve the lives of all South Africans. “It is nearly 100 days since we decided, together, to make a clear and decisive break with the discord and division of recent times. “It was a moment at which we made plain our determination to act with urgency and resolve to transform our society, to grow our economy and to create the jobs that our people so desperately need,” he said.
NEWS SNAPSHOT
CELL C ANNOUNCES DEAL WITH MTN Mobile operator Cell C is aiming to give its customers a network speed boost following the announcement of a new partnership with MTN which will see the network provider utilise MTN towers. The deal will see Cell C traffic flow through MTN towers in areas where it is not viable to construct their own towers. Cell C already has a roaming
agreement with Vodacom and it said the MTN deal will have no impact on the existing agreement. “The roaming agreement with Vodacom will continue, with predominantly 2G traffic and limited 3G traffic running on its network. The MTN agreement caters for an extended 3G roaming footprint and access to 4G countrywide,” Cell C CEO, Jose Dos
Santos told Fin24. The deal is set to give Cell C customers who live in rural and semi-rural areas a boost with higher connection speeds, and will ultimately boost the network’s bottom line as more people consume more data. Cell C reported a 6% increase in subscribers to 16.3 million and data revenue of R5.2bn in 2017.
R100M FUND TO HELP SMALL FISHERIES GROW Agriculture, Forestry and Fisheries Minister Senzeni Zokwana says the announcement of a R100 million development fund, sponsored by private sector companies, is set to help small fisheries players who have challenges with access to funding. The Minister briefed media in Cape Town tabling the department’s Budget Vote speech in the National Assembly. “Our understanding is that they are going to make sure that when these small-scale fishermen and women receive their fishing rights – as we are going to launch the small-
scale fisheries policies – sometimes they are not able to exercise their rights to go and fish because of access to funding. “The aim then is to make it easier… We want to make sure that more funding is availed by the private sector and we believe that it is a very good gesture that they have done to make sure that fishing communities can participate,” he said. “Government has invested considerably in agriculture to create a favourable and supportive environment for the farming community, particularly subsistence
and smallholder producers. “This includes the support provided by the development financial institutions (DFIs). However, this support has not translated into meaningful participation of black producers in the agricultural, forestry and fisheries value chains. As a result, these sectors remain untransformed over 20 years into our democracy.” Zokwana said this meant that more focus should be given not only to support smallholder production, but to increase the number of black commercial producers.
www.enterprise-africa.net / 9
AFGRI AGRI SERVICES
AFGRI: Africa’s Agricultural
Partner for Life PRODUCTION: Manelesi Dumasi
The journey to agricultural success starts with a trusted partner, and after many years of success on the African continent and further afield, AFGRI has become recognised as a partner that can support all agricultural businesses as they grow. The goal of this sizeable South African business is to drive food security across Africa. CEO, Tinus Prinsloo and CFO, Jacob de Villiers talk to Enterprise Africa about the company’s success. 10 / www.enterprise-africa.net
INDUSTRY FOCUS: AGRICULTURE
//
Not many companies can boast 95 years of success in agriculture – a hard industry that requires constant focus and attention to detail, as well as extensive knowledge and local expertise. But for AFGRI, formed in 1923 as a coop-style operation, the past nine and a half decades have brought major triumph. The company has grown from a smaller regional farming business to become a major force in the continent’s agricultural sector, with operations spanning the entire value chain. The AFGRI reach has also expanded into other nations. AFGRI Agri Services is the servicefocussed arm of the business that looks after everything involved in farming that is not food. The services offered by this division of the wider AFGRI business were consolidated in April 2017 after the group completed a reorganisation programme, as CEO Tinus Prinsloo explains. “We regrouped all of the companies within the organisation. Obviously, we had many companies and we decided to group them into investment companies that deal directly with the farmer and other companies that deal in the food business. Everything related to the farmer, whether it’s insurance or finance or grain management or retail or equipment or emerging farmer business, is now all grouped together. The foods business; which includes edible oils, animal feeds, milling etc; that is the second group.” This structural reshuffle came into place on April 1 2017 and Prinsloo says
// WE HAVE A SIZEABLE BUSINESS IN WESTERN AUSTRALIA AND IT’S CLOSE TO THE SIZE OF OUR BUSINESS IN SOUTH AFRICA // 12 / www.enterprise-africa.net
that AFGRI has felt very little change. “For our side, not much has changed” he says “but on the food side, they are actively now seeking new opportunities and mergers across the whole of Africa. We as AFGRI are already active in Africa and so the regrouping was important; everything now makes more sense.” The reorganisation is the latest milestone for the company which de-listed from the JSE in 2014 before making several important acquisitions in 2016 and 2017. A PAN-AFRICAN AGRI BUSINESS AFGRI Agri Services is active across several Southern African nations. This is largely down to its agency deal with John Deere to distribute its famous and highly valuable machines. “For the equipment business, we are active in Botswana, Zimbabwe, Zambia and Ghana,” says Prinsloo. AFGRI gained the agency agreement with John Deere in 1962, and in 1963 sold just 28 tractors. By 1972, the company was selling more than 500 each year. Growth from this part of the business is helping AFGRI to gain an international reputation as it solidifies its position in Australia. “The big new initiative for the equipment business is Western Australia,” details Prinsloo. “We’ve been active there for a number of years but in the last three years, we have expanded
that business substantially. There were five John Deere agencies in Western Australia, of which we were one and we have taken over three others leaving just one more. If we take that business, we would have consolidated the whole of Western Australia. That business is really performing well and we will try and take the last business in the next 12 to 18 months, when it suits us and the seller.” AFGRI Equipment has a network of 40 strategically located branches through which it supplies tractors, combine harvesters, planters, balers, sprayers, mowers, spreaders, graders, loaders, post-hole diggers and GPSbased precision agricultural and potato equipment. AFGRI entered Western Australia in 2004 after the purchase of T & H Walton Stores. Soon after, AFGRI acquired several other businesses including Ratten & Slater, Greenline Ag and Jolly and Sons, to further broaden its Australian reach. The acquisition of the final John Deere distributor in Western Australia looks set to happen at some point in the near future and will make for a streamlined approach to the region for John Deere, but Prinsloo says it will happen when it is suitable for both parties. “We will wait until the end of the year and then we will look at the situation again, but we will not go in with an ‘at any cost’ approach. We have
AFGRI
// JD LINK OFFERS BOUNDLESS FEATURES AND BENEFITS – EVEN THE MOST BASIC DATA RELAYED WOULD CONSIST OF EQUIPMENTSPECIFIC METRICS SUCH AS DIESEL LEVELS, ENGINE TEMPERATURE AND FORWARD SPEED. // a sizeable business in Western Australia and it’s close to the size of our business in South Africa. It’s a fantastic business and we want to add to it, but we will not unless it is right for us. “We will not be looking at other countries outside of Africa or Australia,” he says. When it comes to moving the equipment business further into Africa, Prinsloo explains that there would not be much more room for expansion as John
Deere agency agreements already exist in East and West Africa. Where African expansion is on the cards, is with the grain business. “It is easier for them to enter new markets, they don’t need a lot of infrastructure and can move quickly.” Already active in South Africa, Zimbabwe, Zambia, Mozambique, Uganda, Tanzania and Congo-Brazzaville, Prinsloo says there is certainly an appetite for further growth with the grain
business. “They will expand into more African countries if it makes business sense and if the opportunity is there. It would usually be off the back of a third party off-take agreement; for example, if AB InBev need us to help them in a new country, we would seriously consider it.” Financial services is also an area through which AFGRI is active in Africa, and another area that will grow as the rest of the company burgeons on the continent. “We have a sizeable book in Zambia and that will grow over time. We have smaller books in Zimbabwe and Congo-Brazzaville. The finance business will always come off the back of the equipment business or the grain business. We would not enter a country just for finance,” explains CFO, Jacob de Villiers. In the future, the company is considering pushing into Western
BLUE MEANS
HIGH INTENSITY REDUCES PASSES
RUBIN 12 COMPACT DISC HARROW
The Rubin 12 from LEMKEN is the ideal tool for mixing in large quantities of plant material evenly into the soil, thanks to the large 736 mm disc and a unique dual-angle to the soil. It is equally at home in hard soils. The hydraulically adjusted following rollers accurately control the working depth and crumble and firm the soil to leave behind an ideal seedbed.
e skottels gemonteerd t Indiwidueel bin 12 nie me Ru die t da beteken op nie. rst ve ste sre oe
■ Working depth of 7-20 cm, hydraulically adjusted ■ Symmetric disc arrangement to eliminate side-pull forces ■ Mixes organic matter homogenously into soil for rapid organic material decay ■ High working speed ensures intensive tillage and high acreage performance
Contact your nearest area sales manager to find out more about LEMKEN Karel Munnik, director + area sales manager, 082 412 2577, k.munnik@lemken.com Blackie Swart, area sales manager, 082 404 9651, b.swart@lemken.com
www.enterprise-africa.net / 13
INDUSTRY FOCUS: AGRICULTURE
Australia with its grain business. Both Prinsloo and de Villiers agree that there is massive potential for AFGRI and its grain ideas in Australia but “it is still in the very early stages and there is nothing concrete, but we do see big possibilities there.” JD LINK & EACCOUNTS In May, AFGRI Equipment division announced the launch of a new real-time telematics system connecting all makes and models of agricultural machinery in the field with the farmer’s office and mobile devices. A partnership initiative with John Deere, this system is becoming an invaluable tool for commercial-scale farming operations. “It’s part of a new technology that we are looking at and we rolled it out in South Africa with some of our bigger clients,” says Prinsloo. “It was accepted
14 / www.enterprise-africa.net
very well and we want to expand it into all areas. It gives a benefit to individual farmers as they can get more out of their machines. It is a step in the right direction and is something very new. The first few farmers we have worked with are very happy with it and we will eventually roll it out across all of our African operations.” The JD Link system helps collate telematics and a wide range of data from all machines. Vital downtime preventing information is now available at any time to the farmer and this helps to further improve efficiencies. “The solution enables customers to keep track of their fleet, monitor work progress, manage logistics, access important machine information, analyse and optimise machine performance, receive alert SMS or email messages, perform remote
operator support and automate data exchange,” details Prinsloo. “JD Link offers boundless features and benefits – even the most basic data relayed would consist of equipmentspecific metrics such as diesel levels, engine temperature and forward speed. “Second, and probably most exciting, is the efficiency data that becomes available such as hectares completed, average hectares per hour, hitch position and wheel slip. Equipment can even be geo-fenced and time restricted to alert owners of unauthorised usage,” says Prinsloo, who has been in the agricultural industry for his entire career and with AFGRI for more than 12 years. Technology is a big driver of growth AFGRI and partnerships with the world’s top tech providers help the entire
AFGRI
operation to flourish. Aside from JD Link, the company is also fine tuning its new eAccounts system. “We have developed an electronic transaction system, eAccounts, and it works similarly to any other banking platform,” says Prinsloo. “We don’t have a banking license so we do not call it a banking platform but it allows people to log into the system, discover the best price, sell maize or pay a deposit on a tractor, and pay the balance to the farmer or our equipment division. Everything is linked and all of the systems talk to each other. It puts us ahead of our competitors as no one has anything as sophisticated as this.” De Villiers explains that eAccounts will probably need another 12 months of development before it is a complete project. “We have been running with the
project for the past 18 months and we have had R9 billion through the system. Development continues and we will be busy for another year, fine tuning what we offer on the platform. “When we started the project eAccounts we budgeted for development costs of R10 million. It was designed for the finance division to do online payments and create accounts. Since then, we have involved all other divisions and the project is much bigger.” FERTILE ENVIRONMENT The unpredictable and erratic nature of the South African economy has resulted in challenging trading conditions through 2016 and 2017. But the start of 2018 saw most businesses given a reason to be positive following the appointment of business-friendly
President Cyril Ramaphosa. However, since taking the reins, Ramaphosa has reignited the fiercely contested debate surrounding expropriation of land without compensation, saying it could “add an injection to the growth of our country.” Prinsloo and de Villiers are concerned. “While we do feel more confident – it is definitely an improvement from the previous leadership – there have been concerns. Unfortunately, since December when land expropriation without compensation became a topic, we have seen much concern in the agri sector. We are following the debate closely and we believe, taking out the emotion, this is a debate that should be had in South Africa. We are seeing a more cautious approach from farmers and, in some cases, it has
www.enterprise-africa.net / 15
INDUSTRY FOCUS: AGRICULTURE
// WE ARE VERY PROUD OF AFGRI, IT’S A REMARKABLE BUSINESS // had a negative impact on the value of land. we are also closely watching the situation around nationalisation of the Reserve Bank,” says de Villiers. “The land debate is the one area where there is a lot of uncertainty. They are trying their best to calm everyone down, but it does have an impact on the psyche of a farmer who owns land. We hope the debate will sort out an issue that has been there for the last 25 years. The whole idea of commercial farming is based on title deeds to land and the ability of a famer to borrow from banks against that land as security so if you take away that ability, it will have serious repercussions on food security and our President does not want that.” For now, the uncertainty has not derailed the business and AFGRI remains a picture of health. “We are performing
well and growing the business,” admits Prinsloo. “Aside from a few political issues, I am personally very optimistic about the future. We have discussed all of the issues with the leading farmers in the business and we see a lot of uncertainty, but we remain optimistic.” Even the recent drought in the Western Cape, and the dry weather period from two years ago did not managed to slow the pace of this innovative and exciting business. AFGRI is operative with grain mainly in the northern regions of the country and in the season following the dry spell of two years ago, AFGRI delivered a record crop. The only impact felt from the recent drought in the Western Cape was slow sales of John Deere equipment immediately after AFGRI purchased the agency rights
Tinus Prinsloo - AFGRI CEO
16 / www.enterprise-africa.net
there. “This season we are optimistic about sales. We are not as big in the Western Cape as we are in the north, but we are optimistic because things can change so quickly,” says Prinsloo. As the rainy season begins, there is an expectation that farms will produce strongly again without major disruption. GROWING WITH M&A Currently, AFGRI Agri Services employs around 1700 of the Group’s more than 3000 people. De Villiers says that this figure will very likely grow in the near future as AFGRI’s reach continues to grow, and as the company looks to improve its BBBEE rating. “There is a new initiative from the President called YES (Youth Employment Service) where the intended outcome is to incentivise companies to create jobs
AFGRI
Jacob de Villiers - AFGRI CFO
// LOOKING AT BBBEE, THERE ARE NOT MANY AGRICULTURAL BUSINESSES THAT CAN MATCH US, BY THE OLD CODES OR THE NEW // for the youth, which is anyone below the age of 35. AFGRI will participate in that programme by identifying various areas where we can take in interns or other staff members so that we can help young South African’s to improve their skills. We do have a focus on diversifying our employment base and that will be a continuing focus,” he says. Prinsloo agrees, saying: “The workforce will expand as we expand the business. Looking at BBBEE, there are not many agricultural businesses that can match us, by the old codes or the new. We are a Level 3 and that is very good compared to any other agri business in the country. We have addressed that
issue very well so far, and the idea is to improve our level over time.” Will there be further M&A activity before the year is out? Prinsloo says that the company is always working on plans for growth but cannot say whether things will happen that quickly. “Our M&A activity has been tied with the growth of our equipment business because of the John Deere agency arrangement – if you want to get into a country, you have to get the agency agreement. From a grain point of view, we can enter a country without M&A activity. We don’t only grow through M&A activity, we can go in and set up with our existing skills or through
offtake agreements.” Back in 1923, who would of thought that the group of 29 original members of the Oos-Transvaalse Landboukoöperasie co-op would have started an organisation that would spread across the continent and become a leading contributor to Africa’s food security? “Doing business in Africa is a challenge and it differs from country to country. Part of our strategy is to be in Africa, helping with food security across the continent but it is a challenging environment; it certainly isn’t just sunshine and roses. We are always learning,” says Prinsloo. “We are very proud of AFGRI, it’s a remarkable business,” concludes de Villiers. .
WWW.AFGRI.COM
www.enterprise-africa.net / 17
18 / www.enterprise-africa.net
SATIB INSURANCE BROKERS
Booming Tourism Market
Boosts SATIB PRODUCTION: David Napier
SATIB Insurance Brokers is a niche provider of products to suit players in the African travel and tourism sectors. Off the back of strong performance and significant merger activity, SATIB is poised for growth across Africa. New Managing Director, Dewald Cillie tells Enterprise Africa more about his plans for growing the business around the continent. www.enterprise-africa.net / 19
INDUSTRY FOCUS: TRAVEL & TOURISM
//
Speaking at Africa’s Travel Indaba in Durban in May, South Africa’s Tourism Minister, Derek Hanekom said this industry is the fastest growing in the world. “Tourism already contributes about 8% to Africa’s Gross Domestic Product and employs 6.5% of the workforce,” he said. “A record 62 million people visited Africa in 2017, representing nothing less than 8% year-on-year growth.” All of this despite the infrastructural challenges that remain on the continent - good news for all involved in the travel and tourism sector. One South African company that thrives on the success of travel,
Dewald Cillie - SATIB MD
20 / www.enterprise-africa.net
tourism, and related industries is SATIB Insurance Brokers. Based in Johannesburg, the company has almost three decades of success under its belt. Founded by Brian Courtenay as a family-run insurance business specialising in the protection of highvalue wild game around Africa, the company has adapted and evolved to become one of Africa’s leading insurance brokers for corporate and private enterprises requiring specialist risk solutions, focussing specifically on African tourism. But this innovative and important organisation is not looking backwards; it’s sights are firmly set on the future and the major opportunities that exist for exponential, international growth.
ALL OF AFRICA In January, SATIB welcomed its new Managing Director, Dewald Cillie. Although he has been with the company for some 15 years, Cillie is keen to instil a fresh and hungry appetite for growth. And things have started well for him. The company recently announced the opening of a new office in Mauritius as part of a strategy to grow in East Africa and the Indian Ocean Islands. “Mauritius is open and up and running,” he tells Enterprise Africa. “It has moved faster than we anticipated. Over the past five years, we’ve seen significant growth in African enquiries and to capitalise on this accelerated growth, we thought it was important to create a team purely focussed on Africa and the Indian Ocean islands. This led to the decision that we would head our African division from Mauritius. The business in called African Risk Transfer (ART) and it is led by Gavin Courtenay.” Currently, SATIB has three business units running from Mauritius; the retail broking business, ART, which mirrors SATIB in South Africa, a reinsurance brokerage business, and Tourism Risk Underwriting Mauritius (TRUM) which is an insurance binder holder for the company’s Lloyds of London insurance facilities. With Mauritius up and running without too much of a hitch, SATIB’s eyes are now looking to Mozambique as the next growth frontier. “Wherever possible, we would like to be in every single country in Africa,” says Cillie. “But Africa is a unique business environment and each territory has its own insurance legislation. We take one step at a time and ensure sustainability before we start a new project. “We currently have a number of offices in Africa; six in South Africa, and eight in other African countries. We also have associate offices in Mombasa, Dar es Salaam, Kampala and Kigali. We are really trying to focus on Southern, Eastern Africa and the Indian Ocean
SATIB INSURANCE BROKERS
Islands. These are the biggest areas for tourism and hospitality in Africa. Another focus area is Mozambique. We are in talks about certain opportunities in Mozambique and an announcement will probably be made in the next couple of months about our expansion there.” POWERFUL PARTNERSHIPS The SATIB growth story does not stop with its ventures into new geographic markets. The company has recently completed a spate of successful M&A strategies, strengthening its product portfolio and further extending its reach. “We recently merged our operations with the firstEquity Group and now that group has several specialist insurance broking divisions,” explains Cillie.
“This includes a merger with a strategically placed PSG office here in Johannesburg – the Randburg branch. The drive behind this was to get a bigger footprint, and access to household, car and small business risk products that our existing clients might not have. We are also busy setting up a PSG wealth business to take care of our client’s life, health and retirement interests. It’s given us a bigger footprint inside South Africa and allows SATIB’s historic and unique products to be launched to a bigger distribution base.” SATIB has also extended its expertise in the short-term hospitality industry after acquiring a stake in Olive Insurance Brokers. “Their focus is specifically the B&B and small guesthouse industry,” says Cillie. “This is an area SATIB has not really focussed on so this was a fantastic
opportunity to broaden our footprint, and we are extremely excited about this partnership going forward. Olive Insurance Brokers is a fantastic and well-known business within its market. It was a strategic decision to either set up our own, or partner with someone who already has a fantastic reputation in that industry.” This deal forms part of a SATIB initiative which will see it move deeper into rural South Africa, away from the country’s main metros to provide country-wide coverage. “Acquisition is a growth strategy. If you’re in the fortunate position to have these opportunities, it’s an easy growth strategy in certain instances. Acquiring businesses in geographical regions we are not active in, and targeting growth regions, is an obvious strategy for SATIB,” says Cillie.
www.enterprise-africa.net / 21
INDUSTRY FOCUS: TRAVEL & TOURISM
TOURISM FOCUS SATIB’s unique trait is its focus on tourism, travel and hospitality. There is no other company which concentrates only on this sector. While some big multinationals may offer competing products as part of a wider suite, none have the industry knowledge and expertise developed at SATIB over the years. “SATIB’S focus is still the entire tourism
22 / www.enterprise-africa.net
sector,” reminds Cillie. “We work with any inbound tour operator to the larger accommodation providers and anything in-between; our focus is purely tourism and hospitality and providing specialised risk solutions to the industry. “There was an opportunity realised that assets, liabilities and evacuations for certain tourism and accommodation
// WE HAVE A PRODUCT FOR EACH AND EVERY PLAYER IN THE TOURISM INDUSTRY // providers in South Africa need insuring. It started with wildlife broking and became Safari and Tourism Insurance Brokers, focussing on tourism and hospitality as a niche. “We still focus on the wildlife industry, it remains an important aspect of our business, but we now incorporate many other sectors from smaller B&Bs to large hotel operators, specialist game lodges to online tour brokers, and destination management companies. We have a product for each and every player in the tourism industry. “It has always been a family business with both of Brian Courtenay’s sons, Gavin and Anthony still involved today, as well as Julian Freimond who is Brian’s brother-inlaw and a collection of other shareholders.”
SATIB INSURANCE BROKERS
Your No.1 national specialist in Commercial, Domestic, Leisure & Game Lodges for accurate and comprehensive Building & Content Insurance Valuation Reports
0861 99 0003
info@uniqueco.co.za @
www.uniqueco.co.za
www.enterprise-africa.net / 23
INDUSTRY FOCUS: TRAVEL & TOURISM
Asked about flagship moments in the company’s history, Cillie points out the launch of the SATIB24 Crisis Call as a key point in history. SATIB24 Crisis Call offers members a direct line to doctors, nurses and security professionals in a crisis. The team provides seamless delivery of emergency medical, security and incident management specialists so the best possible outcome can be achieved in any situation. “It’s hard to pinpoint one moment as our proudest as we’ve achieved a lot of positivity through the years. But when we launched our SATIB24 crisis and emergency assistance programme, that was a flagship event, especially considering the number of incidents we are involved in on a weekly basis and the numerous lives we helped save,” says Cillie. He also lists regaining control of the company’s shares from external holders, the merger with firstEquity Group, and the merger with PSG’s local offices as milestones in the SATIB story. “Across the group we have around
24 / www.enterprise-africa.net
270 people and with the mergers and the growth vision that we have, it’s an absolute definite for that to grow.” PEOPLE POWER Insurance is a people powered business. The existence of the industry is based on the premise of protecting people, and the delivery of those services is impossible without innovation and dedication of people. At SATIB, employees are nurtured and encouraged to thrive. Cillie himself has been with the company for 15 years, working his way through the ranks. He is keen to ensure a strong flow of talent through the company but admits this can be challenging. “Recruitment is absolutely an issue, even more so for our business considering the niche we serve; it’s a very specialised part of the insurance industry and to find the right skill-set is extremely difficult and costly. “I certainly see that there is an industry bleed of experience and the
gap between the up and coming and the exiting experience is large. All the training facilities are there, but it is a time-consuming process. “We have a successful learnership programme within the business that we continuously run, and many of the learners we put through the programme are now actively employed full-time by the group. We also conduct regular, active inhouse training sessions with staff, from the ground up to senior directors. We sub-contract stalwarts of the industry to give us specific class related training on the needs of our business and that is an ongoing process.” A report from the Insurance Journal, a US-based industry publication, suggests that training is now the most important aspect of an insurance business thanks to the ever-changing nature of the sector. “New skill sets and backgrounds are required, and insurance education is a critical in this changing risk dynamic,” the report states. But investing large sums into training
SATIB INSURANCE BROKERS
Associated Loss Adjusters would like to congratulate Safari & Tourism Insurance Brokers (SATIB) on their success and growth. As one of the top independent loss adjusting firms in South Africa, Associated Loss Adjuster’s reputation has been hard earned and is based on upholding the foundations of professionalism, integrity and technical expertise.
www.alacc.com | alacc@iafrica.com | +27 (0)11 886 1030
employees is something of a Catch-22 for modern insurers as the industry is quickly seeing the rise of automated systems, replacing human capital in various positions. Today, you could call any of the big-name international insurance organisations present around Africa and have your query dealt with without talking to a human being at all. And while Cillie is not convinced that Artificial Intelligence can handle the complex requirements of the customer yet, he admits that movement in that direction is inescapable. “We highlighted this around three years ago, and we realised we need to go down the digital route to ensure our products are out there. It’s where our industry is going, it’s unavoidable. We’re looking at digitising a large portion of our product portfolio so they can be purchased easily online.
“We are underway with it and we have a project team actively looking at rolling out a digital strategy to the larger market.” POSITIVE OUTLOOK Like every other industry, insurance has felt the impact of the ‘Ramaphosa Effect’. Since taking the Presidency, Ramaphosa has managed to instil positivity in the business environment. Following a period of stagnant growth, 2018 started with much enthusiasm and Ramaphosa has been largely credited for the upswing in confidence. “We definitely saw the benefit of change. It’s still early days but obviously our clients’ businesses are driven by an exchange rate. The outlook is positive and the next couple of months will set the tone for what we can expect over the next few years, but right now the feeling is absolutely positive and there is a new energy in
business, and in our clients’ businesses. “Our pulse is our clients and that is where we can actively gauge how the economy is really playing out. The feedback so far has been great, but the stronger the Rand gets, the lower figures we see with international travel. “Overall, things are positive and people are now looking to the future,” says Cillie. And that future involves, more than ever, a focus on growth and first-class client service. “My challenges have been exciting and it’s been a roller coaster ride so far. I am focussing on exponential growth for the business and getting back to personal client service, and that is what I want the business to target at this stage,” Cillie concludes.
WWW.SATIB.CO.ZA
www.enterprise-africa.net / 25
TINTSWALO LODGES
Tintswalo Lodges:
South Africa’s Hidden Gems PRODUCTION: David Napier
Established around 15 years ago, the Tintswalo Lodges business has grown to become a leading light in the country’s luxury travel and tourism industry. Born from the idea of African open-air camping, this is a business that creates a true spiritual experience with soul rather than just creature comforts. CEO Lisa Goosen tells Enterprise Africa more… 26 / www.enterprise-africa.net
INDUSTRY FOCUS: TRAVEL & TOURISM
//
The start of June saw a new board of South African tourism appointed, and Tourism Minster Derek Hanekom said this new board would help drive the industry to new heights. “Tourism is increasingly being recognised as an important driver of economic growth because it has such a positive impact on so many other sectors,” Hanekom said. In 2016, the tourism industry was responsible for around 3% of South Africa’s GDP. The five years from 2012 to 2016 saw tourism create 40,000 sustainable jobs in the country and the industry is now home to more employees than other important sectors such as
28 / www.enterprise-africa.net
mining or utilities. Clearly, travel and tourism have been, and are set to be, of upmost importance in the development and maintenance of the South African economy. The country has so much to offer guests and the income gained from international visitors is a widespread benefit to local communities and wider SA economy. This is why the government is pushing for investment into the sector. According to Hanekom, 62 million people visited Africa in 2017, a steep rise on the previous year. He urged the private and public sectors to come together to “create the right climate and opportunities for investment which
will lead to greater growth.” Without doubt, opportunities exist for those in the tourism sector that are willing to invest and those that are experienced in growing business in this exciting industry. “In Africa, we know how to welcome visitors with warmth and with our own unique flair, and we know how to host them professionally in our own way. We can guarantee a life-changing experience,” said Minister Hanekom. This is also the mantra of the Tintswalo Lodges hospitality business. The company is a sister to the Tintswalo Property Group, a property management business, but the luxury lodge accommodation
TINTSWALO LODGES
portfolio stands alone as an industry leader in South Africa’s international and domestic tourism industry. Recent successes across its range has buoyed Tintswalo to invest further in this side of the organisation, riding the wave of tourism that is not set to break anytime soon. Already recognised for superb offerings at Tintswalo Atlantic (Cape Town, HQ), Tintswalo Safari Lodge and Tintswalo Manor House (Kruger National Park), the company is looking to invest into new projects in Waterberg, Limpopo and Boulders Beach, WC. Lisa Goosen is the CEO of the Tintswalo Lodges business and
leads the company’s 250 people, all the time reinforcing the importance of delivering world-class standards. She tells Enterprise Africa more about the upcoming project. “After operating Tintswalo successfully for the past 15 years, preparation meets opportunity and we are thrilled to announce the expansion of the Tintswalo brand. We are excited to enter a new era where we will be redefining our product in terms of the grandeur of the offering to bring to market a second tier of an upmarket, yet more cost-conscious offering, whilst maintaining the ethos, quality and service each of our perfectly located boutique
destinations have become known for.” The expansion will include the opening of Tintswalo at Lapalala Wilderness, a family-friendly camp of six luxury tents with en-suite bathrooms, will be opening on 1 October 2018. It is one of only two commercial lodges within 44,500 hectares of untouched wilderness. Sleeping up to 12 adults and four children, the Tintswalo at Lapalala Wilderness camp is environmentally conscious and will be operated ‘off the grid’ after refurbishment which will include the addition of private plunge pools. On 1 September 2018 Tintswalo at Boulders Manor will be opening in Cape Town, surrounded by
www.enterprise-africa.net / 29
INDUSTRY FOCUS: HOSPITALITY
30 / www.enterprise-africa.net
TINTSWALO LODGES
// THE REBUILD OF TINTSWALO ATLANTIC BECAME A TRUE FLAGSHIP. IT IS A MAGNIFICENT SITE AND THE RE-CREATION AND REBUILD PUT US INTO A NEW CATEGORY OF LUXURY WITH SERVICE LEVELS // fynbos and with unobstructed views across Boulders Beach and its internationally famous colony of endangered African penguins. Sleeping up to 14 guests in seven rooms, Boulders Manor will operate on a bed and breakfast basis, or as an exclusive-use private villa, with options of either four or all seven rooms for groups of friends or families travelling together for extended stays of four nights or more. At the company’s other Cape Town property, the boutique Atlantic lodge, it seems like every happening is a positive right now after what was a very difficult 2015 where a fire ravaged the site, all but burning it to the ground. A wild veld fire quickly spread across the region, engulfing homes and businesses through Hout Bay and across the Cape Peninsula. March 2nd 2015 was a day remembered for all the wrong reasons, causing devastation for thousands of local people. Goosen describes the site immediately after the fire as a disaster zone. Lodgings, support structures, plants and trees were levelled. Local firefighters were seriously injured tackling the blaze, and even the ground was blackened. But this is a strong community, and a rebuild programme was quickly established, involving local contractors who knew about the passion of the site. In what seems like no time at all the lodge was back, better than ever before, being rebuilt from scratch in only eight months. “The rebuild of Tintswalo Atlantic became a true flagship. It is a magnificent site and the re-creation and rebuild put us
into a new category of luxury with service levels,” says Goosen. Strong performance at the popular Safari Lodge at Kruger National Park aided the company while it struggled in Cape Town. Tintswalo translates from the African Shangaan language to mean: ‘ The intangible feeling of love, gratitude and peace bestowed upon someone offering you a meaningful and worthy gift’. This is the embodiment of the business and Goosen says that the feeling of love is shared throughout the company.
“All our staff are family and we have many long-standing employees and love taking care of others. We always say this industry can never be mechanised and South Africans truly have the gift of care, so we will always be able to have tourism as a contributing factor to our ever-growing economy.” Looking to the future, Goosen is impressed with what has been done so far by Hanekom’s boss, President Ramaphosa. Since taking office in January, business confidence has been greatly improved, and the President has, on several occasions,
www.cavcheese.co.za
Cavalieri is perfectly placed to offer Lowveld restaurants, lodges, and the public, quality cheese and deli products, both local & imported.
Where Good Food & Hospitality Meet 30 Waterfall Avenue, Riverside Industrial Park Nelspruit, South Africa
www.cavcheese.co.za | 013 752 6424/38
www.enterprise-africa.net / 31
INDUSTRY FOCUS: TRAVEL & TOURISM
singled out tourism as a sector of vital importance for South Africa. Commenting on the change in sentiment since January, Goosen says she is positive. “It takes a long time to turn a ship around in choppy waters. This is the task that lies ahead for our current leadership. I think what has been achieved in the last few months has not been any small feat and I do feel positive that there will be some changes that will benefit those who have pushed through the economic struggles and been true ‘die hards’ in SA business.”
At Africa’s Travel Indaba in Durban in May, Derek Hanekom spoke as part of a Tourism Investment Seminar and said that as the South African investment climate develops, the speed of growth in tourism improves. He was clear that an improved economic outlook will result in further investment into tourism projects. Goosen is waiting in anticipation. “While we are excited at the prospect of more governmental support in this sector we have not seen this take a huge effect as yet,” she says. “But we
remain positive that it will. If you look around the globe, countries that focus on tourism create jobs and financial stability through tourism so I believe strongly that South Africa can and will do this. It is not a highly specialised field and our work force is easily trained. A good heart and a caring state of mind makes for a wonderful host. As South Africans, at any level of employment, this is our strong point - hospitality and care.” And it is this enduring quality that Goosen attributes to all South Africans that provides the CEO with
// ANYONE WHO HAS STAYED WITH US WILL UNDERSTAND THE FEELING OF SOUL AND FULFILMENT YOU EXPERIENCE AT ONE OF OUR DESTINATIONS //
Guy Clarke - Executive Chef at Tintswalo Atlantic
32 / www.enterprise-africa.net
TINTSWALO LODGES
most optimism for the future. “Anyone who has stayed with us will understand the feeling of soul and fulfilment you experience at one of our destinations. You will know you are taken care of and your life force is fed with an incredible experience and of course your belly with good food.” For the rest of 2018, the focus of the company will be on growing business at the new properties. “We have some plans for further expansions but right now we are concentrated on the two new properties. We will keep evolving as opportunities present themselves. We are not scared of expansion but also cognitive of orderly progress towards known achievable goals. We are very passionate about what we do and so always look for new things and enhancements.” Current strong growth has forced Tintswalo into a recruitment drive and the company will be welcoming new staff imminently. Expansion outside of South Africa is not yet on the cards, but Goosen says the company would “never say never.” Asked about what will keep the company at the forefront of a highly competitive and saturated
Info@freshtrading.co.za Tel: (021) 510 2220 www.freshtrading.co.za
industry, Goosen highlights the outstanding locations that simply cannot be replicated.
“Our locations are special and breath-taking and this speaks for itself as being timeless and so we will maintain our edge.” She concludes by stating that positive guest feedback is the catalyst which keeps the circle of success turning for Tintswalo. This further motivates staff to deliver quality service which, in turn, results in repeat business and recommendations. Tintswalo is perfectly positioned to thrive in this booming industry. A truly South African success story, all built from passion and innovation.
WWW.TINTSWALO.COM
www.enterprise-africa.net / 33
FANCOURT
Fancourt Targets Families and Adventure Tourists
for Growth PRODUCTION: David Napier
With unmatched offerings in golf, hotel accommodation, conferencing and events, and real estate, Fancourt is a business at the forefront of a drive to place South Africa’s Garden Route to the top of Africa’s tourism industry. CEO Georgie Davidson talks to Enterprise Africa on the hard work that has gone on over the past 12 months. 34 / www.enterprise-africa.net
www.enterprise-africa.net / 35
INDUSTRY FOCUS: TRAVEL & TOURISM
//
South Africa’s lush Garden Route is building a reputation as one of the world’s premier regions for adventure tourism. Stretching around the country’s southern coast, the Garden Route is home to breath-taking coastal vistas and countryside of unparalleled beauty. A number of small towns adorn the route and visitors can experience South African hospitality at its finest. Along the N2 highway between Cape Town and Port Elizabeth is the quiet town of George, and at its heart is one of southern Africa’s leading hospitality destinations – Fancourt. Home to the world-class Fancourt hotel, elite golf courses, The Manor House and unrivalled conferencing and event facilities, Fancourt stands as a shining example of what the Garden Route has to offer. Framed by the Outeniqua mountain range, surrounded by nature-reserve land, and just a stone’s
36 / www.enterprise-africa.net
throw from the ocean, Fancourt has become known as a global landmark for business, leisure and golfing travel. Speaking to Enterprise Africa in 2017, Fancourt CEO Georgie Davidson said that the business was thriving but looking to boost ‘off-season’ business. Now, she suggests that the company is continuing with this strategy as well as collaborating with other regional players to drive the industry across the entire region. “We have been relatively successful but it’s still a work in progress,” she says. “It’s greater than Fancourt, it’s about the entire destination. It’s something we are working incredibly hard on with SATSA and Wesgro to establish a year-round product. We’re benefitting from increased airlift and we launched our Business Playground offer which is up by more than 150% compared to this time last year. It’s an attractive package that you can buy and use to stay, play golf, eat and drink at the bar while being
included as part of the conferencing. “We find that products have a twoyear lead in for returns so we are thrilled that Business Playground has achieved a quicker than expected return after only implementing last year.” 52-WEEK FANCOURT Naturally, Fancourt’s peak season comes through the spring and summer months and had previously dipped in the autumn-winter period. This is why the company has come up with new strategies to drive business when the sun is not so strong. This includes boosting hotel occupancy, golf rounds, and the number of conference activities held at Fancourt. Davidson suggests the key is families. “We are very keen on growing family and lifestyle orientated business,” she says. “We are asking how we can make the Garden Route a destination that is attractive in winter. It ties in adventure tourism, it ties in with establishing
FANCOURT
// THE MOST ENCOURAGING THING IS THE RECOGNITION BY THE LEADERSHIP OF SOUTH AFRICA THAT TOURISM IS AND WILL BE A BIG PLAYER IN TERMS OF EMPLOYMENT // world-class attractions, and we are working with local tourism bodies to create a situation where the whole region is attractive in winter.” Adventure tourists have previously found themselves attracted to countries like New Zealand, Mexico, Wales and Costa Rica. Adrenaline junkies on the hunt for skydiving, bungee jumping and outdoor thrills are being targeted by SAT and other tourism organisations as they market South Africa as an outdoor-lovers paradise. “It’s growing and there are so many activities,” says Davidson, who travels to work across the estate every morning with the Outeniqua Mountains as a backdrop. “There is a lot of collaboration and SATSA has been involved in bringing adventure
tourism players together. We are seeing progress but we are looking for some kind of world-class attraction in the region and that is something we are working on. “For example, we have asked ‘could we be the food destination of SA if the Winelands is the wine destination?’ We are looking to establish the destination as a whole.” The Garden Route is already home to a number of thrill-seeker activities. Visitors can abseil, bike ride, charter boats, blokarts, canoe, cliff jump, dolphin watch, fish, hang glide, hike, horse ride, kite surf, power boat, quad bike, sky dive, scuba dive, zip line, and bungee jump among many other pursuits. Bungee jumping from the Bloukrans Bridge is a must for all
adventure tourists in the region. Located less than two hours’ drive from Fancourt, the world’s highest commercial bungee jump is worldfamous and sees brave folk dive from the bridge into the 709 ft abyss below. Face Adrenalin has been operating the Bloukrans Bridge Bungy accident free since 1997 and sharing turnover with a local community trust. Promoting the region, and activities like this, is vital for the ongoing development of the entire area. “I’m a strong believer in collaboration and I think that it’s very powerful – together we can achieve more,” says Davidson. “Players in the area are coming together and we are pleased that we can talk collaboratively. From a government
www.enterprise-africa.net / 37
INDUSTRY FOCUS: TRAVEL & TOURISM
perspective, all the bodies are working together and are now falling under the Eden Municipality and that gives one combined vision for the region – and that is very important. Collaboration allows us to make the budget go so much further. “We have done it with golf and we are planning something similar with adventure tourism and it involves us pledging funding which the government will match. SA Tourism is committed to cofounding marketing efforts with players in the region, and it has been very successful. We can influence how money is being used to make sure it’s effective and that is great.” DRIVING SUCCESS In February, Golf Digest Magazine published its bi-annual country
38 / www.enterprise-africa.net
course rankings, placing Fancourt’s three courses all in the top 15, with Links taking the top spot. This follows The Links, a privately-owned club, success, placing first in 2011, 2014 and 2016. The publication also placed the Fancourt Links in its global top 40 list. This recognition was the latest in a string of awards for Fancourt after it was named Golf Resort of the year 2018 by IAGTO (International Association of Golf Travel Operators), Fancourt Hotel was named South Africa’s Best Golf Hotel 2017 at the World Golf Awards, and The Manor House was awarded the coveted Condé Nast Johannsen’s Best Newcomer in Africa 2018. “We celebrate it internally and we get together with the entire team to thank them. They are incredibly proud and they do realise that they can influence our standing,” says Davidson.
“We have grown the number of golf rounds played; we’re sitting at around 54,000 rounds now. We have been successful but we do have to be sensitive – the growth we are looking for is in winter as we are almost at capacity in peak season. 60,000 is our five-year target. I’m happy with the progress we have made so far.” For Fancourt to stand out like this, especially with its golf offering, is impressive considering that industry experts often claim SA courses are overlooked at global level. “The feedback from people like Gary Player is that if some of our SA courses were in America, they would be top 10 in the world. The sentiment from top players is that our courses are indeed undervalued. The experience on a South African course has a certain flair that you don’t
FANCOURT
// IT’S REALLY IMPORTANT FOR ME TO CONSTANTLY CHALLENGE THE BUSINESS. WE NEVER WANT TO BE ARROGANT AND WE ALWAYS WANT TO REINVENT OURSELVES // get elsewhere. The truly warm South African experience that was delivered at the BMW Cup was something that blew people away.” In March last year, Fancourt hosted the BMW Golf Cup International where top amateurs from across the globe come to compete in the prestigious tournament. Team Thailand claimed victory and special guest, Gary Player said that the tournament was a great advert for South Africa – something Davidson agrees with. “BMW are incredible to work with and their precision engineering
comes right through on the ground. It’s a fantastic event to host and the international nature of it brings a different dynamic. It’s great exposure and great association with a remarkable brand, and it’s a great market to be exposed to as it’s about Class-A players. South Africa blows them away and it’s a great advert for what the country can offer.” LIVING AT FANCOURT Life on the Fancourt estate is idyllic. Safe, next to nature, and familyfocussed – and all in great weather.
Covering 613 hectares incorporating about 420 existing homes, this is prime South African real estate. At the end of 2017, the company announced its first new residential release in more than ten years when it detailed a 45-unit development called ‘Noem Noem’. “We launched Noem Noem in December 2017,” explains Davidson. “Noem Noem is the original farm on which the development is situated – it’s an indigenous local plant. We used a sealed bid system to launch it as we had so much interest from existing members and confidentiality was of the utmost importance. We sold 11 properties through the sealed bid process and followed that with a further three, and there are four more released very soon. We are around 50% sold out; it’s competitively priced and we have given ourselves five years to
www.enterprise-africa.net / 39
INDUSTRY FOCUS: TRAVEL & TOURISM
maximise its potential.” Responsible development is at the heart of every real estate decision made by Fancourt, and this is why opportunities are limited. While some land does remain available for development, the feeling within the market and the sentiment of existing members will all have to be considered. Davidson is keen to point out that property is not a ‘quick buck’ for Fancourt and reminds of a recent opportunity where real estate land was ready for development but the decision was taken to rather use the site to extend practice facilities. Homes at Fancourt are mainly purchased by golf enthusiasts and prices average around R6.4 million. Encouragingly, demand remains strong, and Davidson suggests that success in the hotels helps drive that demand. “We had a very successful Easter period and what is very striking for me is the family feedback. We had a lot of comments about how amazing the destination is and how suitable it is for children. There is a lot on offer; kids can be kids and parents can relax. From that perspective I am very pleased and very encouraged. We even had people
who have been to stay and then asked about our property offering, so they are coming for a weekend and then saying they could live here; that shows we are getting things right.” FIVE STAR FUTURE? With purse strings tightened following a slow economic environment through 2016 and 2017, pushing an offering that is towards the top end of the market has been challenging. But, with the appointment of Cyril Ramaphosa as the country’s President, confidence and expectation has turned around and companies are now planning for the long-term in South Africa. “The outlook is a lot rosier,” admits Davidson. “The most encouraging thing is the recognition by the leadership of South Africa that tourism is and will be a big player in terms of employment. Mining contributes more GDP but tourism contributes more employment and opportunity. Tourism is definitely now on the radar and that is very encouraging because for some time tourism was put on the backburner.” The company is now in the process of planning a 20-year strategy where previously its was working on a year-
to-year basis, planning three years in advance at the most. Away from economic factors, the other big challenge to hit the region in recent times has been drought. The water crisis in the Western Cape has been described by some as a national disaster and, while Fancourt has not been directly impacted operationally, the tourism industry has felt the effect. “The intention of Day Zero was to make sure Day Zero never happened so from that perspective it has been a successful campaign,” says Davidson. “But there has been knock on impacts on tourism. People have become nervous travelling to Cape Town and South Africa. The wider tourism industry has seen a slowdown and this could be one of the reasons behind it.” She reminds that water scarcity is a global problem and is not exclusive to South Africa citing Sydney, Australia and Los Angeles as examples of other big cities to be affected. “We are lucky that we have an exclusive water right in the area and we are very sensitive with our usage. We have taken measures to reduce our usage and we are actively engaging in talks about our future sustainability. We measure very carefully and we are complying with all restrictions in the region. In George, we have had good rainfall and the dam is overflowing so, as a region, there has not been a major day-to-day impact.” MORE TO COME FROM FANCOURT Asked if she has achieved what she set out to when she was named CEO in 2014, Georgie Davidson says there is a lot left to do and the project is still as exciting as ever. “Will I ever be done? No. Does Fancourt hold enough challenges for me in the meantime? Absolutely. “I keep my finger on the pulse. We have over achieved on the goals I set
// I’M A STRONG BELIEVER IN COLLABORATION AND I THINK THAT IT’S VERY POWERFUL – TOGETHER WE CAN ACHIEVE MORE // 40 / www.enterprise-africa.net
FANCOURT
// THE TRULY WARM SOUTH AFRICAN EXPERIENCE THAT WAS DELIVERED AT THE BMW CUP WAS SOMETHING THAT BLEW PEOPLE AWAY // out when I started but that doesn’t mean there are not new goals forever coming my way. It’s really important for me to constantly challenge the business. We never want to be arrogant and we always want to reinvent ourselves. Some people see innovating a business as a big bang moment but I believe it’s more about the little things that you continue to tweak and challenge the business on.” Fancourt remains important, both regionally and nationally. As part of the Leading Hotels of the World group, the company highlights South Africa to an audience far and wide. Locally, the company employs more than 650 people in peak season and invests heavily in CSR projects to lift the community in which it operates. “The Plattner family invested in the business to create employment and skills in the region and that is something that they remain committed to 20 years later. Continuing to invest in our people will probably be our legacy,” says Davidson. The immediate focus for the CEO going forward will be succession planning across all divisions. “One of the big things for me, was to bring depth to the leadership of Fancourt. The business cannot depend on the family or the CEO for leadership. We’re in the third year of a leadership programme, which we will continue to invest in, and I can feel the difference that is having on the business,” she says. The Garden Route is already one of South Africa and Africa’s big draws
Georgie Davidson - Fancourt CEO
for tourists, and with Tourism Minister Derek Hanekom stating at the recent Africa Travel Indaba that the industry is the fastest growing in the world, the opportunities are big for Fancourt. “In Africa, we know how to welcome visitors with warmth and with our own unique flair, and we know how to host them professionally in our own way. We can guarantee a life-changing experience,” said Minister Hanekom. As the industry grows, changes
and adapts, Fancourt is perfectly positioned to do the same, and with much to celebrate in recent times, this is a business that has become an example to follow for all in hospitality.
WWW.FANCOURT.CO.ZA
www.enterprise-africa.net / 41
TABLE CHARM
Table Charm:
Making A Difference PRODUCTION: Manelesi Dumasi
“We don’t just tell people we want to change lives, we actually do it,” says Table Charm Managing Director, Michael Whitehouse. This is a direct-selling company that is helping to tackle South Africa’s crippling unemployment problem by constantly developing new routes to market and offering an unrivalled product range designed to meet the needs of local consumers. 42 / www.enterprise-africa.net
INDUSTRY FOCUS: DIRECT SELLING
//
The direct selling industry is a proven, successful tool for building a network of customers and marketing products to a relevant commercial audience quickly and effectively. Some call it the oldest industry in history, but by the time it hit US shores and became more formal, the industry was already an established trading method. But somewhere along the way, direct sales has gained something of a bad reputation in various corners, largely due to the negative publicity received by Ponzi and pyramid schemes that have since been shut down. Some direct sales companies, years ago, didn’t have the integrity they needed. Hard sales tactics, through which recruits were pressured into buying products or front-end loading, were used. But today, with the reputation
44 / www.enterprise-africa.net
// WE DON’T JUST TELL PEOPLE WE WANT TO CHANGE LIVES, WE ACTUALLY DO IT // of the industry back on track thanks to international success from a number of big-name brands, this model is proving hugely positive for some companies and their distributors. Selling directly to consumers generates referrals and creates demand, and direct-selling companies are now focusing on general consumer transparency, leveraging new technologies to reach beyond distributors to general consumers and developing corporate sophistication. The industry is also backed by powerful international associations that look out for the rights of the consumer. The perfect example in South
Africa is Table Charm. Founded more than four decades ago as a family business, Table Charm is today one of the biggest employers in the country, with a range of products to suit the needs of almost every individual. Michael Whitehouse is the company’s long-serving Managing Director, and he tells Enterprise Africa that the success that has been realised is down to a focus on improving quality of life rather than making endless profits. “We have always had a commitment to empowering people and changing people’s lives, and we’ve gone from strength to strength. That is where we differ to a lot of
TABLE CHARM
A proud supplier to Table Charm
multi-level direct selling companies,” he says. “We don’t just tell people we want to change lives, we actually do it. We don’t keep office hours. We have meetings in the most rural places you could imagine. We will have meetings under a tree where we just put a table and chairs out in the sunshine. “Our people believe that hard work brings reward. Do what’s hard and life is easy, do what’s easy and life is hard.” A BOUNTIFUL BRAND Table Charm’s core business involves the sale of dinnerware (dinner plates, side plates, bowls, serving platters, tea cups and saucers, and mugs), glassware, cooking utensils, plastic storage
solutions, and other kitchen accessories. Over the years, the company has added to this extensively, but still realises much of its activity through its traditional range. “We have always been big in dinnerware, crockery, glassware, cutlery, and pots and pans, and that is still 55% of our business. In 2010, we got into fragrances and skincare with a brand called Style. We’ve also started to introduce handbags, scarves and fashion accessories,” explains Whitehouse. This growth in the product range forms part of a wider expansion strategy through which Whitehouse would like to see the company grow to become the number one direct selling company on the African continent. In 2014, Table Charm was acquired by Bounty Brands, a group
which will list on the JSE in 2019. “The reason we chose Bounty Brands was because of the synergies and cross selling opportunities. Bounty Brands has a range of healthcare products and they own the agency rights to Russell Hobbs in South Africa and so we will be putting the Russell Hobbs range into ours,” explains Whitehouse. “They have three main divisions which are apparel, food and home care. They own the rights to Vans Shoes, Jeep clothing, Allstar Shoes and others. They also own the Essence homecare brand in SA which is extremely popular.” Currently, Table Charm is present across almost all of sub-Saharan Africa but the vision of Whitehouse is for the company to take its fantastic product range and employment creating abilities as far and wide as possible.
www.enterprise-africa.net / 45
INDUSTRY FOCUS: DIRECT SELLING
“We sell into Namibia, Botswana, Swaziland, Lesotho, and South Africa,” he says. “We recently opened in Zambia and we have opened in Zimbabwe but that market does have its challenges. We have such good relations with the people of Zimbabwe that we are planning to hang in there until there is a turnaround in the economy. “My idea is to go to East Africa via Kenya. I’ve also been to West Africa and looked at Ghana and that market suits our whole ethos – the Ghanaian people are fantastic. Kenya is an easier place to do business with the legal structures and we have big expansion plans there.” While many South African organisations that have expanded into Africa have quickly retreated, Table Charm is one of the success stories. This is thanks to a strict commitment to its core values and a longstanding membership with the Direct Selling Association. “We are very different from most companies as we are all about one-on-one relationships and we have an almost 100% blackwoman staff base. Some companies have race challenges within their organisations – we certainly do not. We have built relationships all
46 / www.enterprise-africa.net
the way through the difficult times that South Africa has experienced because of our mutual goals.
“My main passion is making a difference in other people’s lives. “The direct selling model is
// Jenpak - Your Packaging Partner
JENPAK Jenpak was established in 2011. It’s core focus was to provide a contract packaging service to the pharmaceutical industry. In 2013 the company expanded and started offering the same services to other industries such as the cosmetic and healthcare industries. Increased growth enables the company to procure a wider range of machinery that allows Jenpak to offer a range of services which include, filling and boxing. With a combined experience of over 60 years in the packaging industry, compiled with many strategic partnerships, the company is able to offer its customers a range of services, assisting customers from the concept phase all the way through to the finished product.
TABLE CHARM
working and it has a lot of room to grow in Africa. Even in moredeveloped companies like China, it’s taking off nicely and it’s big in America. We are having doubledigit growth in Southern Africa in this industry and it’s a success story where we are creating employment as a consequence. “Some parts of the industry have been criticised for operating like a pyramid or Ponzi scheme but we make sure we belong to the DSA to keep the consumer protected,” details Whitehouse. A newer addition to the Table Charm product portfolio is a personal care range called Zonke Health. This
range is made for the skin, face and body, and is created using a mix of traditional African herbs with modern scientific techniques. “Zonke means ‘all healing, all health’. We like to work with traditional herbs as our people can relate to it,” says Whitehouse. “We like African Potato, we like baobab, we like moringa, and that can make things challenging from a compliancy point of view as we have to submit samples and paperwork to the medical control council, but it gives us a USP and our people really relate to living off the earth.” These types of product are important for Table Charm as
the company looks to embrace generational shifts and attract new consumers and new sellers. Whitehouse admits that younger agents are less interested in distributing dinnerware but much more excited about fashion items and healthcare products. With the average age of direct sellers sitting at 45 years, gaining the interest of the next generation is vital. “We try hard to get out there with the people; where they live, in the taxi ranks, at social gatherings; we go out there about put out our gazebos and umbrellas and we take our recruiting material. We use our energy to help people join and we
// OUR BIGGEST CHALLENGE IS ABOUT HAVING THE RIGHT TEAM WITH THE RIGHT AMOUNT OF GRIT, DRIVE AND DETERMINATION TO SUCCEED // Test Tubes
Dropper Bottle Sets
JENPAK YOUR PREFERRED PARTNER IN PACKAGING
Injection Vials
Specialising in Contract Packaging, Filling, Printing, Assembly and the manufacturing and supply of glass packaging products. We offer a range of packaging choices and services to the pharmaceutical, cosmetic and healthcare industries.
CONTACT US TO SEE HOW WE CAN HELP YOU! Printed Vials
www.jenpak.co.za 011 908 0072 sales@jenpak.co.za
22 Bentonite Street, Alrode, Alberton, Johannesburg
www.enterprise-africa.net / 47
INDUSTRY FOCUS: DIRECT SELLING
// IT HAS TAKEN A LOT OF FAITH BUT WE HAVE BEEN SUCCESSFUL // try hard to drive word of mouth. We are totally reliant on referrals so if somebody has a bad experience, it’s important to get people talking positively about our company and brand as a whole,” says Whitehouse. The company is also embracing the digital age by investing heavily in the development of a new website and app to help showcase products to the many African consumers active online through mobile devices. “We have hired a developer to
48 / www.enterprise-africa.net
start that as one of our challenges is communication,” explains Whitehouse. “Our people don’t necessarily have access to computers or fax machines, but all South Africans have mobile devices. “We want to build an online system where we go from consultant down and spread our roots over a wide base. Then there is less risk with payment and people can focus more on recruitment. “Our online system will allow our people to place an order with the company and see network, sales and payments, and have access to an e-learning environment which we are pushing quite quickly. That is where we will host all of our training material. The app that we are looking
at doesn’t require a lot of data and is designed for the mass market.” KEEPING THE FAITH Through 2016 and 2017, many businesses, across a range of industry sectors, reported slumps in demand and a weak economic environment which resulted in poor overall business confidence. But that all changed in January 2018 when President Ramaphosa took office and promised to root out corruption in government and create an environment where business could thrive. Table Charm has seen the positive impact of the political switch and is readying for an upward shift in the economic picture. “We did notice that the third
TABLE CHARM
and fourth quarters of 2017 had a downswing in general attitudes of people which permeated in the economy as a whole. In our LSM, which is the masses, there was a negative feeling. But with the Ramaphosa environment, there is definitely a much more positive sentiment but that still has to translate into an upswing in the economy. Looking at the first quarter, things remained slower but we saw an improvement in the second quarter. There is definitely a more positive mood.” Alongside development of the online presence, expanding into new geographic regions, and bolstering its product range, Table Charm will also be looking to bring onboard
new salespeople to ensure the evergrowing family continues to develop successfully. “Our biggest challenge is about having the right team with the right amount of grit, drive and determination to succeed,” says Whitehouse. “Our people must take the vision forward. The Bounty group understand that, and they are helping us to do things better by doing things differently. “We want to move away from conformity and be innovative in how we do things. We are excited, we are always positive, and we are looking forward to the future. “I don’t care who owns Table Charm, I’m never going to run it differently; it’s always going to be about changing people’s lives. So
far, Bounty has bought into it and the environment is dynamic so I am enjoying the way things are going.” He concludes by saying that “it has taken a lot of faith but we have been successful”. This is a business with more than 40 years of sales experience, internationally respected products that are backed by scientific research, a brand that is valued and recognised by customers, and a growing African market that is hungry for further advancement. The next step will be further development on the continent and pursuing further market share in South Africa.
WWW.TABLECHARM.CO.ZA
www.enterprise-africa.net / 49
50 / www.enterprise-africa.net
CHEMICAL PROCESS TECHNOLOGIES (PTY) LTD
CPT
A Very Active Ingredient PRODUCTION: Colin Chinery
With imported active pharmaceutical ingredients accounting for 60 to 65% of a finished product, the prizes for a strong South African entry into the sector are clear. Pretoria’s Chemical Process Technologies is the front runner. “All of a sudden it makes sense for South Africa to look at manufacturing for itself,” says Managing Director, Dr Hannes Malan. www.enterprise-africa.net / 51
INDUSTRY FOCUS: SCIENCE AND TECHNOLOGY
//
The growth of the pharmaceutical industry in South Africa – at R44b the largest drug market in Africa - is seeing a parallel demand for process technology, raw materials and services. And with it comes exciting and lucrative opportunities for players in the raw material market. In front is Chemical Process Technologies of Waltloo, Pretoria, an innovative chemical synthesis company with the ability to develop and commercialise competitive organic synthesis routes. A Top Three SA manufacturer of formulated animal health products and exporter of animal health API’s (Active Pharmaceutical Ingredient),
52 / www.enterprise-africa.net
CPT also supplies intermediates to the pharmaceutical industry, and manufactures fine chemicals chemical substances prepared to a very high degree of purity for use in research and industry. UNIQUELY PLACED This combined capacity to synthesise and formulate products gives it a unique position in Southern Africa. “The company was started by looking at the development and commercialisation of chemical synthesis technology and to become involved in the pharmaceutical industry,” said Managing Director, Dr Hannes Malan “The products for the pharmaceutical industry are very basic intermediates and represent an
easy way to get an income to support development. Ever since then, the focus of the company has been on the development and commercialisation of synthesis technology.” Drugs have two main components: active pharmaceutical ingredients (API), which provide the medical benefit; and the bulk substance used to make the tablet or liquid used to carry the API. South African pharmaceutical factories currently import 90% of their APIs before formulating the medicines in their own plants. And with active pharmaceutical ingredients accounting for 60 to 65% of the final manufacturing cost, South African production should lead to price cuts as well
CHEMICAL PROCESS TECHNOLOGIES (PTY) LTD
“Whether you are a small company looking for water purification and filtration solutions to grow or a large company looking to stay competitive, we offer fully engineered solutions, based on the latest technology, services and support you need in the field of pure water production and handling”
+27 11 315 1842 Byron Neat Byron@vicol.co.za
www.vicol.co.za
// ALL OF A SUDDEN IT MAKES SENSE FOR SOUTH AFRICA TO LOOK AT MANUFACTURING FOR ITSELF AND NOT BEING DEPENDENT FOR CRITICAL PRODUCTS ON ONE OR TWO COUNTRIES // as the emergence of a promising new player on the national manufacturing base. Local production is a key strategy if sustainable, predictable and equitable access to medicines is to be achieved. And given the high-spec quality and technical expertise CPT is bringing to the market, it is a further inducement to the big companies, whose increasing reliance on external partnerships is driven by issues of cost and technology. “In South Africa some 90%+ of all API active pharmaceutical
ingredients are imported, mostly manufactured in China and India, and apart from us, only one other company here is manufacturing APIs,” said Dr Malan. COST-COMPETITIVE SA OPPORTUNITY “With imports carrying quality and environmental issues, we saw there was an opportunity for a local producer, and we are looking at the products currently being used for treatment in South Africa to see whether we can develop the technology to manufacture those
molecules cost-competitively.” CPT was formed in 2001 by one of Dr Malan’s fellow partners and Director Business Development, Dr Gerrit van der Klashorst. With his interest in the development of chemicals and process technology, Dr van der Klashorst was approached by a local animal health company looking for guidance in the development of technologies and the synthesis of a specific active ingredient for one of their products. Around the same time, another operator approached him to take over the production of some very basic
www.enterprise-africa.net / 53
INDUSTRY FOCUS: SCIENCE AND TECHNOLOGY
intermediates for a South African pharmaceutical company. This was to be the birth of Chemical Process Technologies. In 2003 a second partner, looking for an investment opportunity, arrived, and four years later Dr Malan joined the business. “For the animal health sector we are a pure technology company manufacturing on behalf of the multinationals. We do not own registrations. Although formulation is the biggest part of our business, the essence and focus of the company is still the development of technology and its commercialisation.” With the capacity to synthesise various molecules, the 70-employee CPT develops its own process technology, with the emphasis on current and environmentally responsible processes. Typical chemical manipulations
54 / www.enterprise-africa.net
include oxidation, amidation, alkylation and heterocyclic chemistry, with a dynamic Research and Development team which includes four PhD researchers, responsible for the development of proprietary synthesis routes for molecules with an identified viable local market. Last November CPT took a major advance with the opening in Pretoria of a pilot plant for the manufacture of generic active pharmaceutical ingredients, a R50m joint project between CPT, the Industrial Development Corporation, and the Technology Innovation Agency, and with the support of the Departments of Science and Technology, Trade and Industry, and Health. “Over the past 18 years we have been able to fund our own growth,”
said Dr Malan. “But with this project far bigger than we could deal with as a company, we knew we needed some financial support and so we approached the Government.” GOVERNMENT BACKING As a result, the Department of Science and Technology’s Technology Innovations Agency provided a grant for equipment, and the Industrial Development Corporation support for the building and equipment. “We have got some very good partners in these organisations in terms of this project. “To go commercial with our technology, we had to build a pilot plant, advancing to the point where we have the capacity to manufacture products on a big enough scale. The pilot plant is a small but very significant step in the
CHEMICAL PROCESS TECHNOLOGIES (PTY) LTD
// THE PILOT PLANT IS A SMALL BUT VERY SIGNIFICANT STEP IN THE ESTABLISHMENT OF A SOUTH AFRICAN API MANUFACTURING INDUSTRY // establishment of a South African API manufacturing industry. “The fact that we are relative newcomers in the field of generic API production gives us an edge over established producers, since we are using the latest manufacturing technology whereas they have invested heavily in older technologies.” And with stricter environmental and safety regulations and enforcement raising Chinese producer prices, CPT is confident its products would be competitive. “We have the resources in South Africa to participate in the global pharma industry.” It’s a vision shared by the Industrial Development Corporation’s Head of Basic and Speciality Chemicals, Hilton Lazarus. “CPT is an example of the role the IDC can play in setting up our own API manufacturing facilities.” Local production of APIs significantly shortens the supply chain for the South African pharmaceutical industry. For TIA CEO Barlow Manilal, the new pilot plant is a “great achievement,” in line with its object of funding the transformation of knowledge and ideas into commercial products, and helping to develop the economy and ultimately improving the lives of all South Africans. “CPT ticks all these boxes - a perfect fit for TIA.” Close collaboration with local universities allows access to sophisticated analytical equipment and expertise, with lecturers and students given the opportunity to visit the company for exposure to commercial fine chemical manufacturing.
AUTOMATION & MACHINE AUTOMATION SPECIALISTS SPESIALIST INDUSTRIES -packaging -cosmetic -pharmaceutical -automotive -Animal Health
OTHER -fillers -cappers -conveyers -tube sealers -QA systems -assembly machines
Contact: Andries van Jaarsveld Theunis Taljaard andries@protectiveproducts.co.za theunis@protectiveproducts.co.za www.protectiveproducts.co.za +27 12 653 2900
// Protective Products Protective Products and Chemprotech met 4 years ago at a Packaging Trade Exhibition. The challenge that Protective Products had to face was 10 geometries of containers on a single packaging line. The challenge:10 Geometries
The solution:8-head filler & duel-head capper
Protective Products’ experience of 25 years with the machines and systems that we have purpose-developed provides an insight into the diversity of our engineering capabilities. Each one has been purposebuilt for a specific application, but was designed for adaptability for other similar applications. Protective Products has become a trusted name throughout various industries. Protective Products strives to ensure that the South African Industry obtains maximum advantage from the latest technological breakthroughs, and that the local industry has access to the most effective processes, equipment and technical support available worldwide. Our Clients includes : BMW SA & all other automotive manufacturers,Revlon,Diasorin,Kryolan SA,Cipla,Liquifire / Red Cap Gel,Nilfisk,CIM Lubri Fuel
www.enterprise-africa.net / 55
INDUSTRY FOCUS: SCIENCE AND TECHNOLOGY
NATIONAL ASSET “We see the plant as a national asset because nobody else is doing what we are doing. It’s a facility with many purposes and the most critical one for us is to give proof of the technology we are developing,” says Malan. But in the South African pharma sector as in others, skills shortage is a major issue, with Dr Anban Pillay‚ Deputy-Director General of regulation and compliance in the department of health‚ saying that of the factors impacting on South Africa’s capacity to compete, “firstly and most importantly, is access to appropriately skilled persons to develop production capacity.” Dr Malan agrees. “We have excellent scientists in South Africa,
56 / www.enterprise-africa.net
but the biggest problem is that we don’t have enough commercial opportunities for them to apply their skills. We do not have the industries to support them, and the markets are quite small. “When we look for somebody specifically on the chemical side, we will not find somebody with applicable knowledge such as you find in Europe or the US. This is the biggest issue, so we work closely with the number of universities, we train, broaden our current workgroup, and identify people we would like to employ to help us grow. “And when you have given them the opportunity, these guys just fly; people with the knowledge and the passion.”
GOING GLOBAL As one of South Africa’s Top Three manufacturers in the animal health segment, CPT is looking to secure approvals from other animal health companies to start manufacturing for them. “Longer term, we are looking at establishing ourselves as an international manufacturer for animal health products. This will require more capital, and we are slowly but surely putting this in place. “On the fine chemical side there are some real opportunities here in South Africa. For pharmaceuticals, the first thing is to get approval of our facility from the South African Medical Council, and this will happen before the end of the year. “We will use the pilot plant
CHEMICAL PROCESS TECHNOLOGIES (PTY) LTD
// IN THE DECADES AHEAD, WE WOULD LIKE TO HAVE A COMMERCIAL AIP MANUFACTURING PLANT RUNNING HERE IN SOUTH AFRICA // as a combination of R&D and manufacturing, and hopefully generate income to fund more commercial products. In the near future, we would like to have a commercial AIP manufacturing plant running here in South Africa.” An independent business, CPT will be an independent manufacturer able to supply to any of the pharmaceutical companies in the country, says Dr Malan. CHANGING DYNAMICS “We have spoken to most of the pharmaceutical companies in South
Africa and they are all interested in talking to us with regard to processes for specific products. On the pharma side it is very important to show that we can do what we said we can do. Once you have done that the dynamics will change “It’s a very competitive environment, and it’s our objective to grow as a sustainable organisation and continue to develop technology and its commercialisation. The playing field is definitely levelling out, says Dr Malan, with the cost of manufacturing changed dramatically. “All of a sudden it makes
sense for South Africa to look at manufacturing for itself and not being dependent for critical products on one or two countries. “For us the opportunities are clear, and we have a very good chance to become participants in this industry and making a valuable contribution to South Africa and its economy.”
WWW.CHEMPROTECH.CO.ZA
www.enterprise-africa.net / 57
UNILEVER SOUTH AFRICA
Global Brand Continues
Delivering Big Brands Into Africa PRODUCTION: Manelesi Dumasi
Unilever is making moves that will see it established as the long-term, sustainable African organisation that allows consumers to look good, feel good and get more out of life. Its leading product range and unrivalled reach look set to solidify this goliath’s position at the top of all the industries in which it plays. 58 / www.enterprise-africa.net
INDUSTRY FOCUS: FOOD & DRINK
//
The growing worldwide demand for quality food service offerings has reached South Africa. High-quality, fairly priced food, served in an environment that is welcoming and friendly is no longer enough. You must go above and beyond to build genuine client relationships and generate repeat business. So how can South Africa’s top restaurant chains, and leading independent food outlets differentiate themselves in a time when competition is rife and customers are looking for individuality but uniform quality. The answer could be partnering with experienced, reputable and professional industry partners. Take Unilever Food Solutions for example. Active in South Africa for many years, Unilever’s global reputation has helped the company to become a
60 / www.enterprise-africa.net
‘go-to’ name. The food service and restaurant industry has grown significantly in recent years, and has benefitted from the country’s developing tourism industry. Even through the tough economic conditions that thwarted much growth in 2016 and 2017, the quick service restaurant (QSR) sector displayed steady growth, including a 29% contribution to South Africa’s R587 billion franchising sector (which accounts for more than 13% of GDP). The country is home to tens of thousands of food service business, ranging from street stalls to full service restaurants to Michelin star world famous eateries. The attraction of a great restaurant has been proven and location developers, such as builders of shopping centres, are looking to attract the best restaurants to help drive traffic. Growth in sales in the F&B sector
between 2017 and 2020 of 5.6% is expected in South Africa, according to JHI CEO, Nomzamo Radebe. Unilever Food Solutions is a chef’s best friend, offering ingredients, equipment and advice. Utilising the Unilever brand portfolio, food businesses can order Hellmann’s, Knorr, Carte D’or, Robertson’s, Marvello, Flora, Meadowland, Fine Foods, Joko and more. The Unilever range, knowledge, coverage and speed of service is unrivalled in South Africa, and the company is recognised in its own right as a brand of major importance in terms of contribution to the economy. A R1.4 billion home care factory was opened in South Africa in 2015, a R500 million ice cream factory was opened in the same year, and a R511 million investment into the Indonsa factory was also completed in 2015, adding to an already strong
UNILEVER SOUTH AFRICA
infrastructural position. One things is for sure, this global food, beverage and household powerhouse sees Africa and southern Africa as an opportunity. SECURING BUSINESS In September 2017, Unilever announced that it would purchase a 25.75% shareholding in its subsidiary, Unilever South Africa, held by Remgro. The exchange would involve Remgro taking the Unilever Spreads business in Southern Africa and an additional R4.9 billion. Taking full control of the Unilever South Africa business will allow Unilever to quickly advance the
business in the region. Luc-Olivier Marquet, Executive Vice President of Unilever SA said: “Unilever South Africa is a great business, well positioned for sustainable long-term growth. By giving us full ownership of the business, this transaction means we are better placed to accelerate that growth while the Spreads business moves on to Remgro where it augments their current portfolio and can be sure of a great future.” Jannie Durand, CEO of Remgro, said: “Through this transaction, Remgro has exchanged its minority stake in Unilever South Africa for full ownership and control of the
// THIS TRANSACTION IS A VOTE OF CONFIDENCE IN THE FUTURE OF SOUTH AFRICA, BOTSWANA, LESOTHO, NAMIBIA AND SWAZILAND //
Unilever Spreads business in South Africa, Botswana, Lesotho, Namibia and Swaziland plus cash. We believe the Unilever Spreads business in these Southern Africa countries is an attractive business, with leading brands which include Rama, Stork, Flora and Rondo with good growth prospects. “This transaction is a vote of confidence in the future of South Africa, Botswana, Lesotho, Namibia and Swaziland.” Durand thanked Unilever for a positive longstanding relationship and wished Unilever and the employees of Unilever South Africa well for the future. He also welcomed the prospect of having the Spreads business as part of the Remgro Group. It is reported that Remgro wanted more control and further ability to shape the future of Unilever South Africa and saw the opportunity with Spreads.
www.enterprise-africa.net / 61
INDUSTRY FOCUS: FOOD & DRINK
AFRICA HUB Further good news for Unilever in South Africa came in September when the company announced it would move into a purpose built African hub. The 5-star green rated modern and sustainable office in Sandton will help Unilever to drive its Brighter Future for Africa strategy and continue to push business on the continent. Management was understandably excited. “Not only is this a modern open plan collaborative environment for our pan-Africa staff to operate at the heart of the changing retail, marketing and consumer landscape in Africa,” said Unilever Africa President, Bruno Witvoet, “it’s also a springboard for our South African talent into Africa and for our global and African talent to contribute in turn to the growing
62 / www.enterprise-africa.net
body of knowledge on African business here in South Africa.” He continued: “As a truly pan-
African company we see the future of African business in collaboration, breaking down boundaries and
UNILEVER SOUTH AFRICA
exchanges of talent. That’s why we set up a new African Hub Office and, as a thriving well connected African capital, Johannesburg is the ideal location. We look forward to working from here with our partners, customers and suppliers to use our great brands to help build a brighter future for Africa.” Brands including Knorr, Lipton, Omo, Sunlight and Pepsodent will all be managed from the new hub – the Atholl Towers. Unilever South Africa, which is headquartered in Durban, will also fall under direction set out from the new African hub. WUHU In a rebrand of its popular Unilever Deals programme, the company has recently launched Wuhu, a digital FMCG deals and rewards platform. Previously, consumers were rewarded for purchasing Unilever goods, and the platform quickly built a subscribership of more than 700,000 people. Now, Wuhu has been redesigned and upgraded in partnership with Vodacom and delivers real-time digital rewards to consumers, allowing Unilever to convert online consumers to offline sales. Lunga Ngcime, Digital Marketing Lead: Africa – Unilever South Africa said: “Since inception, the platform has realised significant return on investment for Unilever brands, and earned numerous awards while building up the number of retailers to include Checkers, Shoprite, Pick n Pay, Dischem and Spar. The platform has also built nearly 700,000 subscribers that are returning on a monthly basis to get their favourite deals. “We are excited about our partnership with Vodacom. Working with a brand like Vodacom means we can extend more meaningful rewards to our loyal customer base.”
J S Engineering cc
54 TILE RD, ANDERBOLT, BOKSBURG, 1459, SOUTH AFRICA TEL: (011) 892-1900 FAX: (011) 892-1616 Reg. No. CK 1991/001400/23 • VAT No. 4360107157
//AS A TRULY PAN-AFRICAN COMPANY WE SEE THE FUTURE OF AFRICAN BUSINESS IN COLLABORATION, BREAKING DOWN BOUNDARIES AND EXCHANGES OF TALENT // This initiative is taking mobile couponing to the next level in South Africa, and is setting the standard for interaction with consumers in the future. According to Unilever, ‘on any given day, more than two billion people use Unilever products to look good, feel good and get more out of life’. In South Africa, the company has seven factories and two offices employing some 3500 people. This is a company that truly has an impact. With its new
African hub, new consumer reward platform, and with management constantly making decisions that will allow the business to grow, you can expect more to come from Unilever in Southern Africa. To the delight of chefs all over the country, Unilever is here to stay and is now the perfect partner for those in the food service sector.
WWW.UNILEVER.CO.ZA
www.enterprise-africa.net / 63
64 / www.enterprise-africa.net
SAPPI
Sappi Turns New Page In
Vision2020 Strategy PRODUCTION: David Napier
Making big investments locally, strategically acquiring internationally, and delivering consistent quality like no one else, Sappi is a South African born brand that is putting the country on the map. Excelling financially and operationally, this is a company that is truly an example to follow. www.enterprise-africa.net / 65
INDUSTRY FOCUS: MANUFACTURING
//
2018 marks the 80th year of paper production for Sappi in South Africa. Starting out as a single mill, the Enstra Mill, in Springs in 1936, the company had the ability to produce 14,000 tons per year (tpy) and started producing paper from a strawbased pulp in 1938. On founding, the company was known as South African Pulp and Paper Industries Ltd, and expansion was realised quickly with Sappi moving to open new mills and establishing tree plantations to feed its growth. In ’73, the company re-registered as Sappi Ltd, and a new growth phase was entered, driven by Sappi’s unique ozone bleaching technology. The sapoxal oxygen bleaching process was developed at the Enstra Mill and involves using chlorine or chlorine compounds alongside oxygen or hydrogen peroxide to bleach wood pulp, which has a brownish colour, making it white. This process was pioneered by Sappi and is
66 / www.enterprise-africa.net
now a standard for the industry around the world. In 1988, Sappi’s biggest expansion strategy was achieved as the company acquired Saiccor (South African Industrial Cellulose Corporation). This prompted Sappi’s entry to the dissolving wood pulp (DWP) market, and from the mill in KZN, Sappi became a leading industrial player in South Africa. The 1990s saw Sappi expand internationally, opening fine paper mills in Germany, UK, and the USA, and the 2000s saw Sappi acquiring new businesses while closing old, unprofitable mills. Now a major international player, with expertise across several related areas, Sappi was a true South African success story. Today, the company can produce dissolving wood pulp, paper pulp, printing papers, packaging and speciality papers, casting and release papers, and related biomaterials and bio-energy. Sappi’s more than 12,000
people work across seven main mills in Europe, three mills in the USA and four in South Africa. globally, the company can produce more than 5.4 million tons of paper each year, 2.3 million tons of paper pulp and 1.3 million tons of DWP. Sappi products are distributed across more than 150 countries. In 2018, the company is preparing to implement further growth strategies to boost its impressive financials. INVESTMENT & ACQUISITIONS Late last year, in December, Sappi confirmed it was underway with an expansion strategy that would see it increase its DWP production capabilities at its Saiccor DWP Mill by 2020. Adding an extra 250,000 tpy capacity will allow the company to stay up to date with global demand. Sappi is also underway with a debottlenecking programme at the Saiccor Mill and this includes increasing the chipping capacity and
SAPPI
// SAPPI’S STRATEGY OF SECURING ITS LEADERSHIP POSITION IN HIGH QUALITY PRINTING AND WRITING PAPERS WHILE EXPANDING ITS FOOTPRINT IN HIGHER GROWTH AND HIGHER MARGINS MARKET SEGMENTS HAS BEGUN TO DELIVER REAL VALUE AND THIS WILL ONLY INCREASE INTO THE FUTURE // modernising the Saiccor Mill wood yard with all-new equipment. When complete, the mill will have a capacity of more than one million tpy, this is why Sappi has started an EIA (environmental impact assessment) process to understand the effect of the investment on the local region and other impacts. Other expansions are underway at the Cloquet Mill and the Ngodwana Mill to increase capacity at both, aiding the drive to meet global demand. “At our Cloquet Mill, we are completing a study regarding the expansion of pulping capacity within
our existing permit limits, maintaining our ability to make either DWP or Kraft pulp. It is envisaged that such an expansion would have the capacity to increase DWP production by around 30,000tpa and could be brought on line by mid-2019,” the company says. “Sappi is also, as previously announced, in the process of expanding its dissolving wood pulp capacity at its Ngodwana Mill by 50,000tpa through debottlenecking projects. This work is scheduled for completion by August 2018,” Sappi added. In February, Sappi announced that it had gained all necessary agreements
for the acquisition of Cham Paper Group Holding AG (CPG) speciality paper business, a European operations across Switzerland and Italy. The two Italian mills and digital imaging business in Switzerland all now fall under the Sappi Europe banner, and all CPG speciality paper intellectual property is being incorporated into the group. “I am very pleased that we have been able to finalise this acquisition so quickly,” said Sappi Chief Executive, Steve Binnie. “We are now able to move with speed to combine Cham’s strong brands, employees and assets with
www.enterprise-africa.net / 67
INDUSTRY FOCUS: MANUFACTURING
// I AM VERY SATISFIED WITH OUR PERFORMANCE FOR THIS QUARTER AS REFLECTED BY INCREASED SALES, EBITDA AND NET PROFIT // Sappi’s global presence. Our existing as well as new customers will benefit from a broader range of products coupled with our well-established excellent customer service. This transaction strengthens Sappi’s specialities and
68 / www.enterprise-africa.net
packaging papers business both in Europe and globally, improves our profitability and is another significant milestone towards realising our Vision2020 goal.” Sappi’s Vision2020 involves
substantially increasing EBITDA by the end of the decade by achieving cost advantages, rationalising declining businesses, maintaining a healthy balance sheet and accelerating growth in high margin segments. “Our acquisitions, conversions and expansion projects are positioning us to take advantage of the move from plastics to natural fibre, biobased products and paper-based packaging alternatives. Sappi’s strategy of securing its leadership position in high quality printing and writing papers while expanding its footprint in higher growth and higher margins market segments has begun to deliver real value and this will only increase into the future,” said Binnie. In April, Swedish company ÅF (in partnership with engineering firm, Wood) announced that it had been given the contract by Sappi South Africa to undertake improvement and upgrade works at the Saiccor Mill. Set
SAPPI
for completion in 2020’s third quarter, the 320,000 man hour project is set to bring the mill in line with European environmental legislations and standards with reduced carbon dioxide emissions and substantially reduced chemical oxygen emissions. SEALING STRONG PERFORMANCE In February, it looked like the company was managing to perform successfully, despite the political upheaval in its home market of South Africa. The company stated that its expansion plans are set to provide significant returns later in the year and earnings were in line with expectations. EBITDA excluding special items sat at US$172 million, slightly down from the same period in the previous year. Profit for the period was US$63 million, which was down by US$27 million on the same period in 2017. The future outlook was positive, with global demand for DWP remaining strong. “Our performance for this quarter was in line with our expectations,” said Binnie. “We continue to work hard to mitigate increased input costs and the impact of a stronger Rand/Dollar exchange rate. We will begin to see the benefits of selling price increases during the rest of the financial year. “I am very excited about the prospects for dissolving pulp over the next few years. It is also clear that speciality and packaging paper demand continues to grow as the push to encourage the use of paper based packaging over plastic gathers momentum. “Over and above our debottlenecking projects, we are advancing plans for the possible expansion of Saiccor Mill by a further 110,000tpa.” Last month, the company announced its 2018 second quarter results, beating expectations across the board. Binnie was pleased. “I am very satisfied with our performance for this quarter
Inkunzi Foundry (Pty) Ltd 37 years of foundry excellence Manufacture of ferrous & non ferrous castings. Suppliers to Sugar Mills, Paper Industry, Mines, Smelters, General Engineering Industry etc ISO 9001: 2015 accredited
9 Yellow Street, Isithebe, Kwa-Zulu Natal, 4491 Phone: +27 32 459 2994
www.inkunzifoundry.com
as reflected by increased sales, EBITDA and net profit,” he said. “I’m particularly pleased that all regions were able to deliver higher sales volumes despite the shortterm impact of the expansion and conversion projects. We faced higher raw material costs, in particular pulp, for our paper businesses but were able to increase selling prices to offset most of this impact. The acquisition of the Cham speciality paper business was completed during the quarter and the integration into Sappi is moving ahead smoothly. “Our operating performance for the third quarter is expected to be in line with that of the prior year as the impact of the stronger Rand and the various capital projects underway will offset the improved paper markets,” he added. EBITDA excluding special items was
up to US$211 million and profit for the period hit US$102 million. From its Johannesburg headquarters, Sappi continues to make strides as one of the only companies emanating from South Africa and taking market share in major developed economies around the world. In the future, with improvements to its local mills, acquisitions of global expertise, and effectively driving international demand while always maintaining a quality focus, now is the time for Sappi to position itself atop the industry and write its name in the history of the paper and packaging sector.
WWW.SAPPI.COM
www.enterprise-africa.net / 69
Š Petra Diamonds - The Bulk Sample Plant – Crushing Plant at the Finsch mine
70 / www.enterprise-africa.net
PETRA DIAMONDS
Petra Trades Strong In
Hard Market PRODUCTION: Karl Pietersen
An increase in production and revenue in its FY 2018 Q3 is making those involved in Petra Diamonds operation excited about what the future will hold when its various mine plans are completed later next year. www.enterprise-africa.net / 71
INDUSTRY FOCUS: MINING
//
Diamonds, the hardest rock known to man, continue to create industries that are difficult to crack. Mining them, cutting and polishing them, and selling them is no easy feat. But for those with experience and reputation, the industry still holds a significant level of value. Diamonds are not just used for fancy jewellery, they are present across many industry sectors, using their unique make-up to assist when only the hardest material will do. So production of these minerals is important.
This is why researchers around the world have been searching for ways to develop diamonds – or diamonds-like materials – and one expert in the UK seemed to have done just that last month. Dr Oliver Williams of the University of Cardiff demonstrated to the media a technique by which he could create, in just 24 hours, diamonds so similar to genuine stones, the difference could never be spotted. Industrial diamonds crated by humans, instead of those dug from the ground after billions of years of high-pressure and high-temperature moulding,
can usually be created by crushing carbon. But Dr William’s method involves creating a higher purity by using pressures 1000 times lower than the atmosphere and adding a special mix of gases. This is a worry for the world’s major producers – could their methods eventually be phased out thanks to technological advances? According to Citi analysts, sales of synthetic diamonds will make up 10% of total supply by 2030, up from the current 2%. But for the immediate future, miners will have to efficient and effective to extract stones and
// THE FUTURE FOCUS OF THE COMPANY WILL MOVE AWAY FROM VOLUME TARGETS TO VALUE OPTIMISATION //
© Petra Diamonds - Drilling Specialist operating the Simba M4C, underground at Finsch
72 / www.enterprise-africa.net
PETRA DIAMONDS
deliver sales targets. Now is the time for business excellence if ever there was one. SET IN STONE South Africa’s diamond industry goes back to 1867 when a 15 year old boy, Erasmus Jacobs, found a unusual rock on his father’s farm, close to the Orange River. The diamond was names the ‘Eureka’. The ensuing rush to uncover the valuable stones saw South Africa become the world’s leading diamond producer, turning up more diamonds in just a few years than India had in 2000 years. Some of the world’s largest and most famous diamonds come from South Africa. The Cullinan, the Hope, the Excelsior, the Centenary and many more are all South African in heritage. While the mining industry in South Africa is not what it used to be, it remains a vital part of the economy and diamond mining is a major employer. One of the company’s at the top of the industry is Petra Diamonds. Listed on the London Stock Exchange and a member of the Diamond Producers Association, Petra was formed in 1997 as a junior exploration company. Today, the company owns and manages five diamond
mines and produces around four millions carats each year. Finsch, Koffiefontein, Cullinan, Kimberley Ekapa Mining JV, and the Williamson mine in Tanzania are all Petra operations.
In April, Petra released its trading report for the third quarter of its 2018 financial year. the impressive report detailed a reduced Lost Time Injury Frequency Rate, now at 0.18 from 0.24 in the same period last year. Safety remains the highest priority at Petra, and the company has stated its long-term target of a zero harm workplace is its strongest focus. Production was up 20% for the quarter, sitting at 1,194,947 carats from 999,768 carats in FY 2017. This was a record quarterly production figure for the company and helped contribute to a revenue increase of 44% to US$172 million with the company stating it expects to achieve its prediction of 4.6 - 4.7 Mcts for the full year. Petra Diamonds Chief Executive, Johan Dippenaar was pleased with
Making a meaningful, measurable, difference.
Buildings and machinery don’t make companies, people do. Life Occupational Health is proud to be a partner in investing in the health of your biggest asset – your people. Life Occupational Health is a specialist occupational and primary healthcare service provider and the first South African organisation to have achieved ISO 9001: 2015 and OHSAS 18001:2007 certification.
Life Occupational Health is an ISO 9001:2008 accredited national occupational health provider
Careways is a national provider for employee wellness services
www.enterprise-africa.net / 73
INDUSTRY FOCUS: MINING
// PETRA HAS RECORDED STRONG RESULTS IN BOTH PRODUCTION AND SALES, AS WELL AS A CONTINUED IMPROVEMENT IN OUR SAFETY PERFORMANCE // the report and said that the future looked bright despite challenges that will soon come into focus. “Petra has recorded strong results in both production and sales, as well as a continued improvement in our safety performance. It is also important to note that the make-up of our production is transforming, with higher value ROM production representing ca. 82% of our carat volume. The future focus of the Company will move away from volume targets to value optimisation. “While we are very encouraged by the operational delivery against our long-term expansion plans,
risks to performance continue to relate to increased volatility in the ZAR/US$ exchange rate, grade and pricing variability at Cullinan, as well as the outlook for Williamson and the blocked diamond parcel.” Strong performance was realised across the Petra mine portfolio, especially at the Finsch mine in the Northern Cape where ROM production increased 13%. “[This was] driven by higher ROM grades of 63.0 cpht (Q3 FY 2017: 54.2 cpht), positively impacted by the treatment of higher-grade surface ROM material, coupled with the increase in undiluted tonnes from the new Block 5 sub
© Petra Diamonds - Employees underground at the Wesselton Shaft, Kimberley Underground
74 / www.enterprise-africa.net
level cave (SLC). Overall production increased 6% to 553,669 carats (Q3 FY 2017: 522,515 carats), with the increase in ROM production offset by the planned reduction in tailings production,” the company said. Former Finsch mine manager, now Petra COO, Luctor Roode, tells Enterprise Africa that the best is still to come at Finsch. “We are still ramping up the production from Block 5 and will probably reach steady state during next year,” he says. DIAMOND MARKET On the back of the strong production report, Petra shares
PETRA DIAMONDS
© Petra Diamonds - Loading in operation at the Koffiefontein open pit
spiked by 5.7% and positive market conditions make for an exciting outlook for the company. According to Petra’s Q3 trading report, the diamond market “remained relatively strong in Q3, boosted by the continued festive retail selling season, incorporating Chinese New Year and Valentine’s Day, which in turn led to restocking in the pipeline and resultant good demand for purchasing of rough diamonds.” In May, the De Beers Group also released a market report suggesting that global demand for diamonds was strong. “People around the world are spending more on diamond jewellery than ever before and it’s encouraging to see consumers in the US, the world’s largest and
most mature market, leading the way. While new designs and brand concepts played a key role in catching the consumer’s eye, it’s the timeless natural beauty, uniqueness and enduring value of diamonds that continues to resonate with people when looking to celebrate life’s special moments,” said De Beers CEO, Bruce Cleaver. According to the report from the global diamond specialist, and previous owner of the Petra mine portfolio, the global demands for 2017 was at an all-time high of US$82 billion (2% up on 2016). Strong demand in the US and China was the key driver of this market strength, and De Beers praised the marketing efforts of the industry for building a strong position. Across all of its mines, Petra
is undertaking upgrade and improvement works to ensure a safer, deeper, longer lasting, and more efficient mining operation. When these works are completed at the end of 2019, Petra will be aiming for 5-5.3 Mcts per year and a significant increase in revenue. This is a business that is doing everything possible to navigate a hard-to-master industry, and while extracting diamonds from the ground is still viable, Petra continues to demonstrate how it is done best.
WWW.PETRADIAMONDS.COM
www.enterprise-africa.net / 75
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.
MADEX 2018 JUNE 06 | JOHANNESBURG Madex, the ultimate marketing, advertising, design, social media and all that good stuff expo is back! Not your typical marketing event, Madex brings marketing matters to life through an interactive exhibition floor, curated expert content and multiple networking opportunities. Enhance your capabilities, gain valuable insight and knowledge into today’s ever-changing trends and techniques and consult with key providers.
AFRICA RAIL JUNE 12 | JOHANNESBURG Africa’s longest running and most successful railways event now enters its 21st successful year. From humble beginnings as a
76 / www.enterprise-africa.net
small conference with a handful of exhibition stands, it now takes up 2 massive halls at the Sandton Convention Centre in Johannesburg. And has grown to become Africa’s most important and best supported railways conference and exhibition. For 2 decades, Africa Rail has become the undisputed leader. It is an unrivalled platform for the continent’s railways industry to come together … to learn, to network and to do business.
AFRICA RAIL Sandton Convention Centre JUNE 12-13 MADEX 2018 Sandton Convention Centre JUNE 06 – 07 AVIATION FESTIVAL AFRICA 2018 Sandton Convention Centre JUNE 05 - 06 AFRICA’S BIG SEVEN 2018 Gallagher Convention Centre JUNE 24 - 26 AFRICAN UTILITY WEEK 2018 Cape Town International Convention Centre JUNE 15 – 17 CHINA TRADE WEEK – SOUTH AFRICA 2018 Gallagher Convention Centre JUNE 24 - 26 FRANCHISE BUSINESS FESTIVAL Mall of Africa JUNE 29 – JULY 01 CBM TEC – MINING COPPERBELT 2018 Kitwe Showgrounds JUNE 05 - 07
FRANCHISE EXPO 2018 JUNE 29 | JOHANNESBURG Always dreamt of owning your own franchise? Visit the Franchise Business Expo, 29 June to 1 July 2018. The Franchise Business Expo held in South Africa is the perfect opportunity to show thousands of visitors what franchise business you have on offer. Flaunt your recipe for success by booking your stand and have the opportunity to speak directly to interested entrepreneurs to generate sales and leads.
BLUE MEANS HIGH INTENSITY REDUCES PASSES
RUBIN 12 COMPACT DISC HARROW
The Rubin 12 from LEMKEN is the ideal tool for mixing in large quantities of plant material evenly into the soil, thanks to the large 736 mm disc and a unique dual-angle to the soil. It is equally at home in hard soils. The hydraulically adjusted following rollers accurately control the working depth and crumble and firm the soil to leave behind an ideal seedbed.
scs enable mounted di Individually large ith w al de the Rubin 12 plant residue quantities of
■ Working depth of 7-20 cm, hydraulically adjusted ■ Symmetric disc arrangement to eliminate side-pull forces ■ Mixes organic matter homogenously into soil for rapid organic material decay ■ High working speed ensures intensive tillage and high acreage performance
KARAT 9 COMPACT CULTIVATOR le Tool and hass shares
The Karat 9 from LEMKEN is capable of loosening and mixing the soil at the same time thanks to the unique tine spacing. This means the soil is loosened and aerated while large quantities of plant residue can be mixed in without plugging up. Thanks to the share quick change system from LEMKEN and the accurate depth control it is easy to always work at the right depth with the correct share. Contact your nearest area sales manager to find out more about LEMKEN Karel Munnik, director + area sales manager, 082 412 2577, k.munnik@lemken.com Blackie Swart, area sales manager, 082 404 9651, b.swart@lemken.com
■ ■ ■ ■
free exchange
of
Maintenance free overload system for tines Working depth of 5-30 cm Available in 3-7 m working widths Heat treated wearing parts for longer service life