Enterprise Africa September 2020

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

September 2020

www.enterprise-africa.net

Curo Remains Consistent During Crisis Exclusive interview with Curo Fund Services CEO Barri Maggott ALSO IN THIS ISSUE:

Über Flavour / Capewell Springs / Hello Group / GIB

TECTIGHT BELIEVES IN TRUE PARTNERSHIPS BETWEEN US AND OUR CLIENTS. WE PROUDLY RETAIN ALL OF OUR CLIENTS THROUGH EXCEPTIONAL SERVICE AND INSPIRED SOLUTIONS.

INNOVATIVE SOLUTIONS FOR IT INFRASTRUCTURE The Tectight Managed Service Provider (MSP) model allows clients to focus on their core business while managing their IT infrastructure on a proactive basis through a subscription model.

A fully customisable offering allows clients to:

Bundle suitable hardware, software and services

Optimise finances by removing large upfront costs

Streamline management of hardware and services

Delivering the world’s best technology, we are recognised as the 2019 Lenovo Gold Partner of the year, an IBM Gold Business Partner, and an official VMware partner.

Through this tech we specialise in Disaster Recovery (DR) services, Co-Sourcing and complete backup services.

We can handle all Backup-as-a-Service (BaaS) processes for clients, supplying all hardware, software and services, ensuring a complete backup solution so that clients do not have to worry about this time-consuming, monotonous but critical part of any business.

We are so confident in our offerings that we subject ourselves to penalties should we not perform, giving our clients piece of mind and assurance of 100% commitment at all times.

Working with Tectight as your IT partner comes with true benefits beyond industry-leading solutions. We add value by bundling project-based and ongoing support services including installation, implementation and migration services.

Tectight does not only sell IT – we ensure our clients are able to rest easy knowing that the environments we look after are covered.

Consult with Tectight today: +27 (0)10 595-3919 | info@tectight.com | www.tectight.com

EDITOR’S LETTER

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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 Chris Fairhurst  chrisf@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

As we slide down the lockdown scale, business is starting to rebuild, reorganise and recover. Yes, the quarter is likely to show disastrous results for the economy, but South Africa has faced this type of maelstrom before. With many recessionary periods over the past two decades, South African businesses have learnt to be resilient and nimble, and those that haven’t are no longer with us.

Our lead feature for September comes from Curo Fund Services. We talked to CEO Barri Maggott back in April and found out about some of the exciting plans this third-party administration business had in the pipeline. At that stage, the pandemic was worsening but it’s full effect not yet realised.

Now we ask Curo what has had to change and what impact the situation has had on future growth.

As everyone keeps saying – this is not a situation that will resolve itself over night and the effects on public health and the economy will be long-lasting. The key here is innovation.

How can a company innovate to stay relevant and ensure it meets to existing and new needs of its clients? Not an easy task, but one which is now faced by all.

The fact of the matter is that business must go on. Money continues to move, people still require products and services, and those that thrive when times are tough are always those that gain when the tide turns.

Get in touch now and tell us how you’re handling the situation and what you’re doing to better meet the needs of clients in these unusual times. LinkedIn and Twitter is where you’ll find us.

Joe Forshaw EDITOR

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 2020

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

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8/ CURO FUND SERVICES Curo Remains Consistent During Crisis What a difference six months can make. In just half a year, as a result of the global Covid-19 pandemic, third-party investment and asset management administration business, Curo Fund Services has had to rethink its strategy and operations, adapting to a new normal so that it can continue to best serve its prominent international clients.

8/ 4 / www.enterprise-africa.net

CONTENTS

14/ INDUSTRY FOCUS:FOOD & DRINK

INDUSTRY FOCUS:FINANCE

14/ÃœBER FLAVOUR SA Craft Ice Tea With CBD

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

INDUSTRY FOCUS:MANUFACTURING 22/CAPEWELL SPRINGS AND METAL PRESSINGS Demonstrating the Opportunities in Local Manufacturing 28/GLODINA The South African Manufacturing Phoenix INDUSTRY FOCUS:TECHNOLOGY 34/HELLO GROUP Hello PaisaThe Journey Continues

48/FSCA Regulators, Educators and Innovators 54/WARWICK WEALTH Invest With The Specialists INDUSTRY FOCUS:TRANSPORT 60/TSHWANE RAPID TRANSIT Economic Handbrake Slows TRT Rollout 66/VOLVO TRUCKS SA Innovation, Efficiency, Dependability Results in Market Dominance www.enterprise-africa.net / 5

HYDROGEN FUEL CELL SYSTEMS POWER COVID-19 FIELD HOSPITAL Government, in collaboration with the private sector, is putting plans in place to roll out hydrogen fuel cell technologies in various parts of South Africa.

These will serve as alternative energy sources to the country’s electricity grid.

Department of Science and Innovation (DSI) Director-General, Dr Phil Mjwara said that such partnerships will enable government to take alternative energy sources to rural areas while also contributing to the growth of the country’s green economy.

Dr Mjwara was speaking at 1 Military Hospital in Pretoria, where government has set up a field hospital to prepare for the potential increase in COVID-19 patients.

The department unveiled seven hydrogen fuel cell systems as the primary power source for the field hospital, which has facilities for testing and screening, as well as life-saving equipment such as ventilators in the intensive care unit.

The project is a partnership between the DSI, the Department of Public Works and Infrastructure, the Department of Defence and private companies including, Bambili Energy, which is committed to commercialising intellectual property developed through the DSI’s Hydrogen South Africa (HySA) Programme.

Mjwara said that Bambili Energy is working on an initiative to take some of these fuels cells to rural areas in the Eastern Cape and KwaZulu-Natal provinces.

“This is the start, but the idea is to roll the project out to various parts of South Africa,” said Mjwara.

South Africa’s Secretary for Defence, Ambassador Sonto Kudjoe said that the field hospital is now operating using only the fuel cell systems, while Eskom’s electricity grid serves as back-up.

“It is encouraging that there was an opportunity to scale up the project. We can extend the systems to many parts of the country and relieve the burden on Eskom, while transferring skills in the development of hydrogen fuel cells in the country,” said Ambassador Kudjoe.

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TRIBUNAL APPROVES JSE, LINK MARKET SERVICES MERGER The Competition Tribunal has approved, with conditions, the merger whereby JSE Limited (the JSE), the operator of the Johannesburg Stock Exchange, will acquire shares registry firm, Link Market Services South Africa (LMS SA).

“After 12 days of hearing oral evidence from factual witnesses and expert witnesses over a virtual platform, the Tribunal approved the intermediate merger subject to conditions crafted to guard against any potential merger-related competition-detriment,” said Competition Tribunal spokesperson, Gillian de Gouveia.

The transaction has been approved subject to numerous conditions that will remain in force for as long as the JSE (or a successor in title) is in control of LMS SA. The conditions include that the JSE will not be permitted to bundle or tie any products/services related to its licensed functions with any of the services offered by LMS SA. In performing any of its regulatory functions, the JSE will not require market, promote or incentivise issuers/ sponsors to make use of LMS SA’s products or services.

The JSE will not be able to use any of its regulatory functions to favour issuers/sponsors on the basis that they make use of LMS SA’s services.

It will also not be permitted to influence, require or induce issuers/sponsors to make use of LMS SA’s services.

In addition, the JSE must ensure that information relating to issuers/sponsors and their transactions and activities, obtained through its regulatory functions, is not directly or indirectly available or made available to LMS SA. De Gouveia said the JSE will be required to have protocols in place to ensure that information it obtains in the performance of its regulatory functions is not made available to LMS SA. The JSE will be required to publish, on its website and in its JSE Quarterly publication (or any successive publication), the name and contact details of any provider of transfer secretarial services at the request of such a provider, and must state that, in so doing, it is complying with the conditions.

The JSE shall, on request, provide its postbox services to any provider of transfer secretarial services.

“It must do so on terms no less favourable than those on which it provides such postbox services to LMS SA,” De Gouveia noted.

NEWS SNAPSHOT GDP CONTRACTS BY 51% UNDER LOCKDOWN The South African economy contracted by a staggering 51% in Quarter 2 of 2020, as the country reeled from the consequences of the COVID-19 enforced lockdown, Statistician-General Risenga Maluleke has revealed.

In a briefing on Tuesday, Maluleke described the development as a severe punch in the gut of the country’s economy.

“South Africa’s economy suffered a significant contraction during April, May and June, when the country operated under widespread lockdown restrictions in response to COVID-19,” said the national statistics service.

The period coincided with the hardest levels of the country’s lockdown, as government limited movement and economic activity in an attempt to curb the spread of Coronavirus.

“Gross domestic product (GDP) fell by just over 16% between the first and second quarters of 2020, giving an annualised growth rate of 51%,” said Stats SA. Maluleke said the contraction dwarfs the annualised slowdown of 6.1% recorded in the first quarter of 2009 during the global financial crisis.

Historical data from 1960, sourced from the South African Reserve Bank, show that the second quarter of 2020 experienced the biggest fall in GDP since that year, far steeper than the annualised 8.2% decline in the fourth quarter of 1982.

In constant 2010 prices, the country generated almost R654 billion (not annualised) in the second

quarter of 2020. This was the lowest level of production since the first quarter of 2009 when the economy generated R649 billion.

Agriculture was the only sector that was able to keep its head above water as the economy plunged.

“Nearly all industries experienced a massive drop in output in the second quarter of 2020. Construction was the biggest loser. Already in bad shape before the pandemic, the industry experienced its eighth consecutive quarter of economic decline, slumping further by 76.6%,” the service said.

During this period, manufacturing output shrank by 74.9%.

“Plagued by work stoppages and lower demand for steel, factories specialising in metals and machinery were severely affected. The ban on alcohol sales had a heavy impact on the food and beverage division of manufacturing,” said Maluleke.

Air travel came to an almost complete halt, contributing to the fall in economic activity in the transport and communication industry. There was also less activity by rail and road freight operators due to restrictions on the production and movement of various goods.

Household spending, Stats SA said, slumped by 49.8%, in line with the closure of hotels, restaurants, transport services, recreational facilities and many stores. Spending on restaurants and hotels ground to an almost complete halt, plunging by 99.9%.

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CURO FUND SERVICES

Curo Remains

Consistent

During Crisis PRODUCTION: Karl Pietersen

What a difference six months can make. In just half a year, as a result of the global Covid-19 pandemic, third-party investment and asset management administration business, Curo Fund Services has had to rethink its strategy and operations, adapting to a new normal so that it can continue to best serve its prominent international clients. www.enterprise-africa.net / 9

INDUSTRY FOCUS: FINANCE

//

2020 is perhaps the perfect example of how fickle life in business can be. There are now so many real examples of businesses thriving in Q1 and then clinging to life in Q3. Certainly the most challenging time in modern history, the year 2020 is one to remember, or forget.

At the start of the year, the spread of Covid-19 began to hit global markets and Schroders reported steep declines in equities and bond yields, falling shares across developed markets as lockdowns began, commodities including oil plunging as a result of slow demand and over supply, and emerging market equities falling heavily - with South Africa in particular underperforming.

By Q3, a global recession was here and the World Bank suggested the global economy would shrink by 5.2% - the

deepest recession since the Second World War. South Africa continued to struggle with the headwinds from a strong US Dollar and fall out from a harsh lockdown – the local recession looks set to continue for some time.

So, the choice for businesses was to change to survive or accept defeat while watching the competition do what is necessary to operate in the post-Covid environment.

The perfect example of the right way to do things comes from Curo Fund Services. Featured in Enterprise Africa in April 2020, when the effects of the lockdown and the spreading pandemic were only starting to become apparent, the business has had to make significant changes to ensure critical service delivery for clients was not interrupted. Curo is a

// THERE IS A NATURAL CONCERN ABOUT THE ECONOMIC IMPACT AND THE FUTURE // third-party administrator for the asset management and investment industries. The company manages the back-office function for Sanlam and Old Mutual, as well as other highprofile clients.

In April, CEO Barri Maggott explained more about the company’s growth plans. Now, he explains about a strategy and operating shift, a few tough decisions, but an enduring hope for the future.

MILESTONE GROUP Despite short term strains, the investment management industry has held up remarkably well throughout the current Covid-19 crisis from an operational perspective. Systems have performed well and there has not been a wave of outages that would point to a systemic frailty of individual technologies.

That being said, it has been a period of increased operational risk, with resilience being tested in ways not previously contemplated. To thrive in a post-Covid world, firms must look to capitalise on this unparalleled experience, and use it as a base to rethink resilience strategies from a new angle.

Companies must be prepared for the unexpected, which means ensuring their business continuity plans aren’t linear, but factor in the nuances of multiple disruptions happening simultaneously. They must surely also look to automate more functions, as that allows greater flexibility in response to the unknown and unplanned. For example, firms that rely heavily on human labour have found it challenging in countries where working from home is difficult for many.

In an industry so reliant on outsourcing it must be remembered that while you outsource the function you don’t outsource the responsibility; businesses must ensure they have oversight of all outsourced functions, and contingency arrangements for those that are considered critical. Most firms have a range of outsourced functions that need to blend seamlessly with retained operations in support of their business. It’s vital that resilience is achieved across all of these internal and external elements of critical processes during times of disruption.

Covid-19 has demonstrated that operational resilience is not just a buzzword, but a crucial business concern.

Companies should analyse insights from the current crisis to determine how best to prioritise resilience going forward.

Failure to do so would be a missed opportunity to learn from this extraordinary event. Pressure points encountered during 2020 may prove to be key learnings to prepare for future scenarios that could play out very differently.

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Digital Fund Operations A New Era of Innovation for Fund and Pooled Investment Management and Administration

Oversight & Backup NAV Institutional Asset Allocation Fund Processing

milestonegroup.com

SmartsourcingTM

milestonegroup.com

INDUSTRY FOCUS: FINANCE

QUICK ADJUSTMENTS “As with most other businesses we quickly had to move to a work from home model. As an essential service provider, we continued to operate throughout all phases of the lockdown, so it was important that we quickly adjusted and were able to continue providing services to clients. We are very pleased with the seamless transition we made under tight time constraints,” he says.

For many, working from home has been a real challenge. But after the initial uncertainty became normality and people began to thrive in a home working environment. Harvard Business Review suggests that workers spent 12% less time in big meetings and

9% more time dealing directly with customers. Employees undertake 50% more activities by choice, rather than being told to do so, because they realise their importance. Workplace tasks rated as ‘tiresome’ drop from 27% to just 12% while working at home.

In South Africa where load shedding, slack connectivity and extremely strict lockdown was the reality, Curo had to make tough choices to ensure it was compliant from a health perspective, responsible from an operational point of view, and sensible financially.

“Our turnover has been adversely affected by the under performance of the stock markets and this impact has been material,” says Maggott. “With a

// AS AN ESSENTIAL SERVICE PROVIDER, WE CONTINUED TO OPERATE THROUGHOUT ALL PHASES OF THE LOCKDOWN //

Barri Maggott - CEO

12 / www.enterprise-africa.net

major impact on our revenue, we had to make financial adjustments, particularly with respect to managing cashflow and cost containment.

“We also had to adjust for the logistics of data allowances, takehome devices and home connectivity, increased bandwidth requirements and of course a host of health protocols for the office to cater for the limited number of staff who had to go occasionally visit the office.”

Curo has more than R2 trillion in assets under administration and utilises cutting-edge digital tools to ensure the highest quality service for its clients.

Today, Curo is known for global best-inclass fund administration technology and boasts more than 30% of South Africa’s top asset managers as clients. At the start of the year, Maggott suggested a growth strategy that could see the business grow out of South Africa into new territories where its existing clients already had a base. By approaching life-backed asset managers, Curo could quickly find a foothold in the likes of North America and Australia.

But, while the company is still ambitious in its growth aspirations, the global pandemic has caused a slowdown in activity.

SLOW AND STEADY “The situation has not impacted our ambitions but has had some impact on our timelines. The switch to work from home resulted in some lost productivity. There were also some new workstreams that were due to kick off with consultants scheduled to arrive from Europe just before the lockdown happened. So, we lost some time – probably six to eight weeks overall - but we are back on track albeit with this slight delay,” explains Maggott.

“Our strategy and focus for the short term remains the same. We have had to make some tactical adjustments in terms of how we get there but our focus of entrenching our market share in the local market by developing a best in market product still holds true

CURO FUND SERVICES

as this will give us the platform to tackle international markets in similar fashion. Current uncertainty around international travel and cashflow pressures will force us to be circumspect about our expansion internationally but this will still be our aspiration.”

Fortunately, Curo’s clients have performed relatively well during the first three quarters and through lockdown and pandemic uncertainty. While each has been impacted, the strong financial background that these players enjoy has helped them to ride out the storm. This leaves room for Curo to further tailor its service to new client requirements.

“The bulk of our business is with large players who will be affected by the crisis but will survive. We have heard of some smaller asset managers struggling and even closing their doors. We do expect our competitors to struggle as they do not necessarily have the strength of balance sheet that our business does,” says Maggott.

“The relationships between us and our clients do not necessarily become stronger but I do think that the expectation for us to better support the asset manager’s business, and the initiatives they may have to take to respond to the crisis, increases.”

The concern for Maggott and Curo is the longer term economic and social impact in South Africa, where the situation was already dire following ratings downgrades, high unemployment and seemingly endless government corruption allegations.

“There is a natural concern about the economic impact and the future.

Due to the changes we have made we have been able to secure our employee’s jobs and their salaries. Despite this, some concern remains about the future and we will need to communicate frequently and clearly to manage this.

Of course, this is over and above the concerns that were already prevalent in the South African economy. However, we were on a journey to overcome these macro-economic challenges, though our journey will now be slower after Covid-19.

“A greater impact is the broader socio-economic one of staff who have to provide support to family members who have either lost their jobs or had their salaries reduced. Many of our staff come from communities where extended family members live with them and rely on one another for financial support and thus if those family members are affected it places that whole home and family unit under financial pressure,” details Maggott.

NO RETURN TO NORMAL At the end of May, the Curo Fund Services leadership team came together as part of the company’s annual Leadership Summit. For the first time the meeting was held virtually and management discussed the challenges and opportunities for the next three to five years.

“The Leadership Summit is an annual event that brings our leaders together

to collaborate on the future vision and progress of our business. This year was additionally astute given the strategy discussion but also the expression and experience of the event as it epitomises a new way,” said HR Executive and Summit speaker, Mandla Dlova.

What was taken away from the summit was that the future will be different and the time to innovate and make changes is now. The company is choosing to use this time to challenge existing norms and fuel the next phase of development. Maggott is certain that a new way of working is here to stay.

“Will things return to exactly as they were before the crisis? No, they won’t” he says. “Work from home and our office strategy has already changed permanently so there won’t be a return to normal. Also, we have proved that we can successfully make decisions and changes in much shorter timeframes so I would not expect us to revert to old/ normal ways.”

Even with new working practices and operational norms, the very core of Curo remains a relentless drive to take care of, look after and effectively manage the investment administration of clients, and as long as this continues Curo will maintain its position as a market leader, even through the unknown that is 2020.

WWW.CUROFUND.COM

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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

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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

16 / 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 // 18 / 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

www.enterprise-africa.net / 19

CAPEWELL SPRINGS AND METAL PRESSINGS

Demonstrating the

Opportunities

in Local Manufacturing PRODUCTION: David Napier

By focusing on the delivery of high-quality, locally produced goods for the automotive, textile and consumer goods industries, Capewell Springs and Metal Pressings has secured its status as a vital cog in South Africa’s manufacturing industry. MD Emile Coetzee talks to Enterprise Africa about how the company will take advantage of new opportunities and avoid negativity. www.enterprise-africa.net / 23

INDUSTRY FOCUS: MANUFACTURING

//

While many in South Africa’s manufacturing sector continue to be dogged by negative statistics, economic uncertainty, and price wars with importers, those that have focussed on delivering highquality service to clients have enjoyed loyalty and development.

In early March, Stats SA revealed that GDP contracted by 1.4% in the final quarter of 2019. This contraction came as a result of challenges across a range of industries including manufacturing where there was

// IT IS GOING TO TAKE TIME FOR THE COUNTRY’S REPUTATION TO BECOME ATTRACTIVE FOR INVESTORS WHO WANT TO MOVE MONEY HERE //

24 / www.enterprise-africa.net

a decrease of 1.8%. December 2019 showed a 5.9% decline in manufacturing activity when compared to the same month in 2018.

But for Cape Town-based Capewell Springs and Metal Pressings - South Africa’s high-volume manufacturer and supplier of metal pressings, springs, wire forms and strip springs – a continued focus on making the most of the opportunities that do exist, and consistently delivering first-class products and service, has resulted in positivity.

12 months ago, Managing Director at Capewell Springs and Metal Pressings, Emile Coetzee told Enterprise Africa that installation of the new plating plant would help the company to improve quality and capacity, adding a valuable new service to the company’s portfolio.

Previously, more than 60% of the company’s products were coated through a plating plant which was ageing and in need of upgrading. Coetzee secured a new facility and contracted an engineer to install the plant. New customers were

quickly onboarded and new product lines were launched.

Now, Coetzee speaks to Enterprise Africa once again and details the successes that have been achieved as a result of that installation ELECTRO-PLATING “Business is still tough but, with regards to our new plating plant, we have seen an uptick in trade,” he says.

“We are seeing more clients specifically looking for plating services or products that require plating so there have been positive improvements there.

That plant is driving quite a bit of new business for us so that is great, but overall, it is still challenging.

“It has taken time to finally commission the plant. There’s a lot of fine tuning and capacity checking, and that is an ongoing process to ensure we are optimising the plant. In all, it has been a very positive experience. On the environmental side, it has been helpful.

The way we are treating our water now, it’s much better than what we were doing before – it’s very beneficial.”

CAPEWELL SPRINGS AND METAL PRESSINGS

The company is faced with price pressure from the East as manufacturers in China and other countries flood the market with products at extremely low prices.

Manufacturers in South Africa look to importers for cheaper components and this is damaging, but a new wave of localisation incentives as well as general sentiment towards supporting local businesses is helping.

“There’s a big drive for localisation in the automotive sector. The target, by the year 2035, to have 60% of the components used in the manufacture of cars here to come from local suppliers. With that comes a lot of opportunities,” says Coetzee. “The local OEMs are looking to invest another R50 billion into the automotive sector over the next five years so there is a buy-in from the OEMs. We have been approached by a client who is looking for the local manufacture of some products, including wire springs, and that equates to around 35-40% of our current turnover so we can definitely increase our business. It is very doable and it’s now about finding the right investment opportunity. We have the IDC and other organisations that can support us and help to set up this work.

Hopefully, in six months’ time we can confirm that all is going ahead.”

INVESTING IN LOCALISATION Currently, Capewell Springs and Metal Pressings has capacity to produce in its own internal tool room with metal presses and CNC wire forming machines.

The company can handle all aspects of manufacturing in-house, including metal forming, heat treatment, and now high-capacity electro-plating. But if it is to take on large scale orders from global auto makers, it will need further capital investment to build capacity.

“We have presented something to our head office in Germany but we are trying to drive it locally. I am busy putting business plans together for local companies that could help finance it as it would require some capex but it would create more sustainability for the business as a whole. Whether it really requires much additional employment remains to be seen but we would expect minimal additional employment.

“The automotive OEM we are in discussions with faced a situation where a shipping company had let them down, and their production would come to a standstill unless they could localise. It’s a great example of how we can assist,” explains Coetzee.

“If we had the machinery, we could have had the product moving straight away but we are just waiting to invest.

The client can have the product

// WE ARE HOPEFUL AND CHEERFUL, AND EXCITED TO SEE HOW THESE OPPORTUNITIES WILL PLAY OUT // immediately, on demand; they can make changes to their order, and they can gain automotive incentives.”

This is an issue that has been faced by many importers across various industry sectors. While supply is constant and reliable, the low pricing is acceptable but when you need quick communication, problem solving and turnaround strategies, dealing with a reputable local partner brings many benefits.

“That is our ongoing business philosophy,” confirms Coetzee, who explained last year that convincing SAbased companies to buy local was a focus for Capewell Springs and Metal Pressings.

“It depends on timing, price and client.

Typically, we find that some clients want to import but very often things go wrong and things quickly become costly. There are a lot of risks for importing. We like to sell local manufacturing as one thing that can help to eliminate those risks.”

www.enterprise-africa.net / 25

INDUSTRY FOCUS: MANUFACTURING

INTERNATIONAL EXPOSURE Operating as a South African business, Capewell Springs and Metal Pressings is owned by Schrambergheadquartered Kern-Liebers Group of Companies, a global industry leader in the manufacture of components for the automotive, textile and consumer goods industries.

Despite its global exposure, as a business with a presence across more than 40 countries, Kern-Liebers, like Capewell Springs and Metal Pressings, has been unable to completely sidestep uncertain economics.

“The global economy has influenced everyone and they have had a big drive globally in terms of cost saving,” says Coetzee. “Here, the economy hasn’t changed much as far as we have experienced. In terms of our expansion, head office has assisted greatly, and it has been nice to have technical support. We have the advantage of being part of a bigger group and that allows us access to technical knowledge and then share it

26 / www.enterprise-africa.net

with our colleagues and clients.”

But locally, challenges in the economy remain, and even for a thriving global business, a level of unease lingers so long as national growth figures are stunted and local manufacturing continues to decline.

“In the political space, people are realising that so much damage has been done but very few people realised the scope of the damage and how much money had left the country. The further we go, the more we realise about the extent of the trouble. It is not just about one individual solving all of these problems,” says Coetzee. “It is going to take time for the country’s reputation to become attractive for investors who want to move money here.

There is so much potential, across all of Africa. We are sitting on major opportunities but we are realistic – there are a lot of hard steps to be taken. There are strategic moves underway which should benefit the economy in the long run.

“For most of our clients, the numbers haven’t picked up over the past 12 months, and we have a broad range of clients across many industries.

Others in the industry who only focus on exports are booming. It all depends on who you speak to and the time you get them. A little advertising or marketing can help you pick up clients very quickly – there are definitely success stories from manufacturers who are increasing their volumes. We haven’t turned the corner quite yet – the general economy is still slow but we certainly see the potential.”

For almost 40 years, Capewell Springs and Metal Pressings has been delivering excellence and, by building lasting relationships, the company is ready to take advantage of all opportunities available to ensure it continues in a strong and sustainable manner for the next 40 years. While investments into new technology, such as the electro-plating plant, will help to build capacity and quality, the human touch within the business remains significant.

CAPEWELL SPRINGS AND METAL PRESSINGS

DEVELOPING OPPORTUNITIES “We have a strong technical team and everyone contributes. They all understand what needs to be done to make sure these opportunities are realised,” states Coetzee.

Currently home to about 50 dedicated employees, the future of the business will come through localisation of manufacturing, especially in the automotive sector. This is supported by government, business and consumers, and this is where Capewell can offer what others cannot.

// THERE IS SO MUCH POTENTIAL, ACROSS ALL OF AFRICA. WE ARE SITTING ON MAJOR OPPORTUNITIES BUT WE ARE REALISTIC //

“The last 12 months has not been where it should be in terms of our overall business, we have been sitting comfortably with our big clients for many years and some of that business has shrunk, but the last six months have been positive and we are seeing business return.

“There are a number of opportunities that I am working on that are very exciting. We are burning the midnight oil and grinding things out to see how we can get things moving. We are hopeful and cheerful, and excited to see how these opportunities will play out.”

It is this resilience, characterised in so many of South Africa’s robust businesses, that will help Capewell Springs and Metal Pressings to move exciting opportunities into crucial reality.

“There are many projects in the pipeline and many requests for information coming in,” says Coetzee.

“We just picked up some work for a German company who wants us to produce parts for Daimler. All of a

sudden there is an influx of work and its just a matter of getting in onboard and allowing it to influence our turnover.

“We have a few things happening and we are working on projects that have a lot of potential. In the next six months, we should have some idea about these developments.”

This is a business not interested in the challenges faced by the wider industry, and the negativity present in the economy. Capewell Springs and Metal Pressings is driving forward with a single purpose – to provide clients old and new with high-quality products, and efficient, flexible service that importers cannot guarantee.

WWW.CAPEWELL.CO.ZA

www.enterprise-africa.net / 27

GLODINA

The South African Manufacturing Phoenix PRODUCTION: Manelesi Dumasi

Over the past 60 years, Glodina Black Label’s expansive product range has provided South Africa with towels unrivalled in luxurious quality and enduring reliability, but the operation fell off the shelf in 2017 when the factory was forced to close doors.

The IDC stepped up, and now Glodina is successfully implementing a turnaround strategy, bringing its quality back to South African consumers. CEO Mark Goliath tells Enterprise Africa more about the successes of the past 12 months.

//

It’s about time South Africa had a positive business turnaround strategy story to tell. Thanks to long-lasting economic and political woe, the business and investment picture in the country has not been pretty.

This was highlighted in sharp focus in 2017 when the Glodina towel manufacturing business, located in Hammarsdale KZN, closed its doors leaving more than 500 people out of work.

Manufacturing output around the country had slowed and businesses had started looking to cheap imports to fulfil their needs. This situation was and is unsustainable.

28 / www.enterprise-africa.net

Unfortunately, not all that have struggled in manufacturing have found a way out. But for Glodina, investment from the IDC saw the company thrown a lifeline. In 2018, after a year in the wilderness, Glodina resumed operations at the bottom of the ladder – the challenge was on; could this once famous South African brand win back market share and create a sustainable operation once again?

According to CEO Mark Goliath, the turnaround strategy put in place following the company’s reestablishment has been successful and, already, Glodina is rebuilding its presence.

“We are on track to meet our targets for the financial year which

ends at the end of March,” he says.

“Our sales are slightly behind – around 5-6% - but that is not bad at all considering the circumstances. We grew employment and we are now at 211. We’ve gained traction in the retail space – we are now supplying Makro.

That started in September last year and is still growing. At the end of April, we will also supply Game, also part of the Massmart group, and then we will start to have a big retail presence. The brand is growing slowly but surely.”

Last year, Glodina was only operating at 30% while it utilised its R150 million IDC investment to bring onboard world-leading automation equipment, returning the business

INDUSTRY FOCUS: MANUFACTURING

to efficient production. The other towel manufacturer under the IDC umbrella, Colibri, has officially merged with Glodina and, a year on, and the company is soon to be at 50% capacity with an appetite to keep pushing.

Demand driving the capacity increase comes from the addition of business with Game, and also a growth in the hospitality sector – traditionally a stronghold for Glodina.

“We have managed to bring onboard one of the country’s bigger hospitality groups, Tsogo Sun. We are also supplying Sun International and the Sun City Resort with towels. We have grown nicely and we are getting the brand back in there,” Goliath highlights.

In the past, most hotels in the country would have stacked Glodina towels but that demand was allowed to dwindle. This is certainly an area where the company can regain share, and also grow through export. In 2020, Glodina is targeting Indian Ocean island resorts - Mauritius, Madagascar and Reunion – areas with heavy tourist traffic in a bid to build its pipeline.

“We are also looking at Mozambique, Kenya, Nigeria, Gabon and areas in East Africa where tourism is growing,” admits Goliath.

“We want to get in with the hotel chains, some of which we already supply in South Africa.

// PRODUCTS ARE STILL COMING INTO THE COUNTRY WAY UNDER COST SO WE MUST CONTINUE TO DIVERSIFY AND GAIN COMPETITIVE ADVANTAGE WITH SERVICE AND QUALITY // 30 / www.enterprise-africa.net

// THERE IS NO POINT GOING FOR TECHNOLOGY THAT HAS ALREADY MATURED, WE’VE GONE FOR THE VERY BEST WE COULD FIND // “We are also working with a UK company which is looking to move our hospitality towels into a big global hotel chain in the USA. In the next four months, we will have an idea about whether or not that chain wants to switch to our towel. That is a big project that we have in the pipeline.”

MARKET LEADING AUTOMATION Right now, one of the main focusses for Glodina is the installation of new machinery that will improve efficiency, capacity, and quality. Last year, Glodina sent people to some of the world’s finest manufacturing facilities to research best practice processes.

Facilities in Europe, Turkey and India were studied, and Glodina is now adopting those learnings.

“Technicians from Belgium are assisting with the installation of new weaving equipment in the Cape Town plant. We expect that to be fully commissioned before the end of March,” Goliath explains. “In the C&T and make up area, the equipment has been delivered and the installation will be done by March – all of the plans that we had are now coming to fruition. We are expecting by the end of 2019’s Q1 that the bulk of the new equipment will be installed for the start of the new financial year – that is excellent news from our perspective.

With technology upgrades, everything is going to plan.

“Nobody manufacturers weaving looms in South Africa and we had to look to Europe. It gives us credibility – we have gone for the leading equipment suppliers globally and this is cutting edge technology. There is no point going for technology that has already matured, we’ve gone for the very best we could find,” he adds.

“We have partnered with the

KwaZulu-Natal clothing and textile cluster and the job of the cluster is to do benchmarking for its members.

Those benchmarking exercises are transposed against what global trends are and in terms of best practice benchmarking, we have made progress,” he adds.

Without this capital investment into new plant, Glodina would not have been able to win the major national clients that it has. Its capacity would not have increased, and the positivity that has been realised since reopening would not be as impressive.

Makro and Game form part of the Massmart group, a major African retailer, and gaining the trust of these organisations is a real coup.

“We expect those two clients to make up 20% of our business across the group. For the first four months, it will only be Glodina in Game, but we are actively looking at additional products that Colibri could supply.

“We are working hard to get business with Woolworths and we are busy sampling and trialling with them.

25% of our business is probably on the hospitality side of things. We do a lot of business in the independent market, supplying to a lot of wholesalers and our towels for this market make up about a quarter of our turnover.

We have two factory shops - one at Glodina and one at Colibri – and that is possibly another 25% turnover. The retail clients make up another 25% and what we are driving this year is that hospitality will grow for both companies,” details Goliath.

LOCALISATION Manufacturing supports millions of jobs in South Africa and is a key drier of multiplier economics, where value addition, job creation and

GLODINA

export earnings all come as a result of investment. But when investment slows, imports from China and other expert manufacturers increase as basement pricing becomes attractive.

Unfortunately, importing heavily is not good for an already fragile economy and Glodina is keen to localise as much as possible.

“We cannot compete on price with imported products,” admits Goliath. His solution? Offer first-class, comprehensive and speedy service that competitors from the East could never replicate.

“Products are still coming into the country way under cost so we must continue to diversify and gain competitive advantage with service and quality. That is the reason we have been able to get some of these bigger retailers online.

“If you run a full programme with a retailer but not all colours sell well, we could offer turnaround in under 10 days where we will up the order of popular colours and reduce those that are not selling. The retailers are happy with this and they can take advantage of what is trending instead of being left with dead stock.”

Importing on mass, in large containers, from China means that orders cannot be tweaked and retailers are stuck with product that has no demand – this is not flexible in a world of fast fashion.

Currently, the business is managing to take share in the local market and bring some manufacturing back to South Africa. The investments into new equipment and the relentless marketing push to make potential clients aware of the strengths of the

brand are starting to pay off.

“It has been very rewarding seeing the traction we have been able to gain from a sales point of view,” says Goliath. “The South African economy is still very sluggish with GDP growth at 0.5% - where it will stay for the whole year – there is not a lot of disposable income around and all of the retailers results have been down year-on-year; that makes for a tough environment for manufacturing. We have been cautious and we have formed selective partnerships with specific retailers and overall the experience has been a good one so far.”

YEAR 2: RESULTS TIME Following Glodina’s relaunch, the IDC facilitated something of a grace period as the company began its rise from the ashes. Market share has been

Afristar Freight Services is an NVOCC and Freight Forwarding company that offers the flexibility to tailor-make our services to meet our customers specific requirements.

The company was founded by the Managing Director Michael Ryan after a 22 year career in the ships’s agency and freight forwarding industry. His family have been a part of the naval and merchant maritime history of South Africa for the past 100 years and Afristar is a continuation of this proud legacy.

The company’s mission statement is to become “an integral part of its customers’ supply chain, focusing on personal attention to their individual needs.”

Afristar’s shareholders and management team have a combined experience of 156 years in the logistics industry which includes NVOCC, Freight Forwarding and Customs Clearing, Ships Agency, Supply Chain Management and Road Freight.

With the head office in Durban being located in Africa’s busiest port, the company is ideally situated to service sub-Saharan Africa and beyond.

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www.enterprise-africa.net / 31

INDUSTRY FOCUS: MANUFACTURING

// WE ARE ON TRACK TO MEET OUR TARGETS FOR THE FINANCIAL YEAR WHICH ENDS AT THE END OF MARCH // recaptured, the brand is being rebuilt, and the factory is pumping out quality product at a more efficient rate – but now is the time that Glodina proves its worth.

“The first financial year was meant for us to re-establish the brand and get market traction. Next financial year will be the critical one because we are no longer a start-up and we are in the second year of a plan. Because

32 / www.enterprise-africa.net

year one has gone to plan, it places expectation on year two, and that will be interesting,” says Goliath.

A new board has been appointed to lead Glodina and Colibri as one organisation and, when Goliath’s secondment from the IDC comes to an end in May, a new CEO will likely take the reins to continue the story.

“The official merger was completed in November 2019 and we have a single board and single management team to oversee operations. There has been a natural migration of skills and ideas between the two and it is an ongoing process as it is fairly new,” he says.

“We are recruiting for a permanent CEO and it will be a wide search. I am seconded until the end of May and I will ensure of a successful handover if I am not the successful candidate.

“We are also revising our organogram to ensure we streamline operations. That doesn’t mean we are going to retrench people – that is the furthest thing from our minds. We just want to make sure we are using the people we have optimally. Both operations are running fairly lean at the moment. There has been a nice reduction in staff complement at Colibri due to natural attrition through the year. We purposefully did not replace those people in anticipation of the automation that is going live in the next two months. Less people can help to provide a more robust, cost-effective business. Integration is underway and we are happy to have it in full swing.”

As capability and capacity grows across the group, and customer start to notice the benefits of working alongside a proud South African

GLODINA

// WE WILL NOT REST UNTIL WE CAN CALL OURSELVES A GLOBAL SUPPLIER, ON PAR WITH THE BEST IN THE WORLD // manufacturer, Glodina will also look to expand its offering for clients through partnerships within the IDC portfolio.

“The IDC also owns a company called Sheraton Textiles which is a bedding and bed linen manufacturer,” says Goliath. “We have been working together on a project where we can design products for the bedroom and bathroom. It will be marketed as one design portfolio to offer to the retail and independent markets because

there is an appetite for it and globally that is a common strategy. We will not manufacture those products we will definitely partner with our sister company to extract the value that is on offer. That will happen in the next financial year.”

The IDC exists to promote economic growth and industrial development in South Africa, and the turnaround that it has helped to implement at Glodina is a shining example of what is possible.

Localisation is vital, and nowhere is that more obvious than in the community surrounding the Glodina plant.

“90% of our employees come from Hammarsdale. The closure had a direct impact on the economy there and when we reopened, it was great to re-establish some pride. We have been working closely with CSI projects in the Hammarsdale area and

we are supporting creches and old age homes so that we can implement targeted initiatives that help build credibility in the community and show people that we are up and running again and we are here to stay – that has been rewarding,” explains Goliath.

Now, further hard work begins.

The company must build capacity to ensure ROI and increased market share. With capital expenditure in place, Goliath sees no reason why Glodina cannot go on to achieve great things, bringing back the Black Label reputation for the highest quality.

“We will not rest until we can call ourselves a global supplier, on par with the best in the world,” he concludes.

WWW.GLODINA.CO.ZA

www.enterprise-africa.net / 33

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 / 35

INDUSTRY FOCUS: TECHNOLOGY

//

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 // 38 / 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.

40 / 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

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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

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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 // 44 / 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 // 46 / 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 / 47

FSCA

Regulators, Educators

and Innovators PRODUCTION: Timothy Reeder

If you are a financial institution offering a product or service in South Africa then you will already be very familiar with the Financial Sector Conduct Authority (FSCA). The market regulator of South Africa’s thriving, highly-regarded financial sector is heavily focused on enabling the consumer to make more informed choices than ever, and is mirroring the boom of Fintech in the country with its own revolutionary Innovation Hub.

//

South Africa’s financial services sector is a sophisticated network boasting dozens of domestic and foreign institutions providing a full range of services. These encompass commercial, retail and merchant banking, mortgage lending,

48 / www.enterprise-africa.net

insurance and investment, and are all backed by a sound regulatory and legal framework.

Often described as one of the most well-regulated and stable financial services industries in the world, South Africa’s financial industry was historically the jurisdiction of the

FSCA’s predecessor - the Financial Services Board (FSB).

Running until 2018, the FSB supervised and regulated the nonbank financial services industry in the public interest, and by all accounts, with relative success. So what prompted the formation of the FSCA?

INDUSTRY FOCUS: FINANCE

CHANGE IN SCOPE “Despite the FSB’s successes, there was a clear need for South Africa to have a dedicated conduct regulator that would ensure that financial institutions prioritise treating their customers fairly,” explains Tembisa Marele, Head of Communications at the FSCA. “The FSCA not only regulates how financial firms conduct themselves, but also empowers customers to make better financial decisions,” she goes on. “As part of our strategy, our mandate as a conduct regulator is to promote fair customer outcomes, provide financial education and assist in maintaining financial stability in South Africa.

“The FSCA’s prioritisation of financial inclusion is not just about increasing consumer access to financial products and services as an end,” Marele clarifies. “We want and need to ensure that this access enables South Africans to use appropriate financial products that meet their needs and improve their quality of life.”

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The FSCA has a much broader remit than the FSB enjoyed, with oversight of financial products and services like banking, services related to credit, and the buying and selling of foreign exchange. “This requires a shift in approach from the FSB’s traditional compliance driven model to one that is proactive, pre-emptive, risk-based and outcomes focused,” Marele impresses.

The scale of the change required has been significant, impacting how the FSCA is structured, resourced and skilled as well as how regulatory and supervisory frameworks are designed.

“In this time,” Marele describes of the changeover, “we made key appointments to the executive team, provided support in the development of primary legislation, drafted and published several regulatory instruments and assisted the industry to navigate the changes in regulation and legislation.

“We also prioritised engagements with our key stakeholders, as it remains our belief that it is only through a collaborative approach that we can effectively regulate the sector.” Marele is conservative, even

// IT REMAINS OUR BELIEF THAT IT IS ONLY THROUGH A COLLABORATIVE APPROACH THAT WE CAN EFFECTIVELY REGULATE THE SECTOR // humble in her assessment of the FSCA’s impact to date, but it has been keenly felt throughout the industry.

“We should look at the industry and its milestones in terms of whether or not it’s treating its customers fairly, and while there is some progress, it remains something that needs to continuously be prioritised and scrutinised.

“The concept of treating customers fairly is not new to the industry and for the past seven years we have sought to entrench it.

Although we continue to see progress, our efforts have been intensified under the FSCA.”

INDUSTRY FOCUS: FINANCE

EDUCATION AND INNOVATION One important aspect of the FSCA’s mandate requires it to provide education to financial customers and promote financial literacy and inclusion, which drives its consumer education strategy. Marele goes on to describe the form that this takes. “We are working to develop best practice for the monitoring and evaluation of the impact of consumer education initiatives undertaken by the financial services sector,” she delineates.

“We want to drive industry initiatives that are better coordinated to maximise the impact of the sector’s spend on financial education, and ensure that this leads to changes in the behaviour of South Africans when it comes to money.

“We’ve partnered with the Department of Public Works to provide financial literacy to participants of the Expanded Public Works Programme (EPWP), and we’re coordinating national financial

52 / www.enterprise-africa.net

education projects such as Money Smart Week and the Financial Literacy Schools Speech Competition,” Marele adds, by way of illustration.

Perhaps chief among the imminent causes of excitement for Marele is the FSCA’s Fintech Innovation Hub, which, in partnership with the South African Reserve Bank (SARB), will see the body collaborate with all other regulators in the Fintech sector to create solutions for the South African market.

“The decision to follow a multi-regulator approach to the regulation of Fintechs uses an agile and design-thinking approach,” says Marele, “which has culminated in the impending establishment of the Innovation Hub. “The idea is to facilitate innovation in the sector in a manner that is coordinated, collaborative and controlled.”

The Hub will be used as a vehicle to engage with the Fintech ecosystem,

// WE WANT TO DRIVE INDUSTRY INITIATIVES THAT ARE BETTER COORDINATED TO MAXIMISE THE IMPACT OF THE SECTOR’S SPEND ON FINANCIAL EDUCATION // enabling regulators to craft new policies and innovate. “The Hub encompasses a Regulatory Guidance Unit, which is the first entry point for Fintech firms to obtain support in navigating the regulatory landscape and data and insights from the Unit will inform policy development,” Marele expands.

“There will also be a Regulatory Sandbox that will provide a live testing environment, that balances the risks

FSCA

and benefits of introducing innovative solutions to the market and which cannot be addressed within the current regulatory framework. An Innovation Accelerator will drive innovation, with common benefits across participating regulators and solutions.

“Additionally, an Internal Innovation Function will be owned by each regulator and will interface with the Innovation Hub. This is where

// THE CONCEPT OF TREATING CUSTOMERS FAIRLY IS NOT NEW TO THE INDUSTRY AND FOR THE PAST SEVEN YEARS WE HAVE SOUGHT TO ENTRENCH IT //

disruptive technologies and leading practices identified in the Hub will be recommended for consideration by individual regulators.”

Fintech is recognised to be rapidly transforming the essence of global financial services, and no more is it in evidence than in the SA space.

South Africa has been posited as the Fintech capital of the continent, with the industry managing to grow its investment value from $15 million to $170 million in 2018, and continuing this positive trajectory in 2019.

Marele is in absolute accordance with the suggestion of a fundamental shift towards the widespread integration of technology into the sector moving forward. “There are currently 217 active operational Fintech companies in South Africa operating across eight of the subsegments,” she says. “Some Fintechs operate across more than one segment which increases the total number of Fintechs to 224. These were founded in the last eleven years and

the number is expected to grow as the adoption of technology increases.

“In the future, financial regulators will be faced with the challenge of achieving a balance between supporting innovation, and managing the potential risk they pose,” Marele warns of the flip side to the many opportunities such endeavours present.

“They are imperative to supporting Fintech growth, but at the same time we must maintain a stable financial system.” This is really the essence of the FSCA: doing everything in its power to educate and facilitate the needs of consumers, while keeping the all-important equilibrium to ensure the continued success of one of South Africa’s true success sectors.

WWW.FSCA.CO.ZA

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WARWICK WEALTH

Invest With The Specialists PRODUCTION: Colin Chinery

Exceptional client-centricity focussed on the lucrative lifestyle segment has seen international wealth management specialists Warwick Wealth become one of the South Africa’s fastest growing financial planning operations. And the momentum continues. “I believe the next 10 years will become the most successful in this company’s history,” says Managing Director Marc Wiese. www.enterprise-africa.net / 55

INDUSTRY FOCUS: FINANCE

//

To trace the link between an oval ball, a croquet mallet, a four ace bridge hand and high net worth investing, reach back to a period house on an old 17th century wine estate in Constantia, Cape Town.

It was here in 2002 that Ian Kilbride and Steve Wallace formed international wealth management specialists Warwick Wealth.

Now, with offices in Cape Town, Claremont, Constantia – as well as Johannesburg, Durban, Port Elizabeth, Knysna and East London – the established investment operation offers a range of bespoke financial products, delivering arguably the best client service in South Africa.

Exceptional client-centricity is a Warwick hallmark, a management ethos driven not by merely selling a product, fund or unit trust, but by analysing specific financial needs and each client receiving a bespoke investment plan.

56 / www.enterprise-africa.net

// WHEN THINGS ARE TOUGH, THEY START ASKING DIFFICULT BUT IMPORTANT QUESTIONS. AND THAT’S WHERE WARWICK CAN PROVIDE THE ANSWERS // HOLISTIC PLANNING “Right from the start the focus was on conducting financial planning in a holistic way, the wealth of high net worth individuals and those with some degree of disposable income. That was where the niche was,” says Group Director of Corporate Affairs, Professor Tim Hughes.

And along with that niche, and closely identified with it, was another.

“What Ian and Steve had identified - and this was important in South Africa - was a kind of lifestyle market, people who played bowls, golf, or bridge, and so forth. And so the market for Warwick almost identified itself.”

Sport is in the DNA of Ian Kilbride, a Lancastrian who settled in South Africa in 1990. His father had played Rugby League, while Kilbride is a supporter of

Everton Football Club, still travelling the 6000 miles from Cape Town to watch his Merseyside favourites – “supporting Liverpool Football Club is one of the deadly sins!”

The genesis of Warwick – named after the English university where Kilbride graduated – was Appleton, the private client asset management he formed in 1992, with offices in Johannesburg, Durban, Port Elizabeth and Cape Town, and listed on the JSE seven years later.

Appleton, together with Cadiz Asset Management and Warwick Wealth Management are today housed under the Spirit Invest holding company, managing and administrating over $3bn of client assets, and of which Kilbride is Executive Chairman.

WARWICK WEALTH

UNIQUE PRODUCTS AND SERVICE Warwick is focused on unique products and service levels designed for the client wanting quality and professionalism.

Initially, each client meets with a qualified Warwick professional to

// A NUMBER OF FINANCIAL SERVICES COMPANIES HAVE EXTENDED THEIR OPERATIONS OUTSIDE SOUTH AFRICA, AND FRANKLY THE RECORD AND PICTURE IS VERY MIXED //

determine their specific financial needs and requirements. “We are the closest I think you will get in South Africa, to a private banking operation,” says Hughes.

“Our entire business model is about applying a very direct, personalised tailored service to the individual client, looking at the particular financial and income needs and specific risk profile.

“Altogether a holistic view of the client, with Warwick constructing financial products and offerings around it.”

WARWICK LIFESTYLE The Client Network is one of three Warwick operational arms, with a second, the Lifestyle network, one of the biggest sponsors of grass-roots sports and lifestyle institutions in South Africa, sponsoring between 200 and 600 different sports events a year, including bowls, golf, rugby, croquet,

bridge, running and cycling.

Formed in 2002, Warwick Lifestyle is the largest network of its kind anywhere in Africa, with several hundred sports, recreational and social clubs, along with retirement villages and other senior associations.

“We have built long standing relationships with clubs, some running almost 20 years,” says Warwick Managing Director Marc Wiese.

“We have established our brand, and reputation for what we can do for clients. We have built a great client base, and this will continue to be a large focus for our business going forward.”

The third - and one which Wiese believes will supply Warwick with the bulk of its planned distribution and growth over the next decade - is Warwick’s Professional Network.

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INDUSTRY FOCUS: FINANCE

“If you look after your clients very well you retain your client base. That is great. But from there we want to grow. We are one of the fastest growing financial services in South Africa, and we are very ambitious.”

PROFESSIONAL NETWORK Launched in 2007, the Professional Network is Warwick’s direct link to the thousands of industry professionals working throughout South Africa and around the world, a vast network of Independent Financial Advisors (IFA’s) and other professionals aligned with Warwick through its Succession, Intermediary, Advisory and Merger plans.

Of these, the most important is Succession Planning, says Wiese. “We believe the average IFA is older than 55, with those coming in from a new and

younger generation far less than many years ago.”

Despite an exceptionally attractive basic salary plus progression incentives package, Warwick finds direct recruiting of appropriately qualified, ambitious, young professionals highly challenging.

RECRUITING CHALLENGES “Over the past ten years in particular, it’s become increasingly difficult to find really good people of the right calibre and qualities and yet the quality of our wealth specialists improves every year.

“We have an expansion drive in Johannesburg to secure more wealth specialists, and the latest we appointed there was late last year.

“After narrowing down from way over 100 applications we went through 58 interviews, and only one was of the

// I BELIEVE THAT THESE WILL BECOME THE MOST SUCCESSFUL TEN YEARS IN THIS COMPANY’S HISTORY //

Marc Wiese, MD Warwick

58 / www.enterprise-africa.net

right calibre for Warwick. We won’t appoint for the sake of appointing.”

So Succession Planning and mergers are the dual keys to operational growth. “We offer by far the best succession planning deal for IFAs looking to exit the industry or retire.

“We estimate there is going to be in excess of R100b to potentially up to R400b IFA investment books looking to retire.

“This, along with mergers, gives us a tremendous opportunity of extending a structured approach, meeting each client face to face, explaining the benefits, and slowly but surely, transitioning them and meeting their financial planning needs.

“The other offering we have within the Professional Network, is our Intermediary plan, an opportunity to partner with Warwick and earn a regular passive income through building a bespoke financial investment strategy.”

With more than 100 staff at offices in Cape Town, Durban, Johannesburg, Port Elizabeth, East London, and Knysna in the Western Cape, Warwick is looking to expand over the next few years to other cities including Bloemfontein, Pietermaritzburg, and Pretoria.

BEYOND SA? Expansion beyond South Africa’s borders however is more challenging.

“There are very clear opportunities in major growth points such as Nairobi, Dar es Salaam, Lagos, Kampala where there are high networth individuals looking for the type of service we can offer,” says Professor Hughes.

“The opportunities are there, and while you don’t actually need a bricks and mortar presence, the one constraint is our model of being highly personalised, and providing that faceto-face type of service.

“A number of financial services companies have extended their operations outside South Africa, and frankly the record and picture is very mixed. And we want to make sure we get it right.”

WARWICK WEALTH

The Warwick Cape Town Sales Team

Meantime, “enormous opportunities within the financial services industry over the next five and potentially ten years” means South Africa will continue to be the company’s core focus, says Wiese “After say three or five years we will be looking at Africa – likely to become one of the big hubs at some stage in the future - as well as potentially the UK, where we already have a presence, and Australia, both of whose financial service regulation models are very similar to South Africa’s. Mauritius is another we have in view.”

If territorial expansion is active on the Warwick planner, investment, outsourcing is very much in the here and now.

OUTSOURCING = STABILITY “One of the cornerstones of investing is diversification, and this includes different jurisdictions,” says Wiese.

“I still think there’s a lot of value in South Africa, which is an amazing country. But for high net worth individuals to have a bulk of their wealth invested in an economy and stock market that makes up less than 1% of the world economy and stock market, will certainly not provide them with that required diversification.”

// WE ARE ONE OF THE FASTEST GROWING FINANCIAL SERVICES IN SOUTH AFRICA, AND WE ARE VERY AMBITIOUS // Warwick anticipated this trend four years ago, says Hughes, with an executive decision to externalise client’s funds, sometimes as much as 50%.

“This means our clients have been enjoying real currency returns and growth from our international portfolio.”

Wiese cites a company declaration that ‘Warwick as a nationally-based financial services organisation provides on average, the best client service in South Africa.’ “That’s our statement, and I stand by that.”

Recalling that seven years ago Warwick went through a period of substantial growth, he says the last three or four have been one of enormous investment some consolidation, “building an exceptionally scalable model that will give us further growth over the next five to ten years.

EXCEPTIONAL GROWTH “Last year was a tough time in the market, yet we had exceptional growth, and going into 2020 we are taking on several fairly large independent financial advice businesses. Growth for this year is pretty much set there.

“I think the industry is going to go through an enormous change over the next ten years, and I believe that these will become the most successful ten years in this company’s history.”

The Warwick MD’s comments are a refreshing counterpoint to a New Year survey showing consumer sentiment remaining at a two-year low, with household budgets increasingly constrained by slow wage growth, high tax rates, and soaring electricity prices.

“Even if the economy struggles and things are tough out there, I think in some senses it allows us even better opportunities because clients are looking for something special.

“When things are tough, they start asking difficult but important questions.

And that’s where Warwick can provide the answers.”

WWW.WARWICKWEALTH.COM

www.enterprise-africa.net / 59

TSHWANE RAPID TRANSIT

Economic Handbrake

Slows TRT Rollout PRODUCTION: David Napier

While the plans for development of the Tshwane Rapid Transit system are welldocumented – new buses, new routes, and more people – the economic climate has thrown up multiple challenges. CEO Samuel Matebane talks to Enterprise Africa about the plans that are in place, and when we can expect to see movement. www.enterprise-africa.net / 61

INDUSTRY FOCUS: TRANSPORT

//

From Ga-Rankuwa in the west to Bronkhorstspruit in the east, crossing the world-famous Pretoria CBD at its heart, the sprawling Tshwane Metropolitan Municipality is one of South Africa’s busiest cities. Almost three million people share this 2500 square mile part of Gauteng and the flow of people falls to a few specialist providers. Perhaps the most prominent public transport system is the Tshwane Rapid Transit (TRT).

The region’s version of a worldwide success story, bus rapid transit (BRT), the TRT is a modern and effective bus service designed around the Tshwane commuter.

For TRT CEO Samuel Matebane,

// FOR ME, THE THING THAT SHOWS WE ARE DOING WELL IS THAT WE HAVE BEEN FIGHTING OFF OTHER COMPANIES WHO ARE TRYING TO TAKE DRIVERS FROM US // 62 / www.enterprise-africa.net

2020 has started with mixed feelings.

The company on the cusp of significant expansion, that could see more and more residents able to benefit from the efficient and reliable bus service offered by the company, but economic and political issues have slowed progress.

Currently, the TRT has access to a segregated right-of-way infrastructure throughout the municipality, utilised by a fleet of modern buses that provide commuters with fast, easy and safe transport. Matebane would like to add more routes, more buses, and improved services but is waiting to receive approval from all parties involved.

“Our goal is to move all public transport from the city-centre and have them operate in the peripheries.

How possible is that considering the financial constraints in the country right now and the timescales we face?

That remains the question to which I have no answer right now,” he tells Enterprise Africa.

BUDGET IMPACT In February, Finance Minister Tito Mboweni’s budget speech detailed spending cuts which would hit transport and housing as the government looks to relieve pressure on its finances. Only urgent priorities

would receive significant attention and public transport spending would be reduced by R13.2 billion over the next three years.

“It does impact us,” admits Matebane. “Transport may not be a priority for all but when you look at the percentage of household income spent on transport you see that, for the poorer, it’s a large portion of their income so that does impact us directly.”

TRT is built on the principle of providing excellent customer service.

With this budget news, TRT plans to invest in new buses – especially environmentally friendly compressed natural gas (CNG) powered buses – will be re-evaluated.

“We are reviewing the situation and reprioritising as we work with the City of Tshwane on these matters. From a roll out point of view, there will likely be a slowdown,” says Matebane.

“We have 114 buses right now. 40 of those businesses have been successfully converted to CNG. It’s good for the environment, there are less emissions, and they produce less noise than regular buses. With global warming and various environmental concerns that have become prominent, we have had to look at how we can expand and how we are making an impact.”

TSHWANE RAPID TRANSIT

SUSTAINABLE FUTURE While initial outlay for CNG converted buses is large, the long-term impacts make sense, both financially and environmentally. Eventually, the target at TRT is for all buses to run on CNG or similar systems. With government expenditure under the spotlight like never before, any investment will be meticulously considered as Matebane explains.

// IT’S GOOD FOR THE ENVIRONMENT, THERE ARE LESS EMISSIONS, AND THEY PRODUCE LESS NOISE THAN REGULAR BUSES //

“Looking at buses with environmental credentials, like a solar powered house, the initial cost is higher than the normal conventional product – that is a big factor for us to consider.

We are paying a premium right now in order for us to benefit in the longer term but we are busy deciding on what is best for the company and it is certainly not a decision we take lightly.

“We would like to purchase around 57 new buses in the future and we are in discussions surrounding that right now. When we are ready to partner with OEMs, we will ask the question about whether we purchase CNG buses or conventional buses. Any acquisitions will be price dependent.”

In terms of running cost, the price of fuel (diesel) came down 54 cents in March. Even with the Rand depreciating against the Dollar, the prices of petrol

and diesel came down. For TRT, using a fleet of CNG buses allows for improved bulk buying capabilities which will result in savings.

“Our aim has always been to move further into natural gas as we expand.

The main reason for that is that the more fuel we use, the economies of scale bring the average costs down which helps us a lot in the long run,” details Matebane.

In terms of expanding the reach of the system to new communities, growth is pencilled in for Q2 and Q3, helping to further entrench the reach and reputation of TRT. COMMUNITY ASSET “The company is viewed in a very positive way and the communities of Tshwane are very proud of the company,” insists Matebane. “We see

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INDUSTRY FOCUS: TRANSPORT

that in the number of passengers that we are moving – on average, 25,000 per day. Day in day out we have enquiries about our expansion.

“We will be expanding in April,” he adds. “Through that expansion, we are expecting another 15,000 people per day onto our buses. In July, there will be another expansion and that is when the new buses will come in handy.”

The route between Loftus stadium and Menlyn will receive attention and continues with a growth strategy that has been in place for a long time.

“It is all part of the strategy which was developed in 2014. We have reprioritised based on the cost and budget situation but overall expansion has been planned for a long time and we are looking forward to getting moving,” says Matebane.

Asked for more specifics on time frames for new buses and route expansion, the CEO is unsure. “We work alongside the city so we have to wait and see,” he says. “A lot of decisions are made at government level so it is difficult to commit to certain times but

64 / www.enterprise-africa.net

I know that in the next financial year we are aiming to complete the purchase of the 57 new buses.”

REALISTIC GOALS Over the past 12 months, there has been frustration from some commuters when services have been cancelled or changed without notice. The vision of TRT is to be the leading passenger transport operator in the continent. So, is it possible considering the challenges that the country and company faces; especially with a range of different competitors all vying for market share in the municipality?

“It is realistic,” confirms Matebane.

“Talking about competition, the BRT does not directly compete with the taxi industry. They are a feeder into that system so we see them as complementary. We do compete with other services but it really all depends where a person is travelling to and from.

We compete very well against other bus companies and we seem to be hitting the right buttons, so we are very proud of the work we do.”

TRT is not the only BRT in South Africa. Cape Town has the MyCiTi, Johannesburg has the Reya Vaya, George has the Go George BRT, Rustenburg has the Yarona, and the Nelson Mandela Bay had a BRT system put in place to service traffic during the 2010 FIFA World Cup. All have come under fire for operational inadequacy, but all continue to move South Africans to and from work on a daily basis. For TRT, some critics have pointed to the relatively small scope of the system when compared to initial promises from 2014. The imminent expansion should ease these concerns as the organisation targets coverage from Soshanguve to Mamelodi.

Matebane is enthusiastic about the future as the business continues to grow its reach, bringing it closer to its vision.

“Our focus area is the Mamelodi commuter bus service and we are busy making that business cost effective.

That is what excites me right now.

We are looking at leasing buses to add to the fleet and we are looking at automated collecting systems as well

TSHWANE RAPID TRANSIT

as adding more value in that space so that we can realise profits. We have a mandate to run that service for another three years from April 1 and that is what excites us,” he says.

Excitement from the CEO’s office spreads through the organisation.

TRT employs around 250 people throughout the business and Matebane, who has been in the industry for 10 years, is keen that all are regularly upskilled with relevant knowledge. For this reason, TRT is busy establishing a new training centre.

EMPLOYER OF CHOICE “In our business, we are recruiting the majority of employees, especially drivers, from the taxi industry. The skills in the taxi industry are different, so we are required to upskill and that is something we are continuing to do,” he says. “For me, the thing that shows we are doing well is that we have been fighting off other companies who are trying to take drivers from us.

Clearly, they recognise that our drivers are better so our continued focus on training is a very important thing for

us right now. We are ready to launch a new training centre for drivers and other employees and we will be taking drivers and asking them to help train new staff members while they go through various internal training programmes. Where we require external training, we will bring people inhouse to complete that.

It helps to save on cost and will save our drivers travelling a long way to external centres. We have the centre, we have the facilities, we have the skills. So we are saying, come and do your training here and save on the cost.

“Currently, we have 36 apprentices in training and we are happy with how the process is going, with various elements of training sponsored by the Department of Transport. It creates a bigger pool for us when we require new skills.”

For the most important people involved with TRT, its customers, the hope is that the service can continue running smoothly, quickly and safely, while expanding across the municipality and introducing new buses which improve sustainability credentials.

Of course, those within the business

will hope that the political and economic landscape can provide some predictability so that plans can be put in place. Unfortunately, they may be waiting for some time following the announcement at the start of the month that the City of Tshwane council would be dissolved and fresh elections would be held after the council had become dysfunctional since November 2019 meetings collapsed.

For Matebane, it’s business as usual as he continues to strive for ongoing improvement.

“We will persist with improving the socio-economic conditions and quality of life of all Tshwane residents, offering a better level of service as part of an integrated public transport system, and striving to be recognised as an employer of choice,” he concludes.

WWW.TSHWANETRANSIT.NET

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VOLVO TRUCKS SA

Innovation, Efficiency, Dependability Results in

Market Dominance PRODUCTION: David Napier

By delivering the core values of the long-established Volvo brand, Volvo Trucks South Africa is managing to claim industry-leading market share as a result of its world-class product and service portfolio. For those moving heavy and extra-heavy around South Africa, this company is positioning itself as the obvious first choice.

//

The Volvo brand is perhaps one of the world’s most trusted and standout when it comes to delivering on its promise - pioneering innovations that put people first, built on quality, safety and care for the environment.

Since 1927, the Swedish automaker has carved out market share alongside the world’s largest players and employs some 105,000 people around the world generating revenue of more than $44 billion in 2019.

In 1999, the passenger car operation of Volvo was sold to Ford before moving under the Geely Holding Group umbrella in 2010. This left the Volvo Group solely responsible for production, distribution and sale of trucks, buses and construction

66 / www.enterprise-africa.net

equipment along with other ancillary products and services.

Volvo Trucks is an industry leader, boasting many innovations and world firsts for its range of medium to heavy duty trucks. The trucks division of Volvo is services by 2100 dealers and 15 assembly plants across 130 countries.

In South Africa, Volvo Trucks was established 20 years ago. Previously, the brand had been imported and distributed by strategic partners but the company saw the potential in the country and set up shop on 13 February 2000.

After building a strong presence in South Africa, Volvo Trucks now offers up a range of high-quality options. The FH16, FH, FMX and FM are all extremely popular because of their

reliability, strength, quality build and safety credentials.

Unfortunately for Volvo Trucks, the South African economy has been under extreme pressure for a number of years with several factors combining to create a lack of business confidence and a slowdown in investment spending.

A truck from Volvo is a relatively high capital outlay and, even for the biggest businesses, when times are tough in the country this type of spend can often slowdown as organisations look to consolidate and perhaps make existing fleet last another year.

However, Volvo Trucks is a company that has navigated challenges many times before. The company is built on the reputation of overcoming difficult situations in harsh environments.

© Volvo

INDUSTRY FOCUS: AUTOMOTIVE

SA’S NUMBER 1 This was proven at the start of the year after the National Association of Automobile Manufacturers of South Africa (NAAMSA) released statistics showing Volvo Trucks market share at 23.2% for 2019.

Selling 3206 in South Africa and other African countries in the past year, Volvo Trucks grew its market share by 4.8% on 2018’s figures to claim the number one position in the industry.

With meaningful growth not expected to return to the South African economy in 2020, this was welcome news for Volvo Trucks and Vice President of Volvo Group Southern Africa, Marcus Hörberg who said: “Our customers and our staff are the main driving force behind everything we do. We believe that the quality of our products, our staff, service, parts and support, played a central role in increasing our market share. We will now work even harder to keep the trust our fleet owners have placed in us.”

The company’s units are assembled in Durban and distributed around South Africa and across the border into neighbouring countries including Botswana, Mozambique,

// OUR CUSTOMERS AND OUR STAFF ARE THE MAIN DRIVING FORCE BEHIND EVERYTHING WE DO. WE BELIEVE THAT THE QUALITY OF OUR PRODUCTS, OUR STAFF, SERVICE, PARTS AND SUPPORT, PLAYED A CENTRAL ROLE IN INCREASING OUR MARKET SHARE // 68 / www.enterprise-africa.net

Namibia, Zambia and Zimbabwe.

Hörberg committed to further investment in South Africa saying that the company would spend money on facility improvements, service centres and staff training.

“We are committed to continue increasing vehicle uptime and optimising vehicle utilisation for our fleet owners,” he said. “Aspects like connected services, flexible service contracts and preventative maintenance all assist fleet owners in keeping the wheels of their businesses turning.”

This investment will also help the company to maintain its position as the number one rated manufacturer in South Africa in terms of overall customer satisfaction. In December 2019, Data Track, a local research company that analyses customer experiences of over 37,500 truck and fleet operators in South Africa, confirmed its research shows Volvo Trucks is the top-rated truck manufacturer.

In January 2020, figures from NAAMSA suggested that Volvo’s efforts had been repaid, with the company selling 207 units in the extra heavy commercial sector (27.3% of the total), 73 units in the heavy commercial sector (26.3% of the total), and three units in the bus sector (10% of total).

These figures represent a total of 26.6% market share in the sectors that Volvo Trucks is active in the first month of the year.

FLEXI-GOLD In October 2019, Volvo Trucks announced the roll out of its new service contract, already established in some European markets, across South Africa. The FlexiGold plan is aimed at companies that need flexibility and adaptation based on markets and demand.

The idea of the usage-based Flexi-Gold contract is for hauliers to pay monthly fees, broken down into fixed and variable parts (km-based) tailored to the truck’s actual mileage. Through advanced telematics technology, vehicles communicate effortlessly with

// THE RAPID DEVELOPMENT OF CONNECTED SERVICES GIVES HAULIERS COMPLETELY NEW WAYS OF INCREASING VEHICLE UPTIME AND OPTIMISING VEHICLE UTILISATION // Volvo Trucks and provide information regarding actual usage which helps to account for fluctuations in seasonal demand – a big factor for those working in agriculture and construction.

“The rapid development of connected services gives hauliers completely new ways of increasing vehicle uptime and optimising vehicle utilisation. By adding flexibility to the payment model, we add another dimension to our offer. A pilot project for this new usage-based service contract has already been successfully implemented locally and will now be available for South African customers,” said Theunis Eloff, Aftermarket Director of Volvo Trucks Southern Africa.

The contract is different from what is currently available from Volvo and the rest of the market, and provides customers with a 40% flexibility span, where annual mileage can exceed or go under the agreed mileage by 20%.

This, combined with no extra invoicing paperwork, brings a much more flexible offering to clients.

“Many transport companies have short-term agreements with their clients or operate in unpredictable and fluctuating markets. They express a need for greater flexibility when it comes to service contracts. We now have the technology to make dynamic and connected solutions like this possible,” said Thomas Niemeijer,

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Business Development Manager, Service Contracts, Volvo Trucks.

“Quite simply, if you drive less, you pay less and vice versa. The Volvo Flexi-Gold Contract offers the same coverage and uptime as a Volvo Gold Contract, at the same predictable cost, but with much greater flexibility to adapt to changing business needs,” added Niemeijer.

FH I-SAVE The nature of Volvo is to be a pioneer.

Invention and innovation is in the company’s DNA. And helping to solve problems for clients is what helps to constantly improve the standing and reputation of Volvo Trucks.

Of course, one of the main concerns for hauliers is the cost of fuel. In South Africa, the Department of Mineral Resources and Energy announced in February that petrol prices would decrease by 13 cents and diesel prices would come down by five cents per litre. This small reprieve was welcomed by those in the transport and logistics industry. “Ongoing declines in the price of oil, since the second week of the year, will give South African fuel users

70 / www.enterprise-africa.net

a breather for February,” said South Africa’s Automobile Association (AA).

For Volvo Trucks, the ability to save clients money while pushing efficiency is important and so the company announced, in the first half of 2019, the launch of the FH I-Save.

This new model boasts the combined D13TC engine with updated fuelsaving features. The result is a 7% improvement in fuel efficiency with no loss of driveability features.

“Volvo FH with I-Save is our answer to this challenge. It is a complete

solution that combines our latest technology to substantially bring down fuel consumption in longhaul operations. And this is without compromising drivability,” said Roger Alm, President of Volvo Trucks.

Currently only available in Europe, the FH I-Save will be rolled out further afield if demand is strong. The model is targeted at those who drive more than 120,000 km each year and, with Southern Africa’s extensive road network, this could quite feasibly be the case for hauliers across the region.

VOLVO TRUCKS SA

© Volvo

UD TO ISUZU January’s figures for sales, according to NAAMSA, show that part of the Volvo Trucks offering to market included sale of the UD Trucks brand. Part of Volvo since 2007, UD has established its own brand strength and enjoys success across southern Africa.

But, at the end of 2019, Volvo Trucks and the Volvo Group announced that it would partner with Isuzu Motors to improve efficiencies and develop new technologies, with a part of the deal being ownership of UD Trucks passing from Volvo to Isuzu.

The result will be creation of the best long-term conditions for a stronger heavy-duty truck business for UD Trucks and Isuzu Motors in Japan and across international markets as well as deeper collaboration and technology expertise transfer between the two global businesses.

President and CEO of the Volvo Group, Martin Lundstedt, was positive about the plan, saying: “The Volvo Group and Isuzu Motors have a wellestablished relationship on mediumduty trucks in Japan based on mutual respect, shared values and win-win

spirit. We see great potential to extend our cooperation within technology, sales and service as well as other areas going forward, for the benefit of our customers and business partners. Our UD Trucks colleagues have done a great job to improve performance in recent years and the alliance opens up a great opportunity to continue the successful journey.”

President and Representative Director of Isuzu Motors, Masanori Katayama, agreed highlighting the opportunities for value creation going forward.

“Isuzu Motors and the Volvo Group strongly believe in the business opportunities and synergy potential between the two Groups. We intend to derive the full value from each other’s different specialties across product and geographical strongholds. Our collaboration will actively contribute to service improvements and strengthened customer satisfaction as well as to prepare ourselves for the forthcoming logistics revolution,” he said.

The non-binding Memorandum of Understanding signed between Volvo and Isuzu is expected to be

cemented by the middle of the year and completed in a binding format (subject to relevant approvals) by the end of the year.

The long-term impact on the business in southern Africa will take time to filter through, but Volvo Trucks has proven on so many occasions to be resilient and powerful and the likelihood is that things will continue as normal.

While Volvo Trucks continues to dominate market share and putting world-class products and services into the market, customers will continue to come. In South Africa it’s clear, Volvo Trucks is reliable, trustworthy and innovative, delivering everything you could need, and more, while moving around the country.

WWW.VOLVOTRUCKS.CO.ZA

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