Enterprise Africa July 2019

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

July 2019

www.enterprise-africa.net

At Home in Affordable Housing Exclusive interview with Tri-Star Construction’s Senior Quantity Surveyor, Frans Maartens ALSO IN THIS ISSUE:

OMIGNAM / Harvey Roofing Products / Kinghorn Brushware / NVest

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 PROJECT MANAGER Chelsea Pettifer  chelsea@enterprise-africa.co.za FINANCE MANAGER Chloe Manning  chloe@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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For those that are lucky enough to make it big across Africa, there seems to be one key common denominator – scalability. Entrepreneurs that go out and find solutions to problems for customers while ensuring that their business is scalable are those that are now thriving, not just locally, but across the continent.

Take Mukuru for example, the African money transfer specialist. The company was formed to address a very apparent need within the economies of southern Africa and it has grown because the premise has scale.

Then there’s Harvey Roofing Products, part of the Macsteel Group. The Harveytile brand and product range competes in a challenging market but its characteristics make it an industry-leader and one which solves problems not just in South Africa but around the sub-Saharan African region. The company’s partnerships in retail and wholesale make it easily scalable.

Another example comes from Regis Holdings, a Mauritius-based heavy industry equipment supplier. As the demand for construction, engineering, oil and gas capital equipment grows on the continent, the ability of Regis to scale its operations has seen it become known as an industry-leading supplier. The majority of the international oil and gas businesses active around the continent now utilise Regis equipment and services.

Scalability is clearly fundamental for those looking to build a continental operation. Without it, you can have the greatest idea, and be successful, but you will miss out on opportunities.

Tell us how your company is using its scalability to onboard new opportunities. We’re online @EnterpriseAfri1 and LinkedIn.

Front cover image: Apartments on William is a residential student accommodation in Pretoria

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

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

10/TRI-STAR CONSTRUCTION At Home in Affordable Housing Operating in the highly-competitive Centurion-based Tri-Star Construction is enjoying an exciting but busy time as its project pipeline continues to grow. Where others have failed to deliver, Tri-Star is a business that has been successfully delivering a range of different projects in a sustainable and financially sound manner. Senior Quantity Surveyor, Frans Maartens tells Enterprise Africa more about Tri-Star’s successes and ambitions.

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CONTENTS

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8/MEDIACOM INDUSTRY FOCUS: CONSTRUCTION 10/TRI-STAR CONSTRUCTION At Home in Affordable Housing 18/HARVEY ROOFING PRODUCTS Quality Stamped: Superior Harveytile Brand Ready for Growth 24/AFRISAM Forging Concrete Possibilities Across Africa INDUSTRY FOCUS: INFRASTRUCTURE 30/WTW CIVILS Laying Foundations for Transformation 36/REGIS HOLDINGS Regis Targets Heavy Growth in Africa INDUSTRY FOCUS: MANUFACTURING 42/KINGHORN BRUSHWARE 114 Years and Still Sweeping for Kinghorn 48/CHET CHEMICALS So Fresh, So Clean

36/ 52/THE BEVERAGE COMPANY More Cheers for The BevCo 60/DISTELL The Toast of Africa INDUSTRY FOCUS: FINANCE 66/OLD MUTUAL INVESTMENT GROUP NAMIBIA Peerless Solutions from Namibia’s Premier Asset Manager 72/NVEST FINANCIAL HOLDINGS Fully-Fledged In the Art of Financial Services 78/MUKURU African Solutions for African Money Movement INDUSTRY FOCUS: TECHNOLOGY 86/TARSUS TECHNOLOGY GROUP Cloud Simplified From Tarsus INDUSTRY FOCUS: AGRICULTURE 98/FRESHMARK Truly the Pick of the Bunch

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RETIREMENT FUNDS KEY TO SA’S DEVELOPMENT

Minister of Trade & Industry, Ebrahim Patel - Photo GCIS

Retirement funds, which are an essential part of South Africa’s capital market environment, have a role to play in the country’s development, says Trade and Industry Minister Ebrahim Patel.

“Aside from underpinning equity and debt markets, they have a role to play in the development of South Africa through investment in real assets. Government’s investment drive is looking not just to Foreign Direct Investment but also and very strongly to domestic investment to stimulate economic growth,” said Patel.

Patel was speaking at a conference hosted by Batseta – the Council of Retirement Funds for South Africa – in Johannesburg.

He noted that the aggregate assets of retirement funds in South Africa was sitting at R4.2 trillion, according to the 2017 Registrar of Pensions Funds Annual Report, with the Government Employees Pension Fund (GEPF) accounting for 40% of the total.

“The size of the retirement funds’ financial holdings mean that their decisions have a huge impact on the national economy,” he said.

Patel called on pension fund trustees to ensure good governance. Trustees, he said, have a fiduciary responsibility to ensure that governance is strong, to hold fund management accountable and to ensure that there is no mismanagement.

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“This responsibility requires ongoing training of trustees, learning from best practice and constant vigilance.

The economy cannot keep paying the huge price of governance lapses at public entities like Eskom or private entities like Steinhoff,” he said.

He called on trustees to support increased private sector investment in the economy.

“You have the responsibility towards your members to help lift the long-term rate of growth of the South African economy as a key means of realising the pension promise.

Pension Fund investments, because they are so large, generally track the performance of the SA economy, which is your investment universe.

“A sluggish economy impacts directly on the performance of your overall portfolio. A growing economy lifts your entire portfolio, hence helping to increase both the value of, and the annual return on the portfolio, to the benefit of retirement fund members.”

Patel called for fund managers to take a longerterm perspective on returns. He pointed to investment opportunities off the back of the Continental Free Trade Agreement that recently came into force.

“There is a market of a billion customers that can be used to provide significant new investment opportunities,” he said.

NEWS SNAPSHOT ECONOMY CONTRACTS BY 3.2% IN THE FIRST QUARTER Statistician General Risenga Maluleke says the country’s Gross Domestic Product (GDP) contracted by 3.2% in the first quarter of 2019. Speaking at the release of the GDP results for the first quarter of 2019, Maluleke said this was largely due to the mining and quarrying and manufacturing industries being negative contributors to growth quarter-on-quarter.

The manufacturing industry decreased by 8.8% and contributed -1.1 percentage points to the GDP. Seven of the 10 manufacturing divisions reported negative growth rates in the first quarter. The divisions that made the largest contributions to the decrease were petroleum, chemical products, rubber, plastic products, motor vehicles, parts and accessories, as well as other transport equipment, wood

products, publishing and printing. Maluleke said the mining and quarrying industry contracted by 10.8% and contributed -0.8 of a percentage point to GDP growth.

The agriculture, forestry and fishing industry contracted by 13.2% and contributed -0.3 of a percentage point to GDP growth. The decrease was mainly because of a drop in the production of field crops and horticultural products. The finance, real estate and business services industries increased by 1.1% in the first quarter. An increase in economic activity was reported in the financial intermediation, real estate activities and business services. General government services increased by 1.2% and this was mainly attributed to an increase in employment. Personal services increased by 1.1%.

SA’S FIRST SHIPMENT OF CITRUS ARRIVES IN CHINA The historic shipment of 5200 tons of citrus in a breakbulk vessel has arrived at Shanghai Port in the People’s Republic of China.

The Baltic Summer reefer vessel carrying citrus from South Africa to the People’s Republic of China arrived at the Shanghai Port on 10 June 2019.

The first shipment was launched on 6 May 2019 at Maydon Wharf Port in Durban.

According to the Department of Agriculture, Land Reform and Rural Development, the reefer vessel was cleared upon arrival in Shanghai without any sanitary and phytosanitary challenges.

The vessel was received by the South African Consul General, Mpho Hlahla, and the department’s attaché to the People’s Republic of China, Mashudu Silimela.

Silimela and the team in Plant Health and Inspection Services Directorates played a significant role in the negotiations for the use of breakbulk vessels instead of containers.

The Minister of Agriculture, Land Reform and Rural Development, Thoko Didiza, has congratulated the department for the successful negotiations that resulted in the approval of breakbulk vessel shipment. She also thanked all parties and the industries that were involved throughout the process since its inception in 2006.

“This signals growth to the South African citrus industry in South Africa and will result in the creation of more jobs. The use of breakbulk vessels at the port will clear the congestion at the port due to some challenges currently experienced,” Didiza said.

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BY PUTTING PEOPLE FIRST, WE GET BETTER RESULTS.

MediaCom has owned entities in a number of owned markets and leverage the GroupM network on the rest of the continent.

Together, we have a presence in over 30 countries across Sub-Saharan Africa. Our experience includes heavyweight clients such as Coca-Cola, P&G, Siemens, Dell, AirFrance, and Richemont.

Our success is underpinned by our belief: “People First, Better Results”; that if we invest in the people, we’ll deliver better results.

GROWING BRANDS IS HARDER THAN PRIORITISING PEOPLE EVER. ECONOMIES ARE UNSTABLE. By putting people first, MediaCom has established a culture built RETAILERS, SHAREHOLDERS, AND on sharing and collaboration, which has implemented some of CONSUMERS ARE DEMANDING MORE, the best-in-class tools that make sharing market-leading concepts and ideas possible at scale. Although the concept of ‘share and WHILE TECHNOLOGY, DATA, AND reapply’ may sound simple, it’s not completely straightforward GLOBALISATION ARE CREATING MORE from an implementation perspective. In fact, it’s extremely hard.

These complex processes take a large amount of knowledge and COMPETITION AND COMPLEXITY. BUT intensive planning.

AVENUES OF GROWTH STILL EXIST, Managing clients in Sub-Saharan Africa (SSA) is a unique and ESPECIALLY IN AFRICA. AND WE KNOW highly specialised field. This is why MediaCom employs three WHERE TO FIND THEM. different models when working with clients.

THESE ARE THE SSA MODELS: Hub & Spoke Model Focuses on developing communication principles, building regional capability, the rollout of tools and technology, thought-leadership, regional insights and trends, as well as regional trading advantages.

Centralised Model Focuses on regional strategy and local flair, direct partnerships, central co-ordination, and the consolidation of budgets on regional buys.

Local Model All strategy, planning, and buying is done in each individual local market, with billing done in the local currency.

In addition to the local market insights provided through our network, we are plugged in to the WPP Data Alliance –TNS, Kantar, and Millward Brown.

This Data Alliance facilitates third-party industry-accepted optimisation, compliance, and efficiency measurements in Sub-Saharan Africa.

CEO of MediaCom South Africa, Ashish Williams

“BEING PART OF A GLOBAL AGENCY NETWORK HAS ALLOWED US TO EXPLORE MANY AVENUES AND OPPORTUNITIES FOR BRANDS LOCALLY. IT ALSO ENABLES US TO PLUG INTO ALL THE TOOLS AND RESEARCH AVAILABLE TO US. WE ARE REALLY A CONNECTED AGENCY – #ONEMEDIACOM.”

MEDIACOM’S APPROACH TO MARKETS

ONE MEDIACOM

MediaCom’s skills and capabilities in Africa can be sorted into three categories, namely Mature, Maturing, and Emerging regions.

1. Mature regions are markets with advanced capabilities such as in-country insights, online and offline strategy, online and offline implementation, buying offline, programmatic buying, media research & analysis, media verification, media performance measurement, and media performance reporting. These markets include Angola, Ghana, Nigeria, Kenya, and Mozambique.

Our CEO of MediaCom South Africa, Ashish Williams, explains the company’s outlook as follows: “Being part of a global agency network has allowed us to explore many avenues and opportunities for brands locally. It also enables us to plug into all the tools and research available to us. We are really a connected agency – #OneMediaCom.”

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Maturing regions refer to markets with a moderately developed landscape and include services such as incountry insights, online and offline strategy, online and offline implementation, buying offline, media research and analysis, media verification, and media performance reporting. Countries in this category include Zambia, Zimbabwe, Rwanda, Ethiopia, Tanzania, and Uganda.

Emerging markets have a strict traditional landscape and make use of in-country insights, offline strategy, offline implementation, buying offline, media verification, and media performance reporting as services. These markets are Botswana, Burundi, French West Africa, Namibia, Lesotho, Swaziland, and Malawi.

One of the benefits of working with a major global network like MediaCom is that clients have access to brand-specific tools and systems that can squeeze every millilitre of value out of their marketing budget. Beyond that, brands also receive access to resources that add value over and above the daily grind.

MediaCom houses a variety of exceptional proprietary tools within its system that adds valuable knowledge and resources to each client. Our teams of Systems Thinkers use data, technology, and creativity to design communications strategies that build brands and generate sales. And we do it at scale. It helps that we are one of the world’s top three global media networks, and part of GroupM and WPP. This gives us access to the richest data sets and the most robust benchmarks in the business; delivering the best results.

IF YOU ARE INTERESTED TO LEARN MORE ABOUT MEDIACOM IN AFRICA, VISIT WWW.MEDIACOM.COM PHONE: +27 11 582 6600 / FAX: +27 11 293 6303 / E-MAIL: MCMJHB.MARKETING@MEDIACOM.COM

TRI-STAR CONSTRUCTION

At Home in

Affordable Housing PRODUCTION: Karl Pietersen

Centurion-based Tri-Star Construction is enjoying an exciting but busy time as its project pipeline continues to grow. Tri-Star is a business that has been successfully delivering a range of different projects in a sustainable and financially sound manner. Senior Quantity Surveyor, Frans Maartens tells Enterprise Africa more about Tri-Star’s successes and ambitions.

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INDUSTRY FOCUS: CONSTRUCTION

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For most South African construction businesses, the industry has not been an exciting place to be. Since the 2010 FIFA World Cup, construction has slumped. Major projects have been few and far between, regular economic hiccups have derailed infrastructure spend, and an uncertain investment environment has forced any spend to be reviewed more closely than ever before.

With technical recessions, highunemployment, lack of consumer spending power, and poor business sentiment in the country, it’s clear that the environment needs much improvement before construction reaches the heights of pre-2010.

Some of the big-name players have closed doors, entering business rescue and liquidation. Corruption has been rife, and trust in organisations of a certain size has waned. But, while this situation has created a challenging operating environment, it has presented opportunities for

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responsible, sustainable, ethical, and financially-sound businesses.

Take Tri-Star Construction for example. Featured in Enterprise Africa in June 2016, the company was a diamond in the rough, taking on large projects and executing on time and on budget. Somehow, Tri-Star managed to outperform the industry and continued growing.

Senior Quantity Surveyor, Frans Maartens said that success was down to a fantastic reputation, built over four decades.

Today, the market remains depressed but Tri-Star continues to grow. “The sentiment is still the same, the market is still poor, and a lot of our competitors have fallen in these hard times,” says Maartens. “There have been a number of construction companies in our space, and in the space above us, that have entered business rescue and liquidation – there have been all sorts of problems.

“That being said, we are managing to grow. We have

// WE LIKE TO KEEP THAT COMPANY CULTURE AND WE FEEL IT CONTRIBUTES GREATLY TO OUR SUCCESS BECAUSE OUR MANAGEMENT IS INVOLVED // concluded all of the projects we were working on previously and we have managed to keep our books reasonably full. We believe that exciting times may be ahead for the companies that are able to weather the storm. The current middle-tier contractors are bound to be forced to grow due to the reduced supply in the market caused by others dropping out. It is extremely important for us to manage our growth over the next five years.”

TRI-STAR CONSTRUCTION

40 YEARS AND COUNTING Founded in 1979, Tri-Star has grown from a small regional concern to become a multi-disciplinary player with activity across a range of sites.

Through its life, Tri-Star has completed more than 360 projects, laid more than 250 million bricks, poured more than 1.6 million m3 of concrete, put up more than 25,000 homes, and interacted with more than 200 clients.

Now recognised as a reputable and trusted contractor, Tri-Star is looking to build on this reputation and include larger projects in its future pipeline.

“We recently concluded a planning session where we decided on how to resource the company going forward so that we can grow organically to manage a larger annual turnover over the next three to five

years,” says Maartens.

“We have seen healthy growth over the last three years and we are planning to remain on a growth path over the next three to five years.”

BIG BUSINESS MARKETING Tri-Star is effective at winning projects through the tender process, although this continues to be a difficult route. The company is also good at designing bespoke, turnkey solutions for clients, and delivering mass volume-based jobs for customers in the residential market. Because of its success with large projects, the company now intentionally markets itself as a premier construction contractor and is on the hunt for bigger customers.

“We are looking to secure some bigger projects between R200-500

// A FEW YEARS AGO, WE DECIDED TO ALSO FOCUS ON AFFORDABLE AND LOW COST HOUSING. THAT HAS PAID OFF GREATLY FOR US // million on the commercial side, and with that we are pushing towards the R2 billion turnover mark in five years,” states Maartens He explains that the company is very aware of the reduced capacity in the construction industry caused by various companies exiting the market. Tri-Star would like to be seen as a contractor willing and able to fill this gap.

Pronto and 3Q (a division of PPC Ltd) consists of 25 concrete readymix plants, located across Gauteng, North West, Mpumalanga and Limpopo as well as 1 Dry Mortors plant based in Gauteng. This network allows us to supply all your concrete needs from any specialised Projects Division can also cater for any big projects throughout Africa.

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INDUSTRY FOCUS: CONSTRUCTION

“We are on a marketing drive to throw our hat in the ring, so to speak, for the industry to consider us as their contractor of choice.

“Part of our marketing drive is to get away from being known as a painting and renovations business.

Many people know that the company started out as a painting and renovations business, but the reputation has followed us and it’s something we are trying to get rid of. We have been doing much larger

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projects and been functioning as a reputable, professional construction company over the last 20 years. The painting and renovations reputation keeps following us and we want to shake it off by informing the market that we are a large commercial construction firm. We’ve sold off the painting and renovations division to our BBBEE partner. It has turned out really well for all parties and the business continues to perform very well.”

The result of this marketing push has seen Tri-Star awarded with large contracts in the housing market and exciting contracts in the commercial sector.

BIGGER, STRONGER PIPELINE Traditionally, Tri-Star has been strong in both the commercial and residential space, completing more than 360 projects. Tri-Star boasts a long list of happy clients that have benefitted from their clientfocused construction approach.

Residential work has also formed a large part of the Tri-Star portfolio in recent years and will continue to do so in future plans.

“What is really contributing to our success is the residential market, where we are known for our excellence,” details Maartens. “A few years ago, we decided to also focus on affordable and low cost housing.

That has paid off greatly for us. It

TRI-STAR CONSTRUCTION

is now a department within our company that is very strong and is contributing to our success. We are doing a lot of affordable, low-cost housing projects for companies that function alongside the government to build new megacities. There is a big housing shortage in South Africa and that means we are doing a lot of low-income, entry-level housing. It’s a space that we have focussed on in the last few years and it is now a big part of our business.”

He highlights affordable housing projects in Diepsloot, luxury apartment blocks in Bedford View, and student accommodation in Brooklyn, Pretoria as recent successes.

“We are working on a multiple developments for Valumax which currently comprises of close to 4000 units. We have delivered various

projects with them and are very proud to be associated with Valumax.

We continually strive to be their contractor of choice. The continuity of this work has enabled us to become extremely efficient at producing good quality products in very ambitious project time lines. Our affordable housing division is currently delivering up to 3000 units per annum and we believe this market will be sustainable into the future.

“The Infinite Luxury apartment block is a 15-storey building that we have just handed over and is now complete. Oak Tree Village we just handed over last month. It was a project we were involved with as a turn-key contractor which included Development Management as well as construction. The Destiny Hotel we are looking to complete by the

end of the year. We topped out on the structure and we are getting into the finishing phases. Another we have recently completed is two high-rise student accommodation blocks in Pretoria called Apartments on William.”

On the commercial side, Tri-Star will soon begin work on construction of a new hospital close to Soweto, demonstrating its ability to handle multiple large contracts at one time.

“It’s a 200-bed hospital in Protea Glen, where we will probably start earthworks in the next few weeks. Because we don’t have the pressure on us that some other companies do, we have been able to go out and secure commercial work alongside our residential work and that is very fortunate in the current market,” says Maartens.

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INDUSTRY FOCUS: CONSTRUCTION

// WE KNOW THE MARKET WE ARE IN, BUT WE ARE IN AN EXCITING PLACE AS A BUSINESS. WE FIND OURSELVES DOING WELL BUT WE REMAIN CAUTIOUSLY OPTIMISTIC //

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MIRACLE TRI-STAR? Latest GDP figures from Stats SA have been underwhelming. In fact, after all the positivity injected by President Ramaphosa and his investment drive, the announcement of a 3.2% slowdown in the first quarter of the year was sobering to say the least. If the country’s construction companies thought that times might be getting easier, these figures hit home hard. So how is it that Tri-Star has continued to perform so well? What is different about this 40-year old industry veteran? According to Maartens, it’s all about culture and good old humble hard work.

“We have a nine-member management Exco committee that runs the business. We don’t have a single MD; we have a round table management style, and all of the members are actively managing company operations and are involved in the day-to-day running of the business. We certainly have a hands-on management style in the business. There is an open-door policy and the people on the ground are very close to the management that runs the company. We like to keep that company culture and we feel it contributes greatly to our success because our management is involved. Our clients and can feel it and see it and that gives them confidence,” he says.

Having moved into a new HQ south of Pretoria, developed and built by its own company last year, Tri-Star is a member of several trade associations, helping the company to maintain extremely high standards. Affiliations include the CIDB (Construction Industry Development Board), NHBRC (National Home Builders Registration Council), SACPCMP (The South African Council for the Project and Construction Management Professions), GBCSA (Green Building Council of South Africa), SAEMA (South African Engineering and

TRI-STAR CONSTRUCTION

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Mechanical Association) and SAARDA (South African Affordable Residential Developers Association) among others. The result is a growing business but one which constantly has its finger on the pulse of the industry.

However, at the end of the final quarter of 2018, the construction industry saw turnover decrease by 8.6% and total capital expenditure on property, plant and equipment dropped by 14.1% compared to the end of Q3. Typically, Tri-Star Construction remains upbeat.

“We are very aware that it is strange for us to be optimistic,” admits Maartens. “We know the market we are in, but we are in an exciting place as a business. We find ourselves doing well but we remain cautiously optimistic.

Growing at this stage might not make sense at this point but we do have to

plan for the future as we are going to be expected to take up work. It’s a great position to be in but we will do so cautiously so we don’t grow and then hit the wall.”

In May, some positivity emerged in the market when research business, Fitch, published expectations of an upturn in African construction activity. For South Africa specifically, positivity comes through government promises to inject R855 billion in infrastructure spend over the next three years. This prompted Stats SA to announce expectations that the construction sector should grow by 2.3% in Q2 2019.

For Tri-Star this is just an added bonus on top of what is already an encouraging time.

If economic uptick occurs, if government infrastructure spending is

pushed through, if business sentiment improves, and if Tri-Star can continue to delight clients by delivering highquality projects, then Tri-Star will become one of the country’s go to construction organisations, leveraging off what is already a very robust base.

Is this the ethical and reliable construction company that the country has been looking for? Based on performance over the past four decades, absolutely.

WWW.TRI-STARCONSTRUCTION.CO.ZA

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HARVEY ROOFING PRODUCTS

Quality Stamped:

Superior Harveytile Brand Ready for Growth PRODUCTION: David Napier

‘Lightweight yet strong, the overall cost effectiveness of Harveytile is legendary’ – this is the message being strongly conveyed by General Manager, Albie Jordaan. He is confident that Harvey Roofing Products is the best in the market and outperforms competition when it comes to quality, cost, and aesthetic appeal. Now on his agenda is further growth; expanding into new geographic markets and further developing the product range.

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INDUSTRY FOCUS: CONSTRUCTION

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All tiles manufactured by Harvey Roofing Products, a division of Macsteel, are stamped with the Harvey Quality Stamp – a mark which ensures only the very best quality materials are used.

ISO:9001 and ISO:14001 certified, every tile that leaves the Harvey Roofing Products factory in Johannesburg is pressed, coated, painted, bound and covered with industry-leading resources. This precision has seen the Harveytile brand becoming known as the best in South Africa. The main differentiating factor between Harveytile and the rest? Harveytiles are made from steel. Being a member of the Macsteel Group, only the finest steel is used in production.

After more than fifty years, Harvey’s reputation is stronger than ever and Managing Director, Albie Jordaan is looking to drive home the quality characteristics of the company’s product range.

“Like anything in life, you get a lot of imitations. People start to copy you because of your success,” he says.

“They use inferior quality and we like to

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reiterate that if it doesn’t say Harveytile, it’s not a Harveytile. Unfortunately, imitation products are a challenge that we constantly face. The problem is that competition tiles are too thin. Our tile is a 0.45mm tile, and we manufacture our own paint which also carries warranty.”

In recent years, Harvey Roofing Products has been on an aggressive marketing drive so that its clients – the large hardware retailers in SA – and end users understand the difference between cheap imports and highquality, SA-produced, speciality tiles.

“We are running various campaigns. We use social media as that is a platform which has taken off in a big way. Our brand awareness campaigns through social media have proven to be successful. We are working hard on our campaign, but research has proven that we already have a very strong brand. Harveytile has become a household brand in South Africa,” says Jordaan.

After being acquired by Macsteel in 2008, Harvey Roofing Products falls under the Macsteel Service Centres SA division. The two businesses have

many complementary elements and the merger came as an obvious and easy decision.

“Harvey was established in South Africa in 1967,” explains Jordaan. “It’s been around for many years and it was owned by Murray and Roberts.

Macsteel supplied the steel for Harveytile and it made sense to acquire the business.

“We use two types of steel. One is with a galvanised substrate, for inland application; and the other is with a zinc aluminium substrate, for coastal applications. We produce in a variety of colours. Our tiles are perfectly suited for residential use, and although it’s a steel tile its appearance does not look like steel. We coat it with a granular stone paint to give the look and feel of a traditional stone roof tile.

“It’s very popular for re-roofing, where you can fit the tiles straight over an existing corrugated roof. The benefits, besides from the aesthetics, are that we offer a 20-year warranty and it’s very easy and quick to install.

There is no hassle-factor of breakage and transport is so much easier.”

HARVEY ROOFING PRODUCTS

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CAPACITY INCREASE In 2017, Harvey Roofing Products was forced to increase capacity at its plant because of increasing demand from customers. While there was not a shortage in steel or raw materials, the production flow was bottle-necking at the coating phase.

“We had two coating lines and we added a third because it was becoming a hold-up within the business,” explains Jordaan.

“Harveytile is dominant in two of South Africa’s provinces – Mpumalanga and Limpopo. In Gauteng, the brand is known but not dominant, so we are looking to raise brand awareness there.

It’s about creating awareness for the end-user about the benefits of having a Harveytile on the roof of your house.

“Going back a couple of years, we couldn’t keep up with demand. At that

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time, we didn’t focus on marketing in other provinces because it would be no use as we would not be able to meet demand with supply. That is why we expanded our capacity. It gave us the ability to focus on business in the other provinces.”

Today, the company’s factory completes a full turn-key manufacturing process and has the capacity to produce up to nine million tiles each year. Currently, the factory runs under capacity and Jordaan is busy growing orders.

EXPANDING RANGE Alongside the well-known Harvey Elite Tile, Harvey Roofing Products also manufactures and distributes the Harvey Tuff Tile; known for strength, the Harvey Thatch Tile; known for fashion and charm, the Harvey Solar Bracket;

designed to house solar panels atop tiled roofs, a Light Gauge Steel roofing structure solution; designed as an alternative to timber, and the company is always looking at innovative new products to further its range.

“We have products in development.

We are working hard to bring exciting new things to our mix, but we have a way to go yet,” admits Jordaan.

“We are busy with the Harvey Slate Tile which resembles natural slate and has the same look and feel. That should be launched by the end of July. We are forever looking at opportunities to diversify our product range.”

Extensive knowledge of the industry, collected by the company’s more than 340 people, over a large time period is key when it comes to product development.

“We are in the roofing market; we

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INDUSTRY FOCUS: CONSTRUCTION

Before

know the market, and we have the channel to the market. In South Africa, roof tiles are predominantly concrete and concrete has the biggest market share. We are looking at different composites to try and take some of that market share, but we are still working on many formulations,” says Jordaan.

Harveytiles that end up on the rooftops of South Africa’s homes and commercial buildings are usually sourced by end-users through the

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country’s large retail network of hardware stores. Harvey Roofing Products has strong relations with all the big players including Buildit, Cashbuild, P&L Hardware, Buco, EST, Builders Warehouse and more. Going forward, Jordaan is keen to further these relationships so that the Harvey brand can grow even stronger.

“80-90% of Harveytiles are sold through retailers and success is about getting retailers to stock the product. You have to be very close to the retailers and it’s about direct interaction, support, back up, and technical assistance.

“When you supply to the retailers, you have a responsibility to create demand with end-users so that they do go to retailers and buy your products.

That is why we see our relationships with retailers as extensions of our own business,” he says.

“Some of the retailers have hundreds of stores around the country and they don’t stock Harveytile in all of their stores. There are regions where it just doesn’t make sense because of the level of demand. But where there is demand, we want to ensure our products are readily available.

“We don’t have exclusivity with certain retailers. Our pricing model is transparent and we have a volume rebate structure with our retailers. We are always looking to expand the number of retailers that stock our product as that is the only way to grow business.”

Further growth will be achieved by realising potential in new markets around Southern Africa. So far, Harvey Roofing Products has made minimal progress building its reputation on the continent, despite the large African presence of its parent company, and sends just 3-4% of production north.

Jordaan is very keen on growing this figure, mainly because of the lacklustre economic conditions in South Africa.

“We see potential for growth in the countries neighbouring South Africa. Right now, there is not huge demand from African markets but there is without doubt huge potential and I am busy developing that. We would be happy to move into new markets with retailers that have outlets there, but further north it would be a direct sale model.

“It looks exciting in the near future. Bear in mind, the South African economy is subdued but there is

HARVEY ROOFING PRODUCTS

After

// WE ARE ALWAYS LOOKING TO EXPAND THE NUMBER OF RETAILERS THAT STOCK OUR PRODUCT AS THAT IS THE ONLY WAY TO GROW BUSINESS // positive GDP growth in many African markets. What makes Harvey attractive to export companies is the ease of transport compared to a concrete tile – especially with breakage and weight.

Now that we have that added capacity, Africa has become a focus.”

BUILDING ECONOMY? The subdued economy in South Africa, which has been a problem for so many, is not something which Albie Jordaan wants to focus on too much. A veteran of the industry, who has been working with SA steel since ArcelorMittal SA was Iscor, he is wary of the fallout that can come with a weak economy but ensures

the only focuses at Harvey Roofing Products are quality and growth.

“Things are going well; we feel very blessed and very fortunate,” he says.

“We have grown market share despite the tough conditions. When things are tough, it’s no use just throwing your hands in the air, you have to stay focussed and carry on.

“We are all hoping for more positivity but I don’t think it’s going to be an immediate turn around – there are many things that need to be fixed in South Africa. If you do want to grow, you will have to grow against substitute products. The forecast for the rest of the year is not really positive but compare that to other African countries, like Botswana and Angola, GDP is more positive.

“Right now, South African consumers are indebted and when they spend money, it’s not usually on house renovations which is unfortunate.

We will continue to make our offer: If you are going to renovate your house, Harveytile is the only way to go.”

With a suppressed construction industry adding to the economic sloth, companies that are not managed well, where efficiency strategies are not

adopted, start to struggle very quickly.

But for 52-year old Harvey Roofing Products, longevity now comes as second nature.

“It is tough out there. We are fortunate that we are still doing well but there are many companies that are struggling.

“We are a people company; we look after our people. Employment is important to us, and having happy staff is vital. If we can grow, we will all grow.

We have no intention of scaling back,” states Jordaan.

Lightweight yet strong, the overall cost effectiveness of Harveytile is legendary. Because of this, the future is nothing but bright.

“We are positive. We will continue growing; there’s no two ways about it.

We don’t see doom and gloom; we’ve always said, if you fail, it’s your own fault,” Jordaan concludes.

HARVEYROOFINGPRODUCTS.CO.ZA

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AFRISAM

Forging Concrete Possibilities Across Africa PRODUCTION: Timothy Reeder

AfriSam’s superior quality construction materials and technical solutions have helped lay some of the central foundations of the remarkable infrastructure development witnessed in Africa over the last 85 years. With a presence spanning the entire continent, AfriSam is leveraging experience and innovation to remain the best in a tough, ever-changing industry. www.enterprise-africa.net / 25

INDUSTRY FOCUS: CONSTRUCTION

// WE HAVE SET THE STANDARD IN TERMS OF SUSTAINABLE BUSINESS PRACTICES AND ARE CONSIDERED THE ‘GREEN’ LEADER IN OUR INDUSTRY //

//

Since its founding in 1934, AfriSam has spent 85 years doggedly establishing itself as a formidable company which is totally committed to facilitating growth on the African continent. The result of these unwavering efforts is that AfriSam is consistently, and famously, the leading supplier of superior quality construction materials and technical solutions throughout the vast African continent.

AfriSam (South Africa) (Pty) Ltd began life in 1934 as AngloVaal Portland Cement Company Ltd, changing to firstly Alpha (Pty) Ltd in 1996, and later to Holcim (South Africa) (Pty) Ltd in 2004. The historic sale of the former Holcim (Pty) Ltd to a black-led consortium in 2007 resulted in the launch of the AfriSam brand as we know it today.

The title reflects both AfriSam’s pride in its roots and its dominance across the territory: “Afri” refers to its strong African heritage while “Sam” stems from the word samente or disamente, - ‘cement’ in six of South Africa’s official languages.

“A strong and trusted history has led AfriSam to be known as a wellrespected and admired African brand,” the company summarises. “We pioneer advanced retail support tools and are progressive in the field of composite cements with C-Tech.

“As the largest producer of aggregate materials and the largest supplier of construction materials by volume in south Africa, we are a reliable supplier for your building needs, big or small.”

NEGOTIATING TOUGH TIMES AfriSam’s size and reputation is paramount to protecting it against the challenges that currently abound in the industry; CEO Rob Wessels spoke in January of what he predicted would be, “a tough 2019”, especially amid ongoing political and policy uncertainty.

If these dual constraints are not

26 / www.enterprise-africa.net

AFRISAM

alleviated, according to AfriSam sales and marketing executive Richard Tomes, in discussion with Engineering News Online, the construction sector will be adversely affected. This is especially true given that the sector relies heavily on policy and political certainty, which could impact on infrastructure investment in the long term.

However, looking ahead with a more positive bent, the resolution of certain issues or concerns could see the market turn yet again, and spark a growing confidence in the private sector with regard to investments in the industry.

To this end, the National Treasury’s reprioritising of resources towards President Cyril Ramaphosa’s infrastructure fund, translating to a R100-billion over the next decade, brings welcome positivity, while

Tomes told Engineering News Online that AfriSam had started seeing the benefits of its own cost-cutting initiatives implemented over the last three years. Of these, he highlighted AfriSam’s business restructuring, the removal of inefficient capacity, as well as the removal of some fixed costs as some of the most impactful.

Industry Insight senior economist David Metelerkamp agreed, too, that despite a stagnant South African economy, the government’s planned infrastructure spend for 2019 was, “a sign of stabilisation.”

IMPORT PROTECTION “We’re able to be a lot more competitive in the market,” Tomes continued to Engineering News Online, “but overall, we still have a situation where there is way too much

capacity and oversupply of cement.”

AfriSam is among the founding members of The Concrete Institute (TCI), a non-profit organisation that provides a comprehensive range of technical services in concrete to the construction industry.

In a bid to curb what Tomes has identified as one of the main threats to industry stability, TCI announced in March that it would be lodging an appeal to the International Trade Administration Commission (ITAC) of South Africa. The intended outcome of this move is to impose import tariffs, or even potentially limitedtime bans, on cement sourced from abroad, in order to protect producers from the mass importation of cheaper product from countries such as China and Vietnam, which trend has exploded in recent years.

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INDUSTRY FOCUS: CONSTRUCTION

“The increase in imports of cement is affecting demand for locally produced cement to such an extent that SA manufacturers are considering mothballing plants, retrenching staff and putting expansion plans on hold,” explains Bryan Perrie, MD of TCI. “The effect of the cheap imports on SA cement producers is exacerbated by a slump of unprecedented proportions in the local construction sector with former giants in the industry already having shut or struggling for survival.

“Imports from China have been rising steadily in 2016 and 2017 and

// A STRONG AND TRUSTED HISTORY HAS LED AFRISAM TO BE KNOWN AS A WELL-RESPECTED AND ADMIRED AFRICAN BRAND //

28 / www.enterprise-africa.net

last year Vietnam joined the fray,” Perrie adds, “with more than a million tons of cement being imported into South Africa. These huge volumes are not required as the local cement industry already has annual spare capacity of around five million tons.”

The South African cement industry has prior experience of combatting such perceived menaces, having already successfully lobbied for government protection against the dumping of Pakistani cement. In the wake of its efforts, the volume of the imports dropped from over 1,400,000 tons in 2014 to about 400,000 tons in 2016.

“The construction industry is now in a far greater slump than during that period so need protection from imported cement even more,” Perrie underlines.

CARBON TAX TRANSPARENCY “AfriSam is passionate in the collective cause to conserve our planet,” begins the company when outlining another of its key commitments. “As such we use natural resources in a deliberated

way and actively pursue activities that support sustainable development.

“We direct significant effort towards environmental stewardship, ensuring life for future generations.”

AfriSam now has the ideal forum to showcase this promise with the advent of South Africa’s carbon tax, in force from the beginning of June this year. In light of its introduction, AfriSam is providing customers with transparent pricing and the ability to make greener choices, and according to Richard Tomes, the new tax is aimed at encouraging responsible behaviour on the part of consumers.

“We are taking a transparent and responsible approach to the new tax,” Tomes says. “By showing the amount of carbon tax payable on each specific bag of cement, our customers will still see the base price that we are charging. This avoids any confusion about how much of the final price is going toward the tax.

“We believe that a tax should not just be a punitive tool, but it should also affect behaviour in society,” he says.

“Just as cement producers are

AFRISAM

// WE DIRECT SIGNIFICANT EFFORT TOWARDS ENVIRONMENTAL STEWARDSHIP, ENSURING LIFE FOR FUTURE GENERATIONS // working hard to reduce carbon emissions, so the end-user can also play their part by choosing an environmentally-friendly brand.”

Rather than apply a blanket price

increase, AfriSam is allocating the amount of carbon tax - a levy that varies according to the amount of carbon emitted in the manufacture of a product - due on each bag of cement. The different cement brands in AfriSam’s range contain varying amounts of clinker, which is of course the most energy-consuming element of cement, meaning that the carbon footprints of the brands differ from each other.

“Conserving the earth for future generations has always been part of AfriSam’s DNA and is underpinned by our core company value of ‘planet’,” AfriSam concludes.

“Actions always speak louder than words and, over the years,

AfriSam has demonstrated its commitment to sustainability through significant investment in research and development of processes and technology to ensure that we are able to produce environmentally responsible products.

“We have set the standard in terms of sustainable business practices and are considered the ‘green’ leader in our industry. So far, we have made significant achievements in our drive towards sustainability.”

WWW.AFRISAM.CO.ZA

www.enterprise-africa.net / 29

WTW GROUP

Laying Foundations for Transformation PRODUCTION: Manelesi Dumasi

Bloemfontein-based road construction specialist, WTW, is expanding by adopting a strategy which surrounds transformation. Being inclusive, sharing knowledge, upskilling other people and companies, and contributing to an improved South Africa has helped WTW to become recognised as a true industry leader.

Director Mosebetsi Dhladhla talks to Enterprise Africa about WTW’s success.

//

How many companies are there across all of South Africa that can claim to having truly embraced transformation since the country’s reformation in 1994? While many talk about being inclusive and transformative, few live by the values set out by the government to help change the economy.

Currently, the South African economic situation is bleak. GDP growth, for the past decade, has been weak. Unemployment continues to move in the wrong direction, and in contrast to its early years as a

30 / www.enterprise-africa.net

democratic economy, South Africa does not enjoy positive business sentiment.

But a new era is emerging. After May’s elections, positivity is returning to the market. Confidence is turning and, although most recognise a total turnaround will not happen overnight, people and businesses are more buoyant about what the future holds.

Perhaps it’s down to the business-friendly approach installed

by President Ramaphosa, perhaps it’s down to the anti-corruption stance he has taken, or perhaps it’s to do with policy clarity. Whatever

the case at national level, positivity and confidence is always fuelled by adherence to transformation strategies.

Nowhere is this more true than at the WTW Group. Headquartered in Bloemfontein, WTW is an industry leading, multi-disciplinary contracting company with vast expertise in delivering a range of infrastructure development projects.

Director, Mosebetsi Dhladhla tells Enterprise Africa that at WTW, transformation is at the heart of everything it does.

INDUSTRY FOCUS: INFRASTRUCTURE

TRANSFORM OR LOSE “We knew we must adapt and realised that if transformation is to be achieved, we must play by the rules and do things right. Often, businesses say they have transformed but in reality they are just paying lip-service and do not invest meaningful time and money into transformation.

“Transformation costs money as a business and it does impact on net profit margins and cost profit margins but it is a journey that, if done right, will help to create a sustainable business and a positive culture.”

WTW was founded in 1976 as Wasserman Teerwerke (Pty) Ltd. The company’s expertise has been developed in the construction, rehabilitation and maintenance of South Africa’s road network. Having completed numerous small, medium,

large and supersized contracts around the country, WTW is now recognised as one of the industry’s problem solvers.

But to get to the top has taken a lot of work; both successfully delivering quality projects as well as transforming the business to meet the expectations of a new socio-political business environment in South Africa.

“We are a totally different business today. We have operated in the apartheid era and in the new democratic dispensation. A lot of what we do had to change,” explains Dhladhla. “We’ve have undertaken a lot of acclimatisation and one of the biggest rules we have set is that every company we work with must be able to show us that they are engaging in transformation on their own. We are looking for like-minded partners and we know that when we do that, we begin to

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move things in a different direction.

“Some companies in our space have been around since before 1994 and they had a choice to embrace the changing socio-political landscape or continue operating in the same way. Many that did not embrace change are those that struggle. One of our key advantages is that we have embraced changes in our operating environment and we assist our partners in achieving their objectives – whether that is building infrastructure or providing inclusion to the previously disadvantaged members of the economy. You must focus on both and if you only focus on one, you may lose your partners.”

Transforming the business at the same time as keeping operations moving, while also diversifying and expanding has created a difficult road for WTW to navigate. But, thanks to its commitment to transformation, WTW has become a preferred supplier for those in control of contracts.

“One of the major challenges has been to maintain the engineering skills within the company while transforming it into an inclusive business, that works for everyone, and is something the country can be proud of. That is an ongoing part of what we do as a business.

One of the things that determines business in South Africa is your ability and willingness to transform. If you embody certain principles, that is taken into account by the institutions when deciding on tenders. If you are not able to adapt and acclimatise, you will have challenges,” says Dhladhla.

ROAD TO THE TOP WTW has completed a number of successful projects in recent months, and Dhladhla is now looking forward to beginning of a host of new projects in locations all over the country.

“The N2 project is complete, that was a R160 million project for resurfacing between Harding and Kokstad. We are now starting a new project on the R61 in the Eastern Cape between Cradock and Tarkastad. That

WTW GROUP

contract is a R150 million and we will be doing road expansion along with some resurfacing and resealing. That is an exciting project for us.

“We had six contracts in the Western Cape which were mainly reseal contracts. Two are already completed in Beaufort West and De Rust, and we are currently in Malmesbury, Pacaltsdorp and Bonnievale. We are also very excited about a contract on the R37 in Mpumalanga where we will be doing resurfacing and rehabilitation. It’s very exciting as it is a rural area and that comes with challenges but it is a very interesting project.”

Picking up this number of contracts demonstrates real success for the company, and the industry, where the last few years have been tough.

“SANRAL is still not giving out a lot of work but we are one of the companies that is picking up work with them so that shows how attractive we

have come as a partner,” says Dhladhla.

“The efficiencies we have put into our business, and the fact that we have always underpinned transformation as a key objective within our own business, has allowed us to build a successful operation. We have been able to succeed tremendously around bridging the gap between the different cultures within the company – if you look at our employee force, it represents the different racial groups and different ethnic groups of South Africa, and that gives us a competitive advantage with project planning and project execution.

“We have seen a huge slowdown in infrastructure spending,” he adds. “It has impacted heavily on our competitors.

The construction industry is facing big trouble and a number of the big companies are beginning to disappear.

There is now serious competition on pricing and most of the projects are now being operated around cost with

efficiencies being the only thing that keeps companies going. The industry is in a tight corner, we have seen a huge reduction in infrastructure spending from government and we have seen an increase in competition. As the economy transforms, you get a number of smaller players that enter the market. This means the bigger players do not get the same piece of the pie that they would have had previously. We have had to embrace that and find mechanisms to work around. It’s part of what we preempted in our strategic plan.”

Growing from family-owned business to national, multi-disciplinary firm, WTW has displayed its ability to grow whatever the conditions.

“Local and provincial government, as well as the private sector, recognise our efforts and that is why we are successful picking up contracts,” says Dhladhla.

“The new market in private development has been a growing

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INDUSTRY FOCUS: INFRASTRUCTURE

// WE HAVE CREATED A UNIQUE MODEL TO WORK IN THIS ENVIRONMENT, BASED ON TRANSFORMATION, INCLUSIVENESS AND QUALITY // market for us. It’s currently only around 2% of total infrastructure spend, but it is growing. Road infrastructure is run by government and most of our contracts come from SANRAL, provincial government and local government.”

COMMUNITY COMMITMENT South Africa’s road network extends across almost 750,000 km and management of the network is split between SANRAL, provincial government, metro councils and municipal government. The network is the tenth largest in the world and requires regular ongoing attention.

In the more rural and disconnected areas of the country, this becomes more difficult but offers the perfect

34 / www.enterprise-africa.net

opportunity for small enterprises to develop. WTW encourages this sort of entrepreneurialism and seeks to always partner with and develop local partners.

“Different cultures feed back to us different expectations and different approaches within the communities.

The way that we have been able to capture that is exactly what our company is all about,” explains Dhladhla.

“You need knowledge around communities and knowledge around how to work within certain cultural groups and, of course, engineering knowledge. We have developed this a lot as one unique value proposition as a company. We do great work with our partners, we are trying to move the country forward, and we are always fostering a single objective within the company, across all people that work here, alongside the communities where we work.

“We have a large spread of projects, we work with people from different backgrounds, and we can work anywhere in the country. That has been key to our success,” he adds.

By partnering with local entities – usually micro, small and medium sized enterprises – WTW imparts skill, knowledge and business acumen, truly acting out its commitment to transformation.

“On a project basis, wherever we go, we take around six or seven of our key people and we work with the local players,” says Dhaldhla. “We are a Level One company and that means that 90% of our procurement comes through companies in South Africa that are transformed - a big percentage of our spend is with local companies. That gives us leverage and positions us as a contractor that is acceptable in the communities that we operate. We are very keen on transferring skills to the local players and making an impact rather than bringing a large team in and out without legacy.”

The upcoming contract in Mpumalanga is the perfect example. A rural location, without easy connection to heavy plant or infrastructure, where WTW will go in, spread skills, transform the landscape, leaving a legacy for the area.

“Obviously South Africa has its own unique political climate and for us, managing that successfully has been key,” says Dhladhla.

SADC EXPANSION South Africa’s economic conditions have not encouraged strong growth in recent years, yet TTG has consistently delivered positivity. While the macro economic climate remains depressed

WTW GROUP

and business leaders hunt for certainty, Crisp admits that the market might not be growing. The solution here is to grow market share.

“We’re not seeing growth in the industry as a whole but we have seen growth in market share. What is benefitting us at Tarsus is a change in the business model from actual transactional hardware purchases through to the cloud. We had the big investment recently from Microsoft and no other competitors have effectively matched it. The growth we are seeing comes from that kind of niche. In the actual distribution business growth has been fairly flat and we don’t expect that to change in a big way in the short-term future. There is still a latency around government policy and momentum with the changes that have been promised,” he says.

Tarsus Distribution is already an industry leader; GAAP is the undisputed leader in its sector; Tarsus On Demand is rapidly growing its share; Printacom and Tarsus Dispose-IT are all smaller contributors to overall revenue but both are looking to claim further market share. To achieve this, Crisp says that customer service has to be the best it can be.

“We pride ourselves on our

customer service but we know our competitors also have impressive offerings,” he says.

“We are confident that we are doing a better job in the On Demandcloud space and the migration of customers and their end users. The assistance we can give to resellers to move their customers on to a cloud basis instead of buying their own licensing is an area where we have invested heavily in expertise.

“We are confident that we are also the leaders in third party logistics and retail specifically. We supply retailers and retail is around a quarter of our business. Our customer service is the best because we have the ability to integrate quickly and efficiently into our customer’s existing systems. The supply chain systems are integrated with the systems of our customer and that is seamless, without heavy documentation. In those categories, we are confident that our service levels are better and we are on top of our competition,” he adds.

This confidence positions TTG perfectly to help guide clients through the country’s migration into the Fourth Industrial Revolution. TTG has the hardware, it has the software, it has the expertise, it has the logistics, it has the

presence, and it has the reputation.

“The world must embrace the Fourth Industrial Revolution because it is a new way of doing business that will be with us for a foreseeable future, and as government and society we should collaborate in creating the enabling environment for entrepreneurs to adapt and adopt the 4IR technologies for the creation of a better life for all,” said the Department of Trade and Industry’s Deputy Director-General of Special Economic Transformation, Sipho Zikode at the opening of the South African Innovation Summit (SAIS) in Cape Town last year.

Entrepreneurs and business leaders will be forced to choose a technology partner, and TTG sits atop the industry with a positive outlook.

“We are happy that we are running efficiently. We will be watching our costs closely and trying to grow our top line quickly. Business success is all about efficiency, cost management, and managing the market, and that is what we do well,” Crisp concludes.

WWW.WTW.CO.ZA

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REGIS HOLDINGS

Regis Targets Heavy

Growth in Africa PRODUCTION: David Napier

Regis Holdings is a leading supplier and contractor in the oil, gas, mining and construction industries around Africa. Starting life in South Africa in 1994, the company has grown to become an international player, and is now on the hunt for more opportunities on the continent. COO Olivier Bernard talks to Enterprise Africa about plans for expansion. www.enterprise-africa.net / 37

INDUSTRY FOCUS: INFRASTRUCTURE

//

When Dave O’Connor started Regis in South Africa in 1994, the future was looking extremely exciting. The country was in a good place, revelling in newlyfound freedom and emerging from the harsh recession of 1989; the global economic climate was improving, and output in developing countries was driving positivity. Global oil prices were reasonably stable, and technology and innovations were connecting the world like never before. O’Connor, a seasoned trader in sub-Saharan Africa, demonstrated true entrepreneurial spirit, seeing opportunities in commodities and supplies for the nongovernmental agencies.

After 12 months in business, he took part in a South African trade mission to Angola. In 1995, Angola like South Africa - was emerging as an exciting African nation for investment and development. Major oil discoveries had prompted large companies from around the world to pump cash into the country. Chevron alone announced that it would invest $600 million

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between 1994 and 1998. Oil became the engine of the economy, and O’Connor saw the potential, quickly involving Regis in activity. From there, the company grew quickly, gaining a reputation for service excellence. was supplying capital equipment, engineering services, procurement management, personnel services and much more.

Because of the company’s focus on quality service delivery, Regis quickly became an in-demand provider, growing across the key energy markets of southern Africa while also diversifying into new industry sectors.

Today, the business is serving oil, gas, mining and heavy industry in Africa and beyond.

Olivier Bernard, COO at Regis, tells Enterprise Africa that the company is now looking for new opportunities across Africa following a highly-successful decade. Headquartered in Mauritius; with offices in Johannesburg, Luanda, Pemba, Kampala, and Toowoomba; Regis is an international player with increasingly global aspirations.

GEOGRAPHIC GROWTH “The main drive behind Regis’ geographical expansion has been to look for diversification to achieve a lower exposure to a single country or a single sector,” he says. “Naturally, the countries closer to our existing locations are more attractive as it is easier to connect them on a regional basis. Other decisive factors will be the number of new projects relevant for our sector of activity, and of course the conditions offered to foreign investors.”

Areas of interest for the company include north Africa, Uganda, South Africa and Mozambique. Regis already holds a strong presence in these markets but Bernard explains that there is still much opportunity to be realised.

“With Regis’ presence in sub-Saharan Africa, it makes sense expanding into the northern part of the continent. The Mediterranean region has several areas of exploration and production, including but not limited to the Zohr project, the largest gas discovery ever made in Egypt.

Regis is looking at several options to become present in the region.”

REGIS HOLDINGS

// AS OFTEN AS POSSIBLE, WE HAVE BEEN TRYING TO OPERATE IN EMERGING MARKETS WHERE THERE IS A LACK OF OFFER FOR OUR SERVICES // In Uganda, the government is hoping that new oil discoveries could propel the country forward similar to other East African nations. The first major find was announced in 2006 and since then the date for first oil has been constantly shifting. Ugandan Energy Minister Irene Muloni announced at the end of 2018 that first oil is now expected in 2022.

“Regis’ entry in the Ugandan market was directly linked with the recent oil discoveries made in the country, and with the projects associated with the start of the production, being the refinery and the export pipeline.

Unfortunately, the FID by Total is still expected as we speak and as a consequence, Regis Uganda is mostly serving the construction sector in the country, and eagerly waiting for the beginning of operations within the oil industry,” says Bernard.

At the end of 2018, Regis was awarded a contract by leading construction firm Mota Engil to assist with the building of roads and bridges around Kampala. Heavy lift equipment, including a 120t crane, has been used to move precast concrete materials into place.

In February, French oil major, Total, announced a significant gas-condensate discovery off the coast of South Africa in the Outeniqua basin. “It is gas condensate and light oil [but] mainly gas. There are four other prospects on the license that we have to drill; it could be around one billion bbl of total

resources of gas and condensate,” said Total CEO, Patrick Pouyanne. South African President, Cyril Ramaphosa was also enthusiastic, saying: “This could well be a game-changer for our country and will have significant consequences for our country’s energy security and the development of this industry.”

Bernard - an oil and gas veteran who spent time with Schlumberger before joining Regis in 2011 to head up Angolan operations - says that this is the type pf development that Regis could support.

“Regis’ presence in South Africa is mostly linked with its trading division, as it is ideally placed to source products for the rest of Africa due to the presence of many industries in the country. To date, Regis has not yet entered the logistic services, but this may change in the midterm.”

He is also buoyant about Mozambique. The country has become a

powerhouse in terms of gas production and the sector looks like it will flourish in the future. Large discoveries in the Rovuma basin (supposedly enough to supply the USA for seven years) are helping to develop this former basket case of Africa. Between 2011 and 2014 the supergiant gas fields of Coral, Mamba and Agulha were discovered, boasting estimated 2,407 billion cubic meters of gas in place. But, according to project advisory business Turner & Townsend, Mozambique still faces challenges. Getting equipment, materials and supplies to site is not straightforward; sometimes appropriate infrastructure is not in place; often too much is required from an unskilled workforce; and sometimes the business culture is misunderstood. This is where Regis Holdings is the perfect local partner. With an office in Pemba, the

Worldwide Automotive Supplier

www.transautomobile.com info@transauto.be telephone: +32 2 352 01 31 Brussels, Belgium Our Mission, Your Satisfaction!

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INDUSTRY FOCUS: INFRASTRUCTURE

// OVER THE PAST FOUR YEARS, REGIS TRANSFORMED ITSELF FROM BEING INVOLVED IN ONE SECTOR AND A FEW COUNTRIES TO SEVERAL SECTORS AND A GREATER NUMBER OF COUNTRIES // company has boots on the ground.

“Regis entered Mozambique in 2012 and we believe strongly in the potential of this country. After years of little to no activity in the energy sector, it is with genuine excitement that we saw the oil and gas operators coming back to Pemba at the beginning of this year. Contrary to many companies who had mothballed their operations during the few years since the last drilling operations, Regis has remained on site, diversifying into support of the mining industry, and also investing into brand new facilities. With the new installations and the largest fleet of lifting equipment in northern Mozambique, we are confident that we will benefit from the activities linked with the ENI development. As for Anadarko’s project, it is still a bit early to see how this will materialise, in particular with the sale of the project to Occidental/Total,” explains Bernard.

In November 2018, Regis announced that it had added a Liebherr LTM 1250/1 with a maximum lifting capacity of 250t, ensuring it remains the leading capital equipment business in the market. This came after Regis Mozambique was given ISO 9001 quality certification, demonstrating commitment to providing consistent high-quality services to clients.

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LIFTED WITH LISTING In March, Regis made the move to list on the Stock Exchange of Mauritius (SEM). Having moved its head office to the Indian Ocean Island in 2007, Regis has been reaping the benefits ever since. “One of the significant milestones in the group history was to move the headquarters from South Africa to Mauritius, to permit its international expansion into Africa while benefiting from the favourable business environment in Mauritius,” says Bernard.

On 29 March 2019, the first 10,000 of 100,000,000 ordinary shares were offered for trading at $1 per share. This strategy demonstrates the company’s commitment to the region and to business on the African continent.

“Mauritius remains a good platform to operate in Africa, even after the latest changes implemented in 2018 for Global Businesses,” details Bernard.

“The country still offers good economics for office support functions, and the financial system is working well to deliver Treasury functions. Mauritius has signed Double Taxation Agreements with a large number of African countries, and this is also another incentive to base our transactions here,” says Bernard.

The group is attractive for investors because of its strong market position, industry-leading brand reputation, geographic spread, and decades of acquired knowledge and expertise.

By strategically targeting developing markets in Africa, Regis has managed to carve out a niche for itself by getting into regions where competition from international players is little to none.

“Regis is a diversified group, and as such we have different competitors

depending on the services we offer,” says Bernard. “As often as possible, we have been trying to operate in emerging markets where there is a lack of offer for our services, and we can provide a unique access to a level of service much above the competition, whether in terms of standards or in terms of capacity.

“In the markets where Regis is operating, there are very few international groups. For example, most of the large integrated logistic providers won’t invest in facilities and fleet where Regis is present, and rather use our company to provide their services on the ground.”

Like any industry, the challenges that come with being an industry leader in a regional market include finding, employing and keeping the best people. Regis is a people business and follows three founding principles: trust, reliability and performance. Without high-quality human capital, these values could never be truly adhered to.

Regis believes that to deliver the quality expected by its clients, investment into its people is non-negotiable.

“Our philosophy is to exceed our clients’ expectations without compromising safety and service quality. To ensure that we live up to this, we pursue a programme of continuous investment in the ongoing development of our skilled personnel and management systems,” explains Bernard.

“Staff retention can be an issue,” he adds, “in particular when we are increasing staff competency by investing in their training to have them certified. New players in our sector of activity will naturally

// AFTER YEARS OF LITTLE TO NO ACTIVITY IN THE ENERGY SECTOR, IT IS WITH GENUINE EXCITEMENT THAT WE SAW THE OIL AND GAS OPERATORS COMING BACK TO PEMBA AT THE BEGINNING OF THIS YEAR //

REGIS HOLDINGS

// OUR PHILOSOPHY IS TO EXCEED OUR CLIENTS’ EXPECTATIONS WITHOUT COMPROMISING SAFETY AND SERVICE QUALITY // attempt to poach our most qualified employees, and there are few legal protections against this, other than trying to build loyalty over the long term by providing market competitive benefits and career opportunities.”

The other threat that comes with being active across such a range of locations and industries is economic slowdown. While diversification does shield from the effects of an isolated slump, when the oil price drops like it did in 2014, there is no hiding. From June 2014 to February 2016, the oil price fell from $115 per barrel to under $35 per barrel. This was critical for the industry as it made much activity unsustainable.

“As far as Regis is concerned, the downturn started further back

than 2017, as first signs of decline in revenues were felt in 2015. 2017 was probably the worst year in terms of activity. However, we are now seeing signs of improvement, which is very encouraging,” says Bernard.

The US Energy Information Administration’s monthly short-term Energy Outlook expects Brent crude oil to average $62 per barrel in 2020 and the World Bank Crude Oil Price Projection is predicting a rise to around $70 per barrel by 2030.

If this expected stability can play out, the future looks bright for Regis Holdings.

“Over the past four years, Regis transformed itself from being involved in one sector and a few countries to several sectors and a greater number of countries, so we are confident that we will manage to benefit from the growth,” says Bernard.

In November, the company sent delegates to Cape Town International Convention Centre to take part in Africa Oil Week, the continent’s largest oil and gas event dedicated to the upstream industry. Many new contacts were made and a number of exciting new leads were grasped from markets around the continent. The level of interest in the event, and the number of companies present buoyed Bernard.

“Today there is a big discrepancy

between Africa’s population and Africa’s share of the world’s economy.

There is no doubt in my mind that the growth of Africa’s middle class, mostly composed of young people, will have a tremendous effect on the economies of the continent and will contribute to higher growth in this part of the world, particularly when comparing it with an ageing Europe,” he says.

For companies like Regis, with a spread of activity across a spread of regions, with a reputation for quality service delivery, and now a listed entity, growth should not be difficult to come by. While many African economies remain uncertain at the best of times, investment in natural resources continues, and operating in that space is at the heart of Regis Holdings. Now is an extremely exciting time for this global business with local presence. As more and more major discoveries prepare to be brought online, the company is perfectly positioned to thrive serving oil, gas, mining and construction in Africa – where Regis is King.

WWW.REGIS.CO.ZA

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KINGHORN BRUSHWARE

114 Years

and Still Sweeping for Kinghorn PRODUCTION: Manelesi Dumasi

With the South African manufacturing industry continuing to face significant challenges, Enterprise Africa talks to Kinghorn Brushware, one of the country’s oldest manufacturers, to understand how this old but still growing business is managing to thrive in tough times. “You now have to work better, be cleverer, and plan to get the margins in a different way,” says GM, Trevor Densham. www.enterprise-africa.net / 43

INDUSTRY FOCUS: MANUFACTURING

//

Family-owned since its formation in 1905, South Africa’s Kinghorn Brushware is one of the country’s oldest manufacturing businesses. Early founder, John Kinghorn came out to the Cape from Scotland at the turn of the century. He had worked for his father-in-law’s brush-making business and, when he arrived in South Africa, he went about setting up his own company. After initial success, and rapid expansion, the factory struggled to run successfully and Kinghorn was forced to sell the business, becoming an employee in the process. In 1924, he tried again, opening a new business named JC Kinghorn. After three years, he was joined at the helm of the company

by Ernest Morgan, who later became his son-in-law. When John Kinghorn passed in 1935, the company was continued by Morgan and he oversaw a growth period that changed the business, catapulting it to the top of the country’s manufacturing industry.

By the mid 1950s, Morgan’s sons-inlaw were involved in the business and it has been under the same family leadership ever since.

Today, the fifth generation is involved, and the company is changing from simple brush manufacturer,

// LIKE ANY BUSINESS, THERE ARE CERTAIN DIFFICULTIES BUT YOU HAVE TO OVERCOME THEM IN A DIFFERENT WAY TO EVERYONE ELSE SO THAT YOU CAN ADVANCE THE POSITION OF THE COMPANY // 44 / www.enterprise-africa.net

becoming a vital supplier into South Africa’s retail and cleaning industry.

Kinghorn’s product portfolio includes brooms, brushes, mops, paint brushes, rollers, dusters, rakes and much more, all manufactured in-house at the company’s factory in Durban.

General Manager Trevor Densham tells Enterprise Africa that, after 114 years, there is still more to come from Kinghorn Brushware as focus shifts to the cleaning industry to bolster its already strong presence in retail and wholesale.

“We are looking to expand into the cleaning market. Our strength currently is in the retail and wholesale markets.

Our idea is to shift the business towards delivering a bigger and better basket, in support of the cleaning industry. We will continue to trade in wholesale and retail, but growth will come from the cleaning industry,” he says.

“It means us developing a different type of product mix as the cleaning industry requires a different type of product. To date, we’ve only had a small percentage of our product going into the cleaning market with the bulk going to retail. It’s all about gearing up and expanding our basket so that we can effectively service the professional contract cleaning industry.

“We do already supply some big national clients but we want to get into that market more aggressively and expand our customer base, so that is where our drive will be.”

Contract cleaning is big business in South Africa. There are more than 1700 contract cleaning companies across the country and around 400 are members of the national association, the National Contract Cleaners Association (NCCA), alongside Kinghorn. While 70% of the market is made up of small and micro enterprises, there is also a handful of major national players with more than 20,000 employees each. With improvements in technology and innovation, and with growing concerns over environmental issues, the industry is one of few that has been growing in South Africa.

// THE BUSINESS IS 114 YEARS OLD THIS YEAR AND IT’S BEEN A FAMILY BUSINESS FOR THAT WHOLE TIME. I DON’T THINK WE WOULD EVER MOVE AWAY FROM BEING A FAMILY BUSINESS // Currently, Kinghorn Brushware can be found in major retailers, wholesale chains, and independent chains across the entire country. Locally manufactured and known for quality, the reasons for Kinghorn’s successes are clear. But, even with the expansion and growth that has been achieved, it certainly hasn’t been plain sailing, and the new strategy to tackle the cleaning industry will soon become vital for Kinghorn’s ongoing development.

“The market is tough,” admits Densham. “In South Africa, we have had something like 1% growth, so it is very tight. As a company, we are showing growth so we must be doing something right. We are going out and finding growth down different avenues and that shows that it is there.

In the past two years, we have been really aggressive in the market and we have been aggressive with pricing and aggressive with sales. We are not getting our growth from an expanding market; we are getting growth from regaining market share and channelling our energies into new markets.”

If Kinghorn can get a grip on the cleaning industry nationally, demand for products could be expanded in a big way. Everything from brooms and mops for the office cleaner through to large, specially-designed road sweepers, brushware for industrial and mining applications – all ordered in bulk – is the type of business being targeted.

KINGHORN BRUSHWARE

SWEEPING ACROSS SOUTHERN AFRICA In order to ensure the pipeline for future work stays full, Kinghorn is actively looking for opportunities to expand its presence outside of South Africa into busy markets in neighbouring countries.

Highlighting the level of quality and durability as key selling points, Densham believes that there is without doubt big potential for growth in subSaharan Africa. Expansion strategies are already underway across two markets: Botswana and Malawi.

“Those are two markets we are targeting because we have the possibility of new clients there,” he explains. “We are busy with a new client in Malawi that supplies a major hardware group, and in Botswana there is a company that will be our agent and they play with all the major retailers and wholesalers in the country. Sub-Saharan Africa in general is our expansion target going forward.”

There are no plans in place to go into new markets and set up new offices or manufacturing facilities. Kinghorn prefers the idea of selling through agents, tapping into existing networks, creating an export operation from the HQ in KZN. “Agents have an existing client base and they are already distributors which means they already have infrastructure in place. It’s just a matter of us supplying the product and they can handle all the sales and distribution to bring the products to market as quick as possible,” details Densham.

Beyond Botswana and Malawi, there is further potential in markets including Zambia, Namibia, Mozambique and Angola. As a group, these economies represent a fantastic opportunity, growing collectively much faster than the South African economy, even if the business environment does not move as quickly.

“We will wait and see how we progress in Botswana and Malawi first.

Trading in sub-Saharan Africa is quite different to South Africa. Unfortunately,

NAC Paints is able to offer specialised coatings for custom projects. We have developed bespoke water-based coatings for Kinghorn and are proud to be associated with their brand.

+27 33 386 9357 / +27 82 372 1324 ccare@nacpaints.co.za www.dekadepaints.co.za

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INDUSTRY FOCUS: MANUFACTURING

things move a little slower in subSaharan Africa compared to South Africa which, in African terms, is a major player.

We are not a first-world country but we trade a lot quicker than many of the other countries in the region.

“In sub-Saharan Africa, Botswana is one of the most financially stable markets.

We are busy supplying in Zimbabwe but through a third-party but we are very aware that the market there is unstable.

Botswana will be our test and we will expand from there,” says Densham.

BRUSHING UP ON SA SUCCESS In South Africa, Kinghorn is one of the industry leaders, but the company will not be resting on laurels. In order to keep growth momentum going, the business is planning to open up sales offices in the major metropolitan areas.

This would allow for fast, easy and efficient ordering and distribution.

“Our head office and manufacturing facility is based in KwaZulu-Natal and we supply into South Africa from here. We used to have a branch in Johannesburg but we closed that a few years ago. Our intention is to open up there again and we are putting sales people into that market right now.

We want to develop sales so that we can open there and following that we would look to open in the Free State and the Western Cape,” explains Densham.

He says that these satellite offices would carry stock and would be fully able to deal with orders and customer queries, encouraging manufacturing in Westmead, Durban to reach capacity.

Kinghorn Brushware is a proudly South African business and is the oldest name in South African brushware.

While the important focus on African expansion and movement into the contract cleaning sector continues, the company will also look to build an e-commerce offering so that products are available for everyone. We have set up our website to be able to function as a shop but it is not a focus right now.

Going forward, it is something we will look at, without doubt,” says Densham,

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who has been in industrial sales and FMCG for his entire career.

CLEARING COMPETITION Like any manufacturing business, one hurdle which must be overcome for Kinghorn is the ever-growing threat of competitors in the market, mainly coming from the East, challenging with basement pricing. Kinghorn’s products are high-quality, long lasting, specifically designed and as such, Densham is not concerned about cheap alternatives.

“There will always be cheap imports. You must be aware of them but you can’t be obsessed with them,” he says.

“The world is so small today; 20 years ago, you didn’t have exposure to products that weren’t made in your country. The world continues to get smaller and there remains a place for the cheap products, intermediate products and top-level products. You

have to go and find the business that you want and not worry about others who want to go cheaper.”

He also highlights the range of products that Kinghorn has developed over the years, claiming that the large batch manufacturers cannot bring such a portfolio.

“The cheaper guys often cannot bring a whole range. They will have one or two items and they flood the market without being able to offer a whole solution to the client. We don’t play in the street vendor market and you would be a lot more affected by cheap imports if you played in that market.”

In the final quarter of 2018, South Africa’s manufacturing sector recorded an increase in turnover of 7.1% compared to Q3. Total capital expenditure on property, plant and equipment increased by 6.7% according to Stats SA. These improvements came as welcome news across as industry

KINGHORN BRUSHWARE

which has faced so much despair over the past decade, seeing its GDP contribution decline from 20% 10 years ago to under 14% today. Pair this with an economy which declined by 3.2% in the first quarter of 2019, and you see a bleak picture. The result is buyers turning to manufacturers that come with a reputation for quality and longevity.

“There is a sentiment towards working with local products,” says Densham. “There’s definitely a sentiment towards working with smaller manufacturers rather than massive corporate-sized players, and we are hoping to capitalise on that.

“People like the fact we are a family business and we have been around for a long time. Kinghorn is the oldest manufacturer in South Africa from a brushware perspective.

“The business is 114 years old this year and it’s been a family business for that whole time. We still have the third, fourth and fifth generations working in the business. The third generation is finishing up retirement now, the fourth generation will retire in the near future, and the fifth generation is still very active within the business. It will continue in the family and one of our mottos is ‘big enough to deliver, small enough to care’ and that talks about us trading with family values. There is a definite trend in the market where customers are looking to deal with smaller companies in South Africa and we fall into that category.”

Despite the weak economic climate and the lack of market enlargement, Kinghorn continues to perform well and achieve growth. Prospects for the future are so encouraging that Densham is confident of increasing the number of jobs offered by the company.

“We are being forced to be more and more competitive and labour is a big contribution to the cost of product. Our factory is labour intensive across certain lines. We have invested in mechanisation and computerised equipment so the reality is that as we grow, there will be positions created but

also jobs lost to automation because it brings the cost down. For example, one new machine will produce what our existing machines produce at four times the speed. Instead of having three machines, we will only need one machine and one operator. It’s a fine balance and it is difficult so, going forward, we are looking at new ways to create jobs. There are certain lines that will always be labour intensive and we play strongly in those markets i.e. industrial applications. Those have to be made by hand as they are normally short runs and can’t be automated. If this type of business keeps growing as it has, we will certainly contribute jobs for the country. This is alongside the opening of new sales branches where we will need sales people, admin people and distribution people,” he says.

Modernisation of the company’s strategy and a rethink of process flow has also helped Kinghorn to prosper.

“Our growth has also come from streamlining processes in our factory and streamlining our raw material purchases,” says Densham. “You now have to work better, be cleverer, and plan to get the margins in a different way to compensate for the non-growth in the market. These are fundamental differences that you must understand

in order to compete as the cheaper alternatives will always be there.”

The most important thing in the FMCG industry is that you continue to drive high-quality output across the company, which in turn continues demand from the end user. For Densham, there is no question that Kinghorn Brushware will continue to deliver for and delight its customers.

The movement into new geographic markets and new industry sub-sectors will help the business to thrive and, as locally made products continue to realise an upswing in popularity, Kinghorn is perfectly positioned to boom.

The company is more than a century old, but it still feels like the start of a journey.

“We are in a great position and we are growing every month which is fantastic. Like any business, there are certain difficulties but you have to overcome them in a different way to everyone else so that you can advance the position of the company. We are growing in a market that is not growing, so we must be doing something right,” he concludes.

WWW.KINGHORN.CO.ZA

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CHET CHEMICALS

So Fresh,

So Clean PRODUCTION: Timothy Reeder

Established in 1965 with the simple aim of manufacturing quality day-to-day household products, the Chet Chemicals facility in Kempton Park, Johannesburg now produces between 200 and 300 metric tons of liquids and powder detergents per day. Though negativity has historically abounded in the manufacturing sector, Chet Chemicals continually bucks the trends to add lucrative products and innovative product lines to its armoury as the industry picks up at speed.

//

Chet Chemicals constitutes the household and toiletries arm of Libstar Operations, manufacturing a vast array of products including bleach, dishwashing liquids, fabric softeners and laundry detergents.

Over the course of its near-55 year lifetime Chet Chemicals has won and kept contracts with a number of major SA retailers in the household field, including both Unilever and Tiger Brands.

48 / www.enterprise-africa.net

“Our relationship with Unilever and Tiger Brands, as well as the retailers in South Africa, is very well-suited to our assets,” explained Sales Director Ross Rossouw, when we last featured Chet Chemicals, of the importance of these big relationships to Chet’s status in the market. “In the early days, we had to look at those guys in order to optimise our volumes, keep our costs down and to enter the major South African

retailers. As a result, we’ve always had a good relationship with them.”

Headquartered in Johannesburg, Libstar began life in 2005 as an investment holding company concerned with companies operating in the Fast-Moving Consumer Goods (FMCG) industry, and now focuses principally on the food, beverage, household and personal care segments of the market.

INDUSTRY FOCUS: MANUFACTURING

The wider Libstar Group consists of 22 business units that operate nationally across 31 sites located in Gauteng, Mpumalanga, Kwa-Zulu Natal, Western Cape and Eastern Cape provinces, with annual net revenues in excess of R7bn.

STAVING OFF NEGATIVITY One could be forgiven for thinking that only challenges and gloom have prevailed in the manufacturing sector as a whole in recent times. Ross Rossouw depicted a, “trading environment in South Africa [which] is very tough at the moment,” while only at this time last year, Business Day identified what it simply called a “glum outlook” for manufacturing in the country, a sector which is the fourth biggest of the economy at 13% after financial services, government and the trade sectors.

However, the FCMG market has

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shown itself to be remarkably robust and resistant to the negativity, a mainstay among the most successful in Africa. In its prescient way, Africa. com warned investors in 2011 against, “missing the boat on Africa’s emerging FCMG market,” and the potential it spotted has been borne out many times over in the years that have followed.

“When you talk to soap and detergent players,” the website said at the time, “there is one common theme: emerging markets, particularly Africa, is where all the growth opportunities are.

“As of 2011, Africa and Asia accounted for 20% of Colgate-Palmolive’s sales,” the report went on. “Soaps and detergents are basic consumer goods that, for many years, have been undersupplied to Africa. As developed markets become saturated, the multinationals have turned their eyes to

the continent’s growing markets.”

While the FCMG sector as a whole continues to hold its own, Ross Rossouw offered his own insight into why Chet Chemicals is such a success story, and looks set to remain as such for the foreseeable future.

“In the field of contract manufacturing in South Africa Chet Chemicals has been an ever-present for over 40 years, and so we’ve obviously earned our stripes,” he explained.

“This endurance has been down to our focus on the quality and the service level we have offered over this time.

We have been and remain successful because we manufacture a quality product which adheres to specifications - that is what gives us the edge.”

UNILEVER MANUFACTURING UPLIFT Unilever was among the headlines in recent years for its almost R4 billion investment to bolster the South African consumer goods manufacturing space over the last four years, culminating in its fourth SA production facility – a R1.4 billion homecare products factory poised to act as a springboard for its products into the frontier African markets.

The facility produces up to 150 000 t/y of household and laundry detergents, while delivering a 50% reduction in the carbon emission footprint and a 70% reduction in water use per ton on that of the original factory.

“Transforming our production capacity is one of four critical initiatives that we are driving to meet expected growth in demand,” Unilever global CEO Paul Polman said at the launch of the facility. “This factory will enable us to better serve our consumer with innovation and green technology, while simultaneously improving service levels for our customers.”

Former-Trade and Industry Minister Rob Davies added at the launch that the Unilever plant had benefited from the Department of Trade and Industry’s (DTI’s) 12i Tax Allowance Incentive scheme, with a qualifying investment

CHET CHEMICALS

•

100% black owned level 1 BBBEE

•

Established in 2002 through Unilever’s transformation programme (Vuka Project)

•

Specializing in full scope toll manufacturing for global brands like Diversey

•

Bulk premixing which Zamani has been offering to household brands like Unilever South Africa, Unilever Nigeria and Unilever Kenya

•

Innovators of sodium chloride-based colour speckles which companies like Chet, KT Wash, Unilever and many others have included in their products

+27 11 914 1941 info@zamani.co.za

// FOR US TO BE SUCCESSFUL FOR THE NEXT 40 YEARS ARE MAKING PLANS TO DOMINATE THE AFRICAN MARKET AS A WHOLE // value of R1.2 billion, an investment allowance of R350 million, and a training allowance of R7 million.

Of Unilever’s total South African manufacturing investment of R4 billion, the group had received nearly R1.9 billion in incentives from the DTI. Other investments by the group include Durban’s Maydon Wharf

www.zamani.co.za sales@zamani.co.za

Unit B2, Benoni Multi Park, 26 Van Dyk Road, Benoni, 1501

soap, detergents, cleaning products, polishing preparations, perfumes and toilet preparations factory, the Indonsa foods production plant, also in Durban, and the Southpole ice cream plant, in Johannesburg.

“It is more than that we have offered tax incentives...we have actively worked together with Unilever on this. We would like local agricultural manufacturers to start benefiting from these investments by being suppliers for plants like the Idonsa factory,” Davies stated.

Such investment and benefits can only spell success for Chet Chemicals, especially as Rossouw went on to describe the company’s plans for expansion in the next few years. “With regards our South African growth potential I think we are pretty much there or thereabouts - I wouldn’t go as

far to say that the market is saturated but it is not far off,” he explained.

“There is not a lot of potential for incremental growth; the growth we see at this stage is the opening of new stores within the retail environment, and it is 100 times more saturated than in the rest of Africa. For us to be successful for the next 40 years we will have to start making plans to dominate the African market as a whole, and we are busy with that,” Rossouw concluded.

WWW.LIBSTAR.CO.ZA/CHET-CHEMICALS

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THE BEVERAGE COMPANY

More Cheers for The BevCo PRODUCTION: Karl Pietersen

Just two years into its life, The Beverage Company has already taken the number two spot in the soft drinks manufacturing industry in South Africa. With a fierce product portfolio, a number of high -quality manufacturing facilities, a national footprint, and an inspired workforce, this is a business that looks set to sparkle now and in the future.

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1. TBC Conference 26.9.18 Day 1 (1)

INDUSTRY FOCUS: MANUFACTURING

//

Just like hard drinks, soft drinks in South Africa is a tough business. There are many businesses competing for valuable market share. Water shortages arising from bad droughts in 2017 amassed pressure onto what is already a tight market. Smaller manufacturers struggled to compete and only the biggest and best managed to stay afloat.

Leading the way in the market is Coca-Cola, or ‘big red’ as the market refers to it. Like almost all of the markets it is active in worldwide, Coca-Cola commands more than 40% of the market – when you reach for a soft drink in Africa, the likelihood is, you reach for a Coke product.

But, in the future, that could change. Smaller players are looking at ways to bolster their position. Some have amalgamated in an effort to compete more effectively, and one in South Africa has mixed together a number of national players to create a truly unique cocktail, capable of claiming market share.

That player is The Beverage Company (The BevCo). Headquartered

Michael Benjamin CEO

54 / www.enterprise-africa.net

in Isando, Johannesburg, The BevCo was established in 2018 after the acquisition and merger of Little Green Beverages and Softbev. Little Green Beverages was founded in 2006 and Softbev in 2015.

Within Softbev is Shoreline Sales and Distribution and Quality Beverages, and acquisition of these two companies has helped to push The BevCo’s product portfolio into a really strong place.

CEO Michael Benjamin was appointed to lead a growth strategy at Little Green Beverages in 2017 after Ethos Private Equity, Nedbank Private Equity and management had taken on the business from its founders.

He quickly went about assessing the market and searching for opportunities to build a national player.

“The genesis of all these ideas comes well before they enter the public space,” he tells Enterprise Africa. “Over a period of years, there have been a number of people hypothesising on whether you could consolidate a number of regional players and put together a business with a powerful national footprint that utilises capability and shared insights to accelerate

development. Many have tried but this is probably the first time it’s come to be.

We started working on it around two years before the first acquisition. There was a number of people in the party and I came onboard around November 2016 after chatting loosely about what could be done.

“I was asked what I thought of the idea and invited to come and look at the numbers, sites, and people.

Eventually, I was asked to come onboard and I said I would be happy to alongside other investors including private equity, banks, management and other stakeholders.”

On 24 April 2017, it was announced that The BevCo had acquired Little Green Beverages and this moment was a flagship in the early development of the business.

Jonathan Matthews, Partner at Ethos Private Equity said: “Ethos invests for growth. Under our stewardship, LGB’s business processes, people and brands will receive enhanced focus and investment to further improve products and deliver value to customers and investors.

THE BEVERAGE COMPANY

Together with management, Ethos has identified opportunities to grow LGB and unlock further performance, service levels and value. To support this growth strategy, executive leadership has been re-aligned and bolstered with key hires.”

Collectively, LGB and Softbev boasted some powerhouse brands, some recognised globally and some known locally. At the heart of The BevCo’s plan has always been to give customers choice.

Local hero brands including Cooee, Jive, Refreshhh and Reboost are complemented by a range of Pepsico beverages global champions including 7UP, Capri-Sun, Mirinda, Mountain Dew, Pepsi and Pepsi Max. The BevCo also manufactures and bottles on a contract basis for a number of highprofile retailers.

“We thought these businesses had very strong brands; brands that resonated with local consumers. Our plan is not to acquire companies and then put in one ubiquitous brand we will keep the local hero brands,” ensures Benjamin.

“The first acquisition which was Little Green Beverages, who were strong in the Eastern Cape, Gauteng and Mpumalanga. The next transaction closed in August 2018 and that was Softbev including Shoreline – strong in KZN – and Quality Beverages

// IT’S NO SECRET THAT SOUTH AFRICA HAS HAD A TOUGH ECONOMIC TIME WITH MANY HEADWINDS AND THAT MEANS PEOPLE HAVE TO FIGHT HARDER FOR THEIR SHARE OF REVENUE //

We supply food manufacturers with quality ingredients and a wide range of additives to help create the taste, texture, performance and appearance you need for your food & nutritional products.

– strong in the Western Cape and Gauteng. Johannesburg is the most populous region, with the most disposable income so clearly that was a must-win market.

“Softbev was home to a number of strong brands but there was no automatic guarantee that we would gain all of the brands. We were in negotiations with PepsiCo and CapriSun and the others around aligning what our vision was and where we thought we could materially stepchange the brands. From their side, they were worried about performance and credibility in the market. For us, our vision has always been around promoting local heroes and global champions, and that gives us a unique capability that other beverage companies do not have. We have competitors who have local hero brands

and others who have global champions, but no one has the portfolio diversity that we have,” he adds.

Now, the fizz has settled and The BevCo is established within the local communities that it targets so heavily. Strategic planning has been ongoing, company assets have been streamlined, and the smaller businesses that came together are reaping the rewards.

“They were all relatively successful,” says Benjamin. “They had good and bad years, they were competing against Coca-Cola and they didn’t always have the financial muscle to compete effectively. With beverages, there is also the cost of distribution – to a point you can make money but after that you become disadvantaged.

Continues on page 58

www.enterprise-africa.net / 55

SUSTAINABILITY, INNOVATION and ENVIRO-FRIENDLY OPPORTUNITIES It is our intention to be a supplier that looks at the Safest and most economical way to wrap a pallet. This does not mean that we must be the cheapest per roll or per kilogram, rather we want to offer a package whereby the full value of packaging is achieved. This means that we can offer the knowledge of how plastic and the wrappers should be run, without having to rely on the OEM to always be on site to do adjustments. As plastic specialists we are backed by our NEWTON TEST CENTRE who are on hand to offer solutions to all types of packaging and machinery.

With the use of technical development Taigan has been able to offer innovation through the fact that we have moved from a 3 layer cast stretch film to now being the Company that offers 33 and 55 layer NANO stretch film to the South African market, a feat that no other manufacturer can match. This development was made in order to look at reducing the amount of plastic required to wrap a pallet without detracting away from the importance of why wrapping is being used. It is not a sake of downgauging to protect manufacturers margins, it is done to improve packaging by using high tech raw materials that allows for NANO technology to be successful worldwide.

Sustainability is a key influence for any market. The understanding that if we did not look at improving efficiencies in extrusion and the correct use of raw materials, this would leave us at a stagnate situation. It is for this reason and the belief that for us to succeed, new equipment such as 2 more 55-layer NANO CAST LINES are on order or being installed, thus offering a monthly extrusion tonnage of 10000 tonnes.

Traceability also has developed with NANO extrusion and we are able to track the exact extrusion conditions of each roll and at what position on the shaft by checking the BARCODE in each roll core. This information gives the DNA of each roll extruded and supplied to our customers. Rolls of our NANO film is protected by individual cartons, although this might seem a bit expensive handling conditions are eliminated, and no waste occurs due to damaged edges.

NANO film is 100% recyclable. The film is OXO degradable which means it is not BIODEGRADABLE, but the portions break down into smaller pieces which makes it easier to recycle. When we supply our hand wrap rolls it is our intention to create a footprint whereby we look to recycle the returned core and offer a savings to the customer. Our hand wrap cores are manufactured in Green for identification.

NANO film is ENVIRO FRIENDLY as it is manufactured to offer thinner film which means less plastic is needed to contain a pallet of goods. The correct use of raw material in extrusion by adding layers such as 33 or 55 allows for the strength and puncture to be maintained and the integrity of the film to be no compromised. This is a first for our country and we are market leaders to promote our social responsibility.

The importance of correct wrapping needs to be understood. Stretch film has been developed to hold goods on a pallet in the SAFEST way but by overstretching the film can result in unstable pallets of goods being transported. It is for this reason that we offer load RETENTION testing at each trial so that we can determine the correct amount of plastic to apply and at the correct cycle which should achieve a maximum stretch value of 5.5 – 6um around a pallet. Thinner or thicker offer other challenges such as waste or falling loads. The correct settings on automatic wrappers are the key to offering effective cost savings.

A full cost analysis is always conducted by our team to set standards and hold us accountable for our product performance .

OUR GOALS : -

Always look at saving money in a responsible way

-

Innovation and understanding customer needs

-

Technical development and training at each site

-

100% commitment to all customers to be their packaging solution and partner

-

Introduce our T.nano55 as the next stage of enhancing the packaging at reduced costs

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Improving on the current packaging and being partners not suppliers – ADD VALUE

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Taigan follows it’s triangle of trust, QUALITY, INTEGRITY and EXCELLENT SERVICE with you the customer at the centre. It is branded on all our products.

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INDUSTRY FOCUS: MANUFACTURING

Continued from page 55 “When we did the deal, we believed we would get a very strong footprint in the major metropolitans and we could use the footprint to drive our growth agenda profitably. We would have had six facilities, but we consolidated two in the Eastern Cape into one.

“It is a very competitive environment,” he adds. “There are a number of new entrants and they all have ambition and are all looking for market share. I think that is a great thing as it does keep us honest. There is no one that we can see that can put together the local heroes and global champions across the absolute breadth of beverage categories. That gives us a unique advantage as it means we are able to load more trucks full which gives us a cheaper cost per case to deliver rather than six trucks coming from six different companies.”

Taking advantage of economies of scale and improved buying power, the company is now delivering products to most countries in subSaharan Africa. “Currently, we’re in

Eastern Cape Production Plat

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Namibia, Botswana, Zambia, Lesotho, Swaziland, Mozambique, and we were in Zimbabwe before they changed the tax rules,” details Benjamin.

This reach, combined with the fantastic product range and significant manufacturing capabilities, makes for a powerful organisation.

“We claim to be the leading independent manufacturer and a leader in market share which is supported by BMR and GFK. There are other substantial players but right now we are comfortably the number two beverage company in South Africa,” explains Benjamin.

He goes on to state that being second in an industry is not something he is happy about – it doesn’t let him sleep comfortably at night. Having worked for almost two decades in the beverage business, Benjamin’s norm is being in pole position. But, competing with Coca-Cola is no easy task and he is well-aware that the challenge is a longterm one, especially with the economic climate faced by South African businesses right now.

“It’s no secret that South Africa has had a tough economic time with many

// US PUTTING IN A CANNING LINE MEANS WE HAVE A PRODUCT THAT CAN TRAVEL OVER LONGER DISTANCES WITHOUT LOSING CARBONATION, WHICH DOES HAPPEN WITH PLASTIC PET BOTTLES // headwinds and that means people have to fight harder for their share of revenue.”

To ensure focus is unrelenting and constantly on the company’s core values (growth, recognition, accountability, passion, integrity and teamwork), the owners have installed a young and vibrant management team without losing the entrepreneurial flair that came with the businesses before amalgamation. The

THE BEVERAGE COMPANY

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entire management team is encouraged to get out and talk to employees wherever and whenever possible.

“The entire leadership team are shareholders making them invested in the business. It drives a very different decision-making process. They are tied to the credibility of the business and they are invested in the growth agenda.

“We have committed to that and every quarter, our exco members

// OUR PLAN IS NOT TO ACQUIRE COMPANIES AND THEN PUT IN ONE UBIQUITOUS BRAND - WE WILL KEEP THE LOCAL HERO BRANDS //

go to every site and talk to people transparently about the performance and what is working and what is not,” says Benjamin.

This also allows for the suggestion and development of new ideas – a key part of growth for any business. Going forward, The BevCo has plans for differentiation and expansion, and this innovative approach to business is yielding a positive relationship with consumers.

“We are putting in canning lines, using less water, using less plastic, and minimising our carbon footprint.

Us putting in a canning line means we have a product that can travel over longer distances without losing carbonation, which does happen with plastic PET bottles.

“Our current plan is not to move into alcohol, but it is quite possible

There is an Air Liquide solution that is right for you.

that we could look at other adjacent categories. We are always looking at new opportunities,” says Benjamin.

While ‘big red’ is probably safe at the top of the pile for now, The BevCo is certainly turning the screw. It’s idea of being locally relevant, and very active in communities, while always delivering international quality have helped to develop a business that people think positively about. In the future, the product portfolio will be expanded and this will only mean more growth.

“Our driving mantra is about giving consumers choice. If our choices are not good enough then they will migrate and enjoy other things,” Benjamin concludes.

WWW.THEBEVERAGECOMPANY.CO.ZA

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DISTELL

The Toast of Africa PRODUCTION: William Denstone

Proudly and immovably rooted in South Africa, Distell is a global concern whose main business is the production, marketing and distribution of a diverse portfolio of award-winning alcoholic brands. Strong performance, award-winning service and astute external appointments are adding up to exciting times for this major market player. www.enterprise-africa.net / 61

INDUSTRY FOCUS: MANUFACTURING

//

The Distell Group is South Africa and Africa’s leading producer and marketer of wines, spirits, ciders and other readyto-drink (RTD) beverages. Its portfolio numbers some of the most loved and appreciated brands not only in South Africa, but the world over.

Having on its books such names as Amarula, Savanna, Hunter’s Dry, Durbanville Hills and Nederburg gives Distell a brand list which is just as diverse as the people who work on the products themselves. Distell’s products combine rich provenance and authenticity, and are carefully priced across the whole continuum from more everyday to the luxury end, in order to cater for the broadest spectrum of consumers.

Employing approximately 5500 people, Distell secures an annual turnover of R21.5 billion. “We craft distinctive alcoholic beverage brands,

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// WE ARE A PROUD AFRICAN ALCOHOLIC BEVERAGES COMPANY WITH HERITAGE, GLOBAL REACH, WORLD-CLASS PEOPLE AND THE ABILITY TO DO EXTRAORDINARY THINGS // enhance memorable moments and inspire responsible enjoyment,” says Distell of its central aims. “The value we create enriches the lives of our people, shareholders and the communities within which we live and work.”

DISTILLER OF THE YEAR “We are a proud African alcoholic beverages company with heritage, global reach, world-class people and the ability to do extraordinary things.

We exist to provide unique moments of social enjoyment through the responsible marketing of well-crafted ciders, wines and spirits,” continues

Distell of the driving forces behind its boundless growth.

The Icons of Whisky Awards, widely accepted to be one of the real barometers of success in the industry, were created to recognise exactly the extraordinary things Distell succeeds in delivering. Alongside its partner event the World Whisky Awards, the two never fail to be attended by some of the industry’s most respected figures.

Distell was, perhaps predictably by now, the undisputed champion on the night in March this year, crowned ‘Overall Distiller of the Year’ at the ceremony. The group’s winning streak

DISTELL

continued at the World Whisky Awards later the same evening, with three additional awards recognising the company’s international single malt and grain brands.

The gongs collected included prizes for Best Scotch, with Distell’s Islay Single Malt scooping the award for the second year in a row, and Best South African Grain for its Bain’s Cape Mountain Whisky. Distell itself was named Distiller of the Year.

Being collected in Glasgow, meanwhile, was a trio of awards at the 12th annual Òran Mór Whisky Awards, including Ledaig PX as Best Newcomer and Bains as Best Overseas Whisky.

This brought the overall total of global accolades to 17, an embarrassment of riches for Distell on a night of unprecedented glory.

Derek Scott, Brand Director for Malts at Distell International, said: “We

are passionate about our malts portfolio and are continually working to provide exceptional whisky for new and loyal audiences alike.

“These awards are amongst the most respected and influential spirits competitions in the world and to have received so many accolades across our brands is huge testament to the talented teams across the distilleries.”

ASTUTE APPOINTMENT While long recognised globally for its own service excellence, Distell is also acutely aware of the importance of strong partnerships, and its appointment of French multinational advertising and public relations company Publicis to manage some of its prestigious brands is among its most astute to date.

Publicis Groupe is the oldest and one of the largest marketing and

communications companies in the world, by revenue, headquartered in Paris. Founded in 1926, the world’s third largest communications group is famed for world-renowned creativity, best in class technology and digital and consulting expertise.

Under its management will be Bernini, Extreme, Count Pushkin, Gordon’s Gin, J.C Le Roux, Klipdrift, Olof Bergh, Richelieu and Three Ships, among others. The appointment of Publicis concludes the second phase of Distell’s efforts to consolidate its agency portfolio, which the company views as a key part of its strategy going forward as it seeks to deliver on its global aspirations.

Throughout its history Distell has responded to the need to evolve and innovate as a business, in order to remain the leader in a very competitive sector. The world of communication

Capped with Service Superior service is about refinement, perfection, innovation, ability to adapt and style. Most importantly, it is about meeting these high standards with no fuss.

As South Africa's largest metal and plastic closures manufacturer, Nampak Closures has well established and proven track record of delivering professional service. We are supported by Nampak R&D, widely regarded as one of the most advanced packaging science and technology facilities in the southern hemisphere and have access to cross divisional packaging technology, expertise, market trends and knowledge.

Our range of proudly South African screw caps, backed up by our superior personal service, are designed to give your wine perfect sense of style that appeals to even the most sophisticated connoisseur.

For more information, contact us on +27 21 507 8411 or e-mail: madene.koen@nampak.com barry.erasmus@nampak.com

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INDUSTRY FOCUS: MANUFACTURING

HIGH-TECH PROCESSING (PTY) LTD

PROJECT MANAGEMENT, ENGINEERING AND PROJECT INTEGRATION TO THE BREWING, BEVERAGE AND FOOD INDUSTRY

High-Tech Processing (Pty) Ltd is a Breweries, Beverages, Alcoholic and Soft drink plants solutions provider, executing projects both in South Africa and internationally. We provide Project Management, Engineering, Procurement and Project Integration services for multi-disciplinary projects.

Tel: +27 (0) 11 805-5737 processing@processing.co.za www.processing.co.za

64 / www.enterprise-africa.net

// WE ARE PASSIONATE ABOUT OUR MALTS PORTFOLIO AND ARE CONTINUALLY WORKING TO PROVIDE EXCEPTIONAL WHISKY FOR NEW AND LOYAL AUDIENCES ALIKE // agencies is facing its own challenges, too, and together the pair will look to adapt and continue to beat a path for others to follow.

“The dramatic changes in the global marketing communications landscape necessitated a complete re-look of our agency model as well as our internal response to this change,” explained Andre Beyers, Distell Marketing Director, Africa and lead for this project.

“Having got to know the Publicis team and offering through the first phase of the process, we are delighted to have them on board to look after this second batch of brands and look forward to a fruitful relationship,” added Donovan Hegland, Global Marketing Director for Distell.

DOMINANT PERFORMANCE Amid tough trading conditions and ever-growing competition, Distell was able to harness its expertise to emerge with strong revenue and margin improvement as its Africa growth strategy steadily gains momentum.

Reported revenue increased by 7.3%, with growth seen in 12 of its 15 largest brands and Distell also grew its comparable domestic market revenue by 7.8%, with comparable group revenue up by 9.1% to R14.4 billion on constant volumes There was solid domestic revenue growth in all three drink categories, while an exceptional Africa performance was led by Kenya, Mozambique and Zambia.

DISTELL

// AFRICA REMAINS A PRIORITY REGION FOR US GIVEN THE CONTINENT’S GROWTH PROSPECTS AND OUR AMBITION TO BE AN AFRICAN CHAMPION // These African markets delivered exceptional comparable revenue growth of 21.1% on sales volumes, an improvement of 12.7%. Again, outside the Southern African Customs Union (SACU), Distell’s focus markets on the continent too delivered excellent

results, seeing revenue and volume growth of 43% and 34.1% respectively, and lending yet further impetus to the company’s African growth ambitions.

“We are pleased with the momentum and continued resilience of our business,” said Distell’s Group CEO, Richard Rushton, of the performance. “Our results reflect the efficiency initiatives aimed at driving consistent market place execution and enhancing margins.

“I’m particularly encouraged with the stellar performance of our Africa operations at a time when we are increasing investments in route-tomarket capability and local production.”

This is particularly important, as since embarking on its new strategic journey Distell has introduced a number of important steps across its business to

ensure it is responsive to market needs and geared to respond effectively to the ever-changing global landscape.

“Looking ahead, we expect the current tough domestic environment to persist and economic growth to remain lacklustre,” Rushton continued. “We are, however, confident that our consumercentric approach and diversified portfolio of brands will enable us to capture growth opportunities.

“Africa remains a priority region for us given the continent’s growth prospects and our ambition to be an African champion.”

WWW.DISTELL.CO.ZA

www.enterprise-africa.net / 65

OMIGNAM

Peerless Solutions from Namibia’s

Premier Asset Manager PRODUCTION:

Timothy Reeder

Old Mutual Investment Group Namibia (OMIGNAM) began as an asset management business in 1997, as an investment division of Old Mutual Life Namibia. The largest asset manager in the country, it is responsible for delivering sustainable, long-term investment returns to institutional, corporate and retail clients, with assets under management standing at almost N$40 billion. We asked CEO Tyron van Wyk to take us through OMIGNAM’s decorated history and outline how it plans to remain atop an industry packed with both competition and opportunity.

//

“Old Mutual has been in business in Namibia providing insurance and investmentrelated services since the early 1920s,” begins Old Mutual Investment Group Namibia (OMIGNAM) CEO Tyrone van Wyk, “which means that next year will be see us notch up a century of operations in Namibia as Old Mutual.”

OMIGNAM operates from Windhoek, and is the largest asset manager in the country, responsible for delivering sustainable, long-term investment returns to institutional, corporate and retail clients, through its specialist team of 17 professionals, excluding some shared and/or other supporting services within the group.

66 / www.enterprise-africa.net

“Old Mutual Asset Management was incorporated in Namibia in 1994,” van Wyk details on the complex history of this African institution, “but began operations in 1997 as an investment division of Old Mutual Life Assurance (Namibia) Limited under the leadership of Johannes Gawaxab. The business originated from Old Mutual’s recognition in the 1990s of the need of a separate business that focussed solely on asset management to provide specialist services in what was, at the time, a developing market.

“Our history largely mirrors that of the development of the asset management business as a whole in South Africa.

EXTENSIVE HISTORY “Old Mutual Asset Management has since changed name, to what is now known as Old Mutual Investment Group Namibia,” van Wyk describes, before giving us an outline of his own history with Namibia’s foremost asset manager, in which he has played nearly every role. “I became involved in 2005, when I joined as an investment analyst.

Since then I’ve been an analyst, which I did up to 2010, then moved to Chief Investment Officer (CIO) before being appointed, in 2017, as CEO. “I joined Old Mutual Asset Managers after completing my articles and qualifying as a Chartered Accountant at PriceWaterhouseCoopers

INDUSTRY FOCUS: FINANCIAL

initially as an Investment Analyst with a CFA qualification. As such, I moved from auditing to asset management which was an entirely natural flow.”

When pressed, van Wyk pinpoints several milestones since OMIGNAM became active, which have been pivotal to bringing the business to where it stands today. “The formation by Gawaxab in 1997, which saw him actually separate out the life business and actively start managing it differently, rather than being just a registered entity, was definitely a big step,” he states.

“In 1998 we then started having our first pooled, registered investment vehicles under our profile range of funds, also launched by Gawaxab. This was key as it was the initial product range of the company.

“Also important was the creation of our Managing Infrastructure Development in Namibia (MIDINA) infrastructure fund, in 2003, then in 2005 when I joined we started managing the local equity channel, the Namibian-listed shares, from Windhoek.

“Prior to that time, a lot of the

actual investment decision-making was still outsourced to South Africa - Cape Town - even while it was an operational company in Namibia. At that stage, we started taking on functions locally which makes it a key turning point in the timeline of OMIGNAM. “These aside, another key change I would highlight may seem obvious, but in 2007 when we had the name change from Old Mutual Asset Managers to Old Mutual Investment Group, which also changed at the same time in South Africa to reflect the updated vision. In

DYNAMO PROPERTY DEVELOPERS Dynamo Property Developers in partnership with Old Mutual Namibia, have teamed up to provide 207 modern affordable houses in Mariental. Mariental Extension 6 is one of the most affluent suburbs in Mariental. This development will greatly benefit the Mariental Town which is currently facing a huge housing backlog.

Mariental is a small market town in the Hardap Region in the heart of southern Namibia and is the administrative centre of the Hardap Region. Sitting astride the main routes into the Kalahari and Namib deserts, Mariental also services the needs of farmers and a large communal community around it. The Hardap Dam, located 14 miles northwest of Mariental, has a man-made lake and recreational area that is popular with campers and fishermen.

The housing sector in Namibia is currently faced with a huge backlog in terms of the provision of affordable housing for its citizens. The estimated national housing backlog is 280 000 housing units countrywide growing at an annual rate of about 5900 units (Ministry of Urban and Rural Development, 2017). As at 2015 census population count, Mariental stood at +/- 13 500. And according to the Mariental Municipality data, the current housing backlog in Mariental stands at 55% of the total population.

The Mariental Extension 6 development is a mixed –use development, which comprises of; • • • •

Single Residential Ervens General (Multi) Residential Ervens Institutional Ervens Business/Commercial Ervens

The Development will be carried out in 3 phases of which phase one is nearly sold out. The houses comprises of 2 and 3 Bedroom, designed to elegant simplicity and style befitting the esteemed town.

SELLING PRICES The selling prices are well set to accommodate different income levels of the residents, starting at N$ 500 000.00.

SALES TEAM CONTACT DETAILS Ms. Linda Teofelus +264 811 279589 Ms. Cammy Shilongo +264 816 12220 Mrs Kondjeni Naujoma + 264 812 030429 Mrs Vistorine Andreas + 264 812 702499 Email : marientalext6@gmail.com

68 / www.enterprise-africa.net

OLD MUTUAL NAMIBIA.

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www.rbkholdings.com www.enterprise-africa.net / 69

INDUSTRY FOCUS: FINANCIAL

2009, the biggest pension fund in the country then allocated two specialised mandates to the business, which have been significant - over N$5 billion at the time.

“These focussed on Namibian equity and bonds, and were managed at that stage from Windhoek. This translated to a huge injection into local capabilities and local skillsets.

“As of 2012, all South Africa equity, the stock selection on the JSE for external clients, was being managed from Windhoek when it had previously been looked after in Cape Town. This further evidences the building of skills over time.

GRUDGE PURCHASE? “Difficult financial conditions naturally create challenges for consumers locally, especially considering the abstract nature of insurance and savings.” This is Tyrone van Wyk’s response when we ask whether OMIGNAM experiences the oft-seen perception of insurance and financial services as purchases made begrudgingly by consumers.

“These aren’t luxury goods, or even needs, that we provide in the market, and given that, naturally we face a little more of an uphill battle than someone who provides something more prominent and tangible, like a house, especially in a lower income market such as Namibia.

“Compared to insurance,

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however, asset management is in a unique position in that it allows for discretionary investment and disinvestment, without the penalty usually associated with traditional insurance, and as such is an attractive consideration as a financial solution for clients. Asset management also allow for flexible contributions and not monthly, which is the case with traditional insurance premiums.

“The fact that it cannot be defaulted upon is an extremely important point for people, especially those who may be uncertain of an income stream.”

Pension funds are by far the dominant source of assets for OMIGNAM, representing around 51% of industry assets under management, followed by unit trusts that make up around 26%.

Long-term assurance represents around 16% with the remaining 7% comprising Short term insurance, medical aid funds, corporates and what van Wyk terms, “natural persons.”

SETTING ITSELF APART With a raft of competitors all vying to take OMIGNAM’s top spot, we put it to CEO van Wyk: how does his company keep itself ahead of the rest? “We focus on what we call the five Ps, where we think we are unique,” he explains, going on to detail their signification.

“Our investment Philosophy is aligned to the company objectives to

be a consistent competitive long-term wealth manager that focuses on asset fundamentals, while the Process for each investment offering is aligned and interpreted unique to that asset class of solution. Key being the long term consistently competitive performance and as such the process is stable and repeatable.

“We aim to always attract and retain People that align with our group values: champion the customer, the power of diversity and inclusion, agile innovation that makes a difference, always act with integrity, respect for each other and communities we serve and trust and accountability.

“The track record that we build over time stands for our Performance, and reflects the value we create for clients. We seek to be consistently strong achievers with low possibility of producing weak relative performance, across the full range of our solutions.

Through our Product, finally we seek to offer the correct solution to the challenges faced by our clients.

“Competition is good, and brings out the best in the solutions we make available to clients,” van Wyk qualifies. “It is my opinion that competition creates an environment where the client benefits and we need to deliver our best at all times. It truly allows market forces to achieve what it is intended to achieve ” This also translate to competition to keep the best personnel, van Wyk

OMIGNAM

continues. “Namibia is a big country with a relatively small population, limiting choice in people with specific skills. As such these people are highly sought after, and therefore our employee value proposition is critical and something that requires the constant attention of a good executive.”

The Global Competitiveness Report for 2018 ranks Namibia as 111th in the world on Higher education and training, 33rd in labour market efficiency, 50th in Financial market development and 111th in Market Size. The same report states that an inadequately educated workforce is the second most problematic factor in doing business in Namibia.

“Competition for the best people is high as a result, thus we need to offer employees something competitive and create a good working environment in which we can excel.”

CRUCIAL TECHNOLOGY OMIGNAM is certainly not alone in its desire to make customer advice increasingly digital, moving forward.

‘Asset and wealth managers should watch financial technology (FinTech) companies closely and adopt a responsive digital strategy,’ warned Pwc’s global 2016 survey. ‘Otherwise, they face losing part of their business to new entrants.’

‘By being too complacent, investing mainly in self-serving automation and ignoring the imminent technological revolution,’ the report continued, ‘asset and wealth managers might lose touch with their core clients. Keeping abreast with how FinTech is reshaping the industry seems like the most reasonable way forward.”

As van Wyk makes clear, OMIGNAM is certainly keeping itself abreast of the potential that FinTech has to offer, although it is not going to make any drastic changes in its service methods just yet. “Trends on advice differ significantly between target markets,” he begins. “As an asset manager with its biggest client base being represented by institutional investors such as

pension funds and long-term assurance our preferred advice to these categories remains in person expert interventions.

“These clients really expect that level of interactions. Turning our attention to retail categories such as unit trusts the bulk sources of funds remains institutional, being banks and other financial intermediaries.

“However, direct retail clients such as natural persons choose a method of preference depending on age and quantum of investment. This is an area that has significant scope for growth that we engage with and develop, to ensure that we as a business provide low-cost solutions, delivered in an effective way to a wide pool of potential investors.”

ROOM TO GROW In all senses, but market share primarily, OMIGNAM is far and away the leading asset manager in Namibia, as van Wyk delineates. “We have assets under management just shy of N$40 billion as of June 2019,” he outlines. “As at June 2018, however, the Namibian asset management industry managed some N$164 billion spread across 27 registered investment managers, with pension funds being the biggest sources of funding and specific ones being a large component thereof.

“As such, we need to be realistic with our growth expectations and identify areas for future development, especially given the financial conditions which prevail.

“OMIGNAM manages conventional listed assets, alternative assets and offshore funds, meaning we offer investment solutions across the whole spectrum,” van Wyk points out. “We target growth in our local alternative capabilities, as we think this sub-sector has scope for significant growth which will also in turn deepen the local financial markets in Namibia over time.

“We also believe that by offering clients good consistent long-term performance they will reward us with the placement of funds,” he reasons.

“As such, we focus on building a strong

team with local knowledge and skills to help us achieve these objectives.”

This feeds in strongly to OMIGNAM’s extensive efforts to ameliorate the local financial skills pool in Namibia, as van Wyk clarifies. “As a financial services firm and part of a bigger group in the industry we have a lot of initiatives aimed at financial literacy and the need for financial planning and savings in general. These include but are not limited to surveys and publications, as well as sponsorship of specific events and attempts to increase interactions with clients.

“As an asset manager more directly we published a Namibian version of the South African OMIGSA-produced Long Term Perspectives, which contained eight key lessons encapsulated and supported by data that we share widely.”

We finish by asking van Wyk to outline for us where is next for OMIGNAM. “In short, we have the biggest market share in the country now - we are the biggest asset manager - so we have achieved our main objective and therefore need to set additional goals.

“Our long-term ambitions reflect more our desire and our willingness to grow and deepen the local financial markets - to become more important in Namibia and grow investments here. We believe that we can achieve that through our alternative assets, which later on create liquidity in the Namibian market and deepens our industry and the financial markets in the country in general.

“It is beneficial both to us as asset and to our competitors, like stockbrokers, and to the industry as a whole; this is one of our noble objectives we are striving towards, in addition to remaining the dominant market player which we are today.”

WWW.OLDMUTUAL.COM.NA

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NVEST FINANCIAL HOLDINGS

Fully-Fledged

In the Art of Financial Services PRODUCTION: William Denstone

A full financial services group, NVest Financial Holdings offers solutions for the full spectrum of its clients’ financial needs. Maturing all the time, the company now has in excess of R30 billion in assets under management and a broad range of companies under the NVest brand. CEO Anthony Godwin takes us through NVest Financial Holdings’ story of acquisition and diversification, at an exciting time of opportunity for businesses in South Africa. www.enterprise-africa.net / 73

INDUSTRY FOCUS: FINANCE

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Established in Port Elizabeth in 1985 as NFB Financial Services Group, following nearly 30 years of growth and change, NVest was incorporated as a private company under the name NVest Financial Holdings (RF) Proprietary Limited and converted to a public company at the end of 2014.

The core subsidiary companies of the Group are NFB Private Wealth Management and NVest Securities, private wealth and investment management businesses respectively, and both of each have excellent track records in managing client monies.

The complete service offering of the Group is fairly unique in South Africa: that it has its own stock broking company which is an equities member of the JSE Limited means that it is able to leverage this core strength, both in its product offering within that stock broking company and the financial advisory businesses.

NVest Securities is a traditional stock broking company focusing on private clients, managing both local and offshore discretionary

Anthony Godwin CEO NVest Financial Holdings

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equity portfolios and offering a broad range of local and offshore investment portfolios to meet the needs of individual clients. NFB Asset Management manages the assets of NFB’s local and foreign collective investment schemes CEO Anthony Godwin joined NFB Private Wealth Management in 1988, three years after its inception, and was later part of the team behind the formation of NVest Holdings, into which company the existing NFB entities were purchased.

“NVest Holdings was the vehicle we used to list on the Johannesburg Stock Exchange (JSE),” Godwin explains of the rationale behind the Group’s creation.

“NFB Private Wealth Management is our only private wealth management business, and contributes close to 50% of the Group’s profits,” he details.

“The rest of the Group is made up of the securities, property and short-term insurance arms. Properties provides around 10%, NVest Securities stands at in the region of 35% while our short-term insurance and various others concerns make up the balance.”

// WE HAVE A LARGE FIDUCIARY BUSINESS AND WE REALLY CAN CATER FROM CRADLE TO GRAVE // CRUCIAL JSE LISTING 2014 was rather a watershed year for the nascent NVest Financial Holdings, seeing its staff complement exceed 100 and total discretionary assets under management surpass R6.5bn.

The following year was arguably more significant in the Group’s history, however, in terms of its burgeoning growth, market share and overall structure.

One of the things that made 2015 so vital a year, and going on to prove something of a catalyst to the overall maturation of the business, was NVest Financial Holdings listing on the JSE. Opting for the AltX board, an alternative public equity exchange for small and medium-sized companies in South Africa, was intended to allow NVest to

NVEST FINANCIAL HOLDINGS

increase its reach, raise its public profile and increase the liquidity of its shares, all of which have been borne out many times over.

Since its establishment in 2003, more than 100 companies have listed on AltX, giving them access to capital while providing investors with exposure to fast-growing smaller companies in a regulated environment.

“We are pleased that the company has chosen the JSE as an enabler of its future growth ambitions,” commented JSE head of Capital Markets Donna Oosthuyse. “We wish to congratulate NVest on their listing…[it] is a natural progression for NVest.”

Anthony Godwin added: “We have an opportunity to take a business which started 30 years ago in the Eastern Cape to the South African market and grow it into a brand recognised throughout the country. The NVest Financial Holdings Group has an experienced and sizeable investment process team as well as a formidable distribution network in its current markets and looks forward to growing from strength to strength as an JSE Limited Alt-X Listed company.”

COMPREHENSIVE SERVICE OFFERING “Private wealth is really the main function of our business,” says Godwin, and with this segment of the group contributing half of its total funds, it would be difficult to argue otherwise. Formed in 2005 and today one of South Africa’s leading asset management outfits, NFB Asset Management is positioned at the forefront of the discerning investor landscape. “NFB is the main driving force behind the business.

“The processes behind its success remain largely the same,” Godwin goes on. “The private wealth business is well-established and the procedures have been in place for quite a long time, although we continue finessing them.

“We have moved to a new system, for example, which controls how we offer advice and how we manage clients. It is really just a case of how we

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INDUSTRY FOCUS: FINANCE

improve our existing structure and our offering to the public on an ongoing basis: as the regulatory environment is moving and as optionality is moving for investors, we as financial advisers need to move in line with that.”

Although a key part, however, it is exactly that: one vital arm among many others, and Godwin goes on to clarify that what gives NVest Financial Holdings its strength is its ability to offer the full range of services to a broad spectrum of investors. “I think we are definitely there in our aim to be a complete one ‘stop shop’ for the investor,” he says.

“We have a large fiduciary business

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and we really can cater from cradleto-grave. Our capabilities range from financial planning and education policies, through investment planning and general wealth creation right to retirement and wills and estates.”

With such a strong framework already in place, Godwin explains that, as it has done throughout its history, key for NVest Financial Holdings now is to develop and strengthen its current provisions. “It is really just a case now for us of broadening the scope of products and offerings within the businesses,” he explains.

“This is what originally prompted

the acquisition of the securities business. As a private wealth business, we were outsourcing a lot of that work in the planning stages, and as we got bigger it really just made sense for us to acquire and grow our own stockbroking, or securities, business.”

“It was a similar story with our asset management business,” Godwin continues, of the organic way in which NVest has grown into the force we see today. “In the private wealth management side we were using a lot of the bigger companies, and then some 15 or 16 years ago we decided to form our own; this now manages around 25% of the assets we hold within our own private wealth segment.”

Just as it offers the broadest range of service offerings, NFB caters to a diverse body of consumers, Godwin tells us. “We do have a large number of financial planners who target high net worth individuals (HNWIs), and we grow that base on a daily and a weekly basis. We are not exclusively HNWIfocused, however. We do not have a set amount which is required for someone to be a client of NFB. While the target market for most financial advisors is the high net worth market, we do not restrict ourselves.

NVEST FINANCIAL HOLDINGS

“In the East London or Eastern Cape area, for example, the majority of our client base are not HNWI,” Godwin continues. “We have a wide net and we look after a lot of people who are middle-income individuals, and this is actually where the financial planning need is greatest - the lower to middle end - and it is vitally important to plough time into that segment of the market as well.”

BUSINESS IS BOOMING There was much to celebrate at the release of NVest’s most recent set of figures. Among the headlines were increases in revenue of 5.29% to R306.3 million, headline earnings growing by 10.79% to R65.95 million, and a Net Profit After Tax increase by 7.76% to R64.8 million. This has all been amid tough market conditions, which as Godwin tells us, are already showing signs of improving.

“The reality of where we are economically is that we are feeling the effects of the last 10 years,” he begins, “and I don’t think it is realistic to think that any negative effects can be undone instantly. But there is a positive mood in the country, and steps have been taken

by Ramaphosa that are positive.

“It is clear that the message going out to foreign investors and to the rating agencies is ‘wait and see’, but although things are happening perhaps slower than we would like, there is still an optimistic feeling that there will be a good outcome.

“A big change that has come along with Ramaphosa is his relationship with business,” Godwin continues. “He has reached out to businesses and I think that we realise ourselves that it is politics and policies which are going to be central to changing the flow of capital into South Africa.

“Unless government really focusses on change and improvement in terms of foreign investment into the country, we will continue in our sideways movement. If we do see more of the change that we have seen in recent weeks, though, which helps drive the Rand into a stronger position, then this will in turn drive up our market.

“Worldwide, there is a drive for yield and South Africa as an emerging market has been historically attractive for foreign investment flows. Perhaps our negative political position over the last number of years has seen outflows from South Africa, but we are hopeful now that this trend will reverse and will

see this investment start to come back into the country.”

So well-positioned does NVest find itself after all these years, that when it comes to its geographical footprint, little is set to change, Anthony Godwin concludes. “At this stage, we are happy within the territory of South Africa,” he underlines. “At this point in time we have no plans, nor work in progress to extend our footprint out of South Africa.

“That is where we are, and we are growing within the offices we already have. We are looking to develop our presence within the areas where we already are established, and we still see much scope for further expansion and success right here in South Africa.” Maximising its existing assets and developing its capabilities in line with these; this has been the pillar of NVest’s triumphs to date, and we look forward to seeing what the future holds for this mainstay of South African financial expertise.

WWW.NVESTHOLDINGS.CO.ZA

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MUKURU

African Solutions

for African Money Movement PRODUCTION: David Napier

Moving money around Africa has never been easier and quicker than it is today. Thanks to Mukuru, a mobile-based money transfer company, if you are working in one country and looking to send money home to another, you can do so safely, securely, quickly and affordably.

CEO Andy Jury talks to Enterprise Africa about the success of this African FinTech business.

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INDUSTRY FOCUS: FINANCIAL

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Aguinaldo, from Mozambique, was working in South Africa and sending money back to his family with taxi drivers. The money was not arriving.

Humble, from Malawi, was living in Johannesburg and sending money to loved ones back home but the transfer was taking 48 hours at least. This situation was a problem.

It ties into the story of African money transfer company Mukuru’s origins, stemming from the desires of its UK-based Zimbabwean founders to send money to their loved ones to help during the hyperinflation crisis of 2008.

They quickly realised that in attempting to solve their personal needs they were potentially building a solution that solved the need of a myriad of other African migrants. This marked the start of Mukuru, a company focussed on moving money around Africa quickly and safely.

It was the answer to Aguinaldo’s and Humble’s problems.

An African FinTech business, the premise of Mukuru’s offering sees customers able to use their mobile phone to move money. After a quick and

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easy registration process, customers can place an order – typically $100 or less – and they will receive a text message with a coded voucher. They take the code to a participating partner and pay the cash sum. A text message is then delivered to the intended recipient informing them that the cash is ready for collection, wherever they might be.

It’s an idea based on the migrant worker market in southern Africa as CEO Andy Jury explains.

“Most of our African market diaspora is underbanked or underserviced and typically don’t have access to formal remittance channels, or if they do, they are prohibitive either from a price perspective at the amount they want to send (less than $100) or the level of documentation that is required every time they want to undertake a transaction. There was no process that had been designed to meet this relatively straightforward need of somebody in the migrant diaspora wanting to remit home between $50 and $100.”

Intensifying its intra-African footprint from 2009 onwards, the company quickly found that the problem

was large and the idea was scalable.

It initially focussed on the needs of the Zimbabwean migrant population, primarily in South Africa, but it has expanded to be cover a network of over 70 send-receive corridors.

“We designed a process around our primary customer – someone in the migrant diaspora, who is not in longterm formal employment, without access

// MOST OF OUR AFRICAN MARKET DIASPORA IS UNDERBANKED OR UNDERSERVICED AND TYPICALLY DON’T HAVE ACCESS TO FORMAL REMITTANCE CHANNELS OR REMITTANCE THROUGH BANKS //

MUKURU

to a typical bank account, who does have access to a mobile phone, with cash to send,” says Jury. “Our business model now takes all sorts of tender types and there are many ways that you can pay for and receive money, but initially, and still largely today, the bulk of the business is still done via cash-to-cash transactions.”

PROBLEM SOLVING Since its establishment, Mukuru has grown significantly, signing-up more than one million users and establishing more than 40,000 cash distribution points across the continent. While cash remains king, Mukuru continually innovates its offering with solutions for sending funds to and from a plethora of mobile wallets, bank accounts and even Mukuru’s own card product. Partnerships have been nurtured with the majority of southern Africa’s big banks and retailers, and the brand continues to gain traction

by delivering a quality service that solves a real problem.

“A process that, using informal channels, could to take anywhere between two and four weeks, that was fraught with risk, was expensive, without communication channels can now be very clearly, transparently, simply and easily concluded in a matter of minutes,” explains Jury. “Essentially, it has lubricated a process with that had an immense amount of friction and delivered tangible value to our customers in the process. There is immense white space for us to continue rolling out this approach in Africa.

Typically, money goes from countries that have higher concentrations of economic activity (South Africa, Botswana, Zambia), with large migrant communities, and we have spread our network to other receiving territories, so we are connecting the dots.”

Money can be sent for any reason; school fees, medical bills, grocery shopping, rent – whatever the scenario, Mukuru can provide the solution.

According to Stats SA, more than 1.2 million people will migrate to South Africa between 2016 and 2021, with most coming from other African nations and most heading for Gauteng and the Western Cape. This will add to an already burgeoning market place and will offer Mukuru further opportunities for growth.

Fortunately, for both the company and its customers, the process is easy.

“Let’s say a Malawian now finds themselves in South Africa with gainful employment, and wants to send money home to loved ones. Typically, their journey with Mukuru begins via an introduction with one of our Mukuru ambassador-agents in the field. We set out with a high-tech/ high-touch approach so the agent would speak

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INDUSTRY FOCUS: FINANCIAL

in their mother tongue, building trust, and help to sign the customer up and get them registered using bespoke technology deployed onto a smartphone.

“When the customer has been verified the agent will very often assist the customer to create their first orders, either using USSD technology that is common in Africa, WhatsApp, our own App or phoning in an order to our call centre. Upon the order being created, a text message with a code instructs the customer to one of our partners to pay the money. Our partners include most of the big retailers, so you could walk into Pick n Pay, Shoprite, Pep and many others, head over to the financial services desk and pay the Mukuru bill for the equivalent voucher number and the money is then instantly available for the recipient on the other side. The recipient gets a text message or SMS that they can go and collect from any of our partners or any of our Orange Booths,” details Jury.

Working closely with industry regulators across Africa, Mukuru has consistently been at the forefront of innovation in customer verification, onboarding and solution delivery,

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greatly expanding migrant worker access to industry-leading financial services. Having people on the ground in this early stage of the relationship is vital. For the Mukuru target market, assistance with first-time registration is so important, despite being extremely easy. Documentation must be correct and regulatory forms must be completed without mistake. While technology assists, the first sign-up can be daunting and different for each individual, this is why Mukuru employs such a force in the field.

“Businesses that start by addressing a particular customer ‘call to action’ succeed in organically building scale,” says Jury.

AFRICAN DIFFERENCE The money transfer market in southern Africa has no shortage of players. International companies, local independents, and regional providers are all active and offer different types of service. But Mukuru maintains its position as one of the only players that can handle international money transfer, across borders, while also dealing with domestic transactions,

fully understanding conditions in each market, and committing unwaveringly to its core client base.

“A lot of domestic money transfer services linked to Mobile Network Operators (MNO’s) don’t do international money transfers, and for traditional global money transfer operators, the business model is priced for a different market – usually people who send larger amounts. Many first world FinTech platforms have sprung up in the last two years and they do a good job sending from the UK or USA into Africa, but they are focussed on facilitating transactions virtually, that typically rely on access to bank accounts/financial institutions in order to settle transactions. In our core markets, there is still significant demand for businesses that have strong first-andlast-mile capabilities designed to be able to settle and disburse using cash, and we see a lot of benefit from having a highertouch initial onboarding with customers.

“We have an agent army that activates on the ground in areas and communities in which our customers live, work and feel comfortable: we aim to go to where the people are. We have an entry point when it comes to

MUKURU

building trust, assisting people and getting over the inertia of transacting. It means once we do get a customer into the fold, and we demonstrate how using our services can eliminate key points of friction in their lives, we are able to establish a long customer relationship/ lifecycle,” details Jury.

He explains that by focussing on the informal sectors of the economy, Mukuru has been able to grow the size of the formal market. “We have seen most of our business coming from the informal sector. The informal sector in Africa is much bigger than the formal sector. We have taken market share from the unregulated, informal arrangements that were sending money on buses or through trade communities.”

Customers like Aguinaldo in Mozambique are now transacting safely and securely; no more sending cash with taxi drivers; his money is getting to where it is supposed to be. Mukuru aims to provide certainty for people whose lives often have few day-to-day certainties.

Mukuru’s branding is also a distinguishing factor when it comes to separating it from the rest. The word itself has been taken from Zimbabwean

culture and the Shona language where ‘Mukuru’ can be interpreted to mean the wise, elder, chief, or someone who imparts wisdom, a character of substance in the community – “that is the idea around which we were formed,” says Jury.

Dealing in the informal sector means that installing convenience for clients is fundamental. This is why Mukuru has partnered with organisations that already have considerable reach. Retailers, banks and others are all potential partners for the company and, to date, it has created an impressive network.

“It wasn’t straightforward to get in the door in the early days because we were an upstart at the bleeding edge and no one else was trying to have these conversations,” says Jury of the challenge building relationships. “It has become easier as we have demonstrated there is an untapped market that represents a substantial growth opportunity. We now have amazing partnerships with retailers and other partners who have good footprints and are used to handling cash – particularly those with a pan-subSaharan African presence. Typically, it is a very harmonious relationship where we are effectively filling white space

for them and they turn what would be costly infrastructure for us into variable cost, and the result is win-win.”

In South Africa alone, you can complete Mukuru transactions via its extensive network of over 30,000 formal and informal physical payment locations using cash, Mastercard and Visa credit or debit cards, as well as online via bank transfers/EFT or instant transfers from Mukuru’s own prepaid card product.

Similarly, extensive networks have been created across Africa in Botswana, DRC, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Uganda, Zambia and Zimbabwe, as well the UK and EU, and Asian countries including Bangladesh and Pakistan.

GROWING REACH After a decade building its intra-Africa network and now celebrating a number of successful partnerships, Mukuru is obsessing about how it can continue to deliver hypergrowth. Jury says there is certainly more room for development in the markets where it is already strong, and there is further opportunity in new geographic markets.

“We are an entrepreneurially

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INDUSTRY FOCUS: FINANCIAL

minded company and we still see ourselves as an upstart FinTech business that still has much to do to deliver on its potential. We are constantly looking at where our growth trajectory can be fed from. We have lots of opportunity to roll out our core person-to-person remittance product across new territories as well as deepening our share in our existing markets,” he says.

“We know our potential addressable market is huge. We are looking at expanding our network and growing the flows into and out of Africa and this will encompass other regions like Europe (where the UK in particular is a big territory sending into Africa) as well as Asia (where countries like Bangladesh and Pakistan are increasingly large recipient territories for transactions from Africa). Seeing how we can link all those together will be key to unlocking value for us,” he adds.

But the company will not allow growth to risk its core. “Our primary focus will continue to be capturing intra-African migrant diaspora and entrepreneurial flows,” states Jury.

He is confident that there are still hundreds of thousands of opportunities for the company to have an impact and grow its basket by introducing complementary products.

“We are also looking at how we can continue to vend new products to customers and add a lot of value to their lives. We have a prepaid card

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in South Africa that is allows people to deposit and store funds as well as transacting digitally and that has been transformative as it’s the first opportunity many of our customers have had to use this sort of product and we’ve seen great uptake. We also have a range of other products looking at life insurance and other financial services, so there is scope for growth by scaling the corridors into which we roll out our core products and scope for growth by increasing the number of products that we can introduce to customers in our eco-system.”

This diversification will help build strength and sustainability into what is already a robust offering. By becoming a more turn-key financial services business, entrenched in the lives of its customers, Mukuru can become hardy when facing economic challenges.

“We operate in Africa, we operate in uncertain times, we operate in areas that often lack key infrastructure elements, and we are constantly exposed to all sorts of changes in our operating landscape. We have had to build resilience and layers of protection to ensure we can get things done even if business as usual is disrupted,” says Jury.

ECONOMY UNCERTAINTY? The various economic climates that make up the sub-Saharan African region are prone to unpredictable peaks and troughs. Just a few years ago, the region

// PROCESS THAT USED TO TAKE ANYWHERE BETWEEN TWO AND FOUR WEEKS, THAT WAS FRAUGHT WITH RISK, WAS INFORMAL, WAS EXPENSIVE, WITHOUT A COMMUNICATION CHANNEL CAN NOW BE VERY CLEARLY, TRANSPARENTLY, SIMPLY AND EASILY CONCLUDED IN A MATTER OF MINUTES // was home to a number of the world’s fastest growing economies but today, growth is much more difficult to come by. Tomorrow, the picture will have changed once again. This is why product diversification, exposure to different markets, and sound business principles are so important. Having been successful in these areas has helped Mukuru to avoid significant exposure to weak economic behaviour.

“We are a pro macro-economic exposed business. Typically, our customers require a form of gainful employment or economic opportunity to be able to send money home,” acknowledges Jury. “If there are economic headwinds, that means there are less jobs/opportunities, and that has a dampening effect. However, we are still very much targeting a market with untapped potential, so we continue to see upsides for doing the hard yards and converting customers from informal channels to our products.

While the overall macro-economy has had an impact on the number of people being employed, there have still been

MUKURU

significant opportunities for growth.”

More than 10 years of solving African problems has helped develop almost unrivalled experience in the industry, and that brings a level of resilience which others might not have.

“We are very pro-African. We’ve tried to develop an African-do attitude with African-centric solutions for the problems that are faced on the continent.

Responding to the ebb and flow of the global picture is in our DNA. We feel confident that we can adapt our business to deal with headwinds or tailwinds.”

Away from economic impacts, both regional and global, Jury is clear that, while there remains huge scope for growth, the main challenges to Mukuru’s expansion come in the form of competition.

EY said at the start of 2019 that sub-Saharan Africa is a ‘region of opportunity for FinTech investments due to its unique economic and demographic environment. The region is characterised by less-developed financial infrastructure, and an unbanked population of about 60%. By ensuring access to financial services to this population, FinTechs have the potential

to profoundly change the financial services landscape and play a pivotal role in improving financial inclusion’.

Jury agrees, saying the rise of new competitors is a regular occurrence.

“We do see a lot of new activity in the market. Typically, those that come with good ideas that they want to implement struggle unless they have started from the perspective of looking to solve a particular customer challenge/ problem/need or requirement.

“So, a lot of folks have entered the market with great ideas, that look and sound phenomenal at the outset, but they haven’t started with a customer need, requirement or want in mind, so they end up drifting because they can’t scale the business organically. Those that focus on solving a customer need typically fare better in being able to entrench and grow.”

Mukuru is well-established and has already ridden the waves of various economies. It has been present for its customers while others have come and gone. And it is already looking to provide solutions to the needs of clients in the future.

“We are perpetually trying to

explore new concepts and new ideas in order to stay fresh,” says Jury.

“Hopefully, the end result is that the customer base has an improved offering to choose from. We know we must constantly evolve and it’s a challenge that we welcome. It makes things exciting and vibrant, and ensures no two days are similar.”

The future looks very bright for Mukuru and for the likes of Humble and Aguinaldo, and the many others that have benefitted from its work; safe, secure, fast, and reliable money transfer is never something that will cause worry again.

“We are very excited and happy with the opportunities we have, and we are strongly focussed and motivated to deliver on them,” Jury concludes.

WWW.MUKURU.COM

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TARSUS TECHNOLOGY GROUP

Cloud Simplified From Tarsus PRODUCTION: David Napier

Tarsus Technology Group CEO Miles Crisp talks to Enterprise Africa about the company’s success delivering effective cloud-based solutions to clients across southern Africa.

Alongside its hugely successful distribution business, and a host of other exciting group divisions, the Tarsus On Demand cloud offering is a quickly growing industry-leader.

//

The ICT industry is perhaps one of the fastest changing of all. In the space of just three decades, the internet and advanced computing power has changed the way the world works, and the demand for faster, more efficient, easier to use, and more complex IT hardware and software continues to grow. Staying abreast of all of these changes is almost impossible and those companies operating in the space face a difficult task every day, helping their customers make their investments appropriately.

The whole shift in systems is

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becoming known as the Fourth Industrial Revolution – where technology is helping to blur the boundaries between the physical, digital, and biological worlds. Things like artificial intelligence (AI), the Internet of Things (IoT), virtual reality (VR), robotics, 3D printing, quantum computing and more are quickly disrupting every business sector and completely reshaping the customer experience.

Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, was the first to officially recognise the advent of the

Fourth Industrial Revolution and he warned in 2016 that “the changes are so profound that, from the perspective of human history, there has never been a time of greater promise or potential peril”. This goes for both individuals and businesses. Just look at the likes of Nokia – a company which failed to keep up with technological advances and ultimately paid the price, giving up its significant market share to rivals very quickly.

In South Africa, one of the country’s leading IT distribution organisations, Tarsus Technology Group

INDUSTRY FOCUS: TECHNOLOGY

(TTG), is going through a shift which is seeing it incorporate more and more cloud-based services as businesses embrace the IoT, big data and AI. Founded in 1985, TTG has adapted from simple distribution of IT hardware to become an integrated supplier of the highest quality products, solutions and professional services including supply chain optimisation, cloud-based solutions, IT security services, compliant disposal of IT goods and other electronic goods. Made up of five specific divisions, TTG’s expertise is vast and its brand is now among the most trusted in the market.

Tarsus Distribution is the biggest of the Group and surrounds the supply of technology products to wholesalers, retailers, and businesses through the reseller channel.

ON DEMAND CEO Miles Crisp, who has been with Tarsus for the past seven years and oversaw the rebrand from MB Technologies in 2015, says that Tarsus On Demand – the cloud services division - is starting to perform extremely well.

“It’s any of our services, or anywhere we sell, on a subscription or consumption basis - it’s not only cloud-specific services,” he says. “We have aligned ourselves very strongly with Microsoft, mainly because there is a large installed base and they are converting from a perpetual licensing basis very aggressively onto a subscription base for 365. We are partnering with them and we have 35% market share in South Africa on that process in our particular customer definition.

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“The other part of it is Microsoft have finally brought large data centres online in South Africa. Because of historical data sovereignty issues, there has been a reluctance to move into the big international cloud service providers such as Microsoft. We are now selling their Azure product and we see enormous growth coming from that because end-users have the assurance that their data is being hosted in their geographical region.

“This is a very important and quickly growing area for us which is more than doubling every year. We expect it to more than double this year and then more than double annually, sustainably for the next few years,” details Crisp.

Microsoft in particular is looking to get customers onto subscription packages where they pay a monthly fee for access to software and only have access to the software for as long as they pay the subscription rather than purchasing a perpetual license. At the end of 2018, Microsoft hiked its license pricing by 10% to speed up the switch to a subscription basis. Microsoft’s popular Office 365 software is now only available through a subscription model and, in most cases, this represents a saving compared to the pricing of a traditional perpetual license.

Microsoft data centres in Cape Town and Johannesburg, officially opened in March 2019, support Azure cloud services. Microsoft expects them to start supporting Office 365 by the third quarter and Dynamics 365 by the fourth quarter. For this reason, Crisp is confident that TTG can benefit.

“Our big volume business, which is mainly hardware across all different categories, is Tarsus Distribution and that is the bulk of the group from a turnover and gross margin perspective. By the end of this year, cloud distribution will comprise just 5% of group revenue but it will comprise much more at a gross margin line, doubling every year,” he says.

TARSUS TECHNOLOGY GROUP

LOGISTICS Another quickly growing part of TTG is its logistics offering. Given the nature of the distribution division, logistics is a key element of the organisation.

Successfully delivering goods to where they need to be has become second nature for Tarsus Distribution, but the company saw the opportunity to expand this area of expertise and this idea has been fruitful.

“Hardware distribution - PCs, printers, screens, peripherals, consumables, anything that requires physical delivery – that is the mothership for us,” says Crisp, commenting on the importance of the division.

“Another very fast-growing part of our business is third party logistics,” he adds. “We use our infrastructure to distribute our customer’s goods as a service - we don’t buy and sell the goods

concerned. We handle all of the logistics for one of the biggest IT retailers in the country and our warehouse becomes their hub. About half of what we move for them is product that we sell them and half is from elsewhere - for example, TV screens, toasters and microwave ovens that they also sell through their retail outlets. That part of our business is growing really fast and it’s thanks to our ability to work off existing infrastructure without additional cost.”

Tarsus is an approved distribution partner for a number of global brands including Acer, OKI, Canon, Dell, Epson, HP, Lenovo, Kaspersky, Samsung and many more. The network and experience that has been built up moving tech products around the region from its portfolio of brands has helped TTG develop a deep understanding of what is required for a

successful logistics operation.

“It’s all contracted and accounted for through our distribution business, we own the warehouse from which we operate and we have control over the actual trucks, so it is a nice logistics service.

“We are working closely with the HiFi Corporation and Incredible Connection of the JD Group and we are bringing on many other customers at the same time. For example, we have handled the IT distribution for FNB on behalf of their service provider, Digital Planet, for several years,” says Crisp.

And while logistics is a growing part of TTG, IT remains at the heart of what it does and the company maintains strong IT expertise so that staff can constantly communicate with clients, always offering the best advice and service.

Continues on page 94

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Increased cloud email services adoption highlights need for improved cyber resilience Don’t put your eggs in everyone else’s basket Microsoft’s announcement that it has launched its first cloud datacentres in Africa - one in Cape Town, another in Johannesburg - is a cause for celebration among South Africa’s business sector. As we hurtle into the Fourth Industrial Revolution, access to cloud infrastructure will be critical to power artificial intelligence and edge computing innovation. And while only Azure is supported at present, Microsoft plans to soon launch Office365 from these datacentres, offering organisations increased productivity. Amazon and Huawei also have plans to establish local data centres over the next few years.

However, organisations’ tendencies to rely exclusively on single cloud service providers for day-to-day operations have exposed them to undue risk. With services such as Office365, organisations are not only putting all their eggs in one basket: they are putting all their eggs in the same basket that everyone else is putting all their eggs.

The volume of users on cloud-based email services such as Office365 means there is more malware created for these environments. Criminals know they have only one lock to pick to gain access, so they focus their attention on these cloud services because of the potentially large payoff.

As more businesses move email and data to Office365, there’s an increased need to protect against malicious or accidental loss of data. Mimecast’s latest Email Security Risk Assessment (ESRA) report, an aggregated analysis of tests that measure the efficacy of widely used email security systems globally, including Office365, illustrated the scope of the problem. Of the more than 232 million emails inspected, organisations’ existing email security systems missed more than 26 000 malware attachments, 53 000 impersonation attacks and 23 000 dangerous file types.

What You Really Get From Office 365 Microsoft offers certain protection-of-data capabilities as part of its Office365 services, which are designed to protect against data loss caused by its own infrastructure failing. But these services don’t always offer protection against accidental deletion, data corruption, advanced cyberattacks, or malicious users or administrators. These can often lead to downtime which can bring business operations to a standstill. Continuity is essential to any modern organisation’s efforts to maintain productivity but is not always achievable when all business-critical applications run on a single cloud provider’s infrastructure.

It’s not only breaches, human error or technical error that can cause downtime for an organisation. Wellreported and widespread Office365 outages - the most recent of which took place in Europe in mid-January - highlight what can happen when email data becomes unavailable. As more organisations move to Office365, we’re likely to see South Africa featuring on Downdetector’s outage map. Outages pose serious productivity risks to users who rely on Software-as-a-Service monocultures to support their operations. Even more concerning is the possibility that employees will turn to their unsecure personal Gmail or Yahoo Mail accounts when Office365 goes offline. You then have absolutely no control over email activity.

Important data stored on Office365 can also be lost due to accidental or malicious deletion or ransomware.

If your organisation doesn’t have an independent backup in place, and deleted data passes through short term folders such as the Recycle Bin, Deleted Items folders or retention policies without being recovered, it is lost forever.

Interested in seeing how Mimecast can make email safer for YOUR business? Email success@mimecast.com and use the reference #MIMECAST&TARSUS we will be in touch with you and we be in touch to discuss next steps.

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How Can You Improve Cloud Email Resilience?

To mitigate the risks associated with cloud services, organisations should look to improve their cyber resilience.

An effective cyber resilience strategy should include layered security protection, independent data storage and alternative access routes to key systems like email, for when the worst does occur. The cyber resilience strategy should further include a backup and recovery plan. This was always a priority for organisations when their systems were on premise. The fact that data is now in the cloud does not change this.

South African organisations are arguably a step ahead of their international counterparts in their cyber resilience efforts. The latest research by Mimecast and Vanson Bourne found that 49% of South African organisations have a cyber resilience strategy in place, against a global average of 46.2%. But this still means that half of organisations are yet to have a comprehensive strategy in place.

Recent Osterman Research titled “Why Your Company Needs Third-Party Solutions for Office365”, indicates that organisations globally are starting to supplement the service with third party products to achieve cyber resilience. The study found that nearly one-third of organisations implementing Office365 plan to use thirdparty solutions that will provide improved security, archiving or other capabilities, rather than relying on what is available natively in Office365. In fact, 37% of the typical Office365 budget in 2019 will be spent on a cheaper plan in conjunction with third-party security, archiving and other solutions.

Increased adoption of cloud services is a welcome development in the South African business sector and will support organisations as they strive for greater agility and scalability. But putting all your eggs in one basket – the same basket as everyone else – leaves you exposed to a broad range of risks that can have a debilitating effect on your operations. Using a third-party provider and having an effective cyber resilience strategy provides a safety net and enables organisations to quickly return to standard operations without losing critical data or productivity.

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How tech companies can address different privacy and cybersecurity attitudes

A world of differences Whilst advancements in technology have made the world feel smaller than ever before, the gap between the generations has continued to widen. Differences in lifestyle, values and habits between the various age groups have never been larger. Not least of which, how the different generations perceive technology and cybersecurity.

Generation X, as the last generation to have grown up without technology, remain inherently cautious and slow to adopt new technology.

As such, they are likely to keep a close eye on their online data and finances.

Millennials, in contrast, generally take the security of their technology for granted; with four in five (80%) saying they are happy to trust the safety of their data to the organizations they deal with. As members of society that were born squarely in the internet era, Generation Z understands technology on an intuitive level and are quick to separate their public and private lives.

Therefore, whilst they spend 25% of their lives in front of a screen and

Bridging the generation gap: seemingly like nothing better than share photographs on social media, 81% use privacy settings to limit who can actually see them.

With such a generation gap in attitudes towards technology and privacy; what should tech businesses providing essentially digital services, cybersecurity and devices do to allay these fears, demonstrate their value to their customers and formulate their offerings properly?

The three levels of security The good news is that there are many similarities when it comes to consumer behavior across all the generations.

Whether they come from Generation X, Y or Z, there are three standard levels of cybersecurity that always need to be addressed.

Firstly, the security of devices.

Device security has become familiar to everyone in the 21st century. Whilst the younger generation have enough inbuilt knowledge to know how to protect themselves from basic threats. The older generation rely on the anti-virus solutions available for PCs, Mac’s and any mobile operating system.

Secondly, the security of money.

The changing payment landscape has made it more difficult to protect

our money. The time when we just paid with the cash in our pockets has long gone. Today, using a debit or credit card is by far the most popular method – with four out of five people (81%) having used them to complete an online purchase. The popularity of e-wallets (such as PayPal) and cryptocurrencies are gathering momentum too.

Finally, the security of the data itself. With high-profile breaches continuing to happen with unerring regularity and data becoming the subject of buying and selling, data privacy fears show no sign of abating.

Facebook, for example, in addition to previous data safety scandals recently had to admit that an attacker had exploited a technical vulnerability that provided access to 50 million user accounts via a hole in the ‘view as’ feature of its app. Research shows that there has been a large spike this year in the value of stolen data traded on the dark web: debit card details are the most valuable, selling for an average $250, Amazon credentials are just over $30 A question of trust Whether in the office or the home, for any technology to become

truly transformative, it needs to have an intuitive user experience at its heart that will enhance a user’s daily life. However, as people from all generations demand greater security, trust becomes an important commodity too. Today, consumer behavior is increasingly defined by whether or not the technology brand they are purchasing from has their best interests in mind.

A cross-generational trust in a technology remains imperative to any new service or innovation surviving and become a success. Those organizations that have garnered a trustworthy reputation have enhanced their likelihood of selection, purchase or renewal.

A granular approach and maintaining a balance With an acceptance that there are different privacy drivers between the different generations, should organizations tailor their offerings accordingly? Yes and no. The truth is that your marketing strategy shouldn’t be defined by age alone.

A more granular approach is always recommended and can be done through the creation of different personas. All millennials, for example,

are not the same. One may be single and a mid-level manager in an accountancy firm, another may be married with two kids and play in a symphonic orchestra.

Imagine a company has five defined target audiences including ‘digital office workers’ or ‘school teenagers’. This is only the tip of the iceberg; each of these five groups contains around ten more granular types of audience. Once narrowed down, these granular audiences contain perhaps 10 to 15 different ‘avatars’ themselves. This could be a teenager from a wealthy family who has access to the most advanced gadgets, or a young IT geek responsible for their entire family’s IT. It is, therefore, important for organizations to consider hundreds of granular avatars when planning their marketing communications.

When creating various customer communications, it is important to highlight different use case scenarios for each small group and show how the product meets their habits and needs. Organizations should pay attention to the likely route of a customer’s journey, so that they can communicate with them effectively along the way. The customer journey

through a traditional form of sales funnel doesn’t work with such a granular approach as it needs to be multi-dimensional and contain hundreds of layers. New digital communication channels, such as messenger apps, and emerging marketing tools can assist with this, however. This digital-driven approach to sales does demand investment and reorganization of processes, but it will enable businesses to thrive in increasingly competitive markets. *** Whilst there is undoubtedly a gap between the different generations’ attitudes towards technology and the privacy issues that surround it; there is, perhaps, more commonality than at first thought. A one-size-fitsall approach rarely works as users’ attitudes inevitably vary on different issues. However, it is wrong to put these dissimilarities simply down to the year they were born. Organizations that produce and sell technology in any sphere should maintain a balance between broad values like the user experience and individual values for each target audience.

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INDUSTRY FOCUS: TECHNOLOGY

Tarsus Technology Group CEO Miles Crisp

Continued from page 89 “We do have technical capabilities.

For example, if things are returned to us, we have the capability to asses those goods and send them back for warranty, repair them, or push them into the second hand market. If you look at what is core to us, it is our logistics capability and our IT capability,” explains Crisp.

STRENGTH IN SA Headquartered in Johannesburg, between Sandton and Midrand, TTG has made its name trading in South Africa.

Its customer base is a largely a South African one, its suppliers (apart from international tech brands) are largely South African, and its knowledge and expertise is South African. But, as many companies do when they reach a certain size, TTG has looked to the continent

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for growth. The company is now present in Botswana, Namibia, Zimbabwe, Mozambique, Zambia, and East and West Africa.

Growth and strategy in key markets in East and West Africa has been reviewed recently as TTG looks to optimise its presence. Across Africa, each nation has its own rules, regulations, languages, cultures, and business characteristics, and successfully managing operations across multiple countries can be challenging.

“We don’t move physical goods to East and West Africa, it’s only software at this stage as the supply chain from South Africa into these regions is very complicated. Constant changes in rules and regulation mean we have to remain constantly vigilant and adjust strategy where necessary,” he says.

At the end of 2018, a study compiled

// IF YOU LOOK AT WHAT IS CORE TO US, IT IS OUR LOGISTICS CAPABILITY AND OUR IT CAPABILITY //

by World Wide Worx and Syspro found that South African companies are keen on adopting new technologies and, although slower than some developedcountry counterparts, as speed of advancement continues to increase, more than half of the companies surveyed in the study suggest that they would be interested in adopting new tech (big data, machine learning and blockchain for example) in the future.

Albeit at a slower pace, southern African companies based in neighbouring

INDUSTRY FOCUS: TECHNOLOGY

// OUR CUSTOMER SERVICE IS THE BEST BECAUSE WE HAVE THE ABILITY TO INTEGRATE QUICKLY AND EFFICIENTLY INTO OUR CUSTOMER’S EXISTING SYSTEMS // countries will likely follow suit. This is good news for TTG which, according to Crisp, will continue to look for growth opportunities in southern Africa.

“We are looking at the SADC region for growth,” he says. “Each country has different fortunes and they change quickly. We have seen a lot of growth in Botswana whereas we have seen severe constraints in Namibia because of a slow economy. Mozambique has just had the terrible cyclone which has impacted the country severely and that will result in a slowdown there for some

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time. Interestingly, we have seen a lot of growth coming out of Zimbabwe. There is a lot of price control there and they have just had big increases in prices, but the availability of cash comes and goes so we remain cautious there.”

Outside of South Africa, Tarsus’ On Demand division, where software purchases on a subscription basis are sold, provides big opportunities for growth. TTG’s GAAP Point of Sale division, which caters for the hospitality industry, also provides big opportunities and is already active in Zimbabwe, Lesotho, Swaziland, Namibia, Zambia, Malawi, Uganda, Tanzania, and Kenya.

FLAT FUTURE? South Africa’s economic conditions have not encouraged strong growth in recent years, yet TTG has consistently delivered positivity. While the macro economic climate remains depressed and business leaders hunt for certainty, Crisp admits that the market might not be growing. The solution here is to grow market share.

“We’re not seeing growth in the industry as a whole but we have seen growth in market share. What is benefitting us at Tarsus is a change in the business model from actual transactional hardware purchases through to the cloud. We had the big investment recently from Microsoft and no other competitors have effectively matched it. The growth we are seeing comes from that kind of niche. In the actual distribution business growth has been fairly flat and we don’t expect that to change in a big way in the short-term future. There is still a latency around government policy and momentum with the changes that have been promised,” he says.

Tarsus Distribution is already an industry leader; GAAP is the undisputed leader in its sector; Tarsus On Demand is rapidly growing its share; Printacom and Tarsus Dispose-IT are all smaller contributors to overall revenue but both are looking to claim further market share. To achieve this, Crisp says that customer service has to be the best it can be.

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“We pride ourselves on our customer service but we know our competitors also have impressive offerings,” he says.

“We are confident that we are doing a better job in the On Demandcloud space and the migration of customers and their end users. The assistance we can give to resellers to move their customers on to a cloud basis instead of buying their own licensing is an area where we have invested heavily in expertise.

“We are confident that we are also the leaders in third party logistics and retail specifically. We supply retailers and retail is around a quarter of our business. Our customer service is the best because we have the ability to integrate quickly and efficiently into our customer’s existing systems. The supply chain systems are integrated

with the systems of our customer and that is seamless, without heavy documentation. In those categories, we are confident that our service levels are better and we are on top of our competition,” he adds.

This confidence positions TTG perfectly to help guide clients through the country’s migration into the Fourth Industrial Revolution. TTG has the hardware, it has the software, it has the expertise, it has the logistics, it has the presence, and it has the reputation.

“The world must embrace the Fourth Industrial Revolution because it is a new way of doing business that will be with us for a foreseeable future, and as government and society we should collaborate in creating the enabling environment for entrepreneurs to adapt and adopt the 4IR technologies for the creation of a better life for all,” said the

Department of Trade and Industry’s Deputy Director-General of Special Economic Transformation, Sipho Zikode at the opening of the South African Innovation Summit (SAIS) in Cape Town last year.

Entrepreneurs and business leaders will be forced to choose a technology partner, and TTG sits atop the industry with a positive outlook.

“We are happy that we are running efficiently. We will be watching our costs closely and trying to grow our top line quickly. Business success is all about efficiency, cost management, and managing the market, and that is what we do well,” Crisp concludes.

WWW.TARSUS.CO.ZA

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FRESHMARK

Truly the Pick of

the Bunch PRODUCTION: William Denstone

The fruit and vegetable procurement, buying and distribution arm of Shoprite South Africa’s largest retailer – Freshmark, supplies fresh produce to the Group’s stores both within South Africa and across the majority of its outlets throughout the continent. With new varieties coming thick and fast and old favourites harvesting ever earlier, these are bountiful times for this key industry player. www.enterprise-africa.net / 99

INDUSTRY FOCUS: AGRICULTURE

//

Freshmark is one of the largest purchasers of fresh produce in Africa today for South Africa’s largest retailer, sourcing the majority of the Shoprite Group’s requirements directly from local producers. This allows it to fulfil its longstanding promise of the utmost freshness to the customer, while also reducing transport and packaging costs.

Much effort has been, and continues to be, put into establishing an extensive local network of suppliers, an objective which is being mimicked across the continent as the Shoprite Group

expands further into Africa.

Freshmark prices itself on maintaining direct relationships with farmers, cutting out the ‘middle man’ traditionally associated with this industry, and has established growing programs with each in order to discuss the quality and quantity of the products which are harvested every year.

Alongside the commitment to supporting local goods, at times of need Freshmark is also positioned to import fruit and vegetables to allow it to ensure both a wider variety and that all-important continuity of traditionally seasonal fresh produce,

as well as to introduce specialty fruit and vegetables to both the local and international markets.

Freshmark operates its own network of distribution centres and negotiates production contracts with over 1114 growers to see some 95% of its fresh produce sought from the local environs. It has long played a key role in equipping emerging farmers with the knowledge and skills to produce and meet international GLOBALG.A.P. standards, which guarantee safe and sustainable agricultural production to benefit farmers, retailers and consumers throughout the world.

Returnable Transit Packaging is helping to save the Environment Some things should only be used once… teabags, dental floss and toilet paper. It’s a safe bet most will agree about those, except maybe for the teabags? By indiscriminately throwing everything away we are creating a big problem — overflowing landfills.

Commercial reuse reduces the pressure on valuable resources such as fuel, forest and water supplies. One way in which this is done commercially is through Returnable Transit Packaging (RTP).

RTP’s replace single-use pallets and boxes with reusable containers (crates, bins, plastic containers) and reusable pallets, circulating these within a container pooling system. The more trips a reusable container or pallet makes within this system, the greater the compound gains.

Benefits of RTP: • • • • • • • • •

Waste Management costs are reduced Improved product protection resulting in less product damage Lower material costs over time Longer useful life of products and packaging Lower average packaging cost per trip Less waste to landfill Reduced Greenhouse emissions Reduced transport costs Ability to install tracking systems (IoT)

Rather than manufacturing more wooden packaging, one plastic crate can be used between five to ten years.

Combine with this the fact that without being recycled, the energy used for production is also significantly lower.

Taking a fresh and more modern approach to plastic packaging, Mpact Plastic Containers has moved away from outdated single-trip disposable packaging and developed an array of multi-trip, reusable plastic products that constitute the largest range of Returnable Transit Packaging systems in South Africa.

So, while there are some things that should only be used once, when it comes to packaging, reuse is definitely the better option. As for teabags, that’s probably still up for debate.

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Mpact Plastic Containers is the leading manufacturer of injection moulded products in South Africa.

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NEW VARIETIES One impact of Freshmark’s stringent attention to the latest and most cutting-edge international research is the regularity with which it is then able to bring new and improved varietals and products to the Group’s markets.

While South Africa may be renowned as one of the world’s top table grape exporters, offering a broad selection of new and improved varieties to markets in Europe, North America and Asia, many of its new cultivars are now also proving popular among consumers in the domestic market, with this expansion of grapes’ appeal providing a welcome boost to the category.

Although it is taking longer for many new varieties to become household names in South Africa, there are some notable changes taking place on the domestic table grape market. Tania Van Der Merwe, Freshmark’s National Procurement Buyer of Stone fruit, Grapes and Exotic Fruit, explained how increasing the number of proprietary varieties is positively impacting sales and helping to extend the sales season for domestically-grown fruit.

“We have been experiencing a better eating quality and larger berry size,” she explained. “Meanwhile, better late varieties have given us the opportunity to achieve a longer shelf life that is able to extend our season by approximately six weeks.

“We have also become more accurate with our storage programs,” Van Der Merwe continued, “which is sorely needed for late varieties.

“The introduction of new varieties has led to more choices and has changed our specifications. We’re still competing with the export market, but there are more newer varieties

// QUALITY REMAINS KEY FOR ANY CONSUMER //

available for our local market.

“Quality remains key for any consumer, and therefore suppliers need to ensure shelf life,” Van Der Merwe said of the key factors in growing the sector further. “They also need to ensure consistent harvests annually. The worst for retail is to market a new line for a season and then have limited volumes the next season.”

AN APPLE FIRST Resulting from an exclusive agreement between Freshmark/ Checkers and TopFruit, the South African licensee for New Zealandbased T&G Global, JAZZ™ has arrived as the first fully-branded club variety apple on South African shelves for which Checkers has the exclusivity rights for the next three years.

“Checkers are very committed to this brand and have made sure that all stores that stock the apples have eye-catching point of sale material and recipe cards in stores,” says Liza Matthews, marketing manager at TopFruit.

“JAZZ™ apples are sold in fullybranded packaging which is a first for a branded apple in South Africa.

Normally all branded apples are sold in the supermarket’s own look and feel bags with only the brand’s logo visible on the bag. A consumer marketing campaign has been developed to promote the brand and drive sales during the period that the apples are available.”

According to TopFruit, JAZZ™ apples were first born in New Zealand orchards following a union of Royal Gala and Braeburn varieties.

“Seventeen years later JAZZ™ apples have become a global favourite, being grown in thirteen countries under a closely controlled quality growing programme and sold in 45 countries.

“The JAZZ™ brand’s success can be attributed to the consistency and uniqueness of the JAZZ™ apple eating experience and its durability and versatility,” the company said.

// THE INTRODUCTION OF NEW VARIETIES HAS LED TO MORE CHOICES // PEAR POTENTIAL The promise noted two years ago now of the blushed pear Celina has finally borne fruit, in the form of the fruit’s first harvest in South Africa.

This comes as a major lift to the industry and the export of the new variety will play an important future role in the early season.

Celina will, for the first time in nearly 20 years, offer a viable opportunity for the South African industry to offer the world’s markets a range of blushed pears from early until late season. The first commercial volumes of Celina were harvested this season in various areas, and offered to consumers in South Africa through Freshmark and the Shoprite Checkers Group.

“Celina is the earliest of a range of blushed varieties that South African growers are offering the world’s markets,” says Stargrow’s Andries van der Westhuizen. “It has really been in high demand this year and performed very well in terms of prices.”

“It is the grower’s best friend, because it delivers an excellent yield, the trees come into production fairly early and it eats very well,” concluded Stargrow’s chairman Michiel Prins.

“We are delighted to have it as part of our portfolio. The early promise is certainly there to be one of those varieties which could help shape a new South African pear sector both in terms of returns to the farm and market performance.”

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EXHIBITION CALENDAR

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

MEDIA TECH AFRICA JULY 17 - 19 | JOHANNESBURG Mediatech Africa, organised by Sun Circle Exhibitions and Reed Exhibitions, is a biennial advanced media and entertainment technology trade show held in Johannesburg, South Africa. The expo showcases new technologies and services from industry leaders in AV system integration and communications; live entertainment technology; television and broadcast; animation and film; studio and production, DJ and proaudio equipment.

KZN INDUSTRIAL TECH 2019 JULY 24 – 26 | DURBAN Boasting the largest display of industrial technology equipment in the KZN region, the KwaZulu-Natal Industrial Technology Exhibition (KITE) takes the legwork out of finding best-of-breed light to heavy industrial technology, as well as packaging and printing solutions.

Providing an outstanding industry networking forum, KITE also offers an

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exciting roundup of trending topics at the SAIMechE free-to-attend seminars, the LEEASA conference and the (Manufacturing Enterprise Solutions Association) special interest group.

GTS 2019 JULY 29 - 31 | JOHANNESBURG GTS 2019 offers an excellent opportunity for everyone to access the South African and Continental markets. It also highlights potential global markets for local buyers. As a multi-sector exhibition, thousands of products across various import and export categories will be on show at GTS 2019. GTS comprises four co-located shows: Tools & Build Show (TBS), Household & Appliances Show (HAS), Smart Electronics & Security Show (SES), and Food & Beverages Show (FBS). It is one of the largest B2B events in South Africa, featuring more than 350 exhibitors from 30 countries.

Informative and well-designed workshops will also help you to find reputable suppliers and build your business networks.

FOOD & DRINK TECHNOLOGY AFRICA GALLAGHER CONVENTION CENTRE JULY 09 - 11 KZN INDUSTRIAL TECH 2019 DURBAN ICC JULY 24 - 26 GLOBAL TRADE SHOW 2019 GALLAGHER CONVENTION CENTRE JULY 29 - 31 MEDIA TECH AFRICA TICKETPRO DOME JULY 17 - 19 MINE-ENTRA ZIMBABWE INTERNATIONAL EXHIBITION CENTRE JULY 17 - 19 TANZANIA INTERNATIONAL TRADE FAIR SABA TRADE FAIR GROUNDS JULY 01 - 05 EAST AFRICA OIL AND GAS KENYATTA INTERNATIONAL CONFERENCE CENTRE JULY 25 - 27 WEST AFRICA WATER EXPO THE LANDMARK EVENTS CENTRE, NIGERIA JULY 11 - 13

PROUDLY CELEBRATING INVESTING IN NAMIBIA Old Mutual Investment Group Namibia manages funds of almost 40 Billion Namibia Dollars on behalf of its customers. With a large and diverse customer base we strive to provide a comprehensive, flexible and customized suite of investment management services.

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