AFRICA
THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS
November 2018
www.enterprise-africa.net
Carrick Wealth Changing Industry Perceptions Across Africa Exclusive interview with Founder and Group Chief Executive, Craig Featherby
ALSO IN THIS ISSUE:
Afhco / ANGOR Property Specialists / Carlson Wagonlit Travel / Netshituni
THE JOURNEY TO AGRICULTURAL SUCCESS STARTS WITH A TRUSTED PARTNER
GRAIN MANAGEMENT EQUIPMENT UNIGRO FINANCIAL SERVICES HARVEST TIME INVESTMENTS HINTERLAND
At AFGRI, we strive towards constant progression, growth, innovation and forging our vision for food security in South Africa and the rest of the continent. As your partner in agriculture we provide services across the entire grain production and storage cycle. We offer financial support and solutions as well as inputs and hi-tech equipment, supported by a large retail footprint. With our passion for development we have invested in the development of emerging farmers, through our Harvest Time Investments training programme to foster strong future farmers. AFGRI, a member of the AFGRI Group.
www.afgri.co.za
EDITOR’S LETTER EDITOR Joe Forshaw joe@enterprise-africa.co.za SENIOR PROJECT MANAGER Sam Hendricks sam@enterprise-africa.co.za SENIOR PROJECT MANAGER Tommy Atkinson tommy@enterprise-africa.co.za PROJECT MANAGER Shannon James shannon@enterprise-africa.co.za PROJECT MANAGER James Davey jamesd@enterprise-africa.co.za PROJECT MANAGER Sam Applegate sama@enterprise-africa.co.za FINANCE MANAGER Emily Taylor finance@enterprise-africa.co.za SENIOR DESIGNER Liam Woodbine liam@enterprise-africa.co.za CONTRIBUTOR Manelesi Dumasi CONTRIBUTOR Karl Pietersen CONTRIBUTOR David Napier CONTRIBUTOR Timothy Reeder CONTRIBUTOR Colin Chinery
Published by Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Rouen House, Rouen Road, Norwich NR1 1RB Administration & Finance +44 (0)20 7193 0419 Advertising & Feature Sales +44 (0)20 8123 7859 Editorial & Design +44 (0)20 7193 2735 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Media Group Ltd 2018
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It is worrying that so many South Africans remain concerned about their financial standing. For the past 18-months, the country’s big financial institutions have been researching the market and finding that many employed individuals are under financial pressure. And - against the backdrop of recession, high fuel costs, high VAT, flat retail, rising unemployment, and growing food prices – having personal finance concerns is a worrying situation. Last year, research showed that only 13% of employed South Africans in the large cities had approached a financial advisor to develop a plan; this is a number that needs to grow. In September, we heard from Fisher Dugmore Financial that everyone, rich or poor, can benefit from a financial plan, and this month we hear the same from Carrick Wealth, a business looking to advise clients, all over the continent, on building their wealth. The knock-on effect of financial stress is bad for the wider economy - financial stress leads to increased absenteeism, poor work performance, a lack of concentration, and a range of other issues. “The most important thing is to start – open a bank account, start by saving R1000 a month – just start,” says Craig Featherby, Group Chief Executive at Carrick Wealth. His company will expand across Southern Africa, and then East Africa, as it looks to provide sound, independent financial advice centred around a customer’s goals and ambitions. This month, we also bring you more about the challenges in South Africa’s property sector, where there is a major backlog of people looking for housing. Afhco and ANGOR Property Specialists are doing their best to help the situation by providing and managing quality rental units in the busy metros and suburbs. The combination of personal finance pressure and a shortage of housing across the country might make for a grim environment, but all of the companies featured in November’s Enterprise Africa tell us that they remain positive about the future outlook for the economy and the country. ‘Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all’ – that’s the famous quote from Dale Carnegie. Talk to us on Twitter @EnterpriseAfri1 on LinkedIn, we’re always online.
Joe Forshaw EDITOR
GET IN TOUCH +44 (0) 20 8123 7859 joe@enterprise-africa.co.za www.enterprise-africa.net
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06/NEWS: The News Snapshot A round up of some of the latest news stories from around the country
78/EXHIBITION CALENDAR: Key Upcoming Events Across the Country Our regular update to help you keep track of important events and exhibitions taking place across the spectrum of industry sectors
8/CARRICK WEALTH Carrick Wealth Changing Industry Perceptions Across Africa Cape Town-based Carrick Wealth provides integrated wealth management services to clients big and small, all over Africa. The company has grown significantly in its four years and is changing perceptions in the industry thanks to a concentrated effort to put the client first. Founder and Group Chief Executive, Craig Featherby talks to Enterprise Africa about the company’s success.
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CONTENTS
16/
24/
55/
INDUSTRY FOCUS: FINANCE
INDUSTRY FOCUS: TRAVEL
8/CARRICK WEALTH Carrick Wealth Changing Industry Perceptions Across Africa
48/CARLSON WAGONLIT TRAVEL SA Taking Care of Corporate Travel
INDUSTRY FOCUS: PROPERTY 16/AFHCO Afhco Nears Completion With Half-Billion Rand Developments in Jo’burg CBD 24/ANGOR PROPERTY SPECIALISTS ANGOR Celebrates 20 Years of Growth 33/LEGACY DEVELOPMENTS Leaders In Luxury Lifestyles 41/TRELLIDOR Ultimate Crime Barrier - Stronger Than Ever Before
55/NETSHITUNI COACHES Anything is Possible at Netshituni INDUSTRY FOCUS: AUTOMOTIVE 60/ROSSLYN HUB Progress Steps Up A Gear at Rosslyn Hub INDUSTRY FOCUS: RETAIL 67/HOMECHOICE Omnichannel Digital Retailer Reaping Rewards of Customer Service Excellence INDUSTRY FOCUS: AGRICULTURE 73/REMITTO Remitto Targets Countrywide Growth www.enterprise-africa.net / 5
TITO MBOWENI ANNOUNCED AS NEW FINANCE MINISTER Pravin Gordhan, Nhlanhla Nene, David van Rooyen, Pravin Gordhan, Malusi Gigaba, Nhlanhla Nene, and now, Tito Mboweni. The Minister of Finance roundabout, that has been turning since 2014 now stops with Mboweni who is the former head of South Africa’s Reserve Bank. He was sworn in last month after outgoing Minister, Nhlanhla Nene, submitted a letter of resignation to President Cyril Ramaphosa, requesting to be relieved of his duties. “Over the course of the last few days there has been much discussion among South Africans on matters that arose in the course of the testimony of Minister Nhlanhla Nene at the Commission of Inquiry into State Capture. “As a consequence of these developments, Minister Nene submitted a letter of resignation this morning in which he requested that I relieve him of the position of the Minister of Finance,” the President said. He said Nene had indicated that there is risk that the developments around his testimony will detract from the important task of serving the people of South Africa, particularly as government works to re-establish
public trust. The President took some time to thank Nene for having served the people and the government of South Africa with “diligence and ability”. He said that under difficult circumstances and often under great pressure, Nene consistently defended the cause of proper financial management and clean governance. “It is a measure of his character and his commitment to the national interest that he has taken this decision to resign in the wake of errors of judgment, even though he has not been implicated in acts of wrongdoing,” he said. After a brief stint as advisor to the Reserve Bank Governor between July 1998 and July 1999, Mboweni was appointed as the Governor in August 1999. Mboweni was appointed to several positions during his tenure. This includes his appointment as the honorary Professor of Economics by the University of South Africa between 2000 and 2003 as well as being elected Chancellor of the University of the North West and he was installed as Chancellor in February 2002. In April 2002, Mboweni was appointed as the Governor Professor
NO RISK OF DROUGHT THIS SUMMER Hydrologists from the Department of Water and Sanitation say the country will not experience drought over the next three months, even though below normal rains are forecasted. The hydrologists meet annually during this time of the year to review the department’s readiness for natural disasters such as floods and droughts. “Sporadic flash floods though, cannot be ruled out in the next three months in rainfall regions that are vulnerable to thunderstorms. However, the country will definitely not experience drought during the period under review,” the hydrologists said. The hydrologists believe that the weak El Nino is the cause of the forecasted poor rains. No floods are expected in Western Cape and parts of Eastern Cape because they are winter rain regions.
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Extraordinary in Economics and served in that capacity until 31 March 2005 and has since served in a number of senior leadership and advisory roles. On Tuesday, the President said that having served as a Minister of Labour before being appointed as a Governor of the Reserve Bank, Mboweni brings a wealth of experience “in the areas of finance, economic policy and governance”. “Mr Mboweni takes on this responsibility at a critical moment for our economy, as we intensify cooperation among all social partners to increase investment, accelerate growth and create jobs on a substantial scale.” Mboweni grew up in Tzaneen before attending the University of the North from 1979 until 1980, where he registered for a Bachelor of Commerce degree. However, he did not complete his studies and left South Africa to go into exile in 1980. He later got his Bachelor of Arts (Honours equivalent) degree in economics and political science from the National University of Lesotho in 1985. Three years later, Mboweni received his Master of Arts degree in Development Economics from the University of East Anglia in Norwich, England.
NEWS SNAPSHOT PRESIDENT RAMAPHOSA LAUNCHES R1BN TRAIN FACTORY President Cyril Ramaphosa has officially launched the new, multibillion Rand train manufacturing factory at Dunnottar Park in Nigel, Gauteng. The launch of the train factory will create muchneeded jobs and job opportunities, while attracting investment and boosting the economy of the country. The 72-hectare site at Dunnottar Park, which cost R1 billion, consists of a Supplier Park and Rail Training School, which will manufacture, assemble, test, commission and deliver 580 new commuter trains. This massive investment will include the local manufacturing of parts, maintenance, training facilities, the creation of jobs, skills development, the achievement of a 65% local content, and it will promote black economic empowerment and support communities. Construction of the factory began in January 2016, with manufacturing activities starting in 2017. The overall employment equity constitutes 49% female and 51% male, with 635 full-time employees, 90% of whom are black.
The plant is scheduled to deliver two new trains by December 2018, a further nine trains by March 2019 and an estimated 56 trains over the next two years. The launch is part of government’s 20-year Modernisation Programme aimed at revitalising the rail industry and training and skills development for the Passenger Railway Agency of South Africa (PRASA) employees and young people interested in the rail industry. The President and Transport Minister Blade Nzimande, Deputy Minister of Transport Sindisiwe Chikunga, Gauteng Premier David Makhura, Provincial MECs of Transport, senior government officials together with key government stakeholders and members of the public all attended together, in celebration as the factory was officially opened. “After years of decline, we are determined to restore manufacturing as a growing sector of our economy,” said the President.
SAAT, ROLLS-ROYCE PARTNERSHIP TAKES OFF The Department of Trade and Industry (dti) has welcomed British industrial technology company RollsRoyce’s partnership that will help deliver improved aircraft availability and skills. Based at the South African Airways Technical (SAAT) premises at Johannesburg’s OR Tambo International Airport, the facility is capable of storing a full range of Rolls-Royce engine types to meet the requirements of airline and business jet customers based or operating in Africa. Rolls-Royce is providing technical training to SAAT staff to enable them to conduct work on engines in storage. The long-term goal is for SAAT mechanics to be capable of performing a range of inspection and on-wing services to Rolls-Royce customers on the continent.
Acting dti Deputy DirectorGeneral responsible for industrial development, Thandi Phele, said the partnership between the company and SAAT is crucial. “This partnership between Rolls-Royce and SAAT is critical in many respects. It will not only allow SAAT the ability to store engines at this facility — in compliance with engine manual requirements of RollsRoyce — but it will equip [SAAT] with the capability and capacity to offer technical support on a full range of Rolls-Royce engine types. “[This will be in order] to meet the requirements of airline and jet customers based or operating in Africa. This is key for South Africa as an investment destination in Africa.” Phele stressed that South Africa has a strong focus on improving
investor and consumer confidence by fast-tracking structural reforms and higher levels of investment for economic growth. The SAAT facility can house every type of Trent engine, including the Trent 7000, which will soon power the Airbus A330neo into service. SAAT’s acting Chief Executive Officer Wellington Nyuswa said the agreement will enable the company to demonstrate its capabilities. “This agreement enables us to demonstrate our capabilities to RollsRoyce, with whom we’ve had a longstanding relationship as well as to other outside parties. It dovetails with our strategy to seek further revenue generating opportunities, and will enable our vision to be Africa’s leading world-class maintenance, repair and overhaul company.”
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CARRICK WEALTH
Carrick Wealth
Changing Industry Perceptions Across Africa PRODUCTION: Manelesi Dumasi
Cape Town-based Carrick Wealth provides integrated wealth management services to clients big and small, all over Africa. The company has grown significantly in its four years and is changing perceptions in the industry thanks to a concentrated effort to put the client first. Founder and Group Chief Executive, Craig Featherby talks to Enterprise Africa about the company’s success.
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With a struggling economy set to make life difficult for many South Africans for the next year at least, now is the time for people to seek financial advice to help avoid the temptation of turning to debt or raiding the savings. However, according to the 2017 Old Mutual Savings & Investment Monitor, only 13% of employed South Africans who live in the country’s big metros have a relationship with a financial adviser. For Craig Featherby, who founded Carrick Wealth – a boutique integrated wealth management business – in 2014, this is simply unacceptable. His view is that everyone can benefit from the advice and education that a competent financial planner can give. Whether you are well-versed in personal finance or if you’ve never spoken to a financial adviser
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in your life, you can definitely benefit from a carefully crafted financial plan. “A lot of people choose not to seek advice because it can be too overwhelming,” says Featherby. “Financial planning, and being disciplined enough to stick to that plan, can be an overwhelming concept and we find that people are often doing nothing. That is why we actively try and speak to as many clients as possible and educate them on starting a plan. The most important thing is to start – open a bank account, start by saving R1000 a month – just start,” he says. He details how the market for financial advisers in South Africa is large, with an oversupply of clients and a shortage of suitably qualified advisers. Of the 52 million people in the country, he claims around 25 million could potentially utilise the services
of a sound financial planner but there are less than 100,000 registered planners active right now, according to the Financial Services Conduct Authority (FSCA). “We believe that everybody needs a plan, and everybody needs advice to help them provide for their future,” he says. “Unfortunately, our government and our government’s reserves cannot support people in retirement. Your average state pension is R1600 per month so if you don’t start doing something about it yourself, you’re going to end up in hot water and likely be financially destitute.” Growing from nothing to have offices all over southern Africa in just four years, Carrick Wealth’s reach is wide, and Featherby wants to change perceptions of financial advisers across the region to encourage more people to make use of
Craig Featherby – Founder & Group Chief Executive at Carrick Wealth
INDUSTRY FOCUS: FINANCE
what can be a valuable service. “The industry at large doesn’t have a good name. In the past, it has been geared towards high commission and what is good for the adviser, not what is good for the client. Financial advisers have become product sales people rather than advisers and that causes some people to naturally fear the industry. We find that around one in three of our clients have been ‘burnt’ in the past, where they have been put into investments that were not suitable, resulting in them losing money. That contributes to people trying to do things on their own or not doing anything at all.” Ideally, Craig Featherby likes to sit with clients and discuss a plan. “It is a belly to belly business. We like to deal face to face,” he says. He wants every employee in the business to talk to clients and potential clients to ensure they know Carrick Wealth is an independent business, putting the needs of the client before anything else. “One of our objectives is to create a truly intimate relationship with our clients.” An ideal situation for Featherby is when someone walks into a Carrick Wealth office, who has never before employed the services of a financial adviser, with a goal to achieve. “If someone walks into my office and says they want to start, it would be music to my ears as it would be the beginning of a long-term financial marriage,” he says. “When you start seeing people progress and when their assets start growing, that
// WHEN THE REST OF THE WORLD WAKES UP AND REALISES THAT THE OPPORTUNITIES ARE NOT NECESSARILY IN THE FAR EAST ANYMORE AND THEY START MIGRATING TOWARDS AFRICA, WE WILL ALREADY BE ESTABLISHED // 10 / www.enterprise-africa.net
is what it’s all about. Very soon, with the growth of Carrick, we will start to see our clients achieve their goals and I don’t think there is anything more rewarding than partnering with a client and seeing them achieve those visions – especially when they come back and say ‘thank you, without your help we would not have been able to send our children to university’. It all comes through education and planning.” In 2017, the Financial Planning Institute of Southern Africa undertook a study which found that 70% of South Africans don’t know who to trust when it comes to financial planning. Carrick Wealth’s core values are about reversing this worrying trend and creating a reputation of excellence. “We like to think we change the lives of families and not just individuals. If you are the breadwinner and you have a successful financial plan, you can change the lives of your entire family.” WEALTHY AFRICA Carrick Wealth has grown significantly since its establishment in 2014 and the plan for the future is to continue growing with an aggressive strategy across southern Africa and, eventually, east Africa. Currently, the business is active across South Africa, and has operations in Botswana, Malawi, Mauritius, Zimbabwe. Africa’s total economy contributes an estimated $3.52 trillion to global GDP and many business commentators have labelled the continent ‘the future economic growth engine of the world’. Sub-Saharan Africa, in particular, is exciting with many countries posting strong economic growth figures and development projects expected to continue in a big way. Featherby says that gaining first-mover advantage is the driver behind his ambitious African growth plan, and it’s so far so good. “Africa is where the Far East was 25 years ago,” he enthuses. “The next big thing is going to be Africa. If you look at our operation in Malawi, there is not another single service provider that does what Carrick does registered with the reserve bank. That means the opportunity that awaits us there is enormous as there is no
// ONE OF OUR OBJECTIVES IS TO CREATE A TRULY INTIMATE RELATIONSHIP WITH OUR CLIENTS // competition. That is what we find in the likes of Kenya where there are 12 registered companies in the whole country. It’s a massive market with a growing population and a very young population, and if there are only 12 companies that do what we do, there is an immense opportunity. Our objective is to be the first mover in these markets across Africa. When the rest of the world wakes up and realises that the opportunities are not necessarily in the Far East anymore and they start migrating towards Africa, we will already be established and we will already be representing clients. It’s about dominating the market before too many entrants get into the market.” Featherby, originally from Zimbabwe but who grew up in Australia and KwaZuluNatal, states that he has always been keen on the continental market after many years of exposure to different geographies with a previous employer. “The plan was always to expand into Africa, we have some massive expansion plans because the continent is just such a big place. With 54 countries and a population of 1.1 billion people (set to double by 2050), there is such a major opportunity in Africa and we want to take advantage of that. “Our initial expansion was southern Africa – South Africa, Botswana, Zimbabwe, Malawi – we still need to look at Mozambique and Namibia, but we are now wanting to get our footprint in East Africa. We are starting with Kenya and the next will be Tanzania followed by Rwanda, Uganda and eventually Ethiopia. That is our target for the next 18-months. “We are still focussed on our core which is South Africa, but our attention will certainly be on East Africa over the next 18 months.”
CARRICK WEALTH
OFFSHORE EXPOSURE Apart from remaining completely independent, another string in the Carrick bow is its ability to offer offshore investment opportunities. This is, essentially, taking money out of South Africa and exposing that money to opportunities in other countries, helping to spread risk. In September, it was announced that South Africa entered technical recession with GDP contracting by 0.7% in the second quarter of 2018. You might think that this news would be extremely worrying for Carrick Wealth, considering technical recession often hits the pockets of consumers hard. But Featherby says that he sees opportunities where others get lost in negativity. “All of those negative political and economic statistics actually bode well for us in that people lose confidence in the
economy and therefore look to externalise more funds out of South Africa,” he says. “We started with offshore investing, externalising and investing in South Africa, and safe jurisdictions outside of South Africa. We realised that clients still had large sums of Rand to invest locally so we developed the concept of integrated financial planning which means our team here can sit down with any client and assist them with all aspects of financial planning. Whether it is long-term retirement planning through to short-term aggressive investment structures on to insurance and protecting the client’s assets and the whole fiduciary space where we advise on trusts and estate planning.” An important element in the company’s offshoring strategy is its office in Mauritius. Recently established to provide global financial advisory services to clients from across the world, the office
is completely based on technology and represents Carrick’s maiden venture in the world of virtual services. “Initially, I was against the idea because it’s all done virtually,” says Featherby. “It’s not robo-advice but everything is done through technology. We don’t have meeting rooms, we have studios with cameras and our team can log in and advise a client in China on financial planning or pensions. We never meet the clients, and when it’s time to complete paperwork we deliver the documents ‘door-to-door’. The first 18-months were very slow as we established the idea. This year, the formula has fallen into place. We have 18 advisers in Mauritius and a large portion of our growth is because that operation is successful.” Through this office in Mauritius, and across its network of offices in southern Africa, Carrick Wealth utilises
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INDUSTRY FOCUS: FINANCE
the best institutions, best products, and its abundance of industry knowledge to help clients truly globalise their investment portfolio and make the most of their money. Partnerships with the likes of MitonOptimal and Capital International Group back up the global credentials of Carrick Wealth with both companies brining a tailor-made range of investment services. This is a business which truly has the continent at its feet. But it hasn’t always been easy. The complicated history of the company saw it almost begin life without a name. Subsequently, the Carrick name means more than was ever intended. RICH HISTORY In 2013, Craig Featherby was working for the large global brokerage. After a
decade with the business he found himself growing uncomfortable with the way the company was moving. “The interests of the organisation were being put ahead of the interest of the client in a quickly changing market. The market in SA and Africa needed a firm that truly put the interests of the client first. “It was a big decision, after 10 years in various senior roles, to make the leap,” he remembers. The push he needed came while he spent time in hospital recovering after serious surgery. “I ended up tearing ligaments and having to go for a knee operation. Subsequently, I had clots go through my heart and I was in intensive care for 12 days. That gave me a lot of time to think
and I realised that my exciting chapter was coming to an end and it was time to do something new,” he says. At this point, he still did not know he would start Carrick. He just knew his time with his former employer was up and, in April 2014, he resigned without a set-up prepared for the future. Interestingly, Featherby was spurred into action quickly after his resignation as, when he left, 48 of his colleagues also resigned. “The idea, then, was to start a small boutique investment management firm but after my resignation, 48 other people in group resigned to come and join me. That gave me a predicament because I didn’t have a business, we didn’t have a name, we didn’t have an idea apart from the fact we wanted to be small – but from day one
Capital International Group (CIG) - Proudly Shaping African Financial Futures: Capital International Group (CIG), founded over 20 years ago, is headquartered in the Isle of Man and has a proven record of accomplishment in providing expert offshore financial solutions and services. The company focusses on three key areas of service: Platform, Investment, Treasury. In 2014 CIG opened its first office in Southern Africa, namely in Cape Town, to offer its innovative platform services to the Intermediary market in South Africa. CIG operates both a Cat1 and Cat2 FSP under South Africa’s regulations. CIGs brand and proposition has quickly resonated in the marketplace to become one of the leading open platforms that advisers and wealth managers gravitate to for offshore investments solutions. CIG is particularly delighted to be working with Carrick Wealth, whereby the Group aims to deliver an efficient and effective investment solution to their clients. Carrick Wealth is attracted to a number of features including CIG’s open architecture platform, a solution that enables investment into any funds, listed assets, or structured products as well as to appoint a suitable DFM. In addition to this, all client assets and data is held on the Isle of Man, giving clients like Carrick Wealth true offshore protection. At the same time, our Cape Town office provides local support, onboarding and query resolution; thereby greatly enhancing the client and service experience for Carrick Wealth and its clients. CIG’s ambition for African expansion now extends beyond Cape Town and the company is set to open offices in Johannesburg in January 2019. This office will service existing intermediaries in the region but will also enable CIG to better serve clients in Mauritius and across the African continent. “We recognise that clients throughout Africa are looking to build a wealth portfolio offshore, in a stable jurisdiction, that can provide them with a wide range of investment options in a range of hard currencies,” says Greg Ellison, CIG CEO. “However, these clients are often based in remote locations and travel frequently. Accordingly, they demand superior online reporting and onboarding solutions. These clients also expect their assets to be held in a secure and well-regulated environment. CIG is keen to assist these clients and to work with their intermediaries and advisers to deliver a compelling solution.”
Information in this material does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security.
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INDUSTRY FOCUS: FINANCE
// WE ARE STARTING WITH KENYA AND THE NEXT WILL BE TANZANIA FOLLOWED BY RWANDA, UGANDA AND EVENTUALLY ETHIOPIA. THAT IS OUR TARGET FOR THE NEXT 18-MONTHS // we had just under 50 people. It was an extremely tough time.” Common sense tells you that building an office, creating a brand, growing a client base and satisfying the income requirements of 48 professionals is no easy feat – “It was extremely challenging,” says Featherby. But the business was licensed in October 2014 and the final hurdle, apart from actually running the company, was settling on a name. It had to be strong,
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memorable, meaningful and represent consistency and quality. But after lengthy consultation, the perfect name remained elusive. “I sat with the other founding members and we wrote down pages and pages of names and we tried to whittle it down only to find out the names were taken. My wife started researching famous race horses before looking at famous boats and ships.” She found a story about the Carrick, a clipper ship built in Sunderland, England, launched in 1864, which had served as part of the Royal Navy. In the 23 years after launching, the Carrick conducted 23 successful return voyages from London to Adelaide in South Australia, becoming known for speed and reliability. After 1887, the shop was used to carry coal, timber, and many other goods around Britain and across the Atlantic, always completing journeys without hassle. “The moment she said Carrick, something rang right with me. The other guys agreed and Carrick was born,” says Featherby.
But the name Carrick is more than a symbol of success and reliability. Its connection to the business, previously unknown, was discovered six months after the business was registered as Carrick Wealth. “We found out, completely by chance, that Carrick in Gaelic means Craig,” explains Featherby. SERVICE PEOPLE Like most businesses, Carrick prides itself on the calibre of people it has managed to attract. The company is now home to more than 200 people and this will grow as the African expansion strategy gains traction. “We started with myself and three other members - Mike Fannin, Mike Potts, and Kieron McRae. We started in a tiny rented office for the first four months and we grew from there. “It’s been fun and that has been the most important thing. We have learnt a lot about business and a lot about people. At the forefront of our philosophy is putting the client first. It’s not about a product, it’s about the client’s
CARRICK WEALTH
goals and dreams,” says Featherby. All of the company’s advisers are licensed with the Financial Services Conduct Authority or applicable regulatory body, and all are well-versed in the company ethos – the client comes first. This has helped Carrick to, not only achieve its goals, but exceed them. The pipeline for future talent is strong with Carrick developing from within and investing heavily in the upskilling of future industry leaders. “We have a fantastic development academy through which we brought 24 graduates this year. Training them and seeing them go into the offices is what I really enjoy, and if we do it well, we are going to be able to expand the operation aggressively.” And aggressive expansion is not just a saying at Carrick. It has been demonstrated
over the past four years and is showing no signs of slowing. “We currently manage just over $400 million so we are on track for growth of $100 million per year but that is increasing quite dramatically. The management team recently gave me the Q3 report and we have done exceptionally well compared to last year, we are 53% up compared to the same period,” details Featherby. The leadership has set a long-term goal of attracting $1.5 billion under management, but after the start to its life, the company is already looking beyond this milestone. “Will we stop there? No,” says Featherby. But rather than talk about the money his business manages, Featherby reminds that the company was established to help as many people as possible while always remaining independent. His goals will be
achieved when he starts to see existing clients achieving their targets and potential clients starting to adopt a plan. “It’s not about the money, it’s more about the clients. I’d rather talk about having 100,000 clients over having so many million under management.” Right now, the focus for Carrick is bringing on board new people to help propel it further across Africa, and if everything plays out like Featherby hopes, his business could become one of the continent’s leading financial adviser and wealth management organisations. Carrick and Craig are full of life and are very much open to helping clients grow, protect and preserve their wealth.
WWW.CARRICK-WEALTH.COM
“I grew up on an Aberdeen Angus stud farm in KwaZulu-Natal. As I was growing up, I always told my father I wanted to be a farmer. That was always my goal. My father didn’t share my vision and he convinced me to go to university. “Thereafter, I lost the desire to farm and decided to go into the corporate world. I worked for ABSA Bank for four and half years in KZN, providing listed companies with investment banking services. At the age of 25, I applied for a position at PIC, which is now owned by international investment company, deVere, and I worked in the Middle East for PIC for three and a half years. I then transferred into the deVere group and worked across Asia for five years. “After returning to South Africa, and after spending years living in very busy cities, we decide against Johannesburg and made the choice to settle in Cape Town’s southern suburbs while establishing Carrick. “I’ve always been in some form of banking advisory role and I’ve always had fun doing it. Perhaps my next chapter is to try and become a farmer once again.”
CRAIG FEATHERBY – FOUNDER & GROUP CHIEF EXECUTIVE AT CARRICK
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AFHCO
Afhco Nears Completion With
Half-Billion Rand Developments in Jo’burg CBD PRODUCTION: Karl Pietersen
Afhco is a leading provider of affordable housing and retail spaces in the Johannesburg inner-city, but in the future, this innovative and high-quality business is looking to expand its reach. Managing Director of Afhco Property Management, Kevin van den Heever talks to Enterprise Africa about the exciting projects which are underway right now.
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This month, November 2018, sees South Africa still battling a growing housing backlog of more than 2.1 million units – that’s around 12 million people without access to adequate housing. Affordable property is difficult to come by, social housing is vastly under supplied, and home builders are facing the reality of a slow and unpredictable economic environment. In South Africa’s urban areas, where employment and education opportunities are easier to come by, the problem is even more stark. The central business districts (CBD) of the major cities are difficult places to find accommodation. Despite significant demand in the market, supply fails to keep up. Johannesburg’s inner-city area is a prime example. Huge demand for
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accommodation from all sectors of society is not met with sustainable and quality supply, pushing prices up and leaving many in need. The issue is recognised by government and former-Human Settlements Minister Lindiwe Sisulu who, in 2017, committed R188 million to the City of Johannesburg for the development of housing in the innercity. The then-Mayor of Johannesburg, Herman Mashaba welcomed the influx but stated that the city still faced a 300,000-unit backlog, calling on provincial and national government to ramp up efforts to drive economic revival of the inner-city is a priority, “it is key to creating an inclusive and prosperous city for all residents,” he said. But the shortage remains
as urbanisation continues at an accelerated pace. This problem, that has existed for decades, was a driver behind the formation of Africa Housing Company (Afhco), or Affordable Housing Company as it was known when it was founded by entrepreneur Wayne Plit, back in 1996. MAKING A DIFFERENCE In the post-94 election period, the Johannesburg inner-city had become a not-so-attractive place and many of the corporates had fled the area. This left a stock of empty buildings that Wayne Plit saw as a perfect solution to the shortage. He acquired some buildings and existing residential stock, repurposed and refurbished them into quality residential space and at first began selling units to
INDUSTRY FOCUS: PROPERTY
Jeppe Street Post Office
// IT’S THE FIRST HIGH-RISE DEVELOPMENT TAKING PLACE IN THE CBD FOR DECADES. PEOPLE HAVEN’T SEEN CRANES IN THE CBD FOR SOME TIME SO IT’S EXCITING // end users who could not get finance from banks for the purchase of property in the inner-city. At the time, Afhco was essentially providing end-user finance, taking up mortgagees on the property, and then instalment deals were entered into with the debtors who were paying these off until such times that the property transferred into their names. “There were so many vacant buildings in the inner-city, which was essentially the business hub of South Africa, and some had become hijacked and others had fallen into a state of disrepair,” remembers Afhco Property Management Managing Director, Kevin van den Heever. “In the early 2000s, Mr Plit started the first conversion from open commercial to residential, a building called Castle Mansions. That is what started the trajectory of the business to where it has ended up today.” Today, Afhco takes the useless and creates the useful. The specialist business
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transforms old, unused, derelict, destitute buildings that blemish Johannesburg’s map and comes up with quality rental accommodation. According to van den Heever, Afhco’s work is of a quality better than almost every other company operating in the inner-city. “Between 2007 and 2011, the company brought around 4000 apartments into the market and at the time we had even established our own in-house construction division, including all professionals, architects and on-site management. “We like to think our newer units are very sexy and a cut above what most players do in the inner-city. All of our units have granite kitchen tops, the finish is high quality, and we believe that helps us to build a sustainable business. There are many new entrants in the market who have a certain amount of capital for projects and it just isn’t the same level as us. Our buildings often have more
amenities and we are looking at putting in free Wi-Fi where others could not afford to do this. Because we do things with quality in mind, we are not likely to have major repairs and maintenance issues down the line – we like to do things properly.” Has the work of Afhco had an effect on the housing backlog? The impact is clear. “As we sit today, we have approximately 6500 rental units in the Johannesburg CBD and a further 2500 in suburban areas, mainly in Gauteng but we do have other assets in Cape Town and the mining town of Steelpoort,” says van den Heever. And the company’s influence does not stop there. Thousands more units developed by Afhco were sold in the late-2000s after its supply of stock into the market was so aggressive that it became counterproductive. Afhco simply could not tenant its units fast enough and had to offload property in order to continue developing. All told, the company suggests it has contributed more than 10,000 units to the Johannesburg inner-city. CORPORATE BUSINESS Instead, Afhco’s financial focus is on delivering sustainable returns for the
AFHCO
pension funds, and other stakeholders that are invested in the business since Afhco was taken over by SA Corporate Real Estate in 2014 for a reported R953 million. When SA Corporate Real Estate, a JSElisted real estate investment trust (REIT), came onboard, the need to diversify the Afhco portfolio was quickly identified. “The decision was taken to diversify the business so that the focus was no longer just inner-city Johannesburg but we would also look at suburban property,” says van den Heever. This diversification strategy has proved extremely successful for Afhco. Alongside its strong CBD selection, the company now boasts a R4.2 billion portfolio with 25% of that outside of the Johannesburg CBD. “We have stock in Pretoria, Centurion, Midrand, Northgate, Randburg, Springs, Randfontein, Soweto, Braamfontein, Cape Town and Steelpoort. The strategy is to always look at quality assets that provide an accretive yield.” And, while much work still goes on in the CBD, the real growth for Afhco, according to the MD, will come from investments in the suburban areas. “We are continually looking at growing our income base and that is through development and acquisition opportunities. We are undertaking substantial acquisitions outside of the boundaries of the CBD and that is where we will see bigger growth for Afhco going forward. The suburban portfolio will see substantial growth and that will help us to offer growing returns to stakeholders,” he says. JEPPE & END ST. Currently, the big projects underway at Afhco include two major property overhauls as the team looks to repurpose the Jeppe Street Post Office building in Johannesburg’s CBD to include residential units and retail areas, and completely overhaul an old industrial structure known as the Sidelsky building, also in the CBD and close to many other Afhco buildings. “Those two developments equate to approximately half a billion Rand,” enthuses van den Heever.
“The conversion of the old Jeppe Street Post Office building which is an iconic heritage building, built in 1935, sees us repurposing the upper floors into residential and retaining the ground floor as retail. We have onboarded Boxer Superstore, which is part of the Pick n Pay group, and they will be the anchor tenant. It is being built in three phases and we released the first phase which is residential in September with the following two phases to come on line in the next six to 18 months. “The second project is a brownfield development in the CBD, a R225 million project, where we demolished an old light-industrial structure and we will put up a purpose built, 15-storey student accommodation building. It’s the first high-rise development taking place in the CBD for decades. People haven’t
seen cranes in the CBD for some time so it’s exciting,” he adds. The building is located across the railway from the University of Johannesburg’s Doornfontein campus and is due to come online from January 2019. It is the first of its nature completed by Afhco being more ‘new build construction’ rather than revamp and “we are happy with how it is going,” says van den Heever. Student accommodation represents a major opportunity for a company like Afhco. The very nature of the opportunity is that young people need space to live and study, but only for a limited period. With Afhco being an expert in the rental market, the scenario suits both parties perfectly. And, of course, there is the massive shortage in supply that faces students and universities all over South Africa. The first step for Afhco was to build a relationship with the University of
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INDUSTRY FOCUS: PROPERTY
Johannesburg and gain ideas about what the university expects. Next is to design and construct the building, while getting all-important accreditation from the university. “Students are often taken advantage of as there is such a shortage of accommodation. Unscrupulous landlords have converted backyard shacks or put up something which is really inferior, but students have had very little choice but to accept it. Our new building goes someway to addressing that problem,” explains van den Heever. “We get accredited as a private, off-campus accommodation provider and the University accredit the building for quality standards. Without that accreditation, you cannot qualify to let to students. We typically target bursaryfunded students who are funded by the National Student Financial Aid Scheme. They get full or partial bursaries, that includes accommodation, and the money
flows to us via that institution.” Afhco has two student buildings with around 500 apartments and 850 beds in total. The new building will add another 244 units which translates in 984 beds. “When we’re complete, we’re looking at around 750 apartments which will house 1800 students,” states van den Heever. He is understandably proud of the project and says that it complements the wider End Street precinct, which Afhco has transformed and continues to develop. “This building is situated within a precinct where we have put in the most value to date. We currently have around 2000 of our tenants housed in and around that precinct so we view it as very important. We have repurposed almost all of the other buildings in the area into mixed-use retail and residential buildings. “Because of the location, being so close to the university, and because the university has such a need in terms
// SOUTH HILLS HAS NOT SEEN ANY DEVELOPMENT FOR A VERY LONG TIME AND WE BELIEVE OUR PROJECT COULD BE THE FIRST FULL LIFESTYLE DEVELOPMENT IN THE COUNTRY //
of beds, and given that we already have a big footprint in the region, we thought the student market was the better use so we didn’t eat into our own market and so that we could provide a much-needed service to the university by giving students a quality, purpose built accommodation.” When complete, the new building will give students everything they could require from an accommodation, making their time at university as productive as possible. “Time will tell but we believe it will be very successful for students,” says van den Heever. It will come with all amenities including recreational areas, chill areas, dining facilities, study areas, laundry facilities, outdoor areas and the bedrooms will come fully equipped, “it really is quality accommodation,” he promises. The Johannesburg CBD is a hot spot for students with UNISA, WITS, UJ, and many technicon’s all attracting thousands of learners every year. The huge demand has seen spill over into Braamfontein which many property professionals now regard as a ‘student suburb’.
Jeppe Street Post Office
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AFHCO
INDUSTRY LEADING PARTNERSHIPS In 2016, Afhco, through SA Corporate Real Estate, partnered with leading SA developer Calgro M3 to further alleviate the current shortfall of housing units in the low to mid segment of the residential market. Calgro M3’s Managing Director, Wikus Lategan, said the goal of the partnership is to build a substantial residential portfolio to give South Africans access to rental options within Metro’s. “The current housing shortfall in metropolitan areas is estimated at a mammoth two million units. Despite government’s commitment to closing the gap, spending on infrastructure for housing development is under pressure, and this joint initiative will assist government in improving living conditions for ordinary South Africans,” he said. But Calgro had not worked in the rental market before so needed a partner with knowledge of the sector. “They typically focus on the lower end of the market specialising in largescale integrated mixed-use projects that include FLISP, GAP, CRU housing as well as units for sale to the public, and the partnership with us was their first venture into the rental market,” says van den Heever. “Where the economy has been going over the last few years, developers have been seeing that there is a decline in the number of homebuyers in South Africa but the rental market had become very strong.” Initially, the partnership involves the two companies working together to develop and rent affordable units in Johannesburg and Cape Town. The development sites, located at Belhar and Scottsdene in Cape Town and Jabulani, Fleurhof and South Hills in Johannesburg will deliver approximately 4000 new units Particularly exciting for van den Heever is the project in South Hills, around 10 minutes from the CBD. “The Johannesburg sites have progressed well despite some minor delays and we are effectively into take up of tenanting in
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INDUSTRY FOCUS: PROPERTY
Jeppe Street Post Office
South Hills and Jabulani. Unfortunately, the Fleurhof site remains delayed because of infrastructural issues from the City of Johannesburg. Unfortunately, the sites in Cape Town were held back because of the water shortages. They couldn’t use potable water for construction and that caused a massive delay. They had to bore for water but the water pressure level wasn’t great and the sites came to a standstill. Now that there is water in Cape Town, they are starting to ramp up delivery again. We don’t expect to see any units until March 2019.
// WE BELIEVE WE PROVIDE OPPORTUNITY FOR PEOPLE TO LIVE A BETTER LIFE AND THAT DOESN’T MEAN BY JUST PROVIDING HOMES // 22 / www.enterprise-africa.net
“South Hills has not seen any development for a very long time and we believe the project could be the first affordable full lifestyle development in the country with a mixture of three-storey walk up apartments and freestanding houses. It has a green belt which includes a walking path, a children’s area, a soccer field and basketball court, and even braai areas, all on a secure estate with access control and security. It really is one of the first affordable lifestyle estates in the country. The take up has been a little slower than we would have liked but construction is nearing completion and we think uptake will ramp up quickly.” BUILDING GROWTH The future for Afhco is exciting, and this is in turn exciting for the company’s tenants. Afhco’s reach will grow as more units come online and as more opportunities are realised. With the backing of SA Corporate Real Estate, a highly-
experienced employee base, and a quality list of partners, Afhco has all the building blocks needed to create a sustainable organisation that solves a dire problem. “We’ve revisited why we exist as a business and opportunity was a key word that came out of it,” explains van den Heever. “We believe we provide opportunity for people to live a better life and that doesn’t mean by just providing homes. It talks about everything the company has stood for over the years. “We provide an incredible opportunity for staff and a lot of our building managers have come up from being cleaners or handymen. A lot of our admin team have grown to become middle-managers. We believe we are a sustainable business and that gives comfort to staff as they know they will have jobs in the future.” Asked whether Afhco’s reach could eventually move significantly beyond its current stronghold of the Johannesburg
AFHCO
inner-city, the Managing Director says that nothing will be ruled out. “Certainly, we would take a look at opportunities anywhere in South Africa if the right opportunity presented itself. “We look at things that have scale. Something with 30 units here and there would not be for us. As long as we can instil high-quality - that is our focus. And that doesn’t have to mean high rental; Afhco started as Affordable Housing Company but we changed that to Africa Housing Company because when we moved into the suburban areas, we acquired highquality assets that command higher rentals and those clients do not necessarily want to associate with an ‘affordable’ brand, so we made the change.” Going forward, the perfect scenario for further Afhco investment would be where the company can uplift an entire community by developing an entire region, much like what has been done in and around End Street. The returns are more attractive and the impact the company can have on its tenants’ lives is bigger. “One of our investment strategies previously was to look at precinct development, not just individual buildings. We took a decision many years ago that buying buildings in isolation, scattered all over, does not have the same impact so we would focus on buying up more buildings in one area so that we can have a real impact. End Street is the perfect example,” details van den Heever. “We have developed almost every building in that precinct and we contribute extensively to the upkeep of the precinct. We cannot rely on the municipality. As landlords, in some respects, we have been let down so we must provide security, cleaning and other services. We see that as a necessary for the city because if we don’t do it, it doesn’t get done and our tenants are impacted.” He explains that Afhco manages the city park adjacent to End Street on behalf of the City, and has done so for the past eight years because it provides an opportunity for tenants to get outside. “We do it because we know
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they won’t do it better than us. “We have just opened another park between two of our other buildings where we required permission from the City to pedestrianize the street. We created a public park and we put in all the amenities and have entered into an agreement to manage the park for the next three years with contributions from us for security and cleaning and an option to renew same. We are providing opportunities for tenants, and other citizens to get out of their property into public spaces.” Afhco has been providing an affordable, safe, quality lifestyle for more than 20 years. Gauteng, South Africa’s wealthiest province, remarkably, remains in desperate need for quality accommodation solutions, and this is one company stepping up and answering the call. With government and private sector
understanding that quality affordable housing is a basic right of all, those that have experience and reputation in the space are sure to benefit in the future. Come back to Enterprise Africa in December to hear more from Kevin van den Heever and learn more about Afhco’s amazing corporate social responsibility projects, some of which are firsts for the industry and are kickstarting the growth of new industry sectors in Johannesburg’s CBD. We will also hear about the potential for Afhco in the social housing space – a sector that is desperate for a change in model to ensure it delivers for all South Africans.
WWW.AFHCO.CO.ZA
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ANGOR PROPERTY SPECIALISTS
ANGOR Celebrates
20 Years of Growth PRODUCTION: David Napier
In the next few years, ANGOR Property Specialists intends to add several thousand more units to its existing 45,000 under management. This is a company celebrating its 20th anniversary by detailing a strategy for significant future growth. Executive Director, Dennis Flammer talks to Enterprise Africa about plans to grow in all of South Africa’s provinces, and also the UK. 24 / www.enterprise-africa.net
Sandton Emperor
INDUSTRY FOCUS: PROPERTY
//
It’s 20 years and counting for Johannesburg-based ANGOR Property Specialists, the expert residential property management business that has been delivering quality for its clients since 1998. Founded as a family business offering various property services, ANGOR is now one of the country’s go-to names in property management and has ambitions to increase its market share in the near future. The family that started the company owned a big property portfolio but had identified many areas of frustration where management services were simply unavailable or supplied ineffectively. So, an operation was established in a garage with the idea of filling gaps in the market. In the early days, business was good. The company expanded quickly, growing its staff base and industry influence
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until 2009 when it was taken over by new management. Since then, ANGOR’s reach has grown significantly across South Africa and the company now manages property all over Gauteng, KZN and the Western Cape. The company is responsible for the management of over 45,000 Sectional Title and Homeowner’s Association units in over 450 schemes, worth in excess of R40 billion. Executive Director, Dennis Flammer is delighted with the company’s success. “We are extremely proud and we feel very blessed. I think we’ve got a great team of people here and we are very happy to be in the industry we are in.” Flammer, an accountant by training, was part of the team which oversaw the purchase of ANGOR in 2009 and he says that the immediate focus was expanding reach.
“Initially the business was predominantly in the Johannesburg area, and many of our clients are still in Gauteng, but we have started to grow our reach in the other provinces. We have buildings in KwaZulu-Natal and the Western Cape, and we have recently signed terms on a deal which will see us opening proper infrastructure in the Western Cape by March next year.” This jump into the Western Cape is a big move for the business and will help grow ANGOR’s influence considerably. The expansion will see ANGOR acquire a Western Cape-based business and onboard all of its buildings. “For the last couple of years, we have been exploring opportunities in the Western Cape. We were working on one or two transactions but nothing solid. When this opportunity came
ANGOR PROPERTY SPECIALISTS
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along, we realised it was exactly what we had been looking for the whole time. It has worked out perfectly in terms of pricing, timing and ambition. It will also help us to increase our footprint in the Western Cape while remaining in line with what we stand for,” explains Flammer. “It’s a similar business to ours and we will bring that into the ANGOR family,” he adds. INTERNATIONAL GROWTH In a bid to diversify the company’s risk profile, and grow its presence outside of the South African market, ANGOR acquired a small business in the UK market in April 2017. “The reality is that we are faced with certain risks in South Africa, with our weakening Rand and other factors, so our goal has always been to try
and generate foreign income. It made sense with the UK as our timelines are very similar. The plan was to use the infrastructure we have in South Africa to service the UK market by using our call centres and accounting processing. Relationships can be managed with minimal feet on the ground,” details Flammer. After initially investing in a business with a small collection of around 500 units, ANGOR has intensified its presence in the UK, acquiring two more companies and taking the total number of units under management to approximately 2000. “The three different managing agents still trade under their own names and we are starting to implement our systems there. It is a learning curve for us as the property management model is completely
different in the UK. South Africa is in many ways simpler as a single Sectional Title Act governs it all. The UK is more complicated as there are many individual leases.” Just like when ANGOR was acquired in 2009, the vision is to streamline everything – all processes including accounting, administration and other services. “We switched over everything to our in-house and web based developed systems and we restructured slightly to render slightly different services in a slightly different way. “We have a lot to focus on in South Africa and we still see our market share as small. All our focus, for now, will remain on South Africa and the UK. “Today, we have 45,000 units so I think we have done something right,” states Flammer.
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INDUSTRY FOCUS: PROPERTY
MODERNISING MANAGEMENT In a bid to introduce modern management services to both endusers and property owners, ANGOR has developed a new app that will help tenants pay for, and manage, their utility consumption. The app ensures that tenants are aware of how much power and water they are using, allows them to top up when they are getting low, and it allows landlords to ensure properties are not vacated with outstanding unpaid utility bills. “One of the challenges in South Africa as a landlord is that, even if you have a tenant, you are ultimately responsible for the utility account of the unit. A lot of the time, a tenant will abscond or won’t pay the utility account and the landlord sits with the liability, being the owner of the unit,” explains Flammer. The ANGOR app will help to put an end to this challenge. Developed by ANGOR’s inhouse development team, the app is designed specifically for the South African market and has been a work-in-progress for some time. “We had a system in the past
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which only catered for electricity. We’ve added more functionality in the last month to cater for gas and water as well,” says Flammer. “The prepaid app that we have developed over time sees us collect funds on behalf of the owners and the occupants cannot use the utilities unless they top up their prepaid system. In that way, you almost guarantee that the funds will be available for the community scheme to settle its obligations with the council and reduce the risk of non-paying occupants. “We create one wallet for them, with all the utilities, and they can manage their consumption on the app and see exactly what there are consuming every day. If the balance on their wallet runs low, they will receive a message telling them to top up or their power will be disconnected.” This smart solution displays ANGOR’s ability to add value across
// TODAY, WE HAVE 45,000 UNITS SO I THINK WE HAVE DONE SOMETHING RIGHT //
the full spectrum of property management services. SAFE & SECURE Another innovation being developed by ANGOR in its attempt to become the market leader in South Africa is a range of security services which will ensure buildings under its management use technology for secure access only. “This is a pilot project as we can see frustration in some building complexes,” admits Flammer. The fundamental idea is to replace finger print and tag identification with cell phone technology to restrict access. “There is a challenge regarding finger print access and tag systems as it is an issue to manage this type of access. Cell phone technology is now so advanced, we can create encrypted keys and send them to cell phones so that your phone can become the key to open a gate. Managers can log into the app and see who is at the gate and who has passed through the gate. We are trying to make cell phones remote controls for accessing property. It is still in the pilot phase and we hope to get it right over the next year,” he says.
ANGOR PROPERTY SPECIALISTS
// THERE IS NO REASON WHY WE WON’T BE ABLE TO GROW THE COMPANY AND BOOST OUR FOOTPRINT AROUND THE DIFFERENT PROVINCES OF SOUTH AFRICA // One of the hurdles is the amount of data required to utilise a cell phone for these types of task, but ANGOR has a plan if this hurdle is too high. “So far it is working well but we realise a lot of people are still very aware of the amount of data they are using on their cell phones so if someone doesn’t have data, they might not be able to use the full functionality of the app and that has resulted in us trying to find a solution for those who don’t want to use their phones. The result is us working on key pad entry as well, but we are certainly overcoming the challenges that have faced us,” says Flammer.
Congratulations to ANGOR Property Specialists on their 20th Anniversary. We are proud of our longstanding association and wish them well for the future.
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INDUSTRY FOCUS: PROPERTY
BUILDING FOR THE FUTURE Long-term, the goal for ANGOR is to continue growing the number of buildings under management and claiming more market share in South Africa while also running a successful operation in the UK. Flammer says that expansion in South Africa is almost guaranteed and strong relationships with fantastic development partners make a great recipe for success. “In Gauteng, there are big developers like Balwin and Summercon who deliver a very good product and there is a huge gap in the market to provide housing. “From 2009 to today, we grew the
The Nicol
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// THE REALITY IS THAT WE ARE FACED WITH CERTAIN RISKS IN SOUTH AFRICA, WITH OUR WEAKENING RAND AND OTHER FACTORS, SO OUR GOAL HAS ALWAYS BEEN TO TRY AND GENERATE FOREIGN INCOME // company by around 30,000 units. If we can continue to achieve the same organic growth over the next few years, we would feel very blessed. I do believe it is possible; one of our development partners is planning to build 13,000 rental opportunities over the next few years so if we can continue to render a great service, there is no reason why we won’t be
able to grow the company and boost our footprint around the different provinces of South Africa.” But one issue which has troubled the property market in South Africa is the unpredictable economy. In September, the country entered technical recession, and while it looks likely that this is not a long-term issue, investors remain unsure about
ANGOR PROPERTY SPECIALISTS
the stability of the country. However, ANGOR is set up to provide annuity income which provides more stability when times are tough. “We render a service and it is a requirement, irrespective of what the economy is doing, as trustees need assistance,” details Flammer. “Our core business is a monthto-month management and we didn’t see any impact from the slow economy, but we do have a small sales and rental division where we definitely saw an impact. It’s getting harder for end-users to get funding to buy houses, so our sales have slowed drastically in the last few months. Because of the stock that is available in the market, thanks to the big developers that are building units by the thousands, the rental market is under some pressure because it is much easier for prospective tenants to move into new housing and it’s harder to rent units in older buildings.” He also suggests that property is a “big red light at the moment with regards to ownership and how that will be dealt with but the private residential market is not something we are concerned about at this stage.” Asked if the company’s staff base of 120 will grow as the business takes on more units, Flammer says the successful implementation of ‘employee cells’ can be rolled out without delay. “What we have done in South Africa, as we want to retain a personal relationship with clients,
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is stick to a model where a cell of four people will look after certain groups. A cell will consist of two portfolio managers, one financial controller and an assistant. We will allocate anywhere between 25 and 30 buildings to a portfolio manager, so a cell will manage between 50 and 60 buildings. The moment you bring new business on board, you simply start a new cell and create pockets of ANGOR inside ANGOR. It keeps a personal relationship with end users. If someone calls in, they simply mention the name of the complex they are calling from and they can be transferred to their cell where they will have an existing relationship with the four people in the cell. Each cell receives support from a range of other departments, so we just want to keep duplicating that concept as we grow.”
ANGOR is a business on the up. While it operates in a competitive market, the expertise and knowledge that exists within this business, and the fact that it has been growing for 20 years, make for a very attractive offering. According to its mission statement, the ANGOR Group is “dedicated to increasing the quality of living of each and every occupant living within a property managed by the group,” and to date, that is exactly what it has done.
WWW.ANGOR.CO.ZA
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LEGACY HOTELS & RESORTS
Leaders In
Luxury Lifestyles PRODUCTION: Timothy Reeder
Over the last 20 years, the Legacy Group has created, some of the most exciting retail, commercial and hospitality developments on the African continent. Legacy Hotels & Resorts Chairman, Bart Dorrestein briefs us on some of the recent highlights for the group, including the ever-growing, all-star Leonardo development in Sandton.
//
“The Legacy brand was established by individuals who were leaders in the property development, construction and hospitality industries,” says Dorrestein. “Their role was pivotal to the strong foundations on which the group’s success has been built.” Established in 1999 after the delisting of Stocks Hotels and Resorts, and following a management buy-out to
change both ownership and name, the Legacy Hotel & Resorts portfolio has grown to include 27 hotels and resorts, some of which are owned and some of which are managed. “Legacy offers its clients, shareholders and partners the opportunity to invest in the skills and experience of its founders and the values they aspire to uphold” adds Dorrestein. The various business units in the
Legacy Group all combine to deliver on the group’s values and objectives: Legacy Property Development assists Legacy and outside clients in ensuring that projects are completed on time, to specification and within budget. Legacy Hotels & Resorts, operates a collection of four and five star hotels, bush lodges, leisure resorts and casino resorts in key tourism and business locations throughout Africa.
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INDUSTRY FOCUS: PROPERTY
The group operates a rewards programme which is central to its marketing strategy for all of its hotels and developments. The programme, under the Legacy Lifestyle brand has 870,000 members and provides the ability to earn and redeem cash-back rewards at 270+ retailers, including well known brands such as The Cross Trainer, Pringle, Lorna Jane, Dis-Chem and of course at all Legacy Hotels & Resorts. Another Legacy Group company, Magic Breakaways is a founder-member of RCI and the developer of eight of South Africa’s Golden Crown timeshare resorts. INDUSTRY ICONS Even in its infancy, Legacy was always considered a true pioneer in luxury lifestyle projects on the continent, Dorrestein explains. “The founders of the Legacy Group were involved in
many of South Africa’s iconic hospitality developments,” he reveals, “including Sun City, The Palace of the Lost City as contractors, and Nelson Mandela Square, which was developed in the early 1990s. “The Michelangelo Towers is a development of some 40,000m² with 194 luxury apartments that has set the standard in the mixed-use market segment,” says Dorrestein. He adds: “The DAVINCI Hotel & Suites was an expansion on the concept of mixed-use developments, and was finished just in time to play host to many of the teams and VIPs participating in the 2010 FIFA World Cup.” The DAVINCI is Legacy’s fourth site on the cosmopolitan square, in the very centre of the Sandton business and leisure district. “A new approach, to address changing market conditions in South
Africa, was necessary post 1995” says Dorrestein. “Pre-1995, building and development costs in SA still allowed a single developer or investor to venture into the luxury hotel market, with expectations of Returns On Investment (ROIs) that would outperform the market,” Dorrestein outlines. “However, this changed rapidly post-1995 and new avenues of raising enough capital to develop iconic hotels were needed. This was one of the main contributors to the idea of mixed-use developments, together with the security concerns in SA at the time. “The company’s focus on hospitality started with the development of Kwa Maritane in the Pilanesberg, which was one of its first projects. Ultimately, the development of Sandton Square, now Nelson Mandela Square, together with the iconic 5-Star Michelangelo
Thermaire Investments would like to congratulate the Legacy Group on their new development. To date it has been a pleasure to work with Aveng Grinaker and Wingrove Consulting Engineers on the project. The support of Samsung on their VRV Equipment has been invaluable, and we wish all involved success in the future.
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+27 (0) 11 393 9700 +27 (0) 82 652 6020
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E D L O L S O T N A H W EC T
LEGACY HOTELS & RESORTS
Hotel in the early days remain two benchmarks in the group’s history.” At the heart of business in Africa’s richest square mile, the Michelangelo Hotel which Dorrestein mentions as a seminal property, epitomises the very essence of class, elegance and sophistication. Dorrestein goes on to speak of how integral expanding the concept of mixed-use developments has been to Legacy’s world class portfolio, often blending residential, commercial, cultural, institutional, or entertainment uses, where those functions are physically and functionally integrated. “The idea of living, working and playing in the same estate and/or building made the concept very attractive.” It is an idea that remains central to Legacy’s ambitions moving forward. “Legacy’s vision is to manage four and five star properties throughout Africa,” says Dorrestein, “either through the development of new mixed-use developments or the refurbishment of existing hotels; those which include the addition of elements that make the ‘live, work and play’ philosophy a reality. The factors that have seen this trend grow and become successful in SA are often the same as experienced in other countries in Africa.” STRONG PARTNERSHIPS This drive by Legacy to propel its hotel offering to even greater heights
has been bolstered by collaborations with other key market players, and has allowed Legacy to strengthen its presence in new territories. “We have to make wise decisions regarding which
projects we take on, and how they are funded,” Dorrestein notes. “We strongly believe in the future of South Africa and the African continent. Hotels are fixed assets, so once the investment has been
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INDUSTRY FOCUS: PROPERTY
// WE BELIEVE THAT THE LEONARDO WILL BE THE MOST TECHNOLOGICALLY ADVANCED, ENVIRONMENTALLY FRIENDLY BUILDING ON THE CONTINENT // made, we have to work really hard to make sure that the service levels and customer experience that we deliver is consistently exceptional.” This belief, and the confidence Legacy has in what the continent still has to offer, has led it to take up residency in new and potentially very lucrative climes, Dorrestein delineates. “Legacy has been present in Namibia for some time with the Windhoek Country Club & Resort and the Swakopmund Hotel & Entertainment Centre, and for many years we managed The Wheatbaker in Lagos, which was consistently voted the leading hotel in Nigeria, as is Labadi Beach Hotel in Accra. Since 2016, Legacy has managed five hotels in Zimbabwe, on behalf of African Sun, including two at Victoria Falls. By taking on the management of the five hotels, we are able to play a central role in supporting the development of tourism in Zimbabwe. And, we have interacted very constructively with the Government about the future of tourism in the country. We are convinced that Zimbabwe is on the road to recovery. Whilst rebuilding confidence in any market takes time, we believe all the ingredients are in place to fast track this process.” Dorrestein told SATOA. Legacy’s international marketing team have recently travelled to Zimbabwe to experience first-hand what the country has to offer, and they are now promoting the destination in the United States, Europe and Asia. To support the expansion strategy which Legacy’s Hotel & Resorts division continues to demonstrate, it has had to harness the best technology available. Legacy has partnered with Sabre Hospitality Solutions to introduce a new distribution platform that provide
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its properties in South Africa, Ghana, Zimbabwe, and Namibia with the ability to market rooms to travel agents and tour operators globally. Legacy Hotels & Resorts will leverage the proven and reliable solutions Sabre has crafted to help it to compete in a marketplace where technology is a critical business enablement tool. “We were looking for a technology partner with the powerful solutions we need to foster growth across our properties combined with global connectivity in the hospitality arena and the expertise, service and reliability of an international provider,” Systems Development Manager of Legacy Hotels & Resorts, Andrew Wytrykowski said of the partnership. JEWEL IN THE SANDTON CROWN It should come as no surprise that, with a history replete with groundbreaking examples, the next Legacy milestone project is set to be another revolutionary mixed-use development, at the heart of Africa’s financial hub consisting of luxury apartments, suites, penthouses, offices, a conference centre, an expansive outdoor entertainment area, bars and a creche. “The Leonardo promises to become Africa’s benchmark mixed use development,” states Dorrestein, “offering a complete lifestyle in one location. “There will be some 10,000m² of offices and plans are under
consideration, subject to market demand, to develop a luxury six star hotel.” The already world-famous Sandton skyline is now dominated by its new star attraction, and the unmissable rise of the luxury Leonardo development has been a sight to behold for tourists, travellers and residents since construction began. As it continues to steadily gain in height, the Leonardo has dwarfed its neighbouring skyscrapers and now even stands proudly above the former stand-out, Legacy’s own Michelangelo Towers. “The estimated value of the development is close to the R3bn mark,” Dorrestein tells us, when asked to provide some exclusive insight into the inner workings of this project. “The development commenced on a phased basis with 33 floors, with expansion linked to market demand. The market’s response has been phenomenal, and we are now developing the building to its full potential at 55 floors, reaching 240m into the sky. As it stands around 85% of the residential apartments have been sold, 80% of the office space is accounted for and the bulk of the retail sections have been let,” he says. “The building will eventually consist of 270 luxury residential apartments, eight high-end penthouses and the Leonardo Suite, which will take up the top three floors and is expected to have a selling price of $22million.” Even if it is not in the penthouse, those who settle here will be at the centre of a brand-new precinct set to be a massive boost to what is already South Africa’s premier business node. “The office space from floors nine to 15 is around 6,000m²,” Dorrestein continues.
// THE LEONARDO EPITOMISES THE IDEAL OF A MIXED-USE DEVELOPMENT – A MEANS TO LIVEWORK-PLAY IN THE LAP OF LUXURY, WITH EVERY CREATURE COMFORT AND CONVENIENCE AT YOUR FINGERTIPS //
INDUSTRY FOCUS: PROPERTY
“All tenants and owners in the building will have secure parking and access in and out via state-of-the-art technology that includes using one’s mobile device as your apartment key. Much of the building’s infrastructure has been designed around the Internet of Things, so owners and tenants can be sure that they will have access to the best technology possible, when it comes to managing how they interact with their apartments and offices.” The entertainment and hospitality area of the development will include an extensive meal and bar offering, a luxury spa and gym, and a creche, with a magnificent pool and gardens, while
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the view from this area takes in the Magaliesburg and is set to become one of Sandton’s favourite spots to watch the magnificent sunset. When questioned about the date for the opening of the Leonardo, Dorrestein says: “We have introduced a number of new innovations to the building which have moved the opening date out, but we are confident that we will open in mid-2019.” PRIME REAL ESTATE The Leonardo is not only breathing new life into the famed Sandton horizon, but also generating a lot of talk among investors in the
financial capital of Africa. Its location is enormously beneficial, nestled as it is at the heart of the vibrant and rapidly expanding precinct of Sandton, adjacent to the Johannesburg Stock Exchange (JSE) and within walking distance of the Gautrain and all major businesses. This prime location represents the best of an as-yet unequalled South African lifestyle. “The Leonardo epitomises the ideal of a mixed-use development – a means to live-work-play in the lap of luxury, with every creature comfort and convenience at your fingertips a simple lift ride away,” commented Gijs Foden, Legacy Living Director of Sales. “For
LEGACY HOTELS & RESORTS
residents this means a secure, luxurious living space, full concierge service, a crèche, a rooftop garden restaurant, coffee shop, heated pool, gyms and manicured gardens, and possibly even a commute to work that involves taking the lift a few floors down. “We believe that The Leonardo will be the most technologically advanced, environmentally friendly
// I HAVE NO DOUBT THAT INVESTORS WILL VIEW THE LEONARDO IN THE SAME LIGHT AS OUR OTHER HIGHLY SUCCESSFUL PROPERTIES //
building on the continent. Demand is strong, and as we begin selling the higher floors, I expect the capital values of the properties will skyrocket, as was our experience with The Michelangelo Towers and the DAVINCI. I have no doubt that investors will view the Leonardo in the same light as these highly successful properties, namely a dollar safe investment that protects their Rands in a world class development,” added Foden It is natural that the Leonardo is the company’s main focus for the timebeing, but as Dorrestein concludes, Legacy has its sights set on much more to enhance the group’s offering as the leading provider of African lifestyle properties and development. “We are in the process of completing a number of villas, sold on a whole or fractional ownership basis, in the
Pilanesberg area, adjoining Bakubung game lodge, a Legacy hotel and timeshare development. The iconic Elephant Point that shares a border with the Kruger National Park, is located on the banks of the Sabie River, is also a current luxury project under development. “The refurbishment of many of our products remain a focus and the Michelangelo Towers, the Michelangelo Hotel and the Commodore Hotel in Cape Town are all currently undergoing upgrades and make-overs. We are also looking to expand further into Africa supported by the market’s appreciation of the products we offer and the business ethos of the Legacy family.”
WWW.LEGACYDEVELOPMENT.CO.ZA
www.enterprise-africa.net / 39
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TRELLIDOR
Ultimate Crime Barrier -
Stronger Than Ever Before PRODUCTION: Manelesi Dumasi
Trellidor security products have been protecting South African homes and businesses for more than four decades. Known for unmatched strength, the brand enjoys a solid position in the industry and has become an international player from its home in Durban. www.enterprise-africa.net / 41
INDUSTRY FOCUS: PROPERTY
//
When Trellidor Marketing Director, Peter Rawson stood in front of one of his company’s security gates, filming a TV commercial to advertise the strength of the product, he must have been slightly concerned as an industrial wrecking ball started swinging down towards him. With nothing but the steel security barrier between him and a heavy forged steel ball, Rawson stood confidently looking up at the demolition tool headed straight for his body. And with a bang and a crash he simply blinked, seemingly unnerved and confident. The wrecking ball crashed into the Trellidor gate and, aside from a hefty impact and a small bend in the bars, the product proved its strength, protecting the man and even managing to slide open smoothly after. He was right to trust to the product. It is this muscle that Trellidor has built its name on in South Africa. Founded in 1976, the company is
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now a major manufacturing outfit, employing around 700 people. Its factory in Durban produces security gates and burglar-proofing products among many other. Today, South African residents and businesses trust Trellidor to safeguard their property. BUILT TO LAST House invasion is among the most feared of all crimes in South Africa and it is vital that residents and business owners know that deterrents can do their job. According to Trellidor, there are no recognised testing bodies to set standards for the strength of security barriers and this results in many inferior products making it to market, capitalising on people’s desire to save money where possible. Instead of trying to compete in the market without certification of strength, Trellidor decided to have itself certified – not required by the industry – to prove that it is unmatched for quality and might. The company approached BRE Global
Loss Prevention Certification Board (LPCB) and volunteered its products for accreditation. Fundamentally, LPCB rates security products on a scale from one to five (one being lowest). Trellidor’s Trojan 3 EMESC T3000 security grille was awarded a Level 3 - the highest level achieved by sliding security grilles anywhere in the world. To give an idea of what this type of strength can repel, the Trojan 3 EMESC T3000 security grille was designed for industrial use and was developed following terror attacks in Europe. “All our Trellidor Retractable security gates have built-in strengthening features and patented locking systems that give you the best chance of keeping robbers out,” the company says. Further recognition of Trellidor’s credentials when delivering a quality product come from its affiliate membership of the South African Institute of Architects (SAIA). An example of exactly how strong
TRELLIDOR
and long-lasting Trellidor sliding gates can be was shared last year by one of the company’s Cape Town franchisees. A retractable security gate installed in 1982 was found to be still going strong in Claremont, working just as well now as it did when installed. “Quality has always been high on the list of priorities at Trellidor. This decades-old installation confirms that good quality products will stand the test of time. “Trellidor Retractable Security gates are designed to open and close easily and they’re powder coated with a quality finish to help prevent corrosion and add to their longevity.
They’re always fitted with patented Trellidor locks that are the best that the technology of the time allows,” the company states. A VERY SA COMPANY As Trellidor approaches its halfcentury in South Africa, the company’s lengthy history reminds that it is perfectly established to deliver South African-made products for South African customers. On opening, the business was named L and L Metal Finishings and was focused on corrosion protection and powder coasting – a specialism that remains with the business today.
The name changed to Trellidor in 1983 and the focus officially became galvanised steel retractable gates that were bespoke-designed to fit each individual doorway. In 1988, the factory moved, but remained in Durban, and a brand new dedicated facility was launched at Phoenix industrial Park. In 1994, as South Africa changed dramatically, Trellidor also adjusted, bringing a range of retractable sliding window protectors into the range. They matched the styling of the door gates and are today sold under the Trellidor Fixed Security brand. In ‘95, the factory received SABS
// ALL OUR TRELLIDOR RETRACTABLE SECURITY GATES HAVE BUILT-IN STRENGTHENING FEATURES AND PATENTED LOCKING SYSTEMS THAT GIVE YOU THE BEST CHANCE OF KEEPING ROBBERS OUT // www.enterprise-africa.net / 43
INDUSTRY FOCUS: PROPERTY
// PHYSICAL SECURITY BARRIERS ARE AN EFFECTIVE WAY OF KEEPING CRIMINALS OUT OF HOMES, WHETHER THESE ARE APARTMENTS OR FREE-STANDING HOUSES. THEY ACT AS A DETERRENT BECAUSE THEY INCREASE THE TIME AND EFFORT REQUIRED TO BREAK INTO A BUILDING // ISO 9002 listing and the constant innovation programme continued with new fixings, locking systems and hinges all introduced. The following year saw the company realise international success as the brand began to gain traction in other markets including Australia, Israel, the UK, Portugal, Swaziland, Zimbabwe, Malawi, Mauritius and Namibia. From 1996 through until 2015, the company acquired significant market share and continued to innovate in its product portfolio, offering a host of different products to suit many different environments. Of course, unrivalled strength remained the jewel in the Trellidor crown. In 2015, the company was listed on the Johannesburg Stock Exchange,
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marking the achievement of a longterm vision. By then, the company was present country-wide and was widely recognised as an industry leader. Following this milestone, innovation continued aggressively and, as the company reached its 40th year of business, its range covered security and burglar proofing for all types of home and business. “At Trellidor we believe that every peace-loving citizen has the right to be safe at home and at work. This is why we don’t compromise when it comes to security. It’s also the reason why for 40 years our focus has been providing customers with trustworthy security barriers, manufactured to the highest standards the technology of the time allows,” the company says.
REAL DEMAND It is a sad situation that Trellidor products are so desired in South Africa – crime remains so feared and that results in demand heaped on the security industry. The stats are clear. Homeowners, property managers and businesses need to protect themselves. Crime in South African is rife. SAPS and Stats SA recently reported that, for the period April 1 2017 to March 2018, more than half a million property related crimes were reported to the police. In the same period, more than 22,000 residential robbery cases were reported, and more than 115,000 cases of ‘contactrelated crime’ (arson and malicious damage to property) were dealt with. In May, Community Policing Forums
Protection upgraded
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INDUSTRY FOCUS: PROPERTY
(CPF) in Durban raised concern over the growing number of house robberies, home invasions and hijackings. This is why Trellidor’s product must be so trustworthy. Security products are designed to deter criminals and, with crime figures like those in South Africa, now more than ever they must stand up to the task. The company actively encourages homeowners, and house builders, to protect their property. “Physical security barriers are an effective way of keeping criminals out of homes, whether these are apartments or free-standing houses. They act as a deterrent because they increase the time and effort required to break into a building. If they’re included in the building’s plans they can be installed as seamlessly as
possible,” says Rawson. Potential customers can quite
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easily walk into any Trellidor franchise – there are many around the country and many in the urban metro areas – and order a bespoke product, designed specifically for an individual house. “The service includes helping to plan and design a safe zone within each building, to be used during emergencies and to allow families to sleep safety at home at night,” says Rawson. He highlights the extent of the company’s product range as a key differentiator for Trellidor in the market. “We have elegant, robust designs like Trellidor Rollerstyle aluminium shutters that can be fully automated and remote controlled. If we’re called in during the design phase, we can provide the specs for recessing the shutter’s motor in a ceiling or wall cavity, making it completely unobtrusive when rolled up into the shutter box,” he says. SECURING EXPANSION Since its establishment more than 40 years ago, Trellidor has been a company on the growth path. Never has it been said ‘we are big enough’, and the company believes that as long as buildings in its chosen markets go unprotected, there are growth opportunities. In September, Trellidor CEO
TRELLIDOR
Terry Dennison announced that the company was ready to accelerate its expansion on the continent by further introducing its Taylor Group products through an increased number of African franchises. Taylor Group is Trellidor’s blind and decorative shutters manufacturer. He added that geographic expansion was helping the company to spread risk while the South African market experiences tough economic conditions. Product diversification and geographic expansion helped the company to generate new product sales growth of 26% and international sales growth of 12% in the year to June 2018. To continue improving performance in 2019, Trellidor will continue to hunt for ‘synergistic acquisition opportunities’, said Dennison. In terms of product expansion, Trellidor recently released a new aluminium product, the Retractable Aluminium TA600. While the company has long been involved with aluminium manufacturing, this is the first product that has corrosion resistant properties making it ideal for use on coastal properties. Launched at the East Coast Radio House & Garden Show, the product’s attributes were highlighted by Rawson who said: “It has several features that make it a first choice for coastal dwellers. Apart from being corrosion
// WE HAVE ELEGANT, ROBUST DESIGNS LIKE TRELLIDOR ROLLERSTYLE ALUMINIUM SHUTTERS THAT CAN BE FULLY AUTOMATED AND REMOTE CONTROLLED //
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resistant it has no rivets on the outside. This gives the gate a smooth, clean appearance that is perfect for homes where the visual appearance of fittings is important.” In August, Trellidor displayed its products and the Decorex 2018 exhibition at the Gallagher Convention Centre where Rawson once again highlighted the strength of the products and the brand. “Our well-known trellis-style sliding gates were conceptualized in our home town of Durban by a tool and dye maker and we’ve been manufacturing this design for over 40 years. “We export products all over the world; it has been internationally certified for strength by the London-based LPCB; and we recently redesigned our top of
the range model to suit the crowd control requirements of a securitysensitive Europe.” When it comes to protection and deterrent in an environment where criminal activity is unfortunately a likelihood, Trellidor remains the brand of choice. Its reach, technical capability, and proven ability make it an obvious choice for both business and residential customers. Many companies set out looking for industry leading status, but few end up achieving it. Trellidor has done that, and it isn’t stopping now.
WWW.TRELLIDOR.COM
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CARLSON WAGONLIT TRAVEL SA
Taking Care
of Corporate Travel PRODUCTION: William Denstone
Carlson Wagonlit Travel South Africa knows that keeping employees safe, engaged and productive in transit should always be a top priority for any business. CEO, Louis van Zyl tells us how CWT SA has used the best technology to give it a peerless footprint to serve customers across the African continent. 48 / www.enterprise-africa.net
INDUSTRY FOCUS: TRAVEL
//
Business travel is so often misconstrued as being an optional luxury, and one that in trying economic times - for example, South Africa’s recent slip back into technical recession - may be the first in line when cost cutting is considered. The opposite is true, however, and it is important for companies to not fall foul of this knee-jerk reaction; when reduction in spending is a priority, a well-managed travel policy is crucial. While tighter rules around travel may indeed reduce overspending, they will ultimately also lead to unhappy and unproductive travelling employees. The phenomenon known as ‘traveller friction’ results from stringent policy and causes stress, exhaustion and unhappiness, which can be enormously costly in the long term.
SAFER, HAPPIER TRAVEL This is where Carlson Wagonlit Travel (CWT) South Africa is positioned to shine, helping to control travel costs and afford better care and comfort to staff on the move. In a sea of travel management companies CWT has managed to set itself apart and become the employee-preferred experience, through a combination of the business travel expertise it possesses and the blend of people and technology at its disposal. Focused on providing solutions which will help achieve business goals, CWT South Africa is a subsidiary of Bidvest’s Bidtravel, the travel services division of the leading South African international services, trading and distribution company operational across four continents. “Globally, CWT has three primary operating models,”
// WE MAKE USE OF OUR BUYING POWER BOTH NATIONALLY AND INTERNATIONALLY TO GIVE PREFERENTIAL PRICING TO OUR CUSTOMERS // says Louis van Zyl, CEO for South Africa, of the wider company’s multifaceted business strategy. “First is the proprietary business, where CWT creates a local branch or a subsidiary in a particular market or country in order to serve this new territory. The second option is one where it appoints a partner; this could be an existing company or
Maria Martins - Director of Programme Management, Pine Nel - Chief Information Officer, Phumi Mazibuko - Sales Manager & Louis van Zyl - CEO
50 / www.enterprise-africa.net
CARLSON WAGONLIT TRAVEL SA
travel management service, or even owner-managed operation. This is then brought on board to operate on CWT’s behalf in that market and works very much like a franchise arrangement, whereby the name and systems of CWT global are used to service primarily its existing worldwide customers.” This is a vitally important aspect of CWT’s overall success, and affords it access to some huge clients, as van Zyl sets out. “When you think about the major international conglomerates, for example the General Electrics, Amazons and Facebooks of this world, they each have a very wide international footprint. This means that when CWT concludes
an international agreement to manage the corporate travel of these companies throughout the world, it needs the presence of a partner in that market in order to best serve the organisation and its workers. “The third model, and this is where Carlson Wagonlit SA fits in to the equation, is a joint venture,” van Zyl explains. “In these instances, CWT owns a minority equity stake of an operation and the local company will then operate as CWT in that market. Our South African division is an example of this third business approach, and the idea to form CWT South Africa came about in the early 2000s, when an opportunity
// WE REMAIN FOCUSED ON DELIVERING A TECHNOLOGY-DRIVEN, CONSUMER-GRADE EXPERIENCE ACROSS ALL CHANNELS //
arose for a joint venture agreement with one of the companies within Bidtravel Concorde Travel.” BidTravel has been in existence for well over 20 years and is a division within the greater Bidvest stable, which is one of the largest industrial holdings companies in South Africa. “The agreement reached almost 20 years ago means that Concorde Travel maintains an equity holding of the company but the majority is still held by Bidtravel, and we act as the local joint venture partner of CWT to give us this presence in South Africa.” MAKING LIFE SIMPLE Managing a business travel program no longer needs to be complicated, and CWT South Africa offers a ‘one-stop shop’ solution, greatly streamlining what was previously a task with many different agencies involved: flights,
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INDUSTRY FOCUS: TRAVEL
// MOBILE TECHNOLOGY IS AN INTEGRAL PART OF OUR STRATEGY; WE ARE CONSTANTLY LOOKING AT HOW IT CAN BEST BE ADAPTED TO MEET THE NEEDS OF TRAVELLERS // trains, hotels, insurance - everything is covered. “In fact, we even go a little bit further,” adds van Zyl. “We not only fulfil all of their travel needs, but we also assist our corporate customers in managing their travel policies and strike up agreements with some of the major airlines, hotel chains and car hire companies representing them to negotiate corporate fares. “We make use of our buying power both nationally and internationally to attain preferential pricing to our customers.” One extremely important factor
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in this bid for a streamlined, accessible service has been CWT South Africa’s excellent implementation of the available technology. “By virtue of being a joint venture partner of CWT globally we have access to and utilise a lot of the technology employed by the company, but not only this, we also use the best-in-class technology and tools that are available to travel management companies in general. So, alongside the award-winning CWT app and its reporting and governance tool we also have access to systems like our expense management and online booking tools. “We believe that there is some amazing, leading-edge technologies out there, and so we should be able to offer our customers the very best and usher them to use it when working with us.” CWT’s To Go mobile app, which provides automatic synchronisation of CWT bookings, flight notifications and access to relevant trip-related information, was previously a winner of the Global Business Travel Association (GBTA) award for innovation of the year.
The prize recognises applications that help business travellers make most productive use of their time while travelling. “We are continually looking at new ways to delight travellers by making sure they have the services they need at their fingertips, and CWT To Go is a great example of that,” said Andrew Winterton, former-President Suppliers, Products and Technology for CWT. “Mobile technology is an integral part of our strategy; we are constantly looking at how it can best be adapted to meet the needs of travellers.” The innovations which CWT continues to bring to business travel are the product of careful examination of user dynamics, van Zyl explains. “We will take our customers’ requests and requirements and interpret these to result in the most applicable, efficient technology to realise their corporate travel objectives. “It goes beyond that, though,” he says, “and also relates to applying some intuitive technology to look at trends in terms of where customers go, for instance,
CARLSON WAGONLIT TRAVEL SA
or look at their profiles and ensure that their travel documentation is all in order - if a visa is required to enter a country, or medical certificates - we want to leave nothing to chance. Our philosophy is always to implement technology where it makes most sense to us, and to help us achieve even more efficiencies.” EVEN MORE TO COME The value of CWT South Africa’s emphasis on customer comfort and ease is borne out in the strong performance it manages to keep recording, in spite of widespread economic negativity. It hasn’t been entirely plain sailing, van Zyl points out, but all the signs are very positive. “We haven’t come through completely unscathed,” he starts, “and we are definitely seeing the effects of the economic situation and the contraction of growth manifested in the corporate travel space. I think this is true for pretty much all companies like us. “By that token, however, any growth means that we are increasing our own market share, and our strategy
has brought some recent successes in the local market as well as globally. The knock-on effect of that is that we then take those customers on board into our service delivery capabilities.” Global revenue for CWT was up 1.9% last year to US$1.4 billion, while total transaction volume increased 3.6% to US$23.2 billion, including US$1.7 billion in contracted new sales. CWT increased investment in tech by 61% and surpassed one million downloads of its CWT To Go app, while the corporate meetings and events side of the business secured a 10% in business. Kurt Ekert, President and CEO of CWT, sums up that, “2017 was the year our digital strategy – CWT 3.0 – started feeding through to the numbers. We remain focused on delivering a technology-driven, consumer-grade experience across all channels – and on building a high-growth hotel distribution business. “Our 2017 results show our strategy is working.” The strategy for CWT South
Africa to produce a repeat of this success involves maximising the collaboration with its existing peers, van Zyl concludes. “Moving forward we will focus on expanding our role and working with other CWT partners already in existence throughout Africa. “Where we see ourselves as having a major role is the interaction with the African partner network, and our ability to provide a seamless travel experience for our corporates, whether they are situated in South Africa or in any of the sub-Saharan areas,” lays out van Zyl. “CWT has the largest network of African partners of any corporate global travel management company, so we see it as key to leverage our unparalleled presence and build a highly effective network of travel providers throughout the whole continent.”
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NETSHITUNI COACHES
Anything is Possible at Netshituni PRODUCTION: Karl Pietersen
Established as a family transport company more than 30 years ago, Netshituni Coaches helps students, teachers, nurses, and workers from all over Limpopo and Gauteng to travel safely and efficiently. With a plan to expand its fleet and grow its service portfolio, the future looks very exciting, as Director Luciana Netshituni explains. www.enterprise-africa.net / 55
INDUSTRY FOCUS: TRAVEL
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Providing a regular, reliable, safe, comfortable and affordable transportation service has always been at the heart of Netshituni Coaches – the Limpopobased provider of commuter and charter bus services. Established by Andries Netshituni in 1984, the idea was to help students, teachers, nurses, and other professionals get to work in the province which is sparsely populated with the majority of people living in rural villages. Growing from a handful of taxis and minibuses moving people around Limpopo, the company has become one of the transportation industry’s big success stories, growing into Gauteng and starting a cross-border service while overcoming a number of significant challenges through its more than three decades of operation. Today, the company employs more than 100 people and is planning significant expansion in the coming months. Netshituni moves hundreds of students and workers every single day, and commands strong brand loyalty thanks to the superior service that is delivered. In 2013, after the sudden passing of Andries, wife and co-director Luciana Netshituni stepped in at the helm of the business. Her entrepreneurial flair is helping to drive the company and the brand in a big way. Soon, Netshituni will invest into new buses and coaches to add to its already strong fleet.
// WE ARE ALWAYS TRYING TO FIND SOLUTIONS AND WE NEVER DO THE SAME THINGS. IT’S ALWAYS ABOUT KEEPING PEOPLE HAPPY AND THAT MAKES IT FUN // 56 / www.enterprise-africa.net
“The villages are growing, they are building more hospitals and schools, and the population is growing,” explains Luciana. “The current buses we have get very overloaded and are at capacity. We want to add 20 or more buses to cope with the demand we have. We like to use Scania or MAN buses and it is likely that we will use a local partner to source these buses as we expand. “Depending on demand, we could end up with more than 20 new buses. They will be added gradually and not all at the same time. There are many malls, schools and offices being built so depending on the population growth, we could add more than 20 to deliver an effective service – this is an ongoing investment programme.” Working with individual travellers as well as corporate clients, tour operators and events companies, Netshituni currently operates more than 60 coaches and buses. By adding more to the fleet, the company is not only investing into its own growth strategy, it is also investing into its community by creating much needed jobs. “With each new coach we bring to fleet, we create three more jobs,” says Luciana. DRIVING EXPANSION Ever ambitious, Luciana wants to add different services to the Netshituni business portfolio. Plans include growing the number of destinations and diversifying the type of service offered. Located in the village of Tshikhudini, in the north eastern corner of Limpopo, Netshituni is close to South Africa’s borders with Zimbabwe, Mozambique and Botswana and helping people to travel across the borders is one area where Luciana sees growth potential. “We already work on cross-border services and we provide routes into Zimbabwe,” she says. “We can offer services into Namibia, Malawi, and across the SADC region but this would usually be on a charter service rather than a regular service. In peak season, we operate into Zimbabwe on a daily basis.
“Currently, we are working on a permit for Mozambique as we see demand there. Cross-border is a big thing for the company. Right now, the cross-border buses are full because we are coming into the Christmas period. The buses are each full of 70 people and their luggage as people come into South Africa to buy many different things. Even when we are not as busy, we are still carrying 45 people in each bus.” The company prides itself on being able to offer transport to any destination, in any country in southern Africa. This is a valuable service for those in the tourism industry. Tourism has received a number of investments from government in an effort to boost job creation. And tourism is certainly an industry sector where Luciana sees potential. She tells Enterprise Africa that the company is studying the domestic airline industry as one where the company could grow. The idea was suggested by Luciana’s 17-year old son and has started discussions about what the future could hold for Netshituni in South Africa’s skies. “The idea came from my son who is fascinated with aeroplanes and who wants to be a pilot. He asked me, if he can qualify as a pilot, could we use our transport knowledge to look at the air travel industry? I looked into it and realised that it was certainly possible with the way our economy is right now and the trouble there is with our airlines. I feel it is definitely something we can venture into with the help of my son. He will have to complete his training at flight school so it remains an idea for now, but it is something I am very excited about exploring.” The air travel industry is one which has been highlighted by the South African government, and many governments across Africa, as one which has major potential for creating jobs through its contribution to tourism. At the opening of the Airlines Association of Southern Africa’s (AASA) 48th Annual General Assembly in Zambia, CEO Chris Zweigenthal
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INDUSTRY FOCUS: TRAVEL
// WE HOPE TO CONTINUALLY CONVINCE THE CUSTOMER THAT WE ARE THE BEST AND CONVINCE THEM THAT WE WILL DELIVER WHATEVER THEY NEED TO FEEL COMFORTABLE // said that Southern African airlines – and the destinations and economies they serve – must differentiate themselves through excellent customer service, efficiencies and value-for-money travel, trade and tourism propositions. This is in line with the offering that Netshituni already delivers through its bus and coach business. Netshituni will also welcome another second-generation family leader when Luciana’s youngest son enters upon completion of his studies. “My other son likes the idea of being involved in the daily management of the company but he is only 12 and still has to complete his education. I am excited about getting them involved in the company and time will tell how successful we can be.”
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FUELLING CONCERN One element of the Netshituni business which is causing management a headache is the price of fuel. South Africa’s fuel pricing is regulated and all sellers must stick to prices advised by the government. Since January, the price of diesel has risen from R12.74 per litre to R15.64. This is an 8.61% increase on the same period from last year, and the rising prices are set to continue. According to Luciana, this is unsustainable. “We are expecting the diesel price to go up again and not come down anytime soon so we are unsure - it is scary,” she admits. “When you are providing a good service, but people are complaining about the prices which are out of our control, that is not nice. Most of the people we carry are workers and students and those people do not have a choice – they have to go to school or work.
“We have not seen a drop off in passenger demand but it does affect the lower end of the market where earnings are small.” At the end of October, price increases on diesel for November are expected to increase by around 25-30 cents per litre. Typically, coach fuel tanks can be as large as 600-700 litres. To ensure customers keep coming back to Netshituni, the company has installed many innovative offerings in its vehicles so that comfort and safety are felt by all. These innovations bring a feeling of luxury to travel and this drives customer loyalty. “There is competition” admits Luciana, “but we have Wi-Fi on our buses, we have phone charging points, we have air conditioning, we have reading lamps, and we have reclining seats. These are just some of the innovations that we install to make sure the passenger feels at ease on the bus and keep their lives going while they are on the bus. Netshituni is the only operator in Limpopo to offer these services. “Some of the villages we provide
NETSHITUNI COACHES
for are very poor and Limpopo is a poor province, so our Wi-Fi does help the young people to get information while they ride. Yes, it helps us separate ourselves from the competition, but it is also helpful for the children to get more information for school or work. We have found that the Wi-Fi really does help them to research and acquire knowledge. “We hope to continually convince the customer that we are the best and convince them that we will deliver whatever they need to feel comfortable. We will always listen to the customer – that is the key to keep them coming back.” DRIVING BUSINESS FORWARD With the plans that are being put in place, the quality services that are being delivered daily, and the reputation of the Netshituni brand and name, the future looks extremely exciting for this ambitious business. Expansion of cross-border services, growth of the company’s fleet, development of the employee base, and the floating of ideas around air travel
make for an exciting pipeline that will keep Luciana and family busy for some time to come. “This is still a very exciting business,” she says. “I get bored very quickly so our business is never the same, every day is different. I never wake up and say ‘I’m going to the office and I’ll be home at five’, it’s different every single day and that makes it challenging and keeps the mind working. We are always trying to find solutions and we never do the same things. It’s always about keeping people happy and that makes it fun.” In 2004, Amazon founder and entrepreneur-extraordinaire, Jeff Bezos said: “One of the huge mistakes people make is that they try to force an interest on themselves. You don’t choose your passions; your passions choose you.” This is very much the case in Limpopo at Netshituni Coaches. The passion that runs through the business from top to bottom is an example to follow for other growing enterprises in the region. “I’m very happy with the business and happy with the direction we are moving. The only thing that concerns
me is the impact of the economy on the lower end of the market because it is sad that we provide a fantastic service but people are still left using all of their money on food and transport only. I really hope the economy improves so that there is more money for the lower end of the market. I think it will pick up – the President has sent out a delegation to attract investment into the country and he is making changes so that people can benefit and we can all make something of ourselves,” says Luciana. The wheels keep on turning at Netshituni, and the business is now positioned perfectly for strong growth in the future. The key is to continue delivering service of the highest level and encouraging customers to keep coming back. With the growth of the local population set to continue, it seems like the sky is literally the limit for this industry leading travel expert.
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ROSSLYN HUB
Progress Steps
Up A Gear at Rosslyn Hub PRODUCTION: William Denstone
A R4.5-billion mixed-use development, Rosslyn Hub is the crucial first step towards the creation of the enormous Tshwane Auto City (TAC). The Hub alone looks poised to create 160,000 jobs as well as many more opportunities for employment and skills development, as it sets out to become the central node for vehicle manufacture in South Africa and beyond. 60 / www.enterprise-africa.net
INDUSTRY FOCUS: AUTOMOTIVE
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The automotive industry consistently makes an enormously important contribution to the overall South African economy, and the most recent figures released do nothing to buck this trend. Total earnings from South African automotive exports reached R164.9-billion in 2017, which made up 13.9% of South Africa’s total export earnings and only just missed out on eclipsing the record R171.1-billion achieved in 2016, at 15.6% of total export earnings. Altogether, revenue in the South African automotive business sphere amounted to more than R500-billion
last year, and the broader industry’s contribution to the gross domestic product stood at 6.9%, combining to underscore another strong performance all-round for this evergrowing market sector. A CAR CAPITAL Gauteng’s Tshwane has always had a central role in this crucial, burgeoning industry in South Africa, with some of the biggest names in the world having selected Rosslyn as their home on the continent. Some 40% of all passenger vehicles manufactured in South Africa are produced in Tshwane, which further generates about a quarter of the
manufacturing sector’s value add and contributes in the region of 3.3% to the city’s total economy. The four motoring and engineering sites already established in the suburb of Pretoria belong to Tata, Nissan, Iveco and BMW, with the latter’s R6-billion investment into its Rosslyn plant welcomed by former-Tshwane Mayor Kgosientso Ramokgopa: “We see this investment as a step in the right direction for Africa as a future market for exports. We are certain it will increase our footprint in the manufacturing industry and automotive industry.” Other original equipment manufacturers (OEMs) such
// THERE IS A BIG VISION UNDERPINNING THIS PROJECT BASED ON OTHER AUTOMOTIVE CITIES THAT HAVE BEEN BUILT AROUND THE WORLD //
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
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ROSSLYN HUB
as Daimler, Mahindra and Volkswagen are also represented in Tshwane. However, despite figures which clearly point to much success at Tshwane to date, it seems that the arrival of these huge motoring names and equally large investment was merely the beginning of the area’s bid for automotive renown. As business continues to swell, the forthcoming Tshwane Auto City development will now look to build an entire metropolis around the existing sites and create hundreds of thousands of jobs in so doing. A concept devised way back in 2008, this is the product of the twin visions of government and the automotive industry to transform Rosslyn into the leading automotive investment destination in Africa. ROSSLYN HUB LAUNCH At the centre of Tshwane Auto City will be Rosslyn Hub, whose launch earlier this year marks the vital first stage in bringing the unprecedented African development to life. Set to act as catalyst for Africa’s first Auto City in Rosslyn. Rosslyn Hub will be the beating heart of the colossal 50-year overall project, and will include 1,200 houses and 250 rental apartments, a hospital and clinic, schools and a university with student housing across its 7,000 hectares. It will join and bring together the automotive plants already founded and thriving in Rosslyn, and will also comprise a development logistics park and vehicle distribution centre, a truck staging area and an outdoor automotive pavilion. Bringing to fruition plans on this awesome scale has required a joint venture between the City of Tshwane Metropolitan Municipality, Tshwane Economic Development Agency (TEDA) and Automotive Industry Development Centre (AIDC), and seeks to result in a local automotive industry which is globally competitive, primarily by significantly increasing locally manufactured parts and components.
The eventual aim of the TAC is to emulate what has been accomplished at those already well-established automotive cities - the likes of Shanghai Automotive City in China, Autostad in Germany and Toyota Automotive City in Japan, a point underlined by Brendan Falkson, Director of Big Cedar Property Development, which is tasked with managing this project. “There is a big vision underpinning this project and this vision is based on other automotive cities that have been built around the world.” The overriding emphasis, right from the initial planning stages, has been on establishing a living, smart city that supports local growth and development, comprising public transport and providing adequate housing.
As the auto city is progressed through its stages, with Rosslyn Hub the all-important number one, production is scheduled to more than double in accordance with the terms laid out by the Automotive Sector Vision 2020, which aims to produce 1.2-million vehicles and deepen the manufacturing base by stimulating investment and increasing local content. With Rossyln Hub now very much underway, we can begin to envisage a finished Tshwane Auto City which aligns perfectly with realising such lofty goals. In short, the idea behind Rosslyn Hub, and the wider TAC, is to leverage the largest concentration of automotive original-equipment manufacturers and component manufacturers in Africa to establish a place where their employees can
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INDUSTRY FOCUS: AUTOMOTIVE
// THE FACT THAT ROSSLYN HAS THE HIGHEST CONCENTRATION OF OEMS IN AFRICA MEANS THAT THE WHOLE INDUSTRY IS REALISING AN AUTOMOTIVE CITY IN TSHWANE MAKES SENSE // live, work and entertain themselves within the same precinct. The groundbreaking hub will also benefit from its proximity to existing transport infrastructure, including access to the Capital Park Rail logistics hub. FINANCIALLY AND ECONOMICALLY LUCRATIVE Collaboration between manufacturers will be another welcome benefit of the TAC’s creation; currently, South Africa produces more than half a million vehicles each year, but split between many different producers and models.
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Now, the arrival of a central hub will result in significant savings across the value chain and ramp up economies of scale for other players. “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 that an automotive city in Tshwane makes sense,” explains Falkson. “It helps each role player to create critical mass in terms of their supplier base and logistics, while new shared facilities will help everyone make their pricing more efficient. The vision of the
auto city will help bring scale and will mean that manufacturers can make more cars.” The finished Auto City will, in addition, provide a significant boost to Gauteng’s economy, by attracting both foreign and local direct investment into a multi-billion Rand infrastructure programme. This will in turn transform Rosslyn and Klerksoord into the world’s largest centre for original equipment manufacturing in the automotive industry. Tshwane Auto City will be the first multi-OEM auto city in Africa, whose geographic location will enable accelerated trade into the SADC region in order to stimulate further regional economic growth. “Between 2008 and 2018 around R12-billion has been invested into the Rosslyn area. Following the launch of the hub, we anticipate a 400% increase
ROSSLYN HUB
// FOLLOWING THE LAUNCH OF THE HUB WE ANTICIPATE A 400% INCREASE IN INVESTMENT IN THE NEXT DECADE // in investment in the next decade,” highlighted CEO of the Automotive Industry Development Centre, project manager for the hub’s development and an implementing agency of government, Dr David Masondo. The 10-year first phase of the work alone, with Rosslyn Hub at its centre, is expected to create some 160,000 jobs, and many more opportunities for employment and skills development.
The on-site launch of Rosslyn Hub, for example, saw at least 800 young people queuing to register their names to benefit from the private sector investment in anticipation of the work ahead. “Anything that will benefit young people and give them a great future is good for our country, democracy and development,” commented David Maake, who was among the community leaders who mobilised the people from Soshanguve to bid to become beneficiaries. Progress at Rosslyn is gathering pace, and Falkson rounds off with the impact this is having on overall belief in the TAC behemoth. “[Rosslyn] is 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, and as a
consequence the industry is starting to believe in it more. “At the beginning, when you have a master plan, people switch off. Now, important people are approaching us and asking exciting questions.” With phase 2 of Rosslyn Hub due for lunch in 2020, it was left to Tshwane Mayor, Solly Msimanga, to sum up the positivity which surrounds the direction in which this auto city is heading. “We are proud to become the local government administration where this, Africa’s first auto city, is situated,” he concluded.
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HOMECHOICE
Omnichannel Digital Retailer
Reaping Rewards
of Customer Service Excellence PRODUCTION: Manelesi Dumasi
Keeping up with customer trends in a fastmoving and forever changing environment is one of the keys to success in retail. South Africa’s HomeChoice has developed a profound understanding of its customers to ensure it is always delivering what, where, when, and how they need. “We push ourselves very hard to stay apace with the customer,” says CEO, Shirley Maltz.
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Most companies claim to have developed a ‘deep understanding of their customers’ but very few can back these claims up the way HomeChoice can. This Cape Townheadquartered JSE-listed retail powerhouse has been honing its understanding of “her” for decades. Established in 1985 as a mail order distributor of cast iron pots and pans for the kitchen, HomeChoice
is today South Africa’s number one home-shopping retailer with an omnichannel route to market for its vast product range and complementary business divisions offering financial services (FinChoice) and value-added products. The HomeChoice team is relentless in furthering its understanding of the client so that it can seamlessly deliver first-class
service along with relevant and needed products. “The business has always been mass-marketed, targeted at females, specifically urban, of African descent,” HomeChoice SA CEO, Shirley Maltz tells Enterprise Africa. To be precise, the HomeChoice customer base is 84% female, usually mothers, in the mass-middle market (75% LSM 4-8), earning around R10,000 a month, between
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INDUSTRY FOCUS: RETAIL
30 and 60 years old, living in South Africa’s urban areas, and utilising digital channels (specifically mobile) for shopping. “She’s always shopping somewhere, she just might not be shopping with you,” says Maltz. “If she’s not shopping with you it’s because your products are not good enough. Whether it’s your merchandise, customer service or whatever. We push ourselves very hard to stay apace with the customer.” “We haven’t changed our target market but the market has changed,” says Maltz. “During
apartheid our target market did not have freedom of movement, she had very poor schooling, very poor sanitation, no electricity and no water. There is no doubt in my mind that the roll-out of housing, sanitation, electrification and schooling over the past 35 years has changed her life and that her desire to beautify and improve her home has been a key driver of our business. However, the delivery backlog for these services remains huge and coupled with the impact of the economic hardships over recent years, this has made her more discerning about how
// SHE’S ALWAYS SHOPPING SOMEWHERE, SHE JUST MIGHT NOT BE SHOPPING WITH YOU. IF SHE’S NOT SHOPPING WITH YOU IT’S BECAUSE YOUR PRODUCTS ARE NOT GOOD ENOUGH //
she spends her money. Only by continuing to offer her quality products that are affordable and beautiful, will she respond, and will we continue to grow. “We love our customer, she loves us, and we are very good at developing products for her. We want to focus on her, she is our queen and we will never move away from her.” And ‘she’ has helped the business achieve significant success. Financial results for the six months ending 30 June 2018 detailed group revenue increasing by 16.1%% to R1.5 billion, growth in retail sales of 18.9%, as well as a strong contribution from financial services with loan disbursements growing by 30.0%. Maltz confirms that the business continues to thrive in a challenging environment. “I’m happy with how we are trading but times are tough in South Africa, make no mistake.” OMNICHANNEL STRATEGY As HomeChoice embraces its digital transformation, the company continues to improve customer engagement through the development of existing and new touch points. Mobi and web channels offer convenience, a dedicated customer support call centre provides support across all lines, and the newest strategy, retail showrooms encourages interactions with products and staff. “We launched our first showroom next to our head office in Wynberg two years ago,” details Maltz. “We have just launched our second showroom in Maponya Mall and our third in East London opened on 1 September. Later this year, we will open our flagship showroom in Rissik Street, Johannesburg and our fifth in Nelspruit. “ The concept is that you can
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HOMECHOICE
walk in, look at the product and feel the quality before ordering online for the product to be delivered or collected. “Inside our showroom, we have set up an example of a home and kitted it out with HomeChoice products so that our customers can see exactly what they could have and exactly what we offer.” But she is quick to point out that HomeChoice is “not a bricks and mortar retailer” and the company will never consider the mass roll out of a traditional store network. These showrooms are about complementing the existing digital strategy while creating new interaction opportunities. The retail showrooms are equipped with kiosks for customers to access financial services from FinChoice and trained consultants guide customers around use of the Mobi platform on smartphones and tablets. “With FinChoice, 78% of loan transactions are now digital, and all of that is through mobile phones. Our customers don’t really used fixed lines and that is why we have a Mobi first strategy. Last year, our groupwide digital credit extended was around 32% of total credit extended and right now it’s around 39% so it’s growing very fast,” says Maltz. HomeChoice is also working on more value adding products to fill
gaps in the lives of an increasingly digital customer, who does not have time to waste and is looking for convenience, in the hope that it can develop cross-selling opportunities. “It’s the late evening and you run out of electricity,” Maltz begins.
“You have to walk down the road to buy prepaid power. It can be the same with data. You have to leave your house and leave the kids on their own. We don’t want her to have to do that,” she says. “We’ve launched value added services so
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INDUSTRY FOCUS: RETAIL
// WE LOVE OUR CUSTOMER, SHE LOVES US, AND WE ARE VERY GOOD AT DEVELOPING PRODUCTS FOR HER. WE WANT TO FOCUS ON HER, SHE IS OUR QUEEN AND WE WILL NEVER MOVE AWAY FROM HER // that she can access our financial services portal and buy airtime, data and electricity as a 100% digital product while being able to make payments and transfer money. It’s an engagement strategy so that we can make her life easier and encourage her to our portal more often. “We try and choose really good technology partners and that is why we work with digital experts like Mobiz and Grapevine. We are going live with Oracle Commerce Cloud in September and we will be one of their first cloud implementations in the MEA region. Our new Oracle Commerce Cloud will really improve our speed to market with digital commerce products. “At the end of June 2018, it was about 13% of sales across around 100 brands. We started our brand portfolio in shoes and it worked well so we expanded it to all categories this year. We want to make brands accessible to the mass-market through credit. Our customer is loving having access to the brands, especially in fashion.”
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In the future, HomeChoice will consider introducing branded furniture to complement its fashion and bedding offerings, but Maltz is keen to ensure the range is not flooded. “We don’t want to overcrowd our marketplace – sometimes you can get onto a website and find more than 5000 pairs of shoes and you have to sift through all of them. We don’t want to create that situation – it can be overwhelming,” she says. “We know the customer very well and we want to curate the choice and choose brands that we think she will like. Currently, it’s working well and augmenting our existing offering.” While only a limited number of products will be on display in the new HomeChoice showrooms, the entire product range is easily accessible through digital channels and employees in showrooms will look to drive traffic through web and Mobi. “Our showrooms are to augment our omnichannel strategy,”
Maltz reiterates. “We want to be an omnichannel retailer with a highfocus on digital. Our showrooms will help us capture new market share – perhaps people who are nervous about shopping online or nervous about direct marketing. It helps us service clients by answering queries and recommending products, and it allows us to offer click and collect.” AFRICAN EXPANSION? HomeChoice’s preferred customer also exists outside of South Africa and while she is subtly different in other countries, her buying patterns are similar. This is why the business currently attributes 8% of its customer base to other sub-Saharan African nations. But when asked if HomeChoice will expand beyond South Africa’s borders in a big way, Maltz says that growth will only happen when the time is right. “We are currently in Botswana, Namibia, Lesotho and Swaziland with our retail business. The financial services business has not moved out of South Africa yet, but
HOMECHOICE
testing is underway. “Our top line growth rate over 10 years has been 20% and that’s quite high. At a certain point, you can grow your business too fast and introduce risk. We still enjoy good growth rates here and so I would like us to enter other markets at the right time. I do think it’s an opportunity for us in the medium term, we’re trading well in the countries that we’re already in, our customers like our products and we service those customers well. We will expand cross-border but we’re in no rush. There are logistical challenges. We tested in Zambia two years ago and there was great demand for the product but getting the product to the customer was complex. You must be confident that you can get the product to the customer in a timely manner and that is a big investment. Right now, we are busy with our showrooms and our digital strategy and there is only so much that we can take on at one point.” Interestingly, the customer outside of SA is increasingly digital – perfect for HomeChoice and FinChoice. “Outside of South Africa, we have a higher digital penetration,” says Maltz. “South Africa is very social, we have around 780,000 Facebook friends who are very active with us, but we tend to be more active on social media outside of SA.” This is great news for HomeChoice considering its ‘digital first’ strategy. The only hurdle is
// WE ARE A FANTASTIC BUSINESS. WE HAVE SO MUCH OPPORTUNITY AND WE HAVE A LOT OF FUN WORKING HERE //
ensuring regular, uninterrupted access to Mobi and web connectivity, and the company is working with MNOs to ensure this is as constant as possible. “The cell phone companies can affect us with how broad their reach is and how much their data costs. In the financial services business, we have made all of our Mobi sites free if you’re on Vodacom and soon to be free on MTN. We will soon do the same for our retail business,” explains Maltz. In a time where retail businesses are under the spotlight, heavily scrutinised for how they deal with changing consumer trends, HomeChoice is an example to follow. Four key messages emanate from the company’s success story (which
has seen it become a R744 million operating profit business) - digital transformation is vital, not taking the customer for granted and understanding them deeply is fundamental, not overlooking township economies reaps rewards, and a sensible approach to growth results in sustainable operations. “We are a fantastic business,” admits Maltz. “We have so much opportunity. We have so many ideas and innovations and everyone is excited, and we have a lot of fun working here.”
WWW.HOMECHOICE.CO.ZA
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REMITTO
Remitto Targets
Countrywide Growth PRODUCTION: David Napier
Those active in agriculture and farming understand they work in industries with significant challenges. But for those that can offer fantastic service to clients, things are not so trying. In fact, the future looks bright for companies like Remitto, who have been delivering excellence for the past four years. MD Derek Alexander talks to Enterprise Africa about how his company will continue to grow by following sound business principles. www.enterprise-africa.net / 73
INDUSTRY FOCUS: AGRICULTURE
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Another year is rolling into its last quarter and it’s another year which has been like a roller coaster ride for those active in South Africa’s agricultural industry. Fluctuating currency, land reform, drought, skills shortage, economic turmoil and many more complicated issues have made the sector a challenging place to operate. But, despite the unpredictable nature of the industry, those businesses that are focussed on delivering excellence for their clients are managing to not only survive, they are thriving and growing. Remitto is the perfect example. Founded in 2013 by Derek Alexander, the company has become known as an industry leader in South Africa’s agricultural sector through the manufacturing, importing and distributing of world-class herbicides,
pesticides and fungicides. Four years into its life and growth is very much the appropriate word to associate with Remitto. This Free Statebased company has avoided any of the pessimism that has engulfed others. It has not become embroiled with economic and political negativity that has been peddled in the news. Remitto is a quickly growing business with big ambitions for its long-term future. “In the beginning, it was just me but with the help of great suppliers who were keen to help me with good payment terms and efficient product supply. I started with my own funds so there was no involvement from banks or financial institutions,” Derek Alexander tells Enterprise Africa. “I was working with Yield Chemical Group for 17 years and that company went through an ownership change.
// IT MAKES SENSE FOR US AS WE LIKE TO OFFER MORE THAN JUST PESTICIDES; WE WANT TO OFFER EVERYTHING THAT CAN HELP WITH THE EFFECTIVE RUNNING OF THE FARM //
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I was the MD of that company and I didn’t agree with the methods that the new owners were putting in place for future growth. I saw a gap in the market and I left the business to start my own company with nothing but the knowledge and experience I had gained over the years.” A true entrepreneur, Alexander has built Remitto around the Free State’s farmers which produce 70% of South Africa’s grain. “Remitto means ‘yield’ and that is what we are all about – producing more and being more efficient,” he says. GROWING Currently, Remitto employs around 130 people and works for a strong customer base in the central regions of South Africa with some exposure in the north. But in the future, Alexander is keen to grow into the agricultural centres of the Eastern and Western Cape where there are large markets to attack. However, competition is fierce in these markets and Remitto will look to promote its in house brands which are specifically designed for South African conditions.
REMITTO
“There are some companies that have country-wide exposure and that makes things challenging as they can lean more heavily on suppliers. Personally, I have had to decide whether we want to be big or whether we want to be effective. We can be profitable both ways, but we must pick our scale. Time will tell which is the best method. “We have in house brands, under the name DNA Plant Sciences, and with these products we are already busy expanding in the Western Cape. It will be on a wholesale basis but, with the Western Cape being the biggest market, we have decided we cannot stay out of it. “It is challenging but will get easier with time as we develop and release more of our own products,” he says. And as expansion in South Africa continues, Remitto will also look beyond the country’s borders for growth
opportunities. Alexander explains that the company has already had some success exporting to Namibia and will soon begin a push to gain traction in Botswana and Zimbabwe. “Logistically, they are wellpositioned for us,” he says. “Botswana is dryer and focussed on livestock farming which we can help with. Zimbabwe is the former breadbasket of Africa; its agricultural industry was even bigger than South Africa in the past and I believe they are now at a turning point with the new political system there. Because of these positives, we have decided to go in Zimbabwe, with a partner, to target the industry there as it grows.” Zimbabwe has stated its desire to reach ‘middle-income status’ by 2030 and the new government has highlighted agriculture as a key component of the plan to attain this.
// IT IS A RELATIONSHIP-BASED INDUSTRY. THERE’S LOTS OF TRUST BETWEEN PESTICIDE ADVISORS AND THE FARMER //
PORTFOLIO DEVELOPMENT Without a line of products that deliver the best possible service, Remitto would not have achieved the success that it has realised to date and Alexander is very keen to ensure that the product range remains first-class. To stay at the forefront of the market, Remitto has recently partnered with, among others, European suppliers Agrivi and Biovert to bring new products into its stable. “Biovert offers nutritional products and products that can enhance current pesticides and help them to perform better. There are also some products that are designed to enhance soil health, help microorganisms grow and help bring nutritional deficiencies to an optimum standard. For a long time in this industry, farmers tend to think they have replaced the organisms they take from the soil but that is not the case. We are at the stage where most of the farmers now know that and that product is now in place to help with that situation,” details Alexander. The company’s partnership with Agrivi will see a new type of software
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INDUSTRY FOCUS: AGRICULTURE
product offered and Alexander explains that expanding its service offering is part of a wider growth strategy. “It makes sense for us as we like to offer more than just pesticides; we want to offer everything that can help with the effective running of the farm. “In the industry, you either get a financial programme or a management tool. The product from Agrivi that we will offer is a complete package and can do costings and finances as well as complete management. It controls everything on the farm so that a farmer can understand how much everything costs. It’s a cloud-based programme and can be used to store all harvest and crop reports for as long as necessary. It is a one-stop shop for a farmer who needs to know everything that is happening on the farm. “Lots of farmers are using different systems but the results from our testing is that this one is very good.”
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Alongside these innovative and interesting products, Remitto continues to develop its own inhouse brands and Alexander explains that more will come to the market as soon as they are approved by the relevant authorities. To date, the company has registered 15 products and has 44 more going through the process. “It is more time consuming than difficult,” he admits. “You have to show proof of your chemical composition and then you have to undertake field trials. That can take one or two years depending on the type of product you are registering. Then you have to submit your report, and that is where the problems lay. Previously, this used to take around six-months and today the average is 21 months. You can easily wait up to four years for a product and that creates a big problem. Quite apart from the money you have to spend, it is the most time-consuming thing we do in the business.”
STAYING POSITIVE Despite the challenges in the agriculture and farming industries, Remitto has manged to grow significantly since its establishment. “We are in a country where the exchange rate is dictating prices, so the difficult thing is to maintain margins,” says Alexander. “You must maintain margins as you have a turnover increase as prices increase, so we have targeted a 10-12% turnover increase each year. We have been fortunate to achieve that to date.” And the MD expects this success to continue, even with the major problem of drought presenting significant challenges to the industry. “Two years ago, we saw a huge impact from drought on our sales,” he says. “The experience over the past year has again highlighted the problem of farmers access to finance. That is why we are planning to expand into areas with a slightly different climate and access to modern irrigation. It’s another
REMITTO
reason we are looking at Zimbabwe and Botswana, to spread risk. South Africa has excellent farmers but our climate is getting dryer and hotter. Maybe we are just in a cycle, but it’s definitely one of the biggest issues.” The other big issue facing the company, and the industry – land reform. While Remitto is not directly impacted by the problem, the indirect impact can be major. “Everybody knows that food production is important but, right now, it is more political than to do with helping companies feed people. Land is the last issue that hasn’t been transformed to everyone’s liking. As long as that remains a problem, that will keep people from investing into agricultural industry. The politicians are making the right sounds, but the usual problem here will be whether they can implement. All of the good plans and visions are nothing if you cannot implement,” says Alexander.
Overall, now is a good time to be in the agriculture and farming space. Demand for food products will only continue to grow and the government is pumping money into the sector to ensure it becomes a sustainable job creator. In October, the Department of Labour announced its intention to invest R800 million in agriculture and related business over the next year. Deputy President David Mabuza said land reform processes that South Africa is undertaking pose no threat to the agriculture sector and the South African economy, and the Agriculture, Forestry and Fisheries sectors created an additional 39,000 jobs in the fourth quarter of 2017, according to Stats SA. Remitto is perfectly placed to capitalise on this development. “It is a relationship-based industry,” says Alexander. “There’s lot of trust between pesticide advisors and the farmer. We always stick to sound business principles that have been in
place since the beginning. “After five years, most of our systems are running hitch-free and we have resources to invest into expansion and risk mitigation so that will be the focus for the next five years.” Asked if the future is exciting for Remitto in southern Africa, Derek Alexander is unequivocal. “I enjoy this business very much,” enthuses Alexander. “My focus is to keep the business exciting by always having one or two new projects. As long as we have that, it will always be exciting. Now is an exciting time; there is always uncertainty in some situations but we are certainly entering an exciting phase for our business,” he concludes.
WWW.REMITTO.CO.ZA
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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. AFRICA OIL WEEK NOV 05-09 | CAPE TOWN Africa Oil Week is the meeting place for Africa’s upstream oil and gas markets. The event brings together governments, national oil companies, investors, corporate players, independents and financiers – giving them a place to network, discuss and share knowledge. Africa Oil Week attracts the highest quality speakers. Sessions are headed by top figures in the sector, including ministers, heads of NOCs, leading scientists and CEOs from major and independent companies. AFRICA COM NOV 13-15 | CAPE TOWN The place to meet everybody who’s anybody in African telecoms and technology, AfricaCom brings
together 14,000 attendees, 450 speakers and 400 exhibitors. Whether your focus is connectivity infrastructure, disruptive technologies, digital services or ICT strategy, this is the place to network, learn and get deals done. SOLAR-TEC NOV 17 | CAIRO The leading power exhibition and conference in North Africa brings together over 300 manufacturers and suppliers of power solutions from across the globe. Visit for free and explore a wide range of products including generators, transformers, cables, switchgears, off-grid solutions, PV panels, inverters and much more. Enhance your knowledge in free workshops and seminars delivered by influential industry leaders.
AFRICA OIL WEEK CAPE TOWN ICC NOV 05-09 AFRICA COM CAPE TOWN ICC NOV 13-15 COMPLAST SOUTH AFRICA GALLAGHER CONVENTION CENTRE NOV 13-15 PU TECH AFRICA SANDTON CONVENTION CENTRE NOV 20-21 BUILDEXPO AFRICA TANZANIA DIAMOND JUBILEE HALL – DAR ES SALAAM NOV 01-03 THE BIG 5 CONSTRUCT EAST AFRICA KENYATTA INTERNATIONAL CONFERENCE CENTER NOV 07-09 ETHIOPIA INTERNATIONAL TRADE EXHIBITION MILLENNIUM HALL – ADDIS ABABA NOV 15-17 FEED AFRICA EXPO ABUJA ICC NOV 20-23 SOLAR-TEC CAIRO INTERNATIONAL CONVENTION & EXHIBITION CENTRE NOV 17-19
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