Enterprise Africa April 2019

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

April 2019

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Quality Service Delivery Sets Sureswipe Apart Exclusive interview with Sureswipe Managing Director Paul Kent

ALSO IN THIS ISSUE:

Glodina / Durban ICC / Yamaha / Afrivet

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EDITOR’S LETTER

EDITOR Joe Forshaw  joe@enterprise-africa.co.za SENIOR PROJECT MANAGER Sam Hendricks  sam@enterprise-africa.co.za 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 Chris Wright  chrisw@enterprise-africa.co.za FINANCE MANAGER Chelsea Pettifer  Chelsea@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 CONTRIBUTOR Benjamin Southwold CONTRIBUTOR William Denstone

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

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April’s Enterprise Africa centres around the theme of quality and reputation. A positive situation cannot be achieved without the successful combination of both. Produce quality products but have no reputation? – you’ll end up with no customers.

Poor reputation even with good quality will result in no customers. The balance is vital – both require constant nurturing.

In this edition, we hear from companies that have achieved the perfect mix – quality offerings that are redefining the standards across the country from organisations that have built a reputation over extended histories.

For 11 years, Sureswipe has been bringing innovative services to customers who have been crying out for disruption in the payment service provision industry. By bringing quality service delivery, Sureswipe has built a reputation as an industry leader – MD, Paul Kent explains more.

In Durban, at the city’s International Convention Centre, the focus on quality is unrelenting. Updating of the Centre’s seating, bathrooms, kitchen equipment, Wi-Fi technology and much more, has resulted in several awards and a number of exciting exhibitions coming to KZN. The Yamaha brand in South Africa is known for quality products and new Managing Director, Robin Van Rensburg is looking to drive quality service to help build the company’s reputation across southern Africa.

BluChip Retail Solutions has an unrivalled reputation for excellence but in a difficult retail environment the company has had to adjust its strategy to achieve growth. Because of the level of quality provided, new customers have not been hard to come by.

The message from all is clear: Deliver quality products and your brand will benefit; drive strong brand recognition and demand will always follow.

Tell us how you are promoting your brand and how you are ensuring that quality is non-negotiable. We’re online @EnterpriseAfri1

Editorial & Design +44 (0)20 7193 2735

Cover Image © Devin Lester

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 2019

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

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

8/SURESWIPE Quality Service Delivery Sets Sureswipe Apart Helping independent retailers and other clients to accept payments for their goods and services but doing so with a touch of quality and excellent service delivery has resulted in Sureswipe becoming known as the industry leader in South Africa’s payment service industry. MD Paul Kent talks to Enterprise Africa about the company’s ongoing success and his plans for the future.

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CONTENTS

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INDUSTRY FOCUS: TECHNOLOGY 17/PILOT SOFTWARE All About Serving, Not Waiting INDUSTRY FOCUS: RETAIL 25/BLUCHIP RETAIL SOLUTIONS Retail Slowdown Pushes BluChip in New Direction INDUSTRY FOCUS: AGRICULTURE 30/AFRIVET Raising the Stakes in Search of ‘One Health’ Solutions INDUSTRY FOCUS: AUTOMOTIVE 36/YAMAHA SOUTH AFRICA Quality Without Question Driving ‘Kando’ in SA 44/WOODFORD CAR HIRE Blending Family Principals & Innovation to Stay On Top INDUSTRY FOCUS: LOGISTICS 50/GRINDROD Ground-breaking in Every Way

69/ INDUSTRY FOCUS: HOSPITALITY 57/DURBAN ICC Durban’s Famous ICC Continues to Improve INDUSTRY FOCUS: PROPERTY 64/HEARTWOOD PROPERTIES Property Pioneers Make Landmark Listing INDUSTRY FOCUS: MANUFACTURING 69/GLODINA R150 Million Investment Brings Iconic SA Brand Back to Life INDUSTRY FOCUS: INFRASTRUCTURE 75/RAND WATER Increased Demand No Problem for Rand Water INDUSTRY FOCUS: MINING 81/PETRA DIAMONDS Petra Holds All the Jewels

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R18BN EXPANSION PLAN FOR DUBE TRADEPORT The Dube TradePort Special Economic Zone (DTP SEZ) in KwaZulu-Natal continues to experience an unprecedented wave of investments.

The port, which is one of two SEZs in the province, has already created thousands of jobs and contributed immensely to the provincial fiscus since opening its doors in 2010.

This trend that looks set to continue thanks to the R18 billion investment, unveiled recently, is part of the second phase expansion plan of the DTP SEZ. This second phase will bring an additional 45 hectares of prime light industrial land within the port.

“The site will serve as the foundation of Dube Trade Port’s next phase of investment attraction, which is projected to total close to R20 billion over the next 5 years,” Economic Development MEC Sihle Zikalala said.

Zikalala said this heralded more good news for the growth and prosperity of the province.

“If the massive success of the first phase of the DTP SEZ which we launched in 2010 is anything to go by, we are doubtless that the second phase will surpass all expectations,” he added.

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HISENSE INJECTS R72M INTO SA ECONOMY Trade and Industry Minister Rob Davies has welcomed Chinese electronics manufacturer Hisense’s R72 million investment into its refrigeration and television production lines at its Atlantis factory in the Western Cape.

Referring to the investment as an “important achievement”, Davies said the injection into the plant is proof that South Africa remains an attractive investment destination across all sectors, including advanced manufacturing.

Hisense, a leading global company and a world leader of flat panel television, household appliances and mobile communication, is expanding its plant as it gears for the growth of the fast moving consumer goods sector on the African continent.

“Everyone who is involved with this kind of a project needs to be extremely proud of what has been achieved here because this is an important investment, which has injected R72 million into the economy and created 150 quality manufacturing job opportunities.

Moreover, this investment brings Hisense’s total investment in this Atlantis plant to R440 million, which is a significant investment,” said Davies.

BIDVEST CEO APPOINTMENT A WIN FOR GENDER TRANSFORMATION President Cyril Ramaphosa has offered warm congratulations to accomplished business leader Mpumi Madisa on her appointment as Bidvest Chief Executive Officer.

“The emergence of Mpumi Madisa as Chief Executive of a major corporation in our economy is a significant personal achievement that also signifies a new advance in gender transformation in business,” said the President.

Bidvest named Madisa as CEO-designate on the eve of International Women’s Day, observed on 8 March 2019.

Reflecting on Madisa’s achievement, the President said her appointment is an inspiration and sets an example for many companies, especially at the level of the Johannesburg Stock Exchange (JSE) Top 40, in the development of human capital and the transformation of society.

“Ms Madisa’s appointment is therefore an occasion for celebration and for renewed commitment to accelerated change and progress in the highest echelons of our economy,” said the President.

Madisa will head the trading and distribution company from July 2020, taking over from current CEO Lindsay Ralphs.

She becomes the first woman to lead this major industrial group which employs 137,000 people and has a market capitalisation of R72 billion.

Madisa is a former Chief Director in the Gauteng Provincial Government. She holds a Master’s Degree in Finance and Investment from the Wits Business School as well as a BComm Honours Degree in Economics and a BSc in Economics and Mathematics from Wits University.

NEWS SNAPSHOT

President Cyril Ramaphosa stuck on a commuter train @DavidMilis - Twitter

PRESIDENT WANTS URGENT ACTION ON PRASA President Cyril Ramaphosa has instructed the Minister of Transport, Dr Blade Nzimande, to urgently address challenges plaguing commuter rail agency, the Passenger Rail Agency of South Africa (Prasa).

The President held a meeting with Nzimande at Tuynhuys in Cape Town following his first-hand experience of the difficulties regularly experienced by commuters when he boarded a train from Mabopane to Tshwane CBD last month.

Among the challenges raised at the meeting was the deterioration of infrastructure and unacceptable delays of train services, which often result in commuters arriving late for work, school and other commitments. Passenger and driver safety also received attention.

The President stressed the need for a safe, reliable and integrated public transport system to support the country’s economic development aspirations.

While appreciating that Prasa is currently implementing one of the largest urban rail modernisation programmes in the world, the President said the agency’s failure to implement its

turnaround plans and, in the process, pay due attention to critical rail operational functions, is a cause for concern.

He has directed immediate action to strengthen governance by stabilising the leadership at board level and filling critical vacancies, including that of the Group Chief Executive Officer.

The President has also called for practical and urgent action to bridge the gap between the turnaround strategies developed and their day-to-day implementation.

He has directed that a capable and skilled team of specialists should be established to conduct due diligence on the rail network to determine the extent of challenges.

Urgent action is required to accelerate the implementation of the R172 billion modernisation programme meant to eliminate challenges occasioned by aged infrastructure.

“There is no reason commuters should have to endure frequent delays or feel unsafe on our trains. This is a problem that we can work together to solve,” President Ramaphosa said.

SANRAL GETS R5.7BN INJECTION The Transport Department has transferred R5.7 billion in its mediumterm budget appropriation to the toll road network of the South African National Roads Agency (SANRAL).

The transfer is a strategic intervention by the department to deal with the non-payment by Gauteng road users of the Gauteng

Freeway Improvement Project (GFIP).

“As a result of SANRAL’s toll network experiencing financial difficulties and to ensure that SANRAL complies with its payment terms to investors, as well as to maintain the toll network across the country, funds were transferred from the non-toll network to the toll network,” Transport

Minister Dr Blade Nzimande said.

He said because no additional funding could be sourced from National Treasury to cover the GFIP shortfall, the department had to reprioritise its mid-term spending, while government is consulting all affected stakeholders on the permanent GFIP financing model.

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SURESWIPE

Quality Service Delivery Sets Sureswipe Apart PRODUCTION: David Napier

Helping independent retailers and other clients to accept payments for their goods and services but doing so with a touch of quality and excellent service delivery has resulted in Sureswipe becoming known as the industry leader in South Africa’s payment service industry. MD Paul Kent talks to Enterprise Africa about the company’s ongoing success and his plans for the future.

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The way people pay for the products and services they consume is in a constant state of shift. Before we get settled with whatever the latest trend is, payment systems will likely change again – it’s just the nature of technology, forever adapting. Today, the two most prominent payment methods globally are cash and card. Bartering is almost gone, cheques have become extinct, coins are bulky and inconvenient, and paper cash is unsafe and inconvenient to carry. This, along with the rise of online shopping, has fuelled the growth of card payments and digital money transfer. So, what happens when customers want to use their cards?

Banks are issuing are issuing new cards all the time, but retailers are finding it

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difficult and expensive to accept plastic?

Whether it’s contactless or chip and pin, South Africa’s Sureswipe has the answer.

Founded in 2008 in Johannesburg, Sureswipe has grown steadily over the past 11 years and is now the industry leader in a highly competitive market. The company offers traditional standalone card machine; Integrated payments for larger retail franchise stores looking for faster transactions to reduce queues; mobile MOVE card machines for businesses on the go with a POS LITE APP based point of sale software for start-ups and smaller retailers; Gift and Loyalty card programmes for business owners looking to retain, attract customers and grow their business, and much more.

Managing Director, Paul Kent tells Enterprise Africa about the idea behind Sureswipe.

“We have around 55 million people in the country and there’s over 70 million bank cards in circulation,” he says. “We have good distribution on the issuance of cards but what we don’t have is good distribution of card acceptance points.

We want to make card acceptance easy and accessible to retailers across the country. That means we have to bring options to merchants and retailers of all size. Even to get a traditional standalone or portable card machine, it is still quite expensive for a smaller retailer.

We have introduced a mobile card machine solution to the market which, from a monthly fixed cost perspective,

INDUSTRY FOCUS: TECHNOLOGY

// ONLY 2-3% OF TOTAL RETAIL SALES ARE THROUGH E-COMMERCE SITES AND THAT IS SUCH A SMALL PORTION THAT WE ARE STILL WAITING TO SEE A STRONG SHIFT IN CONSUMER PATTERNS // is roughly about 20% of the cost of a standalone device. These improvements will propel us into an environment where more people can accept card payments.

The estimates however still suggest that just two or three out of ten retailers in South Africa have a card reader in their store and eight out of ten transactions are still cash so there is a lot of scope for growth in South Africa.”

In the UK in 2017 – a market where card transactions are the leading type of payment – more than £900 billion is moved through cards - more than a third of the country’s GDP. Chip and pin, contactless and remote payments are all popular, and mobile and wearable tech device payments are now starting to gain traction as consumers look for easy, fast and convenient payment options.

In South Africa, around ZAR 140 billion now travels through digital payment channels, and that volume is forecasted to increase by more than 16% up until 2021.

For Paul Kent, the opportunities in this ever-changing landscape remain attractive.

He is confident that the key to unlocking further market share is service delivery. The products are based on technology which is already widespread in other international markets and they have been developed to very high standards. Focus on quality service is what helped the company to start, and Kent says that is what will differentiate Sureswipe in the future.

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FIVE YEAR STRATEGY “When we started out more than 10 years ago, the average waiting time for an independent retailer to get up and running took about 30 days before a bank would send someone out. It took another couple of weeks before you would get your card machine installed and if the card machine stopped working, it would take another week to get a technician out – all of this with very high fees,” he remembers. “Since then, the banks have caught up with our offering, but we’ve upped our game since then too. We came in saying we could get customers set-up within seven days and we would send technicians out to fix machines within two days – that was our commitment upfront. We are now getting card machines installed in just two days and our service levels are same day or next day at worst. We asked ourselves ‘if we started the business today with all the knowledge we have now, what would we do differently’ - We are looking at fundamentally changing our operational model at the heart of what we do. We are looking at how we scale the business but still provide the right level of service consistently to the target market that we have identified.”

Fostering strong relationships with customers based on quality service is the key for growth in all service-based industries. Where South Africa’s banks had failed to meet the service requirements of the small retailer, Sureswipe was bringing refreshing focus with excellent service and affordable rate for clients. Actively choosing to concentrate on independent retailers rather than major retail chains, Kent and Sureswipe had found the perfect recipe for success.

“Most transactions in the country are still cash-based, card is moving but cash is still preferred. 10 years ago, there were four major banks and they had an

oligopoly. Barriers to entry were very high and in that environment, with big complacent corporates, they get lazy. That is when the opportunity for competition comes through and we have seen that with the growth of Capitec Bank. I still think there is an opportunity for us to take more market share,” he says.

The use of digital tools will help with Sureswipe’s growth in the same way it has helped the entire card industry to thrive.

The banking sector landscape has shifted to a heavy digital focus and is becoming increasingly popular with many new banks now emerging around the world, with no physical branches and all client interaction and service managed through apps, websites and over the phone. First Direct and Monzo in the UK, GoBank and BankMobile in the USA, Xinja in Australia and many more are new types of bank that are completely app based, 100% mobile, but still issue cards for secure transacting. In South Africa, TymeBank has received attention for becoming the country’s first fully digital bank.

Kent sees the opportunities that stem from the digital approach when it is combined with quality service delivery.

“We take great learnings from the likes of TymeBank with our sign-up process. I believe, if we have the correct documentation, we could get someone up and running with a card machine in 30-60 minutes. We have a network of sales people on the ground and that is where the majority of our sales come from, so if we have people on the ground deploying devices in 30-60 minutes, that will be a real achievement.”

He identifies new start-up businesses as those which could benefit from an efficient digital sign-up process.

“I think newer businesses are looking to do more online sign-up, so we need to work on that. There’s a lot of growth potential there, particularly

// WE STARTED OUT OF ANOTHER COMPANY SO IT WAS MORE INTRAPRENEURSHIP NOT ENTREPRENEURSHIP //

SURESWIPE

with businesses that are opening up for the first time. For the more established businesses in physical stores or in the mall, personal selling is still the best way to target them. There is a lot of growth in our wider distribution network across more regions in South Africa.”

PROUDLY SOUTH AFRICAN Sureswipe has achieved double-digit year-on-year growth and continues to innovate its model to best serve its clients. This is proof that quality of service and competitive pricing is everything in this industry considering that none of the tech is novel. Key in understanding the level of quality needed for the market comes from Sureswipe’s team – people who understand the South African retail environment. With 140 people working countrywide to onboard and service as many clients as possible, Sureswipe remains a growing South African fintech company.

“We have decentralised decision

making and that is the reason we have onboarded experienced people from other markets – we want to distribute decision making and constantly learn.

We like to promote and develop from within and we are looking at developing management so that we can disperse decision making and operate business units separately. That mentality gets people looking at the right things and making the right decisions,” explains Kent, who founded the business in 2008 and has been actively involved every day since.

The idea for the company’s model came about when the South African medical insurance sector experienced changes in the medical benefits. “At the time, I was working at Healthbridge, (an electronic switch between medical practitioners and insurers), we realised that with the industry changing to copayments or reduced medical benefits, the way health professionals were collecting money was changing and that existing technology could help,” says Kent.

“Doctors, who had been so used to just sending claims to a medical insurer, now had to start requesting money from their patients and they were looking for alternative payment mechanisms. Card transactions were the obvious solution and that was at the same time that Capitec Bank was getting into merchant acquiring and looking for a distribution partner. Timing in business is everything and we got the timing right. There was a need in the market for a customer that Healthbridge already had, and there was a bank that could help with distribution around merchant acquiring,” he adds.

“We started off operating out of another company so it was more intrapreneurship not entrepreneurship.”

After starting out as a product within Healthbridge, it became clear to Kent and the rest of the team that this product could work, not just for doctors, but also for independent retailers across the country.

“There were two key things that retailers were struggling with,” details Kent,

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INDUSTRY FOCUS: TECHNOLOGY

“service from the banks – the primary providers at the time – was exceptionally poor, and fees were high. Poor service and high fees is the perfect recipe for disruption. We started the business with a small sales team and had about 200 customers, a few transactions, and we outsourced most of the business operations. We outsourced the call-centre and the technicians, but we quickly started looking at the focus areas that we needed to be competitive in our chosen target markets. It was about access to service and access to product for retailers. We quickly started bringing the service element, that we had historically outsourced, back in-house.”

And, over the last decade, the recipe has been perfected. “We now have more than 8,500 customers and 10,000 point of sale devices in the market,” enthuses

Kent. In that time, the business has been named as a National Business Awards finalist, a Deloitte Top 10 company to work for, a preferred supplier by the Restaurant Association of South Africa, Paul Kent has been named as the NSBC National Entrepreneur Champion, and the company has concluded a number of successful acquisitions.

STAYING RELEVANT In 2016, Sureswipe acquired fintech business Concorde Solutions to provide merchants with a more streamlined process and make the payment method far simpler for consumers by allowing integration between the card payment device and the point-of-sale software. In 2018, Sureswipe acquired a majority stake in point of sale software company Humble Till. Both acquisitions are driven by the

desire to deliver quality service for clients and a seamless experience for end-users, becoming not just a payments provider but a solutions provider.

This growth has been key in keeping the business at the sharp end of the market. “We work in a very competitive environment and when we started 10 years ago there were only the banks and one other non-bank player, but today there are so many. They open and close all the time as it is a very competitive market. Sureswipe is well-positioned to consolidate the market and create growth through acquisition,” says Kent.

As for development of new technologies and preparation for the next generation of retail outlet, Kent remains confident that Sureswipe has the product portfolio to remain relevant and will be able to adapt as and when new concepts

ACS - Proud Product Partner with Sureswipe In a world where at least 40% of CEOs globally consider information security one of the greatest risks to business, ACS a division of Altron was the first company in South Africa to offer retailers a PCI-validated Point-to-Point Encryption (P2PE) solution to protect consumer card data at point-of-sale.

“When searching for a payment solution, the most important factor is the level of security ensuring that sensitive data is not compromised. While criminals are becoming more experienced and ‘find new ways of stealing personal and financial data, it is crucial to have a payment security plan for your business, regardless of the industry or size” says Charl Van Rensburg, Manager for Integrated Transactions at ACS. As with any good sunny day, there’s a dark cloud bound to ruin it. As your customers transact both online and offline daily, there is a chance for criminals to gain exposure, which is why it is becoming more crucial for businesses to protect customers data, ensuring peace of mind. Businesses are now required to have the necessary organisational and technical processes ready to prevent confidential information from being compromised, or they could face hefty financial penalties.

That is why the Payment Card Industry Data Security Standard (PCI DSS) has been implemented to ensure policies and procedures are intended to optimize the security of card transactions and protect cardholders against the misuse of their personal information.

ACS provides its customers like Sureswipe with increasingly-enhanced security at a time where we can see more consumers bank accounts being emptied through fraud. “We want to ensure that we are able to accept any valid payment token presented to a terminal and switch that token securely to the relevant acquiring partner” says Van Rensburg.

He adds “We value our relationship with Sureswipe as their trusted partner for their customers transactions. We understand the importance of providing Sureswipe’s customers with ease, convenience and safety as they transact.”

Protecting the privacy and security of customer’s data has never been more important. Implementing the right procedures and staying ahead of malicious entities that could compromise your business allows you to mitigate the risks in time as well as protect your brand reputation and promise to your customers

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A DIVISION OF ALTRON

INDUSTRY FOCUS: TECHNOLOGY

arrive in South Africa.

“With unattended check outs and Amazon Go-type stores, there are lots of different payment options that are becoming available,” says Kent. “The first thing that will change is the different customer experience at the point of interaction. If you think about making a card payment in a Quick Service Restaurant or boutique store or highstreet chain, the experience is the same in every store. Now, there are many more

options available – QR codes are popular, contactless is more popular with low value items, mobile point-of-sale devices are being used as queue busters; all of these payment options change the experience.

However, we have a very long way to go before we start seeing widespread tech like that in South Africa.”

Could the company look beyond SA’s borders for further growth opportunity?

According to Kent, that has long been an ambition. When interviewed in 2016, Kent

// I BELIEVE, IF WE HAVE THE CORRECT DOCUMENTATION, WE COULD GET SOMEONE UP AND RUNNING WITH A CARD MACHINE IN 30-60 MINUTES //

MD Paul Kent - Image © Devin Lester

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said that Sureswipe should be present across southern Africa by the end of 2018.

To date, the company has only had small success across border through its Humble Software partnership, and the reason for the slow progress is the rate of card issuance by banks.

“We have a philosophy around focussing on the right things and we believe there is a lot of opportunity still here,” he says. “We can do a lot more learning in South Africa before we look elsewhere. There’s a lot of regulatory requirements which differ in most countries. It’s not as easy as just picking up our model and just moving it to another country. More than that, we want to follow the card issuing. We have to consider whether there are enough cards being issued to make electronic payments and card transactions viable at the point of retail. The number of cards in circulation across Africa is still relatively small and until that increases, I’m not sure we want to go and be the bleeding edge in other developing markets.”

BOOMING IN TOUGH TIMES The success that Sureswipe has managed to achieve through its life is a perfect example to follow for companies aiming for the top of their sector. In the 11 years that Sureswipe has been operational, there has been a number of serious recessions in the country, and the 2008 global financial crisis provided little stability for the company in its early years.

“The independents are at the cutting edge of that. They are the first to feel any pinch in the economy and the last to feel any upswing. We really see the sharp end of these slowdowns,” admits Kent.

“What we’ve seen over the last couple of years is many companies closing their doors, much more than in previous years.

Businesses are not even surviving and that is very worrying. The economy is not growing and prices are going up on muchneeded services such as electricity and fuel.

VAT has increased and this has impacted on the ability of people to spend - we see that more and more,” he adds.

In 2018, South Africa’s growth was

SURESWIPE

// IT’S NOT AS EASY AS JUST PICKING UP OUR MODEL AND JUST MOVING IT TO ANOTHER COUNTRY // just 0.8% and figures are not expected to gain much momentum through 2019. However, the ever-optimistic Kent is hopeful.

“I believe the tough times will soon be behind us and I think we are looking towards an uptick in the economy. All the businesses that survive through the slow times are usually those that go lean and invest in running a tight ship. Having been lean and running a diligent operating model usually lets companies thrive when there is an upswing, so I am very positive about our own business and also about our customers.”

With the growth of internet penetration, roll out of strong Wi-Fi,

ongoing growth of the number of banked individuals, smartphone uptake, continued focus on ‘going digital’ in business, there will undoubtedly be opportunities for further growth at Sureswipe.

“The online ecommerce market in South Africa still needs to mature. It has had good growth over the past few years and sales like Black Friday drove people online, but those kind of deals are also in stores. Only 2-3% of total retail sales are through e-commerce sites and that is such a small portion that we are still waiting to see a strong shift in consumer patterns.

“Contactless has not taken off in a big way here yet as a lot of the acquirers, including us, have not done a good job of promoting it in store. Many small value transactions are still cash as its easy, but as contactless grows, it is going to become a lot easier and safer to use cards instead of cash.”

For this award-winning entrepreneur and highly accoladed

company, success has been sweet but there remains a lot more to be done.

An unrelenting and unerring drive for quality service delivery sets Sureswipe apart, and that focus is something which will not change anytime soon.

“Personally, I believe we are still at the start of our journey. I am still very much involved with the business and we have built a great team. In the early days I was very lucky to have a very good COO who ensured the sales operation was like a well-oiled machine.

We have had some great people on the service and technology side, and I think we can do so much more in South Africa, increasing our market share to SMME’s and independent retailers before expanding across our borders,” he concludes.

WWW.SURESWIPE.CO.ZA

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PILOT SOFTWARE

All About Serving,

Not Waiting PRODUCTION: Manelesi Dumasi

Pilot Software is one of the leading ePoS technology providers in southern Africa. As the company looks to continue growing after almost 30 years of success, it is beginning to look at new industry sectors and new geographical markets. MD, Glenn Miller talks to Enterprise Africa about the plans for development with this innovative and important business.

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South Africa’s culinary offerings are some of the world’s best. It is well-known that the creativity of chefs and abundance of high-quality ingredients makes for a truly inspirational restaurant sector. The country is in fact home to the Restaurant of the Year 2019 according to the international World Restaurant Awards where a panel of 100 industry experts judged Wolfgat in the Western Cape to be ‘a small, remote haven of purity and good taste in every sense’.

The hospitality and restaurant sector employs hundreds of thousands of people and is a big contributor to economic performance. And now, with ordering of food deliveries more convenient than ever, the restaurant sector has many opportunities for growth.

But you cannot operate an effective restaurant environment without a management system that helps staff and managers streamline day-to-day administration tasks. Historically, chefs and restaurant owners completed

paper spreadsheets by hand, recording everything from stock, recipes, orders, costs, bookings, staff hours, and many more important numbers. This was time consuming and inefficient, so technology has been created to make the whole process much more friendly.

One of the leaders in this sector in South Africa is Pilot Software. Founded in 1991 in Cape Town, the service offered by Pilot has become integral to the work of its customers and the company has built a strong reputation over almost three decades.

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INDUSTRY FOCUS: TECHNOLOGY

BY RESTAURATEURS, FOR RESTAURATEURS “The company was started by a couple of Spur restaurant managers primarily because they were sick of doing manual spreadsheets for balancing daily stock and performing daily processes within their restaurant. At that time, there was no such thing as an electronic point of sale (PoS), specifically one that dealt with back office complexities,” details Pilot Software Managing Director, Glenn Miller.

“They started building the product out based on the need of themselves in the restaurant. That gained the interest of a few of their fellow franchisees to the extent that they could run it is a business instead of running the restaurant.

“Eventually, some of the area managers of Spur and Spur as a corporation became interested

18 / www.enterprise-africa.net

in the product and they decided that it was something they could successfully implement as a standard in all of their restaurants.”

The Spur Corporation is one of the continent’s leading restaurant franchise networks, with more than 570 outlets across Africa and with exposure in Australia and the Middle East.

Growth with Spur helped Pilot to reasonably quickly take a position among the market leaders in South Africa with key competitors being mainly international companies or those focussed more on front-ofhouse operations.

Eventually, Pilot’s innovation and success was noticed by other big-name players in South Africa’s software industry.

“In 1997, a company called Softline, a local accounting and tax software

// OVER THE NEXT THREE YEARS, WE WILL BE FOCUSSING ON WHERE WE ARE NOW AND OUR EXPANSION INTO THE FACILITIES SECTOR // business, was looking to list and they needed acquisitions to boost their offering. They saw Pilot as a vertical market that they were not in and it was software so they were interested. They acquired 100% of the product along with all of the 400-odd sites and the staff count,” explains Miller.

“Softline listed, and carried the company for five years,” he adds. “In 2002, Softline were approached by Sage International to do a buyout and delist from the stock market. Softline had been on a buying spree and had acquired several software companies in different markets and different verticals.

Sage asked Softline to trim the product portfolio and only focus on accounts, tax and payroll products.

“At Pilot, a Management Buyout Opportunity came up and I was approached to assist thanks to my knowledge in the industry and experience with Softline. I became MD and we have been running independently since then. There have been a few changes but we are still a software business focussed on the restaurant industry.”

Pilot offers software, hardware, mPoS solutions, staff management programmes, accounting products, and all of the maintenance and support that any restaurant business could ever need.

But it is the back-of-house solutions which separates the company from its rivals, and this stems from the ideas installed by the founders back when electronic PoS was still a novel concept.

“We focus on the back end, meaning recipe stock and food cost

INDUSTRY FOCUS: TECHNOLOGY

control,” says Miller. “Our view is that if a restaurant can’t tell you what their food cost is (and it’s surprising how many can’t) then they are losing money hand over fist. We are focussed less on the front of house system as everyone has a touch screen and biometric PoS, and we look for on how restaurants manage their stock and how everything works behind the scenes. We have always focussed on that part of the business and that has helped us differentiate against new cloud and tablet-based products as they literally have no backoffice whatsoever.”

Today, the company boasts an experienced development team and an account management team made up of ex-restaurant managers who know and understand the intricacies of running a successful operation.

“Our customers need flexibility and so we have to have resources available.

We run 24/7 telephonically, remotely and on the road.

“With sales and account management, we tend to hire from restaurants. We look for people who have worked in front of house and can engage customers, and preferably they will have worked with our product.

Because of the churn in the market, we can get access to some very good restaurant managers and they become the drivers of the product. They have worked in restaurants and they

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understand restaurants so they can talk the right language with potential clients,” explains Miller, who has a history in computer hardware sales.

TARGETING CUSTOMERS For Pilot Software, not every restaurant is a perfect customer. The system has roots in the franchise model and is well-suited to independents. The very essence of the idea is about helping restaurateurs take control of their business, making their lives easier. That is why you will find Pilot Software at traditional-style restaurants with table service and higher value per transaction.

“It’s 95% restaurants and specifically sit-down restaurants,” says Miller. “We prefer to stay away from the quick service market as that is overtraded, and we stay away from the hotel integrated market as that is very competitive with international companies. We look at independent and franchise chain restaurants and the rationale there is that it is typically a more stable environment. People typically spend more money on a sit-down restaurant rather than a QSR so we prefer that profile because of the stability.”

When targeting franchises, Pilot looks for individual franchisees and helps them to build a perfect package that works seamlessly before demonstrating to the regional franchise managers and, eventually, the franchise HQ.

// OUR VIEW IS THAT IF A RESTAURANT CAN’T TELL YOU WHAT THEIR FOOD COST IS (AND IT’S SURPRISING HOW MANY CAN’T) THEN THEY ARE LOSING MONEY HAND OVER FIST // “Having built the product over the past 25 years, we believe we have most of the features that anyone could want – but there are always new requests in terms of digital integration, whether its loyalty or mobile payments etc. If we can get a few franchisees on board, we can then approach the franchisor and showcase the work we have done with the franchisees, hoping to be approved as a supplier of PoS products.

“We only have one product and there are iterations around that product depending on the customer requirements. Sometimes the user might want a specific loyalty programme integrated and we can work with third parties to deliver that functionality. Third party functionalities talk to the core product through APIs (application programming interface),” Miller explains.

Pilot has grown its capability enough, crafting its product perfectly, so that its reputation has spread across southern Africa. Today, you can find Pilot Software in more than 2500 South African restaurants and many across the borders in Mozambique, Zimbabwe, Botswana, Kenya, Zambia where the company has representation partnerships.

“We do 10% of our business outside of South Africa. The call centre and administration is handled in Johannesburg and sales and on the

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INDUSTRY FOCUS: TECHNOLOGY

ground support is handled regionally from our local offices.

“Johannesburg is our most popular region just because of its size,” says Miller. “There’s also no seasonality in Joburg whereas some of the other regions slowdown at various times of the year but Johannesburg is constantly busy.”

In the future, Pilot is investigating expansion opportunities outside of Africa. In a push for continued growth, Miller and his team have identified opportunities with franchise partners in Europe.

“We dipped our toes in the water with franchise groups in Cyprus and we hope to grow there. We’ve touched Australia, and we previously had a number of sites in the UK but that franchise has withdrawn from the market. Being a Rand-based product, the exchange rate is in our favour and we can make the product very affordable for any of those Dollar or Pound-based markets. It’s a question of how we can break into the markets affordably, without having sales infrastructure on the ground. It’s certainly something we’d like to do, but

we’d like to do it with partners who have infrastructure and can share the revenue in terms of software licensing.”

European markets are particularly attractive to Pilot because of the number of similarities with the company’s existing operations in South Africa. Tax structures are similar, many of the countries are English speaking, and the time zones are complimentary.

“So, we are confident that the product will meet the needs for the market and we are confident that we can effectively promote the product,” enthuses Miller.

Now is the perfect time to be looking at market diversification and risk dispersion considering the economic climate in Pilot’s home market.

A TOUGH SERVING 2018 saw the economy in South Africa grow by just 0.8%. The outlook for 2019 is that slow growth rates will continue.

Policy uncertainty, power problems, natural phenomenon and a myriad of other factors have all combined to create a challenging environment for all businesses.

According to Miller, for those in the restaurant business, things can be

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22 / www.enterprise-africa.net

especially difficult and that can lead to negative impact on Pilot.

“It’s not just our customers, it’s their customers too. Eating out is always one of the first things to get cut when times are tough,” he says. “Business confidence is down across the board and we are seeing that knock-on effect where cancellations are up 20% compared to what they would normally be. We are seeing a lot of the smaller sites close and, for the first time, we are actually seeing a few of the franchise sites close.

Primarily it’s in areas that are more economically affected than the big metros. As soon as you start removing visitors or luxury spend from these areas, business is greatly affected.”

Because of this atmosphere, Pilot is again looking at diversification – this time in its customer profile. Its product is perfectly suited to work across various industries and the company is keen to explore beyond just the restaurant business.

“To manage our own risk, we’ve investigated a move into the facilities market and we’ve put quite a lot of research and development into being able to cater for facilities requirements.

We’re talking about things like outsourced canteens, outsourced hospitals, retirement villages and similar.

Those groups usually choose one of the big four facilities providers and use them to provide services on a contract basis. We’ve provided proof of concept for all of those big four and we are active with them. Instead of an outright sale, it is a monthly service and we set up as monthly fee for which we provide hardware, software, maintenance, support, development etc. It’s a great

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PILOT SOFTWARE

// WE CAN BE NEGATIVE, OR WE CAN GO OUT AND LOOK FOR OPPORTUNITIES – WE CHOOSE THE SECOND OPTION // model for recurring revenue and our long-term results,” details Miller.

He sees this sector as one which can provide major growth opportunities and is gearing the business to make a real impact in the facilities management market.

“We see two main growth areas,” he continues. “First is facilities where, at this stage, we don’t have a huge amount of competition. We are working hard to get a foothold there before others wake up to the fact it is a viable market, although it does require a lot of development.

Second is traditional cash registers.

In terms of trying to grow the cash payment base in this country, there is a big problem with cash registers because

nothing gets recorded. If we are to widen the tax base, we will need some kind of electronic PoS – whether it’s through a fiscal printer or legislated by government – we are watching closely as we feel there are more cash register hospitality sites compared to ePoS sites.”

Any business that handles over-thecounter transactions between business and customer, which is currently working with a rudimentary cash register, could potentially benefit from the expertise delivered by Pilot Software.

REMAINING POSITIVE After 28 years of successful growth, Pilot Software is anchored alongside the industry’s biggest and best, and tasks itself with remaining at the cutting edge of technological advancements.

To drive further progress within this expert business, the future strategy will be centred around expansion in the facilities sector and ongoing integration of products.

“Over the next three years, we will be focussing on where we are now and our expansion into the facilities sector.

Facilities is a massive sector and if we expand how we want we could easily

double the size of our business by building relationships with a few of the key players.

“There is a lot of opportunities around integrations – for example, mobile payments and loyalty schemes – but it would need to add substantial value to the product for us to put big resources to it,” says Miller.

The restaurant business still provides the company with a host of valuable opportunities and, considering South Africa’s expertise in delivering irresistible food, quality service and a famously warm welcome, it is clear that Pilot has developed a recipe for sustainable success.

“We remain positive as we know that our industry is under pressure. We can be negative, or we can go out and look for opportunities – we choose the second option,” Miller concludes.

WWW.PILOT.CO.ZA

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BLUCHIP RETAIL SOLUTIONS

Retail Slowdown Pushes BluChip in

New Direction PRODUCTION: Karl Pietersen

With the retail environment stumbling in South Africa, expert shopfitter and manufacturing business, BluChip Retail Solutions has had to look to new avenues for growth opportunities. CEO Brett Stagman tells Enterprise Africa that food, residential and commercial property will complement the company’s reputation in the retail sector. www.enterprise-africa.net / 25

INDUSTRY FOCUS: RETAIL

//

In November 2017, Enterprise Africa spoke to BluChip Retail Solutions - one of the country’s leading manufacturing and fitment companies that has delivered endto-end solutions for leading retail chains – and CEO Brett Stagman was excited about the company’s prospects with many big projects in the pipeline.

But 2018 was a challenging year for South Africa. A technical recession and a lack of certainty in the markets resulted in just 0.8% GDP growth.

This impacted on the ability of both consumers and organisations to spend money. This, combined with a switch in spending habits which has seen more people opt to shop online, has resulted in South Africa’s retail sector to slam on the brakes. Stores are cutting back hard on investment and, in some cases, scaling back store

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networks and consolidating footprints.

For BluChip Retail Solutions, which has focused on retail for more than two decades, this situation fuelled a strategy change.

“Retail has taken a big blow in South Africa,” says Stagman.

“Traditionally, 80-90% of our revenue was coming from retail but the retailers are now pulling back and a lot of the big retailers are consolidating and closing some of their doors – it’s not a very pretty picture in the country in terms of retail.

“We’ve gone on a big drive to find new, smaller clients that we previously would not have taken on because we were busy with big brands. We are now working with a lot more smaller brands, and we’ve moved into other avenues - we’re in construction, we’ve built schools and we are continually trying to de-risk ourselves from the retail environment.”

ALTERNATIVE AVENUES Today, BluChip is happy to offer construction services, installations services for office and residential industries, refit and refurb for new industries, as well as maintaining its portfolio of retail work.

While its core offering remains similar, applying its service in new industries has helped to stabilise the project pipeline while the retail industry is shaky.

“Online shopping is taking a big chunk of the spend in retail and property landlords are struggling with leases being cancelled. Edgars, one of the biggest anchor tenants to all of the landlords in South Africa, is completely restructuring and closing some of its doors as it looks to make all of its sites smaller,” says Stagman.

“We’ve moved into gaming, hospitality, restaurants, and we are moving away from retail as much as

BLUCHIP RETAIL SOLUTIONS

possible. Food will always grow and we are concentrating on Popeyes and other restaurants at the moment. we will always have a retail focus but we are trying to de-risk the organisation and grow with other types of business as well.”

On the construction side, the company has demonstrated its capabilities successfully by putting up new school buildings for SPARK Schools, a network of independent and private schools in South Africa.

“We manufacture and deliver all school furniture,” explains Stagman “We did a massive roll out with around R5-6 million of school furniture. This combined with the actual physical construction of the schools makes for an interesting project. We are excited about construction after this build.”

Add construction to shop

fitting, glass and aluminium services, signage, property advisory services, steelwork, tiling, logistics, project management, design, digital display, biometrics, radio frequency identification, and many more services and you quickly realise that BluChip is a company that truly offers a turnkey solution.

“That continues and it gives us the edge in terms of pricing,” says Stagman. “We can go to a retailer and provide a whole host of services and that reduces overall cost. The one division that has taken off quite nicely is our tiling division. We import all the tiles for our clients and where they were paying a large fee for tiles from a distributor, we can import and offer savings but allow everyone to still make margins.”

However, even with slow retail and

unpredictable conditions, BluChip has continued to perform well. Perhaps because of the change in focus, perhaps because of brand strength, or perhaps because of the range of services it can offer – whatever factor it is, Stagman is pleased to report that growth continues.

// WE COULD NOT TAKE ON ANYMORE WORK AND WE HAD OUR BIGGEST MONTH EVER IN NOVEMBER 2018 WHERE OUR FACTORY WAS AT FULL CAPACITY // www.enterprise-africa.net / 27

INDUSTRY FOCUS: RETAIL

staff,” details Stagman. “Some of our divisions, for example signage and glass and aluminium, are new businesses and they are growing continually. With glass and aluminium, we are doing a lot of residential at the moment – probably 60% of turnover is residential.

“The focus for 2019 is for us to move further into residential where we will fit the kitchens and cupboard for large developments. We are also doing a lot of office developments and internal constructions where we will take care of the all the manufacturing for the office. One of our businesses is focussed on digital so we are also going after digital revenues such as online advertising,” he adds.

BluChip CEO - Brett Stagman

// WE DID A MASSIVE ROLL OUT WITH AROUND R5-6 MILLION OF SCHOOL FURNITURE // POSITIVE POSITION “We are up 10% on the previous year in terms of revenue and we anticipate flat revenue for this year. We went up in revenue but down in margin and that is because the new clients we have taken on have smaller margins and there has been a lot of pressure on us from retailers to push down prices constantly.

“You have to work a lot harder to make the same amount of money.

It’s a lot of effort and the revenue is not as big as what you get with the big retail chains. Yes, we are doing a lot of stores, but it is still a very difficult market.

28 / www.enterprise-africa.net

“But we had a very busy end to the year – September, October and November were monster months to deal with. We could not take on anymore work and we had our biggest month ever in November 2018 where our factory was at full capacity so physically we could not deliver more,” he says.

In the smaller but newer divisions of the company, including tiling and glass, growth has been easier to come by. Marketing to both commercial and residential clients, these divisions have helped the company’s staff count to grow from the 320 back in 2017.

“We are up to around 400

CORE BUSINESS Retailers in South Africa that engage customers in engaging and innovative new ways are those that are still seeing success on the high street. The big, cumbersome chains, held back by red tape and slow decision making, are understandably struggling to adjust to the changing environment. But there are some who are nimble and continuing to invest. This is where BluChip is still realising success in the retail sector.

“That part of our portfolio still exists and we still enjoy a lot of success there, but the spend has dropped,” says Stagman. “Our strategy now is to focus on smaller retailers and other franchise food businesses.

“We are busy with projects for Vida e Caffe who are rolling out around 10 stores this year. We are working on an aggressive roll out for Europcar. Other brands like Lovisa, Bras N Things and HP with smaller stores are also ongoing.

“We are working with the international food brand, Popeyes – a very exciting project. We did five or six stores at the end of 2018 and there is 10 more to come this year.

“Cell C had an aggressive roll out last year and opened around 40-50

BLUCHIP RETAIL SOLUTIONS

// OUR STRATEGY NOW IS TO FOCUS ON SMALLER RETAILERS AND OTHER FRANCHISE FOOD BUSINESSES // stores towards the end of the year.

They will be doing around 40 stores from January to May so the roll out continues. We are doing all of those stores and we do everything from design to manufacture to construction and everything between.”

Of course, Stagman and team continue to spread the risk and take on new projects where existing skills can be put to work.

“We’ve put together some very nice, upmarket restaurants,” he

says. “We’ve just finished a brilliant one called Bold – a very upmarket restaurant that we are very proud of. It was a R10 million project in Sandton.”

It is the reputation of BluChip that allows it to take on these new projects. For smaller companies in the same industry, especially those that have not invested in diversification, times have not been so kind.

“Our suppliers of raw materials – generally metal or wood – are down by 30% when it comes to us and our competitors, so the market is definitely taking a serious blow. A lot of the competition are following retrenchment routes and going onto short-time contracts, so it is not easy out there,” says Stagman.

Everyone knows the importance of brand recognition and business reputation. Richard Branson said: “All you have in business is your

reputation - so it’s very important that you keep your word.” Mark Zuckerberg agreed: “You get a reputation for stability if you are stable for years.”

And Jeff Bezos said: “A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.”

And 2019 will be a year of building reputation for BluChip Retail Solutions as it continues through its transitional period to a brighter future.

“We will weather the storm for the next year or so and build the client base while building on our reputation – that is our focus,” concludes Stagman.

WWW.BLUCHIP.CO.ZA

www.enterprise-africa.net / 29

AFRIVET

Raising the Stakes

in Search of ‘One Health’ Solutions PRODUCTION: David Napier

Afrivet is the biggest locally-owned animal health company in southern Africa. Its products help vets, farmers and animal owners to prevent and treat disease, and promote food security and safety. Founder and Managing Director Dr Peter Oberem talks to Enterprise Africa about growing the company by building the product portfolio and opening up large new market sectors.

//

‘‘One Health’ is a concept developed to encapsulate animal, human, and environmental health factors all under one common stable. The idea is that by focusing on positive health at one end of the chain will result in strong health benefits at the other end. It brings recognition that an interdisciplinary approach is required to understand complex health problems, and that the health of humans, animals and the surrounding environment are inextricably linked.

According to the University of Pretoria’s Faculty of Veterinary Science: “A complex mosaic of human, animal and environmental interfaces creates an ever-increasing threat in the form of trans-boundary, emerging and re-emerging diseases. Over the last 50 years, the impact of these diseases, especially zoonotic diseases on the world’s economy, particularly animal and human populations, has prompted a more collaborative effort between animal and human professionals in addressing emerging and other global health threats.

Today over 60% of recognised human

30 / www.enterprise-africa.net

infectious diseases are zoonoses in that they originate from the movement of pathogens mostly from wildlife and livestock to humans.”

This is an idea shared by Gauteng-based Afrivet, one of the country’s leading animal health and pharmaceutical companies.

Formed in 2000 by Dr Peter Oberem, a seasoned vet and game rancher with degrees in entomology, veterinary science and postgraduate qualifications in veterinary parasitology, Afrivet has carved out a strong position in the market by focussing on the unique needs of southern Africa and delivering a One Health approach.

The company’s product range includes a host of ectoparasiticide solutions for veterinary parasitologyrelated problems. After starting out with a focus on ticks and tick-borne diseases, Afrivet moved into worm products and other ranges for poultry, feedlots, and eventually the companion animal range.

Of the top seven biggest animal health companies in South Africa, Afrivet is the only locally-owned business.

“There are many One Health issues in southern Africa and sub-Saharan Africa that are neglected by the multinationals and that is what gives us our enthusiasm, drive and direction,” Oberem tells Enterprise Africa.

“In this part of the world, there are some diseases that are really and truly One Health diseases. For example, Rabies.

Rabies in jackal, bat-eared foxes, kudu and stray or feral dogs can spread to humans – if you control it in dogs and cats then you control it in humans.”

Through its 19-year history, Afrivet has become a leading voice on the benefits of One Health and has developed a product range based around the concept, as Oberem explains.

“In the Eastern Cape, 62% of young people who get epilepsy get it from neuro-cysticercosis which is the cyst of a tapeworm. The cycle is maintained in pigs and if pork isn’t cooked properly, humans develop tapeworms and often then self-infect and develop the immature tapeworm cysts. The way to prevent it is to improve the environment by providing proper toilets and teaching how to cook

INDUSTRY FOCUS: AGRICULTURE

properly. We can then also treat the pigs to kill the cysts and vaccinate to prevent them getting cysts.

“We have a treatment in registration that kills the epilepsy-causing tapeworm cysts in pigs and we have negotiated with a company from India to market their vaccine against the formation of cysts in

pigs. We have applied for import permits and we are confident that everything will come through as this is a serious health hazard for humans.”

This progress fits perfectly with the Afrivet vision of ‘becoming the leading animal health company in Africa in the One Health industry’.

// THE MARKET RESPONSE, BASED ON THE STRENGTH OF THE AFRIVET BRAND AND OUR HISTORY OF ALWAYS PROVIDING SOUND TECHNICAL ADVICE, HAS BEEN VERY WELL ACCEPTED IN THE MARKET //

32 / www.enterprise-africa.net

HEALTHY PRODUCT RANGE With genuine care for the welfare of animals and conservation, and a passion for assisting in the growth of the regions commercial farming activity, Afrivet is looking to build on its history of delivering industry-leading products by adding to its impressive range. The company is already involved in a process of rebranding most of its longstanding products under its own brand names.

“Some of the products are new and some have been re-branded. Many of the Coopers products that were on the market were our developments and we utilised the Coopers brand name to help our credibility while we were still a young business. Now, Afrivet is in a strong position and our reputation is such that we can start building in our own product brands.

“We have a large number of products but our popular ectoparasitic range is now mostly branded as Eraditick. On the worm side, we have done away with the Coopers brand and we are calling our products Eradiworm.

“The market response, based on the strength of the Afrivet company brand and our history of always providing sound technical advice, has been very well accepted in the market,” says Oberem.

One new Afrivet product that is particularly exciting and gaining interest from game ranchers, safari lodges and large-scale farmers is the company’s 5% and 10% acaricidal balls. Developed to control ticks on buffalo, giraffe and various antelope species, this concentrated product is suitable for animals with a heavy tick infestation or tick damage and which cannot easily be treated by conventional applications. Interestingly, the product is packaged in small paintballsized capsules which can be fired from a paintball gun.

“It is something we’ve been working on for a very long time, the idea came up around seven years ago on my game farm,” explains Oberem. “Some species especially eland and kudu suffer from heavy tick burdens, particularly in their ears. This problem controls the tick

AFRIVET

infestations quite easily. It has become important to find a way to apply products to these wild animals but we can’t herd them into a pen and pour or spray product onto them.

“A partner of mine who was interested in paintballing started talking about the idea and as we already had a pour on product called Redline which we realised might be suitable to use in the paintballs. However, it became clear that we would need to concentrate the dose to make it powerful enough but small enough. We concentrated in ten times, down to 2.5 ml dose so that it could fit into a paintball and we had to do all the stability work, formulation work, field trials, and registration which took five years. The registration was difficult and that is what took the time as the concept was very new and people didn’t understand it even through it was the same as our Redline product which was

already registered, just concentrated.”

Animals weighing 65 to 125 kg require one 5% ball while a 10% ball will treat a 250kg animal. The shooter must aim for the hind quarter or neck depending on the area of infestation, must be no more than 50 metres away, and must be positioned square to the animal to ensure the ball doesn’t skim off the skin without bursting. Bigger animals, 250 – 500kg, can take two 10% shots.

The process is not invasive and allows for minimal human contact.

“We are always working on new products – some of our own and some from other producers from around the world,” says Oberem.

HISTORY IN SA Afrivet’s growth and success is largely down to its ability to service unique African problems using experience developed in Africa. Today, Afrivet is

present across the SADC region in Zambia, Angola, Namibia, Botswana, Zimbabwe, Mozambique, Swaziland, Lesotho and South Africa.

But in the beginning, the company was just five people with a small product portfolio and no brand recognition.

“I had been working for a decade in the animal health pharmaceutical industry, first with a company called Coopers.

Coopers was purchased by Hoechst before Hoechst was purchased by Intervet in 1999.

At that time, I was given the job of business development in the Southern Hemisphere – a very nice job, but one which would require me to move to the Netherlands.

That did not suit me as I own a game ranch in South Africa and conservation and game ranching is my passion. Also, my wife is a veterinarian, and she was contracted with the government to assist with improvement of production of African vaccines. So, I decided that I needed to do

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INDUSTRY FOCUS: AGRICULTURE

// PRESIDENT RAMAPHOSA, WHO IS A GAME RANCHER, UNDERSTANDS AGRICULTURE AND UNDERSTANDS THE GAME RANCHING INDUSTRY // something else and the opportunity arose for me to consider doing something on my own,” remembers Oberem.

“One of the very clear things that I learnt over the previous decade in the industry was that the multinationals manufacture products which have a multinational selling footprint. They go for the development of products which are truly international. That leaves a number of ‘orphan’ diseases in Africa, and southern Africa in particularly, which are not important on a global scale. However, they are very significant regionally. For those people, who face deprivation caused by those diseases, they are extremely important. Often, they are left without a solution.”

This is where Afrivet has built its reputation. By providing stock owners in Africa cost-effective solutions, the company has created trust throughout its networks. It has also developed a quality reputation for the amount of research and knowledge it pushes into its markets.

Regularly putting out new books and papers, Afrivet is a recognised authority on African animal health.

“The Bill & Melinda Gates Foundation found our approach very interesting as we provide sound technical advice and deliver thorough research and training.

They engaged us to do a feasibility study on starting a company – maybe Afrivet, maybe not – in West Africa. For the past year, we have been developing a business plan to present to them soon.

“There are different challenges in West Africa but, if you move north from

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South Africa, you will find that a much higher percentage of farmers are smallscale stock owners as opposed to large commercial famers. So we do have the knowledge and we are always learning as we explore the growth of this type of market in South Africa,” says Oberem.

Agricultural development is one of the largest initiatives of the Bill and Melinda Gates Foundation. To date, more than US$4 billion had been committed to agricultural development efforts, primarily in sub-Saharan Africa and South Asia.

Oberem participated in an event in Dubai where his input was welcomed by the Foundation and garnered attention from a number of international organisations including Edinburgh University, The Nelson Mandela African Institute of Science and Technology (Tanzania), University of Liverpool and Iowa State University.

Locally, Afrivet has launched its own laboratory to help fast-track the roll-out of vital treatments “We develop the idea, have a product formulated, do the necessary trail and registration work, and then we use a toll manufacturer. In that way, we can focus on what we are strong at which is understanding the market, developing what is needed, and marketing based on science – providing sound technical advice has always been the basis of our marketing strategy,” says Oberem.

But there are fewer independent people available to do the developmental work that is required, including testing ticks for resistance to products. “We found it necessary to put our own resources into a new laboratory and we use it to identify the different species of ticks that cause problems and test them for resistance.

We also do the same with worms and that means we can advise people better on what active ingredients to use. It fits in with our philosophy of providing sound technical advice,” he adds.

ECONOMY-IMMUNE? Despite President Ramaphosa’s understanding of the

importance of the agricultural sector and his repeated calls for further investment in the industry, there has been no hiding from the slow economic climate in South Africa. Flat GDP growth figures are expected to continue for some time and this often results in extra consideration when it comes to investment, or no investment at all.

For Afrivet, economic sloth is yet to result in any slowdown but the company is very keen to realise long-term certainty in the markets.

“Political talk about land expropriation without compensation causes much uncertainty. Who, with a sound mind, would invest in agriculture in South Africa until there is some form of clarity on exactly what will happen?

“President Ramaphosa, who is a game rancher, understands agriculture and understands the game ranching industry. He understands the animal health industry very well and he wrote a book, Cattle of the Ages, about the Ankole cattle that he imported from Uganda.

He implemented a successful embryo transfer cloning programme and it is clear that he understands the scientific side of the industry – that gives me great hope,” says Oberem.

AFRIVET

To ensure the future of the market, Afrivet has decided to change its approach and try to open up a new, untapped but valuable sector.

“In South Africa there are 14 million cattle and 30 million sheep and goats. Half of those are commercially farmed and half are small scale stock owners in the former homelands on communal lands. 90% of the meat reaching the market comes from the commercial half,” says Oberem. “Our animal health industry is worth around R3.3 billion with 90% of product going to the commercial farmers. If we can increase production on the side of famers in communal areas, we would lessen our reliance on imports of meat (we currently import around R6 billion-worth) and that money we would have spent in markets like Botswana, Namibia, Argentina, Brazil, Australia, New Zealand or similar, could be spent locally. If we can achieve this, our R3.3 billion market becomes a R6 billion market. This idea nudged us into a move which sees us focussing very closely on the small-scale stock owner in South Africa.”

The first step in this process is converting the wealth of information that Afrivet has put into the market for commercial farmers, and making it useful and understandable for smaller operators.

“We want it to teach them how to observe their animals, examine their animals and communicate about their animals.

“We are sponsoring the Chair in Primary Animal Healthcare at the Faculty of Veterinary Science at the University of Pretoria and we have done that for the last five years. They help us to refine our material and develop the knowledge that will help train smaller stock holders. It’s good for food security, it’s good for the economy and it’s good for the country.

And we are also hoping that we will be able to develop a new market where we can dominate as a first mover.”

This re-focus and development of a new strategy comes at a difficult time for farmers in southern Africa and Afrivet, which recently expanded with the opening of a new facility in Mozambique.

Mid-March saw the tropical storm Cyclone Idai hit Mozambique and its neighbours causing chaos and catastrophe around the country. When the flood waters dissipate in Mozambique, the picture of devastation will become clearer but Afrivet is understandably concerned.

“It is most certainly a big problem,” admits Oberem. “We did not suffer any physical damage but the human tragedy and the thousands of animals that have

been washed away is heart-breaking.

It will certainly impact the market very severely as many customers are now gone. It means we will have to subsidise that business for some time. People are resilient and the country will come right in not too long a time.”

Looking to the future, Afrivet will continue to serve the industry with distinction, using its experience and knowledge to assist animal owners, farmers and veterinarians to prevent and treat disease, and promote food security and safety. Founder Oberem, who intends to retire in 2022, remains confident about the future.

“We are a growing business, our market share has grown, we have not felt the economic impact that commercial farmers have been feeling and, even in areas where we are not strong, we are still seeing positivity. Considering the relative youth of Afrivet in the market and the amalgamation of some of the multinationals, I think we have performed remarkably well,” he concludes.

WWW.AFRIVET.CO.ZA

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YAMAHA SOUTH AFRICA

Quality Without Question Driving ‘Kando’ in SA PRODUCTION: Karl Pietersen

Yamaha South Africa distributes industry-leading products to customers across the southern African region. New Managing Director, Robin Van Rensburg is keen to accelerate the company’s progress as he looks to reinstate brand recognition and position Yamaha at the top of the pile in all sectors it competes in.

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Š Yamaha Motor Europe N.V.

INDUSTRY FOCUS: AUTOMOTIVE

//

In Hamamatsu, Japan in 1887, while Paul Kruger was still the state President of the South African Republic, Torakusu Yamaha was busy establishing his business, manufacturing musical instruments, specifically pianos and reed organs.

The company was incorporated in 1897 and Yamaha went on to become what we know today as one of the world’s most recognisable brands with almost 30,000 employees worldwide and an enviable product range including instruments, audio equipment, power products, motors, engines, motorcycles, golf cars, ATVs, and more.

Today, the company’s famous logo still reminds of its beginnings, picturing three interlocking musical tuning forks.

Yamaha products have been imported into South Africa for decades and, especially in motorcycles and marine, the company has carved out a niche in the top end of the market, targeting the premium space and customers looking for products of the finest quality.

© Yamaha Motor Europe N.V.

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But, with such superior products across such a range of sectors, Yamaha’s core message of delivering quality and ‘the performance of your life’ has fallen to the wayside somewhat, and competitors in the markets it operates in are looking to capitalise.

Enter Robin Van Rensburg. This auto-industry veteran has spent time with some of the country’s biggest international brands including Fiat Chrysler Automobiles, Jaguar Land Rover and BMW. Appointed as Yamaha South Africa’s Managing Director in October 2018, he has quickly gone about reestablishing the company’s impressive brand recognition by focussing on service delivery excellence.

“It’s been interesting,” he tells Enterprise Africa. “The first experience was learning the variety of products as that is the big difference compared to the other brands that I’ve worked with.

From road bikes to marine to music to golf cars – they’re all very different but intrinsically they stay true to Yamaha’s core values of quality.

“It’s been something of a baptism of fire as there is still a lot of work that needs to be done in re-establishing and reminding the market of just how good the brand is. On the service side, our dealer network was not up to the standard expected of Yamaha dealers.

Particularly in the rest of Africa – I look after the region from Mozambique Botswana, Namibia and Zambia – and we haven’t really done a good job of making sure those markets have a great service from Yamaha and so that will be the focus going forward.”

He highlights supremacy of the product range combined with world-class customer service as the two irreplaceable ingredients in a recipe for success.

// THERE IS STILL A LOT OF WORK THAT NEEDS TO BE DONE IN RE-ESTABLISHING AND REMINDING THE MARKET OF JUST HOW GOOD THE BRAND IS // “Without doubt, Yamaha has extremely strong brand recognition, even stronger than some of the international auto brands in the country.

It’s probably right up there with the BMWs in terms of recognition as a brand.

In terms of recognition in the premium space, that is where we need to do work because that is where we operate - our pricing is very relative to that sector.

Take BMW for example, a company also in the motorcycle space – our products can be more expensive than a BMW bike, so we have a lot of work to do to remind people of the brand. There are two elements to being premium: First is quality and reliability and then there’s the customer experience that goes with buying a premium product, and that is very important.”

NEW PRODUCTS Yamaha has recently introduced two exciting new products to the market for its South African customers. In the motorcycle and marine sectors, it has a new bike and a new outboard power engine which are top-of-the-range items and which will redefine standards in their industries.

“We’ve recently launched the Ténéré 700 internationally (the South African launch is expected towards the end of 2019) which is an adventure bike for a market where we do not complete well right now,” details Van Rensburg.

“That market is dominated by BMW and KTM and we haven’t had a strong product to compete in that space. Up until now, adventure bikes have been big 1200cc bikes which is great for a

YAMAHA SOUTH AFRICA

road bike as it is very smooth but as soon as you go on anything other than tar, it’s heavy and can become a handful, especially for inexperienced riders. So, an adventure bike with a smaller engine certainly has the potential to take market share.”

The Ténéré 700 has a 698cc, 2-cylinder, 4-stroke liquid cooled engine.

It is designed for longer journeys with both on and off-road capabilities.

Yamaha says it gives riders a new sense of total freedom thanks to its ability to redefine boundaries.

“On the marine side” says Van Rensburg, “we’ve just launched our big 425 horse power motor which plays in the top echelon of the market and has taken off very nicely. The big thing now is to right-size our dealer footprint.

We have had too many dealers and too many of them have been doing an

average job so what we want to do is put the right partners in place in the right areas which might mean having less dealers but doing a much stronger job from a customer service point of view.

We believe that we can have the right dealer network, with the right customer experience, with new products coming to us, and we certainly believe that will allow us to grow.

“In terms of revenue and potential for growth, motorcycles and marine are two key product areas for us. Our music business does really well on both audio and musical instrument sides but, in terms of room for growth, it’s not as big as marine or motorcycle,” he adds.

In each segment that Yamaha plays, there is room for significant growth and Van Rensburg is very keen to use firstclass service to build on the presence the brand already enjoys.

“We are market leaders in the marine business with 56% of the market for outboard motors. We are the market leader in personal water craft or wave runners. Our objective is to continue dominating in these sectors and to take further market share from our competitors. In the motorcycle business, we want to get back to the top in what we call the 500c and above road bike sector. We are very strong in off-road Enduro-type bikes and we will keep our position there. We want to grow our market share in the adventure bike segment with the Ténéré 700 and we believe we can also lead in the below 500cc road market. We also want to lead in golf carts where we remain the industry leader. Also, in the musical instrument business, we are the market leader and we intend to hold our position there,” he says.

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INDUSTRY FOCUS: AUTOMOTIVE

// WE BELIEVE THAT WE CAN HAVE THE RIGHT DEALER NETWORK, WITH THE RIGHT CUSTOMER EXPERIENCE, WITH NEW PRODUCTS COMING TO US, AND WE CERTAINLY BELIEVE THAT WILL ALLOW US TO GROW //

© Yamaha Motor Europe N.V.

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CHALLENGES & SOLUTIONS Yamaha is also active in the power equipment and pro-audio sectors where products including lawnmowers, generators, water pumps, mixers, processors, power amplifiers and speakers are distributed through some of the country’s leading retailers and dealers. But, compared to marine and motorcycle, these sectors are much more challenging because of price sensitivity in the market.

“Power equipment is a very tough sector,” admits Van Rensburg. “It is very difficult to differentiate the engines. We make a quality engine but that comes at a price and a lot of guys that are buying those engines for lawnmowers or generators aren’t necessarily looking for top-quality, they are looking for the best price. The audio business is also tough, simply because with modern music streaming, high-quality sound is not something that people strive for anymore. So, to differentiate our products against others in the market is very difficult.”

In that sector, Yamaha is looking to maintain its position as a premium product, being very selective of the retailers it goes through, but most importantly, working hard with the online channels. “In both musical instruments and audio equipment, we went on to Takealot.com and we had a reasonable first month, but I certainly believe that is something which will grow as people explore our range online and look for the good value,” says Van Rensburg.

For Yamaha across southern Africa, Van Rensburg is clear that his ambition is to unlock the potential of the entire region, but not going too fast and not doing things in an unsustainable manner are also very important in the Yamaha strategy.

Perfecting operations in one country at a time is how the brand will develop, starting with Mozambique.

“We think there is significant potential particularly with the marine business,” explains Van Rensburg.

YAMAHA SOUTH AFRICA

“They have a massive coast line and they have big fishing businesses. On the leisure side, many tourists travel to Mozambique and ride quad bikes on the beach during adventure breaks, so we believe we can do a much better job there on the marine and bike side.

The next priority is Zambia where the marine business is not as big as Mozambique but there is still a big fishing and luxury market, certainly on the motorcycle side. When we get those going right, we will expand further north.”

POWERFUL POSITION TO GROW Operating at the top end of the market is a difficult thing to do in South Africa right now. On the one hand, your customers are the wealthy, where there is not a shortage of disposable income. But on the other, the uncertain economic climate and slow GDP growth rates have knocked confidence and some people and businesses have been holding onto money for longer than usual, considering their investments much more carefully before purchasing.

In February, the National Treasury announced that GDP growth was less than 1% in 2018 and will not reach more than 1.5% in 2019. This backdrop has resulted in a conservative approach to spending.

“We have seen that over the last

Fourways Crossing Shopping Centre, William Nicol Drive , Fourways www.digitalexperience.co.za

From all at The Digital Experience, Congratulations to Robin van Rensburg on your appointment as Managing Director of Tuning Fork (Pty) Ltd. We look forward to building our relationship with you and growing our successful partnership.

four years,” comments Van Rensburg.

But he remains upbeat about the future, stating that in the longer-term, the growth potential in the region cannot

be ignored and there are positive signs for business.

“There does seem to be an underlying confidence that postelections in May, we will have a leader that has common sense and, globally, there seems to be a belief that South Africa is the key to Africa. As long as the outcome of the elections in May is predictable, I certainly think we will see the market climb. What we know, according to our data, is that there is cash around but people are just not spending it.

“Having said that, we are already seeing an upturn. Our sales for the first two months were encouraging – people were starting to spend which is good news. Certainly, in the segment we play in, people have the money, it’s just about giving them the confidence to make their investments.”

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INDUSTRY FOCUS: AUTOMOTIVE

This confidence will be important going forward as the two major stakeholders in Yamaha’s South African operation - Japan’s Yamaha Corporation and South Africa’s Bidvest – expect two things: “Profit and a return on capital” says Van Rensburg.

But, especially from Japan, strategy guidance is minimal and reasonably ‘hands off’ which gives Van Rensburg and the management team

// OUR SALES FOR THE FIRST TWO MONTHS WERE ENCOURAGING – PEOPLE WERE STARTING TO SPEND WHICH IS GOOD NEWS // 42 / www.enterprise-africa.net

on the ground in Johannesburg the opportunity to develop a local plan, suitable for the local conditions.

“I have a lot more freedom than I’ve had before,” he says. “All they want to know is that the brand is well represented and we are growing our market share. Of course, there are certain things that Japan drives, specifically skills. We are on the same page with that as one of the challenges with our business is technical skills.

Working with motors and engines is not a job that everybody coming out of school aspires to do. Youth unemployment here is at 60% so we are on a big drive to get into the technical colleges and get people into apprenticeships so that we start to get skills back in to the business as we need those skills to deliver the Yamaha promise of quality.”

KANDO South Africa’s auto-manufacturing sector is impressive, and remains a vital cog in the economic engine. But Yamaha is happy to continue importing and does not have plans to move into the local manufacturing sector across any of its product lines. The only situation which could result in a change of strategy is if the country’s boatbuilding sector continues to decrease.

“We sell outboard motors but without boats there is nothing to put a motor on,” says Van Rensburg.

“The boatbuilding industry is really struggling, and a lot of the companies have disappeared. Yamaha has recognised this as an issue for Africa and we are looking at what could be possible if we can guarantee some kind of supply, but nothing is concrete yet.

The benefit for us would be getting

YAMAHA SOUTH AFRICA

© Yamaha Motor Europe N.V.

© Yamaha Motor Europe N.V.

// WE ARE NOT EVEN CLOSE TO OUR POTENTIAL YET // boats to sell as we are running out of boats to put outboard motors on and that is a risk.”

The other long-term risk for the company in South Africa is the global switch from combustion engines to electric motors. Here, Van Rensburg is sceptical about the shorter-term, saying: “South Africa still struggles to power its houses never mind a whole nation of electric vehicles.” However, he does admit that there could be a market for certain electric products in South Africa.

“They are experimenting and there is work happening on an electric scooter which I think would do very well here.

We have a lot of fast food deliveries and they always return to a central point without driving a huge distance – if you have an electric scooter, it would take away big running costs and, depending on the initial investment, I feel there would be a big place for it.”

In various international markets, both electric motorcycles and electric outboard engines have proved extremely competitive.

Until that technology, and demand, advances further in Africa, Yamaha will continue to focus on its core product range which has been refined over the years and is now wellknown for its quality.

Yamaha follows a corporate philosophy built around the Japanese word ‘Kando’, a feeling of deep satisfaction and excitement gained when interacting with a product of

supreme quality and exceptional value.

Whether it’s musical instruments, audio equipment, golf cars, marine engines, ATVs, motorcycles or any of the other fantastic products distributed in SA by Yamaha, the company promises quality and the ‘performance of your life’ and Van Rensburg is adamant that this is still just the beginning for the brand in Africa.

“We are not even close to our potential yet. If we fix a lot of those basic elements around customer experience and add that to our great product range, we are certainly going to grow in South Africa and the rest of Africa,” he concludes.

WWW.YAMAHA.CO.ZA

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WOODFORD CAR HIRE

Blending Family Principals & Innovation to Stay On Top PRODUCTION: Benjamin Southwold

The car rental industry in South Africa is one which continues to go from strength to strength, with year-on-year growth reported without fail, particularly in the leisure sector. Profiting from this health is The Woodford Group, South Africa’s largest independent car hire company, famous for its warm service and diverse fleet located at all major centres throughout the country.

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INDUSTRY FOCUS: AUTOMOTIVE

//

The story of South Africa’s largest independent car hirers began back in 1991 in Woodford Grove, Durban, where Woodford Car and Bakkie Hire was started with just two vehicles on its books. “The aim was to provide a low-cost alternative in vehicle hire that placed value for money and service excellence first,” says the company.

“We’ve come a long way since our humble beginnings at Woodford Grove,” the company points out, “but those principals are still firmly entrenched in our approach.” Woodford aims to provide innovation, value, and service excellence to its public, private and commercial customers by offering the widest range of vehicles at competitive rates.

More than 25 years on, Woodford Car Hire and the Woodford Group remain family-owned entities, ensuring a personal touch to the service and a commitment to growing Woodford’s loyal client base. Woodford Car Hire is now South Africa’s largest independent car hire company, with a national footprint at all major airports and centres and a fleet of over 1600 vehicles across three core divisions.

“We believe the process of hiring a vehicle should be as effortless as possible, so we’ve made sure that we shift our focus to streamlining every step in that journey,” the Woodford Group stresses.

// THE HEALTHY INCREASE IN FOREIGN LEISURE RENTALS REAFFIRMS THAT SOUTH AFRICA REMAINS AN ATTRACTIVE DESTINATION FOR INTERNATIONAL TRAVELLERS // 46 / www.enterprise-africa.net

TOP OF A BOOMING MARKET “Our offerings now cover everything from car and truck rentals to logistics and services, providing flexibility for every need of the consumer in the vehicle market,” the company describes. “We have never changed our approach, however; Woodford has remained a family-owned business that has grown steadily through the retention of a loyal set of clients and key partnerships.

“What they all share is our enthusiasm for offering the best value and service,” says Woodford of the key to its success in a market stuffed with rival companies. The competitiveness of the rental industry in South Africa does not look likely to abate any time soon, with industry revenue growing yet again in 2017 this time 3.6%, and reaching an estimated total worth of R5.2 billion.

The industry continues to be driven by business car rental, which accounted for 53% of the value of all sales, but crucially the leisure market remains an important sector: during 2017 there was an increase of 16.7% in car rentals by international visitors and a 1.6% growth in local leisure rentals. This follows on from growth of 22% and 12% respectively in the foreign and local leisure segments in the previous year.

“Leisure travellers are giving our country a big vote of confidence,” says Lance Smith, executive: sales at Avis southern Africa. “This indicates that South African travel remains popular both locally and internationally, which bodes well for future growth.

“The healthy increase in foreign leisure rentals reaffirms that South Africa remains an attractive destination for international travellers.”

“The other good news from the latest figures is the geographical spread,” Smith goes on. “The major growth has been in the main metropolitan areas – especially in Cape Town, which dominates with about 50% of car rental – but we have

// WE BELIEVE THE PROCESS OF HIRING A VEHICLE SHOULD BE AS EFFORTLESS AS POSSIBLE // seen growth all around the country.”

What is also a source of optimism is that the growth rates in car-rental figures were significantly stronger than those for international visitors released by Statistics SA, the most recent of which show a 3.4% annual increase to 802,252 tourists for the year to February 2018. “This means that tourists to SA are more inclined to use self-drive, which shows they feel safe travelling in our country,” Smith explains.

IMPORTANCE OF TECH With such a lucrative market on which to capitalise, major industry players in the industry have acknowledged the increased role of technology in travellers’ lives. The car rental industry has had to improve its services, and respond to the impact that Uber and other technologies are having on the market and traveller behaviour.

Information technology plays a growing role in helping companies to meet customer expectations as well as improving profit margins and making informed decisions. From the outset, Woodford Car Hire has been dedicated to bringing customers the very latest technology at the forefront of the industry. It knows exactly how critical thins to providing a continually improved, more streamlined and hassle-free service every time customers book with the rental giants.

This does not have to translate to futuristic innovations all the time, however; Woodford also gets the basics right, ensuring the backbone of its service is as strong as possible.

With constant research into the latest technological advancements and

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INDUSTRY FOCUS: AUTOMOTIVE

trends in the industry, Woodford is positioned to deliver the easiest, most convenient experience to customers.

Twinned with a complete website revamp, for example, Woodford recently adopted a package of trusted rental software from a renowned technology solutions company. This

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offers its clients a complete and perfected suited package by including secure credit card processing tools, integrating loyalty benefits, and the compilation of customer profiles.

In turn, it gives Woodford the ability to customise its services nationwide to suit the unique needs

of all customers - preferences and booking patterns are analysed by a supplementary system, and strategic methods are then used to benefit the client. This includes live updating of supply and demand rates fluctuations, so that Woodford is able to offer the most efficient service at the lowest cost.

More and more, Woodford acknowledges that customers will be booking its services on the move, and the upgrade also encompasses some great innovation when it comes to mobile: handheld devices can be used by parking attendants and staff to check in a car and obtain boarding passes in a matter of minutes, to ensure the quickest possible service.

Woodford Car Hire’s website is now also fully optimised for mobile, meaning that customers can easily make bookings anywhere and anytime from their smartphones and mobile devices.

The introduction of Amadeus, a

WOODFORD CAR HIRE

// OUR MAIN PRIORITY IS TO KEEP OUR CLIENTS’ GOODS MOVING WITH AS LITTLE HASSLE AS POSSIBLE // global distribution system making Woodford available to Travel Agents worldwide, is perhaps the latest and best of the company’s recent initiatives. Agents can now benefit from customised tools and better incentives when booking with Woodford, allowing it to also offer real-time connectivity to travel companies, guaranteeing the best rates and availability of specific vehicles to the Woodford clients these partners are servicing.

SECURES SOFTBEV DISTRIBUTION Among the Woodford Group’s strong current fleet are some 145 commercial vehicles, ranging from one- to 36-ton monoliths. Such a fearsome line-up was integral to its securing a 36-month contract with Softbev, a major player in the Fast-Moving Consumer Goods (FMCG) industry that specialises in a variety of soft drinks, including Pepsi, Cooee, and Jive.

The contract gives Softbev a total solution for distribution in the Gauteng region via a fleet of 36-Ton Nissan UHD 490 Super Links, and comes with a value of roughly R45 million. It is an extension of the already beneficial relationship between the Woodford Group and Softbev, and follows a similar arrangement that has seen Woodford successfully distributing for the soft drinks manufacturer and supplier in KwaZulu-Natal and the Eastern Cape over recent years.

“We’re very humbled to have received the thumbs up from Softbev for Gauteng,” said Owais Suleman, Managing Director of the Woodford Group. “Servicing them in three provinces is a sign of the mutual trust between our companies.

“We feel we’re the perfect fit for a company that has similar values and ambitions, and will endeavour to service Softbev with the same passion and commitment we have in the past.

“Our main priority is to keep our clients’ goods moving with as little hassle as possible,” Suleman continued of his Group’s utter commitment to service excellence. “Our promise is that we’ll handle any issues or situations that may arise, and will get your goods to its destination in good time.”

WWW.WOODFORD.CO.ZA

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GRINDROD

Ground-breaking in Every Way PRODUCTION: William Denstone

Grindrod’s business is all about moving cargo, by road, rail, sea and air, and providing integrated logistical and specialised services en-route. The company reported a robust set of results last month as ground-breaking took place at its monumental Coega site, construction which includes the Port of Ngqura’s future liquid bulk tank farm and main access road.

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INDUSTRY FOCUS: LOGISTICS

//

Today, Grindrod is a world-class freight logistics operation. With more than 100 years of experience in South Africa’s freight movement and related industries the country is its definite hub and base, but the company is a global concern represented by subsidiaries, joint ventures and associated companies in more than 30 countries worldwide.

In excess of 5000 skilled and dedicated people mean that Grindrod is uniquely positioned to service Africa trade flows.

Grindrod was initially founded in 1910 as a small coastal shipping company, growing into a diversified business trading globally and employing crew from all over the world. In June 2018 its Shipping Division was separately listed on the Nasdaq in New York and on the JSE, a milestone in the Group’s history.

Grindrod Limited now consists of two division: Freight Services and Financial Services.

“The Freight Services executive team have developed comprehensive plans to improve the profitability of the business,” says Mike Hankinson, Chairman, and Grindrod continues to invest in assets and opportunities across its operations with specific focus on oil and gas, dry bulk, bulk liquid commodities, containerised cargo and vehicles.”

“In the long term our strategy is to continue to add diversity and

// WE ARE FOCUSED ON UNLOCKING CORRIDORS TO ENABLE AFFORDABLE LOGISTICS FOR AFRICA’S RESOURCES IN A COMPETITIVE WORLD // 52 / www.enterprise-africa.net

scale,” explains CEO Andrew Waller.

“We are focused on unlocking corridors to enable affordable logistics for Africa’s resources in a competitive world.”

COEGA GROUND-BREAKING The last time that Enterprise Africa delved into what was in store for Grindrod, we shared its excitement in its Oiltanking Grindrod Calulo (OTGC) undertaking. The company had been appointed by Transnet Ports Authority (TNPA) to plan, fund, construct, maintain and operate a new liquid bulk handling and storage facility in Port of Ngqura, in the Eastern Cape Province.

In February this year, after nearly a decade of graft, OTGC and TNPA announced the turning of the first sod at the site of the Port of Ngqura’s future liquid bulk tank farm and main access road, paving the way for Ngqura’s establishment as a new petroleum trading hub for Southern Africa.

This will also allow South Africa to reduce its reliance on imports and ramp up annual distribution capabilities, while facilitating the much-needed refurbishment of a glittering waterfront in Port Elizabeth.

Speaking at the sod-turning event, Mkhuseli Faku, Chairman of OTGC said: “Having been awarded the concession to develop a liquid bulk storage and handling facility in the Port of Ngqura, OTGC is now embarking on the first phase of construction. The terminal will be built to the highest international safety standards and provide exceptional service to its customers.

“OTGC looks forward to becoming a contributing member of the Nelson Mandela Bay community and expects to continue on its growth path in the years ahead.”

Port Manager of the Port of Ngqura, Tandi Lebakeng also welcomed the start of construction.

“The new tank farm will develop the Port of Ngqura’s liquid bulk capacity

// OTGC LOOKS FORWARD TO BECOMING A CONTRIBUTING MEMBER OF THE NELSON MANDELA BAY COMMUNITY AND EXPECTS TO CONTINUE ON ITS GROWTH PATH IN THE YEARS AHEAD // for commodities such as petroleum, diesel, jet fuel, illuminated paraffin and liquid petroleum gas,” she explained. “Once operational, the terminal will facilitate substantially increased throughputs over present volumes handled at Port Elizabeth.

The allocated 20 Ha site also provides ample space for future expansion of the terminal.”

Liquid bulk products will be transported to the Port of Ngqura via ship and piped to the tank farm prior to local supply and global re-export.

The new modern facility will service the oil majors, new entrants into the South African oil industry as well as international traders, all of which will underpin the local shipping industry.

NEW AND IMPROVED FACILITIES Among the most notable news of late for Grindrod has been updates at some of its key facilities. After the award of a logistics contract by Syrah in 2017, Grindrod began construction of a dedicated Intermodal facility in Nacala, to move bagged graphite from Syrah’s mine in Balama to Nacala Port for export.

Key services offered include long-haul transport from the mine to the warehouse in Nacala, and storage and containerisation of the product.

INDUSTRY FOCUS: LOGISTICS

The Nacala site is now operational, and at full production Grindrod will containerise 30,000 tonnes of bagged graphite per month.

To service this contract in Northern Mozambique, Grindrod had to develop a warehouse and container and transport yard facilities, with a total footprint of 60,000m². Phase 1 - the construction of the warehouse and container yard - is now complete and fully operational, and the first cargo arrived in June 2018.

Besides significant investment in infrastructure and equipment, 145 people have already been employed already employed 145 people, a significant boon for the Mozambique economy with 98% of these staff being local.

The Port of Maputo took delivery in February of two new mobile harbour cranes to join the operational

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fleet. The acquisition of new equipment is in response to growing demand, specifically in bulk minerals, and will improve productivity.

“In addition to the two mobile harbour cranes, we have recently acquired 14 payloaders, 8 tractors, 8 forklifts and 2 rail excavators. This investment is in line with the need to improve the berth usage and the rehabilitation and deepening works that are taking place at the moment,” said Chief Operations Officer, Marla Calado.

The new fleet - larger and more modern - will allow higher productivity rates to be achieved supporting increased volumes handled in the port. Larger ships such as Capesize vessels have been calling at the port more frequently since the dredging of the access channel was completed in January 2017.

“Our turnaround times have

// WE WILL CONTINUE TO INVEST IN STRATEGIC ASSETS, ENABLING EFFICIENT LOGISTICS CHAINS AT COMPETITIVE PRICES AND IMPROVING AFRICA’S GLOBAL COMPETITIVENESS // been improving,” Calado continued.

“We believe this new equipment will enable us to further increase our operational efficiency, our competitiveness and our volumes in terms of cargo handling.”

“I am extremely proud of what our logistics partners and Grindrod,

GRINDROD

in particular the Maputo teams, have done to unlock the Maputo corridor and provide an efficient solution to our customers”, said Andrew Waller, CEO Grindrod Ltd. ROCK SOLID RESULTS Following the listing of its Shipping arm in June 2018, a renewed focus on Freight Services yielded positive results for Grindrod at the close of 2018. Furthermore, while its repositioning is ongoing, earnings growth generated by Financial Services is pleasing.

Earnings from continuing operations in Freight and Financial services stood at R803.4 million, an increase of 24% compared to earnings of R646.3 million in 2017.

Headline earnings from continuing operations were stated at R716.6 million, a 26% improvement on the previous period.

Port of Maputo was among the star performers, achieving record volumes of 19.6 million tonnes, a 7% improvement on the prior year. Also of note was the effective dry-bulk terminal utilisation, which resulted in a marked improvement in volumes handled during the second half of 2018.

Not to be outdone, the Logistics Division succeeded in expanding its footprint with the completion of the 60,000m² cross-docking facility in Nacala in 2018. The acquisition and integration of the NovaGroup, meanwhile, strengthened the division’s position in the niche marine technical market and in container storage.

There were also strong results to report in the Financial Services division, as core deposits increased by 14% to R8.9 billion compared to the R7.8 billion of 2017.

Andrew Waller summed up the key aims for the coming year as the stars continue to align for his company. “Grindrod Freight Services’ focus is on unlocking trade corridors.

We will therefore continue to invest in strategic assets, enabling efficient logistics chains at competitive prices and overall improving Africa’s global competitiveness.

“The Financial Services business is focused on continued steady growth, developing a new retail business and increasing its focus on small and medium enterprises in South Africa.”

WWW.GRINDROD.CO.ZA

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DURBAN ICC

Durban’s Famous

ICC Continues to Improve PRODUCTION: David Napier

Two years on from when Enterprise Africa last spoke to Durban ICC and the company is still thriving by attracting new international conventions each year, investing in its facilities to maintain world-class standards, and helping to develop the economy that it calls home. Chief Executive Officer, Lindiwe Rakharebe, talks again to Enterprise Africa about the success of this important KZN icon. www.enterprise-africa.net / 57

INDUSTRY FOCUS: EVENTS & HOSPITALITY

//

In the heart of Durban, just a 10-minute walk from the beachfront and the harbour, and just 30 minutes from King Shaka International Airport sits the Durban International Convention Centre.

Officially opened by Nelson Mandela in August 1997, the centre has become known across Africa – and around the world – as a versatile venue of multiple dimensions, flexible enough to meet any need, big or small, no matter how extraordinary; international conventions, exhibitions, sporting events, concerts or special occasions – every requirement can be accommodated.

Enterprise Africa studied the important work of Durban ICC, helping to put KZN on the world map, in 2016. Rakharebe explained that much work was underway at that stage to ensure the centre continues to meet international quality expectations with various upgrades and improvements going on across the 112,000m2 site.

Today, Rakharebe tells us that the work is constantly ongoing as the centre positions itself as the premier exhibition space on the continent.

“One example is the system of tribune seating we have in Hall 1, which comes from the original design of the building, and gives us the flexibility of offering clients an auditorium set-up with 1680 very comfortable seats or the option of raising those tribunes into the ceiling to give us versatile flat floor functionality on the same day,” she says. “Many of our clients will take the opportunity to hold their plenary session in the morning and we can then reconfigure the venue that afternoon and host a gala dinner in the evening in the same venue. This means you get two venues for the price of one.

It’s a wonderful system but one which has served us well for the past 21 years and was in need of a refurb. The project to refurbish the tribune seats was undertaken in the last couple of months and all of the seats have been completely replaced and everything is brand new.”

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Rakharebe notes: “As a venue that takes pride in the fact that we are a world-class convention, exhibition and entertainment centre, our primary goal is to enhance our guests’ experience and the refurbished tribune seating will definitely improve our clients’ comfort and enjoyment of the event.”

This R6 million project was just one part of a wider Capex spend programme which will see a number of the centre’s features improved.

CAPEX SPEND Bathrooms, kitchens, buffets, and physical infrastructure will all receive part of a R27.3 million budget in the coming financial year.

“We have a rolling five-year Capex plan that we work against and as long as we’re planning correctly, we can tackle major projects in phases without negatively impacting on the business,” says Rakharebe.

Brand new, state-of-the-art

culinary equipment has been installed in the centre’s kitchens to ensure Executive Chef, John Moatshe, and his team can delight all guests with a real taste of Durban.

“Things like the combi-steamers are not produced locally and we need to order in advance as it takes a number of months for them to be fabricated, shipped to South Africa from Switzerland, and installed on site. From ordering to functioning has been a long process, probably in the region of 18-months, and we are thrilled that they are now here and in operation working,” says Moatshe.

In order to display the food, prepared in the newly purchased kitchen equipment, the front-of-house team has also received investment to modernise, refresh and update its display and distribution capability.

“There’s been a fairly big order in our culinary department for buffet tables and front of house presentation

DURBAN ICC

equipment. When we set out large buffets to feed 2000 + people, we want it to feel like a special experience and not like you’re just a number in a crowd, so a lot of effort goes in to making sure the dining experience, which is critical to the enjoyment of every event, is something exceptional. We firmly believe that people eat first with their eyes, so a lot of creativity is being invested into the presentation of our food, seeing what the chefs have produced, and ensuring that guests are excited.

“This investment goes-handin-hand with the re-invention of our entire culinary offering which we have undertaken for the new year. In consultation with our clients, we are mindful of the changing nutritional needs of our delegates. Whilst we have always catered for vegetarian and Halaal patrons, we are seeing an increase in

demand for vegan offerings, as well as gluten-free dishes, and generally more healthy options in our menu pack.” added Rakharebe.

“We have some really beautiful glass and steel buffet tables. They are very eco-friendly and we’ve moved completely away from using table cloths to a look that is a lot cleaner, a lot more modern and a lot more attractive aesthetically,” says Moatshe.

Another feature of the Durban ICC which gives our clients flexibility in their event configuration is our system of moveable dividing walls. These give us the option of offering clients the largest column-free, flat floor event space on the continent, or to conveniently split the space into smaller halls and breakaway venues according to their specific event requirements. We are in the middle of a multi-year project to

replace these operable walls to ensure ongoing top-class operation and easeof-use for our staff and clientele.

“We have a series of five sets of operable walls throughout the centre and these come with a hefty price tag.

We’ve completed the first phase of the project which involved replacing the operable walls between Hall 1 and Hall 2, and we will continue to replace a hall at a time over the next few years. It gives us the flexibility to subdivide the hall and mould the centre around the requirements of whatever event we are hosting that week,” details Rakharebe.

In weeks when the Durban ICC is busy, it can host up to 22,000 people, and this does put strain on the centre’s resources hence the need for its ongoing reinvestment plan. Since we last spoke to Rakharebe in 2016, the bathroom refurbishments, which saw

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INDUSTRY FOCUS: EVENTS & HOSPITALITY

all the taps and porcelain replaced, have been completed and now “it’s time to complete a smaller refurbishment on all of the tiles through the centre’s bathrooms,” she says.

PHYSICAL & DIGITAL In another important upgrade programme, vital for the satisfaction of modern conference delegates, has seen the Durban ICC completely overhaul its wireless internet network. Delegates from government, business and public all converge on the site for large scale events and their communication capability is often the base of any marketing strategy for the day.

“We joke a lot about Maslow’s hierarchy of needs when it comes to a conference delegate and it’s no longer food and shelter at the base of the pyramid – it now starts with Wi-Fi. Once people have their Wi-Fi connection,

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they feel a lot better so that is a nonnegotiable for us,” says Rakharebe.

In 2016, she reminded of the importance of strong Wi-Fi saying that Durban ICC has more than two decades of history but wants to remain at the cutting edge with its technological offerings. After a lengthy upgrade programme, the Centre’s IT attributes are strong.

“The major procurement that we needed for that project is now complete and everything is in place and operational. We are very proud of the Wi-Fi network that we offer – the fastest connection of any convention centre in Africa as well as the ability to host 8000 concurrent users on the network simultaneously.

“We want people to have a good experience when they are with us and we understand that each conference delegate is bringing along two or

sometimes three devices each that all need to be connected throughout the day, so we have invested a lot to ensure the experience is easy and pleasant for every guest,” explains Rakharebe.

This tech investment has also seen the Centre become home to a number of new large HD display screens which can be used by clients during exhibitions and conventions or by the Centre for advertising purposes.

“We also use the screens to promote our beautiful destination so that delegates attending events get an insight to the beautiful country and region they are visiting. Our partners, including Durban Tourism and Tourism KwaZulu-Natal, have some excellent footage that we are proud to display so that we might inspire visitors to travel further in KwaZulu-Natal after their congress or conference is over,” enthuses Rakharebe.

DURBAN ICC

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BUSY 2019 Activity at the Durban ICC in 2018 was fast paced. Several major international events saw thousands of guests pass through Durban, and 2019 looks to be just as hectic.

In May, the Centre will host the 21st African Renaissance Conference as well as Africa’s Travel Indaba which looks to attract 10,000 delegates to the city.

November will see the first ever United

Johannesburg | Durban | Cape Town

Cities and Local Government Congress hosted in Africa being held at the Durban ICC which is expected to bring in over 3000 delegates.

“The Durban ICC is more than simply a venue,” says Rakharebe. “It is a platform for meetings, a facilitator of international dialogue and a place for people to connect, debate and ultimately find common ground. From the moment the guest sets foot into our

// WE FIRMLY BELIEVE THAT PEOPLE EAT FIRST WITH THEIR EYES, SO A LOT OF CREATIVITY IS BEING INVESTED INTO THE PRESENTATION OF OUR FOOD, SEEING WHAT THE CHEFS HAVE PRODUCED, AND ENSURING THAT GUESTS ARE EXCITED. //

venue, the Centre strives to deliver its unique brand of world-class service and a uniquely warm, African experience.”

Rakharebe says that medical conferences are a particular focus of the Centre. “We are very proud to have a number of medical conferences coming through this year such as the 2019 Africa Bio Convention will come to the Durban ICC for the second time, with 2000 delegates. In June, the Southern African Aids Conference will bring 5000 delegates to the city, and the World Association for Psychosocial Rehabilitation is hosting its international congress with us in October.

“We are very lucky to have some fantastic medical schools in our city and province, and a lot of them are world leaders when it comes to HIV AIDS and TB research so we certainly do target the medical industry but our offering

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INDUSTRY FOCUS: EVENTS & HOSPITALITY

// WE ARE PUSHING VERY HARD TO GROW EVERY YEAR AND WE ARE THANKING OUR CLIENTS AND SUPPLIERS FOR THEIR SUPPORT, HELPING US TO PUSH OUR BOUNDARIES ALL THE TIME //

is certainly not limited to those fields at all. We have a proud track record of having hosted medical congresses of all sizes for the past 21 years and it is definitely something that we seek to target because of the benefit and knowledge legacy that gets left behind with us. It accelerates the programmes that we have undertaken as a province and a country to help our people. We see these events as vehicles to fast track those agendas and deliver on those objectives in our city and province.”

In the 2017/18 financial year, the Durban ICC contributed R4.7 billion to the country’s GDP, creating 9474 jobs.

In 2018/19, the target is to increase that contribution to R4.9 billion. Since its

SAFETY

MANAGEMENT

establishment in 1997, the Durban ICC has contributed more than R40 billion to the South African economy and Rakharebe is confident about potential for the future.

“With the crop of international events that we have booked for this year, we are certainly going to be pushing that envelope again,” she says.

“We have set ourselves the target of R4.9 billion for this financial year and, so far, we are on track to achieve that.

That is our primary mandate and why the centre was built initially. For us, it’s about what we can do to bring the right calibre of international events to the destination whose economic impact translates into real jobs for our local

communities each year. We are pushing very hard to grow every year and we are thanking our clients and suppliers for their support, helping us to push our boundaries all the time.”

INDUSTRY LEADING At the end of 2018, Durban ICC was lauded as a leader in its sector, picking up a World Travel Awards accolade (for the 17th time in 18 years) as “Africa’s leading Meetings and Conference Centre”. The business was also nominated as a finalist in the prestigious Top Performing Public Service Award Category at the 16th annual South Africa National Business Awards. On top of this success, in February, it was announced

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DURBAN ICC

that Durban ICC had received a clean audit from the country’s Auditor General for the fifth consecutive year. This recognition helps the company to build a robust base from which growth can be quickly and easily achieved.

“If people are leaving us happy with the experience that they’ve had, and they have achieved the objectives of their events, then that is the real reward we are looking for,” says Rakharebe.

Even with the very successful exhibition and conference spaces that are frequently popping up around the continent, Durban ICC remains the diamond in the African industry and will, according to Rakharebe, continue to push boundaries.

“There is some wonderful product in the convention space and hospitality space on the African continent. It’s great to see that we are growing all the time with new centres opening all the time across the continent. I think we are lucky in that we have been able to play a pioneering role from a South African perspective, being the first international

convention centre, announcing to the world that the country is open for business,” she says. “For us, attracting international business to our shores is a real feather in our cap – it really is a strong source of pride for us. That being said, the pressure is then always on us to live up to the reputation we have built over the past 21 years. We market ourselves as Africa’s leading convention centre, and we work hard every day with every guest that comes through our doors, to maintain that reputation and grow it.

“Africa’s time has come – we are seeing a lot more interest in Africa as a global business events destination and we are going to lead that charge by doing things before others as we understand that is our role,” she adds.

For 21 years, the Durban ICC has been transforming its city, boosting the economy and inviting the world to experience Africa and the world-class service on offer. It’s continuing drive for excellence and constant investment into maintaining the industry top spot

mean that the Durban ICC will keep people and businesses coming back, year after year.

“We’re trying hard and having to be more creative with what we bring to the market but we do have an amazing team with years of experience and an uncompromising commitment to customer service excellence. I am excited about where we’re heading as a Centre, we are completely re-inventing ourselves from a culinary perspective, and some of our technology innovations are positioning us to deliver greater benefit to our clients on the things which matter most to them. I think if we continue working hand-in-hand with our clients and being responsive to their evolving event needs, we will continue to produce fantastic events and service those clients successfully in the longterm,” Rakharebe concludes.

WWW.ICC.CO.ZA

www.enterprise-africa.net / 63

HEARTWOOD PROPERTIES

Property Pioneers Make Landmark Listing PRODUCTION: Timothy Reeder

Heartwood Properties is known for innovative, sustainable developments with high occupancy levels no matter the prevailing economic conditions. Its pioneering listing on South Africa’s new 4AX exchange has been a huge coup for the company, and will see many others follow suit. “The exchange will really help us to grow our business further, and to raise more capital. It suits a small business like ours perfectly,” summed up CEO John Whall.

//

The Johannesburg Stock Exchange (JSE) is far and away Africa’s largest, and the 19th largest stock exchange in the world.

It has a market capitalisation of $150 billion, but is now facing a new wave of competitors, previously unheard of, who will look to offer alternatives to the current exchange giant.

This phenomenon has been put down in large part to introduction of stricter trading regulations South Africa back in 2014, which stopped some smaller, unlicensed companies trading their stocks privately, and in turn created opportunities for new nimble stock exchanges.

This disruption of the exchanges market will spell good news for investors, according to economist Jannie Rossouw in The Conversation, who pointed to examples of rival stock exchanges in other middle-income countries like Chile and Brazil.

64 / www.enterprise-africa.net

“More than one stock exchange in a country offers investors choice and rivalry puts a limit on the ability of a monopoly stock exchange to charge inflated prices for trading and settlement services,” he explained.

AFRICA’S NASDAQ? Arguably the biggest threat to the current order is 4 Africa Exchange (4AX), established in South Africa in 2014 and backed by a fearsomely strong consortium of names such as Bravura, Trifecta Capital and Intercontinental Trust lending their expertise in banking, finance and securities. The group is also fronted by Chichi Maponya of the Maponya Group, one of South Africa’s richest black families.

4AX will look to make financial markets more inclusive by providing, in short, a licensed exchange that is billed as red-tape free, more affordable than the JSE and more accessible to ordinary South

Africans than any other current iteration.

Moving forward, the JSE may no longer suit the needs of growing companies with its sometimes onerous and expensive listing procedures. As a result, many have described the need of a new exchange to act as South Africa’s version of the US Nasdaq composite.

“Our vision is for 4AX to be the preferred alternative exchange for Africa’s top companies and innovators,” outlined Fay Mukaddam, CEO of 4AX, in an open discussion with Business Report.

“We are the only other exchange, apart from the JSE, that is licensed to list equity and debt.

“What really differentiates us is that because of our structures and listing requirements, we are able to accommodate diverse listings - offering innovators and entrepreneurs the opportunity to list new ventures, including bankable projects,” she said.

Even the JSE itself has come

INDUSTRY FOCUS: PROPERTY

around to the idea that diversity is the way forward, despite an early appeal on the award of the exchange licence to 4AX, with Donna Nemer, Director of Capital Markets at the JSE, attributing this to, “a better understanding of 4AX’s market approach, which will increase the diversity of financial markets in South Africa.”

LANDMARK LISTING Founded by entrepreneurs with extensive property development experience and a passion for the industry, Heartwood Properties Limited has built up a proven track record of successful developments primarily focussed in the warehouse and commercial development sector in Gauteng and the Western Cape.

Heartwood offers green and sustainable developments ranging from serviced co-working office space to innovative warehouse facilities. Its biggest undertaking to date is Block A of the popular Willow Wood Office Park in Broadacres, completed in 2011, initially for The Business Centre and

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// THIS EXCHANGE WILL ENCOURAGE A MUCH BROADER PARTICIPATION OF SHAREHOLDERS AS WE LOOK TO GROW THE BUSINESS FURTHER // now Regus with a 10-year lease. The drive, in partnership with SolarSaver, to convert this site to solar power, brought Willow Wood back into the headlines in December last year.

“We realise the potential of solar,” said CEO John Whall, “and the great relief it will bring to our tenants who won’t have to rely on Eskom’s failing system or be at the mercy of its exorbitant pricing structure. Solar is also friendlier to the environment and as property developers we must reconsider the impact we have on nature.”

A joint venture between Gauteng property developers Brydens Group and Montagu Property Group, Heartwood’s is a top-quality portfolio of properties, and current projects include the R80 million multi-tenanted Northriding Showroom Development. It is now also the first property company to proudly list on 4AX.

“The listing of Heartwood Properties on 4AX will assist in bringing into fruition our goals,” explained Whall, “which includes raising capital for deployment in our developments; organically growing the company through new acquisitions, and continuing to enhance our existing real estate portfolio.

“At the same time, the listing of Heartwood Properties also provides potential investors, and tenants, a unique opportunity to invest in a dynamic listed property equity.” Whall added that 4AX had been chosen because it was an inexpensive listing option for the firm whose assets are worth around R120m. In his view, 4AX offers investors guaranteed good governance, transparency and all the controls that go with listed entities.

“4AX is a very attractive proposition and I think more property companies

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looking to list specialised portfolios at low cost will join in,” Whall asserted. “As a development company wanting to expand to meet the market’s demands and keep abreast of trends, listing on the 4AX has been revolutionary.”

Pallidus Capital will act as the ongoing external issuer agent of Heartwood Properties, whose exchange advisory division Head, Johan Fourie, further explained Heartwood’s choice to list on the new exchange. “4AX brings an alternative model, which reduces regulatory costs and inefficiencies, but promotes and is compliant with the highly regarded financial regulatory standards enforced in SA,” he summed up.

INSTANT RESULTS Shortly after completing its 4AX listing, at the end of 2018 Heartwood Properties successfully conducted a capital raise

on the new exchange, which saw 4.5 million new ordinary shares issued to participants and resulted in a material increase of Heartwood Properties’ shareholder base.

“Our objective was to grow the net asset value on the balance sheet and provide retail cash for this new development,” explained John Whall, of the private invitation-only offer to submit subscription offers in order to raise capital to fund future developments, in particular the Soleil commercial property development project in Bryanston, Johannesburg.

Heartwood Properties’ property investments have all experienced significant organic growth during the past few years, which has seen the company’s property portfolio grow from an asset base of R52.6m in February 2014 to R120m in August 2018.

Heartwood’s listing on 4AX can only propel this growth further, as Whall agreed at the listing announcement.

“This exchange will encourage a much broader participation of shareholders, which is exciting for us as we look to grow the business further. Our business has been syndicated up until now and this exchange allows us to expand and grow our shareholder base.

“We have some exciting developments in the pipeline and we look to this listing to allow us to raise capital in the future in a way that is transparent but not as onerous some of the other exchanges. It is perfectly aligned to our growth path going forward.”

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GLODINA

R150 Million Investment Brings Iconic SA Brand

Back to Life

PRODUCTION: Manelesi Dumasi

After the Glodina towel manufacturing facility in Hammarsdale, KZN closed in 2017, the IDC stepped in with a cash injection to bring production back online. Now, the company is looking to the future with renewed vigour as new opportunities and new facilities begin to boost confidence around the iconic South African-made brand. What is the key to reviving this much-loved institution? CEO Mark Goliath tells Enterprise Africa.

//

Two years ago, if you had walked into any of the big hotels in South Africa – or any of the big retail chain stores – there’s a strong possibility that you would be able to pick up a towel manufactured by Glodina, at its Hammarsdale factory close to Durban.

Established more than half a century ago, Glodina grew to become a powerhouse in the South African towelling sector – a trusted brand, manufactured to top quality standards, produced locally. But in early 2017, after a period of sluggish business, dark clouds began to form over the company. Its owner, JSE-listed KAP Industrial Holdings, decided that the brand was not returning requisite value for shareholders and, following an unsuccessful 12-month period through which KAP had tried to sell Glodina, no progress had been made and the business looked set to close with ca 550 jobs under threat.

Having only recently witnessed a big round of retrenchments following the closure of Rainbow Chicken in the area where 2000 jobs were shed, the Hammarsdale community was not ready for more unemployment. The Industrial Development Corporation (IDC) was also not keen for an iconic South African brand to be lost, so a plan was developed where the IDC would assist in funding a preferred bidder to purchase Glodina.

However, after several hurdles were unable to be jumped, the process broke down and the preferred bidder was not suitable, resulting in the IDC withdrawing its funding offer. The plant closed in November 2017.

Local, municipal and national government was not impressed with the situation, ca 550 former employees were left jobless, and customers and suppliers of Glodina were left with a hole in their operations. For the IDC

- set up to promote economic and industrial development - this was simply unacceptable and so it prepared an offer to take all assets from KAP and revitalise the brand. The IDC already had knowledge of the industry, being a 100% owner of Cape Town’s Colibri Towelling. This meant that, for the next 10 months, the IDC had to move its acquisition of Glodina through the Competition Commission to ensure a monopolistic market situation was avoided. After receiving its approval, the IDC re-launched Glodina in November 2018. Nearly 200 previous employees were re-hired and strong efforts were started to re-establish communication and reputation among clients.

MEC for Economic Development, Tourism & Environmental Affairs, Sihle Zikalala along with formerIDC CEO Geoffrey Quena, and many other government and business

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INDUSTRY FOCUS: MANUFACTURING

delegates were present at the factory in November for the reopening, with Zikalala saying: “We are here to say that the province of KZN is alive with the great possibility for investment.”

Mark Goliath, the IDC’s Senior Deal Maker, was seconded to Glodina thanks to experience in the industry, and he has the reins as CEO for 18-months during the company’s start-up phase.

“We are currently running at around 30% capacity and we are busy re-establishing our sales channels which were lost during the closure,” he tells Enterprise Africa.

RE-GROWING To bring Glodina’s business back to the levels of previous years, but to ensure it does not eat away at the market owned

by Colibri, the company is looking to improve product quality and service delivery by investing into new technology and automation processes. With a R150

million injection from the IDC, the target for Glodina is to position itself as a leading African manufacturer that produces to international standards.

“We have developed a plan that looks at modernisation in both entities,” says Goliath. “We will be modernising in the weaving shed, dyeing and finishing, as well as upgrading the make-up and sewing areas where we are looking at levels of automation. The upgrades are focused on improving historical manufacturing weaknesses which will allow the new entity to become more competitive. The Glodina management team recently travelled to Europe identifying areas of excellence as we want to benchmark against the best mills in Europe, India and Turkey – the market leaders in towelling manufacturing. On that basis, we have settled on a package of improvements that we need to make across both facilities with the view of improving product offering and reducing

cost through modernisation.”

Today, management is considering its options for the upgrades and preparing to make investments.

“The IDC has approved the necessary funding for us to acquire assets at both entities and we have engaged with many suppliers. Right now, we are making decisions on who are the preferred suppliers for equipment. We envisage being in a position to place orders with those suppliers in the next few weeks,” explains Goliath.

When all the upgrades are complete, Glodina will have a fleet of machinery that will rank alongside some of the strongest in the industry. “We are definitely going to have world-class manufacturing facilities,” says Goliath. But he is also extremely keen on service delivery. “Quality is not only what you manufacture, it’s also about how you treat your clients so service delivery for our clients will be a key benchmark for us,” he says.

Itema weaving the most beautiful and luxurious terry fabrics in the world Itema is a leading global provider of advanced weaving solutions, including best-in-class weaving machines, spare parts and integrated services. The Company is the only manufacturer in the world to provide the top three weft insertion technologies: rapier, airjet and projectile, with an ample product portfolio and a commitment to continuous innovation and technological advancement of its weaving machines. Born in 1967, Itema is the result of the successful merger over the years of three historic brands: Sulzer, Somet and Vamatex.

Delivering its weaving machines every year to more than 50 countries, Itema features in South Africa important installations, such as the one in Glodina, an historical Customer of the Italian based Company.

With particular focus on terry weaving, the type of fabric produced by Glodina, Itema is the first and foremost rapier terry loom producer, carrying on the excellence of historical and leading terry loom brands: Sulzer and Vamatex.

Rapier technology is well known to be the best choice for terry weaving to guarantee top fabric quality and utmost versatility.

With more than 20.000 Itema terry machines installed around the world, Itema ensures reliability, top performance, unbeatable terry fabric quality and strong track record.

The latest Itema rapier terry machine, named R9500terry, is the most sold loom in all the main high-end terry production markets, including Portugal, Turkey, Japan, South Korea, Brazil. Recent significant installations have been carried out in emerging markets such as Uzbekistan and Botswana.

The model before the R9500terry - the Silver DynaTerry or Silver DT – was the No. 1 best-seller in the world with a remarkable Customer satisfaction rate and more than 5.000 looms operating around the globe, before being phased out in 2015 and replaced by the newer and even better machine, the R9500terry. Nowadays, the R9500terry is already weaving superior terry fabrics in 30 countries due to its technological superiority and unbeatable textile versatility.

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INDUSTRY FOCUS: MANUFACTURING

Along with the growth of automation in the company, Glodina is also hoping to re-employ more people that were retrenched in 2017. As a large employer in the region, the company provides opportunity for many people and their dependents.

“As production grows, we want to create 230 employment opportunities grow to 230 full-time employees, excluding ancillary services, by July 2020.

Our thinking is that through natural growth in the business over the next few years, we will be in a position to create 300 employment opportunities, but I don’t think we will get back to the 550 that were here under the previous ownership.

With the equipment changes that we are bringing in, you don’t need as many hands to achieve the same output, so we want to grow output through growing business which is a two to three-year process. The founding principle of what we are trying to achieve here is to create a sustainable entity that can look after itself for the next 20 or 30 years,” says Goliath.

Both the IDC and Glodina are clear that sustainability will come through realising of opportunities that were

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lost while the company was closed.

Reopening communication with the hospitality sector will be vital over the coming months as Glodina looks to increase from 30% capacity.

“The hospitality sector will remain a cornerstone of our business going forward as Glodina was the market leader in that space historically so we have placed a lot of emphasis there as that is where our brand recognition is highest,” explains Goliath.

“The retail sector will remain important for us but will no longer be the holygrail going forward. We now have two brands, Colibri and Glodina, under one stable and the level of product diversification and segmentation will lead us into new avenues. We have not discounted the possibility of export, especially for Glodina,” he says.

The potential for export is also being explored, with Glodina having a brand presence in Malawi, Namibia, Zambia and Zimbabwe. The African continent will be the focus in the short and medium term, and the long-term could, potentially, hold opportunities further afield. The company is working with agents and hospitality

business around the region to try and build new partnerships and showcase its capability with big-name organisations.

“We are not geared to do that in the next year but there will be opportunities for that to expand in the next three years, where we get better at what we do and we improve our product offering,” says Goliath.

LOCAL MANUFACTURING It’s well-known that South Africa’s manufacturing sector has been under heavy pressure for a number of years, with a number of entities facing challenges that have forced them to drastically change the way they do business. Clearly, Glodina has not escaped the challenges of the wider manufacturing industry but in the future it wants to contribute to improvements in the local sector by delivering excellent products combined with fantastic service, taking market share back from imported brands.

“In the current South African market, around 85% of products are imported,” details Goliath. “This poses a big opportunity for us,” he adds. “A lot of

GLODINA

the discussions we are having, whether it’s with retailers or hospitality businesses, are resulting in people saying that they are delighted we are back and they are excited to see our product offerings. But, we cannot compete purely on price with imported products. Towels imported from Pakistan and India are manufactured considerably cheaper than we can offer – the scale of operation is one hundredfold what we can achieve here. Where we do have advantage is through service delivery and the ability to give clients what they want with the flexibility they require. We can also assist with allowing providing clients with smaller runs of products which assists in their planning.

The towelling industry is moving towards a fast fashion model and we are looking to bring that same ‘apparel feel’ to the sector.

It’s about having the flexibility to change to what your client wants. For example, if our client orders six colours but only two sell very well, they can call and tell us to only deliver the popular lines. If they are importing by the container load from Pakistan or China, it becomes very difficult as they are committed to the colours.

We are trying to provide some value-add which customers will pay more for.”

Bringing this flexible approach will allow local retailers and hospitality businesses to partner with Glodina and its vision for the future. An investment into Glodina now means an investment into South African jobs

and South African industry.

“There has been a lot of uncertainty around Glodina for the past two years.

The one thing that the IDC brings to the party is certainty,” says Goliath. “We have made the investment in Glodina and we are backing that up with investments into equipment and technology, and the market is enjoying that as the previous shareholder was not willing to make investments into technology to move the company forward.”

He reminds that the IDC does not get any financial assistance from government and is run on sound business principles.

“The onus on companies such as Glodina is to contribute positively to the IDC bottom line,” he says.

BRIGHT FUTURE? With a new lease of life, backing from the IDC, a healthy brand, and strong hunger from customers, Glodina is well positioned to regain its industry-leading position.

Operating at just 30% capacity, there is certainly room to improve and Goliath points out that diversification could also become part of the Glodina strategy soon.

“If you look at some of the big global towel manufacturers, they offer home textile products beyond just towels such as bedding, curtains and similar. There is definitely an opportunity, utilising the Glodina brand, to spread our wings into that area. The IDC also owns a home textile manufacturing company and over

the next 18-months, we will be exploring opportunities with them where we will be able to offer a suite of products to clients and test the market with that concept.

If there is a market for Glodina-branded bedding or sheets then it will be an easy test case for us with our sister company,” he says.

The sharing of knowledge, through the IDC, between Glodina and Colibri will also bring benefits for both businesses.

“The intention is to make it the number one towelling manufacturer in southern Africa. We anticipate that this is very much achievable, looking at the demand we have had in just the last two months since our reopening,” says Goliath.

He adds that the loss of Glodina was clearly felt by all retail chains, independent retailers and hospitality businesses and now, just small tweaks are needed to return the company to the top of the pile.

“There is no doubt in my mind that if we fix the inherent problems that were here before, we can make a success of this and grow it to even greater heights than what it used to be.”

Zanele Gumede, eThekwini mayor, was clear that the Glodina factory was vitally important to the region and she was delighted at the reopening. Following the closure of other manufacturers in the region, she said Hammarsdale resembled a ghost town and that was unacceptable.

For Mark Goliath, Glodina is now at the start of a remarkable journey, and management is looking at everything possible to build the community, Glodina brand, and wider manufacturing industry.

“It is a very exciting period,” he admits. “We are now a start-up with a 50year history and the brand presence has left us with a lot of goodwill, opening a lot of doors. We want to ride the wave but also improve on the perception that has been left behind.”

WWW.GLODINA.CO.ZA

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Katse Dam Lesotho

RAND WATER

Increased Demand No Problem for Rand Water PRODUCTION: William Denstone

Rand Water is the largest water utility in Africa, supplying potable water to the Gauteng province and other areas of the country. The company battles geographical and climate factors to deliver a reliable, high-quality supply as demand refuses to abate in the region.

//

The question of water provision has never loomed so large as over the last 12 months or so, with recollections of the drought that gripped South Africa - which will be remembered in the big cities as one of the worst in living memory - so fresh in the mind.

It also proved catastrophic in the bush and remote communal lands, even while attention was fixed

mainly on what it was feared would become ‘Day Zero’ water shortages: in the Kruger National Park it killed off more than 25% of the park’s buffalo population, about 45% of the hippos and up to 40% of trees and shrubs in some parts of the park.

The water crisis peaked during mid-2017 to mid-2018 where levels hovered between 15 to 30% of total dam capacity. In response, the City of

Cape Town implemented significant water restrictions in a bid to curb water usage, and succeeded in reducing its daily water usage by more than half to around 500 million litres per day in March 2018.

The fall in water usage, combined with strong rains in June 2018, led dam levels to steadily increase to close to 70% and allowed the city to begin easing water restrictions.

www.enterprise-africa.net / 75

INDUSTRY FOCUS: INFRASTRUCTURE

SOLUTIONS TO CLIMATE CHALLENGES The rainfall climate of South Africa is one which is infamously variable. Since 1960, seasonal deviations demonstrate wide fluctuations in the long-term average. Deficits of 25% are normally enough to be considered a severe meteorological drought, but even a shortfall of 20% from normal rainfall will cause crop and water shortfalls in many regions, likely accompanied by social and economic hardship.

In addition, South Africa has a wider variety of climates than most other countries in sub-Saharan Africa, coupled with lower average temperatures than other countries within this range of latitude, like Australia, because much of the interior of South Africa is at higher elevation.

Tasked with securing supply amid these myriad demanding factors, Rand Water began full operations over a century ago in 1905. By 1906 the annual daily consumption of water supplied by

Rand Water was around 11 Megaliters per day (Ml/d), a figure which has been growing ever since.

“Rand Water’s major challenge to date has been to augment its water sources to meet the growing demand,” the company states of the gruelling landscape in which it operates. To overcome these challenges, Rand Water has, over more than 100 years, put in place a series of major schemes to respond to the demand for water in an area where it is notoriously scarce.

Bulk Water Supply Pipelines for Rand Water Hall Longmore has, for many years, manufactured steel pipe for bulk water infrastructure administered by Rand Water in and around Gauteng and as far East as the Bushbuckridge Area in Mpumalanga.

Rand Water are currently in the midst of a major expansion programme with pipelines destined for installation at different sites in the region from Nigel in the East to Roodepoort in the West and Vereeniging in the South to Midrand in the North. With production of Phase 2 well under way, many thousands of tons of steel coil has been processed into pipe using the spiral submerged arc welding process.

According to Kenny van Rooyen, Managing Director of Hall Longmore, “Rand Water sets high standards for the pipe supplied to their projects and has consistently prepared specifications comparable to the best in the world.

“For Rand Water in particular, pipe is purpose made according to client dimensions and specifications to the highest recognised international manufacturing and quality standards, to which Hall Longmore has all the appropriate accreditations.

“The manufacture of pipe is optimised through a sophisticated production schedule which seamlessly integrates the requirement of each order. This includes, for example, the grade and thickness of steel (pipe wall thickness), diameter, protective coatings and linings if required, pipe end preparation and delivery date,” he said.

The logistics of delivering pipe is equally important”, says van Rooyen. “Pipe length, diameter and mass are key factors to consider in determining the number of delivery loads required for a project. Generally pipes for bulk water projects are supplied in lengths of over 18 metres and bespoke Hall Longmore truck and trailers are used to ensure safe transportation.”

According to van Rooyen the main advantages of using the spiral welded manufacturing process is that pipe is produced economically with an almost infinite variety of diameters and thicknesses. In addition, further economies are achieved through pipes obtaining their final shape on the pipe mill without any need for further treatment such as straightening and calibrating.

As with all buried pipelines, pipes for Rand Water projects are specially coated and lined to prevent corrosion and, to this end, Hall Longmore provides the widest range of coating options in the South African market and remain at the forefront of new and developing technologies. All coating and lining options extend to satisfying a wide variety of client specifications and are applied to and measured against the highest international standards Hall Longmore has enjoyed sustained success with supplying pipe products to a number of large international and Southern African projects for the transportation of water, gas and petro-chemicals. To this end, Hall Longmore has demonstrated that it is committed to being a strategic partner in the growth of the South African economy.

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The company’s world-class manufacturing facilities produce large-bore welded steel pipes for a variety of applications.

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INDUSTRY FOCUS: INFRASTRUCTURE

The Vaal Dam project in 1938 was perhaps the breakthrough development in this timeline, yielding an unprecedented 354 Ml/d supply, while since 1998, the Lesotho Highlands Water Project has been Rand Water’s go-to source. As early as 1954, the Natural Resources Development Council proposed the idea that water might be obtained from Lesotho to bolster that of the Vaal River, leading to a three-phase scheme including four major dams: Senqu in Lesotho, Ash River in the Free State, Wilge River and the Vaal Dam. Municipal customers account for 95% of the total requirement, with direct supply to some 40 mines making up most of the balance.

Among its customers are Metropolitan Municipal Councils - City of Joburg, City of Ekurhuleni, City of Tshwane - 13 municipalities and 26 industries and direct customers. From the two primary Rand Water purification plants pump, bulk water is distributed through a total network of 3500km bulk pipelines and 60 storage reservoirs.

WATER WEEK Water security is undeniably one of the biggest challenges facing South Africa, and the world as a whole, in the 21st century, particularly in the developing world. South Africans currently consume more water per capita than the world average - approximately 237 litres per day compared to roughly 173 litres. The highest consumption was reported for Gauteng, which notched up 305 litres per person each day.

Furthermore, South Africa has a semiarid climate, with an average annual rainfall of 465 mm, compared to the world average of 860 mm. As a result, South Africa’s water resources are scarce and extremely limited. National Water Week this year included Human Rights Day, celebrated on 21 March, because water is regarded as a basic human right in South Africa.

Safe drinking water and the importance of washing of hands for a healthy and hygienic lifestyle are highlighted in the government’s campaign.

Lesotho Highlands Water Project © Travel Lesotho

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As part of the conservation efforts, the Department of Water and Sanitation recently assured the public that tap water in the country is safe for human consumption. While it is disputed that 11 litres are needed to bottle just one litre of water, it is certainly true that if water needs to be treated through processes like reverse osmosis, deionisation or ultrafiltration, the amount of water required increases drastically.

The establishment of the Blue

// CURRENTLY OUR BULK WATER NETWORK SUPPLYING OUR CUSTOMERS REMAINS STABLE AND WE ARE MANAGING DEMAND AS NORMAL //

RAND WATER

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Drop programme, a measure put in place to ensure that water services institutions deliver good quality water, that complies with the South African Drinking Water Quality Standard (SANS 241), was therefore exactly the response needed to public concerns. The SANS 241 is aligned with the World Health Organisation’s guidelines for drinking water, and government was at pains

// RAND WATER’S MAJOR CHALLENGE TO DATE HAS BEEN TO AUGMENT ITS WATER SOURCES TO MEET THE GROWING DEMAND //

+27 (86) 547 7943



info@coeng.co.za

to, “reassure tourists and the general public that water in South Africa is of a high-quality standard.”

STEADY SUPPLY Total average daily demand for the Rand Water network is projected to increase to around 5500 Mℓ/d by 2030. This gives an average rate of demand growth of 1.75% per annum over this period.

Phase 2 of the Lesotho Highlands Water Scheme (LHWS), expected to be completed by 2024 and deliver more than 1000 Mℓ/d, will offset greatly the current exceeding of Rand Water’s raw water quota allowed by the Department of Water and Sanitation from the Vaal River System.

Despite the ongoing inconvenience of load shedding, the Rand Water System, which serves approximately 12 million people, remains stable and steady. While

 www.coeng.co.za

cautiously optimistic, Media Relations Manager Justice Mohale clarified that the utility was “closely monitoring” the possible impact of load shedding, particularly as some of its capacity has been lost due to increased demand caused by high temperatures.

“In the event that load shedding levels are elevated or prolonged, Rand Water will communicate the impact thereof,” explained Mohale.

“Currently our bulk water network supplying our customers remains stable and we are managing demand as normal,” he concluded.

WWW.RANDWATER.CO.ZA

www.enterprise-africa.net / 79

w Employees underground at the Wesselton Shaft, Kimberley Underground

PETRA DIAMONDS

Petra Holds All the Jewels PRODUCTION: Timothy Reeder

Petra boasts a diversified portfolio of world-class mines which have produced some of the world’s most important and valuable diamonds to date. The recent announcement of leadership changes, along with enviable interim results, gives much cause for excitement for the future of the independent diamond mining group. www.enterprise-africa.net / 81

INDUSTRY FOCUS: DIAMOND MINING

// PETRA HAS DELIVERED SOLID PRODUCTION IN THE FIRST HALF OF FY 2019 UNDERPINNED

BY A CONTINUED IMPROVEMENT IN SAFETY PERFORMANCE //

Drilling Specialist and Long Hole Charging Assistant observing the Simba M4C operating in automation, underground at Finsch

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//

Having blossomed from a junior diamond explorer with a market capitalisation of less than £10 million in 1997, to a leading independent diamond mining group today, Petra’s portfolio comprises four producing operations, and of these, three can be found in South Africa. The fourth is Williamson, Tanzania’s only significant diamond producer based upon the 146-hectare Mwadui kimberlite pipe.

Finsch is South Africa’s second largest diamond operation by production, after De Beers’ Venetia mine, and in 2017 passed 50 years of operations, at which time it had produced nearly 50 million carats.

“For a mine to reach this milestone is significant,” COO Luctor Roode told us. “We’re still going strong and hoping to see many more years added to the life of the mine.”

Cullinan is, again, among the world’s most celebrated diamond mines, not least for having been the source of the two largest stones in the British Crown Jewels.

It has gained renown for being a source of large, high-quality gem diamonds, as well as being the world’s most important source of very rare blue diamonds.

Petra was celebrating a profitable decade at Koffiefontein last time we covered the third of its South African diamond mines. Mining first started at Koffiefontein over 140 years ago, and this remarkable longevity is testament to its quality. Petra’s success has always been down to its focus on value rather than volume production, optimising recoveries from a high-quality asset base in order to maximise their efficiency and profitability. The approach has seen it amass one of the world’s largest diamond resources of nearly 300 million carats.

CHANGE AT THE TOP The group announced in February that, as of April this year, Richard

PETRA DIAMONDS

Duffy had been elected as the man to foster further growth as Petra’s new CEO, bringing with him 27 years’ experience in mining in both open pit and underground mining having led multiple large-scale mining operations across Africa.

“I am delighted to have been appointed CEO of Petra Diamonds,” Duffy commented. “I look forward to working with a very capable team

that has grown the business and laid the foundations for delivering on the recent capital investment programme.”

Petra’s Chairman, Adonis Pouroulis, added: “We are extremely pleased that Richard will be joining Petra Diamonds. He brings with him an impressive depth of global mining experience which we believe will be critical to drive Petra’s



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



transition from a phase of intensive capital expenditure and expansion to a focus on steady-state, cashgenerative operations.

“We are deeply grateful to Johan Dippenaar for all of the work he has done over the past 14 years to lead Petra through a long period of significant growth and establishing the company as a leading independent diamond producer.”

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INDUSTRY FOCUS: DIAMOND MINING

The Bulk Sample Plant – Crushing Plant at the Finsch mine

PLEASING PERFORMANCE Production figures for Petra for the six months ended 31 December 2018 made for pleasant reading, up

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The new Cullinan plant, fines plant feed belt

10% to 2,019,147 carats and with full year production guidance of ca.

3.8 - 4.0 Mcts maintained. Revenue was also on the up, by 8% to

US$207.1 million, and the number of diamonds sold increased 15% to 1,736,357 carats.

While Koffiefontein’s run-of-mine

PETRA DIAMONDS

Drilling Specialist operating the Simba M4C, underground at Finsch

// OUR FOCUS REMAINS TO CONTINUE TO DELIVER OPERATIONAL - AND CAPEX EFFICIENCIES AT ALL OF OUR OPERATIONS // (ROM) production remained flat at 25,275 carats, this was negatively impacted during the period by the community unrest concerning municipal service delivery, operational challenges relating to plant availability and a lower than planned grade recovered.

However, since the start of January 2019 additional crushing capacity has been introduced to the plant, employee attendance has normalised and monthly production is expected to ramp up over January to the levels observed in Q1 FY 2019.

Results were also somewhat marred by volatility in Cullinan’s product mix, a feature associated with complex orebodies such as Cullinan’s, which yielded prices at the lower end of historical ranges - a 4%

downward movement and around US$10 million shortfall in revenues.

There was continued strong operational performance at Williamson with two good quality pink stones recovered post Period end which are expected to be sold in February 2019. “Petra has delivered solid production in the first half of FY 2019 underpinned by a continued improvement in safety performance,” summed up outgoing CEO Johan Dippenaar.

“We are seeing production reaching consistent levels while our focus remains on the delivery of operational and capex efficiencies in order to generate positive free cashflow and subsequent debt reduction.

“Whilst we delivered solid

production and continued to improve our safety performance in the first half, we recognise the impact the lower value of the product mix at Cullinan had on our financial results for the period,” Dippenaar concluded.

“During the second half, we will accelerate the installation of drawpoints to improve access across the full footprint of the C-Cut Phase 1 block cave. Our focus remains to continue to deliver operational- and capex efficiencies at all of our operations.”

WWW.PETRADIAMONDS.COM

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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 TRAVEL WEEK APR 10-12 | CAPE TOWN Three travel industry events – one venue – Cape Town International Convention Centre. An event comprising of three co-located shows – WTM Africa, ibtm africa and ILTM Africa encompassing Africa’s inbound and outbound markets for general leisure tourism, luxury travel and the MICE/business travel sector brought to you by Reed Travel Exhibitions and Reed Exhibitions.

SECUREX WEST AFRICA APR 16 - 17 | LAGOS Securex is the leading exhibition brand for the industry right across the continent with events in West, East and South Africa. It is the trusted platform for security professionals to network with their peers and showcase new technology and services.

In having three exhibition in the ‘corners’ of Africa, it allows companies to access the three main markets in Sub-Saharan Africa, through a tried and trusted exhibition, and the huge potential that they each offer.

86 / www.enterprise-africa.net

RAND SHOW APR 19 - 28| JOHANNESBURG The Rand Show celebrates an incredible 125 years as an iconic event on the Joburg calendar in 2019. The Show was first organised by the Witwatersrand Agricultural Society and attracted 3000 visitors. It quickly became part of South African heritage attracting industries and dignitaries from around the globe and was a firm favourite with the public, with a record 848,332 visitors attending in 1989.

The 125th Celebration promises to be one of the best shows ever with the introduction of fantastic, on trend, content. This will include Africa’s biggest celebration of the global sensation game, Fortnite, a new reality cooking and talent shows, a beautifully presented flower and décor show, international Fitness Expo, world class military displays, drum majorette Gold Cup and so much more.

AFRICA TRAVEL WEEK CAPE TOWN ICC APR 10 - 12 RAND SHOW EXPO CENTRE, NASREC APR 19 - 28 SOUTH AFRICAN CHEESE FESTIVAL SANDRINGHAM ESTATE, STELLENBOSCH APR 26 - 28 AGRITECH ZAMBIA GART RESEARCH CENTRE, CHISAMBA APR 11 - 13 SECUREX WEST AFRICA LANDMARK EVENTS CENTRE, LAGOS APR 16 - 17 PROPERTY BUYER SHOW CAPE TOWN ICC APR 06 - 07

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