Enterprise Africa April 2021

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

April 2021

www.enterprise-africa.net

11 Million and Counting for aYo Exclusive interview with aYo Holdings CEO, Marius Botha

ALSO IN THIS ISSUE:

reOS / Grayswan Investments / CPT / Logicalis SA

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 James Davey  jamesd@enterprise-africa.co.za PROJECT MANAGER Chris Wright  chrisw@enterprise-africa.co.za PROJECT MANAGER Christina Allcock  christina@enterprise-africa.co.za PROJECT MANAGER Eleanor Sarbutt-King  eleanor@enterprise-africa.co.za SENIOR DESIGNER Liam Woodbine  liam@enterprise-africa.co.za CONTRIBUTOR CONTRIBUTOR CONTRIBUTOR CONTRIBUTOR CONTRIBUTOR CONTRIBUTOR CONTRIBUTOR

Manelesi Dumasi Karl Pietersen David Napier Timothy Reeder Colin Chinery Benjamin Southwold William Denstone

Published by Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Rouen House, Rouen Road, Norwich NR1 1RB +44 (0) 1603 855 161 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/ or in advertisements included in this magazine do not necessarily represent those of the publisher.

Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Media Group Ltd 2021

For many, the Covid-19 pandemic is now being talked about as a thing of the past. Obviously, the virus still poses a large threat to life and continues to disrupt like nothing experienced before. But hearing so many talk about the pandemic in the past tense is encouraging.

For the robust, trading has continued and companies have been able to find opportunities.

This has been key to ongoing success. While growth may not have been achieved in the same numbers as we were used to reading in 2019, surviving and being here to tell the story now is largely being seen as a win.

In this edition, we talk again to Chemical Process Technologies (CPT) about the work being undertaken to boost local manufacturing of active pharmaceutical ingredients (APIs), specifically for use in human medicines.

Despite the pandemic, CPT has continued to push forward by gaining its GMP license from SAHPRA, paving the way for commercial production to begin.

At aYo holdings, the microinsurance JV between MTN and MMI, customer numbers have boomed with the company now servicing more than 11 million people across Zambia, Ghana and Uganda. CEO Marius Botha tells us more about how microinsurance will revolutionise and disrupt the market in Africa. Here, the pandemic has recast the spotlight on the importance of protecting income should a household earner be incapacitated.

Craig Buckley, CEO at reOS, talks to us about how the demand for housing will not diminish as a result of the pandemic, and rental is a sector that needs innovation to be efficient.

As such, the company has launched software which brings everything needed into a block-chain-based system designed around empowering rental agents.

For these companies, looking forward with cautious optimism is helping change the mood from a difficult 2020.

While there is a long way to go, 2021 is certainly looking bright.

Get in touch and tell us about how you are preparing to make the most of opportunities available. We’re on LinkedIn.

Joe Forshaw EDITOR

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

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8// AYO HOLDINGS 11 Million and Counting for aYo aYo Holdings, the joint venture microinsurance business from MTN and MMI, is making good progress in its roll out across Africa having already solidified its position in Uganda, Zambia and Ghana. With further expansion imminent, CEO Marius Botha tells Enterprise Africa more about what makes aYo unique.

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CONTENTS

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8// 16// 22// 30// 36// 42//

AYO HOLDINGS 11 Million & Counting for aYo REOS Rental Gets a reOS Proptech Boost GRAYSWAN INVESTMENTS Offshore Megatrend Investing Offers Rich Rewards CHEMICAL PROCESS TECHNOLOGIES (CPT) Local API Manufacturing One Step Closer LOGICALIS SA Architects of Change Succeed in Workplace Shift DEVMARK PROPERTY GROUP Long-term Project Pipeline Buoys Devmark www.enterprise-africa.net / 5

KUSILE UNIT 3 ACHIEVES COMMERCIAL OPERATION Eskom has announced that Unit 3 of the Kusile Power Station has achieved commercial operation status.

This brings to three the number of generation units that have achieved commercial status at the project, generating a maximum 2 400MW to support the South African power grid.

In a statement, Eskom said bringing the 800MW unit to commercial status means construction activity has come to an end on half the eMalahleni, Mpumalanga project.

The achievement of this milestone follows two years of rigorous testing and optimisation since the unit was

first synchronised into the national grid in April 2019.

This also milestone marks the contractual handover of the unit from the principal contractors under the Group Capital Build project unit to the Generation division.

“Bringing this unit to commercial operation is a major milestone for Eskom and the employees involved in the project, who are working hard to ensure Eskom fulfils its promise of bringing stability to the power system,” said Bheki Nxumalo, Eskom’s Group Executive for Capital Projects.

The construction, testing

and optimisation activities on the remaining three units, some of which are currently providing intermittent power to support the grid, are progressing well.

Commercial Operation status is conferred on generation units that have met the requirements for full technical, statutory, safety and legal compliance.

Eskom said it is proud of its team at Kusile who have delivered this third unit with “extreme dedication, and working under challenging conditions during periods of loadshedding and the Covid-19 restrictions”.

NEW CEO FOR PICK N PAY Pick n Pay has faced difficult trading thanks to countrywide bans on the sale of alcohol and tobacco as a result of the Covid-19 pandemic. The company has estimated these restrictions have resulted in R4 billion in lost sales over the year.

In other sectors of the business, trading was good.

Food groceries and clothing saw decent growth and the company cut costs with a voluntary redundancy package.

Recouping and growing after the difficult year will bring an interesting challenge for Pieter Boone who will take the reins at CEO on 21 April following the retirement of Richard Brasher. Pick n Pay Chairman, Gareth Ackerman announced the news stating that a ‘comprehensive local and international search’ was undertaking when looking for a replacement. Boone was previously COO at Metro AG.

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Pieter Boone - CEO

NEWS SNAPSHOT ENVIRONMENTAL PLAN FOR CONSTRUCTION OF SKA PUBLISHED Amendments to the Integrated Environmental Management Plan required to manage the impacts associated with the development of the first phase of the Square Kilometre Array (SKA) in the Northern Cape, without further environmental approval required, have been published.

“The amendments are necessary, as the proposed construction camps would pose a risk to the optimal functioning of the Meerkat radio telescopes currently in operation,” the Department of Forestry, Fisheries and the Environment said.

The amendments include the acknowledgement of the declaration of portions of the SKA site as the Meerkat National Park; the increase in the size of the land core area; the development of a perimeter road along the boundary fence; and the development of a solar farm to contribute to the electricity needs of the facility.

© GCIS

SA RANKED TOP GLOBAL BUSINESS SERVICES SECTOR LOCATION South Africa has been ranked as the top global business services sector location for 2021, according to the Department of Trade, Industry and Competition (dtic).

“In a boost to business confidence, South Africa has won an award as the top global location for business process services, in a sector that is rapidly expanding locally and exporting call centre and related services to other parts of the world,” the department said.

South Africa was named as the Most Favoured Offshore CX Delivery Location for 2021, in the Annual Front Office BPO Omnibus Survey.

The department welcomed the achievement for the country’s business service industry, which has positioned itself as one of the premier locations internationally for business services.

Ranked number two last year, South Africa has beaten stiff competition from India, the Philippines, Malaysia, Poland, Egypt and Northern Ireland to claim the top award for the first time.

Growth in the sector has been driven by strong support by government, through the incentives offered by the dtic. This support has helped to showcase the talent, technology and knowhow of South Africans and to allow them to compete against the best in the world.

The department said sectorgrowth was interrupted by the outbreak of the COVID-19 pandemic that led to closure of businesses in many parts of the world.

“However, the Minister of Trade, Industry and Competition Ebrahim Patel issued regulations

during the lockdown that enabled call centres supporting local and global essential services to continue to operate, where firms in other locations could not,” said the dtic.

Further support was provided by the Presidential Jobs Fund during the pandemic.

Together with the dtic incentives, the Jobs Fund has supported 14,300 new jobs in the sector with R1.9 billion in export revenue.

“This sector is a large and growing employer of labour. The ‘reimagined industrial strategy’ outlined by President Cyril Ramaphosa in 2019 laid the basis for growing established sectors (like clothing, poultry, sugar and steel) and emerging or new sectors (such as call centres, the green economy and digital industries),” said Minister Patel.

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AYO HOLDINGS

11 Million

& Counting for aYo PRODUCTION: David Napier

aYo Holdings, the joint venture microinsurance business from MTN and MMI, is making good progress in its roll out across Africa having already solidified its position in Uganda, Zambia and Ghana. With further expansion imminent, CEO Marius Botha tells Enterprise Africa more about what makes aYo unique.

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CEO MARIUS BOTHA

INDUSTRY FOCUS: FINANCE

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The microinsurance model is coming into play across Africa and causing major disruption in a market that has, until recently, struggled to penetrate beyond South Africa because of barriers to entry including cost, risk, data, economic stability, and scalability.

Microinsurance – aimed at the low or irregular income individuals to protect against unexpected shocks to income – has always been considered the viable approach for Africa. Short terms, low premiums, simple commitments, no paperwork – it suits the market perfectly. But accessing the number of people needed to make it commercially sustainable has been a hurdle.

This is where aYo Holdings – a JV between MTN and MMI – has started to gain traction. By utilising life licenses held by MMI across Africa, distributed by the industry leading subscriber base of MTN – the continent’s largest telco – aYo has found a recipe for quick growth by combining technologies of two of the biggest and best.

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Add in a new CEO keen to disrupt and move insurance on the continent to a new level, and you are looking at a solid investment case that not only has the potential to change the industry for the better but also delivers incredible value for customers and helps break down the barriers for those that may have been previously excluded from the industry.

But implementing an innovation like this in a meaningful way is not easy, despite its ingenious model – especially during a global pandemic when markets and businesses have been turned upside down.

For Marius Botha - an insurance industry veteran who has senior management experience from Stangen, African Bank and Munich Re – the challenge was too tempting to pass up.

He joined aYo in September 2020 with Africa, and the world, still battling the crippling Covid-19 virus.

“I’ve never been into a MTN office as the offices have been closed with restrictions on the number of staff going back,” he smiles.

// WE’RE GRATEFUL AS AYO THAT DESPITE COVID WE HAVE CONTINUED TO GROW MONTH ON MONTH // Asked what is attractive about aYo right now, Botha is clear: The chance to disrupt.

“Along came this opportunity to join MTN, and their vision for disrupting financial services across Africa excites me for two reasons. First, it is a significantly larger scope in role compared to previous management roles, and second, it’s at the forefront of new generation insurance business models. If I reflect back, I had days in my previous roles where I was worried about being disrupted by the new digital platforms and getting stuck in a traditional insurance model that initially faces a slow starvation and then sudden death. The MTN opportunity is closer to

AYO HOLDINGS

where insurance will go in future and so it is an exciting opportunity to get involved and be part of what I believe will change insurance engagement and behaviour going forward.”

YOY GROWTH aYo was founded in 2017 and grew quickly with consumers open and willing to participate in a model with zero paperwork and minimal interactions. Uganda, Zambia and Ghana are currently the key markets.

The idea is driven through USSD technology which is still prevalent on the continent. Today, the company has 11 million customers and has paid out more than R15 million in claims across its hospital and life policies on offer.

“It’s phenomenal growth and the team deserves great credit,” enthuses Botha. “It is a micro insurance business model at this stage, and you need scale in order for the model to work out. The unique customer numbers continue to grow fast as we enter new countries and markets. If you compare that to the opportunity which is the MTN subscriber base, the number is actually very small and so there is massive opportunity for growth. The key challenge for us, in a business model where it’s about high volume-low margin,

// OUR AMBITION AND VISION IS TO REALLY BECOME A UNICORN AND TARGET 50 MILLION OR 100 MILLION CUSTOMERS ON THE PLATFORM AND THAT WOULD BE POWERFUL, MAKING US THE LARGEST INSURER IN AFRICA //

is to make sure you pick the right technology solutions and build for reuse capability despite unique requirements and needs across different markets.”

By deducting small premiums from airtime and mobile money wallets, aYo breaks a financial barrier to entry. By offering hospital and life cover only, the company is focussing on what is required and not pushing products or add-on services on clients that do not need it.

“Our ability to deliver insurance products via mobile money, with no paperwork, with small premiums and small transactions, submitting claims via mobile phones – it’s all powerful in the segment below the low-income segment. It’s an enabler for individuals with low income or those who are entrepreneurs with irregular forms of income. That is the big restriction with traditional forms of insurance – affordability and accessibility,” details Botha.

In December, when the announcement of aYo reaching 10 million customers was formalised, aYo was already preparing to move to new shores in search of further growth. Soon the company will launch in a new west African market, before exploring opportunities to develop the MTN subscriber base further across the continent. For Botha, it’s all about getting the technology right.

“The scaling challenge is very

interesting,” he says. “To some extent, what I’m managing is more of a platform business and IT shop rather than a traditional insurance company and that is why I’m enjoying it. Coming from a professional actuarial background, this is scale and challenges on a whole different level.

It’s not about the complexity of the insurance product, it’s more about the complexity in the technology stack, scaling strategy, and the requirement to be available 24/7 – every second you are down on a production incident is lost revenue. You don’t necessarily have that dynamic in a traditional insurance model with lower volumes.”

With the technology stack standing up to demands to date, and operations across Uganda, Zambia and Ghana all running smoothly, the company is looking to the future with hunger.

“11 million is a great milestone but still a small drop in the ocean,” Botha smiles. “Our ambition and vision is to really become a unicorn and target 50 million or 100 million customers on the platform and that would be powerful, making us the largest insurer in Africa.”

CROSSING AFRICA Currently, aYo is busy ramping up efforts to finish a roll out in Côte d’Ivoire. The company has completed technical integration and is looking to quickly market and promote offerings to the large MTN subscriber base in the country. In 2020, MTN Group’s

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INDUSTRY FOCUS: FINANCE

Côte d’Ivoire arm announced it would see a rise in revenue of around 5-10% thanks to a jump in internet traffic of 35% as the company’s 12 million local subscribers tried to stay up to date with news and advice around the pandemic.

Further down the line, aYo has its eyes on other countries where the perfect recipe of a strong MTN subscriber base and MMI licenses could cook up further growth.

“Nigeria is one of MTN’s largest OpCos and they have done phenomenally well there during Covid-19 in terms of growth of customers and subscribers. The challenge with Nigeria, from a regulatory point of view, is that the market is more restrictive, relative to other markets,” says Botha.

// COVID HAS FORCED PEOPLE TO LOOK AT THE POTENTIAL OF AN EXTERNAL SHOCK THAT COULD, FOR THE UNPREPARED, EXACERBATE THE CYCLE OF POVERTY IN LIFE // 12 / www.enterprise-africa.net

The largest economy in Africa represents a golden opportunity and, according to Botha, there is a need for the aYo offering. But a different structure would be required as to operate in the same way, collecting premiums via airtime or mobile money, would require aYo or MTN to obtain a banking license.

The team is busy exploring what can be done, engaging with regulators in Nigeria, and preparing to jump through the necessary hoops.

As for MTN’s home in South Africa, insurance penetration is much higher, and the traditional insurance offering is more established with financial inclusion further ahead of the rest of the continent. “It is a possibility but I’m not sure from a strategic optionality point of view if it is the best one for aYo to pursue at this stage,” admits Botha. “What’s really powerful from an aYo perspective is the ability to disrupt markets with a low insurance penetration. I do foresee that we can be disruptive in the SA market as there is still outcomes where consumers end up paying a lot for very basic insurance products. If we are going to hit the SA market, that is the space we would look at – the space where people don’t have access and where people need a more affordable product.

“MTN is a federated system and each market operates on its own, with

its own strategic projects that they focus on so we have to negotiate with each individual MTN OpCo to negotiate access to their platforms. While some markets are smaller, they are lower hanging fruit which we will hope to tick the box on a lot quicker before we look at South Africa.”

COVID: SHOT IN THE ARM Insurance as an industry has something of a bad reputation in Africa. Away from South Africa, the industry has failed – for a long time – to reach individuals because of cost, education and industry understanding, and risk for providers.

But the Covid pandemic has moved the importance of mitigating economic shocks – including loos of income – to the forefront of the minds of many. For those where a single person can be the sole source of income for an entire extended family, protecting against unforeseen circumstances is now of clear importance. While the pandemic has been damaging in so many ways, for aYo this renewed focus on the industry and the benefits it can provide has been a form of solace.

“It was positive with digital engagement,” says Botha. “It forced many consumers, who in the past may have felt face-to-face conversations were more trustworthy, to participate with digital engagement.”

AYO HOLDINGS

Of course, during hard lockdown, the sales force was unable to get out and distribute, but the digital nature of this fintech business allowed for continued operation.

“It had a positive impact in terms of the awareness of the value of insurance because for many customers in Africa, where they rely on community support groups, it is a foreign concept to outsource that support to an independent party. So, insurance as a concept and consumer education is a big thing we need to focus on.

Covid has forced people to look at the potential of an external shock that could, for the unprepared, exacerbate the cycle of poverty in life. For many African consumers, Covid impacted them with the loss of productive capability – they were not able to generate business income and were not

necessarily able to work remotely if their work is more manual.

“Customers started realising the value of having insurance cover as you can get a claims pay out after hospitalisation and that protects you from having to take a knock on income,” says Botha.

A secondary development which also played into the hands of aYo was the increasing rate of ‘down selecting’ insurance cover. Consumers actively looked for alternative options as household finances were put under pressure. What they found in aYo was a product of an equal quality but at a much more suitable price and with greater flexibility.

“People were down-selecting their insurance cover but they were realising that they didn’t have to go to a traditional insurer. They could get the

same cover but for cheaper through a different player, a non-traditional platform but with a strong brand that has association with MTN,” says Botha.

One of the challenges set by Covid has been cultural. How can you build and maintain a company ethos with people fragmented, never meeting one another, unable to attend offices? “It’s very hard to keep engagement levels high,” admits Botha.

“I am cognisant of the fact that our busines model is conducive for people to work from home but it’s very hard for new people coming in to find that sense of identity and culture.

I am experiencing it for myself from a MTN perspective. We will have a hybrid model and I think it will be hard for people to go back to no flexibility - I don’t think a five-day office job will still be the norm.”

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INDUSTRY FOCUS: FINANCE

SIMPLICITY RULES Focussing on USSD technology for its roll out, aYo has been able to keep its processes extremely simple at consumer level. This has aided its growth significantly and displays clearly the strategy of seeking out a particular demographic within chosen markets.

“MTN as a telco does need to transform its own business model,” highlights Botha. “It’s no longer a voice dominated mobile telephony company; it’s a data company and is increasingly becoming a financial services company. MTN is unique in that it has the largest subscriber base in Africa and a dominant position with lower income or informal or irregular income customers, so they could launch traditional insurance propositions in partnership with a traditional insurer, but they wouldn’t necessarily be serving their core customer base.”

The product had to be simple, affordable, flexible, and distributable through MTN’s channels. Feature phone usage across Africa remains the dominant technology with smart

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phone uptake improving but not yet universal. Through a few text steps on a USSD string, customers can very quickly gain life or hospital cover at an affordable price point.

Claims are equally as easy, but this is where aYo has to demonstrate its technological nous to mitigate against fraud.

“At claim stage, we would use the network location information we have on the customer – subject to data restrictions that are different in each market – and check where the hospital is relative to the location of the incident to help manage fraud.

The claim would then be paid into the same mobile money account. There are no paper requirements, it’s very quick and very easy, and the beauty for the customer is that they can choose as and when they engage with insurance. It’s a single premium with one month or three-month cover. It can be stacked, so if you can afford more you can buy more. If you want to pause, you have full flexibility. For that target market, that is what makes it

disruptive. Traditional insurance does not allow for that,” Botha details.

Asked if the aYo concept has the potential to disrupt beyond life and hospital cover, the new CEO is sure that the industry will, in time, realise radical change as a result of aYo’s success.

“The vision that I have for the business is that it becomes an insurance platform business in a sense that there is a wider range of product options available to customers. Right now, it is life and hospital cover but we would like short term products and other value added services. Each one of those have unique requirements. The moment we do motor insurance or scooter insurance, the underwriting is very different and you do need information about the vehicle etc. We have to work out, within the constraints of a USSD customer journey, which factors can we collect and use proxies for underwriting as we have to use short engagement journeys. There is a vision to a broader product set but there are a lot of things we need to work out.”

Employing new and different

AYO HOLDINGS

technologies will also be part of the journey for this fintech. As novel versions of traditional products are added to the portfolio, data and information becomes more important.

“If you think about home or contents insurance, a lot of homes in Africa are not bricks and mortar buildings,” says Botha. “We have shacks or huts or informal settlements and there is no formal address or postal code to link to your policy. So, we are looking at technologies to give us geolocation capabilities so that we can pinpoint the home regardless of what it is and start building cover models where we can take customers on the journey while we are comfortable with the risk.”

FUTURE PROOF MTN at Group level has made its position clear when it comes to fintech. The company is looking to further enhance its availability to form partnerships with promising offerings.

Recently, a new venture was struck with MasterCard to allow users to complete ecommerce transactions. At the end of 2020, MTN increased its shareholding in aYo to75% (subject to regulatory approval) thanks to impressive performance from the insurance business. “It speaks of MTN’s broader vision of disrupting financial services,” confirms Botha.

He is confident there are many growth paths, but says there is still a need to iron out many things locally in each region before serious moves can be made.

“The approach is organic as we can grow in different ways. We can try and attract more customers in an existing market or sell more products to existing customers for a higher average revenue per customer. Or we can look at new markets. It’s hard to have an exact road map as there are so many dynamics that we need to take into account. When are elections in that country, what is the political stability like, what is economic growth like, what is the Covid situation?

The extent of hard lockdowns in the different markets we are in varied

extensively. We do have a roadmap for the next target opportunities but we have to asses on a balance of factors before we decide on the next project.”

MTN Mobile Money accounts are highest in Rwanda, Cameroon, Benin and Congo (away from where aYo is already active). With the growth roadmap under wraps for now, Botha will be keen to roll out quickly as other telcos wake up to the possibilities of morphing their offering to include financial services on a larger scale.

Competition in the market will be good for the consumer, bringing increased choice and further reductions in pricing, but aYo will look to utilise its scale alongside MTN to achieve first mover advantage in various African markets.

“I like the concept that there is no guarantee of success here,” says Botha. “To say that you are a platform business with 11 million customers still leaves you with challenges in turning it into genuine profitability because at the moment it has been investment after investment into a technology stack. High volume low margin is not necessarily success. There is still a value component in this challenge where you have to ensure you offer proper value to customers. I’m excited about the challenge of building scale and also driving value for customers in a

sustainable way. There are different microinsurance models and large-scale experiments in the market but to some extent this is an investment and a gamble for MTN and it is exciting to be responsible for something like that. It is so different in so many areas and that is really stimulating.”

For those at aYo, for the company’s shareholders, and for its customers, it certainly feels like a new dawn for the distribution and design of insurance products. With population growth in Africa remaining high, and the rate of insurance penetration still low, it seems that MTN, MMI and aYo have a major opportunity. Not slowed by Covid, and not scared of crossing borders, this is a company with a continent at its feet.

“We’re grateful as aYo that despite Covid we have continued to grow month on month. I keep saying to staff that yes it has been a tough year, but you could have been in an organisation that had it tough too. We have positive growth, we have momentum, and we are looking forward to what comes with that,” Botha concludes.

WWW.AYO4U.COM

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REOS

Rental Gets a reOS

Proptech Boost PRODUCTION: Karl Pietersen

reOS is here to make the property rental market better. Founder and CEO Craig Buckley tells Enterprise Africa more about how his software will make life for agents faster, easier, more efficient and safer. The result? More time to focus on quality customer service. It’s a win-win.

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The weak economic climate in South Africa – present since 2008 – combined with the hefty impact of the pandemic on the spending ability of much of the population has led the country’s property market into dim territory.

Rental vacancies are up, timeous payments are down, property prices have not grown significantly in a decade, and the appetite for moves has been dampened and delayed.

The rental industry specifically has

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faced big challenges. Landlords have struggled for some time to place suitable tenants and now that task is intensified as the country deals with unemployment figures above 32%. When income drops, the ability to pay rent decreases – it’s a simple calculation. But industry pros are hopeful that the situation can turnaround.

Sandton-based TPN Credit Bureau said in March that landlords who rent out properties between

R7,000 and R12,000 per month are seeing just over 83% of their tenants paid up, but tenants in the lower brackets - rentals below R3,000 per month - are still struggling; with just over 65% paid up with landlords. The figures improved through 2020 as the strictest lockdown rules were lifted, but financial fragility in the lower segments of the market will remain a concern for some time.

Finding quality tenants, simplifying processes, and helping to

INDUSTRY FOCUS: PROPERTY

ensure streamlined financial vetting is more important than ever.

This is where reOS comes into its own. A proptech company with software that makes life for rental agents, landlords, and tenants much easier, this South African business is ready to grab the world’s new opportunities by utilising modern blockchain technology – a form of database that stores a large amount of information in an order that is easy to access and manage.

CEO of reOS, Craig Buckley tells Enterprise Africa that while there have been issues to navigate in the property sector, it is one in which demand never diminishes.

“The impact of the pandemic has been a bit of a mixed bag within the property industry, in that there has no doubt been some very real challenges around realities such as a general deterioration in tenants’ ability to pay rent timeously,” he says. “However, these challenges have been offset by exciting new opportunities for businesses like ours, and the value of having a good rental agent managing your property has really been highlighted during these tough times. At the end of the day everyone still needs a roof over their head at night and as a result the intrinsic demand is still there. While we have observed the average rental value per lease decline in real terms of late, this shift is also is also starting to stimulate an uptick demand.”

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PROPTECH In January, Just Property CEO Paul Stevens told Business Tech that the buyers, sellers, landlords and tenants will be looking for more value in the services that are offered to them, leading to a more competitive business environment in 2021 and beyond.

For reOS, this is welcome news as the company looks to begin its mission of ‘positioning agents as the heroes’ of an incredibly tough industry. “reOS has been in the making for several years, and we will always be looking to improve on the current systems,” says Buckley. “The rentals space has an ever-expanding list of intermediaries who require either transactional rails or a layer of services that evolve and shake up the ecosystem between tenants, landlords and agents. Our blockchain architecture allows for this complexity and flexes additional functionality in payment reconciliation for every lease on the system.

“Data is the cornerstone of our platform and accuracy is therefore essential,” he adds. “This is why our platform is built in cutting-edge technology, using the blockchain.

Our hyperledger and bank-grade encryption ensures all data is secure and perfectly reconciled to the underlying leases under management, at all times. I can’t

// AS WE OWN MORE OF THE LOCAL MARKET, OUR INTERNATIONAL APPEAL GROWS, AND WE WILL MOVE AHEAD WITH OUR PLANS TO BE ON THREE CONTINENTS WITHIN THE NEXT FIVE YEARS // overemphasise how very valuable this is to agencies who struggle to find, monitor and manage hundreds of leases each month. Scale is finally within reach, without massive spend, for agencies.”

The earliest iteration of reOS was Rental Connect. As the company grew and transformed after initial investment, new designs and new service offerings were added making the business unique and difficult to replicate. “reOS champions the rental agents by providing them with powerful tools that have the intelligence to automate and grow their businesses to unprecedented scale,” explains CCO, Ben Shaw. “In particular, the ability to automatically reconcile all incoming funds to the correct tenant and schedule the associated outgoing payments (with full transparency) saves agents from their worst week of the month.

Feedback from previous versions has also resulted in our crafting a worldclass, efficient workflow for agents to manage multiples of their current book size. This appeals to franchises who are seeking to grow their business yet maintain data-rich access and reporting controls.”

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REOS

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service portfolio have already been identified and as the uptake of the system increases, reOS will become more powerful and more intuitive. “reOS is actively engaged with partners in various parallels.

Marketing of inventory, maintenance, legal services, eviction procedures, arrears management and collection, housekeeping, research insights and financial services are all within our short to medium-term roadmap.

We are also busy piloting some innovative new products, and have had success with a few pre-approved lending facilities,” says Shaw.

BUILDING BLOCKS reOS, which claims to be designed for people and built for business, is already growing. Built for rental professionals, offering a fully branded experience, the software allows rental agents to free up their time to focus on delivering outstanding customer service. This is the real business pitch the company makes to agencies.

Development of the underlying technology had been ongoing for some time, but last year – during the height of the global pandemic – the reOS brand was introduced. Since then, marketing has been a major

// REOS HAS BEEN PURPOSEFULLY BUILT TO INTEGRATE VIA API TO GLOBAL SERVICE PROVIDERS. SO YES, INTERNATIONAL EXPANSION IS VERY MUCH PART OF OUR PLANS //

focus for Buckley, and more recently for Shaw who joined in 2021.

“We have been in stealth mode throughout our Beta phase, and only publicly introduced the reOS brand to the market in October 2020.

Happily, the switch is now turned on, and we’ve already seen encouraging adoption as we start to leverage our established distribution networks,” says Buckley.

“Given that our technology stack scales cost-efficiently, we are able to offer a competitive price point for far more value than traditional competitors. Our customers pay processing fees, which means they only owe us as and when they themselves earn their fees.”

For Shaw – an experienced proptech entrepreneur and former banker - there is much room for optimism following several successful client success stories over the past few months.

www.enterprise-africa.net / 19

INDUSTRY FOCUS: PROPERTY

// REOS CHAMPIONS THE RENTAL AGENTS BY PROVIDING THEM WITH POWERFUL TOOLS THAT HAVE THE INTELLIGENCE TO AUTOMATE AND GROW THEIR BUSINESSES TO UNPRECEDENTED SCALE // “One such example came from the latter part of 2020 and involved a rental management team which unfortunately had to halve their staff compliment during the lockdown, and yet - powered by reOS - managed to grow their rental business operations by 43% in less than a year,” he details. “This really gives insight into the step-change available to agents when switching across to the reOS platform.”

As reOS continues to expand and its benefits become more obvious in South Africa, there is an appetite from Buckley to hit other markets where demand is already building.

20 / www.enterprise-africa.net

“reOS has been purposefully built to integrate via API to global service providers,” says Buckley. “So yes, international expansion is very much part of our plans. We have already had a few approaches from potential international partners and we will announce expansion in due course. “reOS is proudly South African and it is therefore only natural for us to initially focus on the local rental market as our primary case study. As we own more of the local market, our international appeal grows, and we will move ahead with our plans to be on three continents within the next five years.”

BETTER RENTAL As the pandemic abates and global vaccination programs bring protection to populations, businesses will look to regrow or build on any success that was realised during 2020. With this growth comes more jobs, more economic activity, more spending power, and increased demand for property. The spending power of most should improve as the slow process of opening economies allows a return to a more normal trading environment, but companies will always be in the lookout for opportunities to improve efficiencies. reOS offers exactly that and would have likely been successful

REOS

in a pre-Covid environment where businesses were already looking for such improvements. Selling the concept to rental agents and larger landlords who have worked with legacy systems for decades can be hard, but now more than ever productivity and the ability to work remote are in the spotlights.

“There are always challenges with getting businesses to adopt new technology and adapt their historic ways of working,” admits Buckley.

“However, the pandemic has actually played in our favour in this regard, as the industry has been forced to look for innovative ways of working, and agencies that were previously resistant to change are now actively seeking to switch to technology that enables them to drive greater operational efficiencies, enables a distributed work force, and supports a paperless ecosystem.”

Using reOS, processes are automated, payments are one touch, transactions are secure, and complete control is retained at all times – no outsourcing vital tasks to expensive contractors. Buckley brings much of the concept from the fintech world and has found the move into proptech refreshing.

“Just over three years ago, I made the exciting and very rewarding switch from the financial services sector to focusing on customising cutting edge fintech solutions for the very niche needs of the real estate industry.

“I was initially involved in launching industry-first disruptive financial services products that aimed to replace the intermediary. It was during this season that I realised that the real magic happens when you use technology to tool both the customers and the industry professionals, so that everyone can enjoy a better experience and ultimately create enhanced – and in this case unprecedented – value for all parties.”

Alongside strong investors, including Bill Paladino and Mark Forrester, Buckley’s idea of keeping agents in the loop and avoiding a directto-consumer-type model has helped to drive interest in reOS while staying off the immediate radar of competitors.

He says that the input from investors has been invaluable and, like with many tech start-ups, has helped to push the business to a new level much quicker.

“Early investors were hugely influential in establishing our pilot Rental Connect and introducing us to our first few hundred clients.

Thereafter, the team has developed and executed strategy without their executive involvement. Our shareholders have been a real asset, particularly in developing out our growth strategy; contributing both funding and property networks.”

Because of this platform, reOS has been allowed to blossom and, even though markets and figures have resulted in difficult reading for those in the property sector, as the economic backdrop improves, the company will be utilising its technology to unlock new avenues for considerable growth.

“During the measured and comprehensive product learning phase, in parallel, we established a number of significant strategic distribution partners. So as a team we are excited to now shift our focus to leveraging these channels and we will be growing our already meaningful annual recurring revenue base by five times within the next two years. This will be on the back of customer growth, which includes unlocking some new market segments, and be compounded by several new revenue streams being activated,” confirms Buckley.

Time will tell if reOS can gain enough traction to dominate its local market, and if so, there is a window of possibility that it could move quickly to impact the international rental scene, making processes faster and easier on the power of blockchain.

With ambitious targets, reOS aims to quickly become the leading proptech software platform, helping clients to be more efficient while having more time to focus on customer service.

WWW.REOS.CO.ZA

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Grayswan Investments Communications Manager, Nande Boss and CEO, Duncan Theron

GRAYSWAN INVESTMENTS

Offshore Megatrend Investing

Offers Rich Rewards PRODUCTION: Manelesi Dumasi

Leading institutional investment advisory and private wealth management expert, GraySwan Investments has been gearing up as the appetite for different thinking across the universe of offshore investment opportunities grows within its South African client base. www.enterprise-africa.net / 23

INDUSTRY FOCUS: FINANCE

//

In October 2019, life on the Lourensford Wine Estate in the Western Cape – home of GraySwan Investments’ head office – was blissful. More than 3000 hours of sunshine each year helped bolster production in the vineyard. GraySwan Investments also enjoyed a bountiful year, celebrating exceptional growth especially in the private wealth side of the business. The product range was growing – with a specific focus on offshore investment opportunities – and, as the company approached its tenth anniversary, business was booming in both the Cape Town and Johannesburg offices. At the time, the South African economy was weak, fuelling the demand for the offshoring of funds.

2020 came with a bang, but not a welcome explosion of new activity, more of a booming disruption across all market sectors and all economies thanks to the onset of the Covid-19 pandemic. GraySwan, as it has always been, was quick to adapt, ensuring that things were done right. In 2019, CEO Duncan Theron told Enterprise Africa: “Whatever we set ourselves out to do, we do it with integrity and do it wholeheartedly. We always go that extra mile.” The company continued to do everything to protect, nurture, and diversify its investment offering to the delight of their clients.

// IN A WORLD WHERE THE ONLY CONSTANT IS CHANGE, CONSIDERING WHERE AND HOW YOU WILL INVEST FUNDS FROM NOW ON IS OF CRITICAL IMPORTANCE // 24 / www.enterprise-africa.net

RESPONSIBILITY “One of the principles in how we conduct business is ‘boutique’,” says GraySwan Communications Manager, Nande Boss. “The term boutique does not infer that we are small but rather that we provide a premium and tailormade service. It is essential to consider that each of our institutional and private wealth clients has different goals, needs, expectations and risk appetites.

Boutique also means highly-focussed and dedicated to ensuring meticulous care of every individual client. It’s about excellence in everyting we do.”

This boutique business offers trust and performance and service excellence as key selling points. A signatory to the United Nations Principles of Responsible Investing (UNPRI) and a previous winner of the Responsible Investment Consultant of the Year award from BATSETA, GraySwan is also a partner of Unashamedly Ethical – an alliance of businesses focused on ethics in business and leadership.

Environmental, social, and governance (ESG) considerations are becoming more and more important in investment decisions, and so GraySwan has over the past decade delivered insightful and high conviction advice to their clients to ensure transparency through the entire responsible investment process.

“The CFA Institute surveyed individual investors and asset owners in 15 markets and held 23 virtual roundtables. The report found that 85% of CFA Institute members take ESG into account in their investment processes, up from 73% in 2017. Data from the Principles for Responsible Investing show that the number of signatories increased 28% in the first half of 2020 and assets under management grew 20% to more than $100 trillion,” says Boss.

“Addressing investment managers’ business models, the report said that while only 19% of institutional investors and 10% of retail investors currently invest in products that incorporated ESG

// THERE WILL ALWAYS BE EMERGING INVESTMENT THEMES AND MEGATRENDS WHERE INVESTORS, THOSE WHO ARE WILLING TO BREAK AWAY FROM OUTDATED THINKING AND HABITS, CAN BE RICHLY REWARDED // factors, 76% of institutional investors and 69% of retail investors have interest in ESG investing.

“On expected growth areas, the report said that industry professionals expect to see more ESG index tracking and quant funds, ESG thematic products, ESG multi-asset products, climate transition strategies and longterm engagement, as well as better benchmarks. We think people are aware of these trends and will invest responsibly. Our role is still to educate, do the right thing when it’s trending and when it’s not. When we do the right thing, we can be an example for others,” she adds.

Over the last 10 years, GraySwan has made its name on its responsible, ethical and moral approach to both investment advisory and wealth management. Even with the shocks from the pandemic causing further distress in the economy, these principles will not change, and GraySwan will look to balance real and competitive returns with strategies that ensure sustainability in the wider world and such at lower costs.

“It is a great honour and huge responsibility to be entrusted with managing someone else’s financial and investment affairs. We are very transparent about what we can and cannot do,” confirms Boss.

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INDUSTRY FOCUS: FINANCE

// IF WE DON’T PREPARE TO BE PART OF THE CHANGE AND GROW ALONGSIDE IT, WE WILL BE LEFT BEHIND, ALONG WITH THE OTHER DISRUPTED // THE NEW NORMAL According to PwC, now is a ‘challenging time to be an investor’ because the ‘asset and wealth management industry could be considered a bellwether for the overall economic environment’.

The Covid-19 pandemic has instilled a seemingly never-ending sense of uncertainty in markets – exactly the sort of thing investors and asset managers don’t like. Combine this with a myriad of other influences including cybersecurity as asset managers work remotely; the difference in strategy for recovery across different economies; service providers falling out of the market; changes in budget and tax implications for certain products; and a simple reduction in the flow of money in the private space as appetite for risk declines, and you have a difficult scenario to manage.

But GraySwan has significant experience in its industry boasting more than 150 years of investment advisory and investment management experience, and the company’s people

26 / www.enterprise-africa.net

have seen the peaks and troughs associated with economic turmoil many times before. The business acted without hesitation and secured confidence for clients; like many turning to technology to fill the void in the office.

“With the announcement of national lockdown in South Africa, GraySwan immediately released all staff to work from home and be safe while introducing the GraySwan Online Experience,” details Boss.

“It was important for us to let our clients know that business would still continue, but not in our physical offices. Documents could be signed electronically, and our advisors were available through Zoom, Teams and WhatsApp to have conversations with all clients, answering their questions and concerns, and providing recent, relevant and accurate data to inform any financial decision making.”

Microsoft CEO Satya Nandella explained that many advisors experienced ‘two years’ worth of digital transformation in two months’ in March 2020.

“We’ve always endeavoured to lead in this regard,” says Boss. “Historically, GraySwan has always had to adapt and evolve in order to serve our clients in an ever-changing world. The national lockdown due to Covid-19 meant that clients would receive excellent GraySwan services in the comfort of their own homes. This has demanded great intentionality from our staff to remain engaged, adapt, and ensure they are healthy so they can continue to provide excellent service.

“This time also meant that we

need to continue with the work that our GraySwan Charitable Trust does in meeting basic needs, especially over this time. We were able to do so. In the most uncertain of times, people still looked out for each other which was beautiful to see.”

Asked if the pandemic has created an environment where spending and investment decisions are impacted, Boss says: “We took a more cautious strategy on adding risk back into our client portfolios post the material market drawdown in March 2020. But the results have been rewarding as we have strongly outperformed our peers and such at lower risk and also at lower fees over the past 12 months. Most of our products are top quartile over this period. We have also constructed various offshore solutions for our clients which a focus on disruption and healthcare innovation. We’re now working on an offshore digital finance which focus on blockchain technology and cybersecurity as well as a thematic commodity solution for our clients. We knew we had to adapt. We needed to innovate and think about the future, the next decade. We know we can’t advise and manage monies the way we used to as the world has changed.”

While GraySwan has always been an advocate of spreading risk by offering offshore investment opportunities, now more than ever, this advisory offering and wealth management product range is vital for any balanced investment portfolio. Exposure to the many risks of a singular approach, keeping all wealth in South Africa, is almost universally viewed as an unimaginative tactic.

INDUSTRY FOCUS: FINANCE

OFFSHORE SPREAD Asked if the offshore strategy still remains prominent for GraySwan, Nande Boss is clear: “We actively look at the current valuation of the Rand and why this is the time to invest offshore. At current levels of USD/ZAR R14.50, the Rand is trading within the fair value range and is presenting an opportunity to further diversify investments by moving funds abroad. Albeit that we have a database of more than 100,000 offshore funds, we prefer using low cost offshore passive funds for our clients offshore allocations as 90% of actively managed offshore equity funds underperform the markets after fees. We further utilise ESG as a smart beta factor to outperform the markets and around such we utilise a range of thematic megatrend solutions to provide outperformance over the long term. Key to our risk management approach, for our large institutional clients and within our product ranges we actively manage currency risk.

The Rand is the most volatile asset

28 / www.enterprise-africa.net

class in the world, the risk needs to be managed. When the Rand blew out to R18.85 to the US dollar we hedged our clients currency exposure against potential Rand strength. When the Rand recovered to levels below R15 we unwound these hedges and made some handsome profits for our clients.”

For the past decade, the South African economy has ridden almost constant turbulence and to have all assets exposed to these risks alone is not a sensible plan. Many of the country’s specialist and reputable advisors and managers are looking into offshoring and searching for safe destinations for client’s assets.

“There are various reasons why South African investors choose to invest money offshore, including diversification of portfolios, foreign currency exposure, concerns about the current economic state of our country, or planning to emigrate in a few years’ time.

“Over the years, South African exchange control regulations have become a lot less complicated,

// IT IS A GREAT HONOUR AND HUGE RESPONSIBILITY TO BE ENTRUSTED WITH MANAGING SOMEONE ELSE’S FINANCIAL AND INVESTMENT AFFAIRS // allowing South Africans access to a larger range of offshore investment options. In order to assist our clients in navigating the range of offshore investment options, we have been sending out a series of articles to support clients in constructing a well-diversified offshore investment portfolio,” explains Boss.

Of course, the GraySwan team is closely monitoring various investment megatrends, both underway and emerging, around the world to ensure the optimal allocation of our clients’

GRAYSWAN INVESTMENTS

offshore investments. These major shifts in the trajectory of the global economy often arise from constantly evolving developments in technology, changes in demographics and social systems, climate change and ecoawareness, urbanisation at a rate not seen before, changes in the nature of wealth with emerging economies responsible for significant growth and many more. Investing in these megatrends is known as thematic investing. This is a method that GraySwan uses as the foundation to educate and empower their clients to invest offshore.

“We believe the future of offshore diversification vests more and more in thematic and megatrend investing as well as the rapidly expanding and morphing Exchange Traded Fund (ETF) universe. Over the last two years, our research team has made a special effort to analyse available offerings, most notably the multiple megatrends that are shaping the new normal,” says Theron.

“If we don’t prepare to be part of the change and grow alongside it, we will be left behind, along with the other disrupted.”

“To achieve future superior performance for our clients, we continue to access niche and new markets and sectors,” he adds.

Currently, the South African government imposes certain restrictions on those private investors looking to externalise funds and various permissions are required from the South African Revenue Services (SARS). GraySwan is always open to discussions around what is possible for individuals, businesses and large funds considering offshore investment strategy.

RICHLY REWARDED Despite the unwelcome smashing of markets in March 2020, and the restrictions imposed on both private and business life, GraySwan has continued to invest their clients

monies with great success. Harnessing the power of proprietary research and continuing to educate clients in a pro active and high conviction manner characterises the way the business deals with its clients’ money.

Because of its strong foundation, the company has seen through a challenging period, Boss remains very optimistic about the future.

“With our big drive this year to allocate spend on the marketing efforts, we anticipate further growth,” she says. “We have an outstanding and proven long-term track record so we need to start telling investors about our offering. We will also be employing additional financial advisors as we believe there is a material gap in the market.

Private investors are looking for an independent advisor which offers a boutique, premium and tailormade offering and with a track record of outperformance and such at lower fees. People are our strategy because it is people who serve our clients. The founding team is still involved each day as they are passionate about investing and our people!”

The GraySwan team continue to live by the company’s core values of doing the right things, the right way, always. Importantly, while GraySwan is now more than a decade in age, the appetite for growth remains

the same as in the early years. Like South African fynbos, while there is sunshine, progress is unavoidable.

For GraySwan, while there are opportunities, growth will come and, as it always has been, now is about finding the best investment opportunities for clients.

“In a world where the only constant is change, considering where and how you will invest funds from now on is of critical importance. A firm committed to bringing what is necessary to the table; one that welcomes, supports and encourages change is not an ideal but a reality.

Through transformation and innovation comes growth and despite negative global growth forecasts, there will always be emerging investment themes and megatrends where investors, those who are willing to break away from out-dated thinking and habits, can be richly rewarded.

Our goal at GraySwan is to find these investment opportunities and to make such available to our clients, efficiently and affordably,” concludes Boss.

WWW.GRAYSWAN.CO.ZA

www.enterprise-africa.net / 29

Reactors in Ecto Plant

CHEMICAL PROCESS TECHNOLOGIES (CPT)

Local API Manufacturing

One Step Closer PRODUCTION: Manelesi Dumasi

Chemical Process Technologies has gained its license from SAHPRA for the local manufacture of active pharmaceutical ingredients that can be used in human medicines.

This is a major leap forward for specialised manufacturing on the African continent. Dr Hannes Malan tells Enterprise Africa more about the company’s success.

//

Dr Hannes Malan, CEO of Chemical Process Technologies (CPT) – the Pretoria-based chemical synthesis company – is looking forward to turning the company’s ambition for producing active pharmaceutical ingredients (APIs) locally in South Africa into a reality within the next five years.

In 2020, the company received its licence from the South African Health Products Regulatory Authority (SAHPRA)

to manufacture APIs for use in human medicines. Financial Director Anton Steyl told Enterprise Africa in December that the company was entering a very exciting period after much preparation.

Malan agrees, explaining that the pandemic has cast the spotlight on local producers as the need for affordable medicines is now more obvious than ever. APIs, the component of a medicine that provides the medical benefit, are currently manufactured mainly in

China and India - and with borders and transport links closed for long periods as a result of various national lockdowns imports slowed.

“We did not see any delays in our development work and, because we are not in production yet, we did not see any slowdown or anything like that,” he says.

“It certainly increased the interest in local manufacturing and we were approached by a number of smaller companies that were looking for APIs that they could no

www.enterprise-africa.net / 31

INDUSTRY FOCUS: MANUFACTURING

longer get from India and China because of the pandemic. It put us on the radar and that was a positive.”

Currently, CPT is focussed on synthesising five different APIs for various uses. The first stage is to produce the molecules in the company’s pilot plant in Watloo, East of Pretoria.

Next is to create technical documents or drug master files which are then registered, licensed and trialled. Then, the company shares these files with clients so that further testing can be completed. Finally, commercial production is started, where CPT produces APIs at scale. It’s a long process, with many inputs, but receiving the license from SAHPRA is a major step which allows for the company to plan serious progression for the future.

FULLY LICENSED “We are very excited about gaining the license - it was a big hurdle in this whole project,” admits Malan. “It’s the first time we have done anything like this, and one of the things about SAHPRA is that they have really high standards and operate to the European system of Pharmaceutical Inspection Co-Operation Scheme (PIC/S). We are confident that everything is done to a good level and there are no shortcuts. To get our license after the first audit was very exciting as we put a lot of effort preparing for the audit. Obviously, we had some recommendations, and we are busy putting those into place, but they are not insistent about coming back to audit us again.”

The hope for now is that commercial production of APIs will start at CPT’s facility as soon as possible. The company has its initial focus planned, but a wide range of APIs in the pipeline for production as expansion activity increases.

“The way that we have put the project together is to identify the first five APIs. Now that we have the Good Manufacturing Practice (GMP) license means we can start putting together common technical documents or drug master files. We have a pipeline of 12 APIs that we are looking at – two of them are ARVs and one of them will go into the pilot plant this year.

The second will be optimised in our laboratory now before going to the pilot plant.

Metal Tank Industries :Title: Process Solutions Built Around You Strong, reliable and long lasting. After more than 20 years in the SA steel manufacturing sector, Metal Tank Industries has forged a name for quality, durability and care. By investing in industry-leading technology and automation, and building long-term relationships with clients, this team of highly experienced engineers and craftsmen was able to ride out a difficult 2020 and is now looking forward to shining positivity.

“One of the biggest aspects that differentiates us from our competitors is that we have invested in highly automated equipment, and the welding technology that we use to build tanks is of the highest quality in the world.

We are the only manufacturer in South Africa using this technology,” says Managing Director Rob MacGregor.

Headquartered in Benoni, Metal Tank Industries is the local manufacturer of choice for many industry sectors.

The fabricator and supplier of stainless-steel process solutions brings a comprehensive, turnkey offering delivering an entire process connection – from supplying the tank to valves, heating, cooling, electrical and piping configuration, and installation. “We give the customer a one stop shop and execute from start to finish.

We do that in SA and across Southern and Eastern Africa,” says MacGregor.

The partnership between Metal Tank Industries and CPT goes back a long way and MacGregor has seen both companies grow as a result of a flurishing relationship.

“I visited Dr Gerrit van der Klashorst in their first factory in Pretoria and I’ve watched them grow year after year. Every year, we’ve been involved in a different project with different vessels, and we are very excited to see the growth they have had.

“We like to partner with clients on a long-term basis. We work through the thick and the thin, and our intention is always to make things work for the client. We provide after sales service and delivery, and we are a local partner which means we are always there and quick to respond.”

By choosing a local manufacturer for significant capital investments like stainless steel tanking, and its associated engineering, CPT has boosted homegrown business and contributed to the local economy. For both businesses this success story is one of the past, present and future, and is characterised by quality and strength – cornerstones of Metal Tank Industries.

32 / www.enterprise-africa.net

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INDUSTRY FOCUS: MANUFACTURING

“We started with Phase 2 of the project which is the commercial manufacturing of the APIs. We started with the design for our expansion, it will be on the same site, and we have obtained funding from the IDC for that expansion. We expect that expansion to be complete by the end of 2023 and we hope to manufacture of two further APIs then,” explains Malan.

PROUDLY SA The 10,000m2 site in Pretoria is ISO 9001:2015 certified, and CPT is closely tied in with the Industrial Development Corporation (IDC) and the Technology Innovation Agency (TIA) as a division of the Department of Science and Innovation. A cornerstone of South African government policy is to boost local manufacturing capability thanks to its job creation potential. This concept, tied in with health and human medicine, is especially attractive given the current global environment.

“We are still on the journey; we haven’t manufactured APIs commercially yet. Looking at the boxes

34 / www.enterprise-africa.net

we have ticked since we started, we are confident that we will be successful in what we set ourselves out to do.

Personally, I believe that once we have the first successes on the table, it will be easier for people to look at it and realise what is possible. From a government perspective, it has been on the list for a long time, and they have received a large number of presentations and options for how to establish it but a lot of the proposals came from abroad and they had varying interests in access to the market. We are saying ‘we are local, we have invested a huge amount of money and resources into the project’ and so people are waiting to see what will happen,” details Malan.

CPT will aim to supply around 3050% of the local market while learning the market and understanding more about the differences between animal and human medicines. Operation of the plant and constant feedback between CPT, customers and regulators will leave a constant learning curve, for which the company has appetite.

LOCALLY MADE Production of APIs is limited on the continent and local manufacturing comes with major benefits. CPT’s input will be small to begin with, but over the long-term the company will build major influence as customers across the continent begin to realise the potential of shorter lead times, improved logistics, and easier quality control.

// THE BIGGEST BENEFITS FOR LOCAL MANUFACTURES WILL BE HAVING A LOCAL SUPPLIER IN TERMS OF LOGISTICS, LENGTH OF THE CHAIN, COST OF QUALITY CONTROL, LANGUAGE AND OTHER FACTORS //

CHEMICAL PROCESS TECHNOLOGIES (CPT)

From Left to right: Anton Steyl CA(SA) - Finance Director, Llewellyn Strydom - Operations Director, Dr. Gerrit van der Klashorst - Founder & Director, Dr Hannes Malan - Managing Director

“There is almost nothing else like this happening in Africa so we are very excited,” admits Malan. “For a long time people have been saying that you cannot manufacture APIs outside of India and China, and we’ve been saying all along it can be done as long as you have the technology. The molecules that we are using are old and our competitors in India and China are not driven to invest new capital in these molecules so we believe can improve on the technology and look at our costing so that we can manufacture the APIs cost competitively.

“Because no one else is manufacturing locally, there are no import duties for these specific APIs. The biggest benefits for local manufactures will be having a local supplier in terms of logistics, length of the chain, cost of quality control, language and other factors. There is a saving from a quality control point of view and there is a shorter supply chain as products are not shipped over water for three months – you can have an order period of a single month. The customers that we have spoken to are

saying that if we can produce for the same price then they will be willing to buy because of the logistics and quality savings they will generate.”

Of course, a very important factor in the entire concept is cost competitiveness. CPT does not want to rely on subsidies or price premiums as long-term sustainability cannot be built when relying on assistance which is out of the company’s control.

The future outlook for CPT is now very positive. While there has always been optimism, the awarding of the license makes things very real, and the interaction with customers and discussions around production bring the future commercial rollout to the fore. For Malan, achievement of a longheld vision feels closer.

“Getting the next stage up and running and getting the first APIs manufactured commercially is absolutely critical,” he says. “The objective at this stage is to have the expansion completed by 2023 and get into production in 2024. There is still time to go, and a few more hurdles to overcome – the challenge is to get the

drug master files submitted. We then have to provide samples to potential customers as they have to go through the processes with their final product when using us as a supplier. From a regulatory point of view there is still a lot of work to be done but we are confident from the results that we have been able to generate from the pilot plant that the product quality and costing is acceptable.”

For CPT, 2020 will be a year to remember for mostly the right reasons.

The major milestone of achieving a license from SAHPRA has been realised and this South African success story can continue to write its future.

“So far, it’s all good, but these things take time. We are proving that it can be done, and we are hoping that we can encourage other companies to get involved in the industry as the opportunities are large and there is so much happening because there is a real need,” Malan concludes.

WWW.CHEMPROTECH.CO.ZA

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LOGICALIS SA

Architects of Change

Succeed in Workplace Shift PRODUCTION: David Napier

By partnering with the world’s best technology companies, digital services provider Logicalis SA is bringing global know-how and expertise to its growing African client base. In a year more difficult than ever for most, this is a business that has continued to demonstrate why it is one of the best. CEO Frikkie Grobler talks to Enterprise Africa about exciting contract wins.

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Technology was a major disruptor of the workplace preCovid and has since displayed the ability to not only change the way we work but impact the way people live their lives. What seemed like second nature in an office environment in 2019 has become first nature in 2021.

Video calling, digital meetings, online messaging, group chats, customer tickets, virtual campaigns – all powered by the world’s technology innovators.

It has helped businesses through the pandemic work-shift, and it’s here to stay.

The cost, efficiency and

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effectiveness of providers like Zoom, Google Meets, Apple’s FaceTime and others are, according to Rauf Arif for Forbes, set to become favourites by company execs. “In the post-pandemic world, businesses and academic institutions will favour cost-effective hybrid and virtual workspaces over traditional face-to-face and physical workplaces,” he writes. Maybe, in the future, the next generation will be unaware what it is like to not use digital tools for their business interactions?

But, of course, to take advantage of all that technology can offer,

businesses must have a suitable base to work from. Up-to-date hardware, software and infrastructure is now perhaps more essential than the shop front of the past. Many factors including security and capacity are driven by the quality backroom set up of a company’s IT systems.

Logicalis SA – the local arm of the international IT corporation – has grown quickly to become a leading provider of digital services including security, cloud, data management and IoT. Globally, the business services around 10,000 customers with 6500 employees,

LOGICALIS SA CEO FRIKKIE GROBLER

INDUSTRY FOCUS: TECHNOLOGY

generating revenue of $1.7 billion annually. By working with innovative brands such as Cisco, Microsoft, HPE, IBM, NetApp, Oracle, ServiceNow, and VMware, Logicalis has built an ecosystem of world-class solutions and is able to solve problems for clients at scale.

In November 2019, CEO Frikkie Grobler told Enterprise Africa that the company was desperate for growth after its successful establishment in 2017. After strong acquisition activity, Logicalis SA

// I BELIEVE WE WILL DO MORE ACQUISITIONS IN THE FUTURE BUT FOR NOW WE HAVE BUILT A STRONG SOLUTIONS AND MANAGED SERVICES BUSINESS AND NEED TO CONTINUE OUR ORGANIC GROWTH //

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was positioned perfectly to take on the leading managed services providers in the country while keeping an eye on the top spot on the continent.

In December 2019, the first case of Covid-19 was detected in China and the rest is history. But for Logicalis SA, 2020 was not a year of shut down, and the company managed to pick up exciting new contracts to aid in its growth.

REMOTE OFFICE As the first case of Covid-19 was confirmed in South Africa in March 2020, it became clear that the country would have to follow others and implement lockdown measures to stem the spread of the virus.

Quickly, the Logicalis SA offices in Cape Town, Johannesburg, Port Elizabeth, East London and Durban emptied as the company moved to a remote office working environment.

Demonstrating this capability internally was the perfect advert for clients.

“We were very fortunate in the sense that when we started the company, we designed all our systems in such a way that we can remotely access them. It was done for business continuity purposes.

We were able to move to a remote working model within two days,” Frikkie

Grobler tells Enterprise Africa.

This ability to master the situation and assist clients in moving to a remote office working model was extremely attractive and provided the company with a decent market while global chaos engulfed even the strongest of economies.

“Corporates delayed and are still delaying capitol spend,” admits Grobler. “Projects are not cancelled but delayed. We are experiencing a wait and see situation.

“We definitely saw our offering become more attractive. We experienced it through the successes we had during these trying times. The ‘remote office’ has been a key driver for clients to adopt a cloud strategy with our Managed Services layer.”

Logicalis has leveraged its partnerships with global tech leaders to assist in this modern challenge. As a Global Gold Certified Cisco Partner, a Gold Partner of Hewlett Packard Enterprise, a Premier Business Partner of IBM, a Gold Microsoft Partner, a Star Partner for NetApp, and a trusted partner to many more of the world’s top IT providers, the company is perfectly placed to advise on suitable solutions and will not force a ‘one size fits all’

LOGICALIS SA

package on any customer.

“That is our strategy and it is paying off,” confirms Grobler. “We focus on value-add solutions for our customers and potential customers.

“Our relationships are solid with our international partners. We added another strategic partnership to our portfolio during 2020 with Hitachi and are now well established as a strategic partner.”

In Feb 2021, Logicalis renewed its status as a Microsoft Azure Expert Managed Services Provider (MSP).

This prestigious status is only given to those proven to be the most high-fidelity cloud managed service providers and promotes partners with the highest level of expertise as managed service providers in assisting customers as they digitally transform their businesses, leveraging the power of Azure – Microsoft’s open and flexible cloud computing platform.

“Our re-certification of the Microsoft Azure Expert MSP status demonstrates the continued investment in our global strategic partnership with Microsoft. We are proud to be part of this elite group of global Azure Expert Managed Service Providers,” said Logicalis CEO, Bob Bailkoski.

In March 2021, Logicalis partnered with Thycotic to bring Privileged Access Management (PAM) solutions to clients across Africa. Thycotic products limit privileged account risk, implement least privilege policies, control applications, and demonstrate compliance. This type of technology is vital as the modern workplace changes.

“The rapid acceleration of digital transformation initiatives and soaring cloud adoption rates globally in response to the pandemic and a remote workforce means that more organisations are seeking privileged access solutions that are purpose-built to support cloud environments. By partnering with Thycotic we will be able to offer our customers a complete end-to-end IT security solution that complements any cloud strategy,” says Caesar Tonkin, Logicalis SA CISO.

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INDUSTRY FOCUS: TECHNOLOGY

2020 NEW BUSINESS By making quick decisions and remaining nimble, after Logicalis moved its employee base to a safe remote working environment, the company continued to perform well while others struggled through the challenges of 2020.

In September, Logicalis SA announced the big news that it would partner with Liquid Telecom to deliver security solutions to customers across Africa. As a leading communications solutions provider for the continent, boasting the largest independent fibre network which stretches more than 70,000km, Liquid Telecom is a big triumph for Logicalis.

“Liquid Telecom has appointed Logicalis as their strategic security partner. This is a feather in our cap as Liquid Telecom has some very large enterprise customers on the African continent,” says Grobler. “We will deliver services as well as product through Liquid Telecom to their customers. It

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is a very important strategic win for us. It will give us exposure to a larger customer base as well as experience in the rest of Africa. It is also confirming the quality of our security solutions and services.”

David Behr, Liquid Telecoms Chief Digital Officer, said: “At Liquid Telecom, we pride ourselves on ensuring that our customers get the best services and solutions, meaning we need to partner with the best as we extend our offering in the cyber security space. Logicalis was the obvious choice for us as we venture to expand our offering in the cyber security industry not only for their wide range of solutions and products but also for their global reach.”

In December, capping off a tough year on a positive note, Logicalis SA released details of an exciting new partnership with Quantum Foods – a large diversified agricultural player in SA and on the continent.

Logicalis will provide a multi-

faceted managed services contract, bringing Quantum Foods IT efficiency forward to a new phase of modernisation, allowing the company to make use of large amounts of data and improve competitiveness.

“Quantum Foods was a very important win for us,” says Grobler. “The success of the service transition was crucial as the market had all eyes on us to see if we could pull it off. With the success, we have proved to the market that we are capable and deliver on our promises. I hope to announce similar wins soon.

“At Logicalis SA, we pride ourselves in supporting some of the most important businesses in the country.

Quantum Foods is an important strategic player in the supply of eggs, animal feed and broilers to the country’s big poultry producers, and consequently to South Africa’s food production. We are excited to join forces with them, and we are looking

LOGICALIS SA

forward to helping their business achieve their objectives with our exceptional solutions.”

For Quantum Foods, the feeling of success is mutual. “Of the providers we considered for this work, Logicalis was a stand-out candidate.

Their effort to obtain a detailed understanding of our businesses requirements, transparent approach and energetic and knowledgeable executive team positioned them as the preferred outsourcing and digital transformation partner for Quantum Foods,” stated Michiel van Niekerk, CIO at Quantum Foods.

ARCHITECTS OF CHANGE TM In February 2020, Logicalis – at global level – repositioned its brand to highlight the transition towards becoming a strategic consultative partner rather than a more distant IT provider. The Architects of ChangeTM strap line talks of the focus that Logicalis now places on purpose, proposition, behaviours and personality. In South Africa, Logicalis is following the new brand guidelines to the letter and already reaping the rewards.

“We have fully adopted the mantra and it is exactly what we deliver to our customers,” says Grobler. “We assist our customers and potential customers with their digital transformation strategy.

Every customer requirement is different and that is where we as the Architects of ChangeTM come in. We work with the customer to design a solution for their business and do not force then into a

// WE ASSIST OUR CUSTOMERS AND POTENTIAL CUSTOMERS WITH THEIR DIGITAL TRANSFORMATION STRATEGY //

pre-defined solution.”

This new branding is important for Logicalis in South Africa considering the company is only young in its life. After starting out in 2017, Logicalis has grown significantly and a major part of that development has been through merger and acquisition activity. The company acquired Clarotech in September 2018 before gaining Mars Technologies in July 2019 and then agreeing a partnership with Qualys in September 2019. Of course, this brings together various cultures which can cause friction. But, managed correctly at Logicalis, the transition from small to big business has been a success. The Mars Technologies team has now been fully integrated into the Logicalis head office and the business is working towards the goal of being true Architects of ChangeTM. “I believe the brand is established,” admits Grobler. “The market is taking notice of Logicalis and the number of enquiries we receive is proof that the industry is aware of us and taking notice. Establishing a brand and keeping the brand relevant is a continuous effort and not something with a start and end date.”

In November 2019, Frikkie Grobler was keen on seeing Logicalis dominate the local marketplace while also expanding across Africa. The African market represents a major opportunity with only a few companies managing

to make the difficult but attractive jump from national to international organisation. While for many growth plans have been pushed back as a result of the pandemic, Logicalis remains optimistic.

“We will always look at good opportunities. I believe we will do more acquisitions in the future but for now we have built a strong solutions and managed services business and need to continue our organic growth. Obviously with the pandemic, plans have had to move a bit. We are currently servicing some of our customers in various African countries through partners. We will continue to build relationships with partners in the different countries until such time we are ready to penetrate the Africa market,” confirms Grobler.

As the rate at which technology changes the workplace and the industries that we know gathers pace, it is clear that partnering with experts like Logicalis brings benefits that are both measurable and essential in an ever-changing world, catalysed by a pandemic that no one has been able to avoid. Who better to trust than the Architects of ChangeTM themselves?

WWW.ZA.LOGICALIS.COM

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© Devmark Property Group

DEVMARK PROPERTY GROUP

Long-term Project Pipeline

Buoys Devmark PRODUCTION: Karl Pietersen

By maintaining a strong and long-term project pipeline, and by investing into developments where quality is the core focus, Devmark Property Group is building on its reputation as a leading developer in the Western Cape to overcome the challenges posed by the Covid-19 pandemic. www.enterprise-africa.net / 43

INDUSTRY FOCUS: PROPERTY

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At the end of 2018, Devmark Property Group was celebrating a glittering haul of trophies, being labelled as one of the country’s premier real estate developers, with an award-winning CEO, and with many projects in the pipeline which would bring further glamour to the company’s already prestigious portfolio.

The African Property Awards had bestowed three accolades on the company including Best Residential Development and Best Development Marketing for Plettenberg Manor, and Best Single Unit Residential Development for Klein D’Aria Private Reserve. And Hein Ehlers – the company’s founder and leader – had been labelled by the International Association of Top Professionals (IAOTP) as the Top CEO of the Year for 2018 thanks to his leadership and financial management skills. He was also labelled business Innovator of the Year Award by the IAOTP in 2019.

© Devmark Property Group

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The company was flying high and breaking ground on exciting new projects. Internationally, Devmark was looking into opportunities in Europe – in the UK and the Netherlands.

The company was expanding into affordable housing in South Africa, as well as broadening its scope by investing heavily in a large mixed-use development in Cape Town.

Even through what was a tough economic climate, Devmark continued to grow and thrive. Ehlers told Enterprise Africa: “The recession doesn’t stop people retiring, and the affordable housing shortage doesn’t stop because of the recession. So, we are blessed in the sense that we have very large projects that have all been de-risked.”

DEVMARK PROPERTY GROUP

// WE ARE STRUGGLING TO KEEP UP WITH THE DEMAND FOR QUALITY AFFORDABLE HOUSING CLOSE TO CBDS AND AMENITIES // But even the most seasoned businessman could not have predicted a total and complete shut down of market activities thanks to a transmissible virus that was previously unknown. While key infrastructure projects have been allowed to continue, the overall hit on consumer confidence has left even the strongest businesses with a new future to consider.

2020: UNFORGETTABLE In SA, the property industry has shifted. Young professionals are seeing growing wages halted.

The growing middle class has lost confidence in the market.

Families are choosing to move out of metros for more space to ensure they can now live and work at home. Those choosing to stay in towns and cities are adopting modern ideas of cohabiting and shared accommodation, or even micro living, to ensure value for money while the pressure is on the purse. It’s a situation not unique to South Africa; all over the world the property market is changing as safety, security, working from home, and value for money became top priorities overnight.

For Devmark, change was quick and the company adapted to a new model to ensure safety of staff.

“We follow the protocols as recommended by the government and have implemented a work from home policy and a rotating office schedule,” details Marketing Manager Dejane Steyl.

In 2018, Hein Ehlers told Enterprise Africa that his mantra of being brave while others were scared had gone a long way in helping his business to grow. During the early years, circa 1995, after the company’s formation and around the time of the dawn of the new South Africa, there was much uncertainty in the markets and many competitors were scared.

Devmark – then called Devprop Projects – displayed confidence and began buying up land. The journey since has been remarkable, and has made a real impact on the lives of so many. And the company will not let the pandemic undo three decades of exceptional work.

“We are determined to see our pipeline of projects materialise and successfully complete them, we have 30 years of expertise that has carved

our name as an industry leader. We are determined to maintain that despite the Covid pandemic and all the distress it has caused the economy,” says Steyl. “Our CEO has a saying that we all try to strive towards: ‘We don’t get tired, and we don’t give up!’”.

The Devmark project pipeline is significant. It was large in 2018 and while some projects have been completed, some are moving into development stage, or second or third phases.

“We are in the fortunate position to have a pipeline of projects and a steady stream of sales which carries us through the pandemic,” says Steyl.

“The pandemic might have delayed some of our projects but we have every inclination to see them through and complete them. There will always be new opportunities arising, especially in South Africa.”

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INDUSTRY FOCUS: PROPERTY

PROJECT PIPELINE Currently, the company is readying itself for breaking ground on the Tyger Valley mixed-used development which will host commercial, residential and retail space, and will be focussed around an athletics stadium and velodrome.

The Galleria is a R6.2 billion development, north of Cape Town, which will also be home to a highquality business hotel and a medical facility alongside a substantial residential portfolio of 500-700 units. “We have made good progress and we are hoping to break ground early 2021,” confirms Steyl.

The development will be Green Building Council South Africa (GBCSA) rated and will include a ‘green lung’ close to the residential portion, allowing for people to enjoy a great

breath of nature on their doorstep.

At another flagship development – the Plettenberg Manor retirement estate – close to the Garden Route National Park, Devmark is making fantastic project and is now 80% complete. The company is completing the final 126 units – project value R282 million – and residents will soon be able to enjoy the quality and luxurious lifestyle which boasts picture perfect natural surroundings and a soul soothing atmosphere.

Similar success has been built at Helderberg and Langebaan Manors – both high-quality luxury retirement developments. Helderberg, in Somerset West, and Langebaan on Saldanha Bay, will drive sales success for the company over the coming months. They are the perfect

Design.

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// WE WERE 70% SOLD OUT WITHIN THREE MONTHS OF THE LAUNCH OF THE DEVELOPMENT. IT IS DUE TO THE VERY SOUGHT-AFTER LOCATION, BEING ON A WORKING WINE FARM AND A HIGHEND PRODUCT //

example of de-risked project that Hein Ehlers is keen to implement over a longer period of time.

“At Helderberg Manor we have completed all the houses and apartments and are starting construction of the assisted living very soon. At Langebaan Manor we started with civil works at the end of 2020,” details Steyl.

The other major project keeping the Devmark experts busy is the Klein D’Aria residential estate in Durbanville. Surrounded by vineyard and lush countryside, this development has all the hallmarks of a Devmark success story.

“It has been very successful,” says Steyl. “We were 70% sold out within three months of the launch of the development. It is due to the Simplyvery dosought-after location, being MANUFACTURINGon a working wine farm and a highend product.”

FUTURE PROOFED course, it has not been all plain SimplyOfdo sailing for Devmark. The company’s DESIGN push into Europe has slowed, with plans to invest into retirement assets in the UK and the Netherlands now delayed.

And plans to roll out hospital facilities Simplyalongside do Samaritan Health, using the SUPPLY experience of working on prestigious

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DEVMARK PROPERTY GROUP

© Devmark Property Group

// WE ARE IN THE FORTUNATE POSITION TO HAVE A PIPELINE OF PROJECTS AND A STEADY STREAM OF SALES WHICH CARRIES US THROUGH THE PANDEMIC //

retirement villages – has been delayed but is expected to get back on track in the first half of this year.

But overall Steyl is positive about the future and remains optimistic about business going forward.

“We are struggling to keep up with the demand for quality affordable housing close to CBDs and amenities.

Again, we are in a very fortunate position to have a pipeline of secured projects,” she concludes.

For more than 30 years, Devmark has been displaying exactly what it means to be a property developer

that South Africa can be proud of.

The relatively short-term delays inflicted by the pandemic will not present a hurdle that Devmark cannot overcome. For now, a slightly different way of working is still bringing the same end result – property developments of the highest quality that allow residents and tenants to enjoy life and business to the max.

WWW.DEVMARK.CO.ZA

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