Enterprise Africa August 2018

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

August 2018

www.enterprise-africa.net

Fisher Dugmore Financial

Guiding Financial Growth Exclusive interview with co-founder, Dave Fisher ALSO IN THIS ISSUE:

Knight Frank / Wild Peacock Products / Mthembu Tissue / EBH

Giving hope to people in need

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 Sam Applegate  sama@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

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The message from our featured companies in August remains the same as the message we have been hearing for the past six-months: Be patient, a turnaround the economy is coming but it may take some time.

Since taking office, President Ramaphosa has been pushing a transformational agenda, and people have been backing him. Almost every single person we talk to says the same thing – he is installing a new level of confidence among the business community, but he needs time to ensure certainty and sustainability.

This month we talk to a handful of important businesses from a range of sectors and ask them how they have managed to become successful and remain on top of their industries, through economic turmoil and challenging market conditions.

Wild Peacock Products tell us that these issues have always been, and always will be, present in SA and it’s about developing a strategy to constantly adapt.

Mason Complete Office Solutions explain the importance of staying up to date with the needs of the customer and being innovative.

Fisher Dugmore talk of the need to deliver a quality service that is unrivalled in the industry. Clients appreciate the extra lengths companies go to so they can help their customers.

Mthembu Tissue Converting highlights the importance of persistence – when you have a good model and a level of experience, you must continue to push your ideas, despite hurdles that may be placed in your way.

And Knight Frank South Africa explains more about the need to bring international ideas and expertise to your business – this can be refreshing for an expanding company.

All of these organisations, and the others featured this month, are proof that business excellence remains achievable and, even in challenging conditions, can be attained.

Tell us how your business is remaining positive, and if you think a turnaround is coming. We’re online @EnterpriseAFri1

Joe Forshaw EDITOR

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

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

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

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

8/FISHER DUGMORE FINANCIAL Guiding Financial Growth Fisher Dugmore is the financial advisory and planning business that can help you create a plan to grow your wealth. Formed through the merger of Andrew Dugmore & Associates and DFB Financial Advisory Services, Fisher Dugmore has become one of the most trusted, reliable and productive businesses in the industry. Co-founder, Dave Fisher talks to Enterprise Africa about the success of the company and how it consistently delivers for its clients.

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CONTENTS

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63/ 38/ INDUSTRY FOCUS: FINANCE 8/FISHER DUGMORE FINANCIAL Guiding Financial Growth

51/THE BIOVAC INSTITUTE Biovac to Produce GBS Vaccine in Cape Town INDUSTRY FOCUS: FOOD & DRINK

16/MARSH AFRICA Finding the Opportunity in Risk

63/WILD PEACOCK PRODUCTS Extraordinary WC Food Supplier Looks to Africa

INDUSTRY FOCUS: PROPERTY

INDUSTRY FOCUS:MINING

21/KNIGHT FRANK SA Cape-Ability Benchmark

70/PALABORA MINING COMPANY The Gold Standard In Copper Mining

INDUSTRY FOCUS: DISTRIBUTION

INDUSTRY FOCUS: SECURITY

26/MASON COMPLETE OFFICE SOLUTIONS Shifting Office Supply Business Inked in SA’s History

77/FIDELITY ADT Global Player With Local Knowledge

INDUSTRY FOCUS: MARINE

84/GRAND CENTRAL AIRPORT A Flight Club You’ll Want to Join

33/ELGIN BROWN & HAMER EBH Celebrates 140 Years on SA’s Waters INDUSTRY FOCUS: MANUFACTURING 38/MTHEMBU TISSUE CONVERTING Epic to Cloud Nine 44/FALCON SIGNAGE SUPPLIES All Signs Point to Falcon Dominance

INDUSTRY FOCUS: TRANSPORT

INDUSTRY FOCUS: AUTOMOTIVE 90/TENNECO Cleaner, Faster, More Productive INDUSTRY FOCUS: TOURISM 95/TOURVEST DESTINATION MANAGEMENT Proudly South African Tourvest Enjoys Global Success www.enterprise-africa.net / 5

RAMAPHOSA’S GREAT SA ROAD SHOW ROLLS ON AS HE BAGS ALMOST $35 BILLION IN FDI

Photo: DIRCO

President Cyril Ramaphosa has been flying the SA flag high around the world as he visited a number of countries in July, securing deals worth almost $35 billion for South Africa’s economy.

On his first official visit to the United Arab Emirates (UAE), the President met with Sheikh Khalifa bin Zayed Al Nahyan, in Abu Dhabi to discuss the beginning of a new chapter in the long-standing relations between the two countries.

The result of discussions was a commitment by UAE to invest US $10 billion in key sectors of South Africa’s economy, including tourism and mining, to support the sustainable development of the country.

“The leadership of the two countries reaffirmed their deep commitment to further consolidate their strong bilateral relations across a variety of fields, including trade, transport, infrastructure development, tourism, mining, investment and cultural cooperation,” the Presidency said.

Earlier in July, Ramaphosa also completed an official state visit to Saudi Arabia where he secured a $10 billion

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investment pledge into the South African energy sector from the Middle Eastern powerhouse.

“This commitment from the Kingdom is a demonstration of confidence in our economy and gives further impetus to South Africa’s drive to raise $100 billion in new investment over the next five years to create jobs and for development,” he said.

During his visit, described as a remarkable success story, Ramaphosa met with King Salman bin Abdulaziz al Saud, the Crown Prince Muhammad bin Salman and the government of Saudi Arabia. He received the Order of King Abdulaziz, the highest honour by the Kingdom of Saudi Arabia awarded to citizens of Saudi Arabia and foreigners for meritorious service to the Kingdom and is named after King Abdulaziz Al Saud, the founder of the modern Saudi state.

But Ramaphosa’s biggest win in July came when Chinese President Xi Jinping came to town, meeting with SA officials and announcing an investment commitment of $14.7 billion in South Africa.

“President Xi Jinping has indicated that China is ready to invest and work with South Africa in various sectors, such as infrastructure development, the ocean economy, green economy, science and technology, agriculture, environment and finance,” Ramaphosa told the press.

The Chinese President called South Africa a ‘good brother and comrade’. He said both parties had agreed to further increase development cooperation in infrastructure, trade, technology and financial cooperation to unlock collaboration potential.

All of this came after the President had upgraded relationships with Ghana, bringing the relationship to Bi-National Commission (BNC) status.

“The era of President Ramaphosa will be an important one in the history of South African. I am here to renew our friendship. We want our connections to be more heightened,” said President Akufo-Addo extending his hand of solidary for greater partnership.

Quite the month for the President!

NEWS SNAPSHOT PICK ‘N PAY TALKS OF CREATING 15,000 JOBS Pick ‘n Pay’s head, Gareth Ackerman said last month that South Africa was not yet through economic turmoil but had certainly turned a corner.

His message was that creating employment remains a cornerstone of economic development. He labelled job creation as South Africa’s ‘number one priority’.

That is why, he said, the company has invested R5.3bn in opening and refurbishing stores and building its supply chain, creating 14,000 jobs in the process. And in the next three years he hopes to more than double this figure.

“In just about every public survey, the number one priority for South Africans is employment. It’s not difficult to see why: with job security comes dignity, the ability to chart your own future, provide for your family and play a meaningful role in the economy,” he said in a statement issued after the company’s AGM. “We hope that with the focus on foreign investment into South Africa, it is not just replacement capital, but new investment into the economy.

“Local companies need to be recognised and incentivised to increase

their investment and create jobs.”

He is keen, in particular, to address the issue of youth unemployment “The company’s impact is far wider: we work with about 10,000 suppliers, and last year spent nearly R68bn with them. This provides employment to more than 400,000 people.

“In total, we believe at least 1 million people are directly affected by Pick n Pay by way of employment.

“Getting South Africans to work should be the top priority of any business looking to the long term stability of our country. It’s a worthy goal for all of us in the corporate sector,” said Ackerman.

UNEMPLOYMENT UP The country’s official employment figures were released at the end of July but it was not an enjoyable announcement for Statistician-General Risenga Maluleke.

He stated that the official unemployment rate increased by 0.5% to 27.2% in the second quarter of 2018, up from 26.7% in the first three months of the year.

The number of people in work

shot down, and manufacturing was highlighted as an industry where losses had been severe. Manufacturing has lost 55,000 jobs year-on-year, and Maluleke said that basic metals and food production were the main drivers of the employment losses in the sector.

Of the 20.2 million South Africans aged 15 to 34 years, the number of young people not in employment,

education and training (NEET) increased by 0.4% in the second quarter year-on-year.

This rate increased for black African males and white males. The female rates of NEET was recorded at over 40% among black African females aged 15 to 34 years old.

“Black women are the most vulnerable when it comes to unemployment,” Maluleke said.

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FISHER DUGMORE FINANCIAL

Guiding Financial

Growth PRODUCTION: Karl Pietersen

Fisher Dugmore is the financial advisory and planning business that can help you create a plan to grow your wealth. Formed through the merger of Andrew Dugmore & Associates and DFB Financial Advisory Services, Fisher Dugmore has become one of the most trusted, reliable and productive businesses in the industry. Co-founder, Dave Fisher talks to Enterprise Africa about the success of the company and how it consistently delivers for its clients.

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INDUSTRY FOCUS: FINANCE

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“There is a difference between earning money and keeping money,” says leading Certified Financial Planner (CFP), Dave Fisher.

The book he is currently writing, based on his quarter century in South Africa’s financial industry, will hopefully teach people how to keep more of that money and improve what he calls their “financial context”.

Fisher together with Andrew Dugmore is Co-founder and Director of Fisher Dugmore Financial, a boutique financial planning and advisory firm with two offices in Gauteng, in Centurion and Silver Lakes.

“I’ve done a lot of thinking, reading, research and courses about what motivates people. I found that everyone has what I term a ‘financial context’. That is the way you think,

feel and behave with money, which determines your level of wealth.

“Your academic intelligence will enable you to take a certain career path, but how well you work with that money and how much you end up keeping is determined by your financial context – it’s like a money muscle. I am passionate about helping people understand that, and I want them to realise what they can do to make a difference.”

While only a very small percentage of South Africa’s employed population employ a

financial advisor, Fisher is confident that the approach of his business, as well as a general improvement in the economic climate, will help the industry to thrive in the future. The key, he says, is clarity.

“I have a unique way of preparing a strategy for a client. I know it works as existing and new clients will speak to each other and refer people because they clearly understand the process. I feel the need to share that model with people. I have always been very interested in why certain people

// WE DELIVER ON A FAR MORE PERSONAL LEVEL. BANKS CAN OFFER INVESTMENT AND INSURANCE ETC FOR CLIENTS, BUT THEY DON’T DO IT ON A PERSONAL LEVEL LIKE WE DO //

Andrew Dugmore and Dave Fisher

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FISHER DUGMORE FINANCIAL

// WE WERE RUNNING TWO IDENTICAL BUSINESSES BUT UNDER SEPARATE BRANDS // work well with money and why certain people do not – it’s key to understand this so we can tailor a solution.”

A common saying in business – ‘the purpose of a business is to create a customer who creates customers’ is very true in the financial advisory space, and Fisher Dugmore has managed to achieve this.

A HISTORIC MERGE Before and during Fisher’s journey as an author, he has always been recognised as an industry-leading financial planner and this is largely due to the successes he has realised as part of Fisher Dugmore.

The story of the birth, growth and establishment of this business goes back three decades and is rooted in insurance.

“Andrew Dugmore and I started our careers in the life insurance space with Sanlam. He started around five years before I did. He resigned to become an independent insurance broker (almost swear words today) in 1988 and I did the same in 1992,” explains Fisher.

“We started our individual businesses and didn’t know each other at all. We were both small, working individually with only a PA each. In 1993, we met on a trip to Cape Town for a mutual provider.

We got on well and would meet periodically for coffee before talking about the synergies that existed between our businesses. Eventually, in 2002/03, our conversations got to the point where we amalgamated our short-term insurance businesses to form Fisher Dugmore & Associates.”

At this point, Dave Fisher and Andrew Dugmore were still running their practices independently and started to toy with the idea of a more complete merge.

“We were running two virtually identical businesses but under separate brands,” says Fisher.

“Eventually, we put together a buy and sell agreement so if anything happened to either of us, the one who was left would buy the others business to ensure continuity. That led us to, in 2016, talking about rebranding and we were advised to use the power of our brand, promoting one unified brand, and that is where the Fisher Dugmore Financial brand was officially born.

From there, we relaunched the corporate identity of the company as the Fisher Dugmore Group, with four companies involved, namely is Fisher

Dugmore Financial Centurion (my old practice), Fisher Dugmore Financial Silver Lakes (Andrew’s old practice), Fisher Dugmore & Associates (the company we formed together in 1993 for short-term insurance), and Fisher Dugmore Securities (for physical share trading for clients).”

The new brand - which is embodied by the nautilus shell, a symbol of growth and perfect proportion – offers a complete financial package for clients and has brought significant strength to the company. “We’ve experienced growth of between 15-20% per annum since we started,” says Fisher.

Today, Fisher Dugmore is a holistic financial planning business and is no longer just about insurance.

The highly qualified team deliver personal service, the likes of

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INDUSTRY FOCUS: FINANCE

// WE’VE EXPERIENCED GROWTH OF BETWEEN 15-20% PER ANNUM SINCE WE STARTED // which simply cannot be offered by corporate-sized organisations.

“We see ourselves as a boutique family-type business where we provide holistic financial planning for clients including estate planning, wills, investments, retirement, medical aid etc – we believe in holistic financial planning for our clients.

“We deliver on a far more personal level. Banks can offer

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investment and insurance etc for clients, but they don’t do it on a personal level like we do. Our speciality is building very close relationships with our clients and providing one-on-one trust-based relationships where we do everything for them. They see us as their go-to place for everything financial and investment,” details Fisher.

LIGHTING THE WAY In the future, Fisher Dugmore will explore ways to improve efficiencies and streamline internal and external operations. Of course, new technology will help to move the business forward.

“Andrew and I spend a lot of time looking at the best tools to

manage our businesses and that means we are always expanding the tool set we have for clients, workflow, and practice management. We are constantly tweaking and constantly investing into our own inhouse compliance software that allows us to work on tablets with clients to eliminate paperwork,” says Fisher.

“We always have growth in the back of our minds, but we do not have solid plans for expansion at this point. We do service clients in other parts of the country – Andrew and I both have clients in Cape Town, Durban and other parts of South Africa but we are able to service them all from our current branches in Centurion and Silver Lakes. With technology and the way the industry

FISHER DUGMORE FINANCIAL

// THERE WON’T BE A MASSIVE TURNAROUND OVERNIGHT. I THINK WE WILL GO SIDEWAYS FOR A LONG TIME TO COME. EVERYBODY’S MORE OPTIMISTIC WITH RAMAPHOSA IN CHARGE BUT THERE’S STILL MANY CHALLENGES TO OVERCOME // is going, we are able to service most clients remotely.”

Currently, the business describes itself as the ‘masters of wealth navigation’ and Fisher says that, even among big-name competitors, for those looking for financial advisory services, it is difficult to overlook his business.

“In our space, there’s a lot of independents as well as the big banks and insurance companies - there are also certain ‘independently flavoured’ financial advisory companies, and

there are a few family office-type businesses that play in the high-net worth individual space but when it comes to the boutique investment space that doesn’t discriminate by the size of the client, we are definitely one of the market leaders.”

But going forward, the concern for the business is that only a small group of people are making use of financial advisors, and with the country’s economic outlook not promising a major change for consumer pockets, will the industry

itself be able to grow?

“Yes, only a small percentage of people employ financial planners, but it’s that same portion that are the highest earners in the country,” explains Fisher. “Large parts of the employed population are contributing relatively insignificant amounts to tax. There’s a very broad lower-middle class and the uppermiddle class and wealthy is where you see employment of financial planners. As the economy grows, we will build a larger culture of saving

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INDUSTRY FOCUS: FINANCE

and build people’s prosperity. When they have more disposable income, people will employ financial advisors but when they are in survival mentality, financial planning is the last thing on their minds.”

Clearly, the precursor to more people using financial planners in South Africa is economic growth.

And Fisher suggests that the industry could yield in the medium-term.

“The forecasts in the short-term are for very low growth but things do look positive in the medium-term,” he says.

He describes the economic landscape as “more positive than it was a year ago” but admits significant hurdles remain for South Africa in a turbulent global economy.

“There won’t be a massive turnaround overnight. I think we

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will go sideways for some time to come. Everybody is more optimistic with Ramaphosa in charge but

there’s still many challenges to overcome. Large changes are needed before we see an impact

FISHER DUGMORE FINANCIAL

on people’s pockets and before we see the sort of growth that we saw during the Mandela era or during the build-up to the World Cup.” But there is always another side to the coin. Fisher Dugmore deals with clients’ investment portfolios and with a weak economy comes a weak currency, which can help those invested in international stocks.

“There’s a dichotomy in South Africa between what the economy does and what the markets do. When the Rand depreciates, it’s favourable for the stocks of the globally invested companies. Locally, our client’s businesses may perform badly, while their investments still perform strongly,” details Fisher.

Whichever way the economy turns, the people at Fisher Dugmore are more than prepared to

navigate all scenarios. All holders of relevant qualifications, the team is experienced and knowledgeable beyond that of the competition.

Hence, unpredictable economic and political situations have not fazed Fisher Dugmore.

“It’s been business as usual,” says Fisher. “We continue to grow and continue to generate interest with existing and potential clients. In the wider economy, there are isolated sectors where confidence has improved and where businesses are expanding, but most people are still very cautious of the socio-political landscape and there’s been no large growth in any area.”

The next step for the Founders is to ensure the company continues to service clients with the highest-level of quality, as it has since inception,

and for Fisher to finish his book.

“I go away for around two or three days at a time, I lock myself in solitude and I write. I am around three quarters through and I hope to finalise by the end of the year.”

Unfortunately, you’ll have to wait until then to find out how to keep more of the money to earn and learn more about your financial context.

WWW.FISHERDUGMORE.CO.ZA

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MARSH AFRICA

Finding the

Opportunity in Risk PRODUCTION: Timothy Reeder

A global leader in insurance broking and innovative risk management solutions, Marsh’s 30,000-strong team of experts advise individual and commercial clients of all sizes across 130 countries worldwide. In Africa, Marsh specialises in providing clients with the intellectual capital and industry experience to unlock the opportunity in risk.

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In today’s increasingly uncertain global business environment, Marsh is on hand to help clients to thrive by enabling them to anticipate, quantify and more fully understand the range of risks they face. On offer are services spanning risk management, risk consulting, insurance broking, alternative risk financing and insurance programme management.

CENTURIES OF EXPERTISE Marsh is a wholly-owned subsidiary of Marsh & McLennan Companies (MMC), a global professional services firm with a revenue of USD$13 billion annually and 60,000 employees worldwide. Since

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1871, clients from every industry, be they businesses, government entities, multinational organisations or individuals around the world, have relied on Marsh for trusted advice to represent their interests in the marketplace. Its long history gives Marsh, and its clients, the ability to make sense of an increasingly complex world, and help turn risks into new opportunities for growth.

At its root, Marsh provides industryfocused consulting, brokerage and claims advocacy services, while leveraging data, technology and analytics to help reduce clients’ total cost of risk. Marsh uses a team approach to best provide for individual clients’ risk management and insurance needs; essentially, this means that each

partnership is overseen by a client executive, who draws exhaustively from industry and risk specialties to analyse, measure and help manage multiple risks.

INDESTRUCTIBLE RELATIONSHIPS Also, pivotal to accomplishing clients’ goals every time are Marsh’s consulting, brokerage and claims advocacy services, all directed by colleagues who apply deep experience and knowledge of clients’ industries to result in broad-based risk coverage. “Our greatest assets in our business,” summed up Marsh Africa CEO Jurie Erwee in conversation with leadershiponline.co.za, “are our client relationships, which have been built around our clients’ needs.”

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INDUSTRY FOCUS: FINANCE

Marsh SA’s CEO, Spiros Fatouros, expanded upon how important Marsh’s carefully tailored solutions are to its ongoing success. “A huge benefit to insurance broking is the advisory role we play in selecting or even creating a product to suit the specific needs of a client, and we pride ourselves on the advice that we provide,” he explained.

“Marsh’s global footprint has taken over 25 years to build and allows us to service clients locally around the globe. People

// OUR GREATEST ASSETS IN OUR BUSINESS ARE OUR CLIENT RELATIONSHIPS //

Spiros Fatouros - CEO

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don’t often care if you’re the biggest, it’s always about the service you provide.

“The real benefit of working with Marsh is the tailored local delivery that is leveraged off a global network of experts.”

A MARKET RIFE WITH OPPORTUNITY According to the Oxford Business Group’s recent study, the South African insurance sector is, by many measures, one of the most advanced in the world. It has a premium-to-GDP ratio that is among the highest anywhere, and its insurers are wellregulated, well-managed and innovative, while it is also a market which is becoming ever more sophisticated through the introduction of new legislation. Conversely, it is in some ways not a mature market, given that much of the country is unbanked and uninsured or underinsured.

Financial inclusion is limited, and even some basic policies are optional.

For a company as well-run and organised as Marsh, this situation presents both significant opportunities and a number of key challenges. According to Ralph Mupita, CEO of Old Mutual: “Expansion into the rest of Africa by South Africa’s big insurance players is driven by the nascent opportunity of insurance penetration and seeing a growing middle market that will need insurance products over time.

“There are still a lot of growth opportunities in South Africa but growth rates are more attractive in the rest of the continent given the growth of the middleincome base, rates of urbanisation and nascent financial services.”

UNLOCKING POTENTIAL These are untapped markets, both within South Africa’s borders and in the wider region, and present lucrative opportunities for those able to seize them.

The question is, how best to tap them?

Alternative economic and business news platform Ujuh identified at the turn of the year the five trends it felt would be central to shaping the South African insurance industry in the immediate future.

Among these were regulatory changes and the increase in the frequency and severity of extreme weather conditions, but two aspects which Marsh has clearly taken to heart are the need of product innovation and effective application of the necessary technology.

Ujuh states that, “insurers will continue working around the clock to develop innovative products that meet the everchanging needs of customers.”

Jurie Erwee explained how Marsh is so well-placed to capitalise on the abundant scope of the wider African market. “The spirit of innovation is firmly entrenched in our DNA,” he began. “Marsh has pioneered a great number of concepts including the birth of insurance broking in the 19th century. Africa offers a lot of promise long term and we are here to continue to invest. We will see a return on those investments as long as we continue to work through the challenges we face as a country and business collectively.

MARSH SOUTH AFRICA

Mirabilis advert_half pg_Final.indd 1

“In a fast-changing world, the industry will continue to evolve rapidly,” were the thoughts of Spiros Fatouros, as he recognised how far consumer needs have shifted even in recent years. “There is a real trend towards a demand-based economy rather than one of ownership.

Ecosystems are changing and disruptors like Uber and Airbnb are changing the way consumers behave, which will no doubt have an impact on their insurance needs.”

RISE OF CYBERCRIME Certain types of risk are becoming more and more prevalent, not least among them environmental and geopolitical concerns. Most pressingly, findings from a report in April from TheCityUK and Marsh indicate that cybercrime is now the number one risk for financial and related professional services firms. There

2018/07/31 3:35 PM

is no escaping that company boards must do more to meet the challenge, and with the emergence of such risks Marsh is better positioned than anyone else to respond to negate the potentially ruinous consequences.

Marcus Scott, Chief Operating Officer of TheCityUK, explained that, “cyber security is now a major risk demanding board-level oversight as companies find themselves under siege from cyberattacks. In fact, for many of our members it may well be the biggest single risk. As well as mitigating against external attacks, boards must be aware of supply chain threats which could penetrate a business through internal channels. It’s essential for all boards to have robust governance systems in place to manage these risks.”

In response to the emergence of cyber security as a top priority, Mark Weil, Chief Executive Officer of Marsh UK &

Ireland, concluded with how Marsh as a whole will do everything within its power to provide peerless protection. “While there has been much discussion on the technical aspects of cyber risk, little is said on what company boards should be doing to address this threat. Boards need to drive forward digital transformation to maintain their competitive edge, while ensuring they are resilient to the many forms of cyber-attacks digitisation opens them up to.

“We want boards to be able to have a ‘no regrets’ position on cyber, meaning that if a breach does occur, they know that everything reasonable has been done to minimise harm.”

WWW.MARSH.COM

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KNIGHT FRANK SA

Cape-Ability Benchmark PRODUCTION: Colin Chinery

With Cape Town a top international property hotspot, globally-integrated agency and consultancy Knight Frank South Africa is uniquely positioned. “Speak to investors and they are very happy to spend money - especially here in Cape Town,� says new CEO Richard Hardie. www.enterprise-africa.net / 21

INDUSTRY FOCUS: PROPERTY

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Cape Town has some of the world’s most expensive homes and is often grouped with global leaders such as Shanghai and Vancouver. Breathtaking scenery, enviable climate, lifestyle, and superior infrastructure, the ‘Mother City’ has it all - cosmopolitan magnet for foreign buyers and affluent Jo’burg families.

House prices here have climbed nearly 80% in the past five years.

And in city’s four most desirable neighbourhoods on the Atlantic Seaboard - Clifton, Camps Bay, Bantry

Richard Hardie - CEO

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Bay and Fresnaye – almost 20% in the first quarter of this year.

While the market outside the Seaboard has softened in recent months, the property industry here and in South Africa generally, is now at a pivotal moment, says Richard Hardie, the new CEO of Knight Frank South Africa, Residential.

CAPE GETS THE LIMELIGHT “Cape Town has become a real international destination, featuring in the world’s media, and value for money from a global perspective. Our

strengthened political situation has also helped with investor confidence.”

Cape Town and Western Cape are the heartlands of this real estate operation, formed initially in 1983 by Anne Porter as Anne Porter Properties. In 2004 the company entered into association with Knight Frank, the Londonheadquarted global property agency and consultancy, and five years ago rebranded as Knight Frank South Africa, with Anne Porter as board chairman.

From its headquarters in

KNIGHT FRANK SA

// WHEN I ARRIVED HERE TWO YEARS AGO THE BRAND WAS REALLY NOT WELL KNOWN AT ALL, BUT SINCE THEN WE HAVE SEEN A HUGE UPTAKE // Claremont, Cape Town, Knight Frank SA specialises in the sale and rental of residential properties, apartments, farms, guest houses, self-catering and luxury holiday accommodation in the city, suburbs, and Western Cape.

Its paternity is impressive.

Founded in 1896, Knight Frank has grown to become the world’s leading privately-owned global property agency and consultancy, with more than 15,000 property professionals in more than 418 offices in 60 countries, including nine in the rest of Africa.

Hardie values this strong international factor, bringing together a global network of offices and promoting a brand known for exceptional levels of service.

“The way we run the day-today local business here is entirely up to ourselves, but obviously you have to follow corporate branding and global marketing strategies.

I want Knight Frank SA to be fully connected into the international network, and we have already made strong headway.

market moving.”

After working in the property sector in central London and the Channel island of Guernsey – including a period as Managing Director and celebrity buying agent for Phil Spencer, of ‘Location, Location, Location’ TV fame - Hardie returned to his native South Africa in 2016 to head up Knight Frank South Africa’s Atlantic Seaboard, Hout Bay and Cape Town City Bowl operation.

In May this year the 39-yearold was appointed CEO, leading a new management team alongside newly-appointed Chief Operations Officer Nick Gaertner. Hardie reports a subsequent and decisive gear shift.

“We are in a period of change, a young management team is coming through, and it’s more dynamic.

There’s more energy, efficiency, and communication at every level of service we provide. We are all singing from the same hymn sheet, and it is working.

“And we still have Anne Porter as our chairman, who has an unbelievable wealth of knowledge. Nobody knows more about the South African industry than she does.

“So we have this amazing pool of knowledge, skills and experience.

And as far as the umbrella goes, we are effectively a British company, part of the Knight Frank brand, with ideas coming from the London head office.

ON THE MAP “When I arrived here two years ago the brand was really not well known at all, but since then we have seen a huge uptake. Knight Frank South Africa is now very much on the map.”

Supported by authoritative market research and a close understanding of the country’s residential property markets, Knight Frank assists domestic and international clients in all aspects of buying, investing, and selling and owning of residential property in South Africa.

“While we are currently experiencing a softening of the Cape Town market, I regard this as an opportunity to shine, and be seen as the agency that keeps the

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INDUSTRY FOCUS: PROPERTY

// I’M A HUGE BELIEVER IN COMMUNICATION, TEAM WORK, BRAND AWARENESS AND CUSTOMER SERVICE // NEW MINDSET “We are bringing mindsets from a different country, and not completely set in the South African way of doing things. With all this backing behind us, I think to a certain degree we are a different company to work with

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and for, compared with purely local companies.”

While Knight Frank is known as a luxury brand, it is important to have a strategy which covers all aspects of the market, says Hardie. “That said, we prefer to go for quality over quantity.

“But you have to be realistic. This isn’t central London; at the end of the day it’s Africa. Also, we are not an established business but a growing one, so we have to be far more open with our strategy. However, I have done this before in a previous business where we were known for dealing with the higher-end of the market, yet we diversified to include a broader

spectrum of the market.”

But every client can expect the same standard of attention irrespective of price. “We tell people that their property is often their biggest investment, and it doesn’t matter whether it is two and a half million rand, R25 million or R250 million; we want to treat you the same. But as I say, we are looking for quality over quantity more than anything else.”

Hardie is looking for growth, chiefly through increased digitalisation and an expanded network of agencies. “There are still areas where we need agents such as the City Bowl in Cape Town where

KNIGHT FRANK SA

// SPEAK TO INVESTORS AND THEY ARE VERY HAPPY TO SPEND MONEY - ESPECIALLY HERE IN CAPE TOWN // Bay, Southern Suburbs & City Bowl.

“We are also currently setting up a development department for South Africa - a very exciting next step for us - and it has started with a bang and already developing a snowball effect.”

While online viewing and Ipad accessibility have made the ‘office on every street corner’ concept redundant, Hardie stresses the unique advantages of personal contact.

“There is still very much a need for agents and the personal interaction element they bring, and we are always looking to enhance that user journey and make sure it’s as easy and interesting as possible.”

// AND WE STILL HAVE ANNE PORTER AS OUR CHAIRMAN… NOBODY KNOWS MORE ABOUT THE SOUTH AFRICAN INDUSTRY THAN SHE DOES // there is huge amount of development is going on.”

“We are increasing the number of agents and attracting more, focussing very much on core areas such as the Atlantic Seaboard, Hout

BRAND PRIDE For those who fit the Knight Frank SA profiles, Hardie offers a brand to be proud of. “I’m a huge believer in communication, team work, brand awareness and customer service.

Respecting and understanding the people who work for you, and looking after them, is incredibly important to me.

“Wherever I have been I have always had an incredibly good retention rate.” Engage the right people at the outset, get the right mix, and create the environment they want to work in and enjoy, and you will retain your staff.

“There are a lot of companies out there who are in the numbers game, purely interested in bums on seats.

We are not; we are very much about people. We want people to be proud of the brand they work for.”

Foreign ownership in South Africa has experienced an upsurge – up 42% in January this year compared with the same period in 2017 - with Cape Town unsurprisingly

at the front, with just over seven per cent of current total sales made by foreign buyers.

Perception can be critical, and early this year, overseas momentum took a hit as dams ran dry amid one of the worst droughts in the Western Cape in living memory.

Cape Town came within weeks of Day Zero - the moment when taps would be turned off and emergency water rations imposed. As recently as May, some experts were even discussing towing an iceberg from Antarctica to Cape Town to help alleviate the stress on water supplies.

While agents remain upbeat about the demand for the city’s prime housing market, rising fortunes are contingent on developing a longterm solution to its water problems.

GREEN SHOOTS With dam levels 20% higher than at the end of last winter, Hardie believes the market will turn. “If we have the predicted rainfall for the rest of winter, this will have a positive effect, and I think we should start seeing green shoots again towards the end of this year and into the first quarter of 2019.”

There’s a further encouragement for the green shoots – the Ramaphosa Effect. “There’s been an absolute turn around in people’s confidence, and we think this is an ongoing factor.

People definitely feel much more positive about investing here. Speak to investors and they are very happy to spend money - especially here in Cape Town.”

WWW.KFPROPERTY.CO.ZA

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MASON COMPLETE OFFICE SOLUTIONS

Shifting Office Supply Business

Inked in SA’s History PRODUCTION: Manelesi Dumasi

Transitioning from a printer to a stationer to a comprehensive office product supplier has resulted in Mason Complete Office Solutions being recognised as one of the country’s industry leading businesses across all areas of operation. Owner, Dave Boulle talks to Enterprise Africa about the challenges of growing this well-established business to meet the needs of a modern consumer.

//

The often-unseen work of Mason Complete Office Solutions underpins the business of its clients. Sole traders, SMEs, multinationals, SOEs – they all look to the Cape Townbased office supplier to keep their set-up running smoothly.

Whether it’s traditional stationery, IT hardware or solutions, office furniture, promotional goods, corporate clothing or a bespoke product offering, Mason Complete Office Solutions provides a holistic, all-encompassing service for clients that allows them to focus on their core business.

But now is an unusual time for the office supplier. Times are changing.

Trends are different. The office of tomorrow looks vastly different to the

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office of today. The world is a smaller place and it is easy to bring new ideas to new markets. In each of the clusters in which it operates, Mason Complete Office Solutions faces stiff competition and the threat of online discounters.

Enterprise Africa talks to Dave Boulle, Owner of the historic office supply business, about how the business is changing to remain relevant to its valued clients.

“We’re definitely seeing a shift with a number of products declining in sales.

That is why we are moving into more technological areas such as VOIP, fibre solutions and IT-based products,” he says.

“Pen-carbon books for writing invoices manually are dying if not dead.

The fax machines have come and gone.

Diary use is declining. There is definitely a move away from some traditional stationery items, but people still use pens and pencils – we haven’t seen a significant change with that.

“Even in the IT space we are seeing change. Tower-based PC sales are declining, tablets are no longer as popular as they were, but the role of the laptop has increased significantly.”

So Boulle and team are looking at the product range and introducing new items to cater for the needs of a changing environment. But it’s not just with products. Forever holding the vision of providing a complete office solution, Boulle is investigating the potential for offering valuable services to clients.

“Although our offering is diverse

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INDUSTRY FOCUS: DISTRIBUTION

and large, the opportunities in the complete office solution as a concept are significant. If we can grow through development of offerings – whether it’s marketing, recruitment, or something else – that is where our excitement comes from.

“Right now,” he adds “we are looking at acquiring two other companies and that will grow our account base. The opportunities for growth are significant.

We are relatively big in the Western Cape

// I DON’T KNOW OF ANYONE THAT IS DOING WHAT WE’RE DOING IN TERMS OF COMPLETE OFFICE SOLUTIONS //

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but there is still large space around the country for us to grow further, especially if we start looking at increasing other offerings within the complete office solution concept.”

Of course, this type of service could prove extremely attractive for clients and potential clients. Being able to outsource all office services from marketing to recruitment, and being able to pair that with the quick and easy purchase of all office products – Mason Complete Office Solutions is close to becoming the first one-stop-officeshop.

“I don’t know of anyone that is doing what we’re doing in terms of complete office solution,” says Boulle.

“Certainly, there are others who dabble in certain aspects but there is no one who offers the full package that we do.

The offering that we have is supported

// WE ARE NOT THE STATIONERY COMPANY THAT SELLS THE ODD CHAIR // by a professional team in each division.

I am confident that if we only had the furniture division or only the IT division, we would compete strongly with anyone in the market. We are not the stationery company that sells the odd chair. We can do full floor and space planning and modify solutions to meet specific needs of the client.”

Does the company’s long-serving owner consider his business in among South Africa’s best? “No one in any of the industries that we operate in is doing what we are doing so we like to think we are leaders in the space,” he says.

MASON COMPLETE OFFICE SOLUTIONS

INKED IN SA HISTORY The success that the company has realised to date is down to its ability to remain nimble and be innovative, but this comes from a long and strong history. The roots of the business go back more than a century as Boulle explains.

“There was a company called Galvin and Sales which started off as a print company in 1913 in Cape Town. It was started by the Alt family and it was handed down through generations. That business grew until 1980 when it was sold to a company called Perskor which was a large print company with offices throughout SA. At the time, the company was owned by Brian Alt and when he sold the print company, he kept a small subsidiary which was focussed on stationery. He named that business G&S Stationers and that is when my father joined as a minority shareholder. They ran that business for 24 years until 2004 when they both decided they wanted to exit.”

Boulle saw the opportunity and resigned from his role in a large corporate clothing business to buy the company and revitalise its strategy.

He changed the name to G&S Office and refocused to become an office supplier rather than a stationer.

“In May 2007, I finalised a deal with Mason Stationers (a company formed in 1983) and I joined the two businesses together to form Mason Complete Office Solutions. The vision then was to create an office solutions company which provided products and services to corporate customers and that concept remains. We like to get involved with corporates and let them focus on what they do while we support their back office. Whether it’s stationery, IT, office furniture, refreshments, promotional goods – it’s a case of letting our customers focus on their core business while we worry about their back office.”

Since taking the reins, Boulle has acquired five other local office

businesses and incorporated them into Mason Complete Office Solutions.

“When I owned G&S, we had 12 staff and we’re now up to 85 in total.”

The next historic step for Mason Complete Office Solutions, one which will help take it to new heights, is the sale of shareholding to improve BBBEE rating. Often a source of so much stress for SA organisations, Boulle says the process has been tedious but smooth.

“We are selling off a portion of the business into a women’s education and empowerment trust.

Any dividends declared will be used

to fund education for black women in South Africa. The recipients of the shareholding – the Mason Complete Office Solutions Empowerment Trust – will be black women in education. There are other elements that we need to work on in terms of training and development of staff and ensuring our supplier base is as broad-based as possible.

“We are aiming for a Level-4 BBBEE rating for our business and that is the minimum for us to be compliant.

We will be there in the next six months, if not sooner.”

// WE ARE AIMING FOR A LEVEL-4 BBBEE RATING FOR OUR BUSINESS AND THAT IS THE MINIMUM FOR US TO BE COMPLIANT. WE WILL BE THERE IN THE NEXT SIX MONTHS, IF NOT SOONER //

CHOOSE THE PERFECT TAPE APPLY, POSITION OR PROTECT GRAPHICS

[CLEAR]

[PAPER]

32 9 216 6700 | theicgroup.eu RTAPE.COM

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INDUSTRY FOCUS: DISTRIBUTION

ECONOMIC PICTURE Often an area to be cut when companies face a challenging environment, stationery and office equipment can easily be swapped out for budget alternatives. And considering the recent challenges faced by the South African economy, you could understand if some corporates have looked to cut cost wherever possible. But the spread of service offered by Mason allows the company to ride out any economic hiccup.

“In the economy, we can see the contraction, we can see things are not happening as quickly as they use to, and we can see that the growth is not what is used to be – especially with stationery which is the more mature part of our business,” says Boulle.

“We are seeing that every day is a challenge as clients are often

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downscaling or changing their purchasing pattern. We are certainly seeing the tough economic climate prevailing at the moment and it has been for more than two or three years. Fortunately for us, the growth comes from other categories. From a sales perspective, our opportunities come from the companies that are not buying all categories from us.”

He says that the company is actively seeking to upscale its relationships with existing clients and introduce them to the wider Mason Complete Office Solutions range. As for the economic situation for the country, Boulle feels positive.

“I’m optimistic,” he says. “The turnaround is happening – it will take time – but it is happening. I’m confident that we will see a difference in the economy. I suspect that we

might be in a state of limbo until the elections next year.

“Government remains a big spender in the economy and previously, there was not big investment given the uncertainty.

That was significant in terms of impact on business. I know there are South African companies that are sitting with piles of cash, but they don’t want to invest because they don’t know what the future holds. With Ramaphosa installing policy consistency, I feel companies will start to invest again. We are really hoping that the environment becomes right for growth and development in the country.”

Despite any economic slowdown, Mason Complete Office Solutions continues to push forward. Plans are in place to expand further in South Africa by gaining new clients in new

MASON COMPLETE OFFICE SOLUTIONS

// WHAT’S DRIVING US IS STILL THE VISION OF A COMPLETE OFFICE SOLUTION // regions, and to invest into improved digital offerings so that the company can service potential clients across sub-Saharan Africa.

“We will certainly look at expanding our base in South Africa first because that’s the biggest opportunity for us and it’s the market we know and understand,” explains Boulle. “Namibia, Botswana and Zimbabwe are much smaller economies and expansion there could happen if an opportunity arose but it’s not a high priority. I would prefer to develop an online ordering platform where we could outsource the supply of products into a warehouse for distribution around southern Africa, thereby reducing the overheads we would have in any country – that is more exciting and more interesting as an offering.

“We already have our website which works as an ecommerce platform, it would just be a case of adapting that for the relevant environment.”

In terms of the product range, Boulle admits that this is something that will continually adapt and accepts that this is a challenge that has always faced the business. He suggests that the tech focus that has been installed will help the business to remain relevant for clients in the future.

“The paperless office is a bit of a myth – we’re actually selling more paper than ever before.

“We are seeing increased demand for branded technological products.

Previously, clients might give away pens to their customers, but now they want to give away branded flash drives.

Certainly, tech is the way forward, and certainly tech is where we need to explore strongly.

“The role of the cloud, the increase in the power of technology, the growing influence of the IoT means that some things could be completely lost but we don’t think it will be as quick a transition as many

in IT expect. There will be a move towards technology, but it will not be a massive jump that make us redundant.

However, we know we have to invest in technology to stay relevant. If we did not offer the tech that we do, we would be facing an uphill battle,” he says.

This very-South African business has been delivering quality for longer than many of its clients have existed. And by focussing on a singular vision and by constantly delivering quality, Mason Complete Office Solutions will continue to grow, creating a powerhouse brand that offers a total package.

“What’s driving us is still the vision of a complete office solution. The little bit I know about business is that you stick to your knitting as best as possible,” Boulle concludes.

WWW.MASONONLINE.CO.ZA

//

“I am a chartered accountant by training. I was with the Foschini Group for 11 years in a variety of roles. I started in what was called the computer audit department and I then went to the jewellery division as a financial manager before moving to the Exact clothing division as the divisional manager. I then headed up the credit card division before deciding I’d had enough of the corporate world.”

OWNER - MASON COMPLETE OFFICE SOLUTIONS

D AV E B O U L L E

complete offic e solutions

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ELGIN BROWN & HAMER

EBH Celebrates

140 Years

on SA’s Waters PRODUCTION: David Napier

A company which dates back to the 1800s, Elgin Brown and Hamer has long been known in South Africa’s ocean economy as an industry-leader. The company has become a complete, one stop shop for all ship repair needs. What started out as an individual boat repair operation is now a continental leader with international reach. www.enterprise-africa.net / 33

INDUSTRY FOCUS: MARINE

//

In 2013, former President Zuma visited Malaysia and was inspired by progress that had been made in the country in terms of reducing crime, poverty and unemployment. He learned that Malaysia had been following a big fast results methodology, resulting in major transformation in short periods of time.

The President returned to South Africa and quickly went about installing a similar system to impact specifically the South African oceans economy and the healthcare industry.

‘Operation Phakisa’ was the title given to the project and the government claimed the country’s oceans have the potential to contribute up to R177 billion to GDP and create just over one million jobs by 2033.

The programme focusses on six key areas: Marine Transport and

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Manufacturing work stream; Offshore Oil and Gas Exploration work stream; Aquaculture work stream, Marine Protection Services and Ocean Governance work stream, Small

Harbours work stream, and Coastal and Marine Tourism work stream.

To date, progress has been made with large investments flowing through port facilities.

ELGIN BROWN & HAMER

// THE FULL SCOPE OF WORK FOR THIS MAJOR REFIT WAS UNDERTAKEN BY EBH DURBAN AND COMPLETED WITHIN THREE MONTHS AS REQUIRED BY THE CLIENT // One company set to benefit from the country’s focus on its oceans is Elgin Brown & Hamer – one of South Africa’s oldest ship repair businesses.

This Durban-based business has been welcoming vessels from around the world, delivering a range of services at its facilities in Durban, Cape Town and East London.

Whether it’s service, repair, conversion or complete construction, EBH’s skilled and experienced craftsmen have the knowledge to deliver for the most demanding of clients.

HISTORICALLY S.AFRICAN Founded in 1878, EBH has been working on the oceans surrounding South Africa for the past 140 years.

It originated as James Brown Ship Repair before being purchased by Murray and Roberts. At the same time, Murry and Roberts acquired Hamer Ship Repair and Elgin Engineering and the three eventually became one – Elgin Brown and Hamer, the company’s focussed marine division. Later, Elgin Engineering and EBH were bought out of Murray and Roberts as separate companies before, in 2013, DCD entered the fray. Becoming part of the DCD Marine group of companies, EBH gained greater access to international markets and finance.

Today, the company is one of the only ship repair companies in subSaharan Africa to own and operate floating docks and floating cranes.

It is ISO 9001:2008 accredited and OHSAS 18001:2007, and holds a Level 2 BBBEE certification.

Over the years, EBH has displayed its excellence, performing activities including mechanical repairs, steel repairs, piping repairs, blasting and

painting, under water servicing, and hydraulic servicing among others.

Major international clients have included Boskalis, Subsea-7, Maersk, Seacor, and Bourbon Offshore, and EBH works closely with local customers including Transnet National Ports Authority and Richards Bay. OIL & GAS BOOM & BUST Back in 2013, EBH was preparing for a boom in the market, specifically with oil and gas traffic. Prices were high, the industry was enjoying a fruitful period, and no one was expecting

a downturn. But oil prices tanked, the global economic climate started to become challenging, and the local economy had lost momentum following its peak after the 2012 FIFA World Cup. After the oil price crash, and without a meaningful recovery, work in the sector has dipped. However, work on container ships and bulk tankers has improved. There is a hope that the situation in the oil and gas industry will improve in the coming 24 – 36 months but some forecasters are predicting that the price could drop again, from an average of $72 per barrel in 2018 to $69 in 2019. But, southern Africa has its own shining star when it comes to offshore production – the Mozambique Rovuma basin, said to hold five trillion cubic feet (tcf ) of gas in the first phase alone.

Heat Exchange Specialists We are Level 2 BBBEE

Elgin Cooling Systems (Pty) Ltd Elgin Cooling Systems (Pty) Ltd specialises in the manufacture, reconditioning and servicing of heat exchangers. Work is carried out at two branches located conveniently at Spartan, Gauteng and Jacobs, Durban.

With well over 30 years of dedicated service to the Heat Transfer Industry ECS prides itself on its fast lead times but does so without compromising quality

Durban - 031 461 1441/1463/146 Johannesburg - 011 397 5151 WWW.ELGINCOOLING.CO.ZA Gary@elgincooling.co.za / Rodney@elgincooling.co.za

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INDUSTRY FOCUS: MARINE

Sea traffic involved in this operation is going to be big, and will likely increase as time passes. The recognised ship repair organisations in South Africa are more than capable of servicing all types of vessel involved in this important industry sector. EBH has proven its credentials on many projects in the past.

PROJECT PROOF Experts in the entire scope of ship repair – a complete one stop shop – EBH’s skills know no bounds.

In 2008, the company was trusted by Royal Boskalis to complete a full overhaul on its URSA vessel.

“Propulsion plant, generators, winches and dredge pumps were completely overhauled as well as a complete refit of the entire dredge chain,” the company explains.

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“The dredge ladder of 850 tonnes was stripped of its twin 400 kW motors, gear box and cutter drive shaft and cutter head before docking on the 140m EBH floating dock – ELDOCK – for underwater repairs.

“The refit procedure required the 650-tonne steel ladder structure to be removed from the bow of the vessel for repairs. This had never been attempted before since the vessel was constructed.

“The full scope of work for this major refit was undertaken by EBH Durban and completed within three months as required by the client.”

Next into EBH’s yard was the container cargo ship, Border. The vessel required 150 tons of steel to complete repairs.

The company displayed its steel skill in a much-hyped repair job to

the Nino tanker vessel after it ran aground off South Africa’s Wild Coast, containing hundreds of gallons of fuel. EBH tugs brought the vessel into the yard before experts completely rebuilt the underside of the ship, updating the rudder and propellers, in just three months.

In 2009, quality shone through at EBH when the company welcomed the large tanker vessel, Berg. Its pipework had failed during a delivery journey and EBH had been contacted to carry out replacement works.

“Upon inspection, it was discovered that the fully welded pipe systems were in some cases not welded to specification,” says EBH. “Material analysis of the failed pipe sections further revealed that the stainless-steel pipe was manufactured from re-melt SS scrap and had iron

ELGIN BROWN & HAMER

// EBH UNDERTOOK THE REPLACEMENT OF ALL DECK, ENGINE ROOM, PUMP ROOM AND TANK SPACE PIPE WORK WITH THE ASSISTANCE OF SEVERAL PETRO-CHEMICAL QUALIFIED PIPING CONTRACTORS // content that was out of specification.

“EBH undertook the replacement of all deck, engine room, pump room and tank space pipe work with the assistance of several petro-chemical qualified piping contractors, to the satisfaction of the Bureau Veritas Surveyors and owners.”

A flagship project for EBH saw the company completely overhaul the Acergy Eagle, a converted Subsea-7 cable restoring vessel. The major fiveyear project had tight timescales and had to be ready to head back to Angola to complete tie in operations. The vessel had been previously converted into a pipe carrier with moon pool,

heavy lift crane and specialised deep diving bell, spudding and anchor tendon placement.

“It was decided to undertake repairs to the main engines, propulsion and thrusters as well as embarkation of the new sonar equipment, pipe spools and piping for continued link up work in Angola,” details EBH. “The vessel was completely repainted, and new sacrificial anodes fitted throughout. After undocking and main engine trials, the helideck and other loadbearing structures were load tested afloat and certified by the surveyors.”

These are just a handful of examples of EBH work. Throughout its

history, EBH has become an integral part of the South African ocean economy and, in the future, it will undoubtedly help drive the industry forward.

If Operation Phakisa can deliver what it has promised, EBH and the South African ship repair industry will grow in prominence and become one of the key cogs in the country’s economic machine.

WWW.EBH.CO.ZA

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MTHEMBU TISSUE CONVERTING

Epic To

Cloud Nine PRODUCTION: Colin Chinery

KwaZulu-Natal’s Black-owned Mthembu Tissue Converting (MTC) has come from zero to the point where it is ready to challenge the market giants. For its former township boy founder and CEO, General Thembinkosi Mthembu, turning challenge into success is the story of his life.

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INDUSTRY FOCUS: MANUFACTURING

//

Africans need to consume what they make, and make what they consume. The recent rallying call from Transnet Engineering’s Thamsanqa Jiyane, is also a fervent theme of one of South Africa’s most remarkable manufacturers - General Thembinkosi Mthembu, CEO of Kwa Zulu Natalbased, Mthembu Tissue Converting.

“I am not happy with South Africa being a country that consumes when there’s an opportunity for manufacturing,” says this 2017 All Africa Business Leaders Awards (AABLA) ‘Industrialist of the Year’.

“This will not turn our economy round. If we continue to be a consuming nation, we are not moving forward. If you consume you are not creating jobs.”

Mthembu is the entrepreneur who bought the company that retrenched him - Nampak Tissue’s Durban operation - moved on to establish the 100% Black-owned Mthembu Tissue Converting (MTC), and turn R6m losses of his old employer into a turnover of R240m–plus.

Twelve years on and MTC is producing one and two-ply toilet paper, serviettes, kitchen and paper

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// YOU CANNOT BUY NEW MACHINES AND STILL HAVE A STRATEGY FOR GROWTH IF YOU LEAVE PEOPLE BEHIND. A BUSINESS WITHOUT PEOPLE IS NOT A BUSINESS // towels, wipes and facial tissues. With a staff of 110 and a 10-15% yearon growth, its sights are firmly on achieving world-class status.

WHERE IT BEGAN It’s all a long way from Umlazi, the KwaZulu-Natal township where General Thembinkosi Mthembu was born.

This is a Horatio Alger story, the 19th century American writer of young adult novels about impoverished boys, and their rise from humble backgrounds to lives of middle-class security and comfort through hard work, determination, courage, and honesty.

For this South African township boy, growing up was tough. Setting out for school his mother would give him a pack of biscuits to sell during break time. “She would say, if you don’t sell there will be no money to buy your school uniform.”

At weekends, the young

Mthembu sold fruit at the local railway station. Graduating from high school, he went to work as a dayshift packer in a production line at Nampak Tissue where his father worked.

Home at 3pm, the teenage nascent businessman began to look for out-ofhour’s opportunities.

Noticing there was no food truck at a next-door clinic, he researched what people would like to eat, “and from there, I had a business plan.”

With a bank loan he bought a caravan.

Business boomed.

He then bought a pickup truck, installed seats and used it as a taxi.

Within two years he had saved enough to buy a minibus which he also operated as a taxi. The young entrepreneur was on a roll. In 1995, while still working at Nampak, Mthembu bought a petrol station.

Unsurprisingly, his enterprise did not go unnoticed at his day job, winning promotion to plant manager

MTHEMBU TISSUE CONVERTING

// I AM NOT HAPPY WITH SOUTH AFRICA BEING A COUNTRY THAT CONSUMES WHEN THERE’S AN OPPORTUNITY FOR MANUFACTURING //

pay. But his self-belief and resolution never wavered.

“The biggest lesson in my entire journey is to remain focused, always follow business goals, and have systems in the business that work well.”

His faith was backed by the Department of Trade and Industry, whose pivotal support for the installation of new machines and

modern technology has enabled MTC to triple production and upscale manufacturing capability.

And two months ago the DTI was back with a R13m-plus grant from its Black Industrialists Scheme one of over 100 businesses that have benefited from BIS since its launch in 2016 – and targeted at the launch of MTC’s Cloud Nine brand portfolio.

at the Durban Nampak facility.

But the operation was running at an annual R6m loss, and along with 70 employees, Mthembu was made redundant. Invited to move to manage its Pretoria plant, the local boy making good, declined.

“I was born in KZN and couldn’t see myself living in Gauteng. I don’t believe that to succeed you must move to Gauteng. You can progress anywhere as long you work towards your goals.

“After two weeks, Nampak came back to me and said ‘what about you buying these machines, converting the same product and selling back to them?’ We were left with no option since the business was losing money closing down.”

CHALLENGE AND RESPONSE But this was no desperation plunge: Mthembu understood the operation and was confident he could achieve profitability.

After two months of financial analysis, the papers were signed and in 2006 Mthembu Tissue Converting emerged, a BEE initiative in a challenging market.

A blessing in disguise? “Yes I think it was. It was never my plan to work for a boss until I died, and this opportunity came through at the right time.”

The early years were tough; recruitment was difficult, old Nampak suppliers pulled out, inherited machinery was inefficient, and for three years Mthembu worked without

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INDUSTRY FOCUS: MANUFACTURING

“I firmly believe that Mthembu Tissue Converting will continue to contribute significantly to building the local economy of this region,” said Deputy Minister of Trade and Industry, Bulelani Magwanishe.

For Mthembu, the BIS injection is a “dream come true. It has given us an opportunity to get in equipment that gave us the speed we were looking for, and helped a lot in making sure the business could move to the next level, and so compete with the big guys in the market.”

Prominent among the Big Guys is the ‘Baby Soft’ brand, manufactured at Kimberly-Clark South Africa’s plant at Springs, Gauteng. “While we produce at the level of ‘Baby Soft’, the only

disadvantage is that ‘Cloud Nine’ is a new brand as opposed to’ Baby Soft’ which has been on the market for something like 50 years.

General Thembinkosi Mthembu Founder and CEO

42 / www.enterprise-africa.net

GIANT SLAYING “We are fighting a giant, and so it’s not easy to make an impact.

However, by persistence, and

MTHEMBU TISSUE CONVERTING

ensuring our processes and systems are delivering a quality product, I have no doubt that we will definitely meet that challenge.”

The recent ‘Platinum Technology Award, for Quality and Best Trade Name’ from the Paris-based Otherways Management Association, suggests MTC is fast off the block.

“Yes, we are rather proud of this award, and it gives us the opportunity to be recognised in the commercial world, which is very good for a growing company like ours.”

As an innovative and skillsdriven organisation, MTC invests continuously in state-of-the-art machinery, product research and development. “Last year we invested about R47m in equipment, and have another five to six million coming in.

“However, I think we will then put a little bit of a break for 18 months, and look at expansion by having a full range in our basket. After that we will be looking at how things are going in the economy, and then hopefully, going full stream on further investment in our business.

“Continuous investment in this industry is essential. Things change so quickly in this market, and if you don’t invest, you die.”

Recruitment and training are among other key drivers. “There are not enough skills coming into the business to ensure its stability going forward. This is our biggest problem, and our response is to develop our own people once we have taken them on.

“We put a lot of emphasis on training and furthering careers in the company, and this year alone we are looking at investing R800,000 on training and development.

// MY VISION WAS THAT BY 2020-23 THIS WOULD BE A BILLION RAND TURNOVER BUSINESS //

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“We want to make sure our people are well equipped. You cannot buy new machines and still have a strategy for growth if you leave people behind. A business without people is not a business. It is also our policy to help small, emerging companies that have good business ethics, to grow and choose them as our preferred suppliers, and as a company, give back to the community.”

THE RAMAPHOSA EFFECT Earlier Mthembu had spoken about forward planning and keeping an eye on the South African economy.

Does he feel more confident about prospects since the arrival of President Cyril Ramaphosa?

“Oh yes, there’s no doubt about that. Where we are right now is the misery of what has happened in the past.

“The Rand is still struggling of course, and petrol prices are rising almost every month, which is not good for the economy. An extra 25 cents a litre takes unbudgeted money out of salaries and wages and slows down the economy even further.

“However, we are quite confident that things will turn around; it’s

just a matter of us holding on. The Government we have right now is determined to wipe off the corruption - which is the biggest problem in this country. Once this has been cleared I do not think we will struggle to do well in the economy.”

EXCELLENCE AND DIVERSIFICATION Meantime MTC continues to grow, with an eye on diversification, and pursuing its mission – ‘Together re-defining excellence – every time; on time.’

“My vision was that by 2020-23 this would be a billion Rand turnover business. But looking at how the economy is likely to perform from now and through the next five years, I cannot see that this will happen.

“So in that sense we have delayed it a bit, and we are now aiming at a R1b–R1.5b world class ISO business by 2028.

“Whenever I think about business, I’m always thinking four, five, 10 years down the line.”

WWW.MTHEMBUTISSUE.CO.ZA

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FALCON SIGNAGE SUPPLIES

All Signs Point to

Falcon Dominance PRODUCTION: William Denstone

With the most comprehensive range of quality signage supplies, offered at the right price, Falcon is among the leading sign material suppliers in the Southern African region. General Manager, William Gibson takes us through the company’s imminent plans for growth and diversification into potential lucrative markets.

//

Falcon was established in 1995, and in a relatively short lifetime has grown into a fully BBB-EE approved outfit with a national footprint comprising 12 outlets, strategically stationed in South Africa’s key outposts. We asked General Manager William Gibson to outline the Falcon story to date, as it nears its

44 / www.enterprise-africa.net

quarter-century of operations.

“The business started very modestly, giving no real hint that it would end up growing to the entity we see today,” he details. “Falcon came about because of the obvious synergies between the manufacture of number plates, which was what was being made at the beginning,

and of signs - road signage, reflective materials and vinyl, for example - there were very similar principles in the two industries.

These similarities were what brought about the creation of a signage manufacturing company, which later was streamlined to become a supplier to the signage industry.”

www.enterprise-africa.net / 45

INDUSTRY FOCUS: MANUFACTURING

Today, a substantial part of Uniplate Investment Holdings which consists of Uniplate, the largest number plate company south of the equator in Africa, and what Gibson terms, perhaps with a hint of false modesty, “the Differentiator of the organisation” - Falcon. “Initially, we started off only supplying Chromadek sheeting, and some rudimentary vinyl materials were also sourced and sold,” Gibson tells us. Chromadek is an industry-renowned product, billed as being lighter and stronger than any other of the materials used in the early days of sign manufacture material, and that’s why it is also popular in the building industry making roofs up to 80% lighter than those using conventional concrete tiles.

// WE WANT TO INFILTRATE THE MINING INDUSTRY

BY CAPITALISING ON OUR EXPERTISE IN PROTECTIVE FILMS //

Guillotine Department

46 / www.enterprise-africa.net

// WE HAVE BECOME A GENUINE ONE-STOP SHOP // “Today,” he continues, “we supply the widest range of products to the signage industry, which has necessitated rapid and significant expansion on our part.”

NATIONAL EXPANSION Falcon’s footprint has grown substantially from its early days as a start-up in Johannesburg. “We now have 10 active branches and two agencies at our disposal, giving us 12 outlets for Falcon signage material supplies,” explains Gibson. “This gives us coverage of the entire country, from as high as Polokwane in the very north of South Africa, right down to Cape Town at its southern tip.

“We do have a substantial footprint in that we also have a large hub in Durban, where a lot of the materials that we import from Europe and the Far East arrive. These then are shipped to one of the other two distribution hubs, either in Cape Town or our site in Isando, Johannesburg.”

Falcon’s is a truly national operation, with a presence around each of the

major areas in the country; a complex network allowing the company to service customers in every corner of the territory.

“The majority of our branches are located in the Gauteng area - four in fact - while at the Isando hub, which is also our head office, we have two large de-coiling and sheeting lines where we prepare Chromadek trimmed plates for distribution nationally. We also have our hub and a branch in Cape Town, from which we supply into Port Elizabeth and East London, where we have outlets to cover the east coast of the country, while inland we have a branch in Bloemfontein.”

One of the key recent strategic decisions for Falcon concerned its physical location, with the company making the move from a 2500m2 premises to an all-singing 5000m2 site, crucial to greater efficiency in its operations, according to Gibson. “We were not in the best area in terms of serving and delivering to customers, and we wanted to consolidate what

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INDUSTRY FOCUS: MANUFACTURING

// WE ARE THE FIRST OF THE SIGNAGE SUPPLIERS IN THIS PART OF THE WORLD TO OFFER AN ONLINE FACILITY // we do into a central network. We have moved into a far larger location which has allowed us to bring the de-coiling and sheeting of the Chromadek onsite into the centralised hub, as well as afford us the space to bring together all of our stock and give us greater control.”

INCREASINGLY GLOBAL PRESENCE With South Africa comprehensively covered, Gibson goes on to hint at Falcon’s tentative steps to expand beyond its borders. “Outside of

the country we also have a seller in Namibia, and arrangements with resellers in Zimbabwe, Zambia, Botswana and Mozambique. We manage to cover the majority of the sub-Saharan African region with our resellers in those centres, and we showcase all of our comprehensive range of products at trade shows all over. For example, last year we had a stand at the Zambia Sign Africa show, and we do similar in Cape Town, Durban and Johannesburg.”

Falcon achieves the rare balance of having achieved an increasingly international presence, while remaining loyal to its strong local roots. “We source globally, which is why we have distribution hubs in the port cities of South Africa and the main hub sitting in the Gauteng area, servicing South Africa’s biggest commercial and industrial area. It

Lesedi Mohapi (Administrative assistant). Claire Ogivey (Procurement Assistant).

William Gibson (GM). Andrew Horsley (Procurement Manager).

48 / www.enterprise-africa.net

is also important to us, however, to purchase items from local suppliers and support the domestic market where we can, and our Chromadek, ABS and Correx materials are all manufactured here in South Africa.

MASTER OF MANY TRADES “From the humble beginnings of supplying only Chromadek sheeting and basic vinyl, we have been able to add to this offering a wide range of materials sourced both locally and globally to supply into the market.”

Falcon’s growth both in size and in expertise allows it to satisfy an everlarger section of this huge market, but across its wide range of competences it has a few specialities, as Gibson points out.

“We have become pretty much the experts in premium cast vinyl materials, for car wrapping, and are the sole

FALCON SIGNAGE SUPPLIES

New Warehouse and Sales Office

distributors of the French brand HEXIS. We are also the preferred suppliers to ORAFOL, based in Germany.” The ORAFOL Group is of course one of the world’s leading manufacturers of innovative self-adhesive graphic films, reflective materials, cast and adhesive tape systems. “On the rigid material side, we specialise in aluminium composite sheeting which we source from another European company, 3A Polycasa, the leading manufacturer of sheet materials for the field of visual communication.

“We are one of the two main distributors of NUtec Digital Ink to the region as well. To support this business we also offer a technical service to all our customers, whereby we have technicians in every region servicing and repairing customers’ print machines to whom we supply ink.”

As Gibson sums up: “We have

become a genuine one-stop shop you can get it all from Falcon.”

NEW INDUSTRIES TO CONQUER As thoughts turn to the future of Falcon, William Gibson fills us in on the shape that future innovation will take for the company. “One of the new areas that we are targeting, is to enhance our industrial and engineering-grade reflective, protective materials, for use on vehicles and for signage in heavy industries,” he says.

“These will require very hardy materials, and we want to start infiltrating these industries by capitalising on our expertise in protective films.” It goes without saying that in these conditions, which in heavy industries case are often noisy, confined and contain an array of moving equipment, visibility is paramount and Falcon’s products lend themselves

perfectly to such applications.

“We are looking to become more accessible to a wider net of customers, which will enhance our service offering as well,” rounds off Gibson, and this will be invaluable to achieving what he tells us are Falcon’s lofty future ambitions.

“Our long-term goal is of course to increase revenue, but we want to accomplish that by adding value as well as bringing the best products to market. Since 1995 Falcon has been known for having high quality products and never lowering its standards, and we have to keep to that credo.

“We will not be the cheapest supplier or to try to be everything to everybody, but we will be the best.”

WWW.FALCONSA.COM

www.enterprise-africa.net / 49

THE BIOVAC INSTITUTE

Biovac to Produce

GBS Vaccine

in Cape Town PRODUCTION: David Napier

South Africa’s Biovac Institute is developing a novel vaccine against Group B Streptococcus disease. Supported by PATH, developing the vaccine in South Africa is proof for CEO, Dr Morena Makhoana, that this local industry leading organisation is working to international standards. www.enterprise-africa.net / 51

INDUSTRY FOCUS: MANUFACTURING

//

The Biovac Institute is a world-class, specialist vaccine manufacturing business based in Cape Town. The company was set up to produce important vaccines for South Africa, and for export markets. Like another of Cape Town’s key industries, wine, human vaccines need patience to make as they take a long time to research, trial, produce and distribute under cold chain conditions. Just as you would with vines, you must first establish the optimum conditions and facilities for producing a quality product and have in depth knowledge about the market to which you will supply.

Since its official formation as the organisation we see today, Biovac has developed the knowledge and skills to play in the complex, challenging and strictly regulated healthcare

52 / www.enterprise-africa.net

environment. CEO, Morena Makhoana – a medical doctor by training – says that the future of the business is bright, and export opportunities and new partnerships are giving this internationally respected organisation much to be excited about.

“I am certainly optimistic about times to come,” he tells Enterprise Africa. “Because vaccines are part of a country’s primary healthcare system, regardless of the cycles in the economy, there is always a need to vaccinate children against diseases.”

Recent successes have seen Biovac add new products to its portfolio and, through international cooperation, realise the ambition of manufacturing new vaccines locally.

“We now have strategic partnership agreements with three leading global

organisations that we are very proud of,” says Makhoana.

GBS The most recent project that Biovac has been involved with is an internationally significant vaccine development programme, in partnership with Seattle based PATH, which will see the company become one of the world’s first organisations to develop a product that can vaccinate against Group B Streptococcus (GBS).

A leading cause of infection in new-born babies, GBS currently has no licensed vaccine and in parts of the developing world, mortalities have been prominent.

“It’s a very exciting vaccine and it’s not ‘just another product’ that we are developing,” says Makhoana.

INDUSTRY FOCUS: MANUFACTURING

// THERE ISN’T A QUESTION ABOUT IF A PANDEMIC WILL STRIKE, THE QUESTION IS WHEN – FLU STRAINS CHANGE // “While two other multinational companies are also in the process of developing this vaccine, Biovac is currently the only company, that will be developing and manufacturing the vaccine in the developing world That is a unique opportunity to showcase our capability, it will answer the call

54 / www.enterprise-africa.net

to vaccinate against a disease that is specific to Africa and prevalent in other parts of the world, and it will build our intellectual property and capability to potentially supply globally.”

If Biovac’s plans are realised, this could be the start of an exciting journey for the company, further embedding its reputation as a globally recognised establishment. “This we hope will be a global product that can allow us to enter the global vaccine supply eco-system,” details Makhoana. “Our ambition is for us to be a global supplier in time, much like our counterparts in India.”

It is previous successes and a proven track record that has led Biovac to this point. Several successful milestone moments in the company’s

history have confirmed it is able to deliver to partner internationally.

“The past six years have been where the momentum has come through,” admits Makhoana.

He explains that the company reviewed its strategy and moved to an approach of backward integration of its product offering where Biovac initially focussed mainly on importing, packing and labelling vaccines, while building their vaccine manufacturing facilities. In 2012, Biovac signed its first major transaction with a global pharmaceutical company - the French giant, Sanofi.

“The second big milestone came in 2015 when we signed a deal with America’s Pfizer for one of their flagship

THE BIOVAC INSTITUTE

products,” explains Makhoana. “With Sanofi, we will be filling the already blended products in a sterile process.

The Pfizer arrangement will see us blending the product locally and while it sounds simple, it is actually a very complicated technical arrangement that increased our capabilities to deal with biological products. Our recent agreement with PATH with the support of is a product development project and it completes the value chain. We remain an importer, but we are now getting involved with manufacturing, and we also contributing to R&D in an environment where we don’t have a large skills base and where we don’t have many vaccine manufacturers.”

Of course, our investment in job creation and the development of internationally acclaimed sterile manufacturing skills is part of our contribution to our economy.

Other than these important projects underway, Biovac is looking for more opportunities where its expertise could be deployed. “We are here to stay, and we certainly have more projects to come,” says Makhoana.

He uses Ebola and flu as key examples of how the African continent battles to respond to severe pandemics, and while Biovac will not look to develop an Ebola vaccine, flu could

certainly represent an opportunity for local manufacture.

“Influenza is something which has been present for many decades, there isn’t a question about if a pandemic will

strike, the question is when – because flu strains change and evolve,” he says.

“There was the 1918 pandemic, the 1968 pandemic, the 1978 pandemic, and the 2009 near-pandemic. With all of these pandemics, governments tend to become nationalistic and tend to drive their resources inwardly, therefore looking after their own first. There are many flu vaccine manufacturers globally for seasonal use but when a pandemic strikes these companies would struggle to serve all the global demands and their priority will typically be to serve their immediate geography first, leaving those that do not have vaccine manufacturing capability at the back of the vaccine procurement queue.

The 2009 flu pandemic threat was a stark reality check for the WHO and the South African government to such procurement risk. This is why Biovac is looking to collaborate with a likeminded company keen to share their

www.enterprise-africa.net / 55

INDUSTRY FOCUS: MANUFACTURING

// WE HAVE 300 PEOPLE AND 65% HAVE UNDERGRADUATE DEGREES – THAT TELLS YOU ABOUT THE CALIBRE OF PEOPLE WE HAVE, BUT IT ALSO TELLS YOU HOW EXPENSIVE THEY ARE // vaccine manufacturing technology so that we could produce their flu vaccine here in South Africa on a routine basis.

Doing it routinely is very important as when it becomes routine, it’s much easier to upscale when the need arises.

It’s not just about commercial success but also about responding to South Africa’s needs.”

He cites Australia’s CSL (now Seqirus) as the perfect example of a business that has excelled with flu vaccine production, ramping up operations to export globally.

SOUTH AFRICAN STORY 2003 was the year which saw Biovac being launched as a public-private partnership, but its story goes back further than that. The company has always been involved in the health industry, but it has been set up in different formats before realising the success it now enjoys.

“In the mid-60s, most governments in the developed or developing world had vaccine manufacturing assets which were state owned. South Africa was one of those which had its own vaccine manufacturing capabilities,” recalls Makhoana. “The country was in isolation because of apartheid so there was a need for self-sufficiency. Fast-forward and South Africa became more isolated; the economy in the 80s was not doing well and the then government was not investing in vaccine manufacturing assets. On the other hand, globally, technology was advancing and new and more advanced products were coming into the market.”

The country was importing more and more vaccines than before, and manufacturing was largely neglected.

But, like all industries, 1994 gave local

56 / www.enterprise-africa.net

vaccine production a shot in the arm.

“1994 and the new dawn came, a new government took over and between 94 and 99, they reviewed all state assets and the vaccine asset came to the fore. At that time, the state vaccine asset was not producing much. Two facilities had been shut down already and there was only one facility remaining in Cape Town. The government consulted globally and came to the decision that a publicprivate partnership was needed where the State does not run the asset but has

equity because of its strategic nature.

“There was a competitive bid and that culminated in the Biovac that we know today where private and public shareholders are both well represented and operate is a symbiotic arrangement,” says Makhoana.

Initially, Biovac was led by Selwyn Kahanovitz, a pharmacist with a business importing vaccines. When the opportunity came to bid, he put together a consortium that was successful and he became the first CEO of Biovac from 2003 to 2010. Makhoana joined in 2004 as Medical Affairs Manager, becoming deputy CEO in 2008 and taking over as CEO in 2010.

“Prior to joining Biovac, I was in clinical medicine in the public health sector where I was a practicing doctor.

Coming into Biovac was my first entry into the commercial world. I wanted

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THE BIOVAC INSTITUTE

to get into industry using my medical knowledge but I did not have the vision of becoming CEO,” admits Makhoana.

AFRICAN SOLUTIONS PROVIDER Biovac wants to become ‘a key pillar to Africa’s growth’. “The vision is about building capacity in a sustainable way,” says Makhoana. One of the company’s key objectives is to strengthen the pharmaceutical and healthcare environment in South Africa and Africa.

Makhoana is ambitious and enthusiastic about the prospects of growth on the continent and says that the growing wealth of the continent should help drive expansion of the industry.

“We are already active in the countries around South Africa including Namibia, Swaziland, Mozambique and Botswana,” he says. “Further north is where the challenge comes in. The

continent is becoming wealthier, but we have not seen countries start to purchase vaccines themselves– vaccines have typically been donated by UNICEF, GAVI, WHO and other international organisations. Mostly, the vaccines are donated to countries that are low income and this means the direct markets in those countries are very small.

“Governments are the largest buyers of vaccines, so we take various approaches. Where there is selfpurchasing, we try and access those markets as much as we can – that’s middle-income countries surrounding South Africa. More than 65% of vaccines come to the continent through the donor mechanism. The other method is to develop our own vaccines that can be supplied directly to the WHO so that we don’t have to be reliant on a single partner. We would also target the smaller

private markets in countries like Nigeria.”

Exporting will help to ensure Biovac’s capacity is effectively and efficiently utilised. “Vaccines is a volume game. We cannot rely on South Africa alone,” says Makhoana.

Fortunately, Africa is home to some of the world’s fastest growing economies and countries such as Ethiopia, Kenya, Uganda and Tanzania are expected to achieve significant GDP growth figures of between 5.2% and 8.5% through 2018. Ongoing reforms and the improvement in commodity prices has driven up export revenues across the region and this is good news for South Africa’s exporters who are looking to Africa as an opportunity.

At home in South Africa, the economic picture remains unclear.

While confidence and sentiment have improved since political stabilisation in

www.enterprise-africa.net / 57

INDUSTRY FOCUS: MANUFACTURING

// A FEW YEARS AGO, PEOPLE ASKED ME ABOUT MY BIGGEST HEADACHE AND I ALWAYS SAID IT WAS FUNDING. NOW, SKILLS IS MY NUMBER ONE PROBLEM // January, meaningful and sustainable growth figures are yet to be realised, but Makhoana remains confident.

“If the economy continues at its current rate for the next five years, or if it deteriorates further, new vaccines are unlikely to be introduced and that could make our business stagnant from a growth perspective. In the short term, we have not felt an impact, but we are monitoring to ensure we are prepared for the future,” he says.

“I’m an eternal optimist,” he adds. “Personally, I feel the current administration is stabilising the country.

Like with any injured patient, the first thing you do is to stop the bleed and I think that is what is happening right now. After next year’s election, should they continue on this trajectory, that’s where they can start building the economy and in the next five years we should see real growth.”

BUILDING AN INDUSTRY Vaccine manufacturing forms part of the wider pharmaceutical industry, which forms part of the wider healthcare industry. Vaccine manufacture is more of a biological speciality than a chemical concern (traditional pharmaceuticals) and, as such, it comes with more complex issues making it a more difficult market to enter. This is why Biovac must invest heavily in its people to ensure it has the top talent available and ensuring that the industry is prepared for the future.

“We are forging links with the local

58 / www.enterprise-africa.net

universities where we can outsource work or access their skills much like the sort of eco-system you have in other parts of the world,” says Makhoana. “A few years ago, people asked me about my biggest headache and I always said it was funding. Whilst funding remains a concern, retention of our employees and their skills is my number one problem. We often thought that we were unique in that respect however it appears that it is a global phenomenon in our industry.

“We are building a bio-sector from scratch and that feeds into the bioeconomic strategy of the country and the region.

“In South Africa, we are not short of high-calibre academic skills – we have many PhD and Masters educated people. The conversion of those skills into day-to-day manufacturing is where we find the challenge. Fortunately, our staff turnover remains relatively low

and our ongoing investment in growing our people’s capabilities and enabling their career growth within our growing business is paying off. We have 300 people and 65% have undergraduate degrees indicating that our staff calibre is high. Our skillset is world renowned, scarce locally and therefore expensive.

“Investing in continuous learning and development is costly. Biovac often look to other parts of the world to bring expertise to our people due to a lot of the applicable training courses and networking conferences being conducted overseas. Our ongoing skills development investment is much larger than that of a typical pharmaceutical company. We pride ourselves in investing in our people ultimately also to ensure we offer effective products and services to our customers, whether directly through the healthcare service providers or whether indirectly to the end user, the consumer. We typically

// Intramech and Biovac The “FOCS R” chillers used for The Biovac Institute are configured in a typical primary/secondary loop chilled water system.

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The plant deploys a minimum cooling base load to ensure that hot water production is always available. The purpose of this plant is to produce the required climate conditions within the vaccine rooms that are maintained through cooling and reheating of the air provided to the rooms. This is to ensure that the quality of the product is maintained and that the integrity of the institute is upheld. The Biovac Institute is a vaccine manufacturer based in South Africa with a vision to contribute to the health needs of Africa and developing countries

INDUSTRY FOCUS: MEDICAL

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THE BIOVAC INSTITUTE

get the raw skills from the universities or other pharmaceutical companies, but we have to convert those skills into biological vaccine skills. This is done in places like Europe with established international companies like our partners. In return those acquiring the skills first hand then share their new skills with the rest of the team back home,” the CEO says.

Asked if Biovac is the local industry leader, Makhoana is in no doubt.

“From a local vaccine manufacturing perspective, right now Biovac is the only local manufacturer,” he says, “but that does not stop anyone coming in - it’s not easy, but it could happen.”

The company’s competition for market share comes from international players looking to get involved or strengthen their position in Africa.

Big global names sell into Africa and deliver products that are well-known and extensively used in other markets.

“Our strategy is to manufacture locally, provided that the current preference is to buy locally manufacture products. It doesn’t happen at all costs but it has to be balanced between locally manufactured and imported products. We are in a favourable position as we are the only local manufacturer but if an important product comes in at such a discounted rate and we cannot match that, we understand normal market dynamics and we could possibly lose out.”

The company is gearing up to face increased competition by building its export capabilities and building relationships in new markets so that exporting can become a bigger part of

// LIKE WITH ANY INJURED PATIENT, THE FIRST THING YOU DO IS STOP THE BLEED AND I THINK THAT IS WHAT IS HAPPENING RIGHT NOW //

Biovac’s success. “Exports have to be the main market in time,” insists Makhoana.

“South Africa will always be our primary market but we have to look at exporting to make sure we are sustainable. Other local pharmaceutical companies have done that successfully, look at Aspen Pharmacare.”

Just like South Africa’s top vineyards putting the country’s wine industry on the map, Biovac hopes to be the business that showcases South African vaccine manufacturing to the world.

“Like any CEO building a company they passionately believe in, Biovac is close to my heart,” says Makhoana.

“International competition, skills acquisition and retention and funding remain positive challenges, but as long

as we follow our strategy and the longer we continue achieving our small and big goals, we will gain the attention of and remain top of mind for our current and future international partners. This ultimately validates that we at Biovac are doing world-class things in the right way, with quality standards intact.

“My vision for Biovac in 2030 is to be in many geographies offering vaccines and other biological products to the world. I am confident that we will get there and I am proud,” he concludes. .

WWW.BIOVAC.CO.ZA

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WILD PEACOCK PRODUCTS

Extraordinary WC Food Supplier Looks to Africa

PRODUCTION: David Napier

When Sue Baker started selling oysters from her car in 1991, no one could have predicted that her operation would grow to become one of the leading fine food suppliers in the Western Cape, with a reach across southern Africa. Wild Peacock Products is now the partner of choice for chefs when it comes to creation of exciting menus. Second-generation family leader, Ross Baker talks to Enterprise Africa about growing the company’s ever-increasing market share. www.enterprise-africa.net / 63

INDUSTRY FOCUS: FOOD & DRINK

//

Few things have the ability to unite people like food. It has been described as more than means to nourish; it is also a means to unite hearts across the globe. In South Africa, food culture is as varied and diverse as the population, and draws on global influences. Quality food is undoubtedly a source of happiness.

Cape Town-based Wild Peacock Products has recognised this association and, for almost three decades, has been helping customers source the best possible food products for their kitchens.

This specialist distribution company was founded by Sue Baker and has grown to become one of the leading suppliers of food products to the Western Cape’s finest restaurants, delis, cafes, hotels and aspiring amateur chefs.

Managing Director and secondgeneration family leader, Ross Baker tells Enterprise Africa about how the business has always been knitted into his fabric.

“My sister and I grew up in the business – it has become a natural part of our lives.

“I remember when my mother used

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to pick me up from school and we used to drive around delivering oysters. She had a passion for food and a love of oysters, and that remains today,” he says.

Sue Baker, a trained primary school teacher, founded Wild Peacock through passion. Her husband had received a job offer in the Cape wine industry and the family uprooted from Jo’burg to head west. But arriving in the Winelands, Sue was unsure of her career path. “My folks always had a passion for food and wine,” says Baker. “My mother had no idea what to do and a friend suggested selling oysters in the Cape. She got in touch with a farm in Namibia and imported her first 200 oysters. She went to various people, mainly chefs, around the cape and introduced herself. If she managed to sell the oysters she used the money to buy more oysters. Over the years, she added more products and the list has grown alongside the customer base.”

In 1991, South Africa was a different place. Tourism and world-class eateries were not common. “There were probably not more than eight or ten restaurants in the Cape that used oysters or fine foods,” recalls Baker.

Today, Cape Town is an international city that receives millions of visitors from all corners of the globe. “Food has grown to become a major market; in the southern part of the Western Cape there’s around 4000 restaurants. It’s a different market, there’s a lot of innovation and we have caught up with the rest of the world in terms of product usage.”

BIG BASKET Wild Peacock’s journey moved from oysters to meats to cheeses to specialist unique items that must be imported.

Today, it has a product range including more than 1000 individual items.

“Oysters remain one of the main

// MY MOTHER USED TO BUILD RELATIONSHIPS WHEREVER SHE WENT. TODAY, THAT IS STILL THE BACKBONE OF THE BUSINESS //

WILD PEACOCK PRODUCTS

lines that we sell. We’ve built a live seafood holding facility where we can hold up to 15,000 oysters at any time. We have grown to now have around 80 staff and we are still growing,” says Baker.

“It’s always been a home-based business but around four years ago we moved into a new facility which has seven different cold rooms and a bulk freezer for each different product category because different foods must be stored at different temperatures.

We have three high-risk areas: one for fish processing, adding value by fish filleting and portioning; one for cheese cutting, where we cut a whole wheel into portions; and a cured meat slicing area where we can slice parma, iberico, prosciutto or similar on order for customers.

“We have a fleet of refrigerated trucks and they run six-days a week, all over the Western Cape. We import goods from Europe including things like chocolate, caviar and seabass. We do try and use local produce – that is our priority. If we can’t source quality locally, or if it’s just not available, then we will import. Vanilla, for example, doesn’t grow in South Africa but there is a market and people want it, so we go and source it from Madagascar.”

Wild Peacock does not deliver average or everyday bland. Products are top of the range and designed for those who can be creative with them. Clients of Wild Peacock are often those who are searching for something different.

“We have a huge range of cheeses and we choose to work with artisanal cheese makers. 90% of the cheese makers we work with are in South Africa.

“Our cured meats are primarily South African, but we do bring in some from Spain and Italy.

“Poultry products from South Africa like duck, quail, rabbit, freerange fresh chicken and eggs are all of the highest quality.

“We try and be innovative and sustainable with our basket, particularly our seafood,” says Baker.

But the success of Wild Peacock is

Red Dru m, Redfish, Channel Bass, Spottail Bass, Ta mbour Rouge, Loup des Caraibes, Ombrine.

Sciaenops ocellatus Y ear Round Whole fish and fillets.

Our Red Dru m has a light, delicate flavor & a meaty texture. Great for grilling, broiling & sashimi.

GLOBALG.A.P GGN: 4056186701237

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INDUSTRY FOCUS: FOOD & DRINK

not just about having quality products.

The company is recognised as an industry leader because of the knowledge it delivers with products and the relationships it builds with customers.

FINE FOOD PARTNER “My mother used to build relationships wherever she went. Today, that is still the backbone of the business,” admits Baker.

“We try and focus on quality, and that is not the easiest thing to sell, especially when people are price sensitive.

“We try and sell information and a relationship through our staff. Our people are required to know about our products and they should always know more about the product than the customer does. Companies that truly lead industries are innovators, so we are trying to be different all the time.”

For years this has been a cornerstone of the business. Regularly

Ross Baker Managing Director

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Wild Peacock brings in industry specialists to talk to its customers about innovative ideas for products. In April and August, Wild Peacock hosted a number of clients for seafood trade events where the company displayed its products range and showcased what is possible with a little ingenuity.

“We like to bring people to the customers who can talk about the product and who can create relationships in the way that my mother started the business,” says Baker. “We sell our products with information. We have people who are specialists in their fields.

For example, we will send our pastry chef out to advise clients on how to best use our products.

“We have a range of special technical skills and we are constantly trying to train people and move them up through the ranks. We’ve had people start as cleaners who have moved to

Kim Brackenridge Meat, poultry & charcuterie Brand Manager

become order pickers, and then heads of departments in the warehouse or on the farm.

“Our slogan is ‘for the love of food’ and everyone here is a lover of food. We are essentially a distributor/importer/ wholesaler but we try to add value where we can. With fish for example, we buy it in, scale it, fillet it, vac pack it, and make it saleable.”

CARVING A NICHE In the future, the Baker family hopes to take Wild Peacock forward through the same strategy that has seen it grow to where it is today. Specifically, growing the product basket on offer, reaching into new areas, and building relationships with new types of client.

“We recently started a micro-cress farm. We put in a small tunnel and we put in a few pea shoots which eventually grew to a bigger range. We then added

Matthew Christian Wild Peacock Farming Manager

WILD PEACOCK PRODUCTS

// WE WOULD LIKE TO EXPORT TO AS MANY AREAS AS POSSIBLE. WE ALREADY SEND PRODUCTS TO NAMIBIA AND ZAMBIA, AND WE ARE EXPLORING OPPORTUNITIES IN PLACES LIKE ST HELENA // second and third tunnels and we are about to put in a new 300m2 tunnel so there is a lot of growth with micro herbs,” explains Baker.

Micro herbs have been around in culinary circles for a long time. They have been grown and exported from South Africa for more than two decades and Wild Peacock is feeling the demand for these products.

“We just started with sprouts in the same environment and we have plans to also grow mushrooms. That range is only two years old but is growing nicely and we are planning to more capital into that.

We have partnered with other farmers – organic micro veg farmers – for whom

Jac Kolver Pastry Chef & Pastry Brand Manager

we are now selling products.”

In terms of customer base, Baker points out that the business is built on supplying quality products to those that can make use of them in the right way.

But he is quick to say that the company would not reject different types of customer and always looks to please where possible.

“The biggest portion of our client base is restaurants whether they are stand alone or part of a hotel – we deal with chefs, professional or non-professional. We don’t supply supermarkets but we do supply specialist delis and small retailers. We want people to appreciate the products we grow and

Sarah Baker Sales Manager & Cheese Brand Manager

the quality we are able to source.

“If a big name came to us and said they wanted our products for their shelves, we would adjust our business to support that. It’s certainly an area we have spoken about growing into in the future. We are trying to support the home customer by making products available to order and deliver. We try not to say no to business and we try to keep everyone happy where we can,” he says.

Traditionally strong in the Western Cape, but also with presence in Gauteng and KZN, the journey of Wild Peacock will not stop in South Africa. Baker suggests that in the future, significant growth could come from sub-Saharan markets.

Sue Baker Founder

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// IF A BIG NAME CAME TO US AND SAID THEY WANTED OUR PRODUCTS FOR THEIR SHELVES, WE WOULD ADJUST OUR BUSINESS TO SUPPORT THAT // “We do want to achieve big growth rates in the next five years and we see a big part of that coming from the SADC markets.

“We would like to export to as many areas as possible. We already send products to Namibia and Zambia, and we are exploring opportunities in places like St Helena. Also, with a number of our imported brands, we are the sole agency for all SADC countries and we want to utilise that to build a market. Africa is one of the few growing markets and there is a lot of potential.”

FAVOURABLE CONDITIONS? Unlike the fertile environment in which Wild Peacock produces its quality veggies, the South African economy has not been a hospitable home for growing businesses in the last few years. Off the back of a global economic slowdown, compounded by disruptive local factors, South Africa’s growth has been stunted.

For many businesses, this has caused a

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real bump in the road. But for established organisations like Wild Peacock, it’s about adapting to overcome challenges.

“You just have to find your way of moving forward,” says Baker. “We are a company that has been around for 27 years and those challenges have been around for longer than 27 years.

We grow every year and we adapt every year. We know we will never fully escape those issues - what’s the fun without the challenges!”

Asked if he believes the local economic climate will turn around, creating a more predictable environment for business growth, Baker suggests he is confident.

“There is a lot of positive sentiment in the country thanks to the installation of a new President. People are generally more positive and that is a very important thing as positive sentiment drives positive markets.

“The effect of the economy comes in lags. The cost of living is very high at the

moment and that is because of the lag from the previous government and their inefficiency. The current President has a massive job on his hands but he is taking the bull by the horns and looking for a fix. It doesn’t happen overnight so they have to keep going with what they’re doing until the lag is over. I have a lot of faith that the economy will turn around.

We have a very strong country in Africa and that will help us to rebuild.”

He says there has been no material impact on the company as a result of a slower economy, but the effect has been felt across the industry through a slightly slower tourist market. However, “we have continued to grow so we are doing something right.”

FOODIE FUTURE Now in second-generation Baker family hands, there is no suggestion that growth of this business, born out of hard work and passion, will slow.

“My mother is still involved but not

WILD PEACOCK PRODUCTS

as much as she used to be. She comes in everyday and remains the face of the business, but it is now a family business and we are very family orientated in the way we operate,” says Baker.

“While we don’t yet have plans for third generation leadership, it is at the back of our minds – not many businesses anywhere in the world make it through three generations.”

The key ingredients in the Wild Peacock success story will remain the

// FOOD IS A PRODUCT THAT IS DIFFICULT TO SELL OVER THE PHONE – YOU WANT TO BE ABLE TO SMELL AND SEE FOODS. YOU BUY FOOD WITH YOUR SENSES AND THAT’S WHY WE WANT TO GET PEOPLE INTO THE STORE //

same as the original recipe – build strong relationships, add value, work to family values, and consistently deliver quality.

“Competition is rife and is growing” admits Baker “but we are consistently innovative and the best at what we do. We have a lot of competition who specialise in one area but in terms of the basket we do, there is not many who could match us.”

Wild Peacock is also set apart thanks to its warehouse facility, which the company moved into three years ago. This state-of-the-art facility has everything the company needs to store, prepare and distribute its products, and has the added benefit of a space which has been set aside as a café/wine bar/ coffee stop/demo area.

“We had the food emporium in Stellenbosch for six years; it was a retail shop, restaurant and wine bar. When we moved into a new warehouse three years ago, we made a provision for space for a new shop and we closed the store in Stellenbosch. We changed the dynamics and its now a factory shop. It is no longer a restaurant but we do still have a coffee bar and we will soon be including wine

on the menu once again. We want to create a foodie hub that is a hybrid store where we can showcase our products.

We have many professional chefs who come in to collect orders and we want to be able to upsell and display ideas. Food is a product that is difficult to sell over the phone – you want to be able to smell and see foods. You buy food with your senses and that’s why we want to get people into the store.”

With the unrivalled range of products supplied by Wild Peacock, the offering delivered by this industryleader will be enhanced as more people get involved in foodie culture, and as professionals look for more opportunities to differentiate themselves. This is a business that has positioned itself as one of the strongest around, adding value throughout the value-chain. With a Baker at the helm, Wild Peacock will undoubtedly continue to lead the way for many years to come.

WWW.WILDPEACOCK.CO.ZA

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PALABORA MINING COMPANY

The Gold Standard

In Copper Mining PRODUCTION: William Denstone

Palabora Mining Company (PMC), also known as Palabora Copper, is South Africa’s foremost copper mine, located near to the Kruger National Park in the Limpopo Province. The mine is South Africa’s sole producer of refined copper and has remained operational ever since its incorporation in 1956, bringing together underground mining, concentrating, smelting and refining.

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INDUSTRY FOCUS: MINING

//

Copper is a vital material, one which plays a crucial role in almost every home, office and vehicle not only in South Africa, but the world over. This recyclable metal is employed in a range of building and electrical applications but is particularly adept in renewable energy systems, as it is a highly efficient conduit, and is used to generate power from solar, hydro, thermal and wind energy across the globe. It is one of the best renewable resources as it is one of the few materials that can be recycled completely over and over again without a loss in performance.

Renewable energy sources now provide nearly one-quarter of the world’s power and their relevance increases daily for individuals and businesses alike: copper plays

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an important role in making it as efficient as possible with minimal impact on the environment, while its aesthetic qualities ensure that it stays popular in more creative pursuits such as art and construction.

COPPER PIONEERS Founded in August 1956, Palabora Mining Company is a publicly traded mining company headquartered in Phalaborwa, Limpopo province, ideally positioned both physically and in terms of its rich history of expertise to capitalise on copper’s growing national and worldwide importance.

Palabora was instrumental in the commencement of copper mining in South Africa, when it opened this, the country’s first open-pit copper mine, midway through the 20th century.

With its output of approximately

60,000 tonnes of copper per annum, Palabora is South Africa’s major producer of refined copper, providing some 85% of the domestic total. The majority of this product is supplied to the local market, with any excess then exported. Open-pit mining began at Palabora in 1964 and came to an end in 2002 when the pit reached its final economic depth. The development of an underground mine to access the ore remaining below the pit bottom commenced during open-pit production’s final years, costing in the region of $465m, to afford the prospect of a further 20 years’ life in the underground operation which thrives today.

Throughout the first phase of its long lifetime, Palabora was at the forefront of surface mining technology developments. A key feature was its

PALABORA MINING COMPANY

use of a trolley-assist system for haul trucks coming out of the pit, to save diesel, while it was also one of the early adopters of both in-pit crushing and computerised truck despatching.

The underground mine which followed is a block caving operation, and also a pioneer as the first such system to be used in metal mining in South Africa. Its development included driving around 36km of tunnels as well as the underground crusher stations, ore handling infrastructure and the undercut level for the first block cave, situated 500m below the final pit bottom.

UNIQUE PRODUCTION SCOPE Whilst copper forms the foundation of its business, Palabora also leads the way in mining and exporting other by-products such as magnetite, vermiculite sulphuric acid, anode slimes and nickel sulphate, and the company maintains subsidiaries in the UK, USA and Singapore to oversee its marketing of magnetite.

The company owes its origin to the unique formation known as the Palabora Igneous Complex.

Nowhere else is copper known to occur in carbonatites as is the case at Palabora, and a host of other minerals such as nickel, gold, silver, platinum and palladium also occur.

“The refinery produces continuous cast rod for the domestic market and cathodes for export,” outlines Lydia Radebe, Manager: External Affairs and Communications at Palabora, “alongside useful by-product metals and minerals including zirconium chemicals, magnetite and nickel sulphate as well as small quantities of gold, silver and platinum. Palabora operates a large block cave copper mine and

Leolo Community Trust P.O. Box 270 17 Hardekool Street Phalaborwa Tel: 015 781 0819 Fax: 015 781 0041 smelter complex with a production capacity of 30,000 tonnes of ore per day.” Palabora employs one of the most complex recovery circuits installed at any copper mine, producing eight metal, mineral and chemical products in around 20 different varieties and grades.

BACKED BY INDUSTRY GIANTS With Palabora’s long and complex history, we asked Radebe to delineate the ownership structure of the business today. “The mine is 80% owned by the Chinese consortium consisting of the

// SINCE ITS INCEPTION, PMC HAS BEEN AT THE FOREFRONT OF EMPLOYMENT PRACTICES IN THE LOCAL MINING INDUSTRY //

Hesteel Group Company Limited (HBIS), Tewoo, General Nice and CADFund through Smart Union Resources South Africa,” she clarifies.

“The remaining percentage is jointly owned by the South African government through the Industrial Development Corporation (IDC), black empowerment consortium, PMC employees and communities.

“Prior to this, Rio Tinto owned 57.7% and Anglo American had 16.8% of the shares,” Radebe continues. “In September 2012, the two companies announced their intention to sell their respective interests in Palabora and the following December, Rio Tinto announced that it has reached a binding sales agreement with a consortium which is committed to the on-going sustainable management of Palabora. The sale agreement

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INDUSTRY FOCUS: MINING

was concluded in July 2013, and the company’s name changed from Palabora Mining Company to Palabora Copper (Pty) Limited.”

NEW OWNERSHIP BREATHES NEW LIFE The acquisition of Palabora came in 2013 when the company was facing the choice between two possible scenarios, neither of which were at all desirable. “Without the interest of the consortium we were looking at either culmination of the life of mine or no overhauling of the smelter which was outdated and facing shutdown,” Radebe explains.

“Occurrence of the former

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would have resulted in the loss of employment of more than 3500 employees, while the latter would have required us to cut more than 700 staff from off-stream. Soon after the sale transaction, the new owners fostered partnerships between Palabora Copper and a range of Chinese companies in various areas such as economic development, trade, skills and technology transfers to achieve ground-breaking and substantive results in refurbishing and extending the life of the mine.”

This saw the Consortium approve R10.4 billion to extend the life of mine, R878 million to refurbish the smelter and R261 million to construct the

floatation plant to improve copper recoveries, operational efficiencies and lower operational costs.

MINING WITH A CONSCIENCE With Palabora Copper poised to tackle the next phase of its long and illustrious story, it is clear that the company is equally concerned with what it can offer to others as it is with providing the world with this precious resource. This care starts with its staff, and saw the company awarded the Top Employers South Africa certification this year.

According to the certifying body, “our comprehensive independent research revealed that Palabora Mining

PALABORA MINING COMPANY

// PALABORA MINING COMPANY NURTURES AND DEVELOPS TALENT THROUGHOUT ALL LEVELS OF THE ORGANISATION // Company provides exceptional employee conditions, nurtures and develops talent throughout all levels of the organisation.

“It has demonstrated its leadership status in the HR environment, always striving to

optimise its employment practices and to develop its employees.”

The company’s commitment to environmental preservation has led to the launch of its Energy Management Programme, which to date has saved R232 million through avoided energy costs and made it an energy efficiency leader in the mining sector.”

Radebe adds: “Over the years, we have invested more than R160 million in developing the communities through the Palabora Foundation, our community project execution partner.” She sums up how Palabora will cement its reputation as both a mining mainstay and a significant long-term driver of the

local economy. “Since its inception, PMC has been at the forefront of employment practices in the local mining industry.

“We have written and developed our code of ethics to follow numerous strategic imperatives and we strive to be a leading corporate citizen within the mining industry long into the future; supplying a high standard of quality products and services, both reliably and responsibly at national and global level.”

WWW.PALABORA.COM

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FIDELITY ADT

Global Player With Local Knowledge PRODUCTION: David Napier

Fidelity ADT is using all the assets at its disposal to ensure that its customers realise that they are dealing with the biggest and best in the business. Since completing the deal which bought Fidelity and ADT together in 2017, this specialist security provider has been planning its future strategy to secure the lives and property of our valued customers. “Fidelity ADT is better placed than ever to do this,” says Fidelity Security Group’s CEO, Wahl Bartmann. www.enterprise-africa.net / 77

INDUSTRY FOCUS: SECURITY

//

“As South Africa’s largest security provider, we proudly shoulder the responsibility of keeping more people safe than any other company in the country,” says Fidelity ADT. The company, formed just last year following the R2bn acquisition of ADT by the Fidelity Group, is now responsible for more than 350,000 residential and commercial customers.

To explain how the company has grown to achieve such success, National Sales and Marketing Executive, Rob Dale, talks to Enterprise Africa and says that people development is a big focus. We ask whether this sizeable company (with more than 56,000 employees) has genuine opportunities for staff to

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further themselves.

“Fidelity ADT has numerous examples of employees who have

started their careers on the front-line (as armed response officers) and after their studies and hard work, they now

INDUSTRY FOCUS: SECURITY

// THE NEW ENTITY, FIDELITY ADT, IS 54.62 % BLACK-OWNED AND 100% SOUTH AFRICAN // work as line managers or heads of departments,” he says. “The Fidelity Security Group has an extensive learnership and development program. Whenever vacancies occur, the Group prefers to look for possible in-house candidates before looking for external candidates.

“We continue to grow headcount

in line with additional contracts.

The company has a number of long-standing technical learnership programs which has proven very successful.”

Fidelity ADT’s recruitment process is rigorous. The company looks to bring the best of the best as it is conscious that its people

are the ones that deliver for clients. Psychoanalysis testing and background security checking are all part of the process for the Fidelity ADT HR team, and after gaining employment, the company’s people remain part of a training programme that continues indefinitely.

It is this focus on people that makes Fidelity ADT a ‘global player with local knowledge’.

Following the completion of the deal between Fidelity and ADT, Wahl

// Fidelity ADT integrates voice and contact center services with Unify In 2017 Fidelity ADT initiated a moved from the Marlboro campus which they had occupied for many years to the current campus located in Midrand. This provided Fidelity ADT with the opportunity to build and voice and Contact Centre solution which placed focus on delivering a world class system ensuring that ADT customers receive the level of customer satisfaction which would cement Fidelity ADT as the leading armed response company in South Africa.

As the current service provider to ADT, Nashua Communications (Pty) Ltd was tasked with building a world Class High Availability solution ensuring that the customer and monitoring call centre’s remained available 24hours a day and 7 days a week.

The Task • Migrate the telecommunications infrastructure of the Fidelity ADT Gauteng environment to a highly redundant voice with contact centre solution in Midrand that can be expanded and evolve to meet new operational or business requirements.

• Modernize the Contact Center platform to support enhanced efficiency, operational flexibility and improved customer service.

The Solution • Duplex OpenScape 4000’s with 990 users and back up routing for the Contact Centre.

• OpenScape Contact Center Enterprise for 231 agents plus OpenScape Contact Center Voice Portal (IVR) with 32 channels.

• Mediant 2600 redundant SBC’s (Session Border Controller) • Redundant Libra SIP Voice Recorder systems for 390 channels each.

• The Libra Voice Recorder solution includes a Nexus and Qnique quality assurance solution.

• Professional Services and Project Management.

• 790 IP OpenScape Desk Phone 35G telephones, 200 OpenStage 40 G HFA telephones for the operators’ desks.

• 2 OpenScape Biz X8’s as redundant interface’s to customer alarm panels.

• Proteus Telephone Management System • Nashua Communications Integration service.

The Benefits • Integrated networked communications services and business applications have transformed working life for Fidelity staff and enabled truly flexible working.

• Migration to a single and highly resilient communications platform has delivered annualized savings.

• Utilizing OpenScape Contact Centre, Fidelity ADT has introduced innovative new response and assistance services for consumers.

• The new unified IP telephony, communication and collaboration environment can be centrally managed and is fully extensible.

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FIDELITY ADT

// WHERE MANY SECURITY COMPANIES ONLY RESPOND TO CRIME INCIDENTS, FIDELITY WORKS TO PROACTIVELY MITIGATE CRIME IN THE COMMUNITIES IN WHICH IT OPERATES, AND THAT IS A VERY STRONG PROPOSITION FOR CUSTOMERS // Bartmann, Fidelity Security Group’s CEO said that the company was now perfectly positioned to offer worldclass services to its customers.

“Where many security companies only respond to crime incidents, Fidelity works to proactively mitigate crime in the communities in which it operates, and that is a very strong proposition for customers. Fidelity’s airborne helicopter support unit, as well as its canine unit, will provide extra levels of support to our teams while in the field, and allow for the provision of services in higher risk areas.”

ACQUISITION The move which sparked previous ADT owner, NYSE-listed Tyco, to sell off its South African operation began in 2014 when the South African government backed a law that would see all private security firms at least 51% locally owned. While the law is still awaiting approval, some major firms have claimed it sends the wrong message to international investors.

However, Fidelity ADT is now a fully-fledged South African organisation and has its sights set on further growth.

“Fidelity Security Group finalised the acquisition of ADT from Tyco (now Johnson Controls) in March 2017 after receiving regulatory approval for the transaction from the Competition Tribunal. The new entity, Fidelity ADT, is 54.62 % blackowned and 100% South African,” says Dale. “The acquisition covers all of ADT’s residential and commercial services as well as its Kusela guarding business. The Fidelity Security Group is celebrating its 61st anniversary this year and the company, which began as a Cash Solutions Service, has

Nashua Communications manages, operates and installs next generation collaboration solution to deliver a host of voice, video, data and hosted services to its customers

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INDUSTRY FOCUS: SECURITY

// IT IS A GIVEN THAT OUR VISIBILITY, RESPONSE TIMES AND TECHNOLOGY NEED TO BE IN PLACE BUT IT IS THE VALUE ADDS AND THE HUMAN CONNECTIONS THAT ACT AS DIFFERENTIATORS // evolved over the years to become a front-runner in the market. Coupled with ADT’s armed response expertise and security technology solutions in residential and commercial markets, the acquisition has perfectly positioned the business for growth in the local market.”

And its success and dominance has been documented following positivity with regional accolades.

At the end of 2017, Fidelity ADT was named as the winner in the Security and Armed Response category at

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the 2017/18 Ask Afrika Orange Index Awards. Rob Dale puts this success down to the company’s people.

“In our security category, connections and trust are key and that comes from the various touch points customers have with our business. It is a given that our visibility, response times and technology need to be in place but it is the value adds and the human connections that act as differentiators.

It is the daily connections our reaction officers have with customers or the

interactions our customers have with our monitoring centres and call centres that impact significantly on customer service ratings,” he says.

“In our business our product is defined by the quality of our people, so a lot of attention is centred around both theoretical and practical training. We work in a highly regulated industry with stringent control mechanisms.

“This is the second successive time Fidelity ADT has come out tops in the security category. We are definitely not resting on our laurels though and will continue to look at ways to continually enhance our survey offering. With crime patterns shifting constantly, operating in isolation is not an option. Information sharing has become a necessity between residents, the SAPS, community

FIDELITY ADT

associations and other relevant parties enhancing the need for more robust personal connections and a highly proactive approach to crime.”

FUTURE PROOFING Currently, South Africa’s employment figures paint a bleak picture. Almost 27% of the country’s 55.7 million people remain unemployed. Of course, this holds back economic development, but it also deepens the threat of individuals turning to crime.

But since January, positivity has been injected in the nation following the appointment of Cyril Ramaphosa as South Africa’s President.

“The change in leadership in the highest office of the land has the potential to ignite economic growth, spur investor confidence and create much-needed jobs in the country. Fidelity ADT is hopeful that our politicians and leaders in government will act decisively against corruption, mismanagement at state-owned enterprises and do what is needed to get South Africa back on track,” says Dale.

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As well as looking to the government to help revitalise economic growth, Fidelity ADT is also taking matters into its own hands, investing in various expansion strategies. Of course, it continues to effectively grow and nurture its large staff base, but it is also looking at further acquisitive activity, more geographic expansion in South Africa, and more work in the digital/ tech space.

“The new entity aims to position itself as a leader in providing customers with an end-to-end solution from the individual in the residential space all the way to corporate asset protection. There are exciting new developments in the pipeline,” details Dale.

“The Fidelity Security Group has been successful with the National

tender for FNB, and the addition of a substantial national footprint of armed response and technical service support have been instrumental in the Group’s ability to offer end-to-end security solutions to partners.”

He concludes by saying that the company is certainly on a growth path and will continue to invest in its future, and in the future of South Africa. This is business that is committed to delivering on its promise: ‘With ADT protecting your home or business, you can rest assured that your security is taken care of’.

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GRAND CENTRAL AIRPORT

A Flight Club You’ll

Want to Join PRODUCTION: William Denstone

Perfectly positioned midway between Johannesburg and Pretoria with easy access to the N1 highway and the Gautrain Midrand station, Grand Central Airport recently celebrated 80 years of putting private and public traffic into the air from its ever-expanding 40 hectare Midrand facility.

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INDUSTRY FOCUS: TRANSPORT

//

“There is no sport equal to that which aviators enjoy while being carried through the air on great white wings.” So said Orville Wright on the flying experiments of the famous brothers, and it is perhaps the “sensation of perfect peace” he felt in flight which inspired the creation of South Africa’s Grand Central Airport back in 1937. Behind its conception was a group of racing enthusiasts also harbouring a keen interest in flying, and in its early years the airport was used exclusively by the small band of individuals constituting the original flying club.

EXCEEDING EXPECTATIONS These members flew from Grand Central Airport under the permission of Mr Harry Shires, the man behind African Flying Services, South Africa’s largest private air transport concern at that time, who had bought the land as part of a somewhat speculative deal. Until 1939 the aerodrome was hive of activity and notched up some impressive aviation feats for South Africa, with Muriel Shires became South Africa’s youngest flying pupil under the tutelage of none other than Miss Doreen Hooper, the country’s first woman flying instructor.

Proceedings at Grand Central understandably ground to a halt during the Second World War, but enthusiasm flared anew at its end, largely thanks to the help of Eddie McConnell, manager of African Flying Services, in which company the ownership of the club was vested. A short-lived era at Louis’ Field in Randjesfontein came to an end in April 1952, and the club’s 130 members decamped back to its place of birth where Grand Central has remained ever since.

The intervening years have borne witness to great change at the airfield, with Dr Mickey Flynn credited with the initiative to expand

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operations in 1964. As a result GCA has been home to commercial and private operators, training schools and maintenance organisations while a multimillion Rand upgrade in 1992 gave Grand Central the scope to offer even more facilities and thus play an even bigger role in the aviation industry in South Africa.

PIVOTAL INDUSTRY Aviation is a key part of the economic lifeblood of Africa. It supports 6.9 million jobs and $80 billion in GDP. It carries people and goods across and outside the continent, and brings in economic investment, tourism, trade and aid.

It also still holds much promise, with African aviation forecast to grow at 5.4% a year over the coming two decades, to conclude in a near tripling in size. Currently, 76.6 million people use air transport as inbound or bound passengers or those that travel within Africa, and projections by the International Air Transport Association (IATA) indicate that this figure will grow to 300 million by 2035.

There are several private-sector

// THE EXPERIENCE TRAINEE PILOTS GAIN AT GRAND CENTRAL IS INVALUABLE // initiatives already underway, as well as IATA’s commitment to continuous training through the IATA Airline Training Fund in Africa, meaning that African aviation looks set to realise its abundant potential. Thousands of young African aviation professionals have already benefitted from the help and expertise on offer through such schemes, and if Africa can meet the future demand for highly skilled aviation roles it will see not only substantially increased GDP growth, but also investment in future job creation and, ultimately, a large slice of the prosperity that aviation can generate.

There is nothing stopping Africa from going on to become a global aviation training centre in time, meeting its own market needs and exporting skilled labour to other parts of the world that are going through their own growth stages.

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INDUSTRY FOCUS: TRANSPORT

POSITIONED TO CAPITALISE Grand Central today is a fully equipped airfield and open 24 hours a day, whose complex incorporates a modern terminal building. Also on site are car hire companies such as Avis and Europcar, as well as facilities including The Harvard Café Restaurant and Conference Centre. The airport is currently used as a base for numerous flying schools such as Lanseria Flight Centre, Hover Dynamics, Superior Pilot Services, SimCentral, and Flight Training Services.

“The experience trainee pilots gain at Grand Central is invaluable because they are exposed to a fast-paced airspace with plenty of traffic,” says Gary Renault, Grand Central Airport Manager, “which in turn affords them a better PPL.” The Private Pilots License is the first step

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to piloting an aircraft with passengers and a valuable opportunity for an individual to fly for enjoyment, while for the aspiring commercial pilot, it offers the chance to build up hours.

Helicopter charters are also offered to and from the airport, with Grand Central home to all major agencies. The entire ground floor of the terminal, which is complete with a charter pilot lounge and a VIP passenger lounge, is full, and there is only a 2% vacancy on the first floor of the terminal building. Perhaps most notable about Grand Central is its air of exclusivity, including the absence of scheduled commercial flights; instead, most of the passengers moving through the airport are private pilots or charter flight passengers flying to their own agendas.

“Business people and high-profile

// BUSINESS PEOPLE AND HIGH-PROFILE PASSENGERS ENJOY QUICK AND EASY ACCESS THROUGH THE AIRPORT // passengers enjoy quick and easy access through the airport,” explains Renault. “The busy executive can effortlessly park his car, board his jet or chopper and be in the air within minutes. VVIPs can even arrange to be driven directly to their waiting plane without being waylaid by the general public or the media.” The airport offers hangarage and parking for private aircraft and a multitude of air charter companies, which Renault explains

GRAND CENTRAL AIRPORT

helps to keep traffic flowing.

“Our aircraft movements are extremely high for a small airport and because we are only dealing with small aircraft, we can land and park at a much higher frequency than commercial airports.”

HEADING EVEN FURTHER AFIELD? Grand Central Airport continues to grow and change in order to meet the ever changing demands of its clientele, but this successful boutique airport never strays from providing first class service to the aviation industry.

Whether or not the hardy enthusiasts behind its creation could ever have pictured the scale of the operation we see today is impossible to say, but it would surely have been impossible to envisage the airfield celebrating its 80th birthday, which came last year.

To mark the event, the airport’s management began to investigate the viability of expanding their infrastructure to include new multifunctional hangars and/or T-hangars, additional taxiways and more helipads and parking. This followed the airport’s acquisition in June by Old Mutual Life Assurance Company of South Africa, who already owned the surrounding land, to see it become the sole shareholder of Grand Central Airport (Pty) Ltd and usher in a new era for the airport.

Perhaps most important to Grand Central’s future ambitions will be whether it can regain its international airport status - currently, South Africa limits the number of international airports to one per province, except for Gauteng which has OR Tambo and Lanseria. There are big considerations

and big opportunities to come for Grand Central, as Renault concludes.

“Just because we are currently a general aviation airport does not preclude us from talking to commercial airlines,” he says of the plans, although adds a note of caution when talking of change to this exclusive, boutique facility. “Bringing an airline to Grand Central will radically change the dynamics here, however, and we would have to consider terminal security, baggage handling, our existing fuel farm and all kinds of additional infrastructure needs.”

WWW.GRANDCENTRAL.CO.ZA

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TENNECO

Cleaner, Faster, More Productive PRODUCTION: Timothy Reeder

A $9.3 billion global manufacturing company, Tenneco is one of the world’s largest designers, manufacturers and marketers of clean air and ride performance products and systems, which it supplies to the automotive, commercial truck and off-highway markets.

//

Tenneco is one of a select few top U.S automotive component suppliers represented in South Africa today, having successfully built strong business links between its South African operations and other international stakeholders which in turn enhance the potential for mutually beneficial trade between the two countries.

Tenneco in South Africa has become perhaps most well-known

for pioneering global ideas for cleaner air, as well as its unerring commitment to developing smoother, quieter and safer transportation. As such, it is among the world’s leading designers, manufacturers and distributors of both Ride Performance and Clean Air products and technology solutions for diversified markets including light vehicle, commercial truck, offhighway equipment, and also caters for the aftermarket.

DRIVING MADE SAFER AND CLEANER Within a raft of high-end offerings, with primary brand names such as Monroe®, Walker®, XNOx™ and Clevite®Elastomer, Tenneco has established itself as a global leader in two key product lines.

In employing its Ride Performance offering, customers look to the company to provide advanced suspension technologies that deliver performance, comfort and the power to differentiate vehicles. As Tenneco itself explains:

// WE ARE ABLE TO DRAW ON WORLDWIDE RESOURCES TO SERVE CUSTOMERS WITH HIGH QUALITY STANDARDS AND SERVICE ANYWHERE IN THE WORLD // 90 / www.enterprise-africa.net

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INDUSTRY FOCUS: AUTOMOTIVE

“By partnering with our customers we deliver safety, value and a superior driving experience, powered by people, innovation and superior products.

“We are able to draw on worldwide resources to serve customers with high quality standards and service anywhere in the world. Our solutions are at the forefront of technology and tailored to each vehicle manufacturer’s requirements and vehicle type, making us a partner of choice for customers wanting to create a signature ride for their vehicles.”

In the second of its dual areas of expertise, Tenneco has grown into a worldwide preferred choice for designing, engineering and manufacturing Clean Air solutions for

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passenger cars, light trucks, commercial trucks and high horsepower engines.

These technologies are used in an array of applications spanning marine, locomotive and stationary power.

“We deliver Clean Air products and systems designed to meet global emissions regulations anywhere in the world to ensure that we have the right solutions in place to meet the needs of our global customers,” says the company of its inarguable claims to Clean Air product leadership, which has seen it investing in its core sciences including combustion and thermal management, materials science and thermoelectrical energy. “This advanced research enables the development of creative solutions that help us to better meet customers’

current and future emissions control needs,” Tenneco explains.

SA’S CRITICAL MARKET? It is impossible to overstate the significance of the automotive industry to South Africa’s overall prosperity; the sector is the mainstay of the national industrial base and accounts for 7.5% of GDP. In recent years South Africa has improved its global ranking to 21st in

// THE AUTOMOTIVE INDUSTRY IS TRANSFORMING AT AN INCREDIBLE RATE //

TENNECO

the world, from 24th just a few years prior, and holds a market share of 0.68%.

South Africa remains the biggest vehicle market in Africa, accounting for 37% of new vehicle sales on the continent.

According to economist Dr Azar Jammine, Director and chief economist at Econometrix, a slight slowdown in new purchases will spell big business for the likes of Tenneco. “The decline in new vehicle sales in recent years affected retail sellers negatively,” he began, “but it would provide a boost for the after-sales market as buyers would keep their vehicles for longer. This means additional maintenance and servicing.”

This is a perfect time, then for Tenneco to be named a GM Supplier of the Year by General Motors during its 26th annual Supplier of the Year awards ceremony, as was the case in April this year. GM recognised 132 of its best suppliers from 17 countries who have consistently exceeded GM’s expectations, created outstanding value, or brought innovations to the company.

EXCEEDING EXPECTATIONS Tenneco earned two Supplier of the Year awards at the ceremony, one being given to each of its Clean Air and Global Elastomer teams. The award was the second in three years for the elastomers team, which was also afforded the same lucrative status in 2016. “This is an opportunity for General Motors to honour those suppliers who are truly the best of the best,” outlined Steve Kiefer, GM senior vice president, Global

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Freightmore is the proud transport partner to Tenneco Purchasing and Supply Chain. “The automotive industry is transforming at an incredible rate. The relationships we have with our supply base means everything when it comes to delivering a strong vehicle line-up today and the cutting-edge vehicles and mobility services of tomorrow.

“We’re extremely honoured to receive this important recognition from General Motors for our Clean Air and Elastomers teams,” responded Brian Kesseler, Tenneco CEO. “This award demonstrates Tenneco’s commitment to partnering with our customers to deliver world-class products and solutions.”

INDUSTRY LEADERS UNITED April also brought big news this year in the form of activist investor Carl Icahn’s announcement that he plans to sell auto parts maker Federal-Mogul to Tenneco in a huge $5.4 billion acquisition deal.

This would result in his unloading an investment he has held for nearly two decades and picking up a new stake in Tenneco. Federal-Mogul Corporation is an American developer, manufacturer and supplier of products for automotive, commercial, aerospace, marine, rail and off-road vehicles, with expertise in industrial, agricultural and powergeneration applications.

Tenneco plans to separate into two independent, publicly traded companies - one focusing on powertrain products and the other on auto parts. According to Tenneco, “the transformational acquisition looks to accelerate long-term value creation by creating two focused, purpose-built industry leaders in their respective markets with greater scale, and strategic and financial flexibility.”

The partnership brings together complementary businesses, and the aftermarket and ride performance company will include Tenneco Ride Performance and Federal-Mogul Motorparts, while the powertrain technology company will be made up of Tenneco Clean Air and FederalMogul Powertrain. “Going to market with well-recognised brands, more product categories, greater coverage and expanded distribution capabilities is a strong formula for capturing growth, particularly in China,” concluded Tenneco Executive Chairman Gregg Sherrill on the ground-breaking partnership.

WWW.TENNECO.COM

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TOURVEST DESTINATION MANAGEMENT

Proudly South African Tourvest Enjoys

Global Success PRODUCTION: Karl Pietersen

Industry leading integrated tourism group, Tourvest, is furthering its reach around the globe by opening up in East Africa and entering new markets including Australia and New Zealand. CEO of Tourvest’s Destination Management division, Martin Wiest talks to Enterprise Africa about the company’s future plans.

//

As the largest tourism business in the Southern Hemisphere, Tourvest is riding the wave at the top of a travel and tourism industry that is showing no signs of crashing anytime soon.

The company, which has roots firmly planted in South African soil, is now home to more than 5000 people and incorporates several major brands across a range of sectors.

Tourvest is ambitious, and the company is hoping to grow into an international travel and tourism

powerhouse over the coming years.

Martin Wiest is CEO of the group’s Destination Management division and he tells Enterprise Africa that the future is very exciting for this historic African powerhouse.

“The only limitation that we have is the availability of cash for acquisition or organic growth. We are in the fortunate position of being substantially cash generative. There’s always more ideas than there is available cash so it’s our job to identify the cleverest places to invest our cash.”

Tourvest was founded in 1997 as an entrepreneurial experiment to create a tourism-specific business that incorporated various African focussed activities. After growing quickly in its first years, the business accelerated its growth by going on an acquisition extravaganza.

“In South Africa, in the late 90s, there was a listing boom,” recalls Wiest. “Various stakeholders, mainly from the jewellery and inbound leisure sectors, agreed that it was a great way of creating cash to grow a

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INDUSTRY FOCUS: TOURISM

tourism business rapidly.

“The key person at the time was Steve Griessel who was group CEO and he took a few jewellery businesses and some inbound tourism businesses and brought them together as one.

“It was listed in 1997 before going on a wild shopping spree, purchasing 200 businesses over a two-year period. Through that, we streamlined, installed business pillars and applied logic to the situation, resulting in the Tourvest you see today – the biggest tourism player in the Southern Hemisphere.”

The companies purchased by Tourvest range in size and style. Wiest had been part of a business formed in 1981 before moving into Tourvest upon acquisition. The oldest business in the portfolio is Wilson Collins Travel, founded in 1901.

Right now, attractive investment

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opportunities are being presented in East Africa and Wiest sees this as an ideal region for Tourvest to attack.

AFRICAN EXPANSION “The core driver behind that is mainstream destinations like South Africa have new competition in the

digital environment such as booking. com or Expedia,” he says. “While they don’t kill us, they certainly apply a lot of pressure in our mainstream destinations. In niche destinations, that the consumer considers exotic, no one wants to work there without a partner.”

TOURVEST DESTINATION MANAGEMENT

// WE BELIEVE THAT THE CULTURE OF AN AFRICAN COMPANY IS HIGHLY ENTREPRENEURIAL AND OPPORTUNISTIC BUT NOT AS BUREAUCRATIC AS MANY EUROPEAN COMPANIES // Currently, the company operates a highly successful operation in Kenya, Tanzania and Uganda, and Wiest explains that this will be used as a breeding ground for growth further north.

“We are taking our east African operation as the incubator for expanding north into Ethiopia and south into Rwanda - the infrastructure is there, the vehicles are there, the corporate structures are there, and the registered companies are there. The same applies to Mozambique.”

He also highlights Madagascar as an opportunity because of its beach tourism offering and potential extensions to holidays into Namibia and South Africa.

“The principle is not because Ethiopia or Madagascar are heaving, the principle is that those countries, because of their exotic nature, will be a home for DMC (destination management company) for decades to come and mainstream destinations do not have the same level of sustainability.”

But it’s not only Africa where the CEO sees potential. Although tourism across the continent has been highlighted as an industry with major possibilities, Tourvest is an international business and continues to look further afield for growth opportunities.

“We are focussing very strongly on expanding, not only on the African continent, but elsewhere too. We want to get into countries where the business model offers a high-service, high-hand holding destination management concept, where we can remain relevant for decades to come,” says Wiest.

GLOBAL PLAYERS Four international markets in particular have been identified by Tourvest as locations which could offer up expansion opportunities for the company. “We are busy with expansion strategies in New Zealand and Australia. The logic behind that is the consumer profile travelling to those destinations is identical to those travelling to South Africa. The same applies to Argentina and Brazil.

Those four countries are where we want to acquire businesses in the next 24 months, and then synergise

our customer base while moving into those environments,” says Wiest.

Tourvest’s existing international partnerships a rife for expansion of this nature.

“In South Africa we deal with hundreds of worldwide customers in terms of our overseas wholesalers.

We have around 150,000 trips to South Africa from wholesalers and at least half of those wholesalers also have products for New Zealand and Australia, so it’s only logical to try and gain a platform there.”

As well as growing in new regions, Tourvest will look to bolster its operations in existing foreign markets.

This means acquisition to build revenue so that the balance is more international and less African.

“We want to remain Africa’s largest tourism entity and grow

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INDUSTRY FOCUS: TOURISM

// WE ARE BY FAR THE BIGGEST HANDLING DMC IN RUSSIA FOR THE WORLD CUP; WE WERE THE BIGGEST IN BRAZIL, WE WERE THE BIGGEST IN SOUTH AFRICA AND PART OF OUR TEAM WILL MOVE ONTO QATAR // our base in Africa, but we feel very strongly that we want to have a more diversified business with more investments globally. We run a chain of destination merchandise stores in the Caribbean, we are investing in Cuba, we are running a retail environment in Spain, we are running a retail environment in India, but Tourvest still generates more than 70% of revenue on the African continent. We will always be an African company at heart, we believe that the culture of an African company is highly entrepreneurial and opportunistic but not as bureaucratic as many European companies. We would like 50% of our turnover generated outside of the continent, mainly because we are

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running out of growth opportunities in Africa,” says Wiest.

Currently, the Tourvest group generates turnover of around $1 billion but, through international expansion, the hope is that this will be doubled over the coming five years. A key part of this growth ambition will be Team Destination Management (TDM), where the group is already strong.

TEAM DESTINATION MANAGEMENT “The business model is very unique,” details Wiest. Tourvest started its TDM to contribute to the German FIFA World Cup in 2006. “We started the business for TDM as a learning project for the 2010 World Cup in South Africa.”

He describes the business as a

‘globally mobile event specific DMC that moves from event to event’.

Currently, the team is as busy as ever, handling the FIFA World Cup in Russia and already preparing to move on for future major sporting events.

“Our team in Russia is over 600 staff and we are handling around 50,000 passengers, mainly for sponsors where our key accounts are Visa and Budweiser. We are also handling 15 of the 32 participating football federations with their friends and family programmes, and their own sponsor programmes and media groups. We are by far the biggest handling DMC in Russia for the World Cup; we were the biggest in Brazil, we were the biggest in South Africa and part of our team will move onto Qatar,

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INDUSTRY FOCUS: TOURISM

// I BELIEVE VERY STRONGLY THAT TOURISM HAS A MATERIAL PART TO PLAY IN SOUTH AFRICA, RECTIFYING MANY OF THE SOCIOECONOMIC PROBLEMS WE HAVE HERE // part of our team will move onto Tokyo for the summer Olympics and Rugby World Cup. What we’ve created is a business model of a globally mobile sports-focussed DMC and we are the only one in that environment.”

Asked if the group has become reliant on big sporting events, considering their inconsistent nature, Wiest says that a deliberate split between TDM and inbound leisure keeps the company moving.

“This year, the World Cup is our single biggest and most profitable project by far. It’s in the region of $50

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million which is around a third of our total turnover for the year. But in the next three years it is not. If you annualise it, it’s still important but not comparable to inbound leisure. The combination between big sporting events and inbound leisure is what makes us tick – both are equally important. This year, Russia will form around 50% of our EBITDA but in the next three years, that unit will lose money until we get into the Qatar World Cup. Sports is feast or famine and inbound leisure is bread and butter, but the combination is what keeps us healthy.”

TOURISM CREATES JOBS Investment in the tourism industry has been pushed heavily in South Africa recently, with Tourism Minister, Derek Hannekom and even President Ramaphosa talking of the tangible benefits that a strong tourism industry can have for the wider economy. Wiest agrees and hopes investment will continue.

“On the continent, there is no better mainstream destination than South Africa,” he says. “The South African economy is heavily weighted towards agriculture and mining.

Agriculture will continue but mining is on the decline with the mines getting deeper and less cost efficient. We need new drivers of employment and the theory is for every eight tourists, there is one job created. It’s a job creator in a meaningful, decentralised fashion. It

TOURVEST DESTINATION MANAGEMENT

doesn’t only create employment in the urban centres, it creates jobs in the rural areas where the hotels, lodges and safaris are. Tourism has a material role to play but we don’t think we should look for mass tourism – volume tourism, but not mass tourism. We need to continue offering great value and service for little money.”

Currently, South Africa is placed highly in the world tourism competitiveness index, looking at what it offers for what it costs. It offers fantastic value for money, perhaps a function of the currency which has depreciated over the past few years. “I believe very strongly that tourism has a material part to play in South Africa, rectifying many of the socioeconomic problems we have here,” says Wiest.

Talking of the economic-political situation that has caused headaches for many business leaders in South Africa over the past few years, Wiest explains that the tourism industry saw the benefit of a weak Rand, encouraging large numbers of international tourists into South Africa.

“South Africans as a whole are far more upbeat about the future of their country than they were before.

Strangely enough, for us, 2016 and 2017 were two record years in a row and that was largely down to the previous administrations cunning ability to destroy the currency,” he says. “This made our business better than ever. Now that we have a more stable government, we see a slight weakening of our international markets in the face of a stronger Rand.

As a South African, I am very happy that the changes have occurred but for inbound leisure it is not necessarily the best thing. We must get used to a new reality – we are not going to have another record year, but we don’t want to have record years every year.

I would prefer a stable country, with a future for everybody, with slightly lower trading levels rather than a corrupt country with high trading levels but no future for my children.”

Martin Wiest, CEO

And the future does look bright for this very African but international organisation. Acquisition activity will continue and movement into new markets will allow Tourvest to spread its expertise and success far and wide.

Wiest, who arrived in South Africa from his homeland Germany in 1983, says that he is confident about times to come because of the experience that has been built up.

“Anybody can trade while the market Is buoyant. I’m a strong believer

that the management team we have is better than anybody else, and that team has in the last 20 years grown the business consistently in good times and bad. We have a proven track record of being able to grow despite circumstances, and when everything aligns like it did last year, we can deliver humdinger years.”

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EXHIBITION CALENDAR

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

INTERBUILD AFRICA AUG 15 | JOHANNESBURG INTERBUILD AFRICA celebrates its landmark 50th birthday in 2018, with a long and successful legacy that has earned this event the title of Africa’s largest building services and construction exhibition.

INTERBUILD AFRICA, together with its world-class co-located shows, is the definitive showcase for the full spectrum of building, construction and related industries. These shows offer exhibitors unparalleled access to an international audience of key industry buyers and influential decision-makers. Take advantage of the opportunity to launch your latest products and innovations to a captive and specifically targeted industry audience.

MANUFACTURING INDABA KWAZULU-NATAL AUG 22 | DURBAN The annual Manufacturing Indaba Kwazulu-Natal brings together provincial manufacturers and businesses to explore growth opportunities, find out about the latest manufacturing incentives and trends, and provide a platform for networking and collaboration.

• The conference programme will include plenary sessions as well as debate sessions to unpack and encourage active participation at the event.

• The exhibition provides an

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opportunity for manufacturers to showcase their expertise, network with industry peers and meet business suppliers BIO AFRICA CONVENTION AUG 27 | DURBAN The BIO Africa Convention is an international event co-hosted by the South African Department of Science and Technology, Technology Innovation Agency (TIA), and AfricaBio, a biotechnology stakeholder association in partnership with other strategic partners. It seeks to enrich the implementation of past and existing Africa-based/led initiatives for growth and sustainable development, especially in the bio-economy sector.

BIO Africa Convention provides a platform for dialogue and discussion with stakeholders in the global biotechnology environment. It will also showcase bio-innovations from the broader biotech community of South Africa and the Africa region, creating an enabling environment for commercialisation of local innovations.

Under the theme, “Africa – Open for business: Together building the BioEconomy”, BIO Africa Convention, aims to attract international investors and facilitate business networks and the collaboration of minds amongst industry, academia, regulatory authorities and future industry leaders.

100% DESIGN SOUTH AFRICA GALLAGHER CONVENTION CENTRE AUG 08 – 12 KENYA TRADE EXPO KENYATTA INTERNATIONAL CONFERENCE CENTRE AUG 09 – 11 INTERBUILD AFRICA NASREC EXPO CENTRE AUG 15 - 18 GHANA TRADE SHOW ACCRA INTERNATIONAL CONFERENCE CENTRE AUG 16 - 18 OIL & GAS AFRICA CAPE TOWN INTERNATIONAL CONVENTION CENTRE AUG 21 – 23 CAPE INDUSTRIAL SHOW CAPE TOWN INTERNATIONAL CONVENTION CENTRE AUG 21 -23 MANUFACTURING INDABA KWAZULU-NATAL DURBAN ICC AUG 22 ATM & CASH INNOVATION AFRICA RADISSON BLU HOTEL, SANDTON AUG 23 BIO AFRICA CONVENTION DURBAN ICC AUG 27 - 29

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SMART INSPECTION SOLUTIONS – WITH EXPERTISE AND KNOW-HOW. Reliable quality control in pharmaceutical packaging.

Seidenader supplies inspection solutions for ampules, vials, syringes and cartridges: from table-top units to high-performance inspection machines with state-of-the-art image processing systems and complementary leak testing technologies for liquid and freeze-dried products.

More than 120 years of experience and comprehensive knowledge of the high safety and quality requirements of the pharmaceutical industry make Seidenader one of the world’s leading suppliers of inspection solutions today. A Seidenader syringe inspection machine has also been installed in Cape Town, South Africa.

www.seidenader.com