Enterprise Africa September 2018

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

September 2018

www.enterprise-africa.net

Omnichannel Digital Retailer Reaping Rewards of

Customer Service Excellence Exclusive interview with HomeChoice CEO, Shirley Maltz ALSO IN THIS ISSUE:

TBAC / FMI / Fisher Dugmore Financial / Weldamax

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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 Rouen House, Rouen Road, Norwich NR1 1RB Administration & Finance +44 (0)20 7193 0419 Advertising & Feature Sales +44 (0)20 8123 7859 Editorial & Design +44 (0)20 7193 2735 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Media Group Ltd 2018

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This month we hear about positivity in the retail sector where major direct marketing business, HomeChoice, is seeing continued success thanks to an unwavering dedication to its core customer base. The level of understanding and loyalty that the business has for its clients is being repaid as sales continue to grow. We talk to CEO Shirley Maltz to find out more about what the future holds for HomeChoice.

We also look again at Fisher Dugmore, the Gauteng-based boutique financial advisory business, following on from last month’s discussion with Dave Fisher. This time around we talk to the second director behind the company, Andrew Dugmore, and get his take on the business that helps you keep more of your money.

Another personal finance story comes from Durban’s FMI. This life insurance specialist is perhaps the most exciting and innovative insurance business we have featured for some time. Its idea of focussing on products with income benefits is starting to gain real traction.

In the manufacturing sector, one which has received a real bashing over the past few years, we hear the story of a shining light, a job creator, a quality producer – The Bespoke Amenities Company. Manufacturing hospitality cosmetics and other related products, this business has its sights set on very realistic international expansion.

We also hear from LEMCO, Weldamax and AQS Liquid Transfer about how these experienced SA businesses are planning to tighten their grip on chosen markets, ensuring future growth.

Interestingly, everyone we talk to still seems to be supportive of the initiatives being put in place by Cyril Ramaphosa. Despite the country facing a new period of ‘technical recession’, the theme seems to be consistent: ‘we regularly face short-term challenges, but we have a leader who will bring success over the long-term’.

Get in touch and tell us how your company is being innovative and how you are faring in a tough economic climate. We’re online @EnterpriseAFri1

Joe Forshaw EDITOR

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

www.enterprise-africa.net / 3

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

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

9/HOMECHOICE Omnichannel Digital Retailer Reaping Rewards of Customer Service Excellence Keeping up with customer trends in a fastmoving and forever changing environment is one of the keys to success in retail. South Africa’s HomeChoice has developed a profound understanding of its customers to ensure it is always delivering what, where, when, and how they need. “We push ourselves very hard to stay apace with the customer,” says CEO, Shirley Maltz.

9/ 4 / www.enterprise-africa.net

CONTENTS

25/

32/

62/

INDUSTRY FOCUS: RETAIL

INDUSTRY FOCUS: PROPERTY

9/HOMECHOICE Omnichannel Digital Retailer Reaping Rewards of Customer Service Excellence

52/ATTACQ Developing the Hottest Property

19/BIG FIVE DUTY FREE The Runaway Choice for World Class Duty-Free

57/AZMET TECHNOLOGY & PROJECTS SA’s AZMET Sparkles in Armenian Gold Project

INDUSTRY FOCUS: MANUFACTURING

INDUSTRY FOCUS: DISTRIBUTION

25/THE BESPOKE AMENITIES COMPANY Hospitality Amenities Specialist to Create African Jobs

62/WELDAMAX Forging Close Bonds

INDUSTRY FOCUS: INSURANCE 32/FMI A Better Way to do Life Insurance

INDUSTRY FOCUS: MINING

70/AQS LIQUID TRANSFER Trusted Pumping Solutions Keep Things Flowing INDUSTRY FOCUS: FABRICATION

40/MARSH AFRICA Finding the Opportunity in Risk

77/LEMCO The Laubscher Brothers Are Men of Steel

INDUSTRY FOCUS: FINANCE

INDUSTRY FOCUS: SECURITY

46/FISHER DUGMORE FINANCIAL Helping YOU Become Financial Independent

82/ASSA ABLOY Innovation Is the Key to Better Security Solutions www.enterprise-africa.net / 5

WESTERN CAPE DAM LEVELS CONTINUE TO RISE

Hely - Hitchinson Dam

The Western Cape continues to benefit from winter rains as its dam levels rise after a long, hard, dry summer.

Winter rainfall has seen dam levels in the province continue to rise from 51% to 52.5% in the last week of August.

Theewaterskloof Dam, which is one of the main six dams that feed Cape Town, increased slightly from 42.0% to 43.1%. Clanwilliam Dam is at 99.95%, while Voelvlei is up from 59.9% to 63.3%.

However, the department maintained that the water restrictions would not be lifted soon, and urged residents to continue saving water. “The department will only review the restriction at the end of the hydrological cycle in September,� the department said.

In Gauteng, the Vaal Dam is at 95.5%, while the Integrated Vaal River System (IVRS), consisting of 14 dams

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serving mainly Gauteng, Sasol and Eskom, decreased slightly from 83.9% to 83.5%. The system was at 79.3% during the same period last year.

In the Eastern Cape, dam levels continue to remain low. The Algoa System with five dams serving Nelson Mandela Bay increased slightly from 18.1% to 18.4%. Last year the system stood at 31.8%.

Kouga Dam has increased from 6.8% to 6.9%. Loerie increased from 71.5% to 96.0% and Groendal increased from 37.8% to 39.2%%.

The Amathole System, which has six dams that serve East London, decreased from 89.5% in the same period to 82.6% this week. Laing Dam has decreased slightly from 97 % to 96.7%.

In the North West, Ngotwane recorded 62.6%, while Hartebeespoort Dam is at 96.7%. Sehujwane Dam

decreased from 83.1% to 82.8%.

In KwaZulu-Natal, the Umgeni Dam System, with five dams serving eThekwini and uMsunduzi in Pietermaritzburg, decreased by 1% from 73.4% to 72.9%.

The system was at 58.3% in the same period last year.

Midmar Dam decreased by a fraction, from 94.8% to 94.7%, while Inanda Dam decreased slightly from 69.7% to 69.3%.

The Northern Cape has experienced an insignificant increase of 0.1%, from 88.6% to 88.7% this week. Spitskop Dam decreased slightly from 91.6% to 91.2%.

In Limpopo, the average dam levels decreased from 71.7% to 70.7%. Albasini decreased from 84.5% to 84.2%.

The average dam levels in Mpumalanga decreased by a fraction, from 78.7% to 78.2%, while Witbank remains at 99.3%, Middelburg at 97.6% and Buffelskloof at 79.1%.

NEWS SNAPSHOT TRANSNET RECORDS 11.3% INCREASE IN REVENUE Transnet has recorded an increase in revenue by 11.3% to R72.9 billion for the year ending in March 2018.

The company’s Group Chief Executive, Siyabonga Gama, announced the company’s financial results for the year which ended on 31 March 2018 last month.

Gama attributed the increase in revenue to a 4.3% increase in railed export coal volumes; a 6.5% increase in railed automotive and container volumes and a 6.1% increase in port container volumes.

The reform pledge was included in Transnet’s financial results for the year through March, which showed an 18% rise in earnings before interest, taxes, depreciation and amortisation to R32.5 billion rand ($2.2 billion). That was driven by rising volumes of rail-transported coal and automotives.

Transnet continued to execute its infrastructure investment programme, spending R21.8 billion, a 1.6% increase from the previous year. This takes total investment under the Market Demand Strategy (MDS) to R165.6 billion in the past six years.

“As at 31 March 2018, the cumulative expenditure incurred on the 1064 locomotive contract amounts to R30.1 billion, with R7.3 billion spent in the year under review.

“A total of 402 locomotives have been accepted into operations while 16 have been delivered and are currently undergoing acceptance testing,” said Gama.

Group Chief Executive, Siyabonga Gama,

SABC, MULTICHOICE SIGN NEW CONTRACT The South African Broadcasting Corporation (SABC) and MultiChoice have signed a new commercial channel supply agreement allowing the SABC News and SABC Encore channels to continue to be broadcast on DStv. “The SABC welcomes the new agreement with Multichoice, which will bring certainty to our viewers and our staff. The board and management of the SABC are satisfied that the agreement meets both the commercial and governance needs of the SABC,” the

public broadcaster’s CEO, Madoda Mxakwe, said in a statement.

The agreement follows extensive discussions between the parties, as the previous contract is set to expire.

“SABC and Multichoice believe that this agreement will give their relationship a new start. DStv customers will continue to enjoy around the clock news coverage from SABC News on channel 404, while SABC Encore on channel 156 will allow viewers to indulge in nostalgia, airing old favourites and classics,” said a statement released

by both parties.

SABC archives, which the SABC uses to produce SABC Encore, remain the wholly-owned property of the SABC. “We are pleased to be able to continue to carry these channels on DStv. We have a long-standing relationship with SABC and are happy that we have reached a mutually beneficial agreement. We look forward to continue working with the SABC to deliver great entertainment to our customers,” Multichoice South Africa CEO Calvo Mawela said.

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HOMECHOICE

Omnichannel Digital Retailer

Reaping Rewards

of Customer Service Excellence PRODUCTION: Manelesi Dumasi

Keeping up with customer trends in a fastmoving and forever changing environment is one of the keys to success in retail. South Africa’s HomeChoice has developed a profound understanding of its customers to ensure it is always delivering what, where, when, and how they need. “We push ourselves very hard to stay apace with the customer,” says CEO, Shirley Maltz. www.enterprise-africa.net / 9

INDUSTRY FOCUS: RETAIL

//

Most companies claim to have developed a ‘deep understanding of their customers’ but very few can back these claims up the way HomeChoice can. This Cape Townheadquartered JSE-listed retail powerhouse has been honing its understanding of “her” for decades.

Established in 1985 as a mail order distributor of cast iron pots and pans for the kitchen, HomeChoice is today South Africa’s number one home-shopping retailer with an omnichannel route to market for its vast product range and complementary business divisions offering financial services (FinChoice) and value-added products.

The HomeChoice team is relentless in furthering its

// SHE’S ALWAYS SHOPPING SOMEWHERE, SHE JUST MIGHT NOT BE SHOPPING WITH YOU. IF SHE’S NOT SHOPPING WITH YOU IT’S BECAUSE YOUR PRODUCTS ARE NOT GOOD ENOUGH // understanding of the client so that it can seamlessly deliver first-class service along with relevant and needed products.

“The business has always been mass-marketed, targeted at females, specifically urban, of African descent,” HomeChoice SA CEO, Shirley Maltz tells Enterprise Africa.

To be precise, the HomeChoice customer base is 84% female, usually mothers, in the mass-middle market (75% LSM 4-8), earning around R10,000 a month, between 30 and 60 years old, living in South

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Africa’s urban areas, and utilising digital channels (specifically mobile) for shopping.

“She’s always shopping somewhere, she just might not be shopping with you,” says Maltz.

“If she’s not shopping with you it’s because your products are not good enough. Whether it’s your merchandise, customer service or whatever. We push ourselves very hard to stay apace with the customer.”

“We haven’t changed our target market but the market has changed,” says Maltz. “During apartheid our target market did not have freedom of movement, she had very poor schooling, very poor sanitation, no electricity and no water. There is no doubt in my mind that the roll-out of housing, sanitation, electrification and schooling over the past 35 years has changed her life and that her desire to beautify and improve her home has been a key driver of our business. However, the delivery backlog for these services remains huge and coupled with the impact of the economic hardships over recent years, this has made her more discerning about how she spends her money. Only by continuing to offer her quality products that are affordable and beautiful, will she respond, and will we continue to grow.

“We love our customer, she loves us, and we are very good at developing products for her. We want to focus on her, she is our queen and we will never move away from her.”

And ‘she’ has helped the business achieve significant

HOMECHOICE

success. Financial results for the six months ending 30 June 2018 detailed group revenue increasing by 16.1%% to R1.5 billion, growth in retail sales of 18.9%, as well as a strong contribution from financial services with loan disbursements

growing by 30.0%.

Maltz confirms that the business continues to thrive in a challenging environment. “I’m happy with how we are trading but times are tough in South Africa, make no mistake.”

OMNICHANNEL STRATEGY As HomeChoice embraces its digital transformation, the company continues to improve customer engagement through the development of existing and new touch points. Mobi and web

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INDUSTRY FOCUS: RETAIL

channels offer convenience, a dedicated customer support call centre provides support across all lines, and the newest strategy, retail showrooms encourages interactions with products and staff.

“We launched our first showroom next to our head office in Wynberg two years ago,” details

Maltz. “We have just launched our second showroom in Maponya Mall and our third in East London opened on 1 September. Later this year, we will open our flagship showroom in Rissik Street, Johannesburg and our fifth in Nelspruit.

“The concept is that you can

walk in, look at the product and feel the quality before ordering online for the product to be delivered or collected.

“Inside our showroom, we have set up an example of a home and kitted it out with HomeChoice products so that our customers can see exactly what they could have

//Mobiz - The key to HomeChoice’s successful mobile strategy Being South Africa’s number one home retailer, HomeChoice has to be at the forefront of customer engagement to drive growth. As the business has moved from newspaper advertising through catalogue marketing to digital modernity, the way it has embraced mobile channels has been vital to its success. A key element of the company’s mobile strategy has been its relationship with Mobiz, the Cape Town based technology company.

Mobiz developed SmartSMS specifically for use by businesses looking to create more personal and relevant engagements with their customers through mobile. Since establishment in 2005, Mobiz has helped improve customer engagement by 800% over traditional SMS and has improved collections over print and email by 20%.

“We started working with HomeChoice in 2014,” details Mobiz CEO, Greg Chen. “We provide a customer engagement platform that helps them to drive mobile engagement.

“HomeChoice has been using Mobiz for mobile communications with their customers, from a monthly mobile statement, all the way through to mailing specials that are sent out with a personalised landing page for each customer, who get their own unique offer and message.

“When we started working with HomeChoice, we predominantly focused on marketing, but over the last four years, we have become more integrated with their external and internal communication channels.”

Mobiz also recently partnered with all four major networks in South Africa to provide zero data usage when engaging with their SmartSMS. “We are constantly innovating and have recently launched a very big product update, as well as introducing a free data link where all customers engaging through mobile would not have to use their data or airtime.

This is something that we could look at in other parts of Africa, specifically in regions where HomeChoice is growing,” says Chen.

“Since launching this new feature, our clients have seen around 100% improvement in engagement, when communicating with the end-user, because it is a free and accessible channel, regardless of the customer’s data.”

Bentzy Goldman, Business Strategist at Mobiz is confident that mobile will be a key component in the retailer’s Africa expansion efforts. “The growth of mobile, especially smartphone usage, across Africa provides a big opportunity for us and them. We want to make it seamless for the customer to receive relevant offers and make purchases in just one or two clicks without using their data, all in one single engagement. The result is a customer experience that is personalised, efficient and frictionless.”

Mobiz is already changing the way major businesses in SA engage with clients. Along with HomeChoice, other companies in various different industries including Momentum, Old Mutual, Dis-Chem, Woolworths Financial Services, and more utilise this essential mobile marketing platform.

Contact Mobiz today to see how SmartSMS can work for your business.

12 / www.enterprise-africa.net

HOMECHOICE

// WE LOVE OUR CUSTOMER, SHE LOVES US, AND WE ARE VERY GOOD AT DEVELOPING PRODUCTS FOR HER. WE WANT TO FOCUS ON HER, SHE IS OUR QUEEN AND WE WILL NEVER MOVE AWAY FROM HER // and exactly what we offer.”

But she is quick to point out that HomeChoice is “not a bricks and mortar retailer” and the company will never consider the mass roll out of a traditional store network. These showrooms are about complementing the existing digital strategy while creating new interaction opportunities.

The retail showrooms are equipped with kiosks for customers to access financial services from FinChoice and trained consultants guide customers around use of the Mobi

platform on smartphones and tablets.

“With FinChoice, 78% of loan transactions are now digital, and all of that is through mobile phones.

Our customers don’t really used fixed lines and that is why we have a Mobi first strategy. Last year, our groupwide digital credit extended was around 32% of total credit extended and right now it’s around 39% so it’s growing very fast,” says Maltz.

HomeChoice is also working on more value adding products to fill gaps in the lives of an increasingly digital customer, who does not have time to waste and is looking for

convenience, in the hope that it can develop cross-selling opportunities.

“It’s the late evening and you run out of electricity,” Maltz begins.

“You have to walk down the road to buy prepaid power. It can be the same with data. You have to leave your house and leave the kids on their own. We don’t want her to have to do that,” she says. “We’ve launched value added services so that she can access our financial services portal and buy airtime, data and electricity as a 100% digital product while being able to make payments and transfer money. It’s an

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INDUSTRY FOCUS: RETAIL

engagement strategy so that we can make her life easier and encourage her to our portal more often.

“We try and choose really good technology partners and that is why we work with digital experts like Mobiz and Grapevine. We are going

live with Oracle Commerce Cloud in September and we will be one of their first cloud implementations in the MEA region. Our new Oracle Commerce Cloud will really improve our speed to market with digital commerce products.

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“At the end of June 2018, it was about 13% of sales across around 100 brands. We started our brand portfolio in shoes and it worked well so we expanded it to all categories this year. We want to make brands accessible to the mass-market through credit. Our customer is loving having access to the brands, especially in fashion.”

In the future, HomeChoice will consider introducing branded furniture to complement its fashion and bedding offerings, but Maltz is keen to ensure the range is not flooded.

“We don’t want to overcrowd our marketplace – sometimes you can get onto a website and find more than 5000 pairs of shoes and you have to sift through all of them. We don’t want to create that situation – it can be overwhelming,” she says.

“We know the customer very well and we want to curate the choice and choose brands that we think she will like. Currently, it’s working well and augmenting our existing offering.”

While only a limited number of products will be on display in the new HomeChoice showrooms, the entire product range is easily accessible through digital channels and employees in showrooms will look to drive traffic through web and Mobi.

HOMECHOICE

//Grapevine Customers demand to be recognised, remembered and appreciated regardless of when, where and how they choose to shop, buy or engage with your brand.

According to Forbes, 98% of people believe that purchase, delivery and returns should be easily available across multiple channels.

Many South African organisations have been talking up a storm about executing omnichannel strategies to increase customer engagement. In fact, 66% of CMOs say developing deeper, richer customer experiences is their top marketing priority.

However, few have actually moved beyond the talk to deliver a truly seamless connected experience.

Companies, like HomeChoice, who have embraced the shift towards omnichannel marketing automation, have experienced first-hand the positive impact that expertly executed integrated digital marketing and omnichannel communications can have on the business.

With Grapevine as their digital communication solutions partner, HomeChoice have access to world-class platforms and tools to create, automate and measure curated omnichannel customer experiences that flows seamlessly across channels and devices. They are able to engage with their customers across channels such as email, SMS, USSD, social and more from a single point of service. They also have access to a team of highly skilled professionals to advise and support them along their journey.

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INDUSTRY FOCUS: RETAIL

“Our showrooms are to augment our omnichannel strategy,” Maltz reiterates. “We want to be an omnichannel retailer with a high-focus on digital. Our showrooms will help us capture new market share – perhaps people who are nervous about shopping online or nervous about direct marketing. It helps us service clients by answering queries and recommending products, and it allows us to offer click and collect.”

AFRICAN EXPANSION? HomeChoice’s preferred customer also exists outside of South Africa and while she is subtly different in other countries, her buying patterns are similar. This is why the business currently attributes 8% of its customer base to other sub-

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Saharan African nations.

But when asked if HomeChoice will expand beyond South Africa’s borders in a big way, Maltz says that growth will only happen when the time is right.

“We are currently in Botswana, Namibia, Lesotho and Swaziland with our retail business. The financial services business has not moved out of South Africa yet, but testing is underway.

“Our top line growth rate over 10 years has been 20% and that’s quite high. At a certain point, you can grow your business too fast and introduce risk. We still enjoy good growth rates here and so I would like us to enter other markets at the right time. I do think it’s an opportunity for us in the medium term, we’re trading well in the

countries that we’re already in, our customers like our products and we service those customers well.

We will expand cross-border but we’re in no rush. There are logistical challenges. We tested in Zambia two years ago and there was great demand for the product but getting the product to the customer was complex. You must be confident that you can get the product to the customer in a timely manner and that is a big investment. Right now, we are busy with our showrooms and our digital strategy and there is only so much that we can take on at one point.”

Interestingly, the customer outside of SA is increasingly digital – perfect for HomeChoice and FinChoice. “Outside of South Africa, we have a higher digital

HOMECHOICE

// WE ARE A FANTASTIC BUSINESS. WE HAVE SO MUCH OPPORTUNITY AND WE HAVE A LOT OF FUN WORKING HERE // penetration,” says Maltz. “South Africa is very social, we have around 780,000 Facebook friends who are very active with us, but we tend to be more active on social media outside of SA.” This is great news for HomeChoice considering its ‘digital first’ strategy. The only hurdle is ensuring regular, uninterrupted access to Mobi and web

connectivity, and the company is working with MNOs to ensure this is as constant as possible.

“The cell phone companies can affect us with how broad their reach is and how much their data costs.

In the financial services business, we have made all of our Mobi sites free if you’re on Vodacom and soon to be free on MTN. We will soon do the same for our retail business,” explains Maltz.

In a time where retail businesses are under the spotlight, heavily scrutinised for how they deal with changing consumer trends, HomeChoice is an example to follow. Four key messages emanate from the company’s success story (which has seen it become a R744 million operating profit business) - digital

transformation is vital, not taking the customer for granted and understanding them deeply is fundamental, not overlooking township economies reaps rewards, and a sensible approach to growth results in sustainable operations.

“We are a fantastic business,” admits Maltz. “We have so much opportunity. We have so many ideas and innovations and everyone is excited, and we have a lot of fun working here.”

WWW.HOMECHOICE.CO.ZA

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BIG FIVE DUTY FREE

The Runaway Choice for

World Class Duty-Free PRODUCTION: William Denstone

Big Five Duty Free’s array of products can be found exclusively at three of South Africa’s largest international airports: O.R Tambo, Cape Town and King Shaka. Savvy consumers have embraced its unprecedented array of world-class jewellery, liquor, toys and clothing, and with air travel booming and low-cost airlines becoming ever-more prevalent, the possibilities could be sky-high for this South African retail institution. www.enterprise-africa.net / 19

INDUSTRY FOCUS: RETAIL

//

Perhaps the last remaining option for prices to beat even the internet, duty-free shopping remains an integral part of any international trip. No longer merely an exercise in killing time at departures, the value and quality on offer makes it a serious retail endeavour, and while goods being available to buy without either import duty or VAT is a major draw, the Airports Company of South Africa (ACSA) explains that there is more to it than just questions of cost.

“The value proposition that dutyfree also offers is that certain products and sizes or volumes are different to those sold in premium stores at normal shopping malls,” the organisation explains. “For example, alcohol at a duty-free store would be sold in one-litre bottles, compared to 750ml at a normal premium store.”

In the lucrative South African airport commerce market, Big Five Duty Free is known as one of its true forefathers, as explains one half of the

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Big Five husband-and-wife management team Chris Harilaou. “The business was originally established by Marina’s father,” he offers, “who started it at grass roots level at a time when duty free simply wasn’t present in South Africa. It’s fair to say that he was the pioneer of the duty free business here, helping to construct its foundations in the country’s airports and setting it up to grow into the industry we have today.”

This gap in the market was seen some 45 years ago through observing what was taking place all over the world and turned out to be quite the spot, since which Big Five Duty Free has never looked back. Today the company is run by three partners, with a staff compliment totalling around 450 and branches in all of ACSA’s international airports.

LEADERS, NOT FOLLOWERS With an ever-growing arsenal of cosmetics, jewellery, fragrances and wine, as well as ample choice for younger flyers, it is no stretch to say that the duty-free trip has become a staple part of the South African flying experience. This has not come about by chance, however - only through Big Five’s commitment to continually evolving itself and its product offerings has it been able to keep this fairly occasional consumer experience to remain an event to be anticipated, and, most importantly, worthy of spending hard-earned Rand on.

“We see the duty free environment as similar to a fashion brand,” explains Chris Harilaou, “in that we believe it is essential to keep strong foundations

// WE HAVE TO KEEP UP WITH THE DIFFERENT MARKETS AND NICHE PRODUCTS WHICH ARE EVOLVING ON A YEARLY BASIS //

INDUSTRY FOCUS: RETAIL

to the brand, but equally important to keep changing and providing something innovative, new and exciting for the consumer. We have to keep up with the different markets and niche products which are evolving on a yearly basis.”

Renovations to its stores at Johannesburg’s O.R Tambo and Cape Town airports in recent years quickly paid dividends for Big Five Duty Free, with a double-digit sales increase in business following the work.

Chris Harilaou told The Business in Johannesburg the rationale behind the large-scale improvements: “Our existing main shop in O.R. Tambo was about seven years old which is a long time in duty free. We have put in newer brands and newer product sections.

“We decided to do a whole renovation as it has created more convenient shopping. Our renovated store has an international feel, but we also display a lot of South African liquor.

The shop renovation was a challenge as the location was planned as an F&B area overlooking the runway and not as a shop. We have brought the overhead lighting down to a new level to lighten the store, while our display units and the range of products are larger.”

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Embracing innovation recently brought about another important initiative for South Africans travelling abroad and wishing to streamline their pre-flight purchasing. With the 18.43 million eCommerce users currently active in South Africa, a total predicted to be bolstered by a further 6.36 million users shopping online by 2021, it made perfect sense for Big Five Duty Free to create a state-of-the-art e-commerce portal to finally take duty-free shopping online.

Available at South Africa’s O.R Tambo International Airport, the development has allowed passengers departing internationally to make their duty free purchases before even arriving for their flight, and collect them before boarding the plane. ACSA summed up at the time: “Having seen all the beautiful products on offer in Big Five Duty Free, it’s likely you’ll want to make the most of this unique shopping opportunity, but you probably won’t want to carry your purchases with you on your trip abroad,” the organisation pointed out.

“Now, you don’t have to. If you are flying out of and returning to O.R Tambo International Airport, simply buy on departure at Big Five Duty Free,

and when you return from your travels, your purchases will be ready and waiting for you at the Big Five store in international arrivals on your return. It couldn’t be easier to make the most of duty-free shopping.”

AIR TRAVEL TAKING OFF IN AFRICA The South African air travel and transportation industries have had their fair share of troubles when it comes to the start-up and failure of various low cost carriers in the country. This was arguably at its worst during the period from 2012 to 2014, when the budget airline market was characterised by a host of false starts as well as legal and regulatory woes, and the dominance of the market by existing South African Airlines such as SAA, Mango Airlines and Comair.

The four-year period between 2014 and the present have been hugely significant for the low-cost air travel space, though, and in 2018 a number of low-cost carriers are operating in full swing in South Africa, among them Mango Airlines (a division of SAA), FlySafair, FastJet and SA Express. Competition is now rife and South African travellers are presented with a wealth of options to

BIG FIVE DUTY FREE

// WE WANT TO PROVIDE AN A-GRADE SHOPPING ENVIRONMENT THAT’S AS COMPETITIVE AS ANY OTHER DUTY FREE OPERATOR WORLDWIDE // cover a growing number of routes.

This trend is also true of Africa on a much larger scale, where skies are becoming busier as new airlines take to the air and intra-African routes are diversified to meet a burgeoning need of safe, reliable travel. Already in excess of 100 airlines operate across Africa, with more to come imminently.

“The International Air Transport Association [IATA] has identified that the top 10 fastest growing aviation economies over the next 20 years will all be in Africa,” says Tim Harris, CEO of Wesgro, the development agency of the Western Cape Province in South Africa.

“Better air connectivity has boosted trade in goods and services as well as tourism.” IATA forecasts that passenger numbers in Africa will grow by nearly 6% per annum, and by 2036 will see an extra 274 million customers each year to make for a total market of some 400 million passengers.

BUCKING THE TRENDS It is no mean feat for Big Five Duty Free to continue to rack up such impressive figures amid bleak retail sales figures for the rest of the country. Data released this month by Statistics South Africa showed that retail sales growth slowed from 1.9% year on year in May to just 0.7% in June, a much weaker performance than the 2.2% market consensus. Marina Harilaou gave some insight into what keeps Big Five Duty Free in such good shape.

“In order to keep people coming back we offer value for money and are as competitive as possible,” she begins, “alongside a range of promotions which are in effect on a continuous basis in the shops. We do extensive marketing and place a real priority on service to our clientele - we have a lot of repeat customers, particularly on the business side, which has seen our strike rate increase in the airport itself year on year.

“We are showing double digit growth in an economy where passenger growth is single digit at the moment. While it’s

not always easy in these economic times, we are constantly looking to offer our customers the best possible deal.

“As South Africans we are facing our own challenges, not least in the fluctuating nature of the currency at present,” she recognises, “however we have tried to grow a business within the duty free market that’s recognised as a brand across South Africa and sub-Saharan Africa. We welcome our African visitors who in turn spend a lot of money with us, and we strive to look after them, and as a result they recognise the brand.

“They know they will receive genuine products at competitive prices, and with the highest level of customer service. That’s really been our main focus and driving influence: to provide an A-grade shopping environment that’s as competitive as any other duty free operator worldwide.”

WWW. DUTYFREESHOPPING.CO.ZA

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THE BESPOKE AMENITIES COMPANY

Hospitality Amenities Specialist to Create

African Jobs PRODUCTION: Karl Pietersen

The Bespoke Amenities Company has achieved a clean sweep of goals this year: Delivering excellent products, creating jobs and growing business. Founder and Managing Director, Bruce Turner tells Enterprise Africa about his drive for African expansion and growth of the product portfolio. www.enterprise-africa.net / 25

INDUSTRY FOCUS: MANUFACTURING

//

As a business traveller, you’ve probably checked into a hotel and made use of the complimentary amenities gifted to you by your host. The convenience of shampoo, shower gel, lotion, soap and much more is invaluable for regular travellers, and can become an exciting USP for some hotels. But even the best of these amenities can often be imported bulk products that are in fact not unique at all.

Even the ‘high-end’ or ‘luxury’ products are manufactured in the East, places like China, Taiwan, Vietnam or Indonesia for basement prices and distributed across the globe. But in South Africa, one Gauteng-based business is looking to change that and deliver not only world-class quality and competitive prices, but also products that are well-designed and offer something different for clients.

The Bespoke Amenities Company

(TBAC) was founded in 2012 by Bruce Turner, a South African entrepreneur, who realised the potential of the country’s manufacturing sector when it came to cosmetics.

“I had been working in South Africa, for Crabtree & Evelyn,” he says.

“We did importing of hospitality cosmetics but I had always wanted to manufacture, particularly after visiting a number of cosmetic manufacturing facilities. I thought this was a commodity we could do in South Africa and I saw a gap in the market between the international products that we were importing and the stuff that was locally made. I thought we could succeed by following global standards on quality and packaging but by doing it locally – that was my inspiration.”

Turner’s other motivation was an ambition to create employment.

With a ludicrous unemployment

rate currently sitting at around 28%, Turner describes the situation as unsustainable and suggests that whatever small impact TBAC can make is welcome.

“Initially, we didn’t have any clients. We didn’t have any manufacturing experience. We didn’t have any design experience. It started off with us designing the products and then encouraging customers to sign off on the concept so that we could commission a manufacturing run, but we had to develop talent from the ground up.

“I got one of the first orders for a customer in Zambia who needed some soap. I could get the soap boxes made locally and we grew from there.

I invested into packaging, products, plant and factory, and then we got our first big break with Legacy Hotels.

From there we have steadily grown every year.”

// WE WANT TO BE AN AFRICAN MANUFACTURER THAT COMPETES PRICE-WISE AND QUALITY-WISE WITH ANY OF THE BIG MANUFACTURERS AROUND THE WORLD //

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THE BESPOKE AMENITIES COMPANY

CHF Global is a PROUD logistics partner of Bespoke Amenities, we have had the privilege to watch them grow over the years both nationally and internationally and we are very excited to be a part of their journey as they continue to grow into Africa CHF Global is a Niche Logistics company that tailors solutions specific to the needs of our clients such as: • • •

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Distribution Dedicated Loads Domestic and International Courier

For more information on our tailored solutions please contact us + 27 11 822 1022 or info@chf.co.za There is no solution that we cannot cater for so ask yourself, shouldn’t you be speaking to us?

COMPLETE PACKAGE Today, the company makes everything. Walk into a hotel room, wash your hands, take a shower, moisturise, brush your teeth, even put on your complimentary slippers – TBAC could have designed and created everything.

“We make a lot of shampoo and we make a lot of soap but generally you have to provide everything – a hotel group will take shampoo, body wash, lotion, soap, shower caps – everything. We manufacture all of our own liquids, that’s shampoo, conditioner, hand sanitiser, body wash, room fragrance etc; we manufacture a lot of soap (which we also sell to mines, hospitals and schools as well as hospitality) and we have started making components such as bottles, caps and slippers.

“Our goal is to manufacture 90% of the components we use as well as the liquids. We want to invest in bottles, boxes, tubes etc – everything that makes up a product.

“We want to be an African manufacturer that competes pricewise and quality-wise with any of the big manufacturers around the world,” explains Turner.

Competition is fierce. Many hotel chains have existing relationships with brands rather than manufacturers and this means products can come from anywhere. Turner hopes that TBAC can dig deeper into these relationships

and create its own connections resulting in more local manufacturing.

“The long-term vision is that we want to compete with the manufacturers from the East. We really believe there is no reason that a product made in Johannesburg can’t compete against a product from China. Our long-term goal is for global amenities companies to look at us as a real option for global contracts.”

The quality delivered by TBAC is undeniable. Recognised as ‘Proudly South African’ and also a holder of various ISO certifications, the company has proven its credentials

//INITIALLY, WE DIDN’T HAVE ANY CLIENTS. WE DIDN’T HAVE ANY MANUFACTURING EXPERIENCE. WE DIDN’T HAVE ANY DESIGN EXPERIENCE // www.enterprise-africa.net / 27

INDUSTRY FOCUS: MANUFACTURING

// WE REALLY BELIEVE THERE IS NO REASON THAT A PRODUCT MADE IN JOHANNESBURG CAN’T COMPETE AGAINST A PRODUCT FROM CHINA // by cementing its place in customer supply chains across the whole of southern Africa.

“We have resellers across 17 African countries and they make up a big chunk of our business. We

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have partners in Zambia, Zimbabwe, Namibia, Botswana, Mozambique, Angola and more. Typically, we design, manufacture and supply the product and the reseller will service the clients in those markets. We also supply directly to City Lodge Hotels, Legacy Hotels, Holiday Inns in South Africa and other international brands. We are also working on deals which would see us manufacture international brands here for hotels that are contractually obliged to take them. For example, an international hotel chain will have a group standard and part of that standard maybe to have a particular brand. Typically, those brands will be made in the East and shipped around the world. We are talking to brands saying we can

manufacture here and they will get the same product but manufactured locally. That would be very interesting for us and is very important in Africa.

It will also help with logistics – Africa is not like Europe; every border has a different requirement. It is becoming extremely important to work with guys on the continent who know how the continent works,” details Turner.

MANUFACTURING A FUTURE Since the beginning of the year, a number of notable investments have been made into South Africa’s manufacturing sector. Whether it’s automotive, food, textiles or cosmetics, it seems as though everyone recognises the importance of manufacturing as an industry.

THE BESPOKE AMENITIES COMPANY

Just last year, the Manufacturing Circle launched its ‘Map to A Million New Jobs in a Decade’ plan, with

the organisation’s chairman André de Ruyter saying: “If manufacturing can expand to 30% of GDP, between

800,000 and 1.1 million direct jobs can be created, with five to eight times that number in indirect jobs.”

TBAC is already far down the road with investment and expansion plans that will see the company able to grow and create jobs.

“We are opening the factory in Ghana with our partners there,” enthuses Turner. “The expansion plan is to offer a complete logistics solution as we know that Africa is as much about getting the product to the client as it is about making the product. It is vital to have bases in strategic markets and Ghana is part of the ECOWAS (Economic Community of West African States) and there is a need for locally manufactured goods there.

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INDUSTRY FOCUS: MANUFACTURING

“Part of our expansion plan is to have a factory in Ghana that can service all of West Africa, and it’s the same story in East Africa. We’re starting with a distribution centre in Tanzania and we’d like to look at manufacturing in East Africa as well.”

Locally, new jobs will be created in Johannesburg as the company looks to increase its product range by investing in the development of its existing facility in Kya Sand.

TBAC is increasing size, capacity and adding new lines so that it can manufacture more components.

“South Africa is our home and we are definitely investing in manufacturing and scaling the factory to carry more work. We want to continually improve performance

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to ensure we can meet international requirements and be competitive globally,” says Turner.

He also hints at international growth saying that discussions are underway with partners in Europe and the USA about exporting locally manufactured products to other major global markets.

With all of this expansion inevitably comes increased staffing numbers. “We have said we wanted 350 staff by 2020; we are behind that right now but it remains a goal.

It is a big reason we started this business – we need manufacturing jobs in the country. The facility in Ghana will need a team and job creation is always a part of our plans,” says Turner.

SUCCESS SMELLS SWEET Through TBAC’s history, the quest for excellence has never relented. Thanks to this endless drive, the market has responded and Turner has started to see some return on his endeavour.

“From a cosmetic perspective, I believe we are top of the pile but we don’t have a monopoly – there’s a lot of competition that pushes us all the time.

“The market has changed a lot from when we started. I would imagine 70% of the products were imported whereas now it’s probably 70% locally manufactured.

“We are lucky to have a team that works hard to overcome challenges.

It’s not by any stretch plain sailing but we have been lucky and things have

THE BESPOKE AMENITIES COMPANY

fallen into place as we planned. We are meeting all of our goals but it never happens in a smooth line,” he says.

Despite all of the success the company has realised, Turner is under no illusion. The hard work must continue he says.

// WE WANT TO PLAY OUR SMALL PART IN DEVELOPING AFRICAN MANUFACTURING AS SOUTHERN AFRICA HAS, TO SOME EXTENT, SURRENDERED ITS MANUFACTURING INDUSTRY //

“There are some top SA brands and some big corporate conglomerates that play in our space – all across southern Africa.

“Manufacturing is tough. There is learning that happens every day.

We do the right things in terms of our customers. There’s massive room for improvement and there are a lot of risks - just look at electricity supply and cheap Chinese products that flood the market.

“We have managed to grow significantly despite uncertainty.

Our clients are seeing corporates and government travel less but we remain positive about Africa. I remain personally positive about South Africa and that is why we keep investing here. It’s potentially a great manufacturing destination and there is a real need to create jobs.”

Just six years into its journey, TBAC is already making more of an impact than many businesses make in their lifetime. Creating jobs, building an industry, adding value, delighting customers, and manufacturing first class products, this is company building a platform for significant future success.

“We want to play our small part in developing African manufacturing as southern Africa has, to some extent, surrendered its manufacturing industry and, with 28% unemployment, it is a great vehicle for job creation,” concludes Turner.

WWW.TBAC.CO.ZA

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FMI

A Better Way to do

Life Insurance PRODUCTION: David napier

Life insurance is so often overlooked because of its complicated nature and expensive premiums. But FMI, a division of Bidvest Life, thinks the process should be easy and clear, with a focus around income benefits rather than lump sum. CEO Brad Toerien tells Enterprise Africa more about the importance of protecting one’s income against injury, illness and death.

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www.enterprise-africa.net / 33

INDUSTRY FOCUS: INSURANCE

//

“For us, fundamentally, we believe we exist to help people achieve their dreams and plans by making sure we can provide them with an income if they are unable to earn one,” says FMI CEO Brad Toerien.

Talking to Enterprise Africa about how the life insurance specialist is looking to boost its market share in the future, he details two major markers in the company’s history, and says the business is now built around these milestones: offering income protection only and developing of a full range of life insurance benefits; and the acquisition of FMI by Bidvest Life in 2016.

“The most valuable asset anyone has is the ability to earn their income,” he says. “As a life insurance provider, we exist to develop living insurance benefits that can help protect or secure

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// FUNDAMENTALLY, YOU CANNOT LIVE WITHOUT YOUR INCOME, YOU NEED IT TO PROVIDE FOR YOUR FAMILY, AND WE WANT TO HAVE A PRODUCT THAT PROTECTS THAT IF SOMETHING HAPPENS TO YOU. WE FEEL THAT IS QUITE A SIMPLE DISCUSSION TO HAVE // your income against injury, illness or death. Because of that, we build all of our products around income benefits first and foremost. If I pass away, I want to leave my family with an income, but traditionally, we were forced to buy a product with a once-off lump sum benefit. That is the driver behind our difference, we want people to think about their income first, protect that income, and supplement it with lump sum benefits. Inherent in this ethos

is a change in a number of industry behaviours that we are trying to push.”

Toerien, who took the hot seat at FMI in 2007, is pushing this switch harder than ever following the completion of the company’s acquisition by Bidvest.

“Bidvest had a life license that was running and they acquired 100% of FMI. As part of the transaction, we took responsibility for that life license,” he says.

FMI

“The last two years has been a wild ride. The Bidvest transaction came at the perfect time in the perfect place. As a business, I felt that we had just got to the point where we had a launchpad for growth and we had completed our product offering. The deal was our catalyst, it was like throwing fuel on the fire, it has been amazing. Our staff complement has more than doubled in size over the last two years, our sales volumes have grown significantly, and we are in a really exciting place.”

A HUMAN STORY Before its recent successes, FMI began its life as a result of a very human story. Entrepreneurs Simon Cordial and Lucia Kujawa started the company in 1995 as a brokerage but realised a gap and a need in the market for income protection. “They identified

that income protection wasn’t available to entrepreneurs or business owners but only to professionals,” explains Toerien. The pair knew the story of a friend who had been hospitalised and almost lost their business. They realised that there was a critical need for this type of cover.

“So they quickly licensed a product and pioneered income protection for the self-employed in South Africa,” says Toerien.

The business grew quickly and up until 2003, everything was written on a short-term license with FMI effectively an administrator, running on the AIG short-term license. In 2003 – when Toerien joined the business – there was a swing away from writing on a shortterm license towards writing on a life license. Toerien says he “fell in love with the business” and when the founders

stepped away, he was excited and happy to take the reins.

“What we did had got into my blood,” he says. “By offering products that paid people an income when they can’t work gives me a nice feeling, to know that you are helping people in a time of need. It means businesses can keep running, families stay fed and things keep moving forward.”

But, despite his love for the business and passion for the industry, Toerien’s FMI journey has not always been straight forward. “Looking back in hindsight, between 2008 and 2016 was not a smooth period,” he says.

Social, economic, political and many other issues hounded businesses all over South Africa.

“I’d love to say we grew steadily and everything worked according to plan but we had significant

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INDUSTRY FOCUS: INSURANCE

// AS A LIFE INSURANCE PROVIDER, WE EXIST TO DEVELOP PRODUCTS THAT CAN HELP PROTECT OR SECURE THAT FUTURE INCOME AGAINST INJURY, ILLNESS OR DEATH // challenges,” he admits, “there were at least one or two economic downturns, we had to re-structure the business to adapt to changing distribution environment, and we had to transform the business from operating as an

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administrator to fully-fledged life insurer, which meant we had to develop a number of skills. We had to significantly expand our product range from very specialist income protection offerings to incorporate a complete life insurance risk offering.

Over those eight years, there was a lot of building foundations and optimising distribution.”

When Bidvest entered the fray, FMI was in a good place and was setting its sights on revolutionising the market. Importantly, Bidvest supported and encouraged the vision and plans for the future.

Prior to the acquisition, Toerien was the majority shareholder in FMI and, along with a partner, was loving life within a successfully growing

business. The discussion around Bidvest was giving up some freedom but gaining significant backing – a real dilemma.

“They approached us; we were not looking for anything at the time.

Myself and Craig Harding owned the vast majority of the business and we had our independence – it was our business to run and we were having a lot of fun. We definitely were not looking for another corporate partner,” Toerien remembers. “But when Bidvest approached us, we sat down and we analysed the opportunity before quickly realising that being able to partner with Bidvest gave us the best of both worlds – we were losing some level of independence but it would help

FMI

us achieve our dreams. To become a significant business, having a partner like Bidvest is critical. They have been great shareholders and the perfect fit for FMI – providing us with incredible support, whilst allowing FMI the independence to continue to grow through our entrepreneurial spirit.”

As of March 2017, FMI began working through its own life license as part of Bidvest Life. Since then, there has been no looking back and FMI has been aggressively pushing its mantra of ‘income first’.

“Our concern is that behaviour in the market is not rational and we are not buying products in a way that we should be buying them to protect ourselves most efficiently,” claims Toerien.

FMI CEO - Brad Toerien

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INDUSTRY FOCUS: INSURANCE

INCOME ABOVE ALL FMI strongly believes that while pay-outs from lump sum benefits are perfect to settle large debts or pay for once-off expenses, they should not be used to provide an income.

62% of South Africans are behind on their debt payments, which means even a temporary break in income could have devastating long-term consequences. FMI also suggests that seven in every ten people will have at least one disability in their lifetime that will prevent them from earning an income. Following a recent industry survey performed by FMI, Toerien suggests that educating customers and simplifying processes is vital for the business.

“I think there is still a misunderstanding of what life insurance really is and there’s a general sense that people are overwhelmed by the complexity of the product and process,” he says.

“That puts a lot of people off. We do not think it needs to be that way.

It should be a simple discussion.

Fundamentally, you cannot live without your income, you need it to provide for your family, and we want to have a product that protects that if something happens to you. We feel that is quite a simple discussion to have and we can design a product to solves that problem in a really simple way. Our challenge is to cut through the noise and demystify insurance so that customers understand the need and how to protect themselves.

“We want people to recognise life insurance not as a grudge purchase but as a crucial part of their financial planning.”

Asked if he thinks the shift in attitude towards income protection is growing in South Africa, Toerien is buoyant. “We are starting to see some real traction. We have seen significant changes through the advisors that are working with us,” he says.

“Our mix of business is completely different to what you would see across

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the rest of the market – it’s largely income benefits and pushes a stronger play towards disability cover. With the advisors we speak to, we’ve been successful and our challenge is to do that on a larger scale.”

He wants more people to be able to access more products in more ways, while never compromising on quality.

“We do that by continuing to develop our products and make them accessible to more people, building a strong digital platform, making insurance more relevant, more accessible and easier to understand, and we continue to work with more advisors and digital industry experts to close that loop.”

FURTHER GROWTH The future looks extremely bright for FMI. In an industry in which many struggle to even stay apace of legislative and regulatory changes, this front-runner is paving a way for itself to climb to the top.

“We are opening offices around the country. We see huge potential in the South African market,” says Toerien.

The growth strategy has been carefully crafted and will not see the company overstretched. While geographic and product range expansion are thoughts for the longerterm, they are not being considered

// THE DEAL WAS OUR CATALYST, IT WAS LIKE THROWING FUEL ON THE FIRE, IT HAS BEEN AMAZING. OUR STAFF COMPLEMENT HAS MORE THAN DOUBLED IN SIZE OVER THE LAST TWO YEARS, OUR SALES VOLUMES HAVE GROWN SIGNIFICANTLY // at this stage. Toerien explains that the company still has so much market opportunity in South Africa that cross-border moves are way off yet and new lines are inevitable but not for some time. “We don’t have any plans to expand into sub-Saharan Africa or anywhere else in Africa at the moment. We have our hands full here. Expansion into other product lines feels like something we are going to have to look at but it’s not in our immediate future.

“Our sales team is effectively a team of business developers that look after and service our independent advisors. That team continues to grow

FMI

and has grown significantly. As we grow that team, we are able to build relationships with more advisors so it’s a key to our growth.”

Of course, the economic climate in South Africa has raised some concern with businesses looking for substantial growth. Even after political change, the country’s growth prospects remain weak and researchers predict individuals will remain tight-pocketed for some time to come. But Toerien remains typically positive.

“As a smaller insurer, we are still growing quite quickly. We are able to grow almost regardless of what happens at a macroeconomic level,” he says. “Our view as a business is that we are bullish about the country.

We are very positive about where South Africa is going and we think

there are some incredibly strong fundamentals in our country. Having said that, we know there are real challenges; unemployment is a real problem, the state of education is not in a great place, and we need to see how we can contribute to solving those problems. We do that through our core business and we also focus heavily on education through our CSR programmes.”

With FMI remaining small in stature compared to some of the longer-established players in the market, it maintains the ability to move quickly and make speedy decisions. This nimble approach, combined with the strong knowledge of the sector that has been developed over 23 years, has helped create a formidable player.

“We are very excited about

where we are. We are in an incredibly important position. We feel like a 22-year old start up that can move quickly and think creatively but with 22 years of deep experience at the more complex end of the life insurance spectrum,” says Toerien.

“And now with the backing of Bidvest, we can think on a large scale and know that we have shareholders with credibility and a balance sheet to back us. It’s a really amazing position to be in, and I don’t think there are too many businesses in this fortunate position,” he concludes.

WWW.FMI.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.

//

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 1871, clients from

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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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//Get added peace of mind with Old Mutual Insure’s Construction Risks and Assets All Risk Getting the right cover for your construction and erection projects is important. Despite your best intentions, the transition period from the completion of the construction project to the handover of the assets is often a blind spot that many project managers miss.

There is always a real possibility of incurring crippling financial losses due to unforeseen events during this stage, unless the correct insurance cover is in place.

The construction contracting business is not for the faint-hearted due to the high potential for significant loss or damage. Regardless of meticulous planning, unforeseen developments such as loss or damage to the works under construction and the resultant expensive repair work can delay construction progress, with significant cost implications for the project and for the company.

So how do project managers plug this vulnerability gap and ensure that their construction projects are still covered during this critical phase and beyond?

As one of South Africa’s leading Engineering insurers, (with registered offices in Botswana and Namibia), Old Mutual Insure has developed a tailored solution that offers comprehensive, end-to-end cover to mitigate against any eventuality that may potentially arise during the construction phase until the project is handed over upon completion.

Clients often opt for construction cover that insures their construction project against damage and accidents during the construction phase, and an assets all risk policy to cover the property when it is completed.

The Construction All Risks policy will cover the principal, contractors and sub-contractors against physical loss of or damage to the works during the construction phase.

Old Mutual Insure’s Assets All Risks policy will cover all property belonging to the client. This includes the actual buildings, immovable and movable machinery and equipment, as well as the business interruption following an indemnifiable fire loss to this property.

The projects that the Construction All Risk can cover range from domestic dwellings to power stations. The policy also provides legal liability protection for the principal, contractors and sub-contractors in the event of injury to or death of a third party person or damage to third party property arising from the execution of the works.

To give project managers an added peace of mind, the Construction All Risk cover can be extended to provide liability protection in the event of injury to or death of third parties or damage to property as a result of the removal, weakening or interference with the support of land or buildings in the vicinity of the construction site.

It can also encompass added cover for unforeseen expenses including loss of rent or loss of profit arising out of construction delays.

The construction site is constantly evolving as the project progresses. In an ever-changing, hectic environment with a large number of constantly moving vehicles and trades people, hazards are ever present. Overhead lifting equipment, supply vehicles and dump trucks are always maneuvering around the tradesmen, materials and structures on the building site, which greatly increases the chance of an accident.

Once the project is completed and handed over, the property can be insured under Old Mutual’s Asset All Risks policy which will provide cover for physical damage to property at the insured’s premises. Cover can be extended to include Business Interruption, in the form of loss of profits or loss of revenue following a fire loss.

By insuring your construction projects and property with Old Mutual Insure, you will have peace of mind that there will be no gap in cover when the property moves from the Construction phase to the Operational phase.

With the myriad of ever-present obstacles that can derail a construction project, the project managers cannot afford the luxury of risking the financial viability of their companies and their reputation by neglecting to purchase adequate insurance cover. Covering yourself against multiple factors that can delay completion of a construction project shouldn’t be left to chance or luck.

Old mutual Insure is an authorized financial services provider (FSP 12).

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We understand that getting the right cover for your construction project is important. That is why we provide insurance protection for physical loss or damage to the project and legal liability in respect of injury to or death of third-party persons or damage to third-party property during the construction phase. Your vision is our business.

INSURE DO GREAT THINGS EVERY DAY Old Mutual Insure is an Authorised Financial Services Provider (FSP 12)

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For more information, email Michael.Steensma@ominsure.co.za or visit ominsure.co.za

INDUSTRY FOCUS: INSURANCE

// OUR GREATEST ASSETS IN OUR BUSINESS ARE OUR CLIENT RELATIONSHIPS // 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 don’t often care if you’re the biggest, it’s always about the service you provide.

“The real benefit of working with

Spiros Fatouros - CEO

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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 well-regulated, wellmanaged 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 middle-income 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 ever-changing 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

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“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 cyber-attacks. 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 cyberattacks 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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FISHER DUGMORE FINANCIAL

Helping YOU Become

Financial Independent PRODUCTION: Karl Pietersen

Andrew Dugmore of financial planning and wealth specialist business Fisher Dugmore talks to Enterprise Africa about how his business can help clients keep more of their hard-earned money and how he expects the company to continue growing strongly in the coming years.

//

Last month, we heard from one half of the dynamic duo at the head of Fisher Dugmore, the Gauteng-based boutique financial advisory firm. Dave Fisher told us that Fisher Dugmore had managed to

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achieve yearly growth of 15 to 20% because of its ability to build “very close relationships with clients, providing one-on-one trust-based relationships where we do everything for them.”

This month we talk to the other

half of the business, Fisher’s Partner and co-Director Andrew Dugmore about his plans for growth and we ask if he feels as positive about the future as his colleague.

“I go to sleep just so I can wake

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INDUSTRY FOCUS: FINANCE

up and come back into this business,” he says. “If I had a choice, I would do the same work for no pay. We love this business and we love the interaction with our clients.”

Dugmore, also a certified financial planner, is passionate about helping his clients manage their wealth. He heads up the Silver Lakes office of Fisher Dugmore, located just 30 minutes drive from the company’s Centurion office.

Clearly, he is confident about the company’s strategy. “It’s always a learning curve,” he admits, “but we consistently perform well and I expect us to continue performing well. It’s an attitude towards life and an attitude towards investment and saving – with a positive attitude business usually goes well. A positive mindset works wonders for anything.”

PASSIVE INCOME The profile of a typical Fisher Dugmore client places the individual among South Africa’s top LSM classes. They usually are high net worth individuals, with various income streams, who can afford the services of a first-class financial planner. Fisher Dugmore brings a wealth of experience and knowledge to these clients. And the whole idea is around helping people keep more of their money.

“We do complete, holistic financial planning but on a very personal basis,” explains Dugmore. “Dave came up with the river-dam concept – everyone earns a stream of income and we strategize for our clients to build dams in the river to stop the money disappearing – and with that concept we help create passive income. Whether its dividends from shares, rental properties, pension

// A LOT OF PEOPLE WASTE A LOT OF MONEY ON A MONTHLY BASIS WITHOUT EVEN REALISING // 48 / www.enterprise-africa.net

// WE EVENTUALLY REALISED THAT WE HAD SO MANY THINGS RUNNING TOGETHER THAT WE DECIDED TO REBRAND THE WHOLE GROUP. THE RESULT IS A BUSINESS OF MUCH LARGER SCALE. WE HANDLE AROUND R3 BILLION IN INVESTMENT // or from an income stream through a business that runs independently. We try and get the clients to understand that as soon as passive income equals their lifestyle expenses, they become financially independent.”

A big part of this financial management system is budgeting.

“We are very big on budgeting,” says Dugmore. At its very core, this is the practice of estimating income and expenditure over a set period, and it is as vital for individuals as it is for successful businesses. The difference between Fisher Dugmore’s system is that it is tailored, clear, realistic and strict.

“Most families or most individuals go on holiday at the end of the year but they haven’t made provision for paying for that holiday and they use a credit card which they then pay off at 24% over the next year and a vicious cycle begins. We develop savings pockets to care for all of our client’s financial concerns and they have no shocks. It’s very personal and based around each individual lifestyle,” Dugmore explains.

He says instilling a savings culture at the front of the mind is of the utmost importance. But that is not easy. South Africa’s savings rate was as high as 23% in 1960 and is now only 16%, according to recent figures from the World Bank. Compare that to Europe or the US where the figure is always over 20% and sometimes as high as 30%.

However, at the Fisher Dugmore end of the market, execution of the right strategy can reap rewards.

“A savings culture is taught. It depends very much on upbringing, education and environment. If people are used to that sort of culture, they usually follow it. Many do not have

the correct financial education to get involved with a savings culture because they simply do not have knowledge of it, so we try and empower people with knowledge so they can see what compounding interest can do for them – knowledge is power at the end of the day.

“We try and align people with a savings concept. We use a system called Super Saving. A lot of people waste a lot of money on a monthly basis without even realising. We start people saving and every quarter, we increase their saving by 10%. In the first couple of years, people always seem to find the money in the budget. It’s all done electronically so it’s very easy. We very much believe in the savings culture,” says Dugmore.

FISHER & DUGMORE Dave Fisher and Andrew Dugmore aligned their mentality long before they formed their business. Their involvement in the financial services industry goes back a long way and begins at Sanlam in the late 80s. The pair were working as investment planners before both leaving the corporate to become independent.

Dugmore resigned from Sanlam in 1988 and started his short-term practice with Fisher doing the same soon after.

“For a long time, we couldn’t get the businesses to grow so we decided to put the two short-term practices together and appoint managers to look after them. That was in 2006 and that was the first real step in us working together officially. That short-term practice has now grown into a really big entity,” says Dugmore.

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INDUSTRY FOCUS: FINANCE

// YOU HAVE TO TEACH CLIENTS THAT MARKETS DO GO UP AND DOWN AND ITS BENEFICIAL TO STAY PUT. IT’S ABOUT EDUCATION AND KNOWLEDGE // Eventually it became clear that separate businesses was just doubling costs. The businesses were almost identical in every way and shared a similar culture. The obvious move was to merge fully.

Andrew Dugmore - Director

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“We started noticing that we are doing exactly the same thing in two separate locations. We are employing the same type of people, using the same software, using the same systems, with the same ideologies, but duplicating costs. This is where the rebranding came about.

“We eventually realised that we had so many things running together that we decided to rebrand the whole group. The result is a business of much larger scale. We handle around R3 billion in investment. My office is in Silver Lakes, Dave sits in Centurion and our securities company, headed

by Duncan Kirkman, is also in Centurion.”

EDUCATING Fundamental in the offering from Fisher Dugmore is the transfer of knowledge from the experienced team within the company to its clients. Suggesting the best products and services is one thing, but empowering people with knowledge is invaluable and something which Dugmore is only too happy to do.

“We are proud to educate people,” he says. “Even if a client isn’t financially big for us, we like to part with our knowledge so that we can uplift. We’ve been in this business for more than 30 years and we know that eventually people’s circumstances change and they become valued clients. If we can leave a good impression then we have been successful.”

FISHER DUGMORE FINANCIAL

In challenging times, educating people in correct financial behaviour is so important. The last few years have seen a stagnant economy grow only minimally and foreign exchange markets become very unpredictable.

Dugmore admits that the challenges in the markets have been visible for his clients, but again points to education as the key.

“In the lean years, like the last three years, investment portfolios have been very flat. You have to teach clients that markets do go up and down and its beneficial to stay put. Again, it’s about education and knowledge. The markets have certainly been affected in the past three years; balanced funds have been running at 5% where previously they were running at 11-12%. Obviously, politics has played its part but that is also part of an education.”

Dugmore believes that an upswing in the South African economy is coming in the future, but says even during tough times, there are opportunities.

“Over the longer-term there will likely be a positive change but it’s not an instant fix. South Africans have gone through many hard times before but they have always survived. Because our inflation rate and interest rate is fairly high, returns on average remain higher than worldwide.”

In terms of the growth of Fisher Dugmore in South Africa, both Directors believe there is much opportunity. There will not be an expansion of the physical footprint, but there will be growth of business through development of existing relationships and continuing to drive referrals.

MASTERS OF WEALTH “Our strategy is to build with our existing clients and to bring more on board. We have a lot of clients and they keep us busy. We have very strong admin offices and our new business comes from referral – we don’t tout for new business. Organic growth is our preferred method; we tried previously with our short-term business to buy

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other books and it was not successful, you have to have a relationship with clients from the start.

“We have just opened a corporate saver with Nedbank and we can open savings accounts on behalf of our clients and take instructions to transfer money to third parties anywhere.

We deal with anything from medical aid, estate planning, investments, stock broking, life planning – it’s a full package, we are a one stop shop, there are very few products that we don’t offer,” says Dugmore.

He adds that the company will also soon get to a position where more financial planners are required to satisfy the workload. When recruiting, the company prefers to bring in people that can absorb training and add to the already talented group. “Training is very important – you must have the

knowledge and ability. We like to get people and train them from scratch, teaching them how we work and encouraging them to get involved with our culture.”

Asked if the company can continue on the successful growth path that has seen it become one of the country’s undoubted masters of wealth navigation, Dugmore is unequivocal.

“We can certainly sustain it, we just have to carry on delivering the service,” he says. “Because we deliver on a personal basis, meaning we are actual faces in a company, we can still handle the smaller clients as well as the biggest.”

WWW.FISHERDUGMORE.CO.ZA

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ATTACQ

Developing the

Hottest Property PRODUCTION: Timothy Reeder

Attacq stands alongside South Africa’s premier property companies and has been responsible for some of the major recent projects in the country. Of these, it is the iconic Waterfall City that continues to attract both plaudits and ongoing development, the leading light as its owner transitions to a REIT and begins to richly reward its initial investors.

//

Attacq is billed as a premier property company for South Africa, an outfit that targets exceptional and sustainable growth through quality property developments. Attacq achieves this by

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investing in four key market sectors: Retail, Office, Industrial and Hotel, and has amassed a portfolio which numbers such landmark constructions as Lynnwood Bridge Precinct and Glenfair Boulevard in Pretoria,

Garden Route Mall in George and the MooiRivier Mall in Potchefstroom. A leading South African growth fund in the real estate sector, Attacq has a current property portfolio worth in excess of R200 billion.

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INDUSTRY FOCUS: PROPERTY

WATERFALL CITY Topping off Attacq’s comprehensive offering is the edifice which is often referred to as its very own ‘jewel in the crown’, the immense Waterfall City and Logistics Hub set between Pretoria and Johannesburg. Having acquired the development rights to Waterfall City in 2008, Attacq has never wavered in its quest to create a leading Central Business District (CBD) for Gauteng, and ensuring for itself in the process an enviable future development pipeline.

“The Waterfall development consists of Waterfall City, an integrated city that works, alongside Waterfall Logistics Hub; this is Gauteng’s logistics hub of choice, and includes light industrial and warehousing,” the company explains. The vibrant modern city embraces new urban living with provisions for retail, offices, homes, dining, entertainment and more. “It is a truly connected hub, a fully-integrated lifestyle which offers a complete worklife package.

“The design is inspired by the contemporary principles of walkable, energised, mixed-use environments to create a truly first-class city.”

The development as a whole boasts 975,468 m² of remaining

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developable bulk, which is ungeared and of which 600,000 m² is already serviced and immediately available for commercial, residential and industrial developments. In recent months, the Waterfall team have completed on a total area of 92,456m² of leases for new offices and industrial space.

Amidst an until now unparalleled blend of leisure and work offerings sharing the same space, the standout colossus is undauntedly the sprawling Mall of Africa. The largest single-phase shopping mall to be built in Africa, the

precinct spans 131,000 m2 and hosts more than 300 shops comprising a carefully selected retail mix to include both local and international brands.

GREATEST MALL OF ALL With ownership split 80/20 between Attacq and Atterbury Property Developments respectively, Mall of Africa is “a visual, social and economic anchor” of Waterfall City, and forms the iconic heart of the innovative development. Of its importance, Louis van der Watt, CEO of Atterbury says: “In

ATTACQ

line with the Atterbury vision to create working, shopping and entertainment spaces for everyone to live to their full potential, the development of this breath-taking shopping and leisure destination introduces an unmissable, unmatched retail experience.

“Mall of Africa’s exceptional scale, design, location and retail mix places it at the forefront of development.”

Recognition was given from the outset, with Mall of Africa bringing home the coveted SASC Spectrum Award for best super-regional shopping mall shortly after opening in 2016. The site boasts an estimated completion value of more than R4.5billion, and hit the headlines when it welcomed more than 123,000 visitors on opening day to stores ranging right from Armani through to Zara. Its creators call Waterfall “a city developed on a scale beyond anything South Africa has known”.

Along with the recognised local and international brands that now call the Mall of Africa home, a host of other global names have marked their first move in the country with new stores, with Helly Hansen, Asics, The Kooples and Soap Stories some of the most noteworthy. Mike Clampett, head of asset and property management at Attacq, explains that there is “a very good balance, close to equilibrium - there is space for everyone”, and testament to Mall of Africa’s success is its resilience to the continued threat of online retail. A very healthy 11% growth in turnover was announced in December 2017 from the same period in 2016, with a total revenue generated between R3.6bn and R3.8bn, as reported by Fin24.

From a location point of view, Waterfall is perfectly positioned between Johannesburg, Sandton and Pretoria, which is guaranteed to appeal to the broadest range of consumers. “One of Waterfall’s biggest advantages is that it’s right in the centre of Gauteng,” summed up former Attacq CEO Morné Wilken at its opening.

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“Everything has developed around it and, given its central location, it makes it ideal for corporates to consolidate their offices. For example, if a company has offices in Johannesburg and Pretoria, Waterfall is perfectly situated to consolidate. We have brilliant access from the Allandale interchange.”

REIT CONVERSION In May this year Attacq announced its decision to convert to a Real Estate Investment Trust (REIT), the rationale behind which was explained by Interim CEO Melt Hamman. “Our REIT conversion finalises our shift in focus from providing only capital growth to a focus on total return comprising sustainable income distributions as well as capital growth,” he told Engineering News.

“We believe this strategy is a natural step given the progression in our

business since listing in 2013.

“Our quality portfolio of South African income producing assets is underpinned by strong property fundamentals and with a gross asset base exceeding R28 billion as at 31 December 2017. We believe that Attacq will attract a broader investor base by converting to the widely understood REIT structure and by distributing earnings bi-annually.” This news also means that Attacq now intends to pay its maiden dividend towards the close of the year, with a projected payment of 73 cents per share to come, to see patient investors rewarded to the tune of R500m.

WWW.ATTACQ.CO.ZA

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/ E D R A D

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AZMET TECHNOLOGY & PROJECTS

SA’s AZMET Sparkles

in Armenian Gold Project PRODUCTION: David Napier

AZMET continues to showcase SA engineering talent to a global audience. More than a year on from our last look at the Johannesburg-based EPCM business, Enterprise Africa talks again to Marketing Director, Ruan Kukard, about the company’s plans for further expansion and the opportunities that exist for organisations willing to innovate.

//

AZMET Technology & Projects, the South African EPCM company borne out of passion for engineering, has been selected alongside other globally-recognised names to participate in the Amulsar gold project in Armenia. The project,

owned by Lydian International, will see the recovery of gold resources by means of heap leaching and is located in south-central Armenia roughly 170km southeast of the capital Yerevan.

AZMET will share the spotlight in Armenia with the likes of Zeppelin,

ABB, Sandvik and Renco as the project is commissioned later this year.

Founded in 2014, during extremely challenging economic conditions, AZMET has gone from strength to strength and is now recognised as an expert provider in

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INDUSTRY FOCUS: MINING

the engineering, design and project management industry. It’s focus on precious and base metal recovery has helped the company to remain relevant in a quickly changing global industry.

Marketing Director and founding exco member, Ruan Kukard tells Enterprise Africa that AZMET is excited about striking gold in Armenia.

“It is our flagship project to date and is a 10.5 million ton per annum, 1100m3/hr, gold heap leach operation,” he says. “AZMET’s scope of supply includes the design and LSTK supply of the eight tonne carbon per day adsorption, desorption and recovery plant, including reagent make-up and dosing systems. Various innovations have been developed during this project including the development of our own proprietary equipment. These exciting new products benefit our clients on their heap leach projects.

“With Lydian, commissioning is

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foreseen to be finalised before the end of this year.”

He also hints at more Armenian work off the back of the success with Amulsar.

“We are confident in our capabilities to successfully execute capital projects and grow our footprint in this geographical market,” says Kukard.

INTERNATIONALLY RECOGNISED After the four AZMET founders came together to establish the business, initially working from a residential premises, the dream was always to gain international recognition for delivering quality process plants, products and process technologies.

To date, AZMET has been involved in projects and studies in Mozambique, the DRC, Ivory Coast, Kyrgyzstan, Ethiopia, Zambia, Turkey, Armenia and other countries around the world.

Currently, AZMET is ready to commission a project in Turkey after

// IT IS OUR FLAGSHIP PROJECT TO DATE AND IS A 10.5 MILLION TONNE PER ANNUM, 1100M3/HR, GOLD HEAP LEACH OPERATION // completing the installation in Q3 2017.

The Eti Bakir project, awarded to AZMET in 2016, sees the company design, supply and commission a containerised, two tonne Carbon Batch, Gold Desorption and Recovery Plant.

“The project in Turkey was fabricated and installed on time and budget and we will commission the plant in Q3 2018,” details Kukard.

International growth relies on AZMET’s ability to develop relationships

AZMET TECHNOLOGY & PROJECTS

and onboard local representation in its target markets. This is how it has succeeded in Turkey, Armenia and other global markets. When we spoke to Kukard back in 2017, he said focus regions included Canada, Russia, Tanzania, Chile, Peru, and other South American markets.

“We are still exploring those regions,” he says, “the whole of South America is a huge target market for us. We consider ourselves to be experts in precious and base metal beneficiation.

“We are seeking representation in various global territories. We are making progress in Peru and Canada and we have representation agreements in Russia, Algeria and Brazil. We are still actively seeking representation in Chile, Australia and Tanzania since they remain target markets for us.”

South America, specifically Chile, remains a key target because of the big opportunities that exist with copper.

AZMET has vast expertise in copper oxide technology and is working on new copper sulphide technologies.

“All the large mining companies are talking about minimising operational expenditure and increasing throughput.

Our process technologies are developed with the focus on maximising the client’s profit, and we believe it’s just a matter of time before we gain traction and capitalise on these opportunities,” says Kukard.

But before South America, comes a project slightly closer to home. As part of the Hassai Project, AZMET has been awarded a LSTK contract for the design, supply and commissioning of a four tonne Carbon per day, Gold Desorption and Recovery Plant for the gold mining operation, located in Sudan’s Red Sea Hills desert.

“We received our fourth proprietary containerised gold desorption and recovery plant order in 2018. The order

is for the Hassai Project in Sudan. The desorption process makes use of a two tonne split AARL elution followed by zinc precipitation to handle the copper that is co-leached with the gold and silver.

Fabrication of the containerised modules are underway, and the plant will be ready for shipping in Q4 2018 with installation and commissioning following in Q1 2019,” says Kukard.

“We are busy,” he adds. The company has grown impressively in the past 18-months. To accommodate that growth, AZMET has moved into new offices which will allow for further growth.

AZMET CULTURE There is a unique culture of excellence and this is nurtured through the company’s ability to solve metallurgical problems. AZMET looks specifically for multi-skilled engineers to build onto its already strong team. Last year, Kukard explained that having a small but multi-

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INDUSTRY FOCUS: MINING

talented team allowed the company to respond to any enquiry instantly.

Today, and going forward, the company will maintain the same recruitment philosophy to ensure that we provide the best service to our clients.

“We have our culture of service excellence and conduct our business with honesty and integrity” he says.

“Everyone in the company contributes to making AZMET a success and stands accountable in their decision making.

We are very focused on innovation in the mining industry, which resulted in several new technologies and products being developed over the last year.

We believe that this makes us different from other EPCM companies.

“This year, we’ve expanded our project management team, expediting and costing team, as well as the process engineering department. By using referrals and recommendations from valued clients and/or contacts, we have been able to employ brilliant people who truly add value to AZMET.

“We have a dynamic team with the capabilities to execute large capital projects; we are excited about our future growth and current opportunities.”

INNOVATION In AZMET there is a constant focus on developing new concepts and finding more efficient, cost effective and fit for purpose solutions for our clients.

“To differentiate ourselves from other EPCM companies in the world, we develop new process technologies with the aim of reducing project CAPEX and OPEX. We are busy with new products and technologies having niche process benefits,” explains Kukard.

“In 2017, we were awarded the Business of the Year award for Engineering for a second year in a row. We also received the Silver award for innovation.

“We have designed a unique CIC (Carbon-In-Column) system for the Heap Leach Adsorption process. The design originated from a project requirement to handle a big variance in pregnant

Braam Smit, Barry Beylefeld, Charl du Preez & Ruan Kukard

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// WE HAVE GAINED A LOT OF TRACTION IN THE MARKET. WE HAVE HAD A COUPLE OF VERY IMPRESSIVE PROJECTS // solution flow rate. The flared columns with the AZMET patent pending bubble plate (AZ BPP) design provides even flow distribution with minimal pressure drop over a wide range of flows (285 - 1100m³/h). This design ensures optimum counter current carbonsolution contact.”

Activated carbon is used in CIS, CIL and CIP circuits in typical gold plants.

AZMET has developed a patent pending carbon fines removal system and is busy with pilot testing a new carbon transfer pump. The pump has been designed to operate at much better efficiencies

AZMET TECHNOLOGY & PROJECTS

at very low static heads, thus saving operational costs. The pump will also minimise carbon breakage; as any fine carbon in the circuit ultimately leads to gold losses.

The company also filed a patent for a hydrocarbon contamination removal system that will have significant improvements on the operation of especially flotation concentrators.

“The impact of mechanised underground mining is observed when the ROM ore is analysed for hydrocarbon contamination. Any hydrocarbon present in the feed ore will have a negative impact on the kinetics of the flotation circuit. When the hydrocarbon contamination gets too high, it becomes difficult and sometimes impossible to control the flotation, resulting in recovery losses and a reduction in concentrate grade.

Current testwork is showing that the AZMET process is reducing very high hydrocarbon contamination from ‘oil sludge’ ore, rendering the previously untreatable ore floatable with very positive results. We are confident that our hydrocarbon scrubbing process will benefit any operation where mechanised underground mining is used. We do testwork to compare the client’s current base-case operation results against a ‘AZ Cleaned’ ore followed by flotation on the same parameters to show the change in recoveries and grade.” explains Kukard.

“We are also busy developing a carbon to metal technology. Fine carbon that is removed from a CIL and Regeneration circuit contains gold and is typically sent away to a third-party treatment facility for processing. Our technology will give the client the peace of mind that their gold loaded carbon can be treated on their own mine site.

This ensures transparency regarding the amount of gold recovered and will save the client time and money.”

SA SUCCESS STORY? In the past 18-months, many involved in the mining industry have not

AZMET MArketing Director - Ruan Kukard

// ENGINEERING IS NOT A PROFESSION, IT’S A PASSION AND THAT IS VERY TRUE AT AZMET // enjoyed the success that has been realised by AZMET. Perhaps because of the company’s focus on the global mining market, or perhaps because of its culture of excellence, AZMET has not been growth-shackled like other contributors to mining.

Asked if the future could hold more of a local flavour for AZMET, Kukard suggests that anything is possible.

“We are excited about the direction we are moving with our products and process technologies and we believe we will be very successful in the local market after we show the financial benefits on the first PGM concentrator.”

Now is an important point in the journey of AZMET. Four years into its life, the company is transitioning from a small to medium to large organisation very quickly. One of the final snags the

company must overcome is the ability to woo investors, something which, according to Kukard, will come naturally.

“We have gained a lot of traction in the market. We have had a couple of very impressive projects,” he says.

With interest from all across the globe, it seems as though it’s just a matter of time before AZMET bags its next big project and eases into the next stage of its development. And everything becomes that little bit easier when you love what you do: “Engineering is not a profession, it’s a passion and that is very true at AZMET,” Kukard concludes.

WWW.AZMET.CO.ZA

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WELDAMAX

Forging Close

Bonds PRODUCTION: Manelesi Dumasi

Burning brighter, stronger and hotter than others, Weldamax is a shining light in southern Africa’s welding and gas industry. Celebrating its 50th anniversary this year, the company is looking to land major contracts to accelerate its next growth stage. CEO, Nazmi Adams talks to Enterprise Africa about the success of this fiery-hearted industry leader.

//

It has been 50 years since South Africa’s leading gas and welding business sparked into life. Weldamax, based just East of Johannesburg, has been servicing clients big and small since its inception in 1968. Ignition came when the business was known as Maxweld & Braze, and the flames have been fuelled over the years with the addition of many brands and country-

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wide expansion, which has seen the company become recognised as one of the industry leaders.

Turning up the heat within this very South African business, Weldamax, in partnership with a black woman-owned and managed company, announced at the end of last year that it had secured a significant contract with one of the largest companies in South Africa to assist with its gas cylinder business.

“One of the big contracts was with a large national multi-site manufacturer that would require in excess of 3000 cylinders per month where we picked up all of their cylinder business nationally. We started working with them in October last year and by January we were fully up and running. We are currently supplying them, and have been successfully supplying them, for all of 2018,” explains Weldamax CEO, Nazmi Adams.

INDUSTRY FOCUS: DISTRIBUTION

Most of the big gas companies supply gas cylinders to clients on a rental basis and charge regardless of whether those cylinders are full or empty. Weldamax is displaying its full understanding of the welding process by bringing a model which optimises cost for clients and ensures that customers hold the minimal number of cylinders on site to reduce rentals and cylinder losses. This idea is all part of wider strategy to give clients an all in one solution.

“The big area for us going forward is to give customers products that offer an integrated solution,” says Adams. “We are quite uniquely positioned as we are the only company that is able to offer a fully integrated and flexible multi-brand national solution. We really understand the MIG welding and TIG welding process, we understand the attributes that products give you against cost performance, and we have developed a system to assist customers with cylinder management on site. Many customers end up paying more rent for empty cylinders than full cylinders.

Our approach is to help customers significantly reduce their monthly rental cost and it’s disruptive because the gas companies earn money from

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// WE REALLY UNDERSTAND THE MIG WELDING AND TIG WELDING PROCESS, WE UNDERSTAND THE ATTRIBUTES THAT PRODUCTS GIVE YOU AGAINST COST PERFORMANCE, AND WE HAVE DEVELOPED A SYSTEM TO ASSIST CUSTOMERS WITH CYLINDER MANAGEMENT ON SITE // the number of cylinders on site. That is getting a lot of traction from customers.”

When it comes to welding products, Weldamax’s range is almost unrivalled. The company has partnered with three major global companies; ESAB, Böhler, and Air Products to give customers access to a lot of hightechnology products which competitors cannot always match.

“Air Products, one of the largest suppliers of industrial gas, has had a long-standing supply relationship with Weldamax and has worked closely with the company to achieve their growth objectives. Ensuring the availability of cylinders and product to this key player in Air Products’ national distributor network, coupled with innovative offerings and technical expertise, are key elements of Air Products’ distributor model that adds benefits to distributors

such as Weldamax.”, Arthi Govender, Strategy Manager, Air Products As one of the largest engineering businesses in Africa, the customer gain is a real coup for Weldamax and marks the start of strategic move to secure more business with the biggest of the big.

“Previously, the business was strong with small to medium customers but it didn’t have exposure to large corporate customers,” says Adams.

“My challenge has been to keep that but also build capacity to take on large national customers.

“We had to upskill our sales staff to be able to communicate effectively with multinationals and we had to improve our product range to offer exactly what corporate customers required. We did that very quickly last year and that was very pleasing. In most organisations that I have worked, change is very difficult

WELDAMAX

but this organisation’s ability to absorb change and take on challenges was fantastic. There was an eagerness there and we picked up large corporate clients very quickly.”

FORGED IN SA Weldamax plays in a market that is made up mainly of international organisations with strong local representation. But this is a company that has been working in South Africa for half a century and is well versed in local business culture and is a fully-fledged black-owned and blackmanaged establishment.

“Weldamax is celebrating its 50th anniversary this year,” enthuses Adams.

“It started off as an entrepreneurial business called Maxweld & Braze, largely servicing the wholesale market for industrial welding equipment and accessories. It then grew and was taken

over by Thermadyne which is now part of the Colfax group. Thermadyne exited the country and the business was taken over by Sanlam private equity.

During that time, it was distributing Thermadyne welding equipment in South Africa, one of the leading international brands.”

Eventually, the holding company Weldamax was established and under the holding company there are several brands: Maxweld & Braze, Unique Welding Alloys, Thermamax and Selrod.

“Last year, Sanlam private equity divested part of the business to blackowned companies and individuals.

It became the first large, truly South African black-owned and black managed national industrial distributor in the country’s welding industry. That in itself is a very big defining moment in the sense that it has had a dynamic impact

on the market horizon in this country.

Until then, there was no such player.

You had dominance from the traditional multinationals which were mostly foreign-owned and this changed the dynamic dramatically,” details Adams.

Weldamax’s brand portfolio is now one of, if not, the strongest in southern Africa. Adams states that the resuscitation of the Maxweld & Braze brand in 2017 was a flagship moment for the business. “It had been a brand that had been around for quite some time and when I came on board I recognised that it was a real draw so we relaunched as a wholesale brand.

Since then it has gone very well. We developed a clear channel strategy that reduced channel conflict and enabled us to have clearly defined offers into the distributor and end user markets. This is building trust with our channel partners.

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INDUSTRY FOCUS: DISTRIBUTION

“Maxweld & Braze has always been seen as the go-to welding and cutting supplier, with our reliable, quality products that are supported by our excellent service department and sales team,” says Andries Taljaard, manager of Maxweld & Braze. “Our products have always been seen as cost-effective, and fit-for-purpose, with compliance to the relevant safety standards.”

Since the relaunch of the Maxweld & Braze brand, the main focus has been re-establishing the trust within the wholesale sector that the brand was always associated with. “For us, this has been an exciting time working to rebuild the lasting relationships and becoming a leader in the wholesale

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segment once again,” says Taljaard.

“Another defining moment for the business was when Thermadyne exited the business and had to establish its own product brand identity. Thermamax was born and to this day, that is a highly desired and well-established brand in the welding industry, not just in SA but across southern Africa,” says Adams.

WELDING AFRICA Currently, Weldamax has 15 branches around South Africa and partnerships in various sub-Saharan African countries.

Its reach is spread far and wide, and the company wants to be the first name that comes to mind whenever welding is thought about.

“From a geographic perspective, we fully cover almost every region in South Africa and we are expanding quite aggressively into the rest of Africa with our over 3400 line items of welding products. At this stage, that is purely through partnerships with distributors but in the future, we may explore a solid footprint depending on how Africa evolves. Right now, Africa is a big growth opportunity and the Thermamax brand is very well-accepted,” says Head of Sales, Thomas Taljaard, .

He highlights Zimbabwe in particular as a major opportunity for Weldamax. However, like many, he is waiting to see how the land lies before committing.

WELDAMAX

“We are still keenly waiting for socio political change to materialise and we believe that Zimbabwe will rise quickly. Operating in other neighbouring countries is a big part

// OUR ABILITY TO HELP CUSTOMERS IMPROVE THEIR PROCESSES AND REDUCE THEIR COSTS IS PROVIDING US WITH AN OPPORTUNITY. OUR GAS VOLUMES ARE UP 12-13% WHERE THE INDUSTRY VOLUMES ARE MOST LIKELY STAGNANT //

of our strategy. We want to do it in a way that works well with our current partners there.

“Locally, Weldamax is brimming with confidence following a successful period of growth and a renewed sense of business confidence brought about by the country’s new President,” says Thomas.

“Politically, we have a lot of confidence,” says Adams. “We have turned the corner. Ramaphosa has a long history of negotiating with difficult people in difficult situations and he has been engaged in political discussions here for a long time. He has the patience, he has the perspective, but he does still face big challenges – I think we are looking at another tough year. His efforts to tackle corruption have really helped boost confidence in the country. The land issue is a problem and we clearly need a constructive fully

inclusive solution rather quickly.”

Interestingly, Adams suggests that while the company continues to perform well, the industry is going through a challenging time as a result of global market conditions. This is down to the ability of Weldamax to offer a complete solution and assist with effective cost control.

“Across the world, the welding and gases sector has done well. South Africa has gone the other way and that is a problem. Traditionally, South Africa rides the tails of Europe because Europe is its biggest trading partner,” he says.

“The challenge that it brings is that there has been a significant shrinking in the fabrication and manufacturing sector in the first two quarters of this year. The opportunity that creates is that customers become very focussed on cost efficiency. Our ability to help customers improve their processes and

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INDUSTRY FOCUS: DISTRIBUTION

// OUR VISION IS TO MAKE THIS ENTITY THE LARGEST INTEGRATED GAS AND WELDING COMPANY IN SOUTHERN AFRICA. WE WANT TO BE THE LARGEST AND MOST INFLUENTIAL // reduce their costs is providing us with an opportunity. Our gas volumes are up 12-13% where the industry volumes are most likely stagnant.”

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A key differentiator between Weldamax and its competitors is its ability to make quick decisions and move at pace with the market.

“We have introduced, updated and refreshed around 100 new products in the past year. Could any of the global competitors here do that? Most likely not. Their restrictions and global processes potentially slow them down,” highlights Adams.

To offer only the world’s best products, Weldamax trusts Durbanbased Airwaves for all import requirements. This ensures products developed in Europe, USA or anywhere are easily available to Weldamax’s growing customer base.

“Airwaves is our clearing and forwarding agent. Typically, every product that we import is channelled through Airwaves. All our products land in Durban, unless we give specific instructions to deliver to another port.

For all imported products, raw materials and finished goods, we use Airwaves.

We benchmark regularly, and we have found them to be far superior in the market in terms of service,” says Garth Conybeare, Head of Finance.

BURNING BRIGHTER With Weldamax already recognised as a leading player in the market, and with ongoing strategies in place to boost the company’s reputation across all of

WELDAMAX

// ULTIMATELY, WE WANT TO BE SEEN AS THE COMPANY THAT PEOPLE CALL IF THEY HAVE A PROBLEM WITH GAS AND WELDING // southern Africa, now is an exciting time for the business.

“We’ve recruited really good people to support us. In South Africa, and globally, these skills are very difficult to find. Also, being blackowned and black-managed makes us very attractive,” says Adams.

“What we are doing in terms of new customers gains, and the new products that we are bringing through, along with improving our internal processes will certainly yield significant benefits over the next few months going forwards. We are seeing a lot of our competitors wobbling quite badly but we remain confident we can maintain our position.”

He highlights the ‘incredible entrepreneurial spirit and the unerring focus on satisfying the customer’ that exist within Weldamax as the key drivers behind the company’s recent successes.

Going forward, it looks like more of the same from the company that promises to give your business real benefits.

“Long-term, our vision is to make this entity the largest integrated gas and welding company in southern Africa.

We want to be the largest and most influential in that space and we want to do that through organic and acquisition growth. We also want to have the best product offering in the market and not compromise on service and quality.

“Ultimately, we want to be seen as the company that people call if they have a problem with gas and welding,” Adams concludes.

WWW.WELDAMAX.CO.ZA

“I have been with Weldamax for 18-months. Previously, I headed up marketing and sales for the largest gas and welding company in South Africa before leaving the country in 2006.

“I then became the global Marketing Director Industrial Products for BOC group in the UK. When Linde bought BOC I headed up the global welding portfolio for the Linde Group before going on to become the Global Marketing Director and Head of the Consumables Division for ESAB. “When I came into this business, I could leverage this experience quickly. That impacted how we went into the market and, for me, having seen the company progress over just 18-months has been quite profound.

“I was working in Europe during the 2008/2009 cash crunch and it gave me the experience of how to deal with a massive industrial demise. At the end of last year and the beginning of this year, when challenging signs remerged, we responded very quickly and that has helped us a lot. Having that experience of managing in difficult times will help the organisation.”

WELDAMAX CEO - NAZMI ADAMS www.enterprise-africa.net / 69

AQS LIQUID TRANSFER

Trusted Pumping Solutions

Keep Things Flowing PRODUCTION: William Denstone

With a vast product variety that caters for the mining, industrial, agricultural and utility markets, AQS Liquid Transfer is an importer and distributor of pumps across Southern Africa. Managing Director Gerhard Prinsloo took us through some recent landmarks in the company’s history, and he plans for AQS to permeate even further afield in this most competitive of markets.

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INDUSTRY FOCUS: DISTRIBUTION

//

The AQS entity has been a stalwart of the South African pump industry for nearly 25 years, but it was around the turn of the century that the business began showing the signs of what it would eventually grow into. “AQS as we know it today was formed in 2002 from a company called AQS Industries,” recounts MD, Gerhard Prinsloo, “when we identified a pressing need within a specific market segment of the industry. As a result, AQS Liquid Transfer was put together specifically to cater for the Air Operated Double Diaphragm (AODD) market sector.”

From here, AQS’s growth has exceeded what anyone could reasonably have expected. “The company started off with the three original directors - those founding partners being Andre Nagel, Peet Snyman and myself - and one additional staff member, and today we are in excess of 150 people,” he

explains. “The values and principles are still the same, however we have changed enormously since the inception of the company.

“At first we had a single small office in Centurion, Pretoria, and now we have ten facilities throughout the country. Our product range has grown from that one original, very specific, offering to numerous different types of pumps and spares that we import from all over the world.” At its disposal too is a world-class facility to allow AQS’s qualified team of technicians to service and repair a wide variety of pumps to the highest specification.

Alfa Show 2016

Product Training 2017

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CAUSES FOR CELEBRATION AQS’s core values include its strong partnerships with suppliers and clients alike, a commitment which propels the company to consistently unlock value for every customer, every time, by providing trusted pumping solutions within a culture of

// WE CONSTANTLY DRIVE TO BECOME MORE AND MORE INVOLVED IN AFRICA, BECAUSE THIS IS WHERE THE GROWTH IS AT THE MOMENT // adaptability and passion. Abiding by its mantra of ‘Pumping to a Different Beat’, AQS’s passion and enthusiasm to exceed expectations drives it to do things differently within what is often an all too impersonal industry.

It is an approach which has led to many causes for celebration in AQS’s lifetime, as Prinsloo lays out.

“Apart from the growth in the business and the people that we have acquired on our journey, one real achievement was overcoming

AQS LIQUID TRANSFER

the important challenge of Broad Based Economic Empowerment.

We were delighted with the way we were able to put together our strategy so successfully - it was a step which opened a lot of doors for us. Next to this of course was our ISO Accreditation, which was a vital step, and the incorporation of the IWP Company was also a massive milestone.

We knew we had incredible water products, and to streamline those was vital to make one coherent company.”

Meanwhile, in 2016 AxFlow, a division of Axel Johson International, acquired a majority stake in AQS Liquid Transfer.

Established in 1989, AxFlow has continually focused on meeting the needs of process industries across Europe, which has resulted in stable growth and a presence in 27 countries. The AxFlow group is the largest distributor of positive displacement pumps and related

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products and services in Europe.

“Of course, the big recent landmark was the part-acquisition by AxFLow,” says Prinsloo, detailing some

of the impact this has had on business so far. “The biggest change has been the piece of mind that it has brought.

All of a sudden we had a ‘big brother’

Technical facility

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INDUSTRY FOCUS: DISTRIBUTION

ISO Certified since 2013

in business, and it gave us access to other international suppliers that we would never have dreamed of being able to reach previously.”

While the new partnership has clearly opened many doors for AQS, it was equally one designed to be mutually beneficial. “One of the big drivers behind this coming together from AxFLow’s side was to expand into Africa, and that is something which has been on the cards for us for a long time - it is something that we are actively busy with, looking to service wider Africa from here in South Africa, which is not an easy task.

“We are active in quite a few countries right now, including Mozambique and Botswana, Lesotho and Zambia, as well as through dealerships in the DRC. It is a constant drive to become more and more involved in Africa, because this is where the growth is at the moment.”

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FOR THE LONG HAUL When asked to give some insight into AQS’s lasting success, Prinsloo in large part thanks the company’s commitment to staying close to its roots. “One of the biggest ways in which a company is measured in

South Africa is its history, and the footprint you manage to build up.

Then comes the product, of course, but above everything else is the service you offer. The AQS family is the propellant that drives this service to make the company fly. That is why

AQS LIQUID TRANSFER

// WE HAVE FREQUENTLY DEMONSTRATED AN AWARENESS OF THE NEED TO CONTINUALLY CHANGE AND ARE VERY WELL-EQUIPPED TO DO SO // we are so successful in South Africa, because we are on the doorstep to provide both the tailored service - if you are not physically there and ready to assist then you are not going to make it.”

Prinsloo does acknowledge the challenges coming AQS’s way, particularly in terms of unpredictable industry sectors. “The instability in the mining sector in Southern Africa is a big concern,” he says, “although instability has been part of mining for all the years I’ve been involved in mining, which exceeds 30 years.

“The current decline in demand for commodities produced by SA mining is my biggest current concern, not excluding the instability in international currency rate of exchange and the demands that

labour put on mining.” However, despite some potential issues, AQS’s expertise will see it flourish as it has time and again until now.

“Taking our history into account, we have frequently demonstrated an awareness of the need to continually change, and we are very wellequipped to do so as a result. If you become stagnant, you are only going to fall behind, and so a large part of our day-to-day planning is to plan for change, and we do that very well.

“Expanding our footstep in Southern Africa has been and will be a continuous project for AQS in order to maintain growth,” begins Prinsloo’s conclusion on what comes next for AQS, “ While our product additions and expansions will be driven by the needs and trends of the market.”

For AQS, no drastic measures are required; it really is a case of ‘more of the same’ as it looks to build on its solid foundations. “We are focussed on growing on what we have already achieved,” Prinsloo sums up. “We do not need to try too many new things, rather we will develop our past achievements.

“We know the market, we know the industry, and so this is where our expertise lies to carry us forward.”

WWW.AQSLIQUIDTRANSFER.CO.ZA

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KHI Solar Plant

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LEMCO

The Laubscher Brothers Are

Men of Steel PRODUCTION: William Denstone

LEMCO’s steel fabrication expertise has been honed by decades of experience, and driven by the unerring ambition of a business where everything is very much in the family. Owned today by the Laubscher brothers, Pieter and Andries, the latter brought us up to speed on LEMCO’s outstanding recent work and the ever-growing demand for its services far and wide. www.enterprise-africa.net / 77

INDUSTRY FOCUS: FABRICATION

//

The LEMCO story dates back to 1967, when the senior Pieter Laubscher began designing and manufacturing steel products and buildings in the Northern Cape. “It was your typical family business start-up,” begins LEMCO Managing Director and Owner, Andries Laubscher. “My father started in the general metals business in the late 60s, and from there the business grew and subsequently moved up to the Northern Cape of South Africa. Back then, the focus was predominantly on catering for the agricultural market which dominates that area.”

GRI

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A FAMILY AFFAIR The quality and expertise which Pieter Laubscher Construction offered meant that rapid and sustained growth followed, paving the way for the junior Laubschers to get involved themselves in the industry much further down the line. “I finished my studies in 2005, and my brother in 2007, and we bought the premises just north of Cape Town in 2006. From then on, it just exploded,” Laubscher says.

By 2008, Pieter Laubscher’s two sons had both fully joined the family business, and with the setting up of offices in the Western Cape began trading as LEMCO - Laubscher’s Engineering Manufacturing Company.

LEMCO Structural Steel CK was registered as a company in its own right in 2009, and by 2010, the company as a whole had established itself as one of the leading structural steel outfits in South Africa. Next year, LEMCO will celebrate its 50th year in business and will be able to look back over half a century of successful operations.

Executive Managing Director Pieter Laubscher offers his own take on what has bred LEMCO’s undisputed success to date. “Quality, quality, quality. I believe this should be the most important aspect of any business,” he enthuses, and this plainly runs through the entire company from

LEMCO

// LEMCO MUST BE A BYWORD FOR QUALITY OF WORK // top to bottom. “Being in charge of all manufacturing, I personally try to produce as high a quality product as humanly possible.

“LEMCO must be a byword for quality of work.”

Currently LEMCO’s facilities include over 2000m² of production space, a 400m² painting bay and over 4000 m² of storage yard. The main facility is very well equipped to eliminate almost all labour-intensive processes, by using various manual and state-of-the-art CNC machines to produce a highprecision product in record time.

ADAPTABILITY AS STANDARD Not only a staunchly family-run business, LEMCO also remains inextricably tied to its South African roots, according to Laubscher. “Our factory remains on the Northern Cape of the country, but as soon as we joined we set up a full-blown office here in Cape Town, where everything is managed and administrated.” Built in 1990, this main factory has evolved substantially over the years, with continual investments in the latest technology meeting the needs of an industry which refuses to stand still.

Despite the unbreakable ties LEMCO maintains to its home terrain, however, it benefits from being extremely versatile in its operations.

Not only in its specialising in all forms of structural steel buildings, able to design any form, shape or size required, but also its ability to simplify projects and roll out anywhere in sub-Saharan Africa, as Laubscher explains. “Five years ago, probably 90% of the work we were doing was in Cape Town, whereas currently, I would say that less than 20% of our business is in the Western Cape. It’s almost seasonal, where we find ourselves employed - we

have a lot of demand in Namibia now, which has been a consistent rich vein for us over the past 18 months.

“Wherever we go, we tend to find that once we get into an area business takes off from there.

“Our adaptability is helped greatly because our product is very much like Lego, essentially, in the sense that if the design and management is done correctly then it really shouldn’t matter where it is to be employed.”

Despite LEMCO’s widening appeal, Andries Laubscher is keen to clarify that South Africa will remain the company’s sole home for the foreseeable future. “I don’t think we’ll ever put up another manufacturing facility outside of South Africa,” he says.

“The capital outlay and sourcing and training of new personnel, as well as managing them, will make it difficult to

be a worthwhile venture.

“We would rather ensure that our playing field is as wide as possible to allow us to handpick our jobs, ones that we can easily manage, rather than a situation whereby we would be forced to take on work to justify the presence of another full-blown office.

// THE PERSONNEL WE HAVE AT OUR DISPOSAL IS PERFECTLY PITCHED TO MAKE A REAL DIFFERENCE AS WE GEAR UP FOR OUR NEXT PHASE //

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INDUSTRY FOCUS: FABRICATION

Seaflower Pelagic Processing

// CHALALA WAS AS CLOSE THE PERFECT PROJECT FOR US AS IS POSSIBLE TO GET // The complexity of the ‘model’ we are building determines whether or not we are willing to work cross-border, which gives us great flexibility.”

CHALALA TOPS THE BILL Take even the briefest of looks at LEMCO’s project list and you will be struck by the breadth of the constructions undertaken in such a short operational lifetime, spanning packing sheds and warehouses through to solar plants and shopping malls. Arguably the pick of the recent bunch, however, is the sea of hybrid structures installed for Number Two Piggeries, Chalala Pig Farms, Malmesbury, the largest and most successful piggery business in Africa.

LEMCO’s workshop hosts some of the most cutting-edge machinery in the industry, which made it a perfect match for fabricating the steel components needed for Chalala’s high-

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tech piggery, a multi-site production unit consisting of a breeding unit, a nursery and three growers sites.

“That was as close to the perfect project for us as is possible to get - the cream of the crop,” Laubscher

begins, of a project clearly close to his heart, “where we have an excellent relationship with the client, who is the biggest in their industry. In this case, Chalala has in excess of 25% of the pigs in the country under their control. We were told what the requirements were and then handed a blank canvas on which to design the eventual project, which turned out to be incredibly

LEMCO

Chalala

simple to realise. This was largely down to the efficiency with which the personnel on site carried out their duties, and the total control we had over all the variables which applied to its construction.”

With 9,600 sows, Chalala Farms will soon produce more than 275,000 piglets per year. It is pioneering a stress-free approach to better satisfy both pigs and consumers. The animals are kept in a comfortable environment at temperatures between 18ºC and 20ºC and humidity levels of 60% to 80% to allow them to thrive. The facility also uses evaporative cooling pads to reduce the air temperature in the production units, while fans are used to disperse the air evenly throughout the building. “We were privileged to be able to continue our relationship with Number Two Piggeries, Chalala Farms as we respect their ethnical business practices,” Andries Laubscher noted, “and it is a relationship we hope to continue for many years to come.”

Meanwhile Jeff van Zyl, General Manager, Number Two Piggeries,

GRI

Chalala Farms, was effusive in his praise for LEMCO’s work on this historic development. “We were looking for somebody who was able to do a job of this size because it’s not normal for a piggery or a farming enterprise building to be built to this scale,” he explained.

“Building is not our trade and we needed guidance, information and assistance in planning this new process. It’s always nice to work with LEMCO as they have very capable employees doing the erecting and sheeting, and offer valuable advice. I would say that they are honest people with a good product and a good price, who know what they are doing and I trust them absolutely.”

STEELING ITSELF FOR ANOTHER PUSH The nature and quality of LEMCO’s business appears to be shielding it completely from the dour news which surrounds South Africa’s steel industry, described as in constant decline since 2010 and suffering from weak demand. Indeed, Andries Laubscher

leaves us with LEMCO’s intentions to ramp up dominance even further in the coming years.

“We as a company are blessed in many ways,” he sums up. “For the past decade we have been growing yearon-year, which puts us in a very good position. We invest in state-of-the-art technology, equipment and handpicked personnel, this way we are able to keep overheads low and ensure that we are still competitive at any pricing structure, no matter how competitive the market is out there.

“I think we work a lot more smartly than if you look back even just ten years. There is a young, vibrant team in our office set up for a good 15 or 20 year run with the people we have on board at the moment. The personnel we have at our disposal is perfectly pitched to make a real difference as we gear up for our next phase.”

WWW.LEMCO.CO.ZA

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ASSA ABLOY

Innovation Is the Key to Better Security Solutions PRODUCTION: Timothy Reeder

Established 21 years ago, ASSA ABLOY South Africa is part of the international Swedish security giant, renowned as the global specialists in the manufacture and supply of secure, safe and, perhaps most notably, state-of-the-art door opening systems and entrance solutions used today across countless market sectors.

//

ASSA ABLOY is the largest global supplier of intelligent lock and security solutions, focused on improving customers’ lives with innovative products that offer great security, safety and convenience. ASSA ABLOY was formed in 1994 through the merger of ASSA in Sweden and Abloy in Finland, and has grown from a regional company to an international

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group with a complete range of door opening products, solutions and services for the institutional, commercial and consumer markets.

In South Africa, you will encounter its broad, trailblazing range of locks, keyless locking mechanisms and door hardware at hotels, hospitals, universities, schools, airports and homes, while such government facilities as police

stations, courts and warehouses have also turned to the industry giant to meet the increasingly complex demands of security today.

The strength of ASSA ABLOY’s protection lies in its use of only elite, recognised brands such as Yale, Union and Mul-T-Lock® Technologies Ltd; all worldleaders and synonymous with innovation, trust and cutting-edge design.

INDUSTRY FOCUS: SECURITY

SECURITY CONVENIENCE One real drive of ASSA ABLOY’s of late has been to streamline everyday security needs, reducing the number of keys required or even eradicating them altogether. This is especially true of ASSA ABLOY’s Residential Solutions, where The UNION Keyed Alike locks mean that, like its master key predecessors, only one key is needed for all the locks in the house, from the gate right to the front and back doors. Not only does it cut out the all too familiar frustration of juggling a huge bunch of keys, trying six or seven before the desired one is found, but where security is paramount, the time spent stranded outside is significantly reduced.

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// THE ACQUISITION OF IDS DELIVERS ON OUR STRATEGY TO GROW OUR PRESENCE IN EMERGING MARKETS // ASSA ABLOY’s ENTR intelligent locking solution goes one step further than this and makes the now dated concept of the key redundant completely. The innovation transforms any door into a smart version of the most important residential line of defence, giving access from a smartphone or tablet, fingerprint reader,

touchpad or even remote control.

With the protection of a mechanical cylinder and the convenience of advanced technology, ENTR succeeds in providing security and options without compromising on performance.

KEY ACQUISITION Trimming down the loads of its customers while expanding its own size; this appears to be the priority for ASSA ABLOY, an impression sealed with the agreement signed at the close of last year to acquire IDS, the leading manufacturer and distributor of electronic security solutions in South Africa. IDS was established in 1985 and is headquartered in Durban, South

ASSA ABLOY

Africa and designs and manufactures a broad range of electronic security products with a focus on intruder detection, from alarm panels and keypads to infrared detectors, remote receivers and transmitters.

IDS’s product range is renowned for its robust simplicity and reliability.

South Africa has the highest rate of domestic robberies per capita in the world, and in this demanding environment millions of South Africans have turned to the trusted IDS brand for security peace of mind.

“I am very pleased to welcome IDS into the ASSA ABLOY Group. The acquisition of IDS delivers on our strategy to grow our presence in emerging markets,” commented Johan Molin, former President and CEO of ASSA ABLOY. “IDS is a very attractive addition to the EMEA division, thanks to its strong position in South Africa, alongside its complementary product range and an excellent team.”

Tzachi Wiesenfeld, Executive Vice President of ASSA ABLOY and Head of the EMEA division added: “IDS’s distribution outlets and its strong relationships with installers and alarm monitoring companies will open new market routes for us.”

DRIVEN BY INNOVATION This year, ASSA ABLOY was, for the fourth time, listed among Forbes’ World’s Most Innovative Companies list, with the 2018 rankings seeing the company named as one of the 100 leading businesses in the world. The award reflects ASSA ABLOY’s increased efforts in innovation in order to meet the needs of the digital and mobile

// A CONSTANT FLOW OF NEW, INNOVATIVE AND SUSTAINABLE PRODUCTS IS THE MOST IMPORTANT DRIVER FOR ASSA ABLOY //

NON-FERROUS METAL WORKS SA (PTY) Ltd

Non-Ferrous Metal Works Group, the Premier Southern African Brass Plus Copper Alloy Extruding Manufacturer, Congratulates Assa Abloy on its Growth and International Marketing Endeavours 27 31 4807388 / Sidneyl@nfm.co.za

www.nfm.co.za society for intelligent, connected and networked door opening solutions, and consequently investment in innovation and product development has increased sharply since 2007.

“I’m very proud that we have achieved such success with our innovation,” said Nico Delvaux, President and CEO of ASSA ABLOY. “Inclusion in Forbes’ list is clear evidence that our innovation and technology-driven culture pays off.”

“A constant flow of new, innovative and sustainable products is the most important driver for ASSA ABLOY’s target of 5% organic growth,” sums up the company, whose ‘Future Lab’ is an initiative aimed at observing and analysing the trends and future of the security arena to provide insights and knowledge. It is a forum where security experts and customers alike can share

ideas on future opportunities and challenges in the market.

“Human needs in the new digital and connected service society serve as an important point of departure for our innovation and product development,” concludes ASSA ABLOY, as it outlines its vision for the future of intelligent security. “Secure, convenient and intelligent door opening solutions that interact with people and products play a major role in the continued development of successful e-commerce and home services, while growing demand is boosting revenue with more value per product, faster replacements and upgraders, more recurrent revenues and new business opportunities.”

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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.

ELECTRA MINING AFRICA SEPT 10 | JOHANNESBURG The world-renowned Electra Mining Africa 2018 is the place to be to source suppliers, manufacturers and distributors for all your mining, industrial, construction, power generation and machine tools needs.

You will have the opportunity to see the latest and greatest innovations and technologies in machinery, equipment, products, consumables, services and solutions.

You can expect to see: • Cutting-edge mining technology, equipment and supplies • The latest in industrial, engineering and manufacturing • All aspects of power generation and electronics • A showcase of trucking, transport and logistics • Everything from abrasives to blading to machine tools and more There will be many new product launches, daily live demonstrations and technical experts will be available to answer questions.

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SMALL BUSINESS EXPO SEPT 06 | JOHANNESBURG The Small Business Expo is devoted to the development of small and medium sized enterprises, providing an invaluable platform for small businesses to market their businesses and interact with prominent business leaders and representatives from a number of corporate companies.

It’s the ideal platform to stimulate business growth and motivate both current and aspiring entrepreneurs.

AFRICA OIL & POWER SEPT 12 | CAPE TOWN Africa Oil & Power is the continent’s premier platform for energy investment and policy. With a heralded series of energy events, AOP brings together an elite class of ministers and senior level government officials and top executives of private sector companies spanning the energy value chain, including upstream, downstream, engineering, construction, services, consulting, power generation, legal and finance.

KENYA INTERNATIONAL TRADE EXPO - KITE KENYATTA INTERNATIONAL CONFERENCE CENTRE SEPT 04-06 SMALL BUSINESS EXPO TICKETPRO DOME, JOHANNESBURG SEPT 06-09 ITU TELECOM WORLD DURBAN ICC SEPT 10-13 ELECTRA MINING AFRICA EXPO CENTRE NASREC, JOHANNESBURG SEPT 10-14 AFRICA OIL & POWER CAPE TOWN ICC SEPT 12-14 FESPA AFRICA GALLAGHER CONVENTION CENTRE SEPT 12-14 AFRICA AEROSPACE & DEFENCE AIR FORCE BASE, WATERKLOOF SEPT 19-23 ELEARNING AFRICA KITWE CONVENTION CENTRE SEPT 26-28

KNOWLEDGE

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RESULTS P ink Elephant is a respected knowledge company that enables IT Management Best Practice through our Technology; Consulting; Education and Support Services.

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Why Choose Us? Our people are experts in what they do and walk the journey with you.

Pristine track record excelling in business transformation for our valued customers.

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