Enterprise Africa September 2019

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

September 2019

www.enterprise-africa.net

Thornybush Hoping for

Spike in Tourism Exclusive interview with CEO Joanne Dickson

ALSO IN THIS ISSUE:

Über Flavour / Tudortech / Hello Group / GIB

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 James Davey  jamesd@enterprise-africa.co.za PROJECT MANAGER Chris Wright  chrisw@enterprise-africa.co.za PROJECT MANAGER Daniel Roper  daniel@enterprise-africa.co.za PROJECT MANAGER Tom Gibbons  Thomas@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 +44 (0) 1603 855 161 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

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The September edition of Enterprise Africa is all about understanding customers.

Every business out there claims to understand its customers, knowing exactly what they want, when they want it and how they want it. But, unfortunately, this is far from the truth. Many companies first decide what they can deliver, and then decide how, where, and when customers will be allowed to join in. Of course, those that take this route rarely manage to become industry leaders.

This month, we are looking at businesses that have a complete and total understanding of customers. They are flexible and nimble, and can adapt to the changing needs of the customer. And they don’t push their ideas onto the customer – they deliver solutions to problems that exist.

Moosa Manjra, CEO at Hello Paisa, tells Enterprise Africa that the company, and the Hello Group, exists to use technology to solve problems for its clients. “Right from the beginning, everything has been focussed around the customer – we take into account what they like, what they don’t like, their choice of language, and we go to great lengths to not only solve a problem but find out how much more we can do for a customer,” he says.

Dennis Gamsy, Founder of GIB Insurance, explains that his company leaves no stone unturned in the insurance market, all in an effort to deliver a comprehensive service for clients.

Swartland, the Western Cape-based building materials company, is diversifying its product range to suit the needs of a changing customer base, and this is helping the company to grow in new areas.

Read these stories and more to understand why you must have a full understanding of your customer if you are to succeed in business.

Tell us what your business is doing to get closer to customers. We’re online @EnterpriseAfri1 and on LinkedIn.

Joe Forshaw EDITOR

GET IN TOUCH  +44 (0) 1603 855 161  joe@enterprise-africa.co.za www.enterprise-africa.net

www.enterprise-africa.net / 3

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

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

8/THORNYBUSH LUXURY GAME LODGE COLLECTION Thornybush Hoping for Spike in Tourism Exciting things are happening at the Thornybush Luxury Game Lodge Collection. On the edge of Kruger National Park, the classic bush landscape is home to the Big Five, and guests come from around the world to experience the iconic South African safari while being hosted in the unique Thornybush accommodation. With big investments recently and about to get underway, this is a business moving forwards with confidence.

8/ 4 / www.enterprise-africa.net

CONTENTS

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32/

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INDUSTRY FOCUS: TECHNOLOGY

INDUSTRY FOCUS: HEALTHCARE

17/HELLO GROUP Hello Paisa - The Journey Continues

56/THE BIOVAC INSTITUTE Local Vaccine Manufacture Returns to South Africa

25/TUDORTECH Turning the Science of Retail Into Art

62/LANCET LABORATORIES Peerless Pathology Services for All Africa

INDUSTRY FOCUS: FINANCE

INDUSTRY FOCUS: RETAIL

32/GIB HOLDINGS (PTY) LIMITED Dedication, Determination & Application Paying Off For GIB

68/HOMECHOICE Tech, Tech, Tech, and Customer Experience Investments Driving HomeChoice

INDUSTRY FOCUS: BUILDING

INDUSTRY FOCUS: AGRICULTURE

39/SWARTLAND New Doors Opening for Veteran Swartland Business

75/AFGRI Key Contributors to a Well-Nourished Nation

45/LIXIL Making Luxury Lifestyles A Reality in Africa

INDUSTRY FOCUS: ENERGY

INDUSTRY FOCUS: FOOD & DRINK 48/ÜBER FLAVOUR SA Craft Ice Tea With CBD

78/NAMCOR Investing in Namibia’s Future INDUSTRY FOCUS: INFRASTRUCTURE 84/LHWP Water, Water, Everywhere… www.enterprise-africa.net / 5

NEW CEO FOR TYMEBANK One of South Africa’s most impressive growth stories from the past two years comes from TymeBank, the country’s new digital banking solution.

Having grown from nothing to have more than 600,000 subscribers, the bank is enjoying a thriving period.

However, in June, former CEO Sandile Shabalala resigned, citing personal reasons, and the bank was left with a void to fill.

Tauriq Keraan has taken the reins and is looking to continue to fantastic growth story of TymeBank.

Keraan was deputy CEO and has been a part of the business since its inception in 2012. The bank is targeting two million subscribers in the next three years.

“Since I first started working in the space of financial inclusion and digital banking over 10 years ago, helping people improve their financial well-being through affordable, accessible and dignified banking has been a passion of m ine,” said Keraan.

“TymeBank is geared to meet the needs of consumers in this market segment responsibly and affordably.

This will facilitate financial inclusion, which is core to TymeBank’s ethos.”

6 / www.enterprise-africa.net

WEF LAUNCHES AFRICA GROWTH PLATFORM

The World Economic Forum (WEF) has launched the Africa Growth Platform to assist Africa’s community of start-up enterprises to grow and compete in international markets.

In a statement, WEF said the Africa Growth Platform will achieve this in three ways with the first being to secure commitments from governments to implement policy reforms aimed at stimulating and accelerating business growth.

“Secondly, it aims to build a community of investors, whether private investors, foundations, multilateral institutions or corporate entrepreneurs to enable better coordination and pooling of resources that could facilitate larger subsequent rounds of funding. Third, the platform will create and sustain a community of start-up businesses themselves, promoting collaboration and sharing best practice,” reads the statement.

WEF said the need for an innovative approach to helping Africa’s start-ups reach the scale where they become sustainable is backed up by data.

“Two thirds of

Africa’s 420 million young people are currently unemployed, which highlights a clear need for new solutions to drive employment growth. At the same time, Africa’s young population is well-endowed with entrepreneurial spirit, with earlystage entrepreneurial activity 13% higher than the global average. However, due to insufficient support and infrastructure, the region’s start-ups are 14% more likely to fail than those elsewhere in the world,” said the WEF. “Africa’s entrepreneurs are its greatest economic asset but spirit and resourcefulness alone are not always enough to help them succeed. Too often start-ups and innovative enterprises fail needlessly through lack of additional finance or overly burdensome regulations.

“The Africa Growth Platform brings together all the actors — governments, investors and the businesses themselves necessary to create an environment where they can fulfil their potential in terms of growth and employment,” said Elsie Kanza, Head of Africa at WEF. The founding members of the Africa Growth Platform are: • Alibaba Group • T. Kearney • Dalberg Group • Export Trading Group • U.S. African Development Foundation • Zenith Bank

NEWS SNAPSHOT COEGA CONTINUES DELIVERING MAJOR IMPACT The Coega Development Corporation (CDC) has announced that it has created more than 120,000 jobs through its programmes across the country.

CDC’s Head of Marketing, Brand and Communications, Dr Ayanda Vilakazi said Coega continues to serve as the leading pioneer for socio-economic development through ground-breaking efforts that ensure standards of sustainable growth are met.

As the CDC celebrates its 20th anniversary this year, a total of 120,990 jobs have been created through the Coega project since establishment in 1999.

“Many indigenous people of the Eastern Cape have felt the impact. We have also provided training to more than 100,000 people, most of whom are women and youth,” Vilakazi said.

Projects within the CDC have facilitated economic growth through job creation, particularly for the youth of this region.

“By year-end 2019/20, the CDC is projecting an increase in the number of operational investors in the Coega Special Economic Zone (SEZ) at 50, making Coega the most successful and leading SEZ in Africa,” Vilakazi said.

With 45 operational investors/ tenants in the Coega SEZ, the SEZ remains the top achiever in South Africa, having achieved R9.53 Billion in Foreign Direct Investment.

“The top investors with the highest number of operational jobs created since establishment include, amongst others, Dynamics Commodities (858 jobs), Discovery (1148 jobs), WNS (592 jobs) and Coega Dairy (305 jobs).

RAMAPHOSA EYES JAPANESE INVESTMENT President Cyril Ramaphosa has encouraged Japanese businesses to reach out to South African companies to find areas of cooperation at the Japan-Africa Business Expo.

“The Japan-Africa Business Expo is an opportunity for companies to meet one another, find points of mutual understanding and work together on new projects... Speak to us about your ambitions and plans, be open about the challenges you face and let us find ways to help,” said the President at the Business Expo currently underway in Yokohama, Japan.

Investors, he said, will be most successful when they partner with local firms, employ local people and learn from local knowledge.

Job creation is an absolute priority for all African economies and must be a priority for foreign companies operating in these markets.

“We look forward to working together to achieve growth, development and shared prosperity,” the President told the gathering of over 150 Japanese exhibitor companies and thousands of business people from Africa and Japan.

He said the message from Japanese companies operating in Africa is clear: now is the time to invest.

“Our hosts JETRO tell us that 57% of Japanese firms currently based in Africa are planning to expand in the coming years. These companies cite factors like a rapidly growing local market, dynamic economies that defy weak global economic growth, and the ever expanding potential of Africa’s export base.

“In South Africa, Nissan has recently invested over R3 billion in their local production operations and Komatsu has recently opened a 300 000 m2 industrial complex, while hundreds of Japanese companies continue to operate and thrive in our market.

“These investments reflect the undeniable reality of a growing Africa,” said President Ramaphosa.

Ramaphosa - Photo GICS

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THORNYBUSH LUXURY GAME LODGE COLLECTION

Thornybush Hoping for

Spike in Tourism PRODUCTION: Karl Pietersen

Exciting things are happening at the Thornybush Luxury Game Lodge Collection. On the edge of Kruger National Park, the classic bush landscape is home to the Big Five, and guests come from around the world to experience the iconic South African safari while being hosted in the unique Thornybush accommodation. With big investments recently and about to get underway, this is a business moving forwards with confidence. www.enterprise-africa.net / 9

INDUSTRY FOCUS: TOURISM

Saseka (main area)

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The Thornybush Luxury Game Lodge Collection in Limpopo and Mpumalanga is opening the door on a new growth phase as it welcomes a new CEO, a recent 50 million Rand investment in Saseka Tented Camp and a further 15 million investment to modernise and refurbish two of its sites.

First fenced in 1955 and built and operated since 1961, Thornybush [Please add in that Thornybush is now unfenced, forms part of the Greater Kruger National Park which encompasses Kruger National Park and a selection of private reserves to the west of Kruger National Park. In total the entire area covers 20,000,000 hectares of unfenced, wild reserve with free movement of animals across this entire area. Thornybush, which sits on the verges of the Kruger National Park, is the second oldest commercial lodge in South Africa. Its reach spans some 14,500 hectares and its 12 luxury accommodation offerings wow both

10 / www.enterprise-africa.net

international and domestic tourists every year.

At the beginning of July, Thornybush announced Joanne Dickson as the company’s new CEO. An industry veteran with more than 25 years experience in African travel and tourism, Joanne brings a wealth of knowledge and ideas that will help the business to further improve its reputation with guests.

First on her to do list is refurbishments at Chapungu and Waterside, while investigating other new opportunities.

“We have two lodges that will be completely overhauled,” she says.

“First is a tented safari camp which is immensely popular but we want to relaunch that with a complete refurb and rebuild in some areas. We are also totally refurbishing Waterside. We are in this for the long-haul, we are passionate believers, and we are strong investors. Our shareholders are not conservative in their investment; they

have committed a further R15 million over the next five years to the two refurbishment projects and they are always receptive to new development opportunities, if the business case makes sense to them.

“In May, we opened another luxury tented safari camp and we are looking at a couple of other properties and opportunities with land where we could build, but we are not committed to anything at this stage.”

BEST VALUE Joanne describes the Thornybush offering as one of fantastic value.

Driving value and enhancing the guest experience are two key areas of concentration for this safari-focussed business. Apart from fantastic accommodation offerings, Thornybush wants to expand upon its current service offering. “As the custodians of our guests precious time and dreams we have a responsibility to deliver magical moments. We want our guests

THORNYBUSH LUXURY GAME LODGE COLLECTION

to leave with magical memories that will last a lifetime” she says.

“We will remain focussed on the core safari experience but we believe we can add more value there,” she says. “Typically, a safari experience is a morning and evening game drive. This is already an amazing experience but we want to expand on that by possibly introducing more walking activities, we’re looking at day and overnight residences at waterholes so that people can spend more time closer to the animals, and we are developing key programmes around family travel.

Most lodges will tell you that they are family friendly, but we want to do some special things around that. We are also looking at things like special excursions to see big tuskers – we are extremely fortunate at Thornybush and on the adjacent Kruger as we have elephants

that have phenomenal tusks – and we are developing the idea of a helicopter tour to see big tuskers if that is a passion for people.”

All of these offerings are designed to ensure guests feel they are receiving value for their money. In such a competitive landscape, value is a fundamental trait that helps companies to differentiate.

A trip to a Thornybush lodge is not about just a comfortable bed and a well-decorated bar. The idea is to deliver experiences that go beyond superb accommodation.

“We do not see ourselves primarily as an accommodation establishment, we see ourselves as an experiential organisation and everything surrounds the guest experience, which surrounds the safari experience,” explains Joanne.

By creating valuable experiences

that guests take away and remember for life, spreading the word to friends and family, is one of the primary goals for Thornybush. This is something that so many businesses aim for but few really achieve. TripAdvisor tells the perfect story: “We had the most spectacular and memorable three days.” “From start to finish, every aspect, every detail, was amazing.” “This trip of a lifetime did not disappoint and we highly recommend,” say genuine Thornybush guests.

“The measure of value is what you experience is greater than the perceived investment. That is a consistent focus for us – we want to be perceived as a five-star operator that charges four-star prices but delivers six-star service. Value is at the core of everything we do, and every member of our team is focussed on it every

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INDUSTRY FOCUS: TOURISM

minute of every day.

“We also believe we need to deliver value to our own team members, to our local community members, to our guests, and the wider community at large – we have a responsibility to work for the wildlife community in which we operate,” details Joanne COMMUNITY BUSINESS The third focus for Thornybush, apart from value and experiential excellence, is its community. By investing heavily in local community upliftment projects, the company expects to build a stronger and more resilient society around it, both regionally and nationally.

“More and more now, there is a real focus on optimising job creation from your local communities - we hope to be leaders in our region in this regard,” states Joanne. “For a business like ours, everything from collecting firewood to renovating the

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lodges to where we procure foods from – we are hugely shifting towards local community service provision versus looking to the big towns around us.”

Involving the community in the value chain brings finance and experience to a remote area that could otherwise become isolated - the Thornybush impact is big, and growing.

“We will continue to find ways to bring more of this into our lodges,” confirms Joanne. “Whether it’s construction or wood or other materials – right now we are mostly purchasing through regular channels but we are changing all of that so we can create opportunities, find people, incubate them, and help them to supply services to us and other businesses.

“We will be leading the way about how to really make this a part of the genetic fabric of the business and achieve real depth. It’s a nonnegotiable way forward for us. I will question every single thing that

the business does moving forward and ask why it couldn’t be serviced through a local community business or person. I hope that it helps to set the tone and more lodges will think about doing it.”

The perfect example of this type of business comes from the Thousand Herbs and Vegetable Garden. Started almost a decade ago as a CSR project, the garden is now a fully-fledged business, woman-owned by members of the Utah community.

“It is just one of our projects, and our position and focus is to be an incubator where we identify people and opportunities and put them together. We put a great deal of work into getting the people and businesses off the ground. We give a lot of mentorship, we help set up distribution channels, we help implement accounting systems - we aim to get them to a point where they are an independent, self-sufficient, sustainable business; that is where

THORNYBUSH LUXURY GAME LODGE COLLECTION

www.cavcheese.co.za

Cavalieri Cheese has been operating in the Lowveld for over 20 years and has become a house hold name throughout the region.

This remarkable business is a wholesale and retail outlet of specialised deli products.

Owned by Karen Cavalieri, the business grew out of humble beginnings to powerhouse suppliers of top-quality, specialised food.

Where Good Food & Hospitality Meet 30 Waterfall Avenue Riverside Industrial Park Nelspruit, South Africa 013 752 6424/38 | www.cavcheese.co.za

we have got to with Thousand Herbs and Vegetable Garden. The ladies there run the business, it is theirs, they are profitable, and they are almost completely independent. They provide their vegetables and herbs to our lodges and other lodges. They also sell into the Hoedspruit local community to the likes of Pick n Pay and more,” says Joanne.

Projects like this have become increasingly meaningful for Thornybush in the past five years.

While the company has always been a fundraiser and donor, it is now focussing on community projects on a full-time basis. “A lot has been achieved and that has inspired us to do more,” says the CEO, who also admits that this process of doing things differently is challenging but rewarding.

STIFF COMPETITION Internationally, a key driver of tourism into South Africa is its safari experience industry. Long-standing and well-serviced, the sector is home to many big-name players who attract guests from around the world.

This is a challenge for Thornybush – differentiating itself from the rest. That is why it is investing into additional guest experiences and refurbishment of its lodges.

“There is a lot of strong competition,” admits Joanne. “We are a key player; recognised, respected, reputable, relied upon and strong.

There are a lot of people who are looking to enter the industry as, in South African terms, it is a key industry.

What you see is affluent people, who come from other industries, have a great deal of interest in this sector and

// WE ARE A KEY PLAYER; RECOGNISED, RESPECTED, REPUTABLE, RELIED UPON AND STRONG // they are often willing investors.”

Asked for the way Thornybush will navigate this environment, with growing new and high--quality existing competitors, Joanne is clear that continuing to improve on experiential delivery is the way forward.

“I already believe that we deliver a great service, I read every guest feedback review at the end of every month and that demonstrates that we are already delivering an incredible experience but my five-year plan is

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INDUSTRY FOCUS: TOURISM

// WE ARE HUGELY SHIFTING TOWARDS LOCAL COMMUNITY SERVICE PROVISION VERSUS LOOKING TO THE BIG TOWNS AROUND US // to ratchet that upwards so, if we are delivering five-star now, we want to be delivering six-star. And I don’t mean that in a hotel standard way, I mean that in an experiential way.”

Fortunately, the tourism market is one which is receiving significant attention and investment from both the public and private sector and

The River Lodge

14 / www.enterprise-africa.net

this is a real help for businesses like Thornybush. In April, former Tourism Minister, Derek Hanekom announced a commitment to creating jobs in tourism. “The global focus on creating jobs in tourism fits in perfectly with South Africa’s strategy to tackle unemployment, poverty and inequality through inclusive tourism growth…

We are confident that we can achieve the National Tourism Sector Strategy’s target of supporting one million direct jobs in tourism by 2026,” he said.

In August, new Tourism Minister, Mmamoloko Kubayi-Ngubane reaffirmed government’s commitment to tourism while on a working trip in Mpumalanga. “President Cyril Ramaphosa has set a target for us to attain 21 million tourist arrivals by 2030, and this can only be achieved if we work together to create conducive and inclusive environments for tourism to thrive,” she said.

This enthusiasm around tourism is invigorating for Thornybush and Joanne is excited about the future.

“We are certainly very optimistic but we know there are no guarantees,” she says. “The key tourism stakeholders are hopeful that the government will continue to make inroads that will positively influence tourism.

There has been a sense from industry stakeholders that bad decisions were

THORNYBUSH LUXURY GAME LODGE COLLECTION

made, in terms of visas and other issues, which didn’t help us. But those have mostly been addressed now and we are actually seeing things go the other way, where visa requirements are being lessened and more countries are coming for a short-term holiday without a visa. The word on the street, and from our President, is that they will be doing everything they can to enhance tourism, and we are hopeful that it will translate into more travellers coming into the country.

“Tourism, directly and indirectly, is a major job creator. If you look at tourism across all of its touch points – airlines, car rentals, Uber through to hospitality, restaurants and retail – its reach is enormous and there are job creation opportunities all the way, hence government’s focus on stimulating tourism.”

The tourism sector is a shining light in what is a relatively dim economy. In the first half of 2019, economic growth slowed significantly but tourism continued to provide opportunities for business. During tough economic conditions, confidence is lessened and people usually hold onto their money,

// IT’S A NONNEGOTIABLE WAY FORWARD FOR US. I WILL QUESTION EVERY SINGLE THING THAT THE BUSINESS DOES MOVING FORWARD AND ASK WHY IT COULDN’T BE SERVICED THROUGH A LOCAL COMMUNITY BUSINESS OR PERSON //

 P.O. Box 383, Hoedspruit, 1380  office@tshukududecking.co.za  0822550475 |  @tshukududecking

Our quality exceeds our reputation!

assessing every spend more closely.

But Joanne is not concerned about the short-term performance of the SA economy; she lists other issues as the biggest concerns.

“There are greater issues, security for example – that is a key consideration for people when looking at our destination. We are also hugely influenced by world events as we are in the international tourism market – over the past 12-months, travellers are down from the UK and Europe, and that is directly associated with Brexit, but arrivals from North America are up.”

Despite these worries, Thornybush continues to thrive. Its sustainable and responsible approach to business is positioning it as a regional example to follow. With Joanne’s appetite for success backed by a resolute ambition of shareholders to continue building

a first-class operation, Thornybush is enjoying a strong period.

“I knew the opportunities that were available to the business.

Thornybush is a beneficiary of a longstanding, solid operation and reputation. In the tough times, the weak flounder and the strong either maintain or flourish. That is the situation here. We are not struggling and not feeling negative at all,” she concludes.

WWW.THORNYBUSH.CO.ZA

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HELLO GROUP

Hello Paisa

The Journey Continues PRODUCTION: Manelesi Dumasi

Leading South African Fintech player, Hello Paisa (part of the Hello Group), is launching a new digital banking service in partnership with Sasfin Bank, that has the potential to bring a large group of the country’s unbanked or underbanked population in the formal financial space. By using technology to make banking more accessible, Hello Paisa is leading the way in the industry and CEO Moosa Manjra believes the company can grow internationally. www.enterprise-africa.net / 17

INDUSTRY FOCUS: TECHNOLOGY

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In 2015, South Africa’s Hello Group was labelled as the country’s next big Fintech player. Founded in 2005 by brothers Nadir and Shaazim Khamissa, Hello Group recognised a gap in the industry for a mass market player, specifically in the migrant worker community.

People were moving across the border into South Africa for work and calling home to relatives in neighbouring sub-Saharan African countries at huge expense. The pair took note and started working on a solution where the growing cell phone market could be utilised to provide a cheaper means for the migrant diaspora to stay connected. In partnership with Cell C, Hello Mobile was born; a product which provided a Sim card product to give migrant workers the mobile operator’s local call rates combined with Hello Group’s low-cost international calls – Hello Group, perhaps lesser known at the top end of the market, was becoming a disruptor.

The Hello Group has always been an innovator, using technology to deliver products that solve problems for customers. After the launch of Hello Mobile, the ambitious Khamissa brothers looked at what other solutions could be offered to the market – numbering in the millions - that they quickly grew to dominate. In 2015, the Group again went out to their customers to see what other problems could they solve and it was evident that sending money home was a huge problem.

Today, the Hello Group has its own division dedicated money transfer operation, Hello Paisa, which is growing its presence in the market by adding complementary services to help solve problems for its clients. By sticking to this mantra, the company has become a leading Money Transfer Operator (MTO), and now has goals to expand globally.

Hello Paisa CEO Moosa Manjra tells Enterprise Africa more about the company’s ongoing growth strategy.

DIGI BANK “At the very heart of it, if we are not solving a problem then we are wasting time. We are always looking to come up with solutions to problems by using technology as that helps to drive down cost,” he says.

“We have just launched our digital bank which is powered by Sasfin Bank and that is a huge initiative for us. It has been operating for three months and every single thing you could do with a regular bank account is available

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// WE LIKE OUR CUSTOMERS TO GUIDE US INTO NEW CHANNELS. WE ARE OUT THERE IN THE STREETS LISTENING TO CUSTOMERS AND ENGAGING THEM ABOUT WHAT THEY WANT // through our digital bank. There are no branches but one of our sales agents will come out to your home and FICA you and register you for a bank account right where you are. They hand over your VISA card and when they leave after 10 minutes, you will have a fully functioning bank account with a card and app. That is one of our biggest projects to date and the team at Sasfin Bank have been very supportive and we are learning a lot. It came about because our customers have asked for it.”

In the banking sector globally, digitisation is now seen as a must for those looking to survive. It allows for easier, more efficient, quicker, and cheaper interaction with clients. Ultimately, digitising banking services makes life easier for customers, and that fits perfectly with the mission of Hello Paisa and the wider Hello Group.

“People say ‘we send our money with you, we make our calls with you, and we want to save our money with you as we don’t get access to traditional bank accounts’. Not only are we giving them access, we are making it so easy as we are coming to them – now, everyone has access to a private banker.

“For some digital banks in South Africa, you would have to go into a location to set up your account. We will come to you; we will not make people spend money on transportation to go and open an account,” says Manjra.

HELLO GROUP

In the long-term, this product will help development of the wider South African economy by bringing unbanked or underbanked – estimates suggest there are as many as 11 million – into the formal banking sector which is much safer and much more secure.

“That is exactly the plan,” confirms Manjra, “the same way we have brought a lot of informal remittance into the formal space. We want to get that cash market at the base of the pyramid – the unbanked – into the formal space. We won’t solve the problem tomorrow, but we are trying to do our part.”

The most recent disruptions in the SA banking sector came when Capitec Bank introduced its Global One Account and started using a centralised technology platform to remove menial tasks, freeing up branch staff to effectively deal with customers. More recently, TymeBank has entered the market as a fully digital bank, signing up more than 250,000 customers since November 2018. One thing is for certain, the banking sector is changing and the infamous ‘Big 4’ are seeing their

market shares eaten away.

“I’m sure they are watching but we need to keep our heads down and concentrate on what we do,” says Manjra.

“If we can’t back it up with customers, then it won’t mean much.

“Largely, feedback has been positive.

We haven’t been signing up at full capacity yet and that has been deliberate.

We have signed up 1000 customers per month just to get everyone used to the product and make sure everything on our end is stable. Next we will move out of this soft launch and really go out and acquire the way we know we can,” he adds.

MALAICHA A key market for the Hello Group is Zimbabwe. In the past 20 years, estimates suggest that millions of Zimbabweans have crossed the border for different reasons. Remittance from South Africa to Zimbabwe is a strong corridor for Hello Paisa and for the industry in general. But, with the country’s currency crisis and political instability, sending money is often not

the most effective use of resources.

“You can’t do much with a $100 note in Zimbabwe – purchasing basic commodities has become challenging,” says Manjra.

The situation has become dire for some. So, instead of sending money from South Africa back to friends and family in Zimbabwe, some people have resorted to buying groceries and sending a bag full of goods on buses or through other informal channels. Hello Paisa again saw an opportunity to help.

“We thought that we could surely do this smarter, cheaper, safer and better,” details Manjra.

“We have recently launched a new product called Malaicha.com and that is an android app where you can shop for groceries such as oil, sugar, wheat or cereal – there is around 400 products on the app – and you can pay in the same way you would when you complete a Hello Paisa transaction. The groceries are then available instantly in Zimbabwe.

There are serious issues in Zimbabwe with food shortages and money value,

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INDUSTRY FOCUS: TECHNOLOGY

and Malaicha.com allows Zimbabweans in South Africa to send groceries to family in Zimbabwe instantly – we even deliver the groceries for free. It’s only been running for a few months and the orders have gone through the roof. We are very excited.”

Malaicha, a Ndebele word meaning ‘to transport goods’, will take away the pain and the problem by using technology. Because of the success already realised in Zimbabwe, Hello Paisa has received requests from other channels for a similar service. “We will open up across other corridors very soon. We also think we can grow a lot in Zimbabwe; currently we have four collection sites in Zimbabwe and we think we can expand that so that many more who really need it can benefit,” says Manjra.

For Hello Paisa, and the Hello Group, this type of initiative – where having a positive impact is a core value – helps to solidify the company’s industry-leading position.

“Being a leader is not about sitting back and relaxing; we are constantly looking to innovate. This is a company where we never just sit in the boardroom, we are always out on the street and talking to people about what they want. Of course we fail, but we fail fast and learn faster – that is what we are all about here. We listen to where the issues are and then we try and solve them. Ultimately, we are helping people and that is our drive. Malaicha.com is a godsend for some people in Zimbabwe.

This innovation ensures people are getting food. We feel it is something we should be proud of.”

// OF COURSE WE FAIL, BUT WE FAIL FAST AND LEARN FASTER – THAT IS WHAT WE ARE ALL ABOUT HERE // 20 / www.enterprise-africa.net

LEVERAGING THE GROUP Hello Paisa was founded in 2015.

Fortunately, because of the Group’s position in the market, a large number of potential clients was already laid out in front of Hello Paisa as soon as it got up and running.

“With Hello Mobile, we offered the ability to make international calls at a much cheaper cost and we leveraged off a lot off those relationships, making a lot of Hello Mobile customers Hello Paisa customers. They were using our network to make cheap calls home, so we brought them Hello Paisa to send money home at a fraction of the cost.

Unlike our competitors, we already had a beachhead market.”

This allowed Hello Paisa to become the first recipient of an independent money transfer license in South Africa.

Today, the company remits to more than 30 countries and makes use of iOS and android apps, as well as USSD technology, a multilingual call centre and instore pay points.

“Our call centre will call you back as we understand the cost a customer takes by making a cell phone call in a market where every penny counts,” says Manjra.

“Right from the beginning, everything has been focussed around the customer – we take into account

what they like, what they don’t like, their choice of language, and we go to great lengths to not only provide a solution but find out how much more we can do for a customer.

“We have our own operations in Malawi and Zimbabwe. What that means is that today you can send money from South Africa to Mozambique and we will use a partner in Mozambique to disburse funds. In Malawi, you can send your funds from South Africa and collect it at a Hello Paisa point in Malawi. We employ more than 100 people in Malawi, more than 100 people in Zimbabwe. The customer can choose the collection method and it could be cash, bank account or mobile wallet. Whatever the sender feels is suitable is the method we will use and it differs between each corridor. We have partnered with the biggest banks and networks around the region and that takes a lot of effort to set up,” he adds.

This approached has allowed Hello Paisa, just like Hello Group, to move across sub-Saharan Africa, engaging with various migrant communities, and looking at new solutions to unique problems. It also drives brand recognition and brand loyalty – important in a crowded marketplace.

“We understand that the customer

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needs all the help they can get and by giving this type of service, customers stick by us. That is how we are growing and how we are opening up new corridors. We like our customers to guide us into new channels. We are out there listening to customers and engaging them about what they want,” says Manjra.

HELLO WORLDWIDE? Currently, Hello Paisa accommodates payments into several nations outside of the African continent, including the sub-continent. The company is always looking to grow its reach and has started to build a presence in the Middle East where Manjra says that the market is competitive but enormous.

22 / www.enterprise-africa.net

“We have started to grow in the Middle East and we have been there for seven months. It’s very competitive but we are doing our thing and trying to use technology more than the other players in the UAE. I’m sure that very soon we will publish some strong results and we can continue growing from strength to strength.

“Europe and the Middle East are thriving outbound remittance regions where up to 60-70% of the population can be migrants. It is a growing market but you do have to be in the right geographies.”

With global expansion firmly on the agenda of both Hello Paisa and Hello Group, management will be hoping for a quick resolution to economic distress

at home in South Africa. For many reasons combined, the economy has been very unpredictable over the past several quarters and even contracted by 3.2% in Q1 of 2019. This type of swing effects spending power of customers on the front line and, significantly, impacts the stability of exchange rates.

“When it gets weak, remittances slow down,” admits Manjra. “The

// WE THOUGHT THAT WE COULD SURELY DO THIS SMARTER, CHEAPER, SAFER AND BETTER //

HELLO GROUP

Moosa Manjra - CEO

// AT THE VERY HEART OF IT, IF WE ARE NOT SOLVING A PROBLEM THEN WE ARE WASTING TIME // customers certainly shy away from sending when we have such volatility and that does hurt. It’s unpredictable but we’ve learned to adapt and live with it.”

The CEO, who has been with the Group since 2011 – watching it grow from 30 people to more than 700 in South Africa – tries to avoid becoming entangled in issues out of the

company’s control.

“I am a South African and I am an optimist,” he says. “I believe in the opportunities we have here. We have been in similar positions before and everyone is doing their level best to get the economy back to where it needs to be.”

So far, in its relatively short life, Hello Paisa has certainly started to achieve its founder’s expectation of providing significant growth opportunities, and it has realised industry expectations by becoming a leading Fintech organisation. Ultimately, the business is achieving on the expectations of its customers by using technology to solve problems, and that is the most important thing.

Manjra concludes by explaining that the fantastic work going on at Hello Paisa, and the growth story that the company is on, is all down to a hardworking group of people who follow a culture of continuous improvement.

“We have some decent products but we also have really really good people. There are a lot of guys putting in a lot of hard graft and that is why we are doing so well. Our people play a huge part in making this a success.”

WWW.HELLOGROUP.CO.ZA

www.enterprise-africa.net / 23

TUDORTECH

Turning the Science of

Retail Into Art PRODUCTION: Tudortech & Karl Pietersen

Tudortech brings the world’s top end homeware appliances, photographic products and digital storage brands to South African consumers. CEO Gary Shap shares his company’s vision and goals with Enterprise Africa. www.enterprise-africa.net / 25

INDUSTRY FOCUS: TECHNOLOGY

Tudortech’s Office in the heart of Cape Town

//

As you scour a retail store, or shop online, you may not realise that many of the best-in-class brands have been brought to you by Tudortech. Sigma, Leica, Olympus, SanDisk, Western Digital and Dyson are all available to the South African market through this industry-leading business, based in Johannesburg and Cape Town.

// OVER THE LAST 18 YEARS, WE HAVE ESTABLISHED A DISTRIBUTION NETWORK, SUPPLYING PRODUCT INTO MORE THAN 10,000 RETAIL STORES // 26 / www.enterprise-africa.net

By building relationships with global leading brands, nurturing partnerships with retailers, and understanding the needs of the end-user, Tudortech has managed to develop a business that is growing strongly in a strained economic environment.

The company’s roots go back to the early 80s and a photography industry where films were loaded into cameras, and negatives were developed in dark rooms.

“My father owned a retail photographic store in Cape Town called Cameraland,” CEO Gary Shap tells Enterprise Africa. “At the time, there was a big need for photographic film. He was travelling overseas and he came across a film brand called Tudor Film. It came from the UK and a company called Tudor Photographic whose focus was supplying film to emerging markets. My dad had never heard of the brand but he struck up a relationship with Tudor

Photographic in the UK and began importing film and selling it to South Africans.

That is how the wholesale arm of the business started out. We called it Tudor Photographic and as the business evolved and grew, we changed to Tudortech.”

As the demand for Tudor film grew, Tudor customers began asking for more specialised gear. Shap’s father proudly met the founder of Sigma Japan at a World

TUDORTECH

// HE WAS ONE OF THE GREAT MINDS OF SILICON VALLEY AND SHARED HIS VISION FOR THE WAY FLASH MEMORY WOULD TRANSFORM THE MOBILE PHONE INDUSTRY // Trade Show and their inspired conversations and common passion for photography led to an aligned strategy to bring Sigma to South Africa. Since then, Sigma has transformed as a brand and the combination of world leading

Japanese optics together with South Africa’s abundant beauty and wildlife has led the next generation to buck the industry trend. Kazuto Yamaki, CEO at Sigma, has worked tirelessly to innovate and create the most desirable lenses in the world and Gary Shap is proud to be part of Sigma’s journey to bring one of the world’s finest lenses to the South African consumer.

ANALOGUE - DIGITAL The next stage in the development of the business came in the late 90s when the photographic industry started to shift away from filmbased photography towards digital image capture. Film was quickly going to become all but redundant but Tudortech was prepared. Its next move would catapult it into a

new stratosphere in terms of size and reach.

“We could see that the future of photography was a digital one and in 2001 we won the rights to distribute SanDisk in South Africa.

Over the last 18 years, we have established a distribution network, supplying product into more than 10,000 retail stores,” explains Shap.

SanDisk, manufacturer of flash memory cards for cameras and other tech products, quickly became the brand of choice for all photographers looking for large, fast and reliable digital memory. But SanDisk saw further opportunities to grow and Tudortech helped to implement their vision in South Africa.

“I built a relationship with the founder of SanDisk, Eli Harari. He was one of the great minds of Silicon

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INDUSTRY FOCUS: TECHNOLOGY

Valley and shared his vision for the way flash memory would transform the mobile phone industry. I was able to share his insights with the likes of Vodacom early on and established SanDisk as a valuable accessory for consumers hungry for more photos, videos and movies on their devices. That is how we expanded beyond photography into the explosive mobile phone space.”

Subsequently, the technology market changed dramatically.

Computing and processing tech became more affordable and every household became a potential customer for tech manufacturers.

Not only would many homes have phones but desktop and laptop computers, devices that could accommodate a USB storage drive, expanded too. This drove Tudortech

// WE MAKE IT OUR BUSINESS TO REALLY UNDERSTAND THE VISION OF OUR PRINCIPALS AND WE BRING OUR LOCAL KNOWLEDGE AND 30 YEARS OF RETAIL EXPERIENCE TO PUT TOGETHER A PLAN TO ELEVATE AND GROW THEIR MARKET SHARE IN SOUTH AFRICA //

28 / www.enterprise-africa.net

into the IT and mass retail space.

“With tremendous focus and passion for the brand, we expanded SanDisk across the breadth and depth of SA retail and won numerous global awards for our sales and marketing achievements.

Today, we have an 80% retail market share for memory in South Africa, something for which we are extremely proud,” says Shap.

In 2016, Western Digital (WD), the hard disk drive manufacturer purchased SanDisk and proceeded to appoint Tudortech as their distribution partner in South Africa.

“That led to further growth in the business and gave us the ability to manage and grow the entire storage category for our retail customers,” says Shap.

Even while focusing on this

TUDORTECH

growth in the IT space, Tudortech never relented in its traditional market of photography where it expanded its photographic division to incorporate Leica and Olympus. Today Tudortech services the broad spectrum of the imaging and video market across the consumer photo, broadcasting and cinematic industries.

INNOVATION TO THE CORE In 2017, Tudortech added another jewel to its crown when it announced a partnership with Dyson, the British tech company that is best recognised for its iconic vacuum cleaners, bladeless fans and hairdryers.

“Dyson has exceptional products that truly revolutionise the categories in which they play.

They use ingenious technology to solve everyday problems and enhance quality of life and we were honoured when they chose Tudortech as their distribution partner,” says Shap.

Like with all of its brands, Tudortech had to combine all elements of its business, across sales, marketing and distribution, working closely with its retail partners to build and execute a strategy that would launch this iconic global brand to the South African audience.

“Dyson stands for excellence

and their attention to detail, from product to retail execution, is second to none. We now have over 80 Dyson retail displays nationwide.

The brand is growing strongly amongst SA consumers and proves

that South Africans do appreciate quality and innovation.

“Working with such a creative and innovative company such as Dyson is super exciting. And with the expected launch of their electric

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www.enterprise-africa.net / 29

INDUSTRY FOCUS: TECHNOLOGY

vehicle in the next year or two – who knows what the future holds,” enthuses Shap.

GETTING THE VISION ACROSS When Tudortech had exhausted the opportunity for these brands within their traditional channels, it bravely and creatively pushed the boundaries by taking products into places where those categories had never been seen before. This enhanced both brand-value and elevated the consumers shopping experience. “We thought @home stores and customers were a perfect fit for the Dyson products but at the time, @home did not sell large appliances. Both companies could see the vision, took some risk on the unknown and have never looked back. We continue to grow and

30 / www.enterprise-africa.net

expand our partnership,” says Shap.

Tudortech was now a wellestablished distributor of leading global brands across mass-retail, supermarkets, consumer electronic, mobile, IT, healthcare, homeware, furniture, e-tail and more, having built relationships with all of South Africa’s major retailers.

This network, combined with a thorough understanding of the desires of its principles and endusers, made Tudortech a powerful and well-respected organisation.

“We are a value-added distributor, we’re not a logistics partner. We make it our business to really understand the vision of our principals and we bring our local knowledge and 30 years of retail experience to put together a plan to elevate and grow their market

// TODAY, WE HAVE AN 80% RETAIL MARKET SHARE FOR MEMORY IN SOUTH AFRICA, SOMETHING FOR WHICH WE ARE EXTREMELY PROUD // share in South Africa,” says Shap.

For the CEO, partnerships between Tudortech, its principals, and the market are paramount.

ALWAYS GROWING Tudortech is constantly on the lookout for opportunities helping brands live up to their full potential in this region or bringing new leading products to Africa’s shores.

“We are often in conversation with international brands,” states Shap. “We don’t, however, take on hundreds of brands but prefer to partner with companies where we feel we can make a significant difference and give them the focus and attention they deserve to make that difference. I would call us a boutique distributor, focused, agile and creative.”

Asked if this strategy is currently working for the business, Shap is clear: “The market shares of our brands speak for themselves and that’s something we are really proud of.

“We certainly see growth in Africa,” he adds. “More and more, our principals are looking for growth across the continent so there is no question that, particularly in subSaharan Africa, we are looking to extend our business. We are certainly looking at Kenya, Rwanda, Angola, Botswana and Namibia. These are countries where we certainly see opportunities.”

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and fast growing mega market, Tudortech, according to Shap, is certainly an African partner worth speaking to.

Don’t be fooled by numbers alone. Tudortech’s deep understanding of the channels to market, its knowledge of marketing, and its innovative approach to merchandising and demand generation is something worth taking note of.

THE ART OF RETAIL The South African economy contracted by 3.2% in the first quarter of 2019, business confidence and general sentiment has been low. When these types of economic concerns are raised, spending is reduced and international brands think

twice before entering or further investing in the country. Thankfully, Tudortech is a trusted partner and continues to achieve for its principals and retailers.

“There is no question that the South African economy, and retail in South Africa, is under tremendous pressure,” admits Shap. “When times are uncertain and there is increased volatility, you want to deal with people you trust. Yes, in difficult times relationships are tested but we have actually become closer to our customers during this time. They have chosen to consolidate and we are fortunate that we have been able to show continued growth.

“There are companies out there who simply move boxes” says Shap, “but I’d like to think we are unique in the value we bring and the value

we create for our retail partners and the brands we love to build.”

Tudortech’s answer to achieving success during challenging times lies in intensive joint business planning between itself, retailers, and the brand, marrying the needs of all parties to achieve common desired objectives. “It’s the area where we use our creative DNA and experience to turn 1 + 1 into 3, we call it turning the science of retail into art and encompasses the core of who Tudortech is today.”

WWW.TUDORTECH.CO.ZA

www.enterprise-africa.net / 31

GIB HOLDINGS (PTY) LIMITED

Dedication, Determination & Application Paying Off For GIB PRODUCTION: Manelesi Dumasi

For the past 37 years, GIB Holdings has been growing significantly, and fulfilling its promise of leaving no stone unturned across South Africa’s impressive insurance broking market. Deputy Chairman and Founder Dennis Gamsy talks to Enterprise Africa about how GIB continues to grow, and how the company has managed to remain independent.

//

South Africa remains a vastly underinsured nation.

The country is home to a sophisticated and well-established financial services industry, but many still choose not to take out products that could seriously benefit their lives.

According to the AA, as much as 70% of South Africa’s 12 million vehicles are still uninsured. According to the Health Minister, only 16% of the population is covered under a medical aid scheme.

Adding to the problem, just 13% of South Africans who live in metropolitan areas have a relationship with a financial advisor. The reasons given for avoiding insurance? “It’s a luxury I can’t afford. It will never happen to me, and I

32 / www.enterprise-africa.net

don’t believe in insurance.”

However, the country enjoys a thriving insurance and financial services industry – the most developed on the continent, operating in line with the highest international standards and the envy of many first world countries.

Protection against risk has never been a bigger market. Today, you can insure everything from your house, plane and phone to your pet, business and your family’s lives.

So, why would an entrepreneur choose to get into this market? It’s crowded with strong competitors, and the sentiment across the population remains precarious.

According to Dennis Gamsy,

Founder and Deputy Chairman of GIB Holdings – a SA-based insurance and financial services institution – the key to success is to leave no stone untuned.

Established in 1982, GIB started life as a general short-term broker.

Gamsy, now an industry veteran, saw the opportunity for an independent broker to service multiple product lines, and the business quickly went about creating a strong network in service of its clients.

“Philosophically, we made the decision very early on in our life not to leave any stone unturned,” Gamsy tells Enterprise Africa. “We didn’t want any gaps in any areas of insurance. The result of that is that we have classic

INDUSTRY FOCUS: FINANCE

short-term insurance broking, we have aviation insurance, marine insurance, re-insurance we have a minority stake in Debtsource, where we house our credit insurance division and we have a strong and growing Employee Benefits Company. We have chosen to set up different companies, with different Managing Directors, across all of the disciplines in the insurance industry. It is costly but we are a very entrepreneurial company.

“We try and fill product lines as they are demanded by the market,” he adds. “We do believe we cover all bases but it all depends on the people you can find. When we started GIB Aviation, for example, we knew we needed the right person – it’s no use starting without the appropriate expertise.

We employed an ex-Lloyds aviation broker as Managing Director of GIB Aviation 20 years ago and he remains as its MD. Any new product lines we look at, we demand appropriate people with specialist skills. South Africa doesn’t have an abundance of such characters and we believe you cannot call yourself a master of a particular area unless you have top professionals. Part of our strategy is to buy teams from larger brokers. If there was a particular line of business that required specialist expertise, we would look at acquiring a team from a broking house that is strong in that particular area of expertise.”

// PHILOSOPHICALLY, WE MADE THE DECISION VERY EARLY ON IN OUR LIFE NOT TO LEAVE ANY STONE UNTURNED. WE DIDN’T WANT ANY GAPS IN ANY AREAS OF INSURANCE // 34 / www.enterprise-africa.net

NETWORK PARTNERS In the late 80s and early 90s, as GIB was growing and its reputation becoming more widespread, the company began to pick up bigger, corporate-style clients.

This was fantastic news for GIB, but it meant that expansion was needed to service clients effectively. International exposure was required so GIB looked to the world’s large broking networks.

“We became the first South African and African partner in AssurexGlobal.

They had partners in 132 countries and we became the South African arm,” says Gamsy.

“As we continued, another network – Unison Global of Germany – approached us to be their partner and we did so. In 2011/12, Marsh purchased Alexander Forbes to become the largest broker in South Africa and, at a similar time, Aon purchased GlenMib becoming the second largest broker.

The result of those two deals meant that other networks that were working with Alexander Forbes or GlenMib felt uncomfortable with Marsh and Aon as they were competing universally against them. We were the approached and became the network partners for Worldwide Broker Network (WBN), A.J. Gallagher - listed on the NYSE, Jiang Tai of China, FUNK and Verspieren, the largest independent brokers in Germany and France respectively.

“We are now the network partners for all of these networks and that gives us a very useful flow of business on a constant basis. A result of this flow of international business into GIB is new business around Africa. To formalise that effectively, we established the GIB Africa Alliance where we have a broker network of our own in 40 countries across the African continent so that we can adequately service all of the networks that supply business into GIB.” Connections with these networks have catapulted the business to the top echelons of the industry and GIB is now recognised as a wholly-owned, proudly South African, independent insurance broking group and one of

// THE SHAREHOLDERS RUN THIS COMPANY – THAT IS EXTREMELY DIFFERENT FROM ANY OF THE LARGER BROKERS AND INSURANCE COMPANIES IN THIS COUNTRY // the major composite insurance broking houses in the country, known for independence, competence, integrity and competitiveness.

A key element, helping to further develop this reputation and status, came in 2018 when GIB invested into a strategy that would gain it Level One B-BBEE status. Gamsy is clear that the company wants to be involved in the full spectrum of South African society, and a Level One B-BBEE accreditation is the only way to unlock the potential opportunities that exist among the country’s state-owned enterprises.

“We are among the largest independent brokers in South Africa.

We want to be fully participative in the SA business world and so we have become seriously black empowered,” he says. “We are a Level One Broad Based empowerment company and that is the top level of empowerment of any broker in this country. Our partner of over 9 years is Lephatsi, a financial services company driven by Herman (Johannesburg’s Mayor) and Connie Mashaba. I have known Herman and Connie for more than 25 years as members of YPO so it wasn’t a surprise for us to get together. It has been a fantastic BEE partnership which is not easily said in the context of the South African firmament. Herman, because of his integrity resigned as Chairperson of GIB when he became Mayor of Johannesburg about three years ago and was succeeded as Chairperson by Connie.

GIB HOLDINGS (PTY) LIMITED

“We spend a lot on retaining our Level One B-BBEE, and that combined with compliance are non-productive areas of cost. It takes a bit out to maintain those levels and it is costly. We used to be involved, for example as the Brokers to SANRAL, but we were a Level Four. When we went to be reappointed as their brokers, the first question asked was about our BEE level and we were immediately disqualified. We could’ve stayed at Level Four, but we decided to work towards Level One so that we could requalify going forward. We will certainly be looking to get back into their business in the future.”

GROWING GIB GIB has been a growing business for 37 years. Expansion into new product lines, growth with international partner networks, acquisition and merger activity, and internal investment into staff and compliance are all part of a strategy which sees the company stick to its credo ‘Return To Service’, an approach which has helped delight clients for decades.

In the future, Gamsy sees growth potential on the African continent, where – especially in sub-Saharan Africa – the insurance market remains in its infancy compared to the developed world. Many remain uninsured across a large number of product lines and the overarching insurance penetration rate is low, creating a gap in the market for a player that has capacity, experience and reach to effectively service a growing middleclass and growing commercial demand.

“Africa is certainly a growth area because we do get business passed to us through our networks on a weekly basis - it’s an important growth area for us,” he says.

“Our other growth strategy surrounds acquisition and mergers in South Africa. We are not scared of a merging situation with appropriate broking houses and we are frequently on the lookout for acquisition opportunities. There’s a huge amount of compliance required in the insurance

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INDUSTRY FOCUS: FINANCE

industry and it’s a costly business to set up and run. We are big enough to have compliance as part and parcel of what we do and that enables us to talk acquisitions to medium-sized firms that don’t have that facility of their own.”

GIB has offices in Johannesburg, Durban and Cape Town and is home to more than 230 people across the group. While Gamsy says that a presence in these major metros is the minimum that you need to operate as a countrywide broker, he admits that expansion through acquisition could tempt the company into new regions.

“There is almost no time that we are not negotiating some form of acquisition. They don’t always come to fruition, but right now we are negotiating on a number of different fronts.”

Unfortunately for GIB, being active in an economy which is prone to unpredictability, and being exposed to the tides of the global economy, has not created an environment

// SUCCESS IN ANY WALK OF LIFE IS DOWN TO DEDICATION, DETERMINATION AND APPLICATION // 36 / www.enterprise-africa.net

conducive for strong growth.

Gamsy cites “external factors” as the only drawbacks to the company’s development. “We are growing very nicely but we could be growing so much better. Business success depends largely on confidence without which there is a despondency around. Uncertainty continues and, in a business sense, we need political action to ensure confidence.

“There is an emigration of skills and that impacts demand for life insurance. This is a hell of a country and it’s hard to match our living conditions anywhere else in the world.

We should be booming because we have so much to offer. The first thing we need is to sort out our educational system which is appalling, and we also need to sort out crime which is equally as appalling. Until those two areas are resolved, we will continue to face difficulties. If things were sorted, people would be coming into the country because it is an incredible place to live – that would impact the demand for insurance.”

At the start of 2019, the SA economy contracted the most in a decade for a first quarter.

Unemployment is now the highest it has been in 11 years. Despite this, GIB is ambitious.

PROUDLY SOUTH AFRICAN GIB – which originally stood for Gamsy Insurance Brokers – came about after Dennis Gamsy realised the importance of being independent, and not having to report to an international head office.

“I started a company in Durban called Samuel A May Natal (Pty) Ltd in partnership with Samuel A May, a Johannesburg-based Insurance brokering business while I was completing my BCom and my cricket career in the early 60s. After my cricket career, I sold my shares in Samuel A May – along with all the other shareholders – to a British bank, The Hill Samuel Group, and we became a wholly-owned subsidiary of Hill Samuel Pensions and Insurances (Pty) Ltd, with Hill Samuel listed on the JSE. Part of the deal was that I would come to Johannesburg as MD and I did that in 1975 and we became the largest broker after Price Forbes and MIB at the time.”

Gamsy admits he did not enjoy answering to a banker in London. “So, we persuaded The Hill Samuel Group to sell us, Hill Samuel Pensions and Insurances, to Alexander Howden, a Lloyds Broker at the time.

“Again, I was MD of Alexander Howden in SA, and again I had to answer to London which did not suit me. At the end of 1979 I resigned,

GIB HOLDINGS (PTY) LIMITED

// IT HAS BEEN A FANTASTIC BEE PARTNERSHIP WHICH IS NOT EASILY SAID IN THE CONTEXT OF THE SOUTH AFRICAN FIRMAMENT // suffered a two-year restraint of trade before starting Gamsy Insurance Brokers on 1 January 1982.”

Like any young business, GIB performed tentatively in its early years.

When the brand became established in the market, after around five years, Gamsy looked to build the team by bringing onboard current CEO Dudley Sanders. “He has been a partner and shareholder ever since,” explains Gamsy.

“Then our real growth began because of Dudley’s vast experience in dealing with large Accounts at Price Forbes.

“We continued to grow and, like all reasonably successful broker houses in SA, were offered deals by the bigger players but we resisted. However, because of the types of clients we were picking up, including Bidvest and Aspen, we needed to have an

international footprint. The way around that for us was to become a partner in international networks.”

The management team and shareholders remain at the forefront of the business and have control over important strategic decisions.

This helps keep GIB nimble and differentiates it from other corporate players in the market.

“The shareholders run this company – that is extremely different from any of the larger brokers and insurance companies in this country,” states Gamsy.

The shareholders have made the decision to invest heavily in the company’s number one asset – its people. GIB puts its growth down to ‘loyal, enthusiastic and energetic people’, and, while people can be one of the most difficult factors to manage in business, the company has a simple approach.

“We pay well, we keep people highly motivated; we are an intense company because we are owner managed. We’re not greedy, we give out high profit shares and strong salaries – there is a lot of incentivisation within the group. To be a Level One company, we have to invest heavily in training and it can be difficult to keep the best talent but it works both ways,” details Gamsy.

It is these people that will fuel GIB’s

growth in the future. Market leaders Marsh and Aon continue to control large shares of the market, but there is certainly a sentiment surrounding going local in South Africa and GIB stands proud as a very South African company.

“We just want to continue growing, exponentially if we can. There is no semblance of selling down or selling out. We have a succession plan and things are good from that perspective.

It’s only external factors that are a concern,” says Gamsy.

With the major opportunities that still exist locally, on the continent, and through international networks, GIB’s comprehensive coverage mantra could be the answer for those looking to get involved in the industry.

For Dennis Gamsy, the GIB growth journey is never-ending and he knows what is required: “Success in any walk of life is down to dedication, determination and application,” he concludes.

WWW.GIB.CO.ZA

www.enterprise-africa.net / 37

SWARTLAND

New Doors Opening

for Veteran Swartland Business PRODUCTION: David Napier

Building materials supply business, Swartland has been a stalwart in South African industry for almost 70 years. by utilising a diversification strategy, the company has managed to continue growing where others have found difficulty. Enterprise Africa speaks to Jurie (Chairman), James (CFO), and Hans (CEO) Hanekom, the brothers and management team at Swartland to find out more about future growth.

//

In July 2018, the Hanekom brothers at the helm of the Swartland building materials supply business, told Enterprise Africa that a diversification strategy was helping to cement the company among the top names in the industry.

Today, that strategy continues and Swartland is delighting its customers by offering an ever-increasing product range, distributed around the country with maximum efficiency.

Founded in 1951 as a small DIY store in the town of Moorreesburg by Oupa Hanekom, diversification has been at the heart of the company’s growth for more than 68 years.

In May, Swartland completed the

acquisition of Hydro Doors and Gates, a steel garage door manufacturer; and by the end of the year, Swartland will begin production at a new polystyrene factory in the Western Cape, marking further expansion into two new markets.

CEO Hans Hanekom puts the company’s ongoing success down to its willingness to change and adapt.

“It’s purely down to our diversification,” he says. “If we didn’t have additional products in additional product categories, and we just went with our traditional products, we would be in line with everyone else. We haven’t posted wild profit figures, but we have done better the building industry and the SA economy as a whole because of

the fact that we have diversified and our new products have plugged holes left by the economy.

“Five years ago, if we had stuck with what we were doing and not invested in diversification, we would be telling a very different story now. We would be no different to any other player in the SA building industry.”

Previously, he spoke about the business moving through a transition, becoming more of a distribution group rather than being recognised as solely a manufacturing company. This evolution continues as the ambitious Swartland continues to seek out growth opportunities.

“Our strategy will most definitely

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INDUSTRY FOCUS: BUILDING

continue,” explains Chairman, Jurie Hanekom. “We have a distribution model that has to be put under pressure. When one range slows, we need to fill with other products to ensure we are busy at all times.

Diversification works for us, provided it is in our current channels. Certainly, we will be making more acquisitions in the future.”

CFO, James Hanekom details more about the recent growth strategies that are already looking very promising.

CONSTANT DIVERSIFICATION “Swartland was a wooden window and door business and took the leap into aluminium windows and doors.

That went really well and sustained the business when wooden products

declined. We then diversified into other products which were not as big as our leap into aluminium in terms of turnover and size of business, but we added different products and different substrates to our basket offering and, where we were declining with old products, the new products carried us.

In terms of the South African business cycle - there has been a massive decline in the construction industry in general – even a steady performance is an improvement versus the rest,” he says.

“We concluded the purchase of Hydro Doors and Gates on May 13. That is a garage door business and that is a significant jump for the turnover of the business. It is again a diversification as we have never been in garage doors and we have never worked with steel

as a substrate. We think that, if done properly, this business has massive potential. We are wanting to at least double, if not treble, that business from where we purchased it.”

Since completing the acquisition in May, Swartland has examined its new subsidiary forensically and stripped out costs where necessary to ensure an efficient operation. The product range has been streamlined, raw material suppliers have been filtered, and all costs have been scrutinized to create a proficient and effective set-up.

“We will be ready to officially start pushing for increased market share from September 1. The purchase of that business is a significant leap on our side, not only because it takes us into new channels but also new

// THE OTHER SUB-SAHARAN COUNTRIES ARE DEFINITELY ON OUR RADAR //

Clockwise from top left: CFO - James Hannekom / Chairman - Jurie Hannekom/ 2nd Generation leader - Oom Jurgens Hannekom / CEO - Hans Hannekom

40 / www.enterprise-africa.net

SWARTLAND

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substrates,” says James.

Away from steel and aluminium, Swartland is also looking to expand its presence in the polystyrene market.

A popular material for insulation, roofing, sound proofing, boarding, and much more, Swartland sees big potential for this versatile product.

“Our next big leap is with our new EPS (Expanded Polystyrene) factory,” says Jurie. “It is used as a building material, and there is one company which has a monopoly on the market in South Africa. As of March 2020, we hope to enter that market and become an alternative to what is out there right now. The factory will open at the end of November this year and this is again an entry into new channels and expansion into a substrate we have never worked with.”

The factory will open, on a new

site, in Atlantis – where Swartland already has a presence.

“We purchased a company called Skyward uPVC which manufacturers PVC windows and doors but we are not yet convinced that the SA market is ready for PVC windows and doors.

However, the property where that business was situated is large and we will put the EPS factory on site there,” details Jurie.

Atlantis, now officially recognised as a Special Economic Zone, is an area that offers certain tax benefits for businesses - especially in the energy efficiency space. In the future, this could become a powerhouse region of the Western Cape. “We are expanding in Atlantis, we are spending a lot of money on the new plant, and we are expecting good things,” says James.

EXPORT SUCCESS A key element of the Swartland business has been its ability to showcase South African manufacturing to an international audience and build export channels into Europe and the USA. After Jurie Hanekom became involved in the family business in 1988, exports became an increasingly important part of the company’s strategy. Export revenue is a welcome addition to the company’s performance and is something that not all competitors can boast.

“We have maintained our numbers in those parts of the world,” says Hans. “That has continued, and we are extremely happy with that part of the business. It is difficult as you are competing on the world stage. To make significant inroads is difficult with our current product range, but there may be opportunities to expand with new

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INDUSTRY FOCUS: BUILDING

products. We certainly have plans to expand our footprint in those areas and we are looking at whether that will be with current or new product offerings.”

Previously, the company’s core product range included aluminium windows and doors, wooden products, insulation boards, showers, awnings, PVC products, and polystyrene products. While not all are currently exported, Swartland is always looking at potential for growth.

“All of our product ranges have continued, and all are growing. We continue to do well, and we are happy with where we are,” says Hans.

Apart from Europe and the USA, Swartland exports to markets across sub-Saharan Africa. Business in these regional markets is important, and these geographies contain quickly growing economies with growing construction

sectors. Because of this, Swartland is watching closely on their progress.

“The other sub-Saharan countries are definitely on our radar,” details Jurie. “We are always trying to grow our presence

Swartland Advert.pdf 1 2019/08/22 03:10:23 PM

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in Namibia, we are actively looking for growth in Botswana, we are hungry for growth in Mozambique, we are getting nice enquiries from Kenya, and we are starting to investigate Rwanda.”

Last year, following the change in political leadership in Zimbabwe, expansion had been pencilled in for that country, just across the border. But now, without material growth, Zimbabwe has become less-attractive.

“At the time, there was a lot of positivity with the change in political leadership. Six months later, the situation remains the same and the currency issues are well-documented.

Right now, unless there is a significant change, it’s not a market that we are interested in at all,” says Jurie.

Swartland’s extensive and perfectlyhoned distribution operation helps the company to move into markets across southern Africa. While manufacturing will always remain important to the sustainability and ongoing success of Swartland, distribution is where the owners see growth coming from.

“The hardest thing about South Africa, believe it or not, is the ability to distribute nationally,” says Hans.

“On a map, South Africa looks like an easy place to deliver to, but there are intricacies involved in getting to all the small towns – it’s incredibly difficult.

That is why we have spent a lot of money on distribution centres around

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// THE PURCHASE OF THAT BUSINESS IS A SIGNIFICANT LEAP ON OUR SIDE, NOT ONLY BECAUSE IT TAKES US INTO NEW CHANNELS BUT ALSO NEW SUBSTRATES // the country, and because we have the ability to be in every town in South Arica at least twice a month, we have a nice backbone to work with getting products through that system.

“We will never lose the manufacturing element of the company as that is what the business is built on.

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The new EPS factory we are putting up is a manufacturing plant, but the reason we are going into that market is because we have a delivery system that can support it. In order for us to continue to grow, we will have to expand our distribution business even further.”

And growth is certainly on the cards. While the management team is well-aware of the challenging economic conditions that surround both the country and the industry, by sticking to its strategy of diversification, Swartland will continue to grow.

“We are not delusional,” admits James. “The South African economy is under pressure, the building industry is under pressure, and we are just doing what we think it takes to survive. We are fighting for every Rand and we believe we have a good strategy going forward. We are not swimming in our

www.finewoods.co.za

own pool – we are with the rest of the industry and we know that conditions are not great. We have developed a model that is different, and we ensure that we spread our risk across multiple product categories and channels – that is the key.

“We are always positive,” says Hans. “We would not be investing in new factories, expansion, and new businesses if we didn’t think South Africa had a chance. Money talks – we are putting up plants and employing people, and that speaks volumes,” he concludes.

WWW.SWARTLAND.CO.ZA

www.enterprise-africa.net / 43

Eurosmart Bathroom

LIXIL

Making Luxury Lifestyles

A Reality in Africa PRODUCTION: Timothy Reeder

No longer mere functional spaces for cleaning and washing, or preparing food, LIXIL Africa takes two rooms of the house that often escape attention - the bathroom and kitchen - and transforms them into places of personal comfort, relaxation, and transformation. Recent months have brought new dawns and major investments for the pioneer of housing products, in its quest to deliver kitchen and bathroom offerings that solve real-life challenges for African consumers.

//

“Everyone dreams of a better home,” sets out LIXIL Africa, and never has a truer word been spoken. We live in an age where image is everything, and the home is a vital cornerstone of identity. “At LIXIL Africa, we use the power of water to make bathroom and kitchen products that help make better homes a reality for everyone in Africa, today and in the future,” the company underlines.

Drawing on a strong Japanese heritage, pioneering innovations come as a result of LIXIL Africa’s association with some of the most well-loved home-grown brands: Cobra, ISCA, Vaal Sanitaryware and Libra all appear on the LIXIL Africa roster, and each and every one has a long and distinguished heritage in South Africa. GROHE, Plexicor, and Apex complete the offering to LIXIL’s African consumers.

“We believe bathrooms are not just functional spaces for cleaning and washing; they are places of

personal comfort, relaxation, and transformation. We see kitchens as more than just a necessity to fulfilling our appetites; they are spaces to unlock our inner creativity, curiosity, and joy.”

It is not purely aesthetics with which LIXIL Africa concerns itself, however; it has one eye firmly fixed on sustainability as it seeks to make luxury available to all. “We are mindful that water is Africa’s scarcest and most precious natural resource, too,” the company makes clear. “That’s why we are continually searching for and creating solutions that allow us to do more with less, such as adapting the shape and design of our products to reduce water usage and protect the world we live in.

“There is potential to do so much more, and our local brands are committed to bringing improved sanitation, better water efficiency, and the joy of careful design to diverse communities.”

GROHE DAWN ACQUISITION LIXIL Africa is the South Africa-based division of LIXIL, which makes water and housing products that touch the lives of more than a billion people around the world, every day. LIXIL Africa was born just two years ago through LIXIL’s acquisition of the remaining 49% of shares of Grohe Dawn Watertech Holdings Proprietary Limited (GDWT) from Distribution and Warehousing Network Limited (DAWN), for an aggregate amount of R324.5 million. For LIXIL, it was a key move in seeking a presence in its last remaining continent, with the transaction finally allowing it to cover Africa.

“LIXIL is expanding the global footprint of its water technology business with this transaction,” commented Kinya Seto, LIXIL CEO and president. “Full ownership of GDWT will strategically position us for growth in South Africa and the emerging markets of sub-Saharan

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INDUSTRY FOCUS: BUILDING

// OUR CAPE TOWN SHOWROOM REVEALS HOW A BETTER HOME IS MADE OF SURPRISINGLY SIMPLE THINGS // Africa. This transaction also allows us greater flexibility in managing the brand portfolio and business strategy in this region.

“We have already seen steady progress in strengthening GDWT’s governance and operational efficiency, with strong support from HQ teams on financial management, supply chain and manufacturing, quality, marketing and other activities.

Taking full control of the business will allow us to accelerate these activities

Eurocube Full Bathroom

46 / www.enterprise-africa.net

and, ultimately, generate sustainable long-term performance and growth in this important region.”

“This is an exciting step forward for GDWT,” added Henk Suelmann, GDWT CEO. “We are set to evolve to become a key part of the global LIXIL footprint via an integration process that will feature investment as well as strong support from Japan and other parts of the network. This will allow us to deliver high-quality service and world-class products to our customers.

We want to see everyone in Africa experience one of our brands, and we believe that as part of LIXIL, this now becomes a real possibility.”

BIG SA INVESTMENT The acquisition of GDWT formed part of a colossal R1.6 billion total investment by the LIXIL Group Corporation in its South Africa arm, as outlined LIXIL President and Chief

Executive Kinya Seto in March last year. Seto explained that, for many years, only around 1 or 2% of GDWT’s sales were reinvested into facilities; there was now a pressing need to rectify the lack of capital expenditure.

“Many of the facilities are 60 years old, so we need to upgrade them to modern facilities and invest more,” Seto expanded. “This year, we are planning to invest 10% of sales.” This translates to an investment of about $13million (R152m) in GDWT’s manufacturing facilities in South Africa, which Seto added would have the welcome benefit of creating a better working environment for employees.

Seto qualified that this investment must be made on an ongoing basis to improve more of the facilities, such as ceramics and acrylics. Investment is necessary to shore up the long-term future of the business because manufacturing

LIXIL

// INVESTMENT WILL ALLOW US TO STABILISE LOCAL PERFORMANCE SO THAT PRODUCTS MANUFACTURED IN SOUTH AFRICA COMPETE AT THE HIGHEST LEVEL // technology changes so rapidly. 60 to 70 years ago most of the products were made from castings, for example, while now they are being forged; the next 10 years could well see a move towards 3D printing, along with changes in the types of material used.

“Our goal is to bring global standards, practices, and among the most modern technology in our industry to South Africa,” BizNis Africa reported Seto as remarking.

“Now that the South African business is fully-owned by LIXIL, we will be more positively aligned to the global business, better able to control the manufacturing process and improve our design capabilities, quality standards and productivity in line with our operations in Japan, Europe and the United States,” he went on.

“We need to ensure certainty, and this investment will allow us to stabilise local performance through better efficiencies, so that products manufactured in South Africa compete at the highest level.”

FLAGSHIP CAPE TOWN SHOWROOM LIXIL Africa wasted no time in making its mark in its long-awaited new home, opening its new, exclusive showroom at Cape Town’s iconic Victoria & Alfred Waterfront, midway through last year. The luxurious environment offers its trademark

premium solutions for every water small add.indd 1 need in domestic, hospitality or commercial properties, making stylish homes a reality for everyone.

Product specialists are on hand to welcome architects, project developers, interior designers and the general public, sharing expert knowledge and inspiring guests to bring their dream bathroom or kitchen to a glistening reality.

“Our new showroom reveals how a better home is made of surprisingly simple things, whether it’s creating a luxurious bathroom space to escape to after a long day, kitchens that unleash creativity, or showers and taps that let you experience water in new ways,” said John Westermeyer, Chief Marketing Officer of LIXIL Africa.

“Our new showroom is an interactive and visual functional

space that offers our customers the 2019/08/31 opportunity to engage personally with our wide range of kitchen and bathroom water-centric products, systems and solutions,” Westermeyer continued.

“Our Cape Town showroom is LIXIL Africa’s flagship display of all that we can offer to discerning homeowners and property developers, and we look forward to welcoming those seeking exquisite design, smart solutions, and simply great products through our doors.”

WWW.LIXIL.CO.ZA

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15:35

ÜBER FLAVOUR

SA Craft Ice Tea

With CBD PRODUCTION: David Napier

Über Flavour is blending locally-sourced, all-natural ingredients, in a Cape Town-based manufacturing facility, to create a range of ice tea drinks that Founder Paul Simon is planning to combine with CBD. What’s not to love?

//

One of South Africa’s most exciting young beverage brands, Über Flavour – based in Green Point, Cape Town – is embracing global trends to deliver products that modern customers desire.

Established in 2015 by entrepreneur Paul Simon (of YDE – Young Designers Emporium – fame), Über Flavour uses all-natural, locally produced ingredients in full to create ice tea-based beverages.

There are no flavourings, extracts or additives – the manufacturing process involves brewing fresh rooibos tea from loose leaves and blending with real fruit juice pressed from real fruits. While many brands play on the idea of health and well-being, few are making products that truly have health-promoting ingredients.

At Über Flavour, it’s all about local, natural, honest inputs for a chemical-free, tasty, healthy output.

The current range includes four flavour variants: Apple and cinnamon, mango and vanilla, honey and lemon, and berry and buchu.

The idea for the product came to Simon when he was travelling back to

48 / www.enterprise-africa.net

South Africa after a family trip to Europe.

He was in a German airport waiting to board his flight when his young daughter asked for a drink. He didn’t want to give her something packed with sugar, hyping her up before a long flight, so he searched out a rooibos-based ice tea.

After boarding his flight and taking his seat he looked at the bottle and saw that the product was manufactured in Germany using rooibos extract rather than actual tea. There was something that did not sit right with Simon. Rooibos, a South African product, being sourced from Germany, to make a drink but only using extract – it didn’t add up. So, he investigated the potential of using fresh tea brewed with a blend of freshly pressed fruit juices to add flavour. All the manufacturers he approached said it couldn’t be done – especially for export – as the product would have such a short life. Like a true entrepreneur, being told it wasn’t possible only spurred Simon on. Eventually, he found a local company that could handle the manufacturing process, using a method that would allow the product to have a shelf life

suitable for export, using 100% locally grown ingredients.

After experimenting with branding and flavour combinations, the product range was completed and positioned as a niche offering – the craft drink of the ice tea market.

Distributed widely throughout South Africa, but mainly aimed at export markets, Simon has succeeded in gaining traction in the USA, South Korea and Singapore. The brand is growing, and it is about to embark on a diversification strategy that will launch it to the forefront of another internationally growing trend.

HIGHLY SUCCESSFUL It seems the future of the soft drink market is surrounding cannabis, specifically CBD (Cannabidiol). CBD is a product of the hemp plant and can be added into drinks reasonably easily. It has no psycho-active element and is not related to THC (tetrahydrocannabinol), the element in cannabis that gives the ‘high’. CBD has been claimed to have strong health benefits.

INDUSTRY FOCUS: FOOD AND DRINK

Many brands around the world are already adding CBD to their beverages and Simon is keen to take Über Flavour in this new direction after returning from a sales trip in America.

“I have just returned from the USA where you can’t walk into a store without finding a CBD product of some kind. We want it to be a catalyst to get our product out there and scale it,” he tells Enterprise Africa.

“We are launching our first variants that contain CBD. We are playing in the CBD space as it has many medical

50 / www.enterprise-africa.net

benefits and is the new trend in food and beverage. We are expecting very big things from this launch, we’ve created a very nice campaign and we are super excited.

“We are starting with one variant, apple and ginger. We are starting with this variant to test the market and we will probably expand it across the range in the future.” Über Flavour is not the only company exploring this exciting new trend. In February, Enterprise Africa spoke to Poison City Brewing in Durban

about adding CBD to their beer. After its launch, the product flew off the shelves and out of the taps, demonstrating the appetite for CBD-based offerings. In September 2018, South Africa’s highest court legalised use and possession of cannabis in private places, and growing of cannabis for private consumption.

Clearly, there is a growing cultural acceptance of cannabis, both locally and internationally. Über Flavour hopes to capitalise on this movement.

“The challenge is that the legalities are different in every single country.

The Health Minister in South Africa has given a one year go ahead for products with less than 20 mg – but it is only for one year; what happens after that if they change their mind? I can’t see it happening, but it is a reality that we have to consider.”

Because of Simon’s position within the beverage industry, he is privy to knowledge about upcoming products.

He is already aware of at least 20 other brands that are ready to enter the CBD beverage market but not all are as highquality as Über Flavour.

“The challenge for us as a relatively small company is to educate the customer about what type of CBD we are putting in. It sounds strange but many people are taking hemp oil and putting it into drinks claiming that it is CBD – that couldn’t be further from the truth,” he explains. “Other brands are using CBDs that are substandard in quality. We have completed tests of CBDs that are available in the South African market and we found that many of them test positive for insecticides. It makes sense because if you are extracting anything from a plant that has been sprayed, you will extract some of that spray too. Like with all the other ingredients in our products, we use real materials; we don’t use vanilla extract - we use real vanilla pods from Madagascar. I like to source everything locally, but we have decided to source our CBD from a Swiss laboratory. It has all the necessary authorisations and certificates of

ÜBER FLAVOUR

analysis and we will be putting 10 mg into each bottle.”

This is a bold step for Über Flavour.

The company is building a strong brand, with a loyal following within the niche that it operates. The hope is that this move will bolster its already robust presence, complementing the hard work that has already been done.

“I do believe it will become the nature of our business. We think it will be a catalyst for us to pivot. We are geared up from a manufacturing point of view to take the business to the next level. CBD is going to be all the rage but I’m not sure how long that will last,” says Simon.

He describes the competitive environment as “like the space race” and says that Über Flavour wants to lead in terms of product development while gaining first-mover advantage.

INTERNATIONAL PRODUCT One of the cornerstones of the Über Flavour business model is the company’s focus on export markets. The company has developed an extensive international presence and the team is always on the road, displaying products, talking to buyers, and exploring markets in an effort to take the Über Flavour idea into new territories.

Paul Simon explains that the reason for focussing on export is because he saw the economic challenges, that have plagued the country, before they hit. Slow economic growth, high unemployment, lacking confidence – all have caused the country to slip to a 3.2% GDP contraction in the first quarter of 2019. The one positive of a situation like this is exporting becomes attractive as the price of the Rand encourages foreign importers.

“There is no question that we have economic challenges at the moment.

It was one of the reasons for starting a business like this and hedging our bets so we could look at overseas customers as well,” says Simon.

“Even if it gets tough here, it just makes it easier to sell into the UK, USA and Europe. We feel that was intentional and we did see it coming.

We are nicely positioned now to take advantage of that. The fluctuations are the difficult part.”

Exporting has not always been plain sailing. Previously, Über Flavour was negotiating a deal to supply 120,000 bottles a month into China. After initially agreeing the deal following a successful trade show, it took six months to get the products approved by the authorities for the Chinese market. During that sixmonth period, there was political change

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INDUSTRY FOCUS: FOOD AND DRINK

in South Africa and the Rand appreciated significantly. This left Über Flavour’s pricing close to cost and made the deal unsustainable. “It’s very difficult to plan a business when you have fluctuations of as much as 22% in the exchange rate. We learnt lessons there and we did ultimately lose the deal,” says Simon.

Relationships have also broken down with distributors in the UK, the Netherlands and Dubai but every effort is being made to discover new contacts so the Über Flavour flow can continue.

“Currently we do not supply into the UK, despite having strong interest in the product from various companies.

It is certainly a market we would like to export to in the future. South Korea and Singapore remain strong for us and we

// WE CERTAINLY HAVE INTENTIONS TO GROW THE BUSINESS BUT WE ARE NOT A COMPANY THAT WILL GO AND BUILD A LARGE CORPORATE HEAD OFFICE // 52 / www.enterprise-africa.net

have just sent new orders out. The USA, we are working on a new order for a chain called Cost Plus World Market. In the Netherlands, we are trying to build new relationships.

“We have previously been involved in supply into the UAE but relationships broke down and so we are in the process of signing new deals for the UAE. Canada is on our radar but we are exploring the legalities of importing products into that country,” explains Simon.

“I have been in the USA at a trade show and we have been asked to begin a review process with Walmart. Obviously, for any relatively small company, that is great news. We are at the very beginning of the review process but they are looking at the CBD product and it is clear that it is becoming very mainstream,” he adds.

Even with international success, the company never wants to move into the mainstream mass-market. The intention is always to remain niche, craft focussed. Simon is passionate about using ‘real’ ingredients and will not compromise on this.

“Our product is different from other ice teas in the market – the majority of other brands operate in what I call the ‘Coca-Cola space’. Effectively, they are flavoured waters that have a tea extract in. We have turned that idea on its head

and we are one of the only ice tea brands in the world that actually brew tea from loose tea leaves. If our product tastes of apple, it’s because it has apples in it, not apple flavouring,” he says.

Complementing the company’s international success, Über Flavour is realising fantastic growth in the local market. South Africans have taken to a product that is made with real, locally grown ingredients.

“We have just signed up with DisChem who have a good 150 stores – that should be coming online in the next few weeks. We are doing some really nice business with Seattle Coffee Company where we are the cold beverage of choice across all of their stores. Things are going really nicely locally but winter is always a difficult period for the beverage market, however we are almost 20% up on last year.”

Recently, Über Flavour started manufacturing in a new facility, one that is highly committed to local societal development. The Goedgedacht farm, close to Malmesbury, is owned by the Templeton family and has been set up as a trust of which the beneficiaries are the children of the area. To date, the trust has built five schools and is highly regarded in the area. On site, Goedgedacht runs a farming operation and a manufacturing

ÜBER FLAVOUR

// WE ARE LAUNCHING OUR FIRST VARIANTS THAT CONTAIN CBD // business – a Woolworths Blue Flag facility where olive tapenades and cordials are produced. Über Flavour delivers all of the raw materials, including bottles and caps, to the site and the manufacturing centre bottles and packs ready for distribution. ÜBER OR UBER Asked about the naming of the product, considering it is the same as the global e-hailing taxi service that has taken the transport world by storm, Simon explains that the two have no relation and his company started using the name before ever hearing about the taxi business.

“Uber the taxi service was not in South Africa when we were coming up with names and developing,” he says.

“We used Über as the German adjective of ‘better than, great, premium’ and it has always linked to our word, flavour. Just before we were about to launch the Uber taxi e-hailing service arrived in the country and we didn’t know what to do. We didn’t have money to change all the work we had done so we decided to run with it. Our lawyers

looked into and discovered that Uber don’t own the word Über – it’s a word that cannot be owned by one particular brand or party. They are Uber taxis and we are Über Flavour, and in South Africa there are three others that use the name Uber but with different spellings.”

Ultimately, the coincidence caused no problem for either business and Simon ensures there is no love lost. There was even a plan to run a JV programme where Über Flavour would supply cool boxes and drinks for the back of Uber cars in the premium service, but that deal never materialised. ÜBER GROWTH Operating in a market that is about to boom locally and globally, with a product range that is already well received, and a brand that is harnessing the power of all-natural ingredients, Über Flavour is a company with an exciting future. Still young, and very nimble, the business is targeting growth in the coming years.

“We certainly have intentions to grow the business but we are not a company that will go and build a large corporate head office. Having a top down structure with big costs is a business style that is coming to an end,” says Simon.

“We want to be the niche mainstream drinks brand. People

want the real thing. They don’t want something that is full of extracts. If it’s supposed to taste of peach, people want to taste real peach. Of course, it has to make commercial sense. It has to be in enough outlets and people have to be able to get hold of it.”

Because of the success the brand has achieved to date, Simon is bullish about the future and is excited about export opportunities.

“We are working of a low base, but we are seeing nice growth. Things are challenging but we like to think that we will continue manufacturing and creating jobs locally in South Africa – that is what we need to turn the economy around – but the idea for now is to get the product exported more than sold locally.”

The combination of real ingredients, exciting marketing, local input and an ethical and honest approach to business have helped Über Flavour to deliver what a changing consumer palette wants, both in the bottle and from a business perspective. This is a South African export that has all the potential to become globally renowned.

WWW.UBERFLAVOUR.COM

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THE BIOVAC INSTITUTE

Local Vaccine Manufacture

Returns to South Africa PRODUCTION: Timothy Reeder

After years of negotiation and capacity-building, South Africa has been granted a licence to manufacture one of the world’s most important vaccines, Hexaxim. South Africa’s Biovac Institute (Biovac) will begin production of the vaccine next year, and follow in 2020 with antipneumonia inoculation Prevnar, marking the first local manufacture since the mid-1990s: decreased cost, increased availability and a spurring of economic growth are all set to follow.

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INDUSTRY FOCUS: HEALTHCARE

// OUR VISION IS TO BE A HEALTHFOCUSED CENTRE OF EXCELLENCE ROOTED IN AFRICA FOR THE DEVELOPMENT AND MANUFACTURE OF QUALITY VACCINES //

//

Based in Cape Town, the Biovac Institute (Biovac) is a world-class, specialist vaccine manufacturing business based in Cape Town, which sets out to produce important vaccines for both the South African and export markets.

Biovac is the result of a public-private partnership formed with the South African government in 2003, to revive the country’s human vaccine manufacturing capacity.

“Our vision is to be a health-focused Centre of Excellence rooted in Africa for the development and manufacture of quality vaccines for Africa and the developing world’s needs,” the company sums up of its founding principles, as it ensures continued and seamless delivery of over 25 million doses of critical vaccines each year to all nine provinces of South Africa, as well as some key neighbouring countries.

“As the only Southern African human vaccines manufacturer,” Biovac says, “we recognise the need for a domestic manufacturer of vaccines to enable the Southern African region to respond to regional epidemics and vaccine-preventable diseases.”

STEADY DEVELOPMENT When it comes to something as critical as human vaccines, the process is not one to be rushed, and consequently Biovac has had to carefully gather the knowledge and skills to compete in the complex, challenging and strictly regulated healthcare environment.

“While developing our manufacturing facilities,” Biovac explains, “we have been importing, exporting, packaging, testing and distributing vaccines. Our leap of faith ensured that we delivered the required vaccines to the children’s vaccination program, known as the Expanded Programme on Immunisation, in South Africa and the region.”

The endeavour to re-equip South Africa and the African continent as a whole with a sufficiently modern manufacturing capability has, in

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THE BIOVAC INSTITUTE

Biovac’s own words, “progressed steadily and significantly.” To date, over R600 million has been invested in infrastructure and skills development at Biovac, seeing an economic benefit of more than R500 million per year to the South African economy.

“Our sustainable strength, as we progress on our journey, lies in our ability to partner with others,” Biovac makes clear. “Among others, we have partnered with research organisations like the University of Cape Town and international organisations such as the World Health Organization (WHO). We have also looked to industry as well as funding organisations like the Industrial Development Corporation and the Bill and Melinda Gates foundation.”

Above all, at Biovac the primary aim is to strengthen the pharmaceutical and healthcare

environment in South Africa and Africa, contributing to the socio-economic transformation of the country and continent. “I am certainly optimistic about times to come,” summed up CEO, Morena Makhoana, when we spoke last year.

“Because vaccines are part of a country’s primary healthcare system, regardless of the cycles in the economy, there is always a need to vaccinate children against diseases.”

HEXAXIM AND PREVNAR MANUFACTURE The hexavalent vaccine Hexaxim is used to vaccinate children against six life-threatening infectious diseases: diphtheria, tetanus, acellular pertussis - more commonly known as whooping cough - inactivated polio, Haemophilus influenza type b and hepatitis B.

00000 Econorisk Enterprise Africa ad September 2019.indd 1

It is a vital aspect of South Africa’s expanded programme on immunisation, and more than three million children currently receive the vaccine every year. Of the 14 vaccines administered between the ages of zero and two years, four are Hexaxim. The initiative has had a marked effect on the number of children under the age of five that have died, down from 89,418 in 2005 to 47,409 children in 2013.

Morena Makhoana revealed earlier this year that, in a huge move for the company and the country, Biovac will start local production of French healthcare leader Sanofi’s Hexavalent vaccine next year, with its plant set to produce four million doses of Hexaxim vaccine annually. Until now, South Africa’s government has had to buy in around 95% of the 25 million doses of vaccine supplied annually by Biovac.

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INDUSTRY FOCUS: HEALTHCARE

“We start production of (the) hexavalent in Q3 2020,” Makhoana confirmed at Biovac’s state-of-the art facility in Cape Town. Set to join Hexaxim for Biovac in 2021 is Pfizer’s anti-pneumonia Prevnar 13 vaccine, for which it expects a full output of three million doses to start in the first half of 2021.

Under a five-year agreement signed with Pfizer in 2015, Biovac has to date only packaged labelled syringes but it is now acquiring the formulation and filling processes ahead of the launch. “The technology transfer process has enabled significant knowledge transfer, job creation and direct investment,” said Rhulani Nhlaniki, Pfizer’s country manager.

Biovac’s dose of Hexavalent, a six-in-one vaccine for several diseases including diphtheria, tetanus and

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// THE TECHNOLOGY TRANSFER PROCESS HAS ENABLED SIGNIFICANT KNOWLEDGE TRANSFER, JOB CREATION AND DIRECT INVESTMENT // polio, is the only one in the world that is fully liquid and unlike other versions on the market, Makhoana added, does not have to be mixed before injecting.

This makes it easier to administer in remote and resource-poor clinics across Africa.

“On this particular six-in-one vaccine we are the only tech transfer partner with Sanofi in the world, so we are very proud,” Makhoana told Reuters, while for Sanofi, it appears clear that continued investment in South Africa’s vaccine programme will be central to bolstering its own position. “South Africa, and Africa for

that matter, is an emerging market and showing strong growth year-onyear and hence will remain a priority for Sanofi,” said Merilynn Matthew, who heads Sanofi’s South African vaccines unit.

HARNESSING LOCAL PRODUCTION Local vaccine manufacture has many foreseeable benefits, including decreased cost and increased availability, as well as the capability to provide vaccines to the region.

The local manufacturing process can also spur economic growth, and is a key catalyst and multiplier for job

THE BIOVAC INSTITUTE

// IMMUNISATION IS ONE OF THE MOST SUCCESSFUL AND COST-EFFECTIVE PUBLIC HEALTH INTERVENTIONS // creation. Business Day has mooted manufacturing as South Africa’s potential ‘sunrise sector,’ and with 9.6 million of its population currently unemployed, there is a huge pool of untapped talent to dip into.

Manufacturing vaccines locally firms up a sector which is prone to shortages and price fluctuations, realities which often have severe consequences for public health.

Vaccines are supplied into a global

market from a relatively small number of sites and manufacturing problems, mostly linked to issues of quality and safety, occur and not infrequently affect the supply of vaccines to lower value markets.

When Biovac was established the annual cost of vaccines was only R188 million, but this has since exploded to R1.75 billion. Hexaxim alone accounts for 37% of the expenditure, and being able to manufacture locally using imported antigens will enable Biovac to ensure a domestic capacity in vaccine production and save an estimated 15% of the cost compared to international procurement.

“Immunisation is one of the most successful and cost-effective public health interventions,” Biovac sums up of the reverberations to be felt as a result of its commencing

local production in the coming years, “and biotechnology will become a significant growth area and contributor to our Gross Domestic Product.”

“We are building a bio-sector from scratch and that feeds into the bio-economic strategy of the country and the region,” Makhoana explained, and now Biovac is closer than ever to being able to effect the economic transformation which will result from this new era of vaccination in the country.

WWW.BIOVAC.CO.ZA

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LANCET LABORATORIES

Peerless Pathology Services for All Africa PRODUCTION: Timothy Reeder

Operating in the private healthcare environment, Lancet Laboratories offers specialist pathology services for the corporate, insurance and mining sectors. Headed up by a team of nearly 100 specialist pathologists, Lancet processes almost two million tests per month and offers an extensive range of pathology services, from sophisticated molecular and cytogenetic investigations to advanced chemical analyses.

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INDUSTRY FOCUS: HEALTHCARE

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Lancet Laboratories is among the leading pathology laboratories operating throughout Africa, providing vital diagnostic and monitoring services in South Africa, Botswana, Ghana, Kenya, Mozambique, Nigeria, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe.

Established more than 60 years ago in the heart of Johannesburg’s central business district, Lancet Laboratories pairs a primary focus on pairing high quality, cutting edge pathology services with clientcentred, efficient turnaround times.

“A key Lancet Laboratories hallmark is its continuous growth and development,” the company describes. Its team of pathologists, each with their own area of expertise, lead the service, not only to ensure the quality and validity

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of investigations but also to offer consultative services to physicians, managed healthcare institutions, the occupational health environment and the insurance industry sectors.

Such growth and progress has propelled Lancet Laboratories from its contented base within South Africa to its current position enjoying operations in 12 countries in Southern, East and West Africa.

“Lancet Laboratories is committed to providing diagnostic excellence,” Lancet Laboratories sums up.

“This, together with its important role and responsibility to provide specialist pathology services and infrastructure to support the fight against the key health issues affecting our continent, makes Lancet Laboratories the optimal partner for anyone seeking pathology and diagnostic services in Africa.”

LESOTHO MEDITECH EXPANSION The small, mountainous country of Lesotho within southern Africa is home to approximately two million people. The region faces many risks to public health due to low coverage of essential public health services and ailing institutions. “While Lesotho’s Government continues to invest heavily in healthcare infrastructure, the sector experiences a variety of challenges, which are exacerbated by the country’s topography and the isolation of many rural areas where the majority of the population resides,” said the Lesotho Review.

“This represents a significant access barrier to both healthcare personnel and patients.”

Lancet Laboratories is doing all it can to improve the situation, though, and to help achieve Universal Health Coverage for all of Basotho by 2030.

LANCET LABORATORIES

In partnership with MEDITECH South Africa (MTSA), Lancet Laboratories recently implemented the integrated software solutions provider’s core laboratory and administrative modules at its Lesotho branch.

In December last year, with much of South Africa winding down as the festive season hit, the MTSA teams chose rather to begin the execution of the system set-up, and were able to pass over a functional LIVE environment to Lancet Laboratories in January 2019 for final testing and verification; Go-LIVE was achieved on 1 February 2019.

MTSA has provided integrated software solutions to healthcare organisations throughout Africa and the Middle East for over 37 years, and strives to be the preferred business partner in delivering effective long-term solutions and services through its enviable local knowledge and experience.

With its broad reach throughout Africa, meanwhile, Lancet Laboratories is able to offer faster and more efficient turn-around times to more patients and their doctors, offering crucial specialist pathology services to Africa’s population in support of the fight against HIV, tuberculosis and other key health issues affecting the continent.

SUPER CERBA MERGER In a move aimed at strengthening the provision of effective, evidencebased healthcare across Africa, at the turn of the year Lancet Laboratories announced that it would merge operations with its leading counterpart in Europe, Cerba HealthCare. The partnership sees Lancet join a plethora of laboratories which make up Cerba’s international network, which combine to offer a comprehensive solution in the field of biological diagnosis from the sample centre to the specialities laboratory.

With headquarters in Paris and over 6,300 employees, Cerba Healthcare operates a network of

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INDUSTRY FOCUS: HEALTHCARE

laboratories and technical facilities which span the whole of Europe, centred primarily in France, Belgium, Luxembourg and Italy and which serve more than 50 countries in Europe, Africa and the Middle East. Additionally, it operates a central lab testing for clinical trials for pharmaceutical and biotech industries and for diagnostic trials as well as veterinary and genetics.

// LANCET LABORATORIES IS COMMITTED TO PROVIDING DIAGNOSTIC EXCELLENCE //

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The newly-formed Cerba Lancet Africa represents a Joint Venture which will serve millions of healthcare professionals and patients throughout Africa, providing internationallyaccredited, high-quality pathology services for the prompt and precise diagnosis of a wide variety of illnesses and their effective management.

Cerba Lancet Africa will now manage a network of the more than 100 laboratories previously owned by Lancet, spanning 11 African countries including Kenya and with over 1,400 employees serving more than 1.3 million patients a year, generating over Sh5 billion in turnover in 2018.

The joint venture is set to cover operations in Kenya, Tanzania, Uganda, Rwanda, Botswana, Ghana, Mozambique, Nigeria, Swaziland, Zambia and Zimbabwe. Lancet’s

operations in the Republic of South Africa, home of its founding base and headquarters, will however not form part of the JV. “Lancet’s brand will be retained in all countries where Lancet Group of Laboratories are already operating, including in Kenya where it is incorporated as Pathologists Lancet Kenya (PLK) and operates 38 labs and service points across the country, with Lancet Uganda, Tanzania and Rwanda as PLK’s subsidiaries,” the joint statement went on to explain.

The Competition Authority of Kenya (CAK) approve the terms of the new JV in December 2018, to effect the takeover of Lancet Laboratories South Africa’s shareholding while retaining the local shareholder Dr Ahmed Kalebi. The transaction met the threshold for exclusion specified

LANCET LABORATORIES

// WE ARE DELIGHTED TO PARTNER WITH CERBA HEALTHCARE AND ARE LOOKING FORWARD TO EXPANDING OUR EFFORTS TOGETHER AND WORKING TO IMPROVE THE HEALTH OF AFRICAN CITIZENS // in the Mergers Threshold Guidelines under the CAK Act. “Our common goal is to develop medical services in regions where we are already present and to expand into other countries,” said Jérôme Thill, Deputy Chief Executive Officer of Cerba HealthCare. “Alongside our partner Lancet Laboratories, we are also planning an ambitious investment programme to offer innovative services in clinical pathology that meet the needs of patients, health professionals and

healthcare organisations, alongside businesses across the continent.”

Peter Cole, CEO of Lancet Laboratories, went on to express his delight at what the partnership will bring to the continent on which Lancet Laboratories has made such great strides over its history. “The broad expertise of both our groups, Cerba HealthCare, a leader in clinical pathology in Europe, and Lancet, a leader in clinical pathology in South Africa, coupled with our respective knowledge of the African

continent across very different and complementary territories, will be real strengths for our joint venture,” he enthused.

“We are delighted to partner with Cerba HealthCare and are looking forward to expanding our efforts together and working to improve the health of African citizens.”

WWW.LANCET.CO.ZA

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HOMECHOICE

Tech, Tech, Tech,

and Customer Experience Investments Driving HomeChoice PRODUCTION: Karl Pietersen

The hugely impressive, JSE-listed HomeChoice business is continuing to invest to bring its customer closer so that it can engage and interact on a digital level, using technology to onboard more customers and make it increasingly easy for products to be accessed. Retail and financial services have performed well and things are looking exciting for the future.

//

It has been a tumultuous year for the South African retail sector. Consumers spending habits continue to shift, and the demand for new, faster, easier connections between buyer and seller is continuing to change. For some retailers, the changes have been too fast and too big and the top-heavy players have simply fallen over. A lack of understanding of the market, an inability to move quickly, and unsustainable cost bases have taken their toll.

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However, those that have invested in diversification, understanding of the customer base, recognition of international trends, and systems to back up ongoing digitisation, are those that are ploughing through the uncertain retail landscape, overcoming the challenges of a unpredictable economy, and are churning out good results while delighting customers at every chance they get.

HomeChoice is the perfect example. The home shopping retailer has grown its omni-channel route to

market after starting out as a cataloguebased mail order business back in 1985.

Featured in Enterprise Africa 12-months ago, HomeChoice SA CEO Shirley Maltz explained that the success of the company was down to an embrace of a digital strategy, and a crystal-clear understanding of who the HomeChoice customer is and how ‘she’ behaves.

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

INDUSTRY FOCUS: RETAIL

HomeChoice has a clear and rich understanding of exactly who it is targeting, and who it has built a relationship with over the past 34 years.

The customer base is 84% female, usually mothers, in the mass-middle market (75% LSM 4-8), earning around R10,000 a month, between 30 and 60 years old, living in South Africa’s urban areas, and utilising digital channels (specifically mobile) for shopping.

Offering everything from kitchenware and home fabrics through to fashion products and electrical goods, HomeChoice’s product range is tailored to offer product excellence, at affordable prices, in a convenient manner. Traditionally, the company has a strong range of its own products but more recently, 140 branded products have been added to range at the request of customers.

The innovative business has also entered the market of financial services through its sister company FinChoice.

This allows the customer even further flexibility, offering various payments

// THE MOST SUSTAINABLE DRIVER OF GROWTH IS THE CUSTOMER AND HOW EFFECTIVE YOU ARE AT BRINGING NEW CUSTOMERS INTO THE GROUP AS THAT TELLS YOU THAT SHE IS LOVING YOUR PRODUCTS, AND I AM VERY COMFORTABLE IN TERMS OF OUR CUSTOMER ACQUISITION // 70 / www.enterprise-africa.net

methods and financial services that were previously not available to this market.

In addition, HomeChoice, last year, opened the latest in a roll out of retail outlets in Rissik Street, Johannesburg.

Maltz was clear that the company is not looking to venture into a traditional bricks and mortar retail network-type business, but these inventive stores were being installed to complement the HomeChoice digital strategy and encourage purchases through mobile and online channels.

The opening at Rissik Street was the fourth for the company and represented the flagship of the range. It was received with particular warmth by HomeChoice customers who queued outside on the day of opening before clambering under the shutters as they rolled for the first official time. The modern and sleek store design offers customers the chance to touch and feel products before ordering them to be delivered to their homes.

Today, there are seven showrooms throughout South Africa, and the company has furthered its ‘on the street’ presence by adding ChoiceCollect containers. These converted shipping containers allow for customers to collect and return purchases and have been strategically positioned in township economies including Soweto and Khayelitsha.

“Our seven Retail showrooms and five ChoiceCollect containers are bringing the HomeChoice brand closer to customers, attracting new customers and offering added convenience,” says Maltz, who adds that more ChoiceCollect containers and more new showrooms will be added in the second half of 2019. Some reports suggest that the company is aiming for 30 retail showrooms in total, in a bid to continually attract new customers.

“We want to be an omnichannel retailer with a high-focus on digital.

Our showrooms will help us capture new market share – perhaps people who are nervous about shopping online or nervous about direct

// WE ARE CONTINUING TO INVEST FROM A CAPEX PERSPECTIVE – IT’S TECH, TECH, TECH, CUSTOMER EXPERIENCE, AND OUR SHOWROOMS // marketing. It helps us service clients by answering queries and recommending products, and it allows us to offer click and collect,” says Maltz.

The company maintains its large call centre operation to assist customers, it continues with aggressive pushing of its mobile application and online shopping portal, and it is ongoing with the rollout of value-add services. Combined with its new retail outlets and ChoiceCollect containers, the results of HomeChoice’s efforts are clear to see, even in what is a challenging environment.

Released in August, the HomeChoice Interim 2019 Results show that the customer – a digitally savvy, urban African woman – is not as depressed as the rest of the South African economy. Around 160,000 new customers were introduced to the group in the last six months and that is the result of call centre agents being fully multimedia enabled and able to interact with customers through Instagram, Facebook, WhatsApp and more.

HomeChoice was up 8.6% on the previous year and reached R1.7 billion.

Retail sales were up 7% to R0.9 billion and finance income was up by 7.7% with loan disbursements up 34.2%.

FinChoice, the financial services division, continues to attract new business, providing personal loans, insurance and related products. Revenue for the period was up 18.8% to R424 million. There was an increase in stand-alone insurance premiums of 58% and operating profit

Top Technologies in the Courier Industry 2020 and Forward

Mobile devices remain the primary source of all real time tracking information. Using geospatial services, mobile data gives us a brand new perspective on analytics.

A study conducted in 2016 by the IATA and SITA reveals that deployment of RFID technology could reduce the number of mishandled bags by up to 25 percent by 2022. RFID label technology is a game changer in the courier and logistics industry.

Route and Capacity Optimization will become more usable with better data and improved co-ordinates. This facilitates better route planning as well as dynamic routes. Machine learning applications are essential as it learns from current logistics patterns.

Maximising the throughputs of our conveyer systems enables us to move high volumes quickly and accurately. Our conveyer systems have been upgraded to increase sortation abilities. These systems are capable of vertical expansion.

Courierit’s focus on innovation requires us to constantly re-evaluate our technological requirements.

Since we operate in a fast paced industry, whe where it is essential to leverage technology to ensure that you are aligned with customer goals and requirements.

Our primary focus is to ensure that the technology employed benefits the day to day performance of our customers.

Although we are always open to best practices across the world, we also take heed of the delivery constraints specific to South Africa.

This ensures our business technology models are agile and responsive to South Africa’s diverse and complex landscapes.

GET IN TOUCH sales@courierit.co.za www.courierit.co.za

facebook.com/courieritsouthafrica instagram.com/courieritsa linkedin.com/company/courierit

Cape Town - 021 555 6777 Johannesburg - 011 928 8300

INDUSTRY FOCUS: RETAIL

// OUR SEVEN RETAIL SHOWROOMS AND FIVE CHOICECOLLECT CONTAINERS ARE BRINGING THE HOMECHOICE BRAND CLOSER TO CUSTOMERS, ATTRACTING NEW CUSTOMERS AND OFFERING ADDED CONVENIENCE // was up 16.2% to R158 million.

While these results were satisfactory for Maltz, she was keen for the business to improve going forward.

“We have around 915,000 customers in total and 26% of those in the retail route are registered on digital channels and 86% of customers in the financial service business. The reason we feel positive is that the informal economy in South Africa is much more vibrant than people think. We have 29% unemployment in South Africa but 74% of our customers have a secondary source of income. She may be classified as unemployed but in her mind, she is

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self-employed and sees herself as an entrepreneur. We ask our customers about that and 150,000 say they are self-employed and proud of it; and they are a lot more vibrant than you would think if you are not living in that informal environment,” says Maltz.

Because of the nature of the customer base, Maltz is happy to stick to the digitisation strategy and continue converting the business to a totally digital store and digital financial services business.

“The outlook is going to continue to be muted and difficult in South Africa but we are very committed to

our strategy. The most sustainable driver of growth is the customer and how effective you are at bringing new customers into the group as that tells you that she is loving your products, and I am very comfortable in terms of our customer acquisition. “ Customers are increasingly utilising digital channels and this is evidenced in the HomeChoice call centre where activity decreased by 3% and changed to become more of a digital support team. Over the next five years, HomeChoice expects this trend to continue with people choosing to interact in an increasingly digital

HOMECHOICE

HomeChoice Call Centre

manner. The company maintains its strong sales force of more than 4000 people who operate on a self-employed basis, similar to the globally famous Avon model, and HomeChoice will continue to support these sellers with training and development opportunities. Showroom and container business improved by 2% in the period under review, and mobile and social media interaction in the digital channel saw 41% credit extended up from 39%. This is another channel that the company sees growing aggressively as new technology is rolled out.

Competition in the retail space is rife, and this will remain one of the main threats to HomeChoice’s market share. In the future, three million square metres of new retail shopping space is expected to be rolled out around the country, adding to the existing 2000 shopping centres. The JSE has seen

listed retailers shunned, with shares ending up in the bargain basement.

Food retailers have been especially hard hit and it all comes back to having unsustainable debt structures and a lack of understanding of the changing consumer marketplace. Some industry commentators expect the only way out of the situation is for costs to come down or volumes to go up.

Fortunately for HomeChoice, its market and model are unique, and its reach within the lives of its customers is still growing. Strategies underway to fully digitise the business are coming to completion and this retailer is one which will not be halted.

“We are a fantastic business,” Maltz said in 2018. “We have so much opportunity. We have so many ideas and innovations and everyone is excited, and we have a lot of fun working here.”

In 2019, she continues

enthusiastically. “We’ve managed our expenses tightly across the group and we are investing where we want to – technology is going to be our biggest investment as it has been for the last couple of years, both in terms of staff and systems. As we digitise our marketing, we are going to see our marketing expenses coming down.

We are continuing to invest from a Capex perspective – it’s tech, tech, tech, customer experience, and our showrooms. We have also invested in our warehouse to improve efficiencies in our Johannesburg DC – we are focussed on improving her experience with us.”

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AFGRI

Key Contributors to a

Well-Nourished Nation PRODUCTION: Benjamin Southwold

With a core focus on the critical business of grain commodities, AFGRI is a leading agricultural services company set on driving food security across Africa with a focus on disruption and innovation. Nearly 100 years’ accumulated expertise enables AFGRI to provide services across the entire grain production and storage cycle, as well as financial support and solutions.

//

Grain, which includes maize, wheat and several other crops, looks set to remain the staple diet of South Africans for many years to come. Maize in particular underpins the national provisions; it is the country’s most important grain crop and contributes somewhere in the region of a 40% majority of the gross value of South Africa’s field crops.

Not only a dietary staple, maize is also a crucial source of livestock feed, and an export crop. Maize production can exceed 10 million tons in good years and generates at least 150,000 jobs in years with sufficient rainfall, and uses almost one-half of the inputs of the modern agricultural sector.

Given its primary role in feeding the

nation, and the dual challenges of an arid land and notoriously unpredictable climate, AFGRI knows that it is more important than ever that the industry is supported in order to remain secure and thrive. “We are passionate about food security for our continent, on which our business has a more than 95-year heritage in grain and agriculture” AFGRI outlines. “It is this passion that drives our vision into Africa.”

SECURING SUPPLY Established in 1923 as a cooperative style farming operation, AFGRI has expanded and diversified to become a trusted, multi-discipline partner of the agricultural industry. As well as taking care of the entire grain production and

storage cycle, AFGRI is also heavily involved in the supply of equipment through its ties to the John Deere brand.

It is supported by a large retail footprint - its Hinterland network numbers 61 branches - and offers a multitude of value-added services to the agricultural and corporate market.

Grain management is arguably the cornerstone of the AFGRI business, but also noteworthy is its stance as a leading provider of specialised finance to businesses in the agricultural value chain, through its UNIGRO arm, originating and administering credit facilities to primary producers of agricultural products.

As well as maize, AFGRI also handles and stores wheat, sunflower, soya

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INDUSTRY FOCUS: AGRICULTURE

// WE RECOGNISE THAT IT WILL TAKE MASSIVE INVESTMENT TO DRIVE FOOD SECURITY, WHICH REMAINS OUR CORE VISION // beans, barley and sorghum at more than 100 operational points throughout South and Southern Africa, including Congo-Brazzaville, Uganda, Tanzania, Zimbabwe, Mozambique and Zambia.

Bolstering food security aims in a big way, South Africa’s current storage capacity of around 4.7 million tons is now due to receive a boost from the creation of a strategic grain storage platform vehicle in collaboration with STANLIB Infrastructure Investments, Wiphold, and the Land Bank. The announcement came courtesy of parent holding company, AFGRI Group Holdings (AGH) and its BEE

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partner, Izitsalo Employee Investments.

“The AFGRI Grain Silo Company has the clear objective of expanding the current storage capacity to six million tons or more in the near future, allowing us not only to cater for grain storage, but to expand into the storage of other types of commodities,” said Chris Venter, AGH CEO. “The new storage platform will give us the ability to expand storage infrastructure in future, which includes putting up new facilities in areas where it is not currently economically feasible,” added Jacob de Villiers, MD of AFGRI Grain Management and CFO of AFGRI. “We recognise that it will take massive investment to drive food security, which remains our core vision, and this relates not only the availability of food, but also its affordability,” de Villiers concluded. “For this reason, we are also helping drive down the price of food to the consumer by consolidating our own costs and being open to opportunities to form consortiums with like-minded investors.”

AGRICULTURAL TECH With a growing worldwide demand for cleaner and safer food, AFGRI is harnessing the power of technology to keep it at the forefront of the agricultural sector and to ensure it continues to adhere to world-class standards. With the dawn of the fourth industrial revolution edging ever closer, in recent years AFGRI has developed its online capabilities significantly and now offers a major digital platform that can help farmers make and receive payments, manage stocks, and track business from anywhere in the country.

Launched four years ago, the AFGRI eAccounts platform has exploded in popularity, with in excess of 2000 registered users across South Africa and an average of 8300 logins a month. As of May, payments totalling R13 billion had been made through eAccounts. “eAccounts is the ground-breaking electronic account management solution offered to AFGRI’s customers through UNIGRO Financial Services,” the company says.

AFGRI

Benchmarked Agricultural Land Value Data Base Normgebaseerde Landbou Grondwaarde Data Basis Secured Web Accessible Valuation Report Data Base Webtoeganglike Waardasie Verslag Databasis Specialist Valuation Methodology Training, Skills Development & Mentorship Gespesialiseerde Waardasie Metodologie Opleiding; Vaardigheidsontwikkeling en Mentorskap Consistency, Integrity and Objectivity addresses the Unexpected Konsekwentheid, Integriteit en Objektiwiteit voorkom die Onverwagte Proud Supplier of Specialist Professional Agricultural and Commercial Real Estate and Asset Valuation Services to AFGRI and Various other Private Financiers, Banks and Land Owners for more than 15 years.

Trotse Verskaffer van Gespesialiseerde Landbou en Kommersiële Eiendoms- en Bate Waardasie Dienste aan AFGRI en verskeie ander Privaat Finansierders, Banke en Grondeienaars vir meer as 15 Jaar.

 +27 (0) 82 389 3430 // WE ARE PASSIONATE ABOUT FOOD SECURITY FOR OUR CONTINENT // “It is a key differentiator for AFGRI, with around R430 million worth of transactions flowing through the platform each month.” Using its full capabilities, customers can view and receive invoices and statements, and create detailed reports of their grain delivered for storage at any of AFGRI Grain Management’s 85 locations across the country.

“We are exceptionally pleased with the performance of the platform since its launch in 2015 and are delighted we’ve been able to put access to financial transactions

 pv@alg.co.za

 www.agrilandgroup.com

specifically aimed at the farmer, as well as vital information for those involved directly in agriculture, literally in the hands of our users,” commented Tinus Prinsloo, former CEO of AFGRI. Technology extends further than this for the company, with AFGRI Technology Services (ATS) constantly on the lookout for opportunities to introduce emerging technologies such as artificial intelligence (AI), digital solutions, Internet of Things (IOT) and other emerging technologies to the sector and to its customers. “The South African sector is not immune to the technology disruption we are seeing rapidly impact all industries globally, we need to ensure we are looking around corners,” explained Niki Neumann, GM of Innovation and Strategy for AFGRI.

“We are seeing a lot of this disruption coming from start-ups and entrepreneurs, and it’s for this reason we have partnered with the University of Pretoria’s TuksNovation Activate Challenge, which is focused on identifying and supporting entrepreneurs who have solutions in the AgTech, agricultural financial technology and agricultural insurance technology space,” Neumann concluded of AFGRI’s unwavering forward-thinking approach to keeping the nation safely and efficiently well-nourished.

WWW.AFGRI.CO.ZA

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NAMCOR

Investing in

Namibia’s Future PRODUCTION: David Napier

Namibia is hoping that an economic turnaround can come courtesy of a boom in oil, gas and energy, a sector where the country holds major potential but is yet to execute on a meaningful scale. Key in this strategy is parastatal, NAMCOR, where new deals are fuelling optimism about future growth.

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INDUSTRY FOCUS: ENERGY

//

The Namibian economy is in something of a perilous state.

After independence in 1990, the country went through a period of steady and sustained growth, posting strong GDP figures, right up until the global financial crisis of 2008. After a small recovery after 2010, the economy is again in a difficult position with the Bank of Namibia suggesting that 2019 could see the economy contract by 1.7% following a shrinking of 0.1% in 2018.

“The expected deeper contraction during 2019 will be in line with the devastating drought being experienced currently and the anticipated contractions in major sectors such as diamond mining and wholesale and retail trade,” the bank said.

Traditionally strong in agriculture, fishing, mining, and with a focus on growing the manufacturing and tourism sectors, Namibia is a facing a changing landscape where what it knows may not be able to provide all that is needed to bring back growth levels of more than 5%.

NAMCOR, the country’s stateowned upstream and downstream energy business, is hoping that the key to unlocking the potential of the Namibian economy is going to come in the form of investment and job creation through a booming energy commodities industry.

The country, largely a desert nation, is home to large deposits of mineral

// SWAKOP URANIUM IS GOING TO ENTRUST THIS KEY SERVICE TO NAMCOR, A RESPONSIBILITY TO ENSURE THE MINE CONTINUES UNHINDERED THE NEXT FIVE YEARS // 80 / www.enterprise-africa.net

resource and exploiting these valuable products could become an opportunity too important for the government to turn down.

Established in 1967, NAMCOR is responsible for reconnaissance, exploration and production operations either on its own or in partnership with other organisations in the industry, and holds the mission of becoming a worldclass petroleum organisation providing sustainable benefits to all stakeholders.

The company is headed by Managing Director, Immanuel Mulunga, who is busy penning deals that will help to open up the sector alongside international experts, helping to drive value across Namibia.

He tells Enterprise Africa that, across various different projects, the company is already starting to see positivity.

“We are working new terminals, nine new fuel stations, new international partnerships, new exploration licenses and the national oil storage facility at the Port of Walvis Bay. We have a number of big projects underway and we are aiming to double the size of our business over the next five years.”

In the previous tax year, NAMCOR reported revenues of around $1 billion and its business expansion project has been approved by both the Board and the government.

NEW DEALS At the end of August, Mulunga was present at a singing event to announce that NAMCOR had struck a deal with owner of the Husab mine in Erongo, CGN Swakop Uranium, which will see the company supply fuels and lubricants to the mining operation for the next five years. The deal is worth N$3.2 million. This is a major coup for NAMCOR and represents 60% of the company’s annual turnover.

As one of the world’s largest uranium mines, the demand for fuel from Husab is vast and, with plans to 5000 tonnes of uranium ready for export by the end of the year, this deal is

// WE WILL EMPLOY OUR SIGNIFICANT UPSTREAM EXPERIENCE AND TECHNOLOGICAL EXPERTISE AND WORK IN CLOSE COLLABORATION WITH NAMCOR IN EXPLORING THESE BLOCKS // important. The main destination for the supply in China.

“Swakop Uranium is going to entrust this key service to NAMCOR, a responsibility to ensure the mine continues unhindered the next five years,” said Swakop Uranium’s Chief Operations Officer, Angula Kalili.

Previously, fuel had been supplied

by Engen and, now that the mine is out of construction and into export operations, additional fuel is required.

The mine supports more than 1650 employees on a permanent basis and an additional 500 contract workers of which 96% are Namibians. The life expectancy of the mine goes through until 2036 and China sees the project as a major contributor to its nuclear energy stability.

Mulunga called the contract gain a ‘milestone for NAMCOR’ and reiterated that the company’s status as a government-owned business played no part in its landing of the contract.

“The media must note that this contract was not just handed over to NAMCOR because we are stateowned. We had to compete with bigger international companies and pass through strict processes to succeed. We had to create value through competitive pricing. We are competing for market share locally and internationally.”

NAMCOR

multi-disciplinary consulting engineers & project managers Om’kumoh Consulting Engineers cc is a multi-disciplinary engineering consultancy corporation founded in 2010. Over the last decade the firm expanded its activities across Namibia and Angola. The corporation’s project footprint now covers various fields, ranging from its initial core fields of building and municipal services to more specialized fields of water engineering, roads infrastructure and more recently petroleum sector. With the ever changing infrastructural needs of a developing country, such as Namibia, Om’kumoh has been an instrumental partner to Namcor in its expansion driven in the downstream petroleum sector in terms of designing and supervision of bulk fuel installations with the largest project currently nearing commissioning. We pride ourselves with the diverse in-house as well as expert associate knowledge base, technical capabilities and modern software resources such as Revit & Prokon to deliver innovative solutions to our clientele, whilst maintaining a competitive edge in engineering consultancy and project management.

 : +264 61 232 052 |  : +264 61 232 053 |  : admin@omkumoh.com  : PO Box 98195, Pelican Square, Windhoek, Namibia

OFFSHORE BLOCKS In April, NAMCOR came to an agreement with international energy giant, ExxonMobil. The USheadquartered business hasn’t been shy when it comes to investing in African assets and this latest acquisition will see it gain four exploration blocks totalling around seven million acres in Namibian waters.

“These agreements provide ExxonMobil with an opportunity to explore for hydrocarbons using advanced technology in the frontier Namibe basin,” said Mike Cousins, senior vice president of exploration and new ventures at ExxonMobil. “We will employ our significant upstream experience and technological expertise and work in close collaboration with NAMCOR in exploring these blocks.”

The blocks, which sit in water

depths of up to 13,000 feet, are located next to the shore line and extend out to around 135 miles off the coast.

ExxonMobil will operate blocks 1710 and 1810 and hold a 90% interest; NAMCOR will hold a 10% interest. ExxonMobil will assign 5% of its interest to a local Namibian company. ExxonMobil will be operator of blocks 1711 and 1811A, and will hold an 85% interest. NAMCOR will retain a 15% interest.

“We have no influence on who will be given the 5%; they will decide themselves. But I am sure they will conduct the necessary due diligence to see who is fit for the 5% stake,” Mulunga told the Namibian.

Reports suggest that the blocks were acquired for ‘millions of US Dollars’ and some suggest the move represents a gamble for ExxonMobil

considering no commercially viable oil source has been discovered across the 18 wells dug in Namibia since independence.

“The agreement took the form of a normal oil and gas exploration contract. But due to the sensitivity of trade secrets and to protect the interests of the other party, we are not comfortable with giving the amount yet, but it was for several US dollars,” Mulunga told the Namibian.

Set to start in 2019, the exploration license lasts four years and, should no oil be found, ExxonMobil would have to renew the license in the future.

In August, other international giants Qatar Petroleum (QP) and Total signed agreements to acquire exploration licenses for two blocks.

QP will take a 30% interest in block 2913B, while Total will take a

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INDUSTRY FOCUS: ENERGY

40% interest and will operate the block. Impact Oil and Namcor are also partners on the block, with 20% and 10% stakes respectively. Drilling will being in 2020.

“Working on these prospective frontier blocks with our valuable long-term partner, Total, will give another boost to our efforts towards implementing our international growth strategy,” said Saad al-Kaabi, CEO of QP and minister of state for energy affairs in Qatar.

With major companies now showing real interest in Namibia, the oil optimists in the country are excited after prospects declined during the 2014 oil price slump.

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NEW NAMCOR In 2017, NAMCOR started a strategic investment through which it would rebrand its corporate identity and start its own fuel retail business, opening new fuel stations at locations across the country.

The company sees supply of fuel into more rural areas as important for the government and for NAMCOR’s downstream business growth. It marks the company’s conclusion of a fully integrated move across the entire value chain for petroleum products.

“Renovation, upgrading and actual construction of essential infrastructure is ongoing and planned for in Ondangwa, Grootfontein, Gobabis and

Otjiwarongo,” said Mulunga.

In May, the company stated that the new retail site in Otavi was 30% complete; in February, the site at Ongwediva was 80% complete; and the site at Hosea Kutako was also 80% done.

The bright, new, orange, red and yellow logo will adorn the new fuel retail sites with the company hoping for a strong connection with Namibian customers right from the outset.

Entry into the fuel retail industry will be backed up by NAMCOR’s involvement in new fuel depots and the terminal at Walvis Bay. Estimated to cost N$5.6 billion, the National Oil Storage project is cited by Minister of Mines and Energy,

NAMCOR

Tom Alweendo as a catalyst for future economic growth. It was announced last year that NAMCOR would manage the facility, which will be able to store 70 million litres of petroleum products such as petrol, diesel, paraffin and others, on behalf of the government.

STRONG FUTURE Having tabled results last year that detail income of N$575 million for the 2016/17 financial year, the future looks exciting for NAMCOR. With the above mentioned deals adding to a busy schedule, and with the roll out of the fuel retail sites around the country, the company’s plan to double in size looks to be on track so far.

“Despite [economic] challenges, the group realised revenues of N$23 million from the sale of seismic data.

The group’s financial position remains

stable and robust, with cash reserves of N$453 million,” said Mulunga in June last year.

The ongoing Kudu gas project is also a source of excitement for the business going forward.

Identified as a solution to Namibia’s looming energy crisis, the Kudu gas project is being given significant attention from NAMCOR and the rest of the industry. Located 170km off the Namibian coast, gas from the Kudu field will be transported through an undersea pipeline to an onshore power station in Uubvlei.

Reports suggest that the field, located in the Orange Sub-Basin, could hold three trillion cubic feet of proven natural gas reserves. Some optimists expect that, after further development work is completed, the field could contain nine trillion cubic feet.

NAMCOR has entered into initial power purchase agreements with Eskom of South Africa and Copperbelt Energy Corporation of Zambia, and it expecting to export power that cannot be distributed through the 400 MW power station close to Oranjemund.

Despite the concerns surrounding Namibia’s economy, NAMCOR is doing everything it can to rejuvenate international interest in the country. By investing heavily, and helping to attract strong partners to the region, this is a company that is confident about Namibia’s prospects.

WWW.NAMCOR.COM.NA

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LHWP

Water, Water,

Everywhere‌ PRODUCTION: William Denstone

A multi-phased project to provide water to South Africa’s Gauteng region and generate valuable hydro-electricity for Lesotho, the Lesotho Highlands Water Project (LHWP) was established in by a 1986 Treaty signed by the two governments. Phase I of this crucial mega-project was completed in 2003 and inaugurated in 2004; attention switches now to Phase II as preparations and construction activities ramp up in intensity.

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Katse Dam

INDUSTRY FOCUS: INFRASTRUCTURE DEVELOPMENT

//

Lesotho is blessed with an abundance of water.

Completely surrounding it, meanwhile, is South Africa, a much richer country but one which also suffers from a shortage of water. These mutually beneficial circumstances led to the devising of the ambitious Lesotho Highlands Water Project (LHWP), one of Africa’s largest ever engineering undertakings.

While its aims are fairly straightforward, the intricacies of such a project are predictably rather complex. In essence, it entails damming some of Lesotho’s major rivers, the majority of which flow south into the Senqu - the Orange River to South Africans - a process which has created large artificial lakes.

The water from these new lakes is then diverted north through tunnels under the mountains to South African rivers, which in turn lead to the Vaal River System to supply the densely populated, urban and industrial region around Johannesburg and

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Pretoria. In Lesotho, it involves the rivers Malibamatso, Matsoku, Senqunyane and Senqu, and is the largest water transfer scheme that Africa has seen.

ONGOING DEVELOPMENT The award-winning, multibillion Rand, bi-national LHWP is spoken of nearuniversally as an African success story, having paved the way for peaceful cooperation and mutually beneficial socio-economic development across the continent since its founding six decades ago. It was brought about by a treaty signed between the governments of Lesotho and South Africa in 1986, as a priority strategy to reduce poverty, stimulate economic growth and improve the livelihoods of the people of the two countries.

Lessons learned from the devastating droughts of the late 1960s showed that South Africa had to find an additional, reliable bulk water source to ensure that its industrial heartland was not

// PHASE II IS STEPPING AHEAD PURPOSEFULLY WITH 2018 HAVING BEEN A BUSY YEAR FOR THE BOTH THE WATER TRANSFER AND HYDROPOWER COMPONENT // hindered again. Thus formed a joint technical committee between Lesotho and South Africa in 1978, with in-depth feasibility studies completed in April 1986.

These revealed the most viable option to be a four-phased project that would capture the excess flows of the upper Senqu catchment and transfer the water from a series of storage dams via tunnels to South

LHWP

Africa. Hydroelectricity for Lesotho would also result, before delivering the mountain water to the homes and industries of South Africa, while creating revenue for Lesotho and providing jobs.

Phase IA was completed in 1998 and comprised the major water transfer and hydropower components.

Among the most notable was the construction of the iconic Katse Dam, the tallest in Africa at nearly 200 metres high and now one of Lesotho’s most popular landmarks, designed to divert water from the Senqu (Orange) River to the Ash River. A 48.2-kilometre-long tunnel was also put in place to transfer water from the Katse reservoir to the Muela hydroelectric power station in northern Lesotho.

The completion of Phase IB followed swiftly in 2002, and saw the Mohale Dam built on the Senqunyane River as well as a tunnel to transfer water between Mohale and the Katse reservoir. The system is interconnected to facilitate water transfer in either direction for storage in Mohale, or for transfer to South Africa through the Katse reservoir.

PHASE II ACCELERATES The LHWP is one of the largest ongoing development projects in the world, and in 2006 the South African Institution of Civil Engineering (SAICE) named the LHWP as the Most Outstanding Engineering Achievement of the Century. Just prior, in 2005, a Phase II feasibility study was undertaken, in two stages, to identify further development opportunities.

This culminated in the recommendation of the Polihali Dam and transfer tunnel for implementation, and is set to increase the current supply rate of 780-million cubic metres a year incrementally to more than 1.26-billion cubic metres a year. Phase II of the LHWP will be implemented in two parts: a water

Building Your World Structure Tone is a subsidiary of Touchstars Group of Companies. It was established in 2013 and it is 100% Basotho owned. Our promise to our clients is simple - a quality, professional and reliable service on each and every project. We build only “For those who Demand Quality”, and can always provide references from satisfied customers. And we do it for less than you may expect – we promise value for money and transparency of costs on every project.

Current Projects:

A JV Partnership on a 26km Road Construction for LHDA (Lesotho Highlands Development Authority)

Another JV Partnership for LHDA for rehabilitation of the 90 km Northern Access Roads”

P.O. Box 1372, Maseru. 100. Lesotho Tel.: +266 22 318 800 E-Mail: admin@touchstarsgroup.com

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INDUSTRY FOCUS: INFRASTRUCTURE DEVELOPMENT

// PHASE II OF THE LHWP OFFERS CONTRACTORS WORK CONTINUITY FOR A NUMBER OF YEARS AND THE OPPORTUNITY TO GAIN VALUABLE EXPERIENCE ON A LARGE INFRASTRUCTURE PROJECT //

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delivery system to augment the delivery of water to South Africa and a hydropower generation system, which will boost the current electricity generation capacity in Lesotho.

“Phase II of the Lesotho Highlands Water Project comprises the construction of the Polihali Dam and Transfer Tunnel, hydropower generation, social and environmental programmes,” summed up Minister of Water, Honourable Samonyane Ntsekele, at the award last year to a joint venture of Sinohydro SA/Nthane Brothers of the first construction contract on Phase II of the LHWP. “Phase II offers contractors work continuity for a number of years and the opportunity to gain valuable experience on a large infrastructure project. The combination of local, regional and international expertise at the consulting and contracting level will also contribute to skills transfer and capacity building within the construction and engineering sector.”

The Polihali north-east access road project will upgrade the existing 16km-long, gravel road which runs from the town of Mapholaneng in north-eastern Lesotho and the Polihali dam site to a Class A surfaced road. The road will give access to the dam site for construction vehicles and better ease of movement for communities in the surrounding area.

January 2019, meanwhile, saw the LHWP launch the construction pre-qualification for the Phase’s main works: the Polihali Dam and Polihali Transfer Tunnel. “The call for Expressions of Interest for the construction of the 165m high Polihali Dam and the 38km long Polihali Transfer Tunnel is expected to attract the interest of major engineering and construction companies, and we encourage suitably experienced contractors to join forces with local contractors and apply,” announced Tente Tente, Phase II Divisional Manager.

LHWP

White Life Consultants (Pty) Ltd Proudly Part of Phase II of the Lesotho Highlands Water Project +266 5707 0559 • admin@wlc.co.ls

// IMPLEMENTING LARGE SCALE INFRASTRUCTURE PROJECTS COMBINES ‘MATHS AND MUSIC’ // “Implementing large scale infrastructure projects combines ‘maths and music’: the maths of delivering multiple highly technical engineering components within a specific timeframe and budget, and the music of the softer skills of diplomacy, communication, social, environmental and community protection, while considering the interests and expectations of multiple, diverse stakeholders.

“Phase II is stepping ahead purposefully with 2018 having been a busy year for the both the water transfer and hydropower components,” Tente went on, and fittingly, in August this year we learned that the LHDA had awarded a further two separate contracts for the construction of the Polihali Western Access Road (PWAR) (West and East) Joint Venture and Rumdel/ AC JV respectively.

This is the second road construction contract awarded as part of Phase II Advance Infrastructure and the fifth and sixth of approximately a dozen advanced infrastructure contracts for LHWP Phase II. Construction work for PWAR West began on 12 July 2019 and is expected to be completed by 11 June 2021, while the PWAR East

works commenced on 23 July 2019 and are expected to be completed by 22 June 2021.

“The quality roads constructed under Phase II will not only provide access to the Polihali Dam construction site but will also significantly influence sustainable economic growth through tourism and industrial development,” concluded Tente, as the major access corridor for construction equipment, materials and tunnel boring machine components for the Polihali Dam and Transfer Tunnel begins to take shape to allow this extraordinary infrastructure project to enter its next chapter.

WWW.LHDA.ORG.LS

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EXHIBITION CALENDAR

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

ELECTRA MINING BOTSWANA 2019 SEPT 10 - 12 | GABORONE Find out what’s new! Visit Electra Mining Botswana 2019 to view latest products and innovations and get the most upto-date advice from technical specialists and take your business to the next level.

Whether you’re involved in mining, industrial or power generation, with 100+ leading local and international exhibitors on the floor, it’s your chance to find all the products, services and solutions you need to make your business better, faster, smarter and safer.

Botswana’s leading mining, industrial and power generation expo Electra Mining Botswana together with the new occupational health and safety trade show, A-OSH Expo Botswana, will give you access to everything you need to get your business ready for a successful future. Three days that could completely revolutionise the way you do business!

GARTNER IT SYMPOSIUM/XPO™ 2019 SEPT 16 - 18 | CAPE TOWN At Gartner IT Symposium/Xpo™ 2019, discover a refreshing and imaginative

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approach that will change the way innovative CIOs and IT executives think about digital leadership, business strategy, information and technology.

If your key initiatives include transforming organisational culture, improving productivity and efficiency, enhancing customer experience, growing revenue or powering digital transformation, Gartner IT Symposium/ Xpo will arm you with the data-driven insights, tools and practical advice needed to deliver a winning strategy.

By attending Gartner IT Symposium/Xpo™, you’re joining a community of trailblazers, thought leaders and industry experts pushing the bounds of technology and business. This conference is the one place you can access research-backed sessions, get expert advice on your specific challenges and interact with colleagues — all in one place, over three days.

AUTOMECHANIKA JOHANNESBURG SEPT 18 - 21 | JOHANNESBURG~ Get connected with the future of the automotive service industry at the leading trade fair Automechanika Johannesburg. As an international meeting place for the industry, dealership trade and maintenance and repair segment, it provides a major platform for business and technological knowledge transfer.

22ND SASLAW DURBAN ICC SEPT 05 - 07 ELECTRA MINING AFRICA GABORONE FAIR GROUNDS SEPT 10 – 12 FESPA AFRICA GALLAGHER CONVENTION CENTRE SEPT 11 - 13 GARTNER IT SYMPOSIUM CAPE TOWN CONVENTION CENTRE SEPT 16 – 18 WASHEN BULAWAYO, ZIEC SEPT 17 - 19 AUTOMECHANIKA JOHANNESBURG NASREC EXPO CENTRE SEPT 18 - 21 DURBAN BUSINESS FAIR DURBAN ICC SEPT 22 RAGE EXPO TICKETPRO DOME SEPT 27 – 29

THE TIME IS NOW TO START BUILDING

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

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