Enterprise Africa October 2018

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

October 2018

www.enterprise-africa.net

SPG to Revitalise Genrec Exclusive interview with Genrec’s Mkhabela Sibeko

ALSO IN THIS ISSUE:

Rosslyn Hub / Alligator / Falke Eurosocks / Zebediela Citrus

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 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

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The last few weeks have been extremely busy in the South African business arena with leading insurance company, Alexander Forbes opting to replace its CEO before also losing its CFO, and controversial auditing firm, KPMG moving on a CEO after just a year in the role.

The World Bank has revised the country’s growth trajectory for 2018 downwards from 1.4% to 1%, and President Ramaphosa’s economic stimulus package has been criticised for only having limited potential benefits.

But, as always, the country’s businesses continue to buck the trends and deliver brilliant results. Whether it’s through the release of new products and services, growth into new markets, acquisition of new customers, or expansion of existing operations; southern Africa’s business community remains resolute.

Just look at the stories from Alligator, Rosslyn Hub, Zebediela Citrus, Genrec, and Falke Eurosocks, all companies in different industry sectors, but all companies that have set sights firmly on a growth path.

Rosslyn Hub, the precursor to Tshwane’s Automotive City, is now under construction and is hoping to attract international auto OEMs to Gauteng. Falke Eurosocks manufacturers socks for local and export markets and is recognised is one the best in the business. Zebediela Citrus produces some of the world’s best tasting oranges and is planning an export drive to breathe new life into the Limpopo farm. Alligator, Cape Town’s custom product specialist, is investing in its facilities to ensure its quality remains world-class and its capacity grows.

Try telling these organisations about doom and gloom in the economy and you’ll quickly be shot down with talk of all the positivity on the ground that goes unreported – enter Enterprise Africa.

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Joe Forshaw

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EDITOR

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

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

104/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/GENREC SPG to Revitalise Genrec Since taking control of Genrec in May 2018, Southern Palace Group has started a revitalisation programme which will see the company re-emerge as one of the continent’s leading heavy engineering industry players, while simultaneously putting emphasis on diversifying its product offerings.

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CONTENTS

42/

72/ INDUSTRY FOCUS: ENGINEERING 9/GENREC SPG to Revitalise Genrec

86/ 64/FALKE EUROSOCKS FALKE Running With World’s Best INDUSTRY FOCUS: MARKETING

17/LEMCO A Family Affair That Defined the Steel Industry

72/ALLIGATOR 30 Years of Growth in Cape Town for Alligator

23/LESEDI Nuclear Specialists Target Industry Domination

INDUSTRY FOCUS: RETAIL

28/WELDAMAX Forging Close Bonds INDUSTRY FOCUS: CONSTRUCTION

79/HOMECHOICE HomeChoice Announces Strong Results and Growth Against Tough Backdrop INDUSTRY FOCUS: AGRICULTURE

37/WBHO CONSTRUCTION Spreading Its Reach Far and Wide

86/ZEBEDIELA CITRUS Zebediela Targets Double Production in Next Two Years

INDUSTRY FOCUS: AUTOMOTIVE

INDUSTRY FOCUS: INSURANCE

42/ROSSLYN HUB Rosslyn Hub Project Hits Fast Lane

92/CLIENTÈLE SA’s Most Reliable & Valued Financial Services Partner

52/MAXION WHEELS Another Example of SA Automotive Excellence INDUSTRY FOCUS: MANUFACTURING 59/UNIPLATE Never Underestimate the Power of the Number Plate

INDUSTRY FOCUS: FINANCE 99/CAVMONT BANK Cavmont’s Customer Service to the Core

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MARIJUANA FOR PERSONAL USE DECLARED LEGAL The Constitutional Court has ruled that the use and cultivation of marijuana for personal use is legal.

In a landmark judgment delivered in September, the apex court declared section 4(b) and section 5(b) of the Drugs Act and section 22A(9)(a)(i) of the Medicines Act constitutionally invalid.

“The effect of the judgment is twofold; it decriminalises the use or possession of cannabis by an adult in private for that adult person’s personal consumption in private; and it decriminalises the cultivation of cannabis by an adult in a private place for that adult’s personal consumption in private,” said Deputy Chief Justice Raymondo Zondo.

The unanimous judgment delivered by Justice Zondo held that the criminalisation of marijuana in a person’s home or private dwelling infringed on the right to privacy.

Following the ruling, it would be deemed incorrect to charge an adult under the three sections.

The ball is now in Parliament’s court to determine the amount of dagga that an adult may use, possess or cultivate in order for it to amount to “personal use”.

Once Parliament has corrected the defects, the Court said police officers as enforcers of the law must consider all the circumstances and the quantity of cannabis found in an adult person’s possession in order to charge them.

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BOLD PLANS TO IGNITE SA’S ECONOMIC REVIVAL

Photo: GCIS

President Ramaphosa used his time on stage at the UNGA to ensure global leaders that South Africa is continuing to address its economic challenges and is working hard to redress legacy issues that are holding back development.

Prior to his departure for New York, the President announced an economic stimulus package designed to boost economic activity and catalyse stagnant growth figures.

The ambitious and bold measures, which in the main give priority to those areas of economic activity that will have the greatest impact on youth, women and small businesses, arose out of Government’s concern that for several years, the South African economy has not grown at the pace needed to create enough jobs or lift its people out of poverty.

“The stimulus and recovery plan we are outlining consists of a range of measures, both financial and nonfinancial, that will be implemented immediately to firstly ignite economic activity, secondly restore investor confidence, thirdly prevent further job losses and create new jobs, and fourthly to address some urgent challenges

that affect the conditions faced by vulnerable groups among our people,” the President said at the Union Buildings in Tshwane.

The stimulus and recovery plan has five broad parts, namely: • Implementation of growth enhancing economic reforms; • Reprioritisation of public spending to support job creation; • The establishment of an Infrastructure Fund; • Addressing urgent and pressing matters in education and health; and • Investing in municipal social infrastructure improvement.

“It is generally agreed that in order for our economy to grow at a rate that will lead to job creation on a meaningful scale, we need to significantly increase levels of investment.

“We are decisively and rapidly accelerating the implementation of key economic reforms that will unlock greater investment in important growth sectors. These reforms include immediate changes approved by Cabinet to South Africa’s visa regime,” he said.

NEWS SNAPSHOT ALEXANDER FORBES CEO AXED Andrew Darfoor, interviewed by Enterprise Africa in December 2017, has been removed as CEO of one of the continent’s largest insurance businesses, Alexander Forbes.

Despite achieving success with a companywide cost savings strategy, it is thought that the board are unhappy about a gradual decrease in share price over the past two years.

Darfoor said he was successfully implementing a strategy which was agreed with all stakeholders and was on track to meet the Ambition 2022 target. He is reported to be unhappy about the decision and has vowed to legally challenge the dismissal.

ARC is the second-biggest shareholder at Alexander Forbes with a 17% interest in the company, which has a market capitalisation of about R6.65bn. US consulting firm Marsh & McLennan Companies is the biggest shareholder.

“I am not happy about the outcome and I will deal with this in due course,” Darfoor said after being released after just two years.

The company would not reveal any more information about the decision, citing only a “loss of confidence” as the driver behind it.

Independent non-executive director Marilyn Ramplin will act as interim CEO and will be happy to hear that share prices jumped 8% following the announcement of Darfoor’s exit.

In the long-term, Dawie De Viliers will take over as CEO following a successful career with Sanlam. He will begin on November 1 2018.

Andrew Darfoor

JAPAN LIKES SOUTH AFRICA’S OPPORTUNITIES While Japanese companies are keen to invest in the South African economy, South Africa can learn a lot from the East Asian nation, says the country’s Ambassador to Japan, Thulani Dlomo.

“The investment interest is huge. Big and small corporates are looking forward to hear about investment opportunities available in South Africa as well as the country’s investment environment,” said Dlomo.

The Department of Trade and Industry (dti) recently led a

weeklong investment mission to Japan with Presidential investment envoy Phumzile Langeni.

The visit to Tokyo is in line with President Cyril Ramaphosa’s investment drive to attract $100 billion worth of investments into the South African economy over five years.

Dlomo said South Africa and the island nation have cordial relations which presents an opportunity for South Africa to learn from the Japanese with regards to skills development, technology and

trade and investment to grow the economy.

This as the South African government views its bilateral economic relations with Japan as strategic and important.

“This mission is a prioritisation of Japan by the South African government. The mission offers an opportunity to assure the government of Japan and the private sector that South Africa is indeed the best country to invest in,” said Dlomo.

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GENREC

SPG to

Revitalise Genrec PRODUCTION: Karl Pietersen

Since taking control of Genrec in May 2018, Southern Palace Group has started a revitalisation programme which will see the company re-emerge as one of the continent’s leading heavy engineering industry players, while simultaneously putting emphasis on diversifying its product offerings. www.enterprise-africa.net / 9

INDUSTRY FOCUS: ENGINEERING

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Genrec, South Africa’s industry-leading ultra-heavy steel engineering business, has been recast in a new light since a change in ownership.

Formerly owned by Murray & Roberts, this expert steel manufacturing and fabrication organisation had become stale, facing cashflow challenges and realising that customers were turning their backs in favour of competitors.

In May 2018, black-owned and managed South African group Southern Palace Group (SPG) took full control of Genrec and quickly went about breathing new life into the mighty business.

“This acquisition is a continuation of Southern Palace’s strategy to be a leading, black-owned, industrial operating company particularly in the infrastructure, mining services and value-added steel manufacturing industries,” said SPG CEO Lucas Tseki.

“Steel is in the fabric of SPG, with the Group having been involved in the

Medupi Power Station

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steel services business as an investor for the past 15 years. It is important for us to leverage this heritage, the experience we’ve gained over the years and to tap into the vast networks and connections we’ve built up, in order to grow Genrec in South Africa and the rest of the continent.

“We plan to diversify the current Genrec product offering to become a significant steel provider for infrastructure developments in energy, water, mining, health, education and transport sectors,” added Tseki.

The deal, reportedly worth R185 million, was concluded with the hope that Genrec could gain further access to South Africa’s public sector contracts, as well as achieving expansion ambitions on the continent.

To find out more about what the future holds for this highly-regarded organisation, Enterprise Africa speaks to Genrec’s new Head of Legal, Governance, Corporate Affairs and Compliance, Mkhabela Sibeko who

// THE NEW LEADERSHIP IS STRIKING THE RIGHT CHORDS, MAKING THE RIGHT NOISES FOR INVESTORS, AND THERE SEEMS TO BE A COMMITMENT TO TURNING THINGS AROUND // explains that now is an exciting time.

“Everything is exciting, everyday there are new challenges, but everything gives you the feeling that this new animal will wake up in the not too distant future.

“We think we have the necessary gravitas as Genrec to proactively understand what the market wants and accordingly deliver products and services that respond to those

GENREC

demands. I am confident that SPG is up to the challenge.

“When SPG took over Genrec, Genrec was already a continental player in steel fabrication and manufacturing, and we want to maintain that. We have already been a part of iconic projects in Dubai and we believe we can become an international player in steel fabrication,” he said.

M&R TO SPG Genrec was the latest company to be transferred out of Murray & Roberts in a swathe of sell offs that tie back to collusion allegations in the run up to the 2010 FIFA World Cup in South Africa.

“A lot of construction companies went through a difficult patch post 2010,” explains Sibeko. “There were a lot of competition commission enquiries and many were accused of collusion

on pricing. This brought about a situation where it suddenly became less attractive to operate in the construction space. Subsequently, Murray & Roberts decided to sell its construction wing, Concor, to SPG. “After that, discussions started to also bring on board the steel and engineering side of things, Genrec, which was wholly-owned by Murray and Roberts. As of 1 May, SPG took over Genrec and it is now registered as Energy Fabrication (Pty) Ltd but we have kept the name Genrec as it still retains a favourable reputation and we didn’t want to make a wholesale change. Today, we are a 100% SPG owned subsidiary.”

And since SPG took the business, change has been swift. New divisions and new product offerings have been added to the Genrec portfolio, and the company has gone back to its central

offerings to ensure quality is at the core of everything it does.

“It does feel like we are in a completely new environment,” says Sibeko. “There is new leadership, the ethos of this leadership differs fundamentally from the previous leadership, but in essence we remain a company whose people are united in rallying behind the new owners. At the same time, we accept we have come into an environment where there was an existing culture and we respect that.

We will be changing by introducing new aspects to the business, but we will retain aspects that have given us a competitive edge.”

He describes the current situation at Genrec as a “new dawn” and says that the fresh energy being pumped into the business will help to revitalise relationships with all stakeholders.

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INDUSTRY FOCUS: ENGINEERING

“I recently returned from a trip to Australia where I attended an annual gathering of Australian mining houses where they were looking at opportunities in Africa. There were companies there with whom Genrec had done business before but the relationship had broken down. We went back to them and said ‘we are open for business’. One of the companies, in the trucking industry, has since approached us and said they want us to build and assemble chassis for their clients in Japan and New Zealand.

Subsequently, they also asked us to work on a number of trucks for their big client in Ghana and then they asked us if we would take a license for them and set up distribution points in South Africa so that spare parts are easily available locally. If there was any doubt that the future looks promising, the endorsement from this Australian company shows that there is a need for our services.”

He also describes a situation where

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// WE WILL BE CHANGING BY INTRODUCING NEW ASPECTS TO THE BUSINESS, BUT WE WILL RETAIN ASPECTS THAT HAVE GIVEN US A COMPETITIVE EDGE // a South African company, previously a client, had become unnecessarily alienated. The new leadership was quick to refresh the relationship and rebuild bridges.

“There is a local company which makes big trucks to take products underground. We said to them ‘we are a new company, please come on board’, they responded positively and our relationship is now flourishing. There was also another company in Australia which had turned its back on us, but we said to them ‘we are a new and changed company’ and they knew that the steel and fabrication work which came from Genrec was top quality.

We went back to the customer and said ‘we want your business, give us a chance’ and they agreed.”

Clearly, SPG sees huge potential for Genrec and is doing everything it can to re-forge relationships so that quality service delivery can resume.

However, not everything is changing. Genrec has been recognised as a leading industry player for decades and there are elements of the business that will continue to drive this reputation.

“It’s an acceptable norm in commerce and industry that when there is change in leadership, there is some culture shift. The new leadership always comes with their own ethos and idiosyncrasies,” explains Sibeko. “Having said that, there is the old adage which says ‘if it isn’t broken, don’t fix it’ and we agree with that. Elements of this business, like the machining side of

GENREC

things or the fabrication department, remain very competitive, so those things will not be changed.”

NEW PRODUCTS Displaying ambition and enthusiasm for the future of not only Genrec but also South Africa as a whole, SPG has stated that it will install various new offerings into the Genrec stable. Recognising its already sterling portfolio but realising the opportunities for expansion, SPG management is innovative in its approach.

“We have introduced a division called Energy and Transportation which we hope will play in the newly created space following the signing of the independent power producer agreements, where we want to work with windmills, turbines and solar energy,” details Sibeko.

“We have also introduced a mining robotics product offering,” he adds.

“That is going to address specifically issues around mine safety. It is an open secret that around 70 people have died in the mines this year. The robotics that we hope to introduce will go a long way towards decreasing fatalities underground because it will be machines extracting the reef rather than people. Of course, that will have implications around job losses – automation is always associated with people being laid off – but the emphasis is going to be put on creating industries that can improve beneficiation. It is true that with automation, people may be laid off, but we will be creating new jobs in the beneficiation space and other secondary industries.”

POWERFUL BUSINESS Currently, major projects underway at Genrec include those at Kusile and Medupi, where the company has been on site for many years. Medupi and Kusile are flagship projects for Genrec and for South Africa and are recognised as some of the largest construction projects in the southern hemisphere.

Genrec was the lead contractor for all of the site’s steel structures and was also

A PRECISION MANUFACTURING ENGINEERING WORKS. SUPPLYING THE AFRICAN MARKET.

www.mentis.co.za | sales@mentis.co.za Head Office - Johannesburg, 147 North Reef Rd, Activia Park, Elandsfontien Tel: 011 255-3200 | Fax: 011 828 0743

involved in project management, site support, erection planning, boiler unit fabrication and conveyor manufacture.

“At Kusile, we were supposed to have started with the demobilisation process but the latest is that we will only start with that process in December,” admits Sibeko. “At Medupi, we have a partnership with Mitsubishi Hitachi and they have asked us to remain on site as there is still a need for our expertise.

Right now, we have people on site at both power stations and there is a good chance that we will still be on site into the second half of next year at Medupi.”

Upon completion, Genrec will have been one of the most heavily involved contractors in the history of the Medupi and Kusile build and Sibeko is proud of the company’s achievement. He says that today the company remains the industry leader in heavy engineering

for the energy sector and the company has its sights on the pole position across all spaces.

“When it comes to projects in power stations and mines, we retain uncontested industry leader status.

However, when it comes to smaller projects, there is heavy competition. We have had to adjust our own pricing in order to be competitive.”

Demonstrating the company’s ability to quickly and easily move across border, Sibeko highlights recent work in Namibia as some of the company’s most important.

“Another important project for us recently was a bridge construction project in Namibia. It is now completed and everyone is happy. Given the quality of workmanship that went into building that bridge, we believe that will open a host of other opportunities.”

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INDUSTRY FOCUS: ENGINEERING

// IT IS VITAL THAT WE DON’T KILL OUR LOCAL INDUSTRIES AND WE CANNOT ALLOW FOREIGN PLAYERS TO PUSH LOCAL INDUSTRIES OUT OF EXISTENCE // In Africa, Genrec has identified Zimbabwe as a market which holds major opportunity.

“We are very interested in Zimbabwe and the country’s emerging mining industry,” says Sibeko. “With the new dawn in Zimbabwe since the change in leadership, Zimbabwe is now open for business and they are going back and revising legislation that limited investors.

Zimbabwe is now investor friendly and, given their mineral resources, we would like to enter that market.”

Across all of its geographic targets, Genrec will bring expertise in mining, infrastructure, energy, health, education and transportation, and Sibeko says that rail in particular is an interesting industry.

“We are interested in the mining industry as well as the rail infrastructure and rolling stock sector. We hope that this will be a development across the

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length and breadth of Africa – countries such as Mozambique and Angola have a real need for the refurbishment of their rail infrastructure and we are positioned to enter that space.”

STRONG FUTURE Since the acquisition of Genrec by SPG, a future-focus has been instilled by the new leadership team. By recognising the company’s strengths from history, Genrec is positioning itself for a strong future. This steely, experienced, and skilled business is now ready to embrace a new direction as the continent’s go to steel fabrication specialist.

However, there is a large hurdle for the new Genrec to overcome – the unpredictable South African economy.

Recently entering technical recession, the backdrop for Genrec’s rebirth is not pretty, but Sibeko remains confident.

“The many challenges that we have experienced, including downgrading, were a function of the previous administration which weakened good governance at state-owned enterprises, weakened revenue collection capacity at the SARS, weakened the criminal justice system, and marginalised hardworking South Africans,” he says.

“However, with the changes that came in December last year, the tide has started to turn around.

Good governance is now at the top of the priority list with the current administration. We have seen this with changes to the Boards of major parastatals. For me, that shows that the current administration cares about making South Africa an investor-friendly country again. The recently announced recession is a function of all that was bad with the previous administration.

GENREC

The new leadership is striking the right chords, making the right noises for investors, and there seems to be a commitment to turning things around.

South Africa and South Africans are very resilient, and we are confident that things will change for the better.”

As for the local steel industry, a vital component of Genrec’s past success, Sibeko admits that work is needed. “It would be an illusion on my part to say there are no challenges in the local industry but the government is aware of the need for locally manufactured steel,” he says.

He suggests that support from government will be the key to reviving local steel manufacturing and says that as long as locally produced materials are cost-competitive, Genrec will always try and buy SA-made products.

“In the textile industry, there was a set of measures and incentives introduced to encourage people to buy local and we believe the same will happen with steel. It is vital that

we don’t kill our local industries and we cannot allow foreign players to push local industries out of existence.

Given our recent challenges with the economy, the government will respond and we are confident that mechanisms will be put up to mitigate against foreign pricing.”

These short-term challenges, although inconvenient for Genrec, should be easily overcome with the correct intervention. Long-

term, Genrec’s new leadership will undoubtedly drive the business to exciting new heights. Just like it has done for 65 years, this South African institution will continue to build a stronger, tougher and greater country.

WWW.GENREC.CO.ZA

MEET SIMON MKHABELA SIBEKO – GENREC HEAD OF LEGAL, GOVERNANCE, CORPORATE AFFAIRS AND COMPLIANCE “I was previously a lawyer. I’ve been in the public sector, I’ve been in the private sector, I used to work in the mining industry, and I was in a private practice for the past seven years. I joined SPG at the end of March when I was approached and offered the opportunity to be part of an exciting team that wants to awaken a sleeping giant.”

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LEMCO

A Family Affair

That Defined the Steel Industry PRODUCTION: Timothy Reeder

LEMCO is South Africa’s structural steel specialist. It can do anything; any form, any shape and any size that might be required. The sons of its founder, Pieter Laubscher, are at the helm today, and we caught up with Pieter Jnr, who oversees the fabrication facility, to discuss how the current goings on at the company, and how it aims to continue the innovation which has characterised its operations to date. www.enterprise-africa.net / 17

INDUSTRY FOCUS: ENGINEERING

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Pieter Laubscher laid the first LEMCO foundations more than 50 years ago when the nascent Pieter Laubscher Construction began designing and manufacturing steel products and buildings in the Northern Cape of South Africa, at that time primarily catering for the agricultural market which dominates in the area. The rapid and sustained growth that followed paved the way for the junior Laubschers, Andries and Pieter Jnr, to come on board in the industry much further down the line. As Pieter Jnr explains, however, his involvement and emotional investment began long before he officially joined the ranks.

IN ON THE GROUND FLOOR “I was involved in the business from a very young age,” he outlines. “I basically grew up in the workshop so I was always involved in one way or another. I couldn’t have started much earlier; I was first cutting on a lathe when I was about 11 years

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old,” and it must have been easy to predict that these formative years would lead to his full-time participation in the company at a later date.

“I formally joined the business 10 years ago,” he tells us. “Some people say that a family-owned business is more likely to run into challenges or problems than a more corporate organisation, but I believe that it all depends how it is structured. If it is structured correctly then I feel that a familyowned business can work perfectly.”

LEMCO has shown this belief to be absolutely correct as it passes its half-century of operations, which causes Pieter Jnr to reflect on the major changes that he has seen in his own decade as joint-owner.

“I think most notable is that the company has expanded a lot in the past few years, and it was very nice to see it in person. Another key shift is that we have incorporated computer numerical control (CNC) machines more and more, and thus

// IF IT IS STRUCTURED CORRECTLY THEN I FEEL THAT A FAMILYOWNED BUSINESS CAN WORK PERFECTLY // started to target a different market.

This means that, overall, it has changed immensely.”

Using computers to control machine tools results in a process which is far more precise than manual machining, and can be repeated in exactly the same manner over and over again. Because of the precision possible with CNC machining, the production of complex shapes, that would be almost impossible to achieve with manual machining, suddenly becomes achievable.

WORLD CLASS FACILITIES “Upgrading is a big area of investment for us at the moment,”

LEMCO

Pieter Jnr continues, “in order to give our clients a greater range of options - we will shortly be installing a sand blasting machine, for example, so whether people want to smooth a rough surface, roughen a smooth surface, shape a surface or remove surface contaminants, we can help.

“We are always busy with expansions, though, it is a constant process for us,” he asserts. “We are always investing in some form of new equipment or machinery.”

Currently LEMCO’s facilities include over 2000m² of production space, a 400m² painting bay and over 4000 m² of storage yard, and the main facility is equipped to eliminate almost all labour-intensive processes.

Built in 1990, the primary 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. All this combines to allow LEMCO to produce huge amounts of steel for the market.

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INDUSTRY FOCUS: ENGINEERING

“It is a difficult for me to answer, when people ask how much steel we engineer in a month,” is his response to the age-old question as to his production capacity. “I can do more tonnes of steel in one day than in an entire month, for example, if it is heavy type of building that we are working on.

“We do such a huge variety of steel that it differs hugely, too. The most I have done in one week in terms of sheer numbers is 220 tons of steel, but I would say on average, taking into account lighter lattice type of buildings, we get through about 150 tons in a typical month.”

LEMCO’s ability to process quality product in such high volumes

C

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CM

MY

CY

CMY

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// WE ARE ALWAYS INVESTING IN SOME FORM OF NEW EQUIPMENT OR MACHINERY //

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LEMCO

// THE TWO 1000 TON SOLAR POWERED BUILDINGS HAVE REALLY BEEN THE STANDOUT RECENT PROJECTS FOR ME // means that it is more often than not the company of choice for a largescale project. The two phases of the Chalala Pig Farm and the structures which LEMCO provided are just one standout of a portfolio which also numbers warehouses, malls and industrial parks.

TAKING ON SOLAR As it strives to be the very best in the South African market, LEMCO has also identified the growth of the renewable energy market as an especially viable growth area - it was heavily involved in fabricating both the KaXu Solar One and the 346-acre Khi Solar One, the very first solar plant in South Africa.

“The two 1000 ton solar powered buildings have really been the standout recent projects for me,”

underlines Pieter Jnr. Khi Solar One is rumoured to be the first thermal solar tower plant in Africa and the first tower plant to achieve 24 hours of operation with solar energy only.

One of the most difficult aspects for many companies is managing to stay at the forefront of their industry, particularly in one where things move and people are left behind as quickly as this.

LEMCO’s ability to do just that is enviable, according to Pieter Jnr: “We stay ahead through investing heavily back into the company in the form of new technology and skills development.” The right people are of course central to this as well, as he continues.

“If you expand there will always be a place for personnel that is keen to learn and my preferred

way of getting the best staff is to invest in local personnel and skills development, through some of our own projects.”

LEMCO’s commitment to innovation and fervently improving its craft may see it expand outside of the country, and while the manufacturing facility may remain rooted in South Africa, the versatility of the company and the demand for its services will see the LEMCO approach applied in faraway climes.

“I hope that we can expand in future, to allow us to work north of our borders more,” Pieter Jnr concludes. “I feel there is a lot of potential for us and many projects where we could apply all the experience we have gained over the years to exceptional results.”

WWW.LEMCO.CO.ZA

www.enterprise-africa.net / 21

LESEDI

Nuclear Specialists Target

Industry Domination

PRODUCTION: Timothy Reeder

Established in 1984, Lesedi has since positioned itself among the leading engineering, procurement and construction (EPC) and maintenance companies in Africa. Its recent rebranding reflects a long history spent gathering expertise in not only nuclear, but also in industrial power, mining and oil and gas environments. www.enterprise-africa.net / 23

INDUSTRY FOCUS: ENGINEERING

//

Lesedi is an African company whose work spans the power generation, mining and oil and gas industries. It is firmly established as an engineering, project management and maintenance solutions house, and has the capacity to conceptualise, manage, and implement its own engineering projects.

Lesedi was originally founded to provide engineering, recurrent maintenance services and technical resources for the South African nuclear power industry, but has been steadily diversifying over a number of years to become known as a major engineering, procurement and construction (EPC) organisation. The Cape Town-based company today employs more than 300 personnel including qualified engineers, highly experienced project management professionals and technicians all with extensive nuclear and industrial expertise.

KNOWN FOR NUCLEAR Thoughts immediately turn to the nuclear sphere when the Lesedi name is mentioned, and indeed some of its most notable work has been conducted at Eskom’s Koeberg Nuclear Power Plant in the Western Cape. Lesedi has been involved with the Koeberg Power Station for almost 30 years, and has an additional 15 years of experience at global nuclear power stations. The Koeberg plant is famed for being the only facility of its kind on the entire African continent, with the two reactors forming the cornerstone of the South African nuclear program. It supplies in the region of 5% of South Africa’s total electricity needs, and approximately 50% of the electricity demand of the Western Cape.

What is perhaps less well known is that Lesedi has been quietly but steadily broadening its horizons to successfully completing numerous projects in non-nuclear environments too, in large part due to the increasing uncertainty surrounding the nation’s nuclear energy plans. Energy Minister Jeff Radebe

24 / www.enterprise-africa.net

// IT IS IMPERATIVE TO HAVE A BROAD ENERGY MIX WITHIN A COUNTRY // announced at the end of August that South Africa had cancelled plans to add 9,600 MW of nuclear power by 2030, and would instead aim to increase capacity in natural gas, wind and other energy sources.

The expansion plans outlined by Radebe targeted a range of other energy sources, calling for additional capacity of 8,100 MW from wind and 8,100 MW from gas, 5,670 MW from photovoltaic panels, 2,500 MW from hydro and 1,000 MW from coal by 2030.

A NEW ERA BECKONS Lesedi Nuclear Services evolved from Intens Engineering, a company which was founded soon after the construction and commissioning of the Koeberg Nuclear Power Station by Framatome, later becoming AREVA, the renowned global leader in the design and construction of nuclear power plants, in the mid 1980s. Now looking to branch out from a sole focus on nuclear expertise, Lesedi announced earlier this year its intention to completely overhaul and rebrand itself, to become known as a leading contractor in South Africa’s general power generation, mining and oil and gas sectors.

For such a wholesale change to be possible Lesedi has had to diversify its offerings over a period of many years, one of which has been to offer a number of state-of-the-art products and services for a broad range of applications in the industrial and mining environment. Lesedi has also accrued nearly 30 years of expertise in the oil and gas sector, successfully completing projects across Southern Africa since 1990, while its operations maintenance services have helped its clients to protect vital, valuable infrastructure assets and extend their operational life.

Lesedi is also able to execute any

renewable energy projects with existing references in biomass, waste-to-energy, solar, and pumped storage, through its rich and varied expertise in bespoke project delivery, and provides effective solutions for engineering, project management and maintenance services in nuclear, renewable, gas, coal and biomass power generation.

Developing such a broad product and service line does not mean that Lesedi is turning its back on nuclear, though - far from it, details CEO Francis Carruthers. “The nuclear industry is hungry for new projects,” he outlines, “so we should be able to negotiate some good contracts as long as we strike early; if we wait until everybody else picks up on this then we may miss out on these strong commercial deals.

“Nuclear will remain very important - a number of African countries are already looking at it as a vital part of their energy mix. You can’t for example, just rely on geothermal in Kenya, nor can you rely solely on coal in South Africa. It is imperative to have a broad energy mix within a country.”

A BREADTH OF EXPERTISE Lesedi has been making great strides to position itself in new markets and territories for more than a decade now, taking on contracts within both the mining and oil and gas environments as well as the renewable industry. Group business development executive Shane Pereira points out that the company has been in the process of diversifying

// LESEDI OVER THE YEARS HAS DEMONSTRATED THAT LOCAL CONTENT CAN BE ACHIEVED ACROSS THE ENTIRE VALUE CHAIN OF PROJECTS IT’S ENGAGED IN //

INDUSTRY FOCUS: ENGINEERING

since as far back as 2006, embodied by undertaking contracts in the construction of open-cycle gas turbines for Eskom and the Medupi and Kusile power stations, as well as having been involved in biomass and waste-toenergy projects.

“We had a quiet optimism about the nuclear build programme in SA — until recently. About 80% of our revenue is currently non-nuclear,” Pereira reported to BusinessLive in June. “18-months ago we recognised the mining sector as an opportunity for us, specifically focusing on clean air and emissions control. Then a year ago we looked at the oil and gas business and saw opportunity in fuel depots and storage sites.”

Carruthers summed up the change of branding with an insight into the big plans the company has moving forward. “With Lesedi evolving to a firmly established African company, the rebranding of the group reflects its purpose and vision for the future: to be the leading engineering, procurement and construction enterprise recognised for empowering and energising the enrichment of the African continent.”

UPSKILLING IS CRUCIAL At the launch in April this year of the Lesedi Skills Development Academy, in the Western Cape, Trade and Industry Minister Rob Davies described how critical skills development will prove to the South African economy. He explained that the academy had been established in order to address the need of skilled artisans, as well as to close the skills gap in the nuclear and broader energy sector, and their associated industries.

“At all levels of employment, one [needs] to be skilled,” he stated, as reported by Engineering News.

“Government is aware that skills development in the past was limited to the minority and the majority of people had less access, yet it is a critical requirement now for the majority to get jobs.

26 / www.enterprise-africa.net

LESEDI

// THE REBRANDING OF THE GROUP REFLECTS ITS PURPOSE AND VISION FOR THE FUTURE: TO BE THE LEADING ENGINEERING, PROCUREMENT AND CONSTRUCTION ENTERPRISE ON THE CONTINENT // “Every bit counts as a means to address the issue of skills development and unemployment. We, therefore, cannot compromise if we need more people to participate meaningfully in the economy,” Davies added. The skills that the Lesedi academy develops will assist the people in Atlantis to tap into opportunities such as the proposed Atlantis Special Economic Zone, which is expected to be designated by the end of this year.

BIG PARTNERSHIPS One consequence of Lesedi’s gradual widening of its field of expertise has been the scale of the project it has been able to take on, and one of the most

impressive of late has been its partnering with French tracker specialist Exosun to offer the most localised tracking system in the region. Exosun has been steadily expanding its presence on the continent since 2015 and has been active in developing its manufacturing capacity in preparation for upcoming projects in the popular Sub-Saharan region, which last year brought about its first grid-scale project in Namibia. It is this momentum on the continent that led Exosun to expand through this partnership into South Africa.

“After months of extensive research to develop the best strategy in order to benefit our prospects and clients, we have found Lesedi to be a strong

reputable industry stakeholder. Our complementary approach will ensure the success of our customers” said François Ménard, Exosun’s CEO, in a statement.

“Lesedi will deliver the support needed to our customers and will ensure plant design, tracker manufacturing and installation of our single-axis tracker, offering to our customers the highest possible level of local content.

“This is a strategic partnership that will be complementary to Lesedi’s expanding market offerings in the renewable sectors in Africa and we will ensure we achieve the highest degree of local content,” concluded Carruthers.

“Lesedi over the years has demonstrated that local content can be achieved across the entire value chain of projects it’s engaged in and this partnership with Exosun will achieve the same again.”

WWW.LESEDINS.CO.ZA

www.enterprise-africa.net / 27

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.

28 / www.enterprise-africa.net

INDUSTRY FOCUS: ENGINEERING

//

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 countrywide 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

30 / www.enterprise-africa.net

CEO, Nazmi Adams.

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 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

WELDAMAX

// 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 // 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 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

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www.enterprise-africa.net / 31

INDUSTRY FOCUS: ENGINEERING

the distributor and end user markets.

This is building trust with our channel partners.

“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

32 / www.enterprise-africa.net

has been an exciting time working to rebuild the lasting relationships and becoming a leader in the wholesale 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

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Weldamax. However, like many, he is waiting to see how the land lies before committing.

“We are still keenly waiting for

// 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 //

socio political change to materialise and we believe that Zimbabwe will rise quickly. Operating in other neighbouring countries is a big part 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

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INDUSTRY FOCUS: ENGINEERING

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

// 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 // 34 / www.enterprise-africa.net

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.”

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

WELDAMAX

// ULTIMATELY, WE WANT TO BE SEEN AS THE COMPANY THAT PEOPLE CALL IF THEY HAVE A PROBLEM WITH GAS AND WELDING // leading player in the market, and with ongoing strategies in place to boost the company’s reputation across all of 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 black-

owned 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 / 35

WBHO CONSTRUCTION

Spreading Its Reach

Far and Wide

PRODUCTION: Timothy Reeder

Wilson Bayly Holmes-Ovcon (WBHO) Construction is among the largest construction companies in Southern Africa, with decades of experience in major projects spanning Africa, the Middle East and assorted Indian Ocean islands. It has copious large projects ongoing in South Africa, and has recently set its sights on expanding its presence in the UK market and further afield. www.enterprise-africa.net / 37

INDUSTRY FOCUS: CONSTRUCTION

//

Take one look at WBHO Construction’s current project list and you would be hardpressed to believe the extent of the negativity surrounding the industry in South Africa at the present time. The ventures which it has underway range from developments in the building and construction sector to roads and earthworks, passing through civil engineering and the specialist WBHO pipelines arm of the business.

Its all-time highlights include such feats as the enormous 81MW Kathu Solar Farm, a concentrated solar power (CSP) thermal energy power plant, where WBHO commissioned the 340,000 solar panels on schedule required to power up one of the largest present-day solar farms in Africa. WBHO has also completed several significant projects at South Africa’s principal airport, OR Tambo, which handles more than 50% of the country’s air traffic.

These have included construction of a central terminal building, four aprons, rapid exit taxiways, helipad and numerous utility services.

In progress at WBHO, meanwhile,

38 / www.enterprise-africa.net

are the likes of the Sable Park Offices in Cape Town, a development consisting of two towers, each with four levels, totalling approximately 35,300 m2, and the 32 multi-storey Blocks which will comprise the Milkwood Social Housing complex in the Eastern Cape.

AGAINST THE GRAIN WBHO’s relentless pursuit of more varied, impressive and experimental constructions flies in the face of what most consider to be the accepted state of the construction industry as a whole in South Africa at present. In the midst of policy uncertainty, slow economic growth and an underperforming Rand, it has become commonplace not to ask what the state of play is in the industry, but rather to ask quite how bad the situation is, and whether it offers any hope of recovery.

2017 was a particularly challenging year when it came to the health of the field, with a combination of a reduction of skills, budgetary constraints and a desire on the part of the government to divide projects into smaller components in support of emerging black

empowerment-based SMMEs leading to dramatic rationalisation of the industry.

By September 2017, confidence was at its lowest level since the third quarter of 2000, and the slow increase in construction activity, pegged at just 3% year-on-year, and a contraction of around 1% in the value of spending, contributed to poor growth. However, despite the apparent gloom, the past two years haven’t been entirely without reason for optimism.

According to a report by Statistics South Africa, the number of building plans passed in 2016 rose by 6% compared to the previous year, and the total value of newly constructed buildings grew by 8.3%.

It might take some time for the general feeling of negativity and unease to subside, but positive news is starting to filter through more regularly. In 2018, it is forecast that the construction industry can look forward to moderate growth, with the government’s plan to spend more than R940 billion on infrastructure development coming as a welcome announcement. In particular, social housing, renewable

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energy and roads infrastructure projects are expected to sustain growth, while urbanisation and semi-migration are also viewed as drivers of growth. In short, BusinessReport’s confidence that “the [construction] industry is poised to benefit in the medium to long term,”

looks set to prove to be well-placed.

“The commitment by new leaders to focus on growing the economy presents an opportunity to boost the industry,” it continues. “Investor confidence is said to be very high, the highest it has been since 2009.”

// THE COMMITMENT

BY NEW LEADERS TO FOCUS ON GROWING THE ECONOMY PRESENTS AN OPPORTUNITY TO BOOST THE CONSTRUCTION INDUSTRY //

SUSTAINED GROWTH As khplant points out in its 2018 Outlook for SA’s Construction Industry: “the construction industry typically lags the general industry in South Africa by about six months, so any green shoots in the local economy may well be early indicators of a more robust construction sector in the months to come.”

The previous uncertainty in the sector, combined with the delayed reverberations of improved performance, has driven many established companies to explore

40 / www.enterprise-africa.net

the lay of the land in foreign climes, and WBHO has been keen to explore different territories. The origins of the present WBHO group date back to 1970, when Wilson-Holmes (Pty) Ltd was formed by John Wilson and Brian Holmes. A number of mergers followed resulting in the change to Wilson Bayly Holmes (Pty) Limited in 1983, and, finally, to WBHO Construction in 1994. Today the group’s offices are strategically located in Johannesburg, Cape Town, Durban and Port Elizabeth, and to most observers this is a company rooted in its South African heritage.

While this remains true, the local construction market is still undeniably extremely tough, says WBHO CEO Louwtjie Nel, who states that, “our industry is being disseminated in South Africa.” As a consequence, WBHO is calling more and more upon the

WBHO CONSTRUCTION

// STRINGENT BID IDENTIFICATION AND SELECTION, WELL EXECUTED PROJECTS AND CONTAINMENT OF OVERHEAD EXPENDITURE HAVE BEEN PARAMOUNT // opportunities it has grasped in the UK, Australia and wider Africa to continue delivering the strong results for which it is renowned. In September, WBHO was able to report a 9.8% increase in revenue to R35 billion, R1 billion operating profit, up from R780 million in the previous financial year and headline earnings per share of 1,414.6c, up 8.1% from the previous financial year.

FOREIGN OPPORTUNITIES The positive performance was helped greatly by the strong revenue growth brought by Australia, whose contribution increased from 58% to 63%. The revenue contribution from South Africa dropped from 36% to 30%, but the local market still contributed about half the operating profit, and Nel explained that, crucially, the group’s current R54 billion order book is now

well balanced between South Africa, Australia and the UK. The decision to focus its strategy in part on the UK market came as the country presented WBHO with clear growth opportunities. The group said the UK construction market has seen solid progress in recent years, particularly in London and the north west. “The construction environment is similar to that of Australia, with the main contractor fulfilling a construction management role with the different packages of projects being let to subcontractors, and as such was identified as offering the most potential at acceptable levels of risk,” WBHO outlined.

The diversification of its interests allowed WBHO to post encouraging results in spite of low growth, a volatile rand exchange rate and political

events, which have all hampered South African business confidence. “The group delivered a credible set of results this year, where market sentiment in Australia and the United Kingdom was positive, while the local construction environment deteriorated rapidly with a number of large and medium-sized contractors facing financial difficulties,” WBHO concluded.

“Locally, building activity continues to subside which when combined with low levels of public infrastructure spending, has seen a significant decrease in overall activity within the sector. In addition, activity in the group’s targeted markets in the rest of Africa remained relatively stagnant.

Within this climate, stringent bid identification and selection, well executed projects and containment of overhead expenditure have been paramount in delivering profitable results for the overall African business.”

WWW.WBHO.CO.ZA

www.enterprise-africa.net / 41

ROSSLYN HUB

Rosslyn Hub Project

Hits Fast Lane PRODUCTION: Manelesi Dumasi

The development of Gauteng’s Rosslyn Hub project is first step in the growth of the 50-year Tshwane Automotive City. Starting with a residential area, the project will grow to encompass an entire city, dedicated to automotive manufacturing.

Director, Brendan Falkson talks to Enterprise Africa about progress on site.

//

It’s pedal to the metal for Rosslyn Hub, the first stage in the development of South Africa’s Tshwane Automotive City. After five years of planning, this mega project is now moving into the fast lane and is placing the country’s automotive sector in pole position for international investment.

Imagine, Rosslyn Gauteng becoming one of the world’s preeminent auto manufacturing destinations alongside the likes of Toyota City in Japan and

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VW’s Wolfsburg Autostadt in Germany.

The R4.5 billion project to build the first node in the wider Tshwane Auto City development is being started by government, the automotive industry and Big Cedar Property Development.

It is expected to create thousands of jobs over the next 10 years. As the Automotive City is developed over the next 50 years, the economic benefits are set to be enormous.

Upon completion, Rosslyn Hub will be a mixed-use development

consisting of a logistics park and vehicle distribution centre which will have easy access to a new Transnet Rail Hub, fantastic road access, houses, schools and parks, hotels, shopping centres, student accommodation, warehousing any many more facilities for the region’s Automotive OEMs. The whole area will be connected by pedestrian-friendly walkways and cycle paths.

Brendan Falkson, Director of Big Cedar Property Development, tells

INDUSTRY FOCUS: AUTOMOTIVE

Enterprise Africa that work is underway and, so far, going off without hitch.

“There are 800 of 1000 occupied houses and the balance is due to be completed in the next 12 months. The school construction has just started and that will be open in January 2019. It is a Spark School, which is grade R to grade seven primary school, with a strong focus on maths & science with a smart IT driven environment.

“We are busy with detailed design and planning and we are hoping to start on the access road in January – that’s the new important link road known as the K217 which we will be building on behalf of the authorities. The first phase of that is a three-kilometre section of road with a bridge of the PRASA railway line. That first phase must be complete

by November next year because that is when the convenience shopping centre will open. Construction of that shopping centre is due to start in February 2019.

“On site right now is the construction of houses and the school, and behind the scenes we busy with plans for the shopping centre, getting lease agreements signed, and finalising plans with the local authority. Our engineers are also busy getting plans approved for the road.”

// BECAUSE ROSSLYN HUB IS SO CENTRAL TO THE AUTOMOTIVE CITY AND IS BASICALLY THE CATALYTIC DEVELOPMENT FOR THE WHOLE AREA, WE HAVE BEEN WORKING VERY CLOSELY WITH THE CITY OF TSHWANE, THE PROVINCE AND THE AUTOMOTIVE INDUSTRY TO GET US TO WHERE WE ARE NOW // CONGESTED SCHEDULE Work on the first of three phases at the 100-hectare Rosslyn Hub site started in May and since then progress has been non-stop.

“There is a hell of a lot happening,” admits Falkson. “Behind the scenes, we are busy with retail, logistics and industrial. The phase 1 residential development is almost complete, thanks to Cosmopolitan Housing, with Phase 2, including the school, shopping centre and student housing having just started. Then Phase 3, which is exciting from an automotive perspective, is the logistics hub, logistics buildings and vehicle distribution centre, is due to start later next year. We are in detailed discussions with the automotive industry and that is being facilitated by

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the Automotive Industry Development Centre (AIDC). The six main Original Equipment Manufacturers (OEMs) involved are BMW, Nissan, UD Trucks, Iveco, Tata and Ford.”

Current planning activities are centred around the student accommodation for the site which will be built in two phases and allocated to students from MEDUNSA and the Tshwane University of Technology as well as leaners associated with automotive OEMs. The first phase of the student accommodation build will begin in February and when complete, in January 2020, will be available to 1000 students. The second phase will house a further 1500.

“We are waiting to get the drawings approved so we can start construction,” says Falkson. “The second phase will be for students in Rosslyn who are motor industryrelated students. Nissan and BMW need to accommodate around 1500 students each year. They are people who are undertaking apprenticeships, vocational training, after sales service training and a whole range of training.

Sometimes they are short courses but sometimes they can last a full year.”

TSHWANE AUTO CITY South Africa must bring scale to its auto manufacture if it is to compete in global markets. Currently, more than half a million vehicles are produced each year in the country, but this figure is split between many producers of many different types of model.

The big producers must meet certain thresholds to unlock cost efficiencies

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INDUSTRY FOCUS: AUTOMOTIVE

and while BMW and Nissan are already there, an automotive hub would allow major savings for the entire value chain and other players would able to gain economies of scale.

“The good thing about the project is that there is a big vision and the vision is based on other automotive cities that have been built around the world,” says Falkson. “The fact that Rosslyn has such a huge amount of OEMs, the highest concentration of OEMs in Africa, means that the whole industry is realising an automotive city in Tshwane makes sense. It helps each role player create critical mass in terms of their supplier base and logistics.

New shared facilities like the logistics hub we are building will help everyone make their pricing more efficient. With everyone closer together, companies can source products locally and reduce dependency on imports, and the majority of parts used in auto manufacture are imported. It’s all to do with scale. The vision of the auto city will help bring scale and will mean manufacturers can make more cars.”

But could the development of an automotive super region in Gauteng take business and expertise away from companies located in other part of the country - regions with existing automotive centres? Not according

to Falkson who believes that Rosslyn Hub and Tshwane Automotive City will complement the country’s existing network.

“Gauteng has the highest concentration of suppliers to the auto industry and most of the manufacturers operate on a JIT system so we are starting to see the three main auto regions in the country (Rosslyn, Durban and Port Elizabeth) work more closely together,” he says.

“The main focus of the Tshwane Auto City is to get the rail link completely efficient between Durban and Rosslyn as the first link. That means suppliers in Durban can create a much closer link

A VISION FOR AN INTEGRATED SMART CITY DESIGNED FOR PEOPLE TO LIVE, WORK AND PLAY. Boogertman + Partners have designed the masterplan for the Rosslyn City Hub based on the successful examples of leading motor cities like Toyota City in Japan and VWs Wolfsburg Autostadt in Germany. The design of the Rosslyn Hub masterplan provides ease of commuting between work and home along with ease of access to retail outlets, entertainment and lifestyle facilities. To this end a park forms the pedestrian heart of the Rosslyn Hub precinct, connecting all the users and providing solace from the busy industrial and commercial hub. Pedestrian and cycle friendly paths and bridges allow easy alternate ways of moving around the area and bring in green pathways throughout the precinct.

Further emphasis on lifestyle and access are provided by an events centre located within the green space where gatherings and team building events could take place. A vehicle distribution area for this events centre with approximately 4500 parking bays will be located to the north of the park. All the bays will be covered with photo-voltaic panels, generating essential solar energy for lighting in the precinct.

Considering the human scale in the masterplan of the Rosslyn Hub is a demonstration of a central design principle in the work of Boogertman+Partners. The practice is led by a dynamic team of directors who share a vision for innovative and contextually responsible design. The practice believes that architecture and urban design have the ability to generate social, economic and environmental value beyond their immediate parameters, and actively seek to contribute meaningfully to the wellbeing of individuals and each project’s broader context.

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INDUSTRY FOCUS: AUTOMOTIVE

Rosslyn Hub directors, Brendan Falkson, Perfect Mbitshana and Doug Reed are joined by the Mayor of Tshwane, Mr. Solly Msimanga and officials from Nissan SA and the City of Tshwane for the official on site launch

to customers in Rosslyn and vice versa.

If that works, a second link could be put in place between P.E. and Rosslyn.

It’s critical for the whole industry to get logistics right from an efficiency and price point of view.”

The rail link, which has been given the OK by Transnet, would see around 400-500 vehicles transported to Durban’s port for export initially, with that figure expected to grow quickly and sustainably as Rosslyn Hub and Tshwane Auto City progresses.

GLOBALLY CONNECTED ROSSLYN Free movement of products - whether its parts to and from the ports or complete vehicles for export - is essential for the growth of South Africa’s automotive sector. Rosslyn’s road and rail connections combined with the potential of an inland port

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arrangement will undoubtedly create a positive situation for the country’s international OEMs. “The inland port aspect is still being negotiated and it will be the first in South Africa so there is a lot of legislation details that need to be resolved and this means high-level discussions are ongoing. The physical infrastructure is all agreed and we are down to the legal framework around how an inland port would work with in the Transnet model,” explains Falkson.

He is keen to point out that Rosslyn Hub, and Tshwane Auto City, will be developed as smart cities.

Officially defined as ‘an urban area that uses different types of electronic data collection sensors to supply information which is used to manage assets and resources efficiently’, Rosslyn will join the likes of Waterfall

City, Modderfontein New City, Konza Technology City in Kenya and Eko Atlantic in Nigeria as some of the continent’s most ambitious projects.

“We have just returned from the Smart Cities convention in Cape Town and we will soon attend another one in Sandton. There will be many types of smart technology in Rosslyn. The biggest focus for the integrated city is to make sure people live close to work.

Currently, there are long commutes

// IT’S NOW AT ITS MOST EXCITING STAGE AS, AFTER FIVE YEARS OF PAPERWORK AND MEETINGS, THERE IS ACTIVITY ON SITE //

ROSSLYN HUB

// IN AFRICA, INDIVIDUAL CAR OWNERSHIP IS EXPECTED TO INCREASE MORE THAN ANYWHERE ELSE IN THE WORLD AND SOUTH AFRICA IS PERFECTLY LOCATED TO TAKE ADVANTAGE OF THAT // from the townships where the majority of the work force lives to Rosslyn – it can be two or three hours a day. We are creating an integrated city where people can work and live and shop within walking distance,” says Falkson.

The base of the entire city’s smart system will be a modern fibre system, currently being installed.

“We have a very advanced fibre network that is being put down by the biggest fibre operator in the country and the intention is to start rolling out fibre in all types of different format.

There will be very advanced fibre and IoT for the industrial players for things like security, license plate verification, biometrics, and even vehicle tracking.

With this sort of network we could track a vehicle from the time it leaves the BMW plant through to the Durban port and potentially all the way to its final destination.”

But it’s not only smart tech for the benefit the OEMs. Green technology will also be installed to ensure the region becomes as sustainable as possible, and to make the area as ‘liveable’ as possible.

“We are using smart green technology such as solar power and water conservation measures,” details Falkson. “All the roofs are north facing and all have solar panels on, many car ports are solar equipped and that enables us to make use of a lot of solar energy. We also have a lot of pedestrian and cycle friendly routes that make up our combined productive-living city. Because we have an industrial operation of vehicles being made and transported, we also have people having to move around the area on foot or cycle and that is why we have designed extensive

pedestrianised pathways and bridges to create more of an integrated city.”

After meeting with central and regional governments, along with a host of representatives for the automotive industry and the OEMs over the past five years, Falkson is excited about the future of the project.

He calls Africa “the last untapped automotive market in the world” and says that all the big names are now looking at the market on the continent and how they can tap into the growing consumer base.

“There is a big push to start manufacturing vehicles for Africa,” says the Director. “There is a lot of talk about shared rides, electric vehicles and changing vehicle ownership structures, but in Africa, individual car ownership is expected to increase more than anywhere else in the world and South Africa is perfectly located to take advantage of that. The competitive advantage that South Africa has is that it already has a 60-year-old, established automotive industry with a supplier base. That is very difficult to replicate in other African countries. Already, Ford and Nissan are assembling knock down kits for Nigeria and Kenya which don’t attract the tariffs of a full car and that is a model that can be used to significantly grow ownership in north and east Africa. In southern Africa

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INDUSTRY FOCUS: AUTOMOTIVE

there is an opportunity for Rosslyn to make cars for the entire region. This is a major opportunity for South Africa to drive the automotive industry in Africa over the next 20 or 30 years.”

However, creating the beating heart of an entire industry, which is responsible for around 7.5% of a country’s GDP, is no easy feat.

“It’s stressful,” admits Falkson, “but that’s just the nature of development.

We have been busy with this project for five years – it’s not like it has just come up overnight. We have actually owned the land for a lot longer but in the last five years, we’ve been involved with the AIDC discussing plans for the master plan of Tshwane Automotive City which is a much bigger project than Rosslyn Hub. But because Rosslyn Hub is so central to the automotive city and is basically the catalytic

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development for the whole area, we have been working very closely with the city of Tshwane, the province and the automotive industry to get us to where we are now.”

ECONOMIC BRAKES? Even South Africa’s recent dip into technical recession has not slowed the pace of the Rosslyn Hub project.

Thanks to efficient management and

ROSSLYN HUB

a thoroughly-planned strategy, the project remains on course to meet all deadlines and continues to attract international interest.

“The AIDC are in discussions with a number of foreign companies who are looking to move into South Africa and who see the auto city as a perfect home,” says Falkson.

“The project is big enough to skip over micro economic issues. It generates foreign revenue and all of the export contracts are Dollar or Euro based and the weaker the Rand gets, the more competitive our exports become. We haven’t been directly affected by swings in the Rand or political dealings.

“International companies are looking at the country but not looking to supply the country. South Africa is a relatively mature market that is not expected to grow in a big way. The big opportunity is to supply the emerging African market so the economy of the country is not really the concern; it’s the global economy that we are looking at, specifically the African economy.”

On site at Rosslyn, progress is speedy and, importantly, the big automotive OEMs are starting to see a material impact on the ground.

According to Falkson, this is very helpful.

“It’s now at its most exciting stage as, after five years of paperwork and meetings, there is activity on site. It is very rewarding to see something that you’ve worked on for so long come to fruition,” he says. “What is also happening is that the industry is starting to believe in it more. At the

// THIS IS A MAJOR OPPORTUNITY FOR SOUTH AFRICA TO DRIVE THE AUTOMOTIVE INDUSTRY IN AFRICA OVER THE NEXT 20 OR 30 YEARS //

beginning, when you have a master plan, people switch off. We recently had a presentation with Nissan; we were expecting sit in a board room with four or five people but we ended up presenting to 80 of their senior managers at their quarterly management meeting. They came to us and asked for us to get all of the role players in Rosslyn into a board room so that we can explain exactly how emanant this is. Usually, with these major companies, it takes a long time to get through to the CEO but they are now approaching us and asking exciting questions.”

At a community launch event for Rosslyn Hub back in May, more than 800 young people queued to register their names for employment and skills development programmes.

Tshwane Mayor, Solly Msimanga proudly welcomed the launch of the Rosslyn Hub, saying of the project: “We are proud to become the local government administration where this, Africa’s first auto city, is situated.”

Phase 2 of the Rosslyn Hub project is expected to begin in 2020. This is a project that no one can ignore and a project that will, eventually, put Gauteng in the driving seat of the global automotive manufacturing industry.

WWW.ROSSLYNHUB.CO.ZA

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MAXION WHEELS

Another Example of SA

Automotive Excellence PRODUCTION: Karl Pietersen

Maxion Wheels has an exciting future on the road ahead as it gears up to open a new facility and becomes the leading supplier to one of the world’s great automotive manufacturers. A long and varied story, and a hand in almost every innovation of the wheel in history, this is a company that is a true industry leader.

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INDUSTRY FOCUS: AUTOMOTIVE

//

South Africa’s automotive sector is of vital importance to the country’s ailing economy. Reports suggest that more than 900,000 people are employed, directly and indirectly, by the industry which contributes more than R250 billion to annual GDP figures. But now, with South Africa once again facing technical recession, the country cannot afford to let this valuable and significant sector slide the way of mining and manufacturing which seem to have taken a downward route from which there is no return.

This is why South Africa needs industry-leading organisations to step

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// THE LAST SIX YEARS BEEN REALLY GOOD, AND WE HAVE SEEN A REAL TURN AROUND // up and promote the excellence that the country has become known for.

Fortunately, there are many examples and there is a lot of work under way to attract more international organisations to South Africa so that big businesses can take advantage of the growing automotive market across the continent.

One company that has been in South Africa for decades is Maxion Wheels (a division of IOCHPE-MAXION S.A.). Headquartered in Michigan, USA and Ladestraße, Germany, Maxion

Wheels is globally renowned for the manufacture of top-quality products for almost all of the worldwide vehicle original equipment manufacturers (OEMs). The company we see today is the result of mergers and acquisitions from the past century, and this amalgamation of skills from all of the organisations make for a powerhouse corporate business.

As the global Maxion Wheels business celebrates 110 years of success, its South African subsidiary is looking

MAXION WHEELS

forward to a bright future with many exciting projects in the pipeline.

Located just south of Johannesburg’s central hub, Maxion’s South African factory has been in existence since 1965.

The factory was initially focused on the manufacture of aluminium wheels (established as NF-Die) but today is able to produce a range of aluminium, steel and various other products for light, heavy and agricultural vehicles.

Milos Despotovic is the Plant Manager in Johannesburg and he tells Enterprise Africa that as well as entering into exciting new partnerships with global manufacturers based in SA, the company is also planning a new facility for East London and is looking at increasing its export drive.

“The last six years been really good, and we have seen a real turn around,” he says. “We have increased capacity to meet demand in general, and we are exporting to Europe (UK and Czech Republic) as well as servicing the local market. Our factory is up to 320 staff and we are discussing a new plant in East London.

“We are also set to become the sole supplier to BMW in South Africa and that is something which we are extremely proud of.”

QUALITY PRODUCTS BMW is one of Maxion Wheels largest clients in South Africa and the two companies share global presence. It is the goal of Maxion to live by its motto of “No matter where a Maxion wheel is made, it’s made exactly right” and its 28 locations worldwide are all capable of delivering international quality.

In South Africa, BMW announced last year a R160 million facelift at its Rosslyn plant in order to begin production of the new X3 model and take capacity beyond 75,000 units each year. Along with new high-tech robotic production aids, BMW SA announced that it would also export the X3 model

to Germany, Belgium, Italy, Austria, Portugal, Malta, Sweden, France, Greece, Croatia, Slovenia, Denmark, the United Kingdom and Spain.

Maxion Wheels has brokered a deal with BMW to become the sole supplier in South Africa, helping to drive growth of the business. This will help drive traffic through the company’s planned

new facility in East London.

Globally, Maxion Wheels continues to expand its operations by opening new facilities. In India, the company committed $50 million opening a new, two million per year, 25,000 m2 wheel manufacturing centre which will create another 1000 jobs to add to the company’s global workforce of more than 10,000.

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www.enterprise-africa.net / 55

INDUSTRY FOCUS: AUTOMOTIVE

// MAXION WHEELS IS COMMITTED TO SERVING ITS CUSTOMERS’ GROWING DEMAND FOR LIGHT VEHICLE ALUMINIUM WHEELS // “Maxion Wheels is committed to serving its customers’ growing demand for light vehicle aluminium wheels, especially in India where market growth is outpacing available capacity. We’ve been in India for more than 20 years, providing original equipment manufacturers with light and commercial vehicle steel wheels. We’re pleased to satisfy

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our global customers’ growing request that we bring our recognised global aluminium wheel expertise to India, and we are excited about the opportunity our new plant will afford us to strengthen our global footprint and strategically expand our presence in the region,” said Chief Executive Officer of Maxion Wheels, Pieter Klinkers.

INTERNATIONAL RECOGNITION The vote of confidence in Maxion delivered by BMW in South Africa is not unique for the company. Globally, Maxion Wheels is recognised as the industry leader and one of the founding players in the wheel industry. That is why almost all of the major automotive names around the world trust Maxion to deliver what is required.

In June, Maxion was lauded for its partnership with Michelin where the two companies picked up the 2018 CLEPA Innovation Award for Cooperation. CLEPA is the European Association of Automotive Suppliers

MAXION WHEELS

and said the Maxion and Michelin partnership, where the two companies developed the ACORUS Flexible Wheel, was a meeting of two pioneers.

“The automotive industry is undergoing a major transformation and collaboration is key to success in this fast-moving business environment,” said Klinkers. “It not only strengthens and accelerates innovation, it enhances our knowledge and expertise. The ACORUS Flexible Wheel is the result of two global leaders pooling their knowhow to deploy the MICHELIN ACORUS Technology into an innovative product for the passenger car market.”

Introduced at the IAA Cars 2017 in Frankfurt, Germany, the ACORUS Flexible Wheel is a newly designed wheel-tire combination built to withstand tough road conditions and keep drivers and passengers safe. The patented new technology incorporates two flexible rubber flanges mounted on a special wheel body to create a flexible wheel that improves driving comfort and absorbs impacts from potholes and curbs.

ALWAYS DRIVING FORWARD Next on the agenda for Maxion Wheels at global level is to continue developing relationships with its valued clients and constantly innovating to ensure its product range remains competitive and reliable.

In South Africa, with its upcoming investment plans set to solidify its position in a competitive market, the focus for the company will be on

// THE AUTOMOTIVE INDUSTRY IS UNDERGOING A MAJOR TRANSFORMATION AND COLLABORATION IS KEY TO SUCCESS IN THIS FAST-MOVING BUSINESS ENVIRONMENT //

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ensuring the wider automotive industry receives the attention it needs to attract further international investment.

The goal for South Africa’s automotive industry is to grow its contribution to meet 1% of the world’s demand for vehicles, and of course this has a knock-on effect on suppliers of components. Currently, the country delivers around 0.6% of global supply and has to compete with North Africa for the title of the Africa’s biggest automotive industry. At the beginning of October, it was announced that Morocco had surpassed South Africa as the continent’s largest automotive exporter and Morocco’s government has announced its ambition to exceed MAD 100 billion (more than $10 billion) in export sales by 2020. South Africa has responded by releasing details of a proposed automotive code of conduct

which would change the way the local vehicle ownership structure is set up, allowing for more competition in the spare parts and servicing industry.

“If we want an economy that is creating jobs, then we really have to support Small to Medium Enterprises (SMEs), such as the thousands of independent workshops scattered across the country,” said Filum Ho, Managing Director at Autoboys and vice Chairman of the Right to Repair campaign.

Whatever happens, it is likely that Maxion Wheels will remain an undoubted industry leader and, it’s ever-present South African division will continue to deliver on its international reputation for reliability.

WWW.MAXIONWHEELS.COM

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UNIPLATE

Never Underestimate

the Power of the Number Plate PRODUCTION: William Denstone

Number plates have never known such importance in South Africa, and Uniplate has been the market leading license plate company south of the equator in Africa for the past 58 years. Its solutions have recently been bolstered in a big way, too, with both Falcon Signage Solutions and iPlate joining the Group’s development and manufacture of securitised tracking technology. www.enterprise-africa.net / 59

INDUSTRY FOCUS: MANUFACTURING

//

Number plates are one of those products which are so ubiquitous, so indispensable, that they have become almost invisible; everyone knows they need one, and most recognise their importance. All vehicles are required to have two number plates, except for motor cycles which only require a single plate at the back, and the fines for motorists not complying with this rule can be extremely costly.

All South African motorists will also soon be proudly sporting a brand-new set of plates, as part of the Department of Transport’s strategy to standardise number plates in the country. The rollout and associated laws will form part of the National Road Traffic Act as well as the South African National

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Standard for number plates. On the rationale behind this overhaul, The Department of Transport commented that, “the security features of the number plates are part of the broad road safety strategy, which will ensure that we have the right vehicles on our roads.”

UNIQUE OFFERINGS This spells good news for Uniplate, the largest securitised licence plate company in Southern Africa, headquartered in Johannesburg and with its factory in Pretoria.

Established in 1957, Uniplate has been the market leader for the past 58 years, offering customers customised solutions to enable the licence plate to be the one true defining, instantly identifiable feature

of South African cars.

Uniplate has long prided itself on being an example of an innovative player in the industry, capable of offering the industry a comprehensive and professional service, which was only furthered by a 2009 merger with Utsch Toennjes International Group (UTI). This is a company operative in over 100 countries, one which sets out to revolutionise vehicle registrations on a global scale and is able to do so; it has more than 20 locations across five continents, and a management cohort drawing on many decades of global market knowledge.

The partnership enables Uniplate to continue to be the leader in security licence plates, while giving rise to new business segments

UNIPLATE

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www.rennicks.com such as vehicle registration services and identification solutions, two increasingly lucrative segments of this market. Since the coming together, Devandran Naicker, Uniplate Managing Director, describes how the company has been able to set itself even further apart. “Driving the industry forward as we do, with many technological advancements relating to security and crime prevention, we pride ourselves on being ‘outside the box’ thinkers, offering the industry a truly professional service.

// OUR UNIQUE POSITION IN THE INDUSTRY IS THAT WE ARE AN INTEGRATOR OF SOLUTIONS //

“Our unique position in the industry is that we are an integrator of solutions,” Naicker continues.

“We have taken a stance on number plates that is very different from other companies out there.” Uniplate’s modern factory in Pretoria has given it the infrastructure to be a world class manufacturing facility capable of producing acrylic, PET and aluminium blanks for use in assembling a completed license plate.

MORE THAN A PIECE OF METAL Uniplate offers a broad and evergrowing portfolio of identification and securitisation products, among them Radio-frequency identification (RFID) enabled number plates and wind shield label solutions, as well as verification options for smartphones based on digitally encrypted QR codes.

Such products are then employed in

a range of applications; for tracing fleet vehicles, access control or even automated toll road services.

“It’s a very different and more dynamic type of product offering than simply a number plate industry,” describes Naicker, as he goes on to outline how Uniplate is changing the global perception of the number plate as a piece of metal or plastic.

“We are rebranding it - especially in the African context - as a passport for your vehicle, to such an extent that you can secure, manage and control it in accordance with the relevant Government control and security behind it.” The description of a vehicle’s license plate as its ‘passport’ is wholly apt: it is an official document and acts as the primary regulatory identifier of a vehicle.

According to the Number Plate Association of South Africa (NAZA),

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INDUSTRY FOCUS: MANUFACTURING

“number plates play a key role in identifying vehicles in South Africa,� and the most recent crime statistics released by the South African Police Service speak even more loudly as to this importance. Again among the headline figures was the persistent danger for road users when it comes to the threat of hijacking. While an overall 12% drop in vehicle-related crime points to some improvement, car and truck hijacking nonetheless continues to be a major scourge on South African roads with 16,325 carjackings and 1,202 truck hijackings reported for a total of 17,527 in the period recorded.

STRONG ACQUISITIONS The type of advice put forth by the likes of wheels24 can offer a good

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// NUMBER PLATES PLAY A KEY ROLE IN IDENTIFYING VEHICLES IN SOUTH AFRICA // starting point in avoiding becoming a victim of these crimes; placing all valuable items out of sight, ensuring windows and doors are closed and locked before leaving and carefully planning the route before departure can all help prevent the ordeal.

However, the figures show that sometimes even the most careful preparation may not be enough, and companies like Uniplate, and its recently acquired subsidiaries Falcon Signage Supplies and iPlate, are becoming more and more vital in keeping South African motorists safe and secure. iPlate was founded in 2016 and,

like Uniplate, has partnered with UTI as both companies seek to improve service and expand industry reach.

Its goal is to bring customers unique high-quality technology and security solutions for the management, tracking and improved security of movable assets. Falcon completes the Uniplate Holdings trio, and boasts the most comprehensive range of quality signage supplies in the Southern African region. It has gained renown for bringing new and inventive products to its evergrowing base of customers.

Individually the three companies each offer their own strengths as

UNIPLATE

// IT IS ONLY THROUGH INNOVATIONS SUCH AS LPR THAT WE ARE ABLE TO STAY ONE STEP AHEAD OF CRIMINAL ACTIVITY WITHIN OUR FOOTPRINT // leaders of their particular niche, and combine to keep up with the growing number of vehicles on South African roads, and the requirements that have to be met by registration and identification systems as a result. Secure and unique identification of vehicles makes automated traffic

surveillance possible, and has a key role in preventing criminal offences such as theft and hi-jacking.

Fidelity ADT was in the news for its implementation of one of foremost safety methods to feature in the coming years, with state-of-the-art Licence Plate Recognition (LPR) cameras in the Mariannhill Park community geared toward ensuring the safety of the public.

“The LPR cameras make use of smart analytics by collecting and analysing data. The insightful system gathers knowledge of its environment by analysing behaviour that occurs in its viewing,” explained Fidelity ADT district community development manager, Rian Buys, to News24.

“This information is then matched

to the SAPS national database to detect suspicious or stolen vehicles.”

Mariannhill Park Neighbourhood Watch chairman Brian Mills summed up the impact this initiative will have, both locally and more widely. “It is only through innovations such as LPR that we are able to stay one step ahead of criminal activity within our footprint. I would like to encourage all residents to support the service provider as these LPR cameras can make a huge difference to the safety of our community.”

WWW.UNIPLATE.CO.ZA

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FALKE EUROSOCKS

FALKE Running With

World’s Best PRODUCTION: Manelesi Dumasi

FALKE Eurosocks continues to fly the flag for South Africa as a truly world-class manufacturing operation. Its products reach global markets and are widely respected as the finest quality available. CEO Martin Grobbelaar talks again to Enterprise Africa about how the company draws on the skill of its people to maintain its industry-leading spot.

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INDUSTRY FOCUS: MANUFACTURING

//

A very South African fashion manufacturing operation, Cape Town’s FALKE Eurosocks is one of the country’s truly worldclass organisations. Everything in this business is top quality – from the equipment in the factory to the design and creative ideas, to the knowledge and skill of its people – you cannot get better, anywhere in the world. And because of this superior set up, FALKE’s South African products can be found in international markets including the USA, Europe, Australia and New Zealand, the Far East and nations across the African continent.

Back in November 2016, Enterprise Africa spoke to FALKE’s CEO in South Africa, Martin Grobbelaar and asked what was making the company so successful and how it had become stitched into the local Cape Town fabric.

He said that backing from Germany, a local understanding, and above all, a fantastic workforce is what was driving the business. Originally founded in Schmallenberg, Germany in 1895, FALKE began in South Africa in 1974 and since then the people within the business have become more and more valuable.

“Like in most businesses, people are the only asset that actually increase

in value over time – all other assets depreciate,” says Grobbelaar.

His focus on sustainable people development has helped build the FALKE personnel base to more than 450 in Cape Town, and each employee is heavily invested in contributing to the success of the business.

“Most of our people do not travel to our export markets so we try and make the success we achieve real for them. Our managers and sales teams travel regularly and we ask them to share their experiences with everyone in the factory so that they know they are the ones who are responsible for our

SAMIL Natural Fibres (PTY) LTD SAMIL Natural Fibres (PTY) LTD is an innovative South African Mohair Company that specialises in the production and processing of natural fibres as well as speciality spun yarns. Valuing collaboration with communities, and the environment in which we operate, we strive for sustainability of our industry through rendering viable services, products and customer relations.

Starting as a greasy Mohair Buying House in 1961 SAMIL was established in its current form in 1991 with the main shareholding being held in Switzerland. With group companies involved in activities as diverse as farming to the retail industry, SAMIL’S Chairman soon recognised the need to establish ties with other interested parties in the South African, and SAMIL have now established partnerships in various facets of the industry.

The need to become involved in the upliftment and education of the largely rural communities closely involved in the industry, was one of the early priorities and while Local Authorities and the Government assisted in securing land, SAMIL’S involvement was the accusation of Angora Goats as well as an undertaking to purchase all hair produced by the projects. Socks knitted from hair produced at one of the first projects “HARDWOOD” are now available in various outlets as well as “THE MILL SHOP” one of SAMIL’S associate companies, reflects the success of the initiative.

The expertise that the SAMIL gained in this initial venture into the spinning of sock yarns has been invaluable and we are now suppliers of yarns to some of the leading sock knitters in the world. Striving at all times to supply not only high-quality yarns but also to deliver the best service has assisted in SAMIL’s growth in this market.

SAMIL are open to any “quirky” request todays demanding and growing sock knitting market might have and would be willing to try and develop and deliver natural fibre yarns of blends and colours that would allow the knitter to push further push the boundaries in supplying the sport, outdoor and fashion markets.

Through the entire chain of farming, processing, spinning, dyeing, weaving, knitting and retail, SAMIL’S vision is to showcase the Angora Goat Industry of South Africa and to entrench Mohair as a fibre of choice in the global textile industry.

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Switzerland

Alpha Tops SA

+41 22 344 0940

+41 22 345 0108

mail@alphatops.ch

South Africa

SAMIL Natural Fibres (P ty) Ltd

+27 41 486 2430

+27 41 486 2665

sales@samil.co.za

Italy, Biella

Alvigini Fibre Nobili s.r.l unipersonale +39 015 34 444

+39 015 34 447

alvigini@noblefibres.it

Italy, Prato

Meucci + C

+39 0574 64 32 40

+39 0574 64 32 42

valerio@meucci.biz

China, Cashmere

Alpha Tops, Beijing Office

+86 10 8945 1188

+86 10 8945 1155

chris@alphatops.cn

+89 651 258 327 870

+89 951 258 327 872

howard@noblefibres.com

China, Alpaca/Mohair Noblefibres Imp. & Exp. Co.

INDUSTRY FOCUS: MANUFACTURING

success. Our people are proud of their products that keeps them driven, every single day,” says Grobbelaar.

SPORT & FASHION In 2016, FALKE was going through something of a transformation, expanding its product range to incorporate more fashion lines to complement its already strong sports collection. Lots of research and development went into the expansion, and Grobbelaar says that it is paying off.

“It’s part of the long-term strategy for the business and it’s so far so good.

We’ve grown our fashion market by around 25% in the past 12-months. That is primarily in the local market but we have had some encouraging growth in some of our export markets as well, especially New Zealand,” he says.

Currently, FALKE manufactures fashion ranges under three main categories; elegant, smart casual and leisure.

68 / www.enterprise-africa.net

How has the company managed to achieve such success over a relatively short period? The CEO puts it down to clever marketing combined with brilliant products.

“It is product driven, making sure we offer the right products for the consumer in a particular market,” he says, “but there is also a big drive in terms of brand exposure. Marketing and communicating exactly what the brand is about and what we stand for is very important and that is why we are trying to establish an emotional connection with the consumers from a brand point of view. Our marketing team have and still are doing an excellent job in achieving this” But movement to incorporate fashion as well as sport will not be a precursor to a total diversification strategy. Grobbelaar reminds that FALKE is a sock brand and he says that it plans to focus on its core offering for the foreseeable.

// IT’S PART OF THE LONG-TERM STRATEGY FOR THE BUSINESS AND IT’S SO FAR SO GOOD. WE’VE GROWN OUR FASHION MARKET BY AROUND 25% IN THE PAST 12-MONTHS // “Our philosophy is that we should concentrate on what we know we are good at. With the whole FALKE international business over the past 120 years, we believe we are good at what we do and should stay focussed on being market leaders in this category.

We feel we are the sock guys and, because there are experts in every other category, we have no plans to diversifying at this stage.”

FALKE EUROSOCKS

BOOMING DEMAND Currently, FALKE produces between seven and eight million pairs of socks each year. Both local and export markets are desperate for the products coming out of the company’s Belville plant. In South Africa, FALKE’s target market are those individuals that appreciate quality brands and products, aiming its efforts specifically at those with disposable income available.

“There is a huge disparity between the middle class and the man on the street in South Africa,” says Grobbelaar. “the lower segments of the market are dominated by cheap imported products therefore we aim our brand at the top 5% of income earners as that is where we feel we can make a difference.”

Growth in export volumes have been a real positive for FALKE through the past year. Previously, the company was active in the USA but had minimal exposure to other global markets. But now, FALKE’s socks reach an almost worldwide marketplace.

“The US market has been very good and has been growing exponentially for us over the past 10-months. We have grown in New Zealand by around 80% in that last 12-months. We launched into Australia in February and, like when attacking any new market, the first 12-18 months are tough as we build a retail footprint.

Our guys have done a really good job and landed a number of retailers and so we are very excited about our

opportunities there. We do export to Europe and that market is slow but there is major potential. We are also exporting into the Far East – that is a very small market for us now as we only recently started but we are excited about prospects there. We also remain very interested in growing opportunities on the African continent,” explains Grobbelaar.

WRITING ITS OWN FUTURE Although FALKE is sitting pretty right now, with strong products demand, brilliant facilities and people, and a trusted and respected brand, Grobbelaar says business is not easy.

The manufacturing industry in South Africa, especially textiles, has faced a

// OUR BRAND IS CENTRED AROUND QUALITY AND INNOVATION SO FOR US TO BE ABLE TO INNOVATE WE HAVE TO ENSURE WE HAVE THE BEST SKILLS, STATE-OF-THE-ART EQUIPMENT AND STATE-OF-THE-ART RAW MATERIALS //

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INDUSTRY FOCUS: MANUFACTURING

sustained decline and only innovators and industry leaders are still able to operate effectively.

“Like with any manufacturing environment, you always have challenges,” he admits. “We are very fortunate that there is a huge growing demand for what we do. The challenges we do face are all within our own control and that is a nice problem to have. We can’t complain about demand; we are struggling to service that demand at this stage and that is not a bad place to be.”

Asked about the impact of a slow local economy with an unpredictable short-term future, Grobbelaar says that FALKE’s focus on the top end of the market allows it to somewhat hurdle challenges.

“Retail in South Africa is struggling but if you look at the higher tiers of the market, retail is doing extremely

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well. The lower-commodity end of the market has struggled but that is not our market,” he says.

One challenge that was partly out of the control of FALKE was the recent water crisis that enveloped the Western Cape. The widely-reported drought caused problems for so many different companies across a range of different industries, but in typical FALKE fashion, the challenge was faced head on.

“Water was very short in supply and not of good quality so we installed our own water treatment plant where we use ground water and put it through a filtration plant so that we are less of a drain on the municipal water grid. At this stage, we are largely independent of that grid. It was a big investment and it took up some of the funds we had earmarked for a solar energy project,” explains Grobbelaar.

Infrastructurally, FALKE invests

5% of its revenue every year into new equipment. This has been a longstanding strategy and has helped the company to remain at the industry’s sharp end so will continue.

“Investment into equipment is never-ending,” confirms Grobbelaar.

“Our brand is centred around quality and innovation so for us to be able to innovate we have to ensure we have the best skills, state-of-the-art equipment and state-of-the-art raw materials.”

But investment into new equipment and machinery does not automatically result in a production output increase. Rather, FALKE will look at adding value to its existing product range, continuing to bring the best of the best to its customers.

“I don’t think overall volume will increase that much. What will increase will be the level of product

FALKE EUROSOCKS

// WE LEAD THE WAY IN QUALITY OF PRODUCT BUT WE HAVE A LOT OF WORK TO DO WITH MARKET SHARE // we produce, meaning more high-tech products but at the same volumes.

Currently, we are almost full on our site and it’s difficult to expand further. Our expansion involves us replacing old equipment with newer, more advanced equipment which is more energy efficient and more efficient in terms of output. Overall, volumes will remain in the same band for at least the next 12-months but we are focussing on a higher-level of product that can demand a higher price point.”

STILL ROOM TO IMPROVE As a world class player in its market and an industry leader across all of the regions it serves, you might think that FALKE has achieved its vision and can afford to sit back and look at what has been a mighty successful 44 years in South Africa. But that is not the case; Grobbelaar suggests that new targets are always being sought and progress is constant.

“Our goals constantly shift,” he says.

“As we get close to achieving one, we set another so it is an exciting environment to come to every day. Personally, l look forward to arriving here each day and it is a business which is driven by its people.

Without our people, we would not exist and seeing everyone’s commitment and passion is a big driver. Even through challenging economic times, that is what has kept us going and helped us to expand in the way we have.”

The company’s expansion has been so impressive, it seems as though there is not much more that can be achieved, but the ever-ambitious Grobbelaar states that the desire to be the leaders in every market it plays in will continue to drive the business.

“I don’t think we have achieved it yet, we still have a lot of work to do.

In the South African market, we are the leaders but in our export markets, which are a lot bigger than South Africa, we lead the way in quality of product but we have a lot of work to do with market share. However, we are very confident we can achieve our goals there,” he concludes.

WWW.FALKE.CO.ZA

www.enterprise-africa.net / 71

ALLIGATOR

30 Years of Growth

in Cape Town for Alligator PRODUCTION: David Napier

From its factory in Cape Town, family-run custom marketing merchandise specialist, Alligator, is producing promotional and retail products for clients worldwide. Its reputation for quality products and service has seen it rise to the top of its industry, so Enterprise Africa speaks to Managing Director, Stephen Marks about how Alligator can continue growing.

//

Cape Town’s Alligator, a custom product specialist, is the perfect example of how to grow a family business to become a big name with international reach.

Founded in 1954 as a factory which manufactured cooler bags for a single customer, the five-employee business remained stagnant for decades before being acquired by R.J.S Marks, a local entrepreneur with dreams of building a family business that could have a real impact on its customer’s operations.

He purchased Alligator in 1988 and quickly went about diversifying the product and service portfolio. His son Anthony joined him in the beginning

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before brothers Stephen and Gavin, both Chartered Accountants, joined in 1993 and 1996 respectively followed

by Sandy Naidoo who joined in 2008, bringing a wealth of experience in the corporate and promotional market, becoming an integral part of the management team based in the Johannesburg office. Today, the three brothers together with Sandy, and an exceptionally strong senior management team, direct every aspect of Alligator’s business and are hands on business owners.

We ask Managing Director, Stephen Marks, to explain more about how the business has changed from

when the family became involved.

“Today the company is a totally different business and is focused on both importing of finished bespoke product for the corporate promotional industry as well as the retail industry,” he says. “The product range is hugely diverse and we have forged many significant relationships from some of the best suppliers in the world across a diverse range of products including bags, caps, clothing, stainless steel products, tech products, key rings, packaging products and many more.

We still have the factory which employs approximately 150 staff and we have a total staff compliment of about 250.

INDUSTRY FOCUS: MARKETING

Today, our range of services includes concept and design, manufacturing of bags and beach umbrellas, sourcing of products worldwide, warehousing and distribution nationally and internationally, hosting of on-line E-shops for our branch orientated customers, and on-line sales and marketing directly to the public and all business operators.”

FULL SOLUTION This is not simply a branding company or a product design agency. Alligator’s input forms part of carefully planned

marketing strategies. More and more companies are realising the potential that corporate promotional branding can achieve. Being able to communicate directly with your clients, being able to deliver a specific message in an inventive and novel way – marketing is changing and promotional products and experiential marketing are key drivers in this revolution.

The stats don’t lie; a study by the Promotional Products Association International (PPAI) undertaken during 2016/17 showed that six out of 10 consumers keep promotional products

Managing Director, Stephen Marks

74 / www.enterprise-africa.net

with them for up to two years, 85% of people do business with the advertiser after receiving a promotional item, 89% of consumers can recall the advertiser even two years after receiving a promotional product, and 63% of consumers give away their promotional products when not needed.

But how do you make the most of this type of marketing? How can you make promotional products and retail items work for your company, contributing to brand and business development? First and foremost, it pays to partner with an expert and one of South Africa’s leaders in the creation of brand experiences is Alligator. Marks details more about key contract-wins.

“One of our biggest achievements was the winning of the 1995 Rugby World Cup licence to supply a range of bags to the public. Nelson Mandela had just been released from prison and that created a state of euphoria and hope in South Africa. Securing this licence meant gearing up our factory and an introduction to direct importing to cope with the huge demand for our product.

“More recently” he continues, “our engagement with lean manufacturing consultants to help improve our factory performance and at the same time uplifting staff and offering them individual growth within the factory environment is a real milestone. This has been an extremely successful programme and it’s wonderful to see how much the staff have bought into the concept of lean manufacturing which has opened the door to a lot of self-improvement for all staff and improvement in production efficiencies.”

Today, Alligator calls a number of highly-recognisable brands its clients including BMW, SAB (now AB InBev), DHL, Distell, Discovery, Investec and SuperSport, to name just a few.

Distribution of promotional products, especially those that are carefully designed and expertly manufactured, provides many benefits including low-cost effective marketing, instant brand recognition, extensive

ALLIGATOR

// I GUESS I AM THE ETERNAL OPTIMIST AND HAVE BELIEF IN OUR COUNTRY AND OUR PEOPLE // brand exposure, customer loyalty, and improved referral rates.

“Our goal is to offer all our customers a one stop, full solution for promoting their brands and maintaining brand integrity,” says Marks. “Our ‘full solution’ offering spans the entire supply chain and includes product concept, design and development, production, quality control, warehousing, distribution and finally the means to host your own online shop and e-catalogue. Our reporting and management systems keep you well informed on details such as stock levels, top selling items, repeat customers and so much more. Our reports can also be tailor-made to meet your specific requirements.”

AMBITIOUS EXPANSION Although the Marks family has been involved with Alligator for 30 years, the focus on development of the business has never slowed. The three entrepreneurs are always pushing for more, and current plans to expand include bigger premises, more tech, bigger product range, and a focus on geographic growth.

“The industry has changed significantly over the years.

Competition has grown out of improved technology and the industry has become one measured by service, quality of product and creativity,” says Stephen Marks.

“We will be investing in more technologically advanced machinery to improve product quality in the factory; we will be investing in more local resources i.e. job creation to better service customer requirements; we will be developing our own range of

proudly South African manufactured items to offer the market; and we will be taking note of BBBEE requirements and addressing them to the best of our ability,” he adds.

And when it comes to new geographic markets, sub-Saharan Africa will be the first target. Alligator has already set up a ‘cross border team’ to break into new markets and progress is imminent. The company also has strong international ambitions to further its export programme.

Currently, the 1600 m2 facility in Epping Cape Town incorporates both manufacturing and branding operations producing more than 500,000 units annually and this could grow if deals are done in new markets.

Marks says that finding the most costeffective way to market the business (potentially through trade shows

or presentations to multi-national customers) could help to drive growth.

“We also never forget about our responsibility to the people of South Africa hence much investment in resources for the manufacturing side of our business to meet international standards of manufacturing as well as ethical sourcing of product,” he says.

And the manufacturing sector needs all the help it can get. After a difficult few years, the industry in SA is now known as one in decline so much so that President Ramaphosa recently announced a R50 billion stimulus package to revive agriculture and manufacturing specifically. This followed news that South African manufacturing activity posted its worst reading in 13 months in August, according to the PMI (purchasing managers’ index). Currently,

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www.enterprise-africa.net / 75

INDUSTRY FOCUS: MARKETING

manufacturing is responsible for around 13% of the country’s GDP but it shed 105,000 jobs in the three months through June. Combine this with the news of technical recession and you realise backdrop is disturbing.

While the situation is worrying for those in the industry, Alligator has been positioned to overcome short-term challenges and remains

// WE WILL BE INVESTING IN MORE TECHNOLOGICALLY ADVANCED MACHINERY TO IMPROVE PRODUCT QUALITY IN THE FACTORY // 76 / www.enterprise-africa.net

positive about the future with plans for ongoing growth.

“I guess I am the eternal optimist and have belief in our country and our people,” admits Marks.

“While we may be in a technical recession, I believe we have the right leader who will address corruption, particularly in state-owned enterprises, which should encourage foreign investment and lead to growth. SA is a commodity rich country but cannot solely rely on this. We need to improve our manufacturing industry and focus on industries such as tourism which will create jobs. Job creation is the key, hence Alligator’s commitment to growth in our own factory. The key to job creation is the education of our children hence this is where Alligator focuses its social responsibility initiatives e.g. donating of schoolbags

to schools in previously disadvantaged communities.”

Of course, exchange rates are of major concern to Alligator as an importer. But, again, the company has a plan to mitigate against the effects of regular currency pricing fluctuations.

“We want to grow the export side of our business which means striving for a world-class manufacturing facility to produce a range of products that can be marketed worldwide. We are already doing this,” says Marks.

“Another strategy is to remain dedicated and focused on those issues which will provide stability and growth in SA - namely, a commitment to education and job creation being the pillars of stability and growth, resulting in a strong and stable currency. We can only play our own small part here and trust the rest of SA plays theirs,” he adds.

ALLIGATOR

COMPETITIVE EDGE Alligator has proven its ability to supply major corporations with a comprehensive range of products and provide end-to-end merchandising solutions, and this is reflected in its trophy cabinet where awards sit from the likes of SAB (now AB InBev), recognising the company as the supplier of the year. Alligator’s commitment to fair labour practices, health and safety in the workplace as well as social and ethical business practices has earned the company a SMETA 4-pillar audit accreditation from Sedex. Asked about the most important element in his burgeoning business, Marks is sure that people are fundamental.

“Human capital resources and experience is key in this industry,” he says. “Staff need to be empowered

// HAVING DONE THIS FOR 30 YEARS AND STILL HAVING THE PASSION FOR WHAT WE DO, GIVES ALLIGATOR THAT COMPETITIVE EDGE // to grow and take on responsibility.

Experience is required to understand a customer’s needs and the market they are trying to attract. Experience is understanding product development and finding that balance between quality and price. Having done this for 30 years and still having the passion for what we do gives Alligator that competitive edge.”

The growth that Alligator has achieved to date is a fantastic achievement for a business that started out as not much more than a vision for a family-run operation. And, now under second-generation Marks family

leadership, the journey continues.

“The long-term vision is to maintain steady year-on-year growth by continuing to provide great product at competitive prices, whilst providing a safe and secure environment for all staff to work and grow,” Stephen Marks concludes.

WWW.ALLIGATOR.CO.ZA

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HOMECHOICE

HomeChoice Announces

Strong Results and Growth Against Tough Backdrop

PRODUCTION: David Napier

Leading South African home retail business, HomeChoice, is continuing to grow in this, a purple patch for the historic company. HomeChoice recently released another strong set of results for the period ending 30 June 2018 and CEO, Shirley Maltz told Enterprise Africa more about what is keeping the company ahead of the rest. www.enterprise-africa.net / 79

INDUSTRY FOCUS: RETAIL

//

Picture a perfect environment for a retail business – would it include extraordinary unemployment levels, technical recession, record-high fuel prices, unprecedented VAT increases, and a soft Rand versus the Dollar? Probably not, but that is the reality for today’s retail businesses in South Africa.

Consumers are feeling the pressure, there’s no doubt about that. And for retailers that distribute products around the country, there is stiff competition with prices under pressure as cheaper alternatives are imported from around the world.

But never fear; now is not the time for a total capitulation of retail (like what is beginning on some highstreets in Europe). Even in these challenging and changing times, South Africa’s retailers are embracing transformation

HomeChoice Delivers Strong Growth – Highlights for period ending 30 June 2018: •

Revenue up 16.1% to R1.5 billion

•

Retail sales up 18.9% to R856 million

•

Loan disbursements up 30.0% to R853 million

•

Credit extended on digital channels up 54.7% to 39.1% of all credit

•

Cash generated from operations up 37.9% to R240 million

•

Headline earnings per share up 14.7% to 250 cents

•

Interim dividend up 15.9% to 95 cents

•

Customer base up 5.0% to 836 000

and continuing to thrive.

A good example comes from HomeChoice, one of the leading

75 Bofors Circle, Epping 2, Goodwood, Cape Town, 7560 PO Box 311, Eppingdust, Goodwood, Cape Town, 7475

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80 / www.enterprise-africa.net

providers of innovative retail and financial services products to a growing female mass market customer base across southern Africa.

This is a retailer that has shunned the recent negativity emerging from the retail sector and the wider economy, and has set its sights firmly on growth. Since its establishment back in 1985, HomeChoice has been an ever-growing business. Through its history, the company has performed incredibly. Overcoming a difficult period in the early 00s, this is an organisation that has achieved major success thanks to an unwavering focus on its core customer. HomeChoice has adopted a strategy which sees it invest heavily in research to understand its customer – who she is, where she is, what she is like, what her life entails, and what she wants.

Today, she is officially recognised as female, usually a mother, in the mass-middle market (75% LSM 4-8), earning around R10,000 a month, between 30 and 60 years old, living in South Africa’s urban areas, and utilising digital channels (specifically mobile) for shopping.

“When talking about our customer segment, people forget about the informal economy and that is absolutely massive. There are

HOMECHOICE

NRB_Sept 2018_HalfPG Ad_CHOSEN PR.indd 1

micro enterprises that only exist in the township suburbs,” HomeChoice SA CEO, Shirley Maltz tells Enterprise Africa.

“You can speak to some of the wealthier people in this country and they might be down in the mouth, but our customer is positive.”

Thanks to this deep connection with the customer, JSE-listed HomeChoice has managed to deliver another set of excellent results for the year ending 30 June 2018.

9/21/2018 3:34:08 PM

STRONG NUMBERS Headline earnings increased by 16.1% to R260 million and HEPS increased by 14.7% to 249.6 cents, continuing its growth trajectory and pleasingly ahead of the five-year annual compound growth in HEPS of 13.2%.

“I’m happy with how we are trading but times are tough in South Africa, make no mistake,” said Maltz.

“Despite the current challenging retail environment, we are seeing the

// DESPITE THE CURRENT CHALLENGING RETAIL ENVIRONMENT, WE ARE SEEING THE BENEFIT OF OUR CONTINUOUS INVESTMENT INTO IMPROVING OUR CUSTOMER EXPERIENCE AND ACCELERATING OUR DIGITAL TRANSFORMATION //

benefit of our continuous investment into improving our customer experience and accelerating our digital transformation. Credit extended via digital channels increased by 54.7% to R792 million and now accounts for 39.1% of total credit,” she said of the results.

“Pleasingly, we continue to acquire more than 20,000 new customers per month, contributing to continued growth in our customer base,” she added.

The numbers were positive with group revenue growth substantially outperforming its peer market, increasing by 16.1% to R1.5 billion.

Retail sales increased by 18.9% and financial service offering, FinChoice, achieving a 30% increase in loan disbursements. Operating profit increased by 14.4% to R374 million.

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INDUSTRY FOCUS: RETAIL

OMNI CHANNEL BUSINESS HomeChoice, unlike many retailers, has embraced the digital age and continues to invest heavily in digital capabilities to take its retail and financial services to consumers in the most efficient manner.

Traditionally, HomeChoice is a direct

marketing business, with roots in mailorder and catalogue distribution, but today mobile communication is one of its most important channels.

“For the last three years, digital has been our fastest growing channel at around 45% growth in our retail

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business. Our call centres support our digital strategy.

“People are time pressed and they want to shop online – it’s easier than going to the high-street. Our competitors who thought that digital would never be a thing in South Africa are now waking up to the fact that it is, and they are all implementing digital strategies,” said Maltz.

“We have made notable progress in our transformation to a digital department store. Customer engagement through digital, especially mobi channels is growing rapidly, with 60% of retail digital sales from mobile phones.

“We will continue to position ourselves as a leading digital partner in the mass market, with an omni channel offering that provides an attractive and seamless retailing experience across all channels,” she added.

Digital connections with customers have been particularly important for the company’s financial services operations, where revenue grew by 13% and EBITDA by 15.9%.

“FinChoice is a rapidly-growing FinTech platform,” said Maltz. “Our customers are highly engaged on the platforms; of all loan transactions in the period, 78% were concluded digitally, one-third outside of normal trading hours.

“We have entered the insurance market and we are comfortable with how that is trading. It’s exciting to be

HOMECHOICE

developing female-specific insurance products and that is our main new vertical. Our financial services business is also launching value added services for our customer base.”

Combine this digital success with the opening of the company’s showrooms in various locations around South Africa and you quickly realise how firm HomeChoice’s grip is on the market. The company recently opened its newest showroom in East London on the corner of Caxton and Buffalo Streets.

“From the exclusive bedding collections that have made us famous, to our range of trusted appliances, cookware, furniture, and fashion, the new showroom offers customers an enhanced shopping experience in an exciting 1200m² space,” said HomeChoice.

The company’s flagship showroom will open on Rissik Street in

Johannesburg later in the year but the intention is for showrooms to support the company’s omni channel strategy rather than creating a ‘bricks and mortar’ network. The new showrooms will act as another connection between HomeChoice and its customers, and will help feed orders into the new R37 million state-of-the-art distribution centre in Gauteng.

“A lot of retailers are used to opening stores, but we are not. If you look at our heritage, we are a direct marketing business. What that meant is that we were used to a distant relationship with our customer. She would call us or mail us, and we would then delivery the product. We are now an omni channel business but our heritage reflects a digital business.

“We’ve always had a centralised warehouse and that is one of the things that retailers struggle with. Sometimes,

when they pick a product, they won’t be choosing one product for one customer.

They’ll choose thousands of products to be distributed around hundreds of stores. We are not set up like that, we prefer a one-on-one relationship with the customer,” said Maltz.

VERY SOUTH AFRICAN How does HomeChoice understand its customer so well and connect with her on such a meaningful level? A lot of work goes into it, but the fact that the business is South African to the core is very helpful. Yes, HomeChoice is active in other southern African markets, and is planning further expansion in Africa when the time is right, but this is a truly South African business, based in South Africa, founded by South Africans, serving South Africans, and employing more than 1600 local people.

Maltz tells Enterprise Africa more

TM

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INDUSTRY FOCUS: RETAIL

about the company’s founding: “Our founder, Rick Garratt, had some direct marketing businesses previously in South Africa, the UK, Australia and Germany. He returned back to South Africa in 1985 and set up HomeChoice as a direct marketing company through an insert in the newspaper. He had three partners and they put an insert into the newspaper, selling cast iron pots and pans. They waited for the responses and nothing came back.

They were devastated.

“Eventually, someone came to them and said they had a PO Box full of replies for the advert and the team realised they had put the wrong PO Box address on the ad.

“Despite this mishap, the business grew from there and we still have some employees from 1985 in the business today which is amazing.

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// WE WILL CONTINUE TO POSITION OURSELVES AS A LEADING DIGITAL PARTNER IN THE MASS MARKET, WITH AN OMNI CHANNEL OFFERING THAT PROVIDES AN ATTRACTIVE AND SEAMLESS RETAILING EXPERIENCE ACROSS ALL CHANNELS // Soon after beginning, they launched bedding and that is now the heritage of the business and our biggest category representing 65% of our sales.

We now have our own sub-brands for bedding. We are going to be building on our branded strategy.

“We were one of the first companies to offer credit to mass-market women in the 1980s during apartheid.”

Since then, HomeChoice has gone on to become a retail pioneer, establishing a number of firsts in the

regional market.

“We set up our first call centre so that we could speak to the customer in 1994. We also launched our delivery network in 1996 as a CSI project.

We wanted a delivery network to bring products to our customers but delivering into a township suburb is much more complex than delivering anywhere else. We decided we must have people who understood township areas, the risks involved and the address complexities. We helped set up small

HOMECHOICE

Sheraton Textiles is a 99 year old household textile manufacturing company with facilities in Cape Town and Pietermaritzburg (in KwaZulu-Natal), and a chain of retail factory outlets in the Western Cape.

Sheraton Textiles is the supplier of choice to major hospitality groups as well as the largest supplier of luxury linen to the country’s major retail chains.

The Company continues to focus on developing world class manufacturing capabilities, with strategic focus on key product and design development, including an industry leading embroidery plant which is recognized as the largest facility of its kind in South Africa.

Fabrics are sourced for the group from both local and overseas suppliers, and undergo meticulous quality control and testing procedures prior to manufacturing.

Sheraton has positioned itself as an innovative & design centric business inspired by international trends.

www.sheraton.co.za

businesses to make up our delivery network and we now have people who have 30 employees and earn R10 million each year. The average driving business is earning around R1.5 million and they are trained in many aspects of business management. It has been a hugely successful initiative for us and has helped everyone involved as they now have self-sustaining businesses,” says Maltz.

The company launched its first website in 1997 and followed this with a listing on the JSE before investing in a new 200,000 m3 distribution centre in Cape Town in 2000.

“In 2007, we set up the micro loans business, FinChoice and we opened a 1000 seat call centre in 2015,” says Maltz.

One milestone in particular stands out for the CEO, the formation of the HomeChoice Development

Trust which has spent more than R19 million and raised donations of more than R20 million on early childhood development.

“We set up as an NGO 13 years ago.

We donate 1% of our profits to the trust every year and they own just under 1% of the business, receiving dividend flow. We looked at our customers and asked where she would want us to spend the money and we decided to focus on early childhood development.

There are no state pre-schools in South Africa and we focus on early childhood development because our customers work. We try to set up schools and get them registered formally. To date, we have supported around 270 schools and put 15,000 children through those schools,” says Maltz.

One thing is for sure, in the retail environment, service is now a key

differentiator. HomeChoice’s investment into an omni channel strategy will help launch its superior service levels even further into the spotlight. The increasing number of touchpoints, where the customer and retailer meet (whether real or digital) mean that HomeChoice is becoming more involved in her life. and this in turn fuels that ever-growing understanding of what she wants, where she wants it, and how she wants it.

Even in these difficult times, HomeChoice remains a clear front runner in retail and acts as an example to follow for others looking to succeed in this highly challenging industry.

WWW.HOMECHOICE.CO.ZA

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ZEBEDIELA CITRUS

Zebediela Targets

Double Production

in Next Two Years PRODUCTION: David Napier

The Zebediela Citrus farm in Limpopo produces some of South Africa’s best tasting fruits but despite this, as a business, the farm had lost its way. But following a big investment in 2017, Zebediela is very much alive and kicking, and looking to regain former status as the biggest and best producer in the country.

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INDUSTRY FOCUS: AGRICULTURE

//

The once mighty Zebediela Citrus farm in South Africa’s Limpopo Province is going through a revival period as it looks to regain its reputation as one of the southern hemisphere’s most important fruit producers.

Previously, the Zebediela business was known as one which could grow one orange for every eight people in the world. It was heralded as the southern hemisphere’s largest citrus growing farm, but its legacy was sour and tainted. Originally, the business was founded in 1918 but was eventually taken over by the Apartheid government through the ARDC (Agricultural and Rural Development Corporation). Following the dawn of the new South Africa under Nelson Mandela, a plan was put in place to give the farm back to the local community, close to Polokwane, allowing for all to participate in the success of Zebediela, but things again failed to prosper. The local community was not equipped to run a business of such scale. As well as administration and finance struggles,

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// WE ARE PLANNING TO TARGET THE EU IN THE NEXT SEASON. WE ARE ALSO VERY STRONG IN THE MIDDLE EAST AND RUSSIA – THESE ARE KEY MARKETS FOR US. WE PLAN TO GROW INTO CANADA IN THIS COMING SEASON // the farm was also neglected with incorrect citrus trees planted, poor management of irrigation systems, and low yields effecting ability to deliver on international export orders.

Unfortunately, the Zebediela case went down as an example of how not to carry out land restitution.

But the desire from the local community to make their land work for them was never questioned and after years of difficulty, hope finally came through a cash injection from a new partner, Russia’s Eight Mile Investments, headed by CEO Evgueny Zakharov, who holds an eight-year lease on the farm.

Reportedly worth R100 million, the lifeline handed out by the Russian investors has helped Zebediela to keep

jobs and obtain financial stability. The deal saw land owners receive R2.5 million in annual rent payment and a 50% profit share. The investors also made between R60 million and R90 million available in running capital.

On the ground, the impact was felt immediately when eight new John Deere tractors, worth R500,000 each, were delivered.

Today, the operation is a growing concern. With 250 permanent staff and 800 seasonal workers, Zebediela is a vital part of the local community and the wider South African export programme. The Bjatladi community (which is around 2000 members strong) is now promising a return to maximum capacity at the farm and expansion into

ZEBEDIELA CITRUS

new product ranges to satisfy the needs of its local and international clientele.

Enterprise Africa speaks to General Manager, Kobus Swanepoel about how this citrus giant is awakening.

SUSTAINABLE GROWTH “At this stage, the relationship is working well and there is strong support for the community from Eight Mile, who also support other projects in the region,” he says.

“The farm is 4300 hectares big and we are now cultivating around 800 hectares so there is a lot of space for us to work on. Currently we are farming 750 hectares of citrus and 156 hectares of macadamia nuts. We are expanding into passion fruit and other products.”

Asked if more land around the farm will be purchased to accommodate a growing demand for the region’s

product, Swanepoel says Zebediela is home to more than enough space for current requirements.

“We have enough land here” he says, “we have 2500 hectares laying here ready to be developed so the plan is to develop 200 hectares per year.”

Currently, the plan for the future is to completely revamp the farm by taking out old, small yielding trees and replacing them with high-yield, highly productive plants to ensure maximum production. Some of the trees on site are more than 30 years old and experts usually agree that the productive life for a citrus tree is no more than 25 years.

Alongside its famous citrus, the Bjatladi community is also looking to plant soya bean and corn plants on adjacent farms to help diversify its offering.

“It is a plan for the future,” admits Swanepoel. “We are going to plant

other, new fruits before we de-bush the land and start to replant citrus. On our other farm, we are planning 400 acres of soya bean and corn.”

International demand for these products is strong and the region already has a proven track record with these crops so planting of new products seems like the perfect growth strategy.

SUCCESS IS SWEET Currently, Zebediela is gearing up for its next export push. This will include delivering products to markets all over the world including some parts of the EU, the Middle East, Russia and Canada.

The business had been restricted when exporting to Europe after not following protocols around spraying but since Eight Mile’s involvement, European export is now firmly back on the agenda.

However, the company still battles with

provento

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INDUSTRY FOCUS: AGRICULTURE

// THE TASTE IS JUST BETTER, I’M NOT SURE EXACTLY WHY, PERHAPS IT’S THE SOIL, PERHAPS IT’S THE CLIMATE, IT’S SWEETER THAN THE REST OF THE COUNTRY AND WE ARE HAPPY ABOUT THAT // the infamous citrus blackspot which has been troublesome for a range of SAbased citrus exporters for some time.

“We are still limited in the EU because of the blackspot but I think that should be overcome soon so we are planning to target the EU in the next season. We are also very strong in the Middle East and Russia – these are key markets for us. We plan to grow

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into Canada in this coming season.

Zebediela Farm has not exported to Canada before but we adjusted our export strategy so that we can get into that market,” says the GM. One differentiator that sets Zebediela apart from the rest of the country’s producers is its superior taste.

“This is something you get only from Zebediela – it’s a much sweeter

orange and the local market is keen on it. We offload a lot of oranges here in the local market as people are happy to buy. The taste is just better, I’m not sure exactly why, perhaps it’s the soil, perhaps it’s the climate, it’s sweeter than the rest of the country and we are happy about that,” explains Swanepoel.

DOUBLE TIME While the current set up at Zebediela is stable and largely positive, Swanepoel reminds that challenges remain, and these will have to be carefully navigated if the business is to achieve its vision of doubling production in the next two years.

“We are keen on achieving that target but there are factors that could

ZEBEDIELA CITRUS

hold us back,” he says, “first is water.

We are in the middle of an extended drought and our dams are empty.

We are currently only irrigating from boreholes. Hopefully, we will have a strong rainy season and then we will be able to expand. The second challenge is the demand for new citrus trees from the nursery. Currently, there is a three to four year waiting list. We are on that list and we have managed to purchase around 400 hectares of tree which are in the nursery now.”

Of course, the lack of rain has been of real concern to those at Zebediela.

Swanepoel confirms that if the dams don’t develop and the boreholes dry out, the business will have to look at

reducing production and taking out the least productive orchards first. “It’s a big problem for us and that is why we pray for rain. But we do believe we will get the water we need,” he says.

Away from water and acquisition of new trees, Zebediela is also faced with a weak local economy but this of course presents opportunities for the export arm of the business.

“It has been quite difficult, especially with the fuel price and the Rand-Dollar exchange rate. However, the weaker Rand has helped us with our export income,” says Swanepoel.

Through all the past challenges and the bittersweet events that have characterised Zebediela over the years,

now seems to be the time when this 100-year old business will start to fulfil its potential. Swanepoel reports that negativity is a thing of the past and the focus on the farm in Limpopo is definitely on the opportunities that lay ahead.

“We have to be positive; there are concerns in the country but we are in a good position, everything on the farm is positive and everybody is working for each other. There’s no doubt that there is a positive spirit on the farm right now,” he concludes.

+27 15 642 3101

www.enterprise-africa.net / 91

CLIENTÈLE

SA’s Most Reliable & Valued

Financial Services Partner PRODUCTION: Karl Pietersen

Leading SA insurance business, Clientèle, is continuing to deliver for its customers, offering the best products and service in the industry. Its growth strategy includes new products and improved service, and its core principle of Treating Customers Well remains at the heart of everything it does.

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INDUSTRY FOCUS: INSURANCE

//

Back in April 2017, Enterprise Africa spoke to one of South Africa’s biggest life insurance providers, Clientèle, about the company’s remarkable ongoing success in a competitive industry and challenging economic climate. The award-winning company was reaping the rewards of focusing on quality service, and was picking up new clients thanks to a driven sales operation and a clever marketing strategy. As the first insurance company in South Africa to utilise a multimedia strategy, including a telesales department and television advertising with recognised SA personalities, the company boomed and is now widely regarded as an industry leader.

When speaking to us in 2017, Clientèle’s Group Managing Director

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// AS OUR NAME IMPLIES, WE ARE NOTHING WITHOUT OUR VALUED CLIENTS // Basil Reekie said that “2016 was tough for the industry, however, we have been performing well over the last few years and have no doubt that we will continue to do so into the future.”

Fortunately, the positivity has continued for Clientèle and the company is continuing to aggressively target growth.

The recently published Condensed Preliminary Group Results for the year ended 30 June 2018 detailed, net insurance premiums increasing by 11% to R2.1 billion, value of new business of R448 million, and return on average shareholders’ interest of 48%.

While Clientèle labels these figures

only ‘acceptable’, it is clear that a very turbulent economic situation has impacted on the growth of all major companies and continuation of positive performance is an achievement. How has the company managed to continue on such a pleasing journey? By investing in exciting new initiatives that will prove beneficial to customers.

SWITCH2 The perfect example of this came at the end of 2017 when Clientèle announced the acquisition of Switch2, an innovative credit life company that focuses on providing South African consumers with a wide range of credit life cover at a

CLIENTÈLE

fraction of the cost, compared to that of competing insurers.

Established in October 2016, based in Belville between Cape Town and Stellenbosch, Switch2 has been growing steadily. After the NCA (National Credit Act) capped charges on new hire purchase or loan agreements to R4.50 per R1000, customers quickly began to realise savings.

Clientèle describes Switch2 as a company “in their infancy and management will monitor their progress closely.”

“When consumers realise how much they can save, they are really keen to switch,” said Sasha Knott, CEO of Switch2. “We have a really active call centre, but we realised that we needed further investment into the business in order to grow and take our business to the next level.”

The nature of Switch2 and the culture that exists was perfect for Clientèle, with a strict focus on quality product and first-class customer service.

“We are excited to welcome Switch2 to our stable,” said Iain Hume, Group Financial Director at Clientèle. “We are always looking for ways to broaden our services to the consumer, and credit life is one of the areas we want to expand, so Switch2 is a natural fit.”

ESTATE PRESERVATION PLAN In March, Clientèle launched one of its newest products, the Clientèle Estate Preservation Plan. This move came in response to market demands after it became apparent that winding up an Estate or transferring an Estate, as per wishes of a Will, is becoming increasingly difficult in South Africa.

Clientèle is already big in funeral,

hospital and life cover and provides a range of highly competitive products in each of those spheres.

According to stats from FISA (Fiduciary Institute South Africa), only an estimated 23% of Estates have Wills and 70% of Estates suffer liquidity constraints that impact the timeous and effective winding up. These stats spurred the development of the Clientèle Estate Preservation Plan which reduces the risks for your heirs when your estate is being wound up.

The cover includes benefits related to immediate cash needs, administrative costs, executor’s fees and minor debtors, as well as financial assistance to cover monthly expenses.

Basil Reekie said Clientèle was extremely proud of the product. “A tremendous amount of work has gone into preparing this ground-breaking

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INDUSTRY FOCUS: INSURANCE

product. This is a new market for us and we are very excited about it.

Intermediary Brokers are going to be a new key stakeholder for us and we look forward to forging strong relationships with them. Safeguarding our clients’ world with compassion will remain our top priority and the Estate Preservation Plan truly embodies this.”

Bart Wouters, Head of Distribution, Estate Division, Clientèle Life said: “The Estate Preservation Plan is a unique offering which provides a vital link between the Client, Fiduciary Specialists and Financial Advisors, as all parties involved are aligned in terms of their interests.

This plan, combined with a first to

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market online underwriting capability, is dedicated to assisting Financial Advisors. Meaning that Clientèle Life is well positioned to enhance the value proposition to clients.”

SERVICE, ABOVE ALL Clientèle lives by a vision of being ‘South Africa’s most reliable and valued financial services partner’, and this is of course unachievable without an unwavering dedication towards effective communication and customer service.

The work that Clientèle puts into this was commended in June when the Long-Term Insurance Ombudsman announced that the company was

among the highest ranking when it comes to complaint resolution.

While no company likes to admit that it receives complaints, it is a cold fact of business that at some point it will happen, and that is when the best are sorted from the rest. Poor complaint handling can result in damage to reputation and alienation of customers while positive responses can drive customer loyalty and act as excellent marketing tools. In the financial services industry, where products are intangible, it really is service that separates industry leaders from the pack.

Clientèle sticks to a very clear mantra of Treating Customers Well (TCW), and 84.3% of the company’s decisions were

CLIENTÈLE

Basil Reekie - Clientele Group Managing Director

// WE HAVE BEEN WORKING VERY HARD TO ENSURE CLIENT SATISFACTION AT EVERY POINT IN THE CLIENT EXPERIENCE FROM THE MOMENT THAT A POLICY IS SOLD UNTIL THE CLIENT CLAIMS AND BEYOND // upheld by the Ombud in 2017, which is the second highest amongst all major long-term insurers.

“As our name implies, we are nothing without our valued clients.

Thank you for allowing us to safeguard your world with compassion. Our quest to improve our service will never end,” said Reekie.

Henry Dladla, Clientèle Client Services Executive, added: “We have been working very hard to ensure client satisfaction at every point in the client experience from the moment that a policy is sold until the client claims and beyond. The success that we have achieved in handling queries is the result of the combined efforts of multiple

teams in Clientèle and a corporate culture that strongly emphasises customer service. Our clients have multiple channels to escalate any queries and this ensures that we make the best possible decision.”

Clientèle promises to ‘safeguard your world with compassion’, and despite challenging economic conditions and a short-term future that remains unclear for South Africa, this is a company that has always, and will always, stick to its principles and put its clients first – truly an example to follow for all in the industry.

WWW.CLIENTELE.CO.ZA

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CAVMONT BANK

Cavmont’s Customer Service

to the Core PRODUCTION: Manelesi Dumasi

Zambia’s Cavmont Bank is one of the country’s leading financial institutions and is helping to solve the problem of financial inclusion which has been a crippling factor in economic development for some time. With new branches, new products and a ceaseless focus on customer service excellence, the bank continues to grow every year. www.enterprise-africa.net / 99

INDUSTRY FOCUS: FINANCE

//

On Monday October 1, international customer service week kicked off.

Started in 1984 in the US by the International Customer Service Association (ICSA), the week-long celebration takes place annually during the first full week in October when customer-oriented organisations and institutions around the world recognise the importance of customer service excellence to their success.

In Zambia, one organisation that fully embraced customer service week was Cavmont Bank. The commercial bank with a national presence, owned

by Capricorn Investment Holdings and listed on the Lusaka Stock Exchange (LuSE), announced that it was ready to do more to ensure its clients receive excellence every time they connect with the bank.

// ANY SERIOUS BUSINESS OWNER, AND ANY SERIOUS ORGANISATION, MUST INVEST IN CUSTOMER SERVICE // Back in July 2017, Enterprise Africa spoke to Cavmont Bank and former-CEO, Charles Carey about how the company was building on its already quality reputation. He said that by investing in new people, new infrastructure, and new services the company would grow to deliver the same level of service that would expect to receive when walking into a bank branch anywhere in the world.

Today, that focus on customer service remains, and Cavmont Bank continues to invest time, effort and money into ensuring its customers receive all the help and support they need so that they can become promoters for the brand.

CUSTOMER SERVICE IS KEY Ackim Thole, Branch Administrator at Cavmont’s Makumbi Branch recently shared his idea of service excellence: “For me, excellence means meeting the customer’s expectation more efficiently and effectively.

My customers should expect from me the best service, meeting their expectations in a timely manner.”

Ingrid Mwansa, Cavmont’s Customer Service Manager reiterated the importance of the company’s customer service strategy: “Sometimes people think that customer service seems to be an easy thing and people sometimes look down on it. They find that people

ATMs essential as 9 out of 10 payments are still in cash There are only 10.9 ATMs for every 100 000 adults in Zambia* – a relatively low number in comparison to some of the country’s neighbours. In addition, recent research** shows that more than 90% of payments in emerging markets are still cash-based. This means that the machines have to work hard and offer real reliability.

“Consumers are comfortable with cash – it’s universally trusted and accepted; it’s anonymous and quick to handover,” says Wayne Abramson, CEO of ATM Solutions, the proud and reliable ATM partner of Cavmont Bank.

“This is why the ATM remains an important tool for financial empowerment across Zambia, and the rest of Africa.”

ATM Solutions was founded in 2000 to provide consumers with easier access to their cash, and now owns and operates a network of over 5 600 ATMs across sub-Saharan Africa and Eastern Europe. The company understands the markets in which it operates and provides solutions to match needs.

“Our main business objective is to connect people to their money, and businesses to their customers,” says Abramson. “ATMs don’t just benefit consumers, there is substantial benefit for retailers too,” he says. Research shows that up to 40% of cash withdrawn in-store is spent in-store. In addition, retailers can cash their machines from their tills, saving on cash deposit fees, and merchants earn transaction fees on all transactions.

ATM Solutions is proud to partner with Cavmont Bank in Zambia to extend their ATM footprint – both in their branches and in retail locations, making it easier for their customers and consumers in general, to have access to safe, convenient ATMs at which to transact. *Flux trends report: The end of cash, 2017 ** World Bank 2015 figures

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CAVMONT BANK

working in the corridors of power think that what a customer service advisor does is not that important.

But I do believe that the most important people in any organisation are the front-line colleagues.

“They are the first touch point for any customer and their interaction determines whether the customer will turn into a loyal customer and become an advocate, talking about us positively to other potential customers, and

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EnterpriseAfrica_2018_70mmx100mm.indd 1

27/09/2018 12:38:07 PM

improving my profitability.

“Any serious business owner, and any serious organisation, must invest in customer service. If you want your business to grow you must invest in customer service and you must invest in your people.

You must have a strategy from the top to bottom where everyone is customer-oriented. Everybody in the organisation must know about the product you are selling.

“At Cavmont, we train our agents to take accountability for their clients and then to recognise issues that can be solved very quickly. If any issue cannot be solved, we must explain to the customer the problem and ensure the enquiry is passed to someone who can deal with it. Just passing to someone else with the hope that they will be able to deal with it is not acceptable.”

This approached was recognised in 2106 and 2017 when the company claimed two Global Banking and Finance Review Magazine awards for Best Retail Bank in Zambia and Best Customer Service Bank in Zambia.

Last year, the company was underway with a strategy to open six new branches to ensure its reach was felt in all corners of the country, whether high-street Lusaka or in rural southern and eastern regions.

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INDUSTRY FOCUS: FINANCE

NEW PRODUCTS Quality customer service has also been shining through as the bank has listened to its community and introduced new products including unsecured personal loans with a higher value than ever before, and a special mobile banking system, Touch and Go (TAG), that allows Cavmont customers to pay bills, transfer money and check a balance.

“At Cavmont Bank, you can now borrow up to K150,000 unsecured, no more K50,000 limit. We have increased our limits and that means, as long as you bank with Cavmont Bank and you have steady income to your account every month, you can apply for up to K150,000. Of course, there are terms and conditions. It doesn’t mean you have to borrow

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// INVESTMENT IN CUSTOMER SERVICE REALLY IS CRUCIAL. THE RETURNS ARE VERY BIG BUT THE LOSSES ARE EVEN BIGGER //

the whole K150,000, you can borrow somewhere in between. All you have to do is visit one of our branches or call us,” said Head Communications and Customer Service, Chilunga Puta.

All of these strategies are aimed at bringing quality products, that have been well-researched and perfectly designed for the Zambian market, to a wider audience and continuing to

CAVMONT BANK

grow the reach of the bank.

And now is an important period for any Zambian company pushing for meaningful growth. The government is looking to diversify the economy and move away from reliance on copper mining and include more agriculture, tourism and mining of other minerals.

“Our main objective is to sell the country as the best investment destination,” Zambia’s Secretary to the Treasury in the Ministry of Finance, Fredson Yamba told African Law & Business. “We strongly believe that there are a lot of opportunities, especially in mines and also in agriculture and tourism, where potentially people can invest and get

a return on their investment.

“We don’t want to just rely on mining as a major source of economic activities,” he added. “We are aware in Zambia that we rely too much on copper as a source of foreign exchange earnings, because currently 70% of our foreign exchange is derived from copper mining activities and 30% comes from non-copper activities.”

With a strong financial industry, which includes banking, pension and insurance, and a stock exchange which is one of the continent’s most prominent, financial services is an industry that could certainly add to the country’s economic mix, creating jobs and driving value for all Zambians.

And with the backing of the

USA, which in September announced formal backing for the Zambian economy, now is a perfect time for those that can grow to push forward and make a real difference.

By focussing on its customers and by creating more jobs, Cavmont Bank is a Zambian business that will continue to grow and will attract investment.

“Investment in customer service really is crucial. The returns are very big but the losses are even bigger and we do not want to a part of that,” said Mwansa.

WWW.CAVMONT.COM.ZM

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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.

FUTURE ENERGY AFRICA 2018 OCT 01-03 | CAPE TOWN Future Energy Africa provides a full-stream integrated exhibition and conference platform committed to advancing future oil, gas and energy solutions for the African continent.

This cohesive event will enable Africa’s governments and key officials, NOCs, IOCs, gas and LNG stakeholders, integrated energy companies, technology providers and power generation entities to interface and connect with the fast-evolving energy value chain and corporates driving

FUTURE ENERGY AFRICA 2018 CAPE TOWN ICC OCT 01-03 UGANDA EXPO UMA EXHIBITION CENTRE LUGOGO OCT 05-09 EDUTECH AFRICA SANDTON CONVENTION CENTRE OCT 09-10 MINE-ENTRA ZIMBABWE INTERNATIONAL EXHIBITION CENTRE OCT 10-12

Africa’s energy future This event provides companies with an affordable exhibition experience and free to attend on floor technical sessions at the Centres of Technical Excellence (COTES) across three days of powerpacked networking and knowledge exchange.

ADDIS BUILD ADDIS ABABA EXHIBITION CENTRE OCT 12-15 TANZANIA OIL & GAS SUPPLIERS CONFERENCE: HYATT REGENCY – THE KILIMANJARO, DAR ES SALAAM OCT 11-13 BUILDMACEX NIGERIA EKO HOTEL & CONVENTION CENTRE OCT 16-18

MINE-ENTRA OCT 10-12 | BULAWAYO Zimbabwe’s most reputable mining, engineering, transport, building and construction exhibition Having been in existence for a successful 22 consecutive years, the expo has built a solid reputation of providing an integral business and networking platform. Regarded as “the platform” for meetings, networking, and sharing of innovative ideas, the objective of the expo is to bring together the cogs that make Zimbabwe’s mining sector continue to move forward

104 / www.enterprise-africa.net

EDUTECH AFRICA OCT 09 | JOHANNESBURG Over the last three years, the EduTECH Africa conference has continued to be the largest of its kind in Africa, hosting the largest gathering of teachers, principals, HODs, IT Managers, Government entities and vendors. These decision makers, your buyers, are eager to learn, engage and network with you.

By bringing the most innovative minds together from across education and technology, EduTECH Africa ignites new ideas and inspires the audience to think differently. You’ll be stimulated by innovators, business leaders and entrepreneurs from across Africa.

AFRICAN CHEMICALS IMBIZO 2018 DURBAN ICC OCT 24 GLOBAL EXPO – BOTSWANA TRADE SHOW GABORONE OCT 30 – NOV 02

Your engine reliability Our trusted range Trusted by the best to deliver a complete range of advanced products and support.

For generations, aviation has counted on Shell Aviation to provide high-quality fuels and to deliver innovative oils, greases, and fluids – all designed to increase your efficiency and reliability, and backed

by Shell’s comprehensive support.

To learn more about Shell Aviation fuels please contact Saj Hoosen:

To learn more about AeroShell lubricants please contact Steve Cloete:

Shell Downstream South Africa (Pty) Ltd Phone: +27 6 09 766 766 Email: sajidah.hoosen@shell.com

Atlas Aviation Lubricants Phone: +27 11 917 4220 Email: steve@atlasoil.co.za

THE TIME IS NOW TO START BUILDING

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