Enterprise Africa August 2017

AFRICA August 2017

www.enterprise-africa.net

JEGIE PADMANATHAN:

People Are The Power

of Bidvest Prestige ALSO IN THIS ISSUE:

CCI Global / Thebe Tourism Group / RPP Developments / ALG Estates

Š Nelson Mandela Foundation / Matthew Willman

EDITOR’S LETTER EDITOR Joe Forshaw joe@enterprise-africa.co.za SALES MANAGER Hal Hutchison hal@enterprise-africa.co.za SALES ADMINISTRATOR Emma Neethling sales@enterprise-africa.co.za SENIOR PROJECT MANAGER Sam Hendricks sam@enterprise-africa.co.za PROJECT MANAGER Shaun Cousins shaun@enterprise-africa.co.za PROJECT MANAGER Shannon James shannon@enterprise-africa.co.za PROJECT MANAGER Aaron Chapman aaron@enterprise-africa.co.za PROJECT MANAGER Stewart McErleane stewart@enterprise-africa.co.za PROJECT MANAGER Nathan Phillips nathan@enterprise-africa.co.za FINANCE MANAGER Emma Smith finance@enterprise-africa.co.za SENIOR DESIGNER Harvey Tarlton harvey@enterprise-africa.co.za CONTRIBUTOR Manelesi Dumasi CONTRIBUTOR Karl Pietersen CONTRIBUTOR David Napier CONTRIBUTOR Timothy Reeder CONTRIBUTOR Emily Ayson CONTRIBUTOR Djamil Benmehidi CONTRIBUTOR Colin Chinery CONTRIBUTOR Jukka Lethinien

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In June, Stats SA announced that South Africa had officially entered a period of technical recession. In April, the country’s credit rating was downgraded by Standard & Poor’s to a ‘Junk Status’ investment grade.

The Rand continues to fluctuate in currency markets, unemployment continues to creep up, and corruption and inefficiency in the political world continues to create uncertainty and a lack of confidence – the picture isn’t pretty.

So, you’d expect that businesses would quickly close, consolidate or enter periods of quiet while the economy turns around; after all, that’s what happens during recession, right?

Wrong – and this month we have perfect examples. While there have of course been some casualties, many are continuing to thrive and making the best of that most unusual South African trait of ‘predicting unpredictability’.

We talk to the Thebe Tourism Group and CEO, Jerry Mabena who explains that the company is investing heavily in new facilities around the country, including a bespoke new hotel in Kruger Park.

We also hear from leading BPO business, CCI South Africa and learn that the company is planning a new 14,000 m2 office in Durban and expansion on the continent. We also question Bidvest Prestige about growth during tough times, and all of these organisations indicate that they do not ignore negativity in the economy but all of them are bullish about the future thanks to a commitment to sound business strategies that have been well-planned and well-executed.

There’s also comment from Reba Chemicals, TN Molefe Construction, Zorbatex, FormsXpress, Endress & Hauser, and RPP Developments all of whom back the comments from their peers that the slow economy is a cause for concern but, at this stage, nothing more.

With investment continuing to be realised and with entrepreneurs hungry for development, it seems that the view is this slowdown is just one more in a series of hiccups that have faced business over the past three decades – South Africa’s companies are experienced in this regard.

Get in touch and tell us how your business is navigating the current economic climate, we’re online: @EnterpriseAfri1

Joe Forshaw EDITOR

GET IN TOUCH +44 (0) 20 8123 7859 joe@enterprise-africa.co.za www.enterprise-africa.net

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

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

8/BIDVEST PRESTIGE: People Are The Power Of Bidvest Prestige Bidvest Prestige CEO, Jegie Padmanathan says that his 40,000-strong workforce is growing by 6-7% each year; more people are gaining training, development and upskilling; and the company continues to look for expansion opportunities to bring about further opportunities for people to grow. “Our biggest asset as a company is our people; it’s what makes us different,” he says, while talking to Enterprise Africa about the success of this first-class South African services operation.

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CONTENTS

INDUSTRY FOCUS: OUTSOURCING

INDUSTRY FOCUS: AGRICULTURE

16/CCI SOUTH AFRICA: The Call of Africa

70/ALG ESTATES: A Fresh Approach to Citrus Export

INDUSTRY FOCUS: TOURISM

76/KARSTEN FRUITS: World Leaders In Quality Fruit Production and Export

22/THEBE TOURISM GROUP: Truly Transforming Tourism

INDUSTRY FOCUS: CONSTRUCTION 28/TN MOLEFE CONSTRUCTION: The Home Of Engineers And Development 32/RPP DEVELOPMENTS: Atlantis Foundries Forging New Opportunities

INDUSTRY FOCUS: AUTOMOTIVE 38/SHELL SOUTH AFRICA: Quality Retail Offering to Grow Across Shell Fuel Network

INDUSTRY FOCUS: CHEMICAL

INDUSTRY FOCUS: PRINT 80/FORMSXPRESS: FormsXpress: Inked in SA History

INDUSTRY FOCUS: AUTOMATION 84/ENDRESS & HAUSER: Made to Measure

INDUSTRY FOCUS: POWER 88/CONLOG: Innovative Solutions to Everyday Challenges

INDUSTRY FOCUS: MANUFACTURING

92/WIRQUIN SA: 48/REBA CHEMICALS: France’s Wirquin to Expand Further in All The Properties Of An Industry Leader South Africa 54/REMITTO: Way Ahead of the Field 58/UNIVERSAL PAINTS: Paint Supremo Targets Universal Coverage

INDUSTRY FOCUS: TEXTILES 62/ZORBATEX: Zorbatex Excited About Future in Southern Africa 66/LANCASHIRE MANUFACTING: Wearing the Proudly SA Badge With Pride

INDUSTRY FOCUS: INSURANCE 96/INDWE RISK SERVICES: Risk Services Built On Century of Experience

INDUSTRY FOCUS: FINANCE 102/CAVMONT BANK: 25 Years and Counting for Zambia’s Cavmont Bank

INDUSTRY FOCUS: RETAIL 108/KIT KAT CASH & CARRY: Kit Kat Group’s Impressive Expansion Continues

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Flickr: GovernmentZA President Jacob Zuma appoints Advocate Busisiwe Mkhwebane as the new Public Protector, 6 Oct 2016

IDC Profits Soar

The Industrial Development Corporation (IDC) improved its profits by more than 800% to R2.2bn, compared to R223m last year. This is according to the state-owned development finance institution’s annual financial results, released at the end of July.

The group’s funding helps support private sector investment and project development.

“The IDC achieved commendable outcomes in a year characterised by high levels of uncertainty and by a slowing economic growth momentum, globally and domestically,” board chair Busisiwe Mabuza said in the group’s integrated report.

During the year, the IDC approved 175 transactions worth R15.3bn, up from R14.5bn reported previously. However, the total funding disbursed was down 3% to R11bn from R11.4bn reported in 2016.

The IDC has prioritised inclusivity and transformation and reached its targets in this regard. A total of R10.1bn was approved for black empowered companies, up 104% from the previous year. A total of R3.2bn was approved for businesses with women ownership of more than 25%. A total of R2.3bn was approved for businesses with youth ownership of more than 25%, while R4.7bn was approved for black industrialists.

The bulk of funding approved in 2017 was for projects and start-ups (46%), followed by capacity expansions (29%) and businesses in distress (13%), ownership changes (10%) and expansionary acquisitions (2%).

The IDC expects 18,206 jobs to be created and 2,675 to be saved.

Flickr: GovernmentZA Minister of Trade and Industry Dr Rob Davies addresses a media briefing EDIT BG EXTENDED

Minister lauds Adcock Ingram for good business

NEWS SNAPSHOT

Bold decisions needed for SA to achieve 6% growth

SA population on the rise

If South Africa is to achieve 6% growth, extraordinary bold decisions that change the economy must be made, said Finance Minister, Malusi Gigaba recently.

“If we must rebound from a low growth trajectory into which we currently are in; if we must grow our economy at 6% on a sustainable basis; we must take extraordinarily bold decisions that change the structure of production and the sectoral composition of the economy and at the same time change the patterns of ownership over the long haul,” he said.

Speaking at the Thomson Reuters economist of the year award ceremony at the Johannesburg Stock Exchange in Sandton, Minister Gigaba said lower than expected growth is likely this year. Heading towards the tabling of the MediumTerm Budget Policy Statement (MTBPS), in October, will require that tough decisions be made.

“We are far from achieving the 5 to 6% growth target we need in order to begin to dramatically reduce poverty, unemployment and inequality,” he said.

The Minister called on all sectors of the economy including government, business, labour and civil society to do its part to grow the economy while making it more inclusive and fair.

This as the National Development Plan (NDP) “commits us to pursuing growth and economic transformation, we need to do both because one without the other would be inadequate.”

South Africa’s population has increased by close to a million from 2016 to 2017, says Statistician-General Pali Lehohla.

Lehohla released the mid-year population estimates 2017, which indicate that South Africa’s mid-year population is at 56.52 million. This shows an increase of about 902,200 from 2016.

Females make up the majority of the population, with about 28.9 million (51%) as compared to males who make up to 27.6 million (49%) of the population.

There is a majority of about 45.7 million black Africans living in the country, making up 81% of the entire population of South Africa.

The second largest population group is about five million coloured people who represent 9%, followed by about 4.5 million white people who makes up to 8%, and the least being about 1.4 million Indians who represent about 2% of the country’s population.

The largest share of about 14.3 million people (25.3%) resides in Gauteng. KwaZulu-Natal has the second largest population, with 11.1 million people (19.6%) living in the province. The Northern Cape Province remains with the smallest share of about 1.21 million people (2.1%).

According to the report, about 29.6% of the population is aged younger than 15 years and approximately 4.60 million (8.1%) is 60 years or older. Similar proportions of those younger than 15 years live in Gauteng (21.0%) and KZN (21.1%).

Of the 60 years and older age group, their majority of about 1.10 million (23.9%) reside in Gauteng.

© MediaClub SA

Minister saves 3000 mining jobs

About 3000 jobs have been saved in the mining sector following Mineral Resources Minister Mosebenzi Zwane’s approval of Lonmin’s application to acquire Anglo Platinum’s 42.5% stake in Pandora, a joint venture between Lonmin and Anglo Platinum.

The company was due to be placed under care and maintenance, thus placing 3000 jobs at risk.

“Lonmin came and presented its case to us, and one of our primary considerations when assessing their application was how we were best going to prevent retrenchments at the mine.

“We are indeed pleased that we have been able to save 3000 jobs, particularly in the current global economic climate,” Zwane said.

The Minister granted consent for the cession of the right, in terms of Section 11 of the Mineral and Petroleum Resources Development Act (MPRDA).

The granting of the consent is further subject to Lonmin presenting a plan to the department on how it will address its BBBEE compliance.

“We are a reasonable Regulator, and apply our laws consistently to all right-holders. We continue to appeal to right-holders to make use of our open-door policy and engage with us frankly and openly on issues pertaining to this critical sector of our economy. We will always put the interests of South Africa and its people first in all our deliberations,” Minister Zwane said.

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BIDVEST PRESTIGE

People Are The Power

Of Bidvest Prestige PRODUCTION: Manelesi Dumasi

Bidvest Prestige CEO, Jegie Padmanathan says that his 40,000-strong workforce is growing by 6-7% each year; more people are gaining training, development and upskilling; and the company continues to look for expansion opportunities to bring about further opportunities for people to grow. “Our biggest asset as a company is our people; it’s what makes us different,” he says, while talking to Enterprise Africa about the success of this first-class South African services operation.

8 / www.enterprise-africa.net

C

INDUSTRY FOCUS: OUTSOURCING

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Founded in 1969, Bidvest Prestige has achieved phenomenal grown over the past 48 years, becoming an important contributor to both the wider-Bidvest Group and also the South African economy. The company is the largest leading specialist of world class outsourcing solutions in South Africa, Southern Africa and Mauritius. Its focus includes the supply of contract cleaning, event staffing, caregivers, specialised cleaning services, mobile toilet hire, training and landscaping.

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Falling under the umbrella of the Bidvest Services division, Bidvest Prestige employs around 40,000 people and it is this provision of such widespread opportunity that delights CEO Jegie Padmanathan.

“We’re proud of being able to provide employment to a part of the labour base of South Africa that may not have been given opportunities elsewhere,” he enthuses. “We’re very proud that we are able to give people a choice. The bulk of our labour force comes with limited education and we have put in

place technical and operational processes to undertake a lot of training and give people the tools to earn income. Most importantly, we have the opportunity to change people’s lives and our biggest asset as a company is our people; it’s what makes us different. We can give people skills that they may not have ever known they could have and we’re hugely proud of that. It’s very complex; we operate across a vast landscape and all employees have to be skilled differently but that is why we have developed the necessary

BIDVEST PRESTIGE

processes to focus on upskilling to ensure growth. We’re very lucky that people put up their hand and say, ‘consider me’ and very happy that people take our challenges on board.”

In June, South Africa’s official unemployment figures increased to 27.7%, the highest level since September 2003. In the first quarter of 2017, approximately 6.2 million people were classed as unemployed.

Negativity stemming from a bleak economic outlook has been blamed in some part for the rise, but Padmanathan insists that pessimism is doing no one any favours and tries to inspire confidence throughout the workforce.

“We are one of the largest workforces in South Africa outside of the resource industry,” he says. “We service in excess of 5500 contracts

across a diaspora of industries and therefore it is critical that positivity is instilled across the employee base as it helps and inspires people and gives alternatives to negativity in the media.”

This negativity stems from the country’s recent dip into technical recession and downgrade by international credit agencies, both of which have dampened confidence and installed a feeling of uncertainty. However, already a player across a number of industry sectors including commercial, retail, healthcare, education, hospitality, mining, food and beverage, and more, the lacklustre economy has inspired Bidvest Prestige to increase its aggression when it comes to widening exposure and spreading its risk.

“We’re very cognisant of the

fact that we are in tough times economically in SA and it’s critical that we have a diversified business model in order to protect ourselves.

Playing in such a widespread number of industries protects us from slowdowns and that continues to be a key focus for us – to be sure that we are consistently strong role players across all markets to protect the bedrock of our business,” says Padmanathan.

“Ultimately, we continue to be a very stable country, we continue to have a mature economy, our stock exchange continues to trade a near record highs, and our currency has remained reasonably resilient. One would think that times are a lot worse considering the noise you hear out there but I prefer to look at the glass half-full and control our own destiny,” he adds.

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Atlas Plastics is celebrating almost 50 years of successful rotational moulding.

Atlas Plastics Pty Ltd is a manufacturing company with our head office and factory based in Klerksdorp in the North West Province. Rotational moulding and extrusion are the two manufacturing processes used to produce a variety of products. We are nationally represented throughout South Africa. With almost 50 years of experience in rotomoulding, Atlas Plastics has established a reputation for manufacturing and design excellence all of which is evident in our extensive range of products.

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BIDVEST PRESTIGE

BIDVEST PRESTIGE CEO JEGIE PADMANATHAN

CLEAR GROWTH Despite the country’s economic plight, Bidvest Prestige continues to grow. Where many companies are choosing to consolidate and hold back on investment until certainty returns to the market, Bidvest Prestige, and the wider Bidvest Group, continues to aggressively pursue growth.

For the half-year ended 31 December 2016, Bidvest CFO Peter Meijer reported Group revenue was up 4.1% to R36 billion and trading profit was up 3.2% to R2.8 billion.

Bidvest Services CEO Alan Fainman said that ‘Prestige showed pleasing growth in new business and noncontractual revenue’ with Services having a ‘positive outlook’ – all of this while South Africa’s economy contracted by 0.7% in the first quarter.

Padmanathan mirrors the positivity voiced by his colleagues: “In tough economic times, we always see opportunities. It’s about how we can get those opportunities to work for us. We continue to aggressively go out and try and gain new market share and grow the contract portfolio base, and those opportunities are there, it’s just about how we structure the business to accommodate the peaks and troughs in the economic cycle.

“In terms of growth outside of the South African landscape in the services field, there’s a strong view within the company that there are opportunities which could comfortably bolt-on to the Bidvest Services division. Services is a growing industry in several parts of the world and can give reasonable returns in terms of shareholder value. Depending on where you are, it seems to be consistently growing consistently at around 4% annually through a difficult global economic climate.”

Proving its positive mindset, and backing its sentiment with action, Bidvest Prestige recently completed

the acquisition of a complementary African business to bolster its service portfolio.

“In August 2016, we bought a business in Mauritius – a cleaning services business and a trading company business that sold equipment into that market – and for Bidvest Prestige it was a major transaction,” explains Padmanathan.

“It was a good bolt-on for us as we have an existing landscaping business in Mauritius and we wanted to grow into the cleaning services space.

In our business model, cleaning, landscaping and cleaning equipment sales all work together - the synergies are there, and we felt that would create opportunities for us to grow into the Indian Ocean space. Over the past 11 months, we’ve been bedding in that acquisition and we continue to look for acquisition opportunities within the South African landscape as well as outside of South Africa.

“We are looking for organic and inorganic growth and part of our strategy is to ensure that, within our existing portfolio of contracts, we ensure efficiency and growth in tough economic times. At the same time, we’ll look for opportunities to acquire at fair value, at a decent multiple, where we can seamlessly integrate and grow the business. It’s certainly something we’ll continue with throughout 2017 and in years to come,” he adds.

LEADING THE INDUSTRY Across the industry sectors in which Bidvest Prestige plies its trade, competition is rife and growing all the time. Although Prestige is undoubtedly the industry leader, there remains a need to deliver service of the highest quality, at a competitive price, in a timely manner. Fortunately, the company’s reputation is immense and is backed by almost five decades of successful operations.

“We are the dominant player because we have been in the industry

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INDUSTRY FOCUS: OUTSOURCING

for more than 40 years, we have a strong track record, and we are Bidvest – a top-ten listed company in SA. All of this gives us traction and reputational value in the market,” says Padmanathan.

“However, it’s a highly competitive space with a lot of players. The reality is that there are a number of smaller players that have the opportunity to gain work as there are companies that do not think cleaning is an important part of business and they just look for the cheapest option.

“Cleaning is not capitally intensive and the barriers to entry are almost non-existent. We must remain focussed on what we do best and what we have done best for the past 30-40 years. We can’t rest on our laurels, we must be

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humble, and we must customise where necessary to ensure service for the client. Competition is good as it creates innovation and out-of-the-box thinking,” he adds.

But even with the documented successes of the company and the sector, does Bidvest Prestige, and the entire the industry, face a threat from an idea that outsourcing is a threat to job creation? Not so according to Padmanathan: “Sometimes people talk of insourcing versus outsourcing and its impact on job creation but the significant number of corporates realise that to remain competitive, they must focus on their core business and outsource their non-core business.

There’s a strong view that outsourcing

is positive for the country; we’re growing our labour force on average by 6-7% per annum and that shows the opportunities that are out there.”

This view is supported by Deloitte which said in its 2015 report on outsourcing in South Africa that: “To say a country that allows companies to outsource in order to obtain efficiencies and cost reduction causes job losses is naïve and uninformed. Statistically, there are more employees that get retrenched annually because of company failures (mainly where the revenues cannot cover the overheads of that company), than job losses caused by efficiencies through outsourcing. South Africa has identified outsourcing as an enabler for economic and social growth.”

BIDVEST PRESTIGE

Another area where job retention has been highlighted is with the rise of technology in the industry and advances that could see human jobs replaced with machines. But Padmanathan is confident that at Prestige people will not be sacrificed to mechanisation, although it will be used to enhance service delivery where possible.

“The nature of cleaning equipment is changing. Largescale machinery is commonplace and you can now get the same level of work done with a lot less inconvenience, and invariably it’s a lot more healthy and hygienic,” he says.

“A cleaner will always have to clean but we can give the tools to improve from a speed and efficiency perspective. Technology is becoming a bigger component in the industry as our clients demand it, and there is sometimes no choice due to the nature

of the industry. It also opens up new contractual opportunities with new clients. Mechanisation is becoming a significant part of the business but we will never not need a large labour force.”

The CEO’s attitude surrounding people is admirable. During these tough economic times, where global markets are so uncertain, management are so often forgiven for focussing attention on survival rather than growth and profit rather than people but Padmanathan, a self-confessed optimist who has only been with Prestige for 11-months, is resolute in his drive for improving people and, as a result, improving service delivery.

Under his stewardship, it is clear that Bidvest Prestige faces an exciting and positive future, one where people are at the core of the business.

“I believe that as a company, we

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CLEANING HYGIENE PROGRESS

Hychem was established in 1989, and offers a complete range of cleaning solutions, from the supply of chemicals, dispensing systems, accessories and training thus ensuring that customers hygiene standards in all aspects of their establishment are achieved.

Hychem has been appointed as an exclusive distributor in the Hospitality Sector in South Africa by Chrisal NV. The range of natural Probiotics in Progress products, called PIP for short have taken the environmentally friendly products to a new level in cleaning efficacy. Four of these products carry the EU Ecolabel namely PIP Control, an odour neutraliser, PIP Result, a floor cleaner, PIP Unidose, for floor scrubbing machines and PIP Universal, an all purpose cleaner and degreaser.

Hychem’s focus is on adding value, training, support, equipment and servicing thereby assisting customers to achieve optimisation of their resources Hychem assists customers to implement good hygiene practices within their Housekeeping, Kitchen and Laundry Departments in their quest towards becoming HACCP compliant.

continue to punch above our weight,” says Padmanathan. “Where there’s opportunity, we’re taking advantage, despite the economic circumstances that we’re faced with – there is work out there. This means we can grow the company, grow the labour force, change people’s lives, give opportunities to people who wouldn’t have had them, bring fair returns for shareholders and overall, in the cleaning space in SA, there’s enormous opportunities to grow further,” he concludes.

HY CHEM “Planned approach to hygiene”

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CCI SOUTH AFRICA

The Call of

Africa PRODUCTION: Colin Chinery

Seen increasingly by foreign investors and multinationals as a port of entry into the African continent, South Africa is fast becoming the new call centre destination of choice for large international firms. “We are very bullish about South Africa, and aim to be the dominant player on the continent,� says Martin Roe, Global Group CEO of CCI, the largest international outsourcer in South Africa.

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INDUSTRY FOCUS: OUTSOURCING

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With South Africa’s unemployment figures remaining bleak, could the pace-setting Business Process Services industry deliver much needed vitality and inspiration?

The Government clearly thinks so, backing inward investment through the Department of Trade and Industry’s (DTI) Business Process Services (BPS) and Business Process Outsourcing (BPO) initiatives, and working with the sector to establish BPS as a key job creator and economic driver.

When Trade and Industry Minister Dr Rob Davies hailed BPS as a key sector for attracting investment and creating new jobs - notably in the 18- to 35-yearold age groups where job creation is most needed - venue and audience could not have been more fitting or receptive.

The Minister was speaking at the unveiling of the R200m custom-built call centre at Umhlanga, KwaZulu-Natal, showcase of the country’s premier international contact centre operator, CCI South Africa.

Part of Mauritius-headquartered

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CCI Global - whose clients number leading brands in Britain, Australia, the USA and Kenya as well as South Africa - CCI has grown from fifty seats to over 6,000 in 12 years, with more than 7,000 permanent employees across six fully functional sites, and a seventh soon to come on line.

BIG AND BIGGER “We are already the biggest BPS operator in South Africa, but this doesn’t stop our ambition,” says CCI Global Group CEO, Martin Roe. “We aim to be the dominant player on the continent.”

CCI South Africa specialises in the operation of inbound, outbound and blended multi-channel contact centres which improve clients’ business operations and contact centre effectiveness by delivering efficient outsourcing solutions.

“Our offering includes consumer sales, service and digital customer management, and we are trusted to deliver high quality services to global household names.”

If its African ambitions are vast, CCI launched here at a time when the

market for international outsourcing in South Africa was limited. But looking for an alternative offshore destination to India where they were already off-shoring, CCI Global quickly saw the potential.

“They came to South Africa and liked it so much that they did a deal with a local outsourcer. Fast forward a couple of years and they set up their own contact centre outsourcing business.

“The first significant customer was now familiar name in the UK Telecoms market but at the time a new entrant to the recently deregulated telecoms market. This company was successful in selling to UK consumers and servicing them, and CCI grew alongside it,” explains Roe. From a single client, CCI moved on to acquire other British clients, growing organically over eight years with a focus on the UK and later Australia, a market with some similarities to the British, and where it has achieved notable success.

SA’S ACE South Africa’s time zone and a cultural affinity with Britain and mainland

CCI GLOBAL

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INDUSTRY FOCUS: OUTSOURCING

Europe are assets. So too is the large English speaking/accent neutral skills pool, a decided advantage over BOP Asia Pacific strongholds such as India.

English-born, and with an impressive sector pedigree, Martin Roe became Global Group CEO in May 2015. Alert to the strategic relevance of the South African and broader African opportunity, CCI set out a strategy to become the largest and most respected outsourcer on the continent.

Centrepiece is a drive for massive trans-continental growth. “From South Africa, where we have some 3000-people servicing South African blue chips, we are growing our footprint across Africa. We acquired a business in Kenya that we are growing, and we’ll be doing the same across a number of other African countries over the next several years.

“We will be doing this for two reasons; multinational companies want to be in Africa, and secondly we see Africa as an interesting destination for international outsourcing. We have proved this in South Africa, where we are the biggest international outsourcer and from where we service UK and

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Australian clients.

“Recently we started servicing US and North American clients from South Africa, and over the next four to five years we see other African countries developing an international capability,” says Roe. Continuing the growth path of the past decade, CCI aims to double its operational size within the next three years. Plans are under way to expand to other parts of the continent through acquisitions and organic growth, with another large African purchase expected in the coming 12 months.

Roe is clear about the characteristics and attributes he is looking for. “It has to be a growth opportunity for us. And we have got to be able to add value by bringing our significant scale and experience to a market and make a substantial difference.

DOMINANT IN KENYA “We have done this in Kenya, where we went in, bought a small player, applied our DNA and infrastructure and are now the dominant player. This is the model we want to follow elsewhere.

“We are already very well advanced in terms of our analysis of individual geographies. The Kenya acquisitions were part of a broader plan in which it was one of the top eight.

“We have another seven we are looking at, predominantly English language destinations at this stage, with Francophile Africa as a Phase 2 plan.

What interests us are large populations with a significant emerging middle class.”

Smaller African countries are less attractive because the scale is not there, says Roe. “But if one of our customers wanted us to move into a smaller African country, we would do so. But we are a big company looking for big opportunities, and so scale is the most important characteristic we are looking for.”

With both scale and building blocks in place, he believes South Africa is set to be the next large-scale English language destination to follow.

“South Africa has been doing outsourcing for some 15 years, which is not long. But it is only recently that it has attained a level of scale that makes it attractive to some of the very big markets, and in particular the USA, which we see as being the biggest international opportunity that exists today.

TAKE-OFF READY “What we also have here in South Africa is a fantastic domestic market which doesn’t exist in India and the Philippines, and this underpins the international expertise we have now got.

“And cracks are appearing in the Indian and Philippines market, which means there’s an opportunity for a new entrant such as South Africa to move in.

We are ready for take-off.”

With staff supportive values at the centre of its operations, CCI has a high staff retention rate. “Our performance is driven by our people and our aim is to create a work environment where people are happy to come to work,” says Roe.

CCI GLOBAL

It’s an employer appeal showcased in the new Durban facility coming on line, the seventh centre in South Africa. Martin Roe is enthusiastic.

“We designed it ourselves; a 13,000 m2 state-of-the-art building including restaurant facilities, fully-equipped gym, a dance studio, hairdressing salon and nail bar, and with doctors and nurses on hand to service our people.

“We believe it may well be the finest workspace in Africa; a piece of real estate comparable with, or better than, anything else you will see on the planet,” he says.

In 2015, CCI Call Centres won the Investor of the Year category at the South African Premier Business Awards, an award that encourages expansion of investment into the economy, and recognising the effort and commitment by local and global companies to create jobs.

“We are a business where the average age of employees is 24, and there’s absolutely no shortage of motivated, high-potential, talented young people.

“However, there is a requirement for having some level of intervention to bring them from where they are today to those higher performing employees we demand.” The outcome is sister company, Career Box, through which CCI runs a workreadiness programme equipping new employees with the skills to enter the world of work.

“With numerous opportunities available for progression, we created our own methodology some years ago whereby we search for and take really high potential people and train them.

“The people are there, and it’s in the interests of all organisations in Africa, and particularly us, to spend the time and effort to train them, because they do end up by becoming extremely high performing individuals.

“We have structured career paths

for all our people, so that they can come in at a relatively junior entry level and over a number of years through our programme, reach the level of company director,” Roe insists.

With South Africa’s central bank unexpectedly cutting its benchmark lending rate last month – the first in five years – citing weak growth, and President Jacob Zuma describing it as in a state of “duress”, the national economy continues in the doldrums.

But for CCI, Roe sees opportunity amid adversity.

“We are in an industry that can do very well in turbulent times because a value proposition to our clients is that we will help them sell more, and help them spend less, both of which are vital in a recessionary or nearrecessionary environment.

“Our business has grown in South African from almost zero employees

to nearly 3000 in less than two years. Right now, the whole world is feeling uncertain, particularly the UK after Brexit. Frankly at the moment I am more concerned about my UK business than my South African business.

“We are growing at 30 to 40% growth year-on-year - it’s all growth.

We are very bullish about South Africa, and we are in a good place. We are an African success story, and we are very proud of it.”

CCI GLOBAL +27(0) 31 286 1600 enquiries@cci-sa.co.za www.cci-sa.co.za

• SALES & SERVICE OF OLIVETTI COPIERS AND RISO • SUPPLIERS OF ALL LEADING BRANDS PRINTER CONSUMABLES • INSTALLATION AND SERVICE OF CCTV’s • COMPUTER NETWORKING

TEL: 031 3121042 CELL: 0845568469 FAX : 0313035270 WEB : www.chanrey.co.za email: henry@chanrey.co.za

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THEBE TOURISM CEO JERRY MABENA

THEBE TOURISM GROUP

Truly Transforming

Tourism PRODUCTION: Emily Ayson

Despite the unpredictable ebb and flow of the global and national economy, the tourism industry in South Africa is positively booming. Idyllically scenic and culture-saturated, the country has plenty to offer whether you are seeking adventure or respite. However, although a steady stream of international visitors are discovering South Africa, domestic ‘Afropolitans’ still seem to be ignored by - or are ignoring - travelling for leisure. It is precisely this fact that has prompted CEO of Thebe Tourism Group, Jerry Mabena, to take action. Sometimes, all you need is a little encouragement to try something new or go somewhere different, even if such an experience exists in a location right on your door step. Enterprise Africa caught up with Mabena to find out just how he is working to transform the face of domestic tourism within South Africa.

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INDUSTRY FOCUS: TOURISM

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An established and respected businessman, and optimist, Jerry Mabena speaks with great pride and enthusiasm about his work and the company that he leads. With an acute awareness and knowledge of the current state of tourism within South Africa, his moral, responsible and positive approach to business correlates flawlessly with values and aims of Thebe Investment Corporation (TIC), the parent company of Thebe Tourism Group (TTG).

TIC was founded in 1992 with an initial investment of just R100,000 from the Batho Batho Trust, who at the time were chaired by the late Nelson Mandela. The founding aims; to increase the success and visibility of black empowerment initiatives, support economically developing areas, practice responsible business and promote mutually beneficial partnerships; still provide the groundwork and impetuses for operations to this very day. Contemporarily, TIC is a completely black-owned company, which has holdings in a vast range of different

industries and its assets are worth over R6 billion. Its reputation is becoming increasingly recognised across the continent and indeed the world, as its performance in the market goes from strength to strength. Yet importantly, underlying such prosperity is one key tenet. Rather than solely chasing profit, TIC is highly committed to investing in products and services that not only benefit the enterprise, but also feed back into the wider community and economy. The desire to showcase South Africa and to also support and stabilise the lives of family, friends and fellow countrymen is palpable and it is no wonder that the company abides by the old African idiom that ‘no matter how far a stream flows, it never forgets its source’.

Tourism is one such area that has great potential for simultaneously generating income and having a positive impact on peoples’ lives.

Identifying an opportunity to enter into a developing and progressive business sphere, in 2001 TIC founded

the Thebe Tourism Group. Today, the division is lauded as one of the most pioneering and successful tourism groups in the whole of South Africa.

Under the direction of Mabena, TTG both manages and holds ownership over an impressively eclectic portfolio of tourism commodities and facilities.

From attractions and car rental to leisure and business tourism, packages can be tailor-made to fit the complex and varied needs of different types of traveller. Whether you are a seasoned globe-trotter or just looking to try something new, TTG allows travellers to witness the true majesty of South Africa, whilst also making the actual process of holidaying seemingly effortless. Yet, behind such a casual-seeming scene, the business of tourism can be far from leisurely.

South Africa recently became the third biggest African economy to officially go into recession as the Rand fell 20% against the dollar in March this year. Consequently, the potential for industries associated with disposable income and non-essential expenditure to be thrown into decline and chaos are substantial. Regardless, the tourism industry and indeed the prosperity

CAPE POINT

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THEBE TOURISM GROUP

and popularity of groups such as TTG are continuing to thrive. According to statistics provided by South African Tourism, in 2016 South Africa hosted 10 million international tourists who collectively spent in the region of R75.5 billion. These intercontinental visitors often stay for over nine days and around 15% of them even opt to venture into multiple provinces. The majority of tourists come from the UK and mainland Europe but there has also been a notable increase in travellers from the United States. However, whilst these numbers are impressive, Mabena reflects on the fact that reliance on foreign visitation can be very problematic. Risk factors such as economic downturn, natural disasters, political turmoil and visa restrictions can signal disaster, deterring people from travelling and thus creating a shortfall in income.

As such, within South Africa there needs to be a rapid and carefully managed shift in focus. To facilitate an uninterrupted revenue stream from tourism, attention needs to be turned to an already present market that has been historically alienated by the tourism industry. Such people - ‘Afropolitans’ - are a crucial target market that if attracted and assimilated, could help boost the wider economy as well as both the viability and visibility of domestic tourism.

Mabena describes Afropolitans as “South Africa’s newly educated, economically prosperous market who have the ability and means to travel for pleasure yet rarely do so”. Since democracy came to the country in 1994, border restrictions were lifted and a newly affluent social stratum developed. As such it seems only logical that indigenous tourism levels would increase. Yet, though domestic tourism numbers in 2016 exceeded 24.3 million people, Mabena notes that an estimated 14 million of these journeys were “short trips to see and stay with family and friends”. Thus, such travellers generally return to rural, underdeveloped

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THEBE TOURISM CEO JERRY MABENA

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THEBE TOURISM GROUP

and familiar areas, with their accommodation often being provided for free. “Significant capital is not injected into the economy via this type of ‘traditional’ South African tourism, as people often find themselves in areas that are off the beaten track and with few commercial leisure facilities.”

For example, in 2016 only 10% of South African travellers visited more than one province, but the average stay was for just 4.3 nights. This is less than half of that of their international counterparts. For Mabena, this situation constitutes a glaring gap in the tourism market and he hypothesises that if his and other allied businesses can attract just 10% of these consumers, then there is an opportunity to bring an extra R2.6 million into the local and national economy per annum.

For Mabena, the buzzword is transformation; Afropolitans not only need to transform their internalised historical tourism practices, but the products and services offered to them must also be transformed into something that they will truly desire and make an effort to seek. What Afropolitans need are packaged holidays which are affordable and easy to plan and execute. They must also be offered a range of activities and experiences that will encourage them to travel, stay and spend in and around places they are already familiar with.

The hope is that not only will domestic tourists be interested in combining family visits with leisure pursuits, but that such initiatives could even become the core reason for their journeys. Thus, to unlock and reignite internal interest in South Africa, TTG have heavily invested in areas of notable cultural, historical, zoological and botanical interest.

For example, in November 2015, TTG gained sole ownership of Cape Point after purchasing Murray and Roberts’ 49.9% share. This narrow stretch of land, interspersed with valleys, bays and beaches is naturally breathtaking and the visiting experience is also enhanced by ‘The Flying Dutchman’ funicular, shops, restaurants and shipwreck trails. The vast,

heterogeneous landscape also provides sportspeople, hikers, photographers and wildlife enthusiasts with a unique location within which they can indulge in their passions. Furthermore, in September 2016, a self-guided audio tour was made available as a mobile device app, signifying TTG’s dedication to always adapting to technological change.

Speaking at the time of the acquisition, Mabena said that TTG was “very proud and excited about this opportunity… visitors can be assured of our continued excellence on site. It’s business as usual at Cape Point, however we are very excited about the move as it is aligned with our growth strategy on the tourism asset management…TTG is eager to improve activities at the site in order to enhance the visitor experience.”

This phenomenal purchase is just the tip of the iceberg, and there are two highly prolific projects sketched out on the horizon for Mabena and company, that are sure to thrill prospective holidaymakers.

Last year, TTG submitted a bid for a one of a kind hotel to be built in Kruger National Park, already a stalwart South African icon. The proposed glass fronted structure, should it be accepted, will be built within a static train on a bridge over the Sabie River, giving visitors a truly unique view to the East of the park from the comfort of their bedrooms. For Mabena, the status rather than scale of the project is what is pertinent, for it constitutes a globally distinctive scheme which has the capacity to accelerate visitation to the site and other locations within the close vicinity.

TTG has also just acquired a 1400 hectare stretch of land adjacent to the park – in partnership with a land claimant community, wherein it hopes to establish more hotels, a high-end camping experience facility and a nature reserve which incorporates a specialised wildlife observation corridor. This ‘gateway’ project will be a prime edutainment and conservation site, in which animals, humans and the environment can all safely and

sustainably coexist uninhibited.

Gesturing back to the philanthropic modus operandi of TTG operations, the scheme places considerable emphasis on responsible construction, using local and ethically sourced materials and remaining as “energy, water and carbon efficient as humanly possible”. With negotiations coming to an end on this project, it will not be long before it gets off the ground and TTG’s and Mabena’s dream of creating the ultimate South African getaway can be realised.

When asked if he thinks TTG have fully realised their vision of being a ‘world-class’ enterprise, Mabena’s reply is both sincere and inspiring.

For this hardworking, entrepreneurial gentleman, such a title is “an everchanging goal post” as expectations of perfection are forever changing.

Instead, he rests his faith in the idea of self-fulfilling prophecy; that the end result of an experience is completely determined by the mindset in which you enter into it. For him, “the amount of Rands in the bank account is not a true measure or representation of success”. Instead, success lies in the production of a positive feedback loop, created by imbuing a business with goodness and being rewarded with financial and reputational prosperity.

His optimism and drive seem to never falter and so it is not difficult to see why TTG and Mabena are enjoying such well-deserved success – he even muses that “when all is said and done, the future is only brighter”.

Indeed, with such an outlook, Mabena and his ever-growing enterprise are undoubtedly canonical figures in the transformation of tourism within, across and beyond South Africa.

THEBE TOURISM GROUP +27 21 551 0288 info@thebetourism.co.za www.thebetourism.co.za

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TN MOLEFE CONSTRUCTION

The Home Of Engineers

And Development PRODUCTION:

Djamil Benmehidi

In a marketplace so competitive and starved of capital as South Africa’s construction sector, it is telling that TN Molefe Construction is not only surviving but thriving. Through its hard-earned and thoroughly deserved reputation for excellence, the company is recognised as one of the country’s most highly-regarded civil engineering and construction specialists. Having watched the company grow from a plucky start-up into the first-choice government contractor it is today, Managing Director, Anne Ndaba reveals the keys to its success.

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As any seasoned business leader worth their salt will attest, if a year is a long time in business, then a decade is an entire lifetime. When Negi Molefe, founder of TN Molefe Construction and its parent company, TN Molefe Holdings first opened the company’s doors for business, the South African construction sector was still riding the crest of a powerful economic boom. Cranes could seemingly be seen clustered on the skyline of every major city, as cityscapes changed and modernised before the eyes of South Africans.

Today, however, with an economy that is in the doldrums, the country’s construction sector is an unforgiving and competitive place, low on confidence, and characterised by razor thin margins and low returns. And yet while industry heavyweights like Group Five and Aveng have seen their order books shrink by 18% and 13% respectively when compared to the same stage last year, TN Molefe Construction has remained largely unscathed. In fact, one might even go one step further and say contrary to the country’s economic

difficulties, the outlook with regards to the present and future is positive.

“The construction industry is definitely facing challenges, and we can feel the pinch. However, I think we see the infrastructure challenges that South Africa has – there are a number of roads where there have been serious accidents, which have required major work, rehabilitation, and expansion – we are positive that because of the pressure on the government to spend on infrastructure that there remains great opportunity within this area on these projects,” explains Anne Ndaba. She continues: “Though we are in the process of expanding into the private sector, so as to ensure we tap more of this market, civil engineering and construction contracts remains our specialist field.”

Having celebrated its 10th anniversary just last month, there is much for Anne and the company to be proud of in terms of what the company has achieved since 2007. Be it the construction or rehabilitation of roads and pavements, water and sewerage facilities and pipework,

TN MOLEFE CONSTRUCTION MD ANNE NDABA

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storm water infrastructure, or earthworks, TN Molefe Construction has excelled in going above and beyond in terms of meeting client expectations, ensuring that projects are completed on-time and often under budget. This is thanks to the astute leadership of Negi Molefe, a man with over 18-years industry experience, and Anne, who since joining the group in 2004 has risen through the ranks from assistant to division leader.

Additionally, TN Molefe Construction also boasts a professional team made up of 100 permanent and part-time staff, among whom can be found some of the best technical and leadership talent in the sector, and a turnkey business model that covers all design-build aspects of a client’s construction project from start to finish.

Anne elaborates on this, saying: “The engineers and designers work together in-house over the course of the construction project, which means clients don’t need to first advertise separately for a designer and then separately for a company to do the construction side of things – through doing everything here at TN Molefe Construction we kill two birds with one stone.”

The award of a contract by Limpopo Roads Agency for the rehabilitation of road D2244 close to Phalaborwa Town is the perfect example of this. Having very recently had its designs approved by the municipality, work is now underway on establishing the site – the prep work which will allow the company to move in and get started.

So too is the successful near completion of one of TN Molefe Construction’s biggest projects yet, an ongoing three-year rehabilitation contract which saw the company provide invaluable services to the Department of Sanitation.

On this, Anne tells Enterprise

TN MOLEFE CONSTRUCTION

Africa: “The project we have with the Department of Water and Sanitation is a three-year appointment for the provision of emergency services.

Under this umbrella we were appointed 11 for projects valued at R178 million.”

She continues: “If you break it down, eight out of eleven of those projects are complete while work is ongoing on the remaining ones. It was the rehabilitation and refurbishment of different waste water treatment plants, with an example being the big challenge of rehabilitating treatment plants polluting the Vaal River. It’s all part of the civil engineering scope. We’ve done many projects on the pipework of sewer lines – such projects are part and parcel of what we do.

“This appointment and its many projects have been a great success, but there is still work to do. We have completed many of the projects, but there are still projects outstanding.

As a measure of our success, we’ve found that some projects have been extended – they’ve reappointed us, and each time there is emergency work to be done the Department of Water and Sanitation they issue us a purchase order. So far, we’ve received two purchase orders for the work as an extension to the works that we’ve been appointed for, and we’ve delivered significant improvements to the quality of grey water.”

Thanks to its standing as the go-to contractor for a number of government ministries and municipalities, the company’s present is in safe hands. And following its entry into a mentorship and technical partnership scheme with construction industry giant, Stefanutti Stocks, under the Voluntary Rebuild Program (VRP), so too is its future. As part of this very advanced mentorship, Stefanutti Stocks will work with TN Molefe Construction at close range, so as

to help it grow and develop to the extent that the company is able to compete with them after a period of around seven-years.

So, the question is what next for the company. It would appear consolidation and organic growth are top of the agenda. In the past year, TN Molefe Construction has invested R10 million in the acquisition of stock and equipment that is used during the execution of civil engineering projects.

She concludes by saying: “For now, most of our projects are from the state but we’re trying to expand, and the coming years will see us move more into the private market as well. We’ve not yet won private sector contracts from this campaign but we will penetrate this market.

And then there’s our plans for expansion further into Africa, which

will see us greatly increase our footprint.”

Over the past decade, Anne has seen the company change beyond all recognition into the upwardly mobile and exciting company it is today.

And going by what’s in the pipeline, it would be unwise to bet against it taking similarly great strides over the decade to come.

TN MOLEFE CONSTRUCTION (011) 794 7823 info@molefe.co.za www.molefe.co.za

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RPP DEVELOPMENTS

40 Years Strong

PRODUCTION: Karl Pietersen

As one of the country’s oldest and most respected property development companies, RPP Developments, in the year of its 40th anniversary, is proud to sit atop the industry and look back over the past four decades at a job well done.

With a highly skilled and experienced workforce, and a strong project pipeline, RPP is a business that is also looking forward to the next 40 years‌

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THE 15 METRE HIGH, 12,000 M² STATE OF THE ART COLD STORAGE FACILITY FOR SEQUENCE LOGISTICS IN AEROTON BUSINESS PARK

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‘40 Years Strong’ is the message coming from RPP Developments – one of South Africa’s leading commercial property developers. Established in 1977 in Johannesburg, RPP Developments has been on a long and diverse journey. This journey has seen the business move into all areas of the property market, becoming an expert in development, investment and management of retail, commercial, industrial and residential properties for institutional and private investors.

The company has endured through economic, political and societal change and today holds a reputation as an industry leader thanks to its years of delivering quality service.

At the end of the year, RPP will officially mark its 40th anniversary milestone by hosting events that will celebrate its past and also provide its stakeholders with a view as to what the future holds.

“We want to send out the message of 40 years strong,” explains Marketing Director, Jock Seeliger (Jnr).

“We can safely call ourselves an industry leader in our niche. If we’re not the oldest, we must be one of the oldest commercial property development companies in South Africa. We’ve seen a lot of others come and go. It’s not an easy sector, there’s a lot of risk, and it’s easy to get ahead of yourself, grow too quickly and have overheads catch up to you in the harder times,” he adds.

0-40: FROM NOTHING TO SOMETHING RPP began its life as a small concern, started by two individuals, focussed solely on retail developments. It was founded by Bill Fenner and Mike Crawford - Fenner from a retail industry background and Crawford an entrepreneurial developer. They came together and began working on the traditional strip-mall model and this spawned the name, Retail Property

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Projects which later became RPP Developments.

They were pioneers with the regional mall concept which moved away from a strip-mall model to a dominant centre in an area of logistical confluence where you could situate all retailers under one 25,000 m2-plus roof. Two prominent examples include the Centurion Mall (Verwoerdburg as it was then known) and the Northgate Shopping Centre. The 1980’s also saw further expansion into other sectors, including commercial, industrial, hotel, institutional and residential developments.

They also diversified into township development whereby they bought large tracts of land, obtained development rights and then established large secure estates such as the Linbro Business Park.

The company pioneered the decentralised, landscaped office park model and built up various nodes such as the well-known Sloane Precinct in Bryanston.

RPP then started smaller sister companies that focussed on different areas of the property development market, including Bridgeport Properties and Stratford Property Ventures. Current Managing Director, Jock Seeliger Snr and current Development Director, Alan Walker, ran Bridgeport which later merged back into RPP and was converted to Bridgeport Property Administration, the company that handles the property and asset management function of the group.

Joe Reed, current Operations Director, formed part of the Stratford Property Ventures management team and rejoined RPP in 2015.

Jock Seeliger Jnr, had his property start in a related company namely Bluegate Properties that focused on residential development and marketing and joined RPP in 2008 to take over the marketing function. The financial director, David

Emmett, joined RPP in 2016 as part of a strategy which involved a renewed focus on the asset management function of the group.

With the incorporation of Bluegate Properties into the group, RPP has been able to penetrate the lucrative South African affordable residential market. “We’ve completed more than 1000 units for various residential funds. Our residential model is similar to the rest of our business, the only residential element is the product - the structure is a commercial property development structure where we develop a turnkey solution for a pre-negotiated exit.

We’ve been busy with residential development through Bluegate since 2004 and we’ve developed a nice yield producing product which seems to have caught the eye of the residential funds that are all looking to expand aggressively at the moment. It is an exciting space to be in and we are expecting a lot of business from it in the future – if you can develop affordable high density residential units close to public transport routes or job opportunities, it’s a market you can’t saturate in South Africa and it should give us some nice volumes.”

REACHING ACROSS SOUTHERN AFRICA Currently headquartered in Bryanston, with offices in Cape Town, RPP’s historical focus has been in and around Gauteng. But over the years, its reputation has taken it national, all over South Africa and further afield on to the continent.

“Our focus has been on Gauteng, especially Johannesburg and Pretoria, because we are located here, but we have also developed extensively in Cape Town, Bloemfontein, Durban, Pietermaritzburg, Nelspruit, Polokwane, Maseru, Maputo, and Namibia. We also had a small development company in the

RPP DEVELOPMENTS

UK and developed one building which was unfortunately part of a bombing attack by the IRA. We are currently looking at two opportunities in the UK and we are confident that those will be closed and get off the ground soon,” details Seeliger.

The company’s spread is down to its expertise. Not a business to overstate its ability or risk its financial position, RPP has not pushed itself into new geographies, rather it has been pulled in by clients with new demands.

“RPP has carved out a niche – our strategy over the years has been to not focus on a specific sector, but rather to take advantage of playing in the different sectors when those markets produce opportunities,” explains Seeliger. “We try not to compete with the big commercial Reits, although we are capable of developing large properties for them. We like to focus on a horizontal band, across all sectors that falls just under the radar of the really big players. We are a small-tomedium sized developer that can handle any size development in any sector. We can develop properties for clients, tenants and investors that are structured from 100% rental solutions to 100% ownership, or anything in-between. We can do this in any part of Southern Africa and that is why we have become dominant.”

Currently, RPP has a busy pipeline and the company is expecting very little downtime for the rest of the year. “In these tough times, people go back to companies with a track record and longevity – that is a big reason why we have a lot of people coming our way in harder times,” suggests Seeliger.

The company recently completed a 19,000 m2 distribution centre for Studio88; it is working on the much-discussed 30,000 m2 ‘Baia Mall’ in Maputo set to open

at the end of the year; it is busy with the Main Straight, a 11,000 m2 office project in Bryanston; whilst the 5000 m2 Fintech campus in Lynnwood, Tshwane is heading towards completion; it is wellunderway with the 4,000 m2 Letsie office project; and it is also busy promoting the Aeroton Business Park. Another exciting project is the ’43 Plain Street’ for First Rand and FNB in Stellenbosch. Next month, RPP will begin work on a 372-unit residential project in Midrand.

“We’re excited about all of our projects; in our game, just being able to get your shoes dirty is hugely satisfying,” admits Seeliger.

“We’re very excited about a 12,000 m2 cold storage facility that we’re busy with in Aeroton for Sequence Logistics which will add another feather to our cap and we’re excited

about the potential knock on effects in the specialized field of cold storage logistics. Creating a long-term opportunity and a chance for repeat business excites us.”

DEVELOPING A NEW STRUCTURE In order to create new efficiencies and order within the business, RPP is currently restructuring with the future in mind. Management is looking to create a distinction between RPP’s development activities and its investment portfolio.

“We are restructuring and merging our various holdings into a leverageable, consolidated and diversified fund. In the past, our investments have been made up of ring fenced properties with different shareholders and so

World Class Structural and Civil Engineers

54 Peter Place, Hampton House, Bryanston T: 011 706 0443 F: 011 706 6074 Email – mvw@mvw.co.za Web - www.mvw.co.za

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INDUSTRY FOCUS: CONSTRUCTION

FROM LEFT TO RIGHT JOE REED, DAVID EMMETT, JOCK SEELIGER SNR, JOCK SEELIGER JNR AND BILL FENNER

we’re trying to put it all together into a position that will create the opportunity to source better priced funding and create a structure that will make the efficient management of the assets easier which should result in improved returns for our shareholders,” he says.

“We’ve been able to acquire some nice external equity.

Following our restructuring, the interaction between our investment business and our development company will put us in a position to take advantage of a greater number of deals and we’re excited about that.”

And the ability to make the most of all opportunities will be vital in the future considering the state of the local economy which seems to have become predictably unpredictable.

Officially, the country entered technical recession in June and this has created clouds of uncertainty and low confidence around investors. But Seeliger, a self-confessed pessimist,

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remains positive.

“What has become clear is that the systems seem to hold up, even when people are trying to get around it. We have always been of the opinion that volatility creates opportunity,” he says. “It always creates some kind of shortage of supply and there’s always demand. We just have to ensure we are careful, choosing the right properties and working within the right lifecycle of those properties.”

Since RPP’s establishment, the company has faced many recessionary periods and has come through all of them. This experience has taught RPP’s management to remain focussed on core business activities and look beyond shortterm problems.

“Since the downgrades and recessions, people see that the world doesn’t stop spinning even though the hype is massive,” says Seeliger. “As long as you don’t put yourself under short-term cashflow

pressure, you should be able to ride out the difficult times. Tenants still need space and we always provide first-class service. Risks come from everywhere, it’s not just South Africa; take technological disruption for example. The property sector is hugely vulnerable to technological advances and that is why we spend a lot of time thinking about what an office, retail or industrial space will look like in five to ten years’ time.”

DEVELOPING PEOPLE Starting out as a two-man operation in the 70s, RPP has built up its staff count over the years, all the while sticking to its principles of remaining a small/medium sized business.

The company runs an intricate inhouse training programme aimed at integrating newcomers not only in terms of skill but also in terms of culture. Today, RPP employs around 40 people and a philosophy of ‘conducting business with integrity’ is instilled in everyone.

RPP DEVELOPMENTS

“We don’t get someone who walks in and knows everything.

We don’t believe the courses out there are great in terms of practical experience so we have to train our staff. There are so many bright, keen, talented youngsters out there and the key is to find them early and develop them to become very good individuals,” explains Seeliger.

“Our model has been to take on people that show potential and then train them inhouse so that they understand our systems, procedures and culture. Retention is more difficult than recruitment. From time to time, people will move from us to the larger commercial developers and Reits but we are happy when individuals show personal growth and find themselves moving into more senior positions externally if we can’t accommodate their development further.”

STILL A JOB TO DO Property development is an extremely challenging industry, especially in the current economic environment,

with financial pressures coming from all angles. Regulations and costs can scupper many exciting projects, but since 1977 RPP has managed to find innovative solutions to a multitude of obstacles that have presented themselves in the development environment. Seeliger says that with the restructuring of the company and the large number of opportunities in its pipeline RPP is positioned well for the future and there is still much to be done for the company and the country.

“Even though it has been a good 40 years, we feel we are at the start of an exciting new chapter that will take us from strength to strength,” he says “We’re very enthusiastic about the future. We feel the pressures that come with the economic situation the same as everyone else but to date we’ve been able to find solutions to those problems before they become too material in our lives.”

This company doesn’t rest on its laurels or success of the past; it is keen to ensure future success by

developing plans now rather than later. And with the combination of the experience of the founders together with the energy and drive of the younger partners these plans look set to make the idea of ’40 Years Strong’ a reality.

“We still feel relatively young for this industry and even our senior directors show no interest in slowing down yet. We think they’ll be sitting by their desks until the end!” he laughs. “We also have very good young people coming in that we are educating. The structure that we’re putting in place will also incentivise those younger people and I think it will stand us in good stead for the next 40 years,” he concludes.

RPP DEVELOPMENTS (011) 244-8000 jenna@rpp.co.za www.rpp.co.za

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SHELL SOUTH AFRICA

Quality Retail Offering to Grow

Across Shell Fuel Network PRODUCTION: Manelesi Dumasi

‘We put the service back into service-station, ensuring you always leave us a little happier than when you arrived’ is the message from Shell South Africa, and by building partnerships with some of the country’s most recognisable brands to deliver quality across its network, this message has a sound framework to support it.

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BUSINESS PROFILE INDUSTRY FOCUS: AUTOMOTIVE

SHELL SOUTH AFRICA

//

At the start of July, the Department of Energy (DoE) announced that prices at the petrol pumps would fall; a welcome reprieve for motorists around the country. A decrease of 68-69 cents on 95 ULP and LRP, and 93 Octane, ULP and LRP sees customers paying R12.86 per litre. This is the second consecutive month that prices have fallen. Prices of Diesel (0.05% sulphur), 0.005% sulphur and illuminating paraffin have also fallen with the DoE citing global oil prices as the driver behind the decrease.

“The prices of petroleum products decreased, on average, in the international markets in line with the lower crude oil prices.

Oil Prices have reached their lowest point for the year as light sweet crude supplies particularly from the United States as well as Libya and Nigeria (unbound by the Organisation of Petroleum Exporting Countries (OPEC) cut agreement) continue to rise,” said the department.

But lower prices don’t mean

an influx of customers for the country’s fuel retailers. Unlike other industries, fuel pricing is highly elastic in South Africa thanks to a tightly regulated market, so attracting customers remains tricky, despite the fact that they will pay slightly less for certain fuel products.

So how do the country’s petrol retailers attract drivers? What makes a commuter or traveller pull in to refuel? What differentiates one service station from the next?

This is the challenge faced by fuel companies across the country, and one of the world’s biggest, Shell, has positioned itself at the front of the industry by partnering with other brands to offer its customers more than just a ’fuel and go’ offering.

Back in 2013, Shell started a relationship with Vida e Caffe, South Africa’s premier coffee retailer, to bring the Cape Town-based company’s European espresso bar culture to the Shell fuelling network.

The development of this

relationship was driven by changing demographics and changing demands from a rapidly changing consumer base. Shell’s Head of Retail Marketing, Yaasier Abrahams told Enterprise Africa last year: “People’s lifestyles have evolved and consumers are looking for much more than just fuel when visiting a service station.”

He said that the reputation and brand-strength of Vida e Caffe, combined with the nationwide reach of Shell had resulted in ‘absolutely phenomenal feedback’ and the roll out of Vida stores at Shell service stations quickly reached more than 100 sites.

To help further enhance the customer offering, Shell and Vida worked together to develop a new brand, Torrador. A secondary brand of Vida e Caffe, Torrador offers the traditional Vida product range but allows for tailoring of services depending on location, especially with food.

In January 2016, Vida opened its 100th store in the Shell network at Dorp Street in Stellenbosch, Continues on page 45 www.enterprise-africa.net / 5

INDUSTRY FOCUS: AUTOMOTIVE

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SHELL SOUTH AFRICA

Continues from page 41 demonstrating the country-wide demand for the idea, and today Vida covers a total of 150 Shell outlets.

The partnership has had the desired effect with Abrahams claiming that turnover and basket size in Shell convenience stores has increased since the launch. “Where we’ve put in coffee shops, we’ve seen the basket size in the store increase and we’re also seeing an uplift in fuel volumes because we’re attracting more consumers from the forecourt into the stores,” he said last year.

With the market heavily regulated, attracting customers through fuel price is not an option and so pushing quality products and quality relationships are critical parts of the offer. Shell has taken a long-term view on this strategy and over the years has partnered with a number of leading SA brands including Steers, Pharmashop 24, Clicks, Discovery Insure, Spar, KFC, Vida e Caffe, and more. These partnerships twinned with industryleading fuel and lubricant products make for a brand with serious clout.

Abrahams explains that today, the Shell brand is highly-regarded among South Africans and the global organisation realises the potential of the SA market.

“From a brand recognition perspective, we do a global customer tracker on a quarterly basis that we have completed that for the past 15-20 years. Our internal brand metrics show us we are tracking very favourably in terms of brand preference as well as premium fuels perception and we’re currently sitting at an all-time high. From an external perspective, our local Sunday Times does a ‘Top Brands’ survey every year and in 2014, the Shell brand was sitting at fourth in the market behind Engen who is the largest player in the market. Last year, we shifted from fourth to second so we see that

strategies and activities are being well-received.

“We are part of the growth segment within the Group and we will be seeing a lot more investment as we continue to grow and deliver value. We have a growing population where 50% is considered youth with long term GDP forecasts looking positive, as the middle class starts to grow and more people within the economy become upwardly mobile and have access to vehicles and have greater discretionary spend. We think it bodes well for the future of this country. We have a population of 55 million and yes, income inequality

is still high, but the trajectory is very positive for us and the group recognises that.

“A good enabler for our growth not necessarily present in other markets is our service champions who are able to upsell products and build one-on-one relationships with customers,” he says.

INNOVATING THE RETAIL SPACE Regarding the popular Shell-Vida e Caffe partnership, the success remains absolute. “We have around 620 service stations and 150 now have Vida full barista-served coffee,” says Abrahams. “We’ve had an aggressive roll out this year,” he

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INDUSTRY FOCUS: AUTOMOTIVE

SHELL SOUTH AFRICA

adds. “It’s been going really well especially considering the tough economy that we’re faced with. Our local consumers love having our Vida staff making coffee for them amidst the humdrum of their daily journeys.”

Adding to the offering for customers at Shell, Discovery Insure and Clicks have also come on board as fuel rewards partners, contributing loyalty rewards for members who refuel at Shell service stations. In November, Discovery Vitality - which already had a longstanding relationship with Vida e Caffe – began offering Vitality Active Rewards.

“It’s been very successful,” admits Abrahams. “Together with our partners we have provided our customers with convenient offers whatever their mission, and rewarded them for their patronage and behaviour in terms of our fuel rewards partners.”

He highlights once more the importance of a successful retail offering in driving consumer demand and ensuring market share retention. Clearly, partnerships are vital to Shell’s strategy.

“Because margins are regulated, the non-fuel retailing space is incredibly important to us and our retailers.

“It’s an exciting time for us.

As consumers wants and needs have changed, and as technology has shifted, it’s opened up so many opportunities for Shell.

The opportunity to engage with customers across new platforms, such as social media, is allowing us to engage and converse with customers rather than just talking at them, and that is really rich for us.”

When Shell entered the South African market 115 years ago, the focus was simply the sale of paraffin and kerosene. Today, arriving at a Shell service station, a consumer is greeted by a selection of world-

class petroleum products, an industry leading retail operation, and much-desired services from carefully selected partners. “We’ve partnered with Clicks across their loyalty programme and we’ve seen phenomenal results where, in a market where fuel demand is declining because of the broader macro economy, to offer customers value with our partners has helped us defend and grow our fuel volumes and grow our other offers,” explains Abrahams.

“We also have expanded our footprint of Quick Service Restaurants and we have more than 100 at our forecourts, catering to the growing demand for food across the network.”

FUELLING THE FUTURE Despite a flagging economic situation and a general feeling of uncertainty surrounding the country’s short-term future, Abrahams remains positive and says that Shell is committed to the SA market with further investment to come.

“We’re one of the first markets globally to be launching the new positioning for Shell V Power building on our technical heritage that we’ve built with Ferrari over the years as well as the recent endorsement of our V-Power fuels by BMW M,” he says. “In the loyalty space, there’s a lot of development happening and this is an area where we have seen good growth. We have already introduced contactless payment for fuel at the pump across the network to facilitate faster and easier payments for our customers and we’ve seen some adoption. We’re also continuously looking to improve and evolve our Convenience Retail Offers as consumers wants, needs and expectations change.

“Both globally and locally food is increasingly important; people want fresh, they want healthy, they want the food-for-now and food-for-

later opportunities, and they want nutritional value so there are good growth opportunities to explore as the market evolves. From a partnership perspective, we started piloting with Spar as a grocery alliance partner and we will be looking to expand with Spar going forward. We had three Spar pilots within the network as of last year and by the end of this year we’ll have 10 and we’ll also be looking to scale that up at selected locations where the customer mission warrants over the next few years.”

And has Abrahams personal experience of the development of Shell South Africa’s retail offering been something that he is proud of and looking forward to continuing? “You get this sort of opportunity once in a lifetime,” he says. “Where you are able to invest and build CVPs (customer value propositions) for your market, this is the stuff that allows you to leave a legacy for the next generation.

It’s very exciting,” he adds.

“It’s important for the SA population as Shell through our retailers employ almost 20,000 forecourt staff and that is a significant contributor to an economy where you have 27% unemployment. We want to make a positive difference for our people but also for consumers in today’s challenging times. If we can make their journeys a little better every day, that is a good purpose to get up for,” he concludes.

The claim from Shell that to ‘Go Well’ you should ‘Go Shell’ and that certainly seems to be true, and looks like it will only be getting stronger in the future.

SHELL SOUTH AFRICA +27 11 996 7000 info@southafrica.shell.com southafrica.shell.com

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REBA CHEMICALS

All The Properties Of An

Industry Leader PRODUCTION: Karl Pietersen

Freddy Motau of Reba Chemicals tells Enterprise Africa that the company is investing into new plant and equipment to drive an export push. He wants the company to become recognised as one of the top industrial and speciality chemicals suppliers in Africa and these investments are the next step in the journey of this well-established South African business.

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INDUSTRY FOCUS: CHEMICALS

//

Celebrating 35 years of successful operations, Johannesburg-based Reba Chemicals has eyes on future expansion and is investing in a new production plant to develop its export offering.

For the past three decades, Reba Chemicals has been one of the country’s go-to suppliers of industrial and speciality chemicals, but in order to catapult the company to the top echelons of the industry, Managing Director Freddy Motau has identified local manufacturing for export as an opportunity.

“Currently we’re working on a project to expand the product range we started with, which is inorganic metal salts like zinc nitrate, zinc phosphate, nickel carbonate, nickel acetate, nickel chloride and nickel sulphate,” he says. “We have contracted an engineering company

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and they are busy planning a new plant for us.

“We’ve completed research around these products and found that they often go to India. There’s also a local market but we hope to export and that is a real driver behind our expansion.”

Since his introduction to the company more than 10 years ago, Motau has been keen on local manufacture and wants to increase SA production for Reba in a big way. “The reason behind that is we want to create employment in the country and we want to save our customers money on shipping costs which are going up all the time,” he says. “We also want to give them the opportunity to carry less stock. They won’t need to carry 12 months stock as they know that Reba Chemicals is just around the corner and can produce certain products in two or

three days.”

Local manufacturing will also help the company achieve another target of further entering the export market in Africa. However, only certain products will be considered for continental markets. “If we expand into Africa, the chemicals we will sell will be for water treatment because there isn’t a big market for automotive chemicals or other ranges that we produce.

“We undertake a lot of research, especially around automotive products, and if we find that a product is not being made locally we will investigate that market. We like to enter niche markets and make things that are not being made by anyone else locally,” says Motau.

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INDUSTRY FOCUS: CHEMICALS

supplier and distributor of industrial and speciality chemicals in Africa’.

With construction of a new manufacturing plant, exploration of new markets, and constant innovation in the product range, Motau remains patiently committed to this vision.

“Right now, our long-term project is to double our turnover,” he says. “I’m targeting the end of 2018 to achieve this. There’s a number of processes to finalise before we can talk about reaching this goal. There’s a number of purchases to make, we have to arrange finance, and it’s going to take a lot of time.”

Asked if the company would be celebrating 35 years of success as it continues on its impressive journey, Motau says ‘not yet’. He is keen to point out that there is more work to be done.

“We are still a growing business.

We are still hiring people and adding

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more products so our celebrations will come at a later stage, possibly after 40 years when we are settled and the company is where we want it to be,” he says.

STEEPED IN HISTORY Despite the fact that Reba Chemicals is still a growing business, it has a long and noteworthy history and is regarded as an industry leader.

“The company was founded in 1982 by Ronald Whitehorn,” explains Motau. “The name Reba is an acronym for the names of the original management; Ronald, Edna, Brian and Adele. From 1982 until 1985, the company was only selling commodity chemicals like charcoal. From 1985 until 2005, the company’s four core products were developed locally - nickel nitrate, nickel phosphate, manganese

phosphate and cobalt nitrate.

The company was created to manufacture chemicals which were imported.

“I joined Reba in 2005 and purchased the company in 2008.

I brought expertise in water treatment, metal treatment and industrial chemicals. I wanted to add products for these areas to balance the company as we only had very few products for only a few customers.”

Following the 2008 global financial crisis and subsequent recessionary period, Motau (a former-chemist, laboratory analyst and technical product manager) decided that the company required diversification in its product range to mitigate against any slowdown in sales. He oversaw the installation and improvement of in-house production technology, with the

REBA CHEMICALS

assistance of MCEP South Africa – the government’s Manufacturing Competitiveness Enhancement Programme, and now leads a SASDC and ISO certified organisation that is a Level 1 BEE Contributor.

“In terms of volumes, acids are our biggest products,” he says. “Things like sulphuric acid, hydrochloric acid and caustic soda lye are commodities that everybody uses and are therefore our biggest sellers. With products like this, we would only look at those which will sell more than five tons per month. We don’t like to sit with too much stock or open drums. When we started we had around 200 products but as time went by we realised that wasn’t efficient. Today, we have around 50 products and if a particular line doesn’t move, we can move quickly to cut it out of the range – we are not tied back by corporate structure.”

Because of its reputation for excellence, Reba Chemicals has developed an impressive client base, with some of the biggest businesses in the country utilising its products.

“Our biggest customers include Rand Water and Eskom. A lot of the time, our end users do not buy directly from us. Most of our products goes through agents. This is especially true with the mines and automotive businesses,” says Motau.

VOLATILE ECONOMY One of the main challenges that stands in the way of Freddy Motau and Reba Chemicals is South Africa’s unpredictable economic climate.

Sometimes more volatile than the chemicals that the company manufactures, the economy is a cause of concern for the Managing Director. However, the company’s focus on spreading risk and diversifying product range means that much of the negativity has

been avoided, for the time being at least.

“The economy is struggling and it does cause problems,” admits Motau. “However, we are surviving.

We have been successful in creating export opportunities so when our market is slow, Zimbabwe, Namibia, Botswana, Swaziland, Lesotho and others continue to buy. We have learned from the past that we need to spread our risk and have outside markets.”

Another tool used by the company to mitigate against a negative trading environment is ensuring top quality is nonnegotiable. This is done by employing well-trained, highly skilled people that are identified by management as value-adding for the business.

“We deal with CHIETA (Chemical Industry Education and Training Authority) and they will bring student to be trained here and subsidise that training. We take around 10 students for practical and theoretical training each year and as soon as a vacancy arises, we will look to those students to fill the role,” Motau explains. “We prefer

this method as the students know us and we know them and we can ensure a good fit for both parties.

We think this is the right thing to do and we know that even if people do not end up employed here, they will have developed a good skillset for work elsewhere in the industry.”

Thanks to its workforce and leadership, Reba Chemicals is extremely well-positioned for the future. Operating in an industry that has been described as a ‘hidden opportunity’ and a ‘market with growth potential’, the future for Reba looks bright.

“We’re not in a bad position,” Motau says. “I’m not nervous, we’re confident in everything that we do.

We’re financially stable and excited about the future.”

REBA CHEMICALS +27 11 976 4938 www.rebachemicals.co.za

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REMITTO

Way Ahead

of the Field PRODUCTION: Timothy Reeder

Supplier of industrial and agricultural chemicals and support services of the highest quality, Remitto sets out to fulfil its mission with the highest regards to health, safety and the environment.

//

Remitto is a leading supplier of pesticides, insecticides and fungicides. Among the company’s primary focuses is assuring faultlessly ethical business practices in a profitable manner, which combine to bring just returns for its shareholders.

In order to do this, it is reliant on loyal committed employees in a workplace where empowerment, respect and rightful reward prevail to engender the passion and commitment which drives the company to further innovation and success.

As well as its core provision of innovative agricultural practices, Remitto is also placed to deliver expert technical support, and to provide health and safety training to any and all persons working within the specialist field of agricultural

chemicals. Remitto will design programmes for all crops in a vast range of different geological and climate areas, with crop rotation vital to achieving optimal yield on sensitive crops. While very much a customer-focussed organisation, Remitto is also keenly aware of the importance of training and development of its staff, in order to remain ahead of its competitors in the market, as well as its own social responsibilities in delivering these solutions.

These services which have come to characterise Remitto are executed in association with some of the best agents in the various fields in which it deals, and can be found from Namibia all the way to Kakamas, located in the Northern

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INDUSTRY FOCUS: CHEMICALS

Cape province of South Africa on the banks of the Orange River. In such a fast-paced and ever-changing world, Remitto is committed to keeping its clients fully up to date with the latest agrochemical technologies.

These can include active ingredients, good agricultural practices alongside market related information.

Remitto’s core product offering plays a crucial role in the challenge of growing the necessary food and fibre to feed the populace, with UN Food and Agriculture organization IPPC Secretariat estimating that 2040% of our global crop is lost due to plant pests and diseases. Worldwide there are about 250,000 species of plants, with 3% of these, equating to 8000 species, being weeds. Of these 8000 weeds 200-250 present major problems for our food supply and meeting the ever-growing demands placed upon those charged with meeting demand.

In a very similar manner to the steps taken in our gardens to keep them free from pests and disease, farmers use crop protection

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products such herbicides, insecticides and fungicides to help control these thousands of weed species, harmful insects and plant diseases that can afflict crops and cause weaker yields. Whether these challenges are organic or conventional, farmers face them each growing season and are constantly in the market for more effective means to combat them.

The need to employ crop protection products can be dictated by climate, environment and geographical location, meaning that each farm presents its own set of requirements in the spectrum of crop protection products. In order to understand how and why certain crop protection products are used, it is vital to possess an in-depth understand of the science behind how and why they work.

This is because pesticides work in many different ways by affecting their target, whether it be a weed, pest or disease, and therefore employing the correct technique comes only as a result of deep

experience and knowledge of the business.

Jennifer Dewey Rohrich farms wheat, corn, soybeans and sunflowers at Rohrich Farms in South Central North Dakota, and succinctly underlines how this knowledge is at the core of productive farming. “The different ways in which pesticides work are called ‘modes of action,’ and it is typically through these modes of actions that pesticides are classified. The importance of knowing the mode of action needed will allow you to utilise crop protection products successfully. Farmers only utilise the modes of action they need for any given situation. Oftentimes farmers will consult a professional called an agronomist to make recommendations or suggestions.”

Robert Bowling, Ph.D. of Texas A&M Agrilife Extension Entomologist remarks that without pesticides, farmers would become dependent on more labour intensive and expensive techniques

REMITTO

to manage pests. These may include a return to such methods as hand weeding fields, crop rotations and mechanical pest suppression in the absence of sprays. This would entail, in some instances, farmers experiencing significant yield reductions as a result of the ensuing damage from pests when management alternatives to sprays are unavailable. The absence of effective spray options would severely limit production and would reduce the number of acres a farmer could manage. “Farmers would experience a reduction in food quality in the absence of sprays. This could impact the nutritional quality, safety, and quantity of food available to consumers while increasing the cost of perishables. Consumers would have to accept holes, discolorations,

and other blemishes on fruits and vegetables in the absence of sprays.

On-farm profit margins would shrink forcing some farmers to seek alternative means to support their families. Furthermore, production costs would increase, and those costs would eventually be passed on to consumers,� he concludes.

Fortunately, Remitto and its representatives are ideally placed to help keep the farmers ahead in this fight against destroyed crops.

Combined, the parties bring a vast amount of experience to the market, via a team of highly qualified employees and agents who are in charge of the running of its business.

With individuals who have over 30 years of experience each, the customer can expect the most advanced and innovative service and advice, tailored to their own

situation. The company makes use of, and has access to, the widest range of herbicides, pesticides and fungicides, and has spent many years developing strategic partnerships with manufacturers and developers of world class pesticide technologies. All of these factors combine to allow Remitto to provide its broad base of clients with the most appropriate solutions in every instance.

REMITTO +27 (0) 71 659 9217 info@remitto.co.za www.remitto.co.za

The building block for your crop

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011 822 8509

www.enterprise-africa.net / 57

UNIVERSAL PAINTS

Paint Supremo Targets

Universal Coverage PRODUCTION: Timothy Reeder

Offering an end product developed by expert technical teams, Universal Paints makes a locally-produced, quality-guaranteed paint, and focuses on producing and selling quality in every colour it produces through its many affiliate stores.

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INDUSTRY FOCUS: CHEMICALS

the last 35 years. “We won’t look outside of South Africa,” for the moment,” states Diab. “Currently, we are primarily looking at regional - so within our Gauteng region - and then we will look at possibly expanding toward other regions, like the Cape and KwaZulu-Natal provinces.”

UNIVERSAL PAINTS CEO RHONE DIAB

//

The specialised expert advice which Universal Paints offers is the result of many years of experience in this highly technical industry, which allows it to supply and service a broad base of consumers who understand the value of quality, longevity and expert service. It is a company which, although relatively young, is steeped in history, which CEO Rhone Diab makes clear as he takes us through the beginnings of its operations in South Africa.

“If we look back to the very start, some 35 years ago, Universal Paints began as a family-owned business,” he explains. “It has shifted over time from being based around retail stores into manufacture, and then slowly moved away from the retail side to starting our own distribution outlets. Today, we have a factory and 16 privately owned distribution outlets.

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“It is quite a unique model as our route to market is through our Universal outlets - we don’t sell direct to anyone else apart from these license holders.”

There are already plans in place to further build upon this current figure of 16 outlets, primarily to help secure its position within a competitive industry, as Diab details: “Last year, the family business was bought out by private equity, with the aim of allowing it to expand and grow rapidly. We operate in a very tight market at present, where we are not seeing huge growth, and as a result the only way to ensure exponential growth is through rolling out new stores.

“Most recent, in April we opened a new outlet, and are hoping to open more before the end of the year.”

These opportunities for the growth Universal Paints seeks, will be found exclusively within the domain where it has become so solidly established over

DIVERSIFICATION Along with its physical expansion and increased footprint, Universal Paints is targeting diversification in its product offering to tie in with its overall plans for dominance. “Incidentally, we have just brought out a whole new colour range, introducing 10 new colours in addition to the basic colours that we offer as standard. We will be looking at developing a couple of new product ranges that we have never put out before - more water-based products, like enamels, primers and wood care products.

“That said, if an opportunity arose to buy a business we would certainly look at having it run in parallel to what we specialise in.”

Universal Paints carefully selects its representatives, assessing each potential location for a new Universal store to ensure that it will be in line with the company’s overriding ethos. Evaluations are done on the prospective new owners as well as sites to ensure that it is in alignment with the Universal Paints strategy. There are supply agreements between the two parties, and all new stores need to comply with the new corporate identity.

“We then help with the store set up, to be ready for trading. We are involved in staff training, and product knowledge.

This is a logical way of operating, as well as highly innovative, and contributes to Universal Paint’s own bid to cover more ground over a larger area. “Each store has a large amount of independence,” Diab adds, “as long as they are not selling competing products to our paint, they are allowed to sell complimentary product that do not compete with the Universal Paint product.”

This is a unique way of working and

UNIVERSAL PAINTS

gives Universal Paints an ever-increasing base of new customers. Aside from the constant view to expanding its store network, research and development is a key aspect of the company’s plans moving forward. “We’re always trying new raw materials and new resources, in order to create a better and more competitive end product.

“We constantly have our eyes and ears open for anything that will fit into our model. If it is available, we will certainly explore the viability of acquiring those businesses,” says Diab.

A STRONG MIX The key to ensuring Universal Paints continued success going forward will be through continuing to build the awareness surrounding the brand, as Diab explains: “Since I’ve been here we have re-updated the website and explored a lot more

//WE’RE ALWAYS TRYING NEW RAW MATERIALS AND NEW RESOURCES, IN ORDER TO CREATE A BETTER AND CHEAPER END PRODUCT// into using various social media and radio advertising, among other methods, order to get our message out there.”

While not the biggest player in a highly competitive market, Rhone Diab highlights a number of key characteristics which serve to keep Universal Paints at the top of its own game. “Our turnaround time and deliveries to our stores are both very quick,” he says, “and we place a huge importance of the quality control of the product that we make. We make smaller batches of paint which means that we can spend much more time on ensuring

the quality of each individual batch.

“The reason that we are able to offer such a superior product at a cheaper price than would normally be expected, is due the fact that we cut out all the associated middle man costs. As our tagline says - we make it, we sell it, you paint with quality.”

UNIVERSAL PAINTS +27 (11) 462 4284 marketing@universalpaints.co.za www.universalpaints.co.za

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ZORBATEX

Zorbatex Excited About Future

in Southern Africa PRODUCTION: David Napier

Zorbatex towels are sold around the world. Their quality is recognised as some of the highest in the industry. The KZN-based company stays at the forefront of the market in terms of design and innovation, and it has a workforce that is the envy of many competitors. Managing Director, Mike Wood tells Enterprise Africa that rather than looking bleak, like much of the industry, the future is looking exciting…

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While South Africa’s textile industry continues to face challenges the likes of which it hasn’t witnessed before, there are a handful of companies that are bucking the trend and managing to thrive in these extremely tough times.

And make no mistake, times are tough. Minister of Economic Development, Ebrahim Patel wrote an

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article for the Journalist describing the decline of the industry in the past two decades: “At the beginning of 1996, South Africa had about 266,000 clothing, textile, footwear and leather (CTFL) workers. By the end of 2011, the numbers had more than halved; we had only 100,000 workers,” he wrote. “For some time, local clothing, textile and footwear factories had not adequately invested in

new machines and processes or trained workers sufficiently. Nor did most of them develop competitiveness against cheap imports through improvements in design, innovation, quality and speedto-market,” he added. Imports from the East (mainly China) took up the residence on store shelves as SA produced goods fell away. But thanks to a new industrial policy, introduced by government in

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2009, SA players have managed to recapture some market share. As an industry that has the ability to create a lot of jobs very quickly, the manufacture of CTFL in SA had the potential to boost the entire economy, hence the government’s intervention. Since 2009, a number of initiatives have been put in place to protect and enhance the industry and it has had some positive effects imports from China have slowed, job numbers have stabilised and sales of locally manufactured CTFL products have increased.

But there remains much more to be done to improve the future outlook for the industry.

One of the companies managing to realise success in these tough times is KZN-based Zorbatex, SA’s leading manufacturer and distributor of towelling products. In order to capitalise on the success it has created in the past few years, Zorbatex is looking at strategies to increase and strengthen its presence in continental markets, mitigating against any further slowdown at home in SA. “Make no mistake, the economic environment in SA is tough,” says Managing Director Mike Wood. “The retailers are not trading particularly well and that’s why we’ve intensified our export focus. We need to diversify in terms of markets, hence our focus on Africa.

“We have a strategy and we’re fighting the good fight. We’ve been subject to the vagaries of volatile currency and politics but you have to get your head down and focus on sound business principles to move forward. It’s been hard work and we’ve had to ensure we make the right decisions.”

EXPORT Wood explains that expansion into African markets fits the focus of Zorbatex as an African business.

“I’m excited about the future and I’m excited about Southern Africa. We see it as the market of the future and we’re seeing rapid development from an

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infrastructural and trade point of view.

Levels of disposable income are rising and being right here in Africa, we are well-positioned to service the market.

“We’re very African-centric and we source all of our raw materials from Southern Africa. We’re very keen to grow our market in Southern Africa and we’ve already realised opportunities in Namibia and Zimbabwe and we want to move further north into Zambia, Tanzania and Mozambique. We have a presence in those markets through third parties – wholesalers who have taken our products there. Other countries, like Ghana and Nigeria, we haven’t even touched and they present huge opportunities,” he says.

As a turnkey supplier of products including beach towels, bath sheets, bath towels, hand towels, guest towels, baby napkins, face cloths, dishcloths, and many more, Zorbatex’s reputation has taken it into international markets.

“We’ve recently started supplying to the Netherlands,” explains Wood.

“Other areas in Europe can be highly competitive but we have set our sights on improving our share in Europe.

Previously, we exported to the USA although that has cooled recently. We supplied five chain stores in the US on a regular basis and we hope to regain that business soon.”

The slowdown in the SA economy (entering technical recession in 2017’s first quarter and still rated at junk investment grade by some international credit agencies) has resulted in adaptation by many textile manufacturers as retailers and wholesalers look for speed and turnaround time to fill quick-changing consumer needs.

“The average South African has less disposable income and we’re seeing food and groceries taking a bigger portion of spend. Retailers want to take less risk and are moving into quick supply arrangements with suppliers who can offer it. It’s about fast fashion; being able to design something and move it in and out quickly. They are ordering more often

but smaller quantities and more bespoke and, in some respects, that plays to our strengths,” details Wood.

QUALITY Over the past 30 years, Zorbatex has developed a continuous improvementstyle approach to business. It invests constantly in new machinery and seeks endless product innovation to ensure that quality and customer satisfaction remain as high as possible. Right now, the company is working on a number of projects to improve quality and prepare the business for a long-term future.

“We’re working on several strategies right now,” details Wood. “From a technical perspective, we’re busy with projects to reduce our environmental footprint - we want to use less energy and water. We want to remain at the front of industry in terms of technology in the textile business and so we’re always buying new machines that can produce something better, cheaper, faster or higher quality. We’ve noticed that the market is becoming more bespoke; every store wants a different brand or different design so we have our own design studio and they’re continually working on product development and technical excellence. Every year we are reinvesting in the company and updating our plant and that’s one of the reasons that we survive against an onslaught from cheaper producers in Asia.

“Importantly, we’re fully automating our dye house in terms of chemical dispensing, water saving and heat recovery and we hope to have that project complete by the end of the year,” he adds.

With demands from retailers become more complex and difficult to satisfy, suppliers need to be nimble and flexible with products. They need to be developed with the end-user in mind, and sometimes before the end-user knows they need them. Zorbatex’s investments into technology and machine upgrades allows the business to remain fast and efficient and this is why Wood is keen to see the company stick to

ZORBATEX

its core strength and not venture out of its lane at this stage.

“We want to stick to towelling; I don’t want to start expanding into sheeting or something new; I’d prefer to stick to our strengths,” he says.

“Consumers want something different and we’re seeing that come through in the home textile industry. For example, the kitchen is now probably the most expensive room in the house and people want fashionable garnishing to go with it; that’s why kitchen towels have become an important part of our business.”

HISTORY The history of Zorbatex goes back further than the aforementioned industry troubles, and so the company and its management has a lot of expertise in dealing with slow markets, political upheaval, and changing fashions and trends.

“The company is 34 years old,” says Wood. “It’s a family run business and was started by my father. He was an accountant and he got involved with a textile company before they asked him to get onboard in a more official way.”

Currently, Wood and his brother head up the management team, taking over from their father and maintaining an appetite for ambitious expansion and sound business principles.

“We’re based in Ladysmith KZN,” details Wood. “The origins of the business are in Pinetown, close to Durban, but we moved to Ladysmith to take advantage of the infrastructural resources that are here. We have plenty of land, plenty of factory space, plenty of labour, plenty of water, and we’re halfway between the two major markets in South Africa on the main transport link, the N3.

“The focus of the business was originally in the kitchen area, doing kitchen towels and tea cloths before expanding into bathroom towels. Our latest expansion has been into jacquard towels. We make high-fashion jacquard beach towels which we supply to all the major chain stores in SA,” he says.”

A major employer for the region, Zorbatex is home to around 400 members of the KZN community. Wood says that the company is a big contributor to the economy by vastly upskilling the local community and this will continue in the future. “In today’s environment, every company needs to be completely ethically compliant in terms of labour regulations, bargaining councils and government laws, and we pride ourselves on meeting all of those and being able to meet the most stringent audits.

“Our policy has always been to train.

We’re heavily involved with SETA and we’re continually putting apprentices though our business – we spend a lot on training. We have people who started out as basic clerks and who are now managing departments and have their degrees or Technikon qualifications,” he says.

Through this approach, Zorbatex has

developed a workforce that can compete with the best. It is adept at changing direction quickly, using different materials and ideas, learning new skills for new machines, and meeting design needs from tough customers. With the growth of the company’s export offering, the business case at Zorbatex looks strong.

With retailers still suffering at the tills, the question is will demand continue to flow through to Zorbatex. Wood is unequivocal in his reply: “We’re very excited about the future and expect to grow year-on-year as we have for the past three decades.”

ZORBATEX (+27) 036-6310526 mike.wood@zorbatex.com www.zorbatex.com

partnering ZORBATEX for all their towelling wet processing requirements

Terry Cloth Process and end-user-related functions | pre-treatment | dyeing | finishing |

RUDOLF GROUP SOUTH AFRICA - RUDOLF CHEMICALS (PTY) LTD. 17, Progress Road - New Germany 3610 - P. O. Box 2395 - Pinetown 3600 Tel.: +27 (0) 31 7058961 - +27 (0) 31 7058962 - +27 (0) 31 7058963 -Fax.: +27 (0) 31 7058964 E-Mail: rudsales@iafrica.com - www.rudolf-group.com

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LANCASHIRE MANUFACTURING COMPANY

Wearing the Proudly SA

Badge With Pride PRODUCTION: Manelesi Dumasi

Lancashire Manufacturing has a long history of excellence in South Africa and has been named as a Proudly South African organisation. Exporting products around the world and supplying heavily into the local market, this is a business that is excelling in an industry under threat.

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The textile, clothing and footwear manufacturing industry in South Africa is perhaps one of the most under threat sectors in the country. Basement prices from markets in the Far East (China, Vietnam, the Philippines etc), demand for instant turnaround from brands and retailers, everchanging international quality compliance regulations, a supply chain that has been dismantled over the years, constant currency price fluctuations have resulted in the decline of job numbers from 200,000 to under 20,000 in just 15 years.

Clothing and textiles is a big industry for job creation; it remains labour intensive despite a rapid rise of technology.

African governments strongly support development of the industry across the continent. This was highlighted in June when the African Development Bank (AfDB) called for the empowerment of small and medium operators in the textiles, apparel and accessories sectors as a deliberate job creation strategy. The AfDB even launched an innovative initiative, called Fashionomics (the economics of fashion), to increase Africa’s participation in the global textile industry supply chain. Fashionomics exists to support the development of micro, small and mediumsized businesses (MSMEs) operating in the textile, apparel and accessories industry in Africa, with a focus on women and youth empowerment.

South Africa’s clothing and textile industry is worth R12 billion-a-year to the economy and just 12 months ago there was a major push to revitalise the industry when Sactwu (Southern African Clothing and Textile Workers’ Union) hosted the 2016 Clothing, Textile and Leather (CTFL) Imbizo in Cape Town. The industry is the second largest sector in the developing world after agriculture and Southern African governments recognise the potential for job creation. Since ’94, huge sums (more than $1 billion) have been spent on modernising and upgrading SA’s textile manufacturing infrastructure.

But with the threats that face the industry, one being premature deindustrialisation across African

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economies (manufacturing in SA was 15% of output in 1962, plateaued at 25% in 1981, but by 2011 shrunk to 18%), you may wonder if it’s possible to really thrive.

Can clothing and textile manufacturers really create the number of jobs that are expected? Can they exist as technology develops and continues to offer a new hurdle? The answer is not simple, but by looking at one of the industry’s success stories you can see that opportunities exist for those with a sound business case and a quality offering that serves the needs of the market.

Lancashire Manufacturing Company, based in Diep River Cape Town, has been manufacturing clothing and textile products, mainly school wear, for 84 years. The company has built a sterling reputation that spans international markets and has grown its employees base from a small family operation to a become an employer of more than 500 people.

SA HISTORY Founded in 1933 by the Swiel family, the company is managed today by third generation family leader, Marc Swiel.

His grandfather founded the business after moving from Lithuania originally, to Lancashire in England – one of the global textiles centres at the time – before arriving in SA. Second generation leader, Arnold, was born in Cape Town and alongside his brother, he joined the business which had made a name for itself, producing first-class juvenile clothing. By the time Marc joined the business, a strong reputation in the local market had led to international orders and customers in the UK, including John Lewis which would order its school blazer and trouser range from Lancashire Manufacturing. But when international sanctions increased against South Africa, this business was instantly lost. The local market again became the focus for the business before international markets reopened in the ‘90s.

Today, the company exports a large percentage of its product while keeping a strong foothold in the local market. Its Envoy brand is considered among the best school wear brands in the world, and the

company enjoys a reputation for quality and flexibility.

“Envoy, has been the Industry benchmark in School Uniform Manufacturing in South Africa for decades.

This has been achieved by continuously updating our plant and equipment to ensure the best production methods are used by Lancashire Manufacturing enabling us to consistently manufacture highly durable and stylish School Uniforms.

“Lancashire Manufacturing refuses to compromise on quality standards and only the finest performance fabrics, tried and tested over many years are utilised for our School Uniform range,” the company states.

PROUDLY SOUTH AFRICAN Lancashire Manufacturing has achieved sought after status as a ‘Proudly South African Company’. “As a School Uniform Manufacturer in South Africa we are extremely proud of that,” the company says. “It comes as a result of our strict quality standards, fair labour practice, environmental standards and 100% of our direct labour costs incurred in South Africa.”

To be recognised as a Proudly South African company, businesses must utilise local content and spend money on suppliers located in SA; must prove products are high-quality; utilise fair labour practices; and adhere to strict environmental standards. These guidelines are developed by the Proudly South African organisation which was established in 2001 through Nedlac (National Economic Development and Labour Council).

Achieving this status has allowed the company to grow and build its infrastructure. The Lancashire Manufacturing factory is home to a large number of high-tech pieces of equipment and a highly skilled workforce. This helps the business to complete large bulk orders and also smaller, more complicated runs quickly and efficiently. CAD systems are used to ensure precision of designs and patterns. Electronic cutters and automatic

LANCASHIRE MANUFACTURING COMPANY

spreaders reduce manual intervention and improve safety. Modern fusing equipment ensures quality, even through severe temperature changes. Sewing machines have underbid trimmers and are sourced from organisations that supply the best machines in the world.

Automatic jet pocket, PW machines have been installed to guarantee consistency across trouser and blazer pockets, and sleeve setting and button hole machines ensure quality. There’s also a strong focus on safety for the end-user and a needle detector has been installed to ensure no broken needles are left in children’s clothing.

“We assist in creating jobs by procuring from local manufacturers,” the company says.

THE ENVOY ADVANTAGE In South Africa, Lancashire Manufacturing supplies its Envoy brand, and other products, to a number of the big retail chains and school shops. The company estimates that it supplies the uniforms to over 1000 schools, representing significant market share - perhaps a reason why the company has managed to avoid the slowdowns that have dogged the industry over the past four decades.

“The Envoy Schoolwear brand remains truly committed to providing unbeatable quality at a great price,” the company states.

A natural progression strategy for the business to achieve expansion is to look at complementary industry sectors and the management has done just that, starting manufacture of a range of workwear and corporate uniforms in 2013. The Enviado security uniform range is popular thanks to its quality; made from superior polyester barathea weave from a South African mill. Having made clothing for the hotel industry and for security businesses, corporate wear is certainly seen as a potential growth market.

So, Lancashire Manufacturing enjoys a strong brand, is home to

experienced and knowledgeable leadership and staff, is technologically advanced, is wellpositioned, and is exploring growth opportunities; how has it managed to avoid the aforementioned challenges that have seen the industry spiral downwards? The management puts it down to quality, flexibility and sticking to its core strength.

“The key to our success has been the philosophy of ‘sticking to our knitting’ and through this we have become masters in manufacturing School Uniforms in South Africa,” the company says.

With many SA retailers looking East for savings, Lancashire Manufacturing reminds that the quality it produces is second to none, its turnaround is much quicker, and flexibility and after sales service offered are first class. Sticking to

these principles and showing historic ability to deliver on time and to defined quality standards make for a robust offering, one that cannot be ignored. Lancashire Manufacturing is an industry leader and that looks set to remain the case for the foreseeable future.

“Lancashire Manufacturing, the preferred School Uniform Supplier, knows what fabrics perform best, what ‘cut’ children prefer and the features necessary for easy wash and care,” the company concludes.

LANCASHIRE MANUFACTURING COMPANY +27 21 705 3804 sales@lancashire.co.za www.lancashire.co.za

high efficiency. high quality. since 1946.

congratulations to Lancashire for being in business for 150 years

providers of:

worsted fabric.

knitting. yarn.

the Hextex factory

Telephone: +27 23 347 0814 Facsimile: +27 23 347 6117 E-mail: hextex@winetex.co.za website: www.winelandstextiles.co.za

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ALG ESTATES

A Fresh Approach

to Citrus Export PRODUCTION: Timothy Reeder

ALG Estates in Citrusdal is found in the fertile upper reaches of the Olifants River Valley, and forms part of the heartland of the Western Cape citrus industry. As one of the leading citrus farms in the region, ALG boasts an extensive estate comprising a number of citrus farms and a proud tradition spanning more than two centuries.

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GERRIT VAN DER MERWE

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ALG ESTATES

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The ALG Estates themselves can be traced back to the founding years of South Africa and the Dutch occupation of the Cape. Indeed, the gable of the original homestead on one of their farms, Karnemelksvlei, the oldest house in the valley, was built in 1767 by the forefathers of the Van der Merwe family.

Fast forward to the present day and the three Van der Merwe brothers - All, Lieben and Gerrit - lend this familyowned business its name, having taken over from their father Gert and founded the Estates in 1974.

“Farming has been taking place for about eight generations in the Citrusdal valley,” Gerrit Van der Merwe explains to us of the company’s rapid rise. “When we three brothers took over the business from our father we began to expand on the farming side. Then, in 1998 we started our own marketing organisation, and through this all we were expanding constantly; we also owned a fertiliser facility which has been joined by our expansion into a logistics company as well.

“On the farming side, back in 1994 there were four production units; at the moment we have between eight and nine in four different production areas within a 130 kilometre radius. The aim of this approach is to be able produce the same products but with a longer consumption window. By using different production areas, we are able to control the produce to yield two or three weeks later or earlier than we currently have.”

Being privately controlled means that the Estate is capable of hands-on management, which enables stringent quality control of its products. It is structured in such a way as to be able to serve special niche markets and to adjust rapidly to customer demands, whether this is with regard special packaging or other diverse needs.

As Van der Merwe explains, the business has seen rapid growth since its concerted focus on increasing production. The size that the farming operation has now attained has

//WE HAVE ALSO DOUBLED THE CAPACITY OF OUR JUICING FACILITY TO ACCOMMODATE OUR GROWTH// necessitated wide diversification and expansion at various levels, using modern management approaches and scientific farming methods in order to fulfil the greater demands placed on the organisation.

“In Africa, one of the key objectives is to create economic wealth of the community around you, and therefore to provide jobs,” states Van der Merwe.

“This is a real priority for us, and as a result we have expanded our production facility so that we can pack more of our own product, which in turn creates jobs. We have also doubled the capacity on the juicing facility on the processing side, in order to

accommodate this growth.

“We are looking to expand by around 10-15% per annum over the next 10 years, so the packaging facility is not the last facility that we are going to build. The citrus industry is very labour intensive, and brings foreign currency into a country - both of these are beneficial from an African point of view as it creates jobs for every hectare that we expand.”

On the whole, farming operations at ALG Estates are highly mechanised and include scrupulous orchard management with computerised irrigation. Fruit picking is undertaken solely by hand and transported to ALG’s

Quantum Forklifts is proud to support ALG Estates Quantum Empowerment Forklifts (Pty.) Ltd., was established by the shareholders of Yadah Forklift Enterprises CC Trading as Quantum Forklifts, mr. W.P. and me. K. van der Merwe, as the empowerment arm of their existing business which operate and manage 92 forklifts in an area which include Citrusdal (the ‘Hub’ of operations), Op Die Berg - Ceres areas, Clanwilliam, Vanrhynsdorp, Klawer, Porterville, Vredendal, Lutzville, Piketbergberg, Morreesburg and surrounding areas.

Citrusdal is ideally suited to provide these essential services and support to farming concerns and industries, as witnessed by the growth of their operation from humble beginnings in 2009/10 with nine forklifts to 92 currently.

Empowerment: Mr. and Me. van der Merwe’s vision includes a strong focus on their Business being a responsible citizen of the community and contributing to wealth creation and development of the community. To this end the employees’ potential were, and are, developed to acquire skills to service and repair forklifts when called upon to do so. To further this goal, four service vehicles, equipped with the necessary parts, equipment and tools, are available and managed by in-house trained technicians to provide efficient service within 24 hours.

Products handled are perishable and need to reach its destinations in as fresh a condition as possible.

Should farmers/warehouses/industries in the areas enumerated above, rent forklifts from the Cape Town area, the transport and handling costs alone, may be in the region of R 10 000. Quantum’s rental conditions make provision for the client to accept responsibility for daily routine maintenance, to insure the forklift and to pay the rentals as agreed (normally 30-days).

The forklifts are refurbished annually, which includes respraying, in order to gain maximum lifetime for each vehicle (up to, but not limited to 10 years).

Extending the efficient operating lifetime of the forklifts, without the further loan repayment expense significantly increase the operating profit overall.

Cell phone number: +27 83 683 1540 Telephone number: 022 921 3823 Email: Quantumforklifts@telkomsa.net

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INDUSTRY FOCUS: AGRICULTURE

own Packhouse, where it is then graded according to quality and size before being treated to prolong shelf-life.

Accordingly, the company’s headline investment in recent times has been the R180,000,000 plunged into upgrading its packaging plant, as well as two new production units to bolster its present capabilities.

Also forming a significant aspect of ALG Estate’s growth plans is its Black Economic Empowerment project, named after the mountain range in the region: Cedar Citrus. It is the Western Cape’s first redistribution program for previously disadvantaged communities,

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and sees ALG covering all running costs until the orchards are in production.

Cedar Citrus started in 1999 through a unique co-operation between 36 farm labourers, where every individual received his own share of citrus land. In the first year 24,000 trees were planted and a further 12,000 where planted in 2002.

“This has expanded by 60%,” says Van der Merwe, “and we were very grateful for the financial aid from the Western Cape government which was integral to our being able to plant these trees. The project currently stands at 36 hectares and will soon be up to 55

hectares, and the idea is for them to have 100 hectares ultimately. This, for us, constitutes a standalone production unit. Then, once they have established a good, effective production unit, we will look to get them involved in the chain in the packhouse and marketing sides.”

Locally ALG products are transported to destinations as far afield as Johannesburg, Port Elizabeth and Durban, mainly by means of its own fleet of transport vehicles, thus enabling the Estate’s products to be distributed to supermarket shelves within days.

Crucially, however, ALG is also perfectly situated to facilitate the export of its

ALG ESTATES

products as well as the prompt servicing of local markets. Cape Town’s export harbour is only two hours’ drive away, and ALG can deliver pallets of citrus for export to cold storage rooms within days of picking.

“We are very locally-focused,” explains Van der Merwe, “and Woolworths is our biggest customer.

That said, 65% of our product is exported at present, because we simply do not have the strong local markets found in places like the Far East, for example. I am confident that the South African industry is going to grow, from 100 million cartons to 150 million

cartons, but we will be looking to grow primarily in big markets like China, Bangladesh and India, where there is an abundance of people for us to serve.”

He finishes by outlining what will constitute the company’s growth plans for the months and years ahead. “Africa is also an option, of course but it is a tricky one due to the dependence on oil and other issues when looking to enter this market. We are on a slightly different pedestal as many of our products are ready late, well-into the summertime, which does make Africa quite lucrative for us due to its demand for these products. Our main focus will

stay in the western world, in the US and Europe, trying to do what we do and doing it better.

“The world is big, so hopefully it can accommodate our growth,” he concludes.

ALG ESTATES 022-921 3439 www.algestates.com

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KARSTEN FRUIT

World Leaders In Quality Fruit

Production and Export PRODUCTION: Timothy Reeder

The Karsten Group is one of South Africa’s leading agricultural businesses, specialising in table grapes, and is respected locally and internationally for the excellence of its products, cutting edge innovation and integrity in its dealings with staff, service providers and customers.

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The history of the Karsten Group is rich and diverse, one of continual growth and expansion. Piet and Babsie Karsten initially founded their family farming business back in 1968 on Kanoneiland west of Upington along the Orange River. Years later, in 1980, they bought the Roepersfontein farm, which has gone on to become the Karsten Group’s headquarters, and remains so to this day.

Today, fruit is grown on several farms along a 250 kilometre stretch of the Orange River, in South Africa’s most important grape growing region. Piet Karsten sums up the philosophy behind the Group’s many successes as such: “Excellence is the result of caring more than others think is wise, risking more than others think is safe, dreaming more than others think is practical, and expecting more than others think is possible.”

Since the landmark acquisition in 1980, several further key additions have gone on to comprise the Karsten Group story. In 2000, taking on a deciduous fruit and vegetable farm

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in Ceres in the Western Cape has allowed the Group to diversify its product range substantially, and to focus primarily on apples, pears and cherries. In 2004, meanwhile, New Vision Fruit was established by the Group as its dedicated export and logistics arm. The company plans, coordinates and executes the Karsten Group’s fruit marketing, as well as fruit committed to the company by external suppliers and partners.

These arms were joined more recently, in 2007, by Horizon Fruits, established to take care of the logistical services, in addition to sharing some of the marketing functions of New Vision Fruit. Having its own logistics company means that the Group has complete control of the products in the supply chain, and as a result quality is not compromised on the at times arduous journey from the farms in South Africa to its clients across the world. The volume of containers handled has grown from 1450 per year in its first year of operations in 2007 to its present total of 7500.

The establishment in 2005 of Karsten UK as the distribution service

provider of The Karsten Group in the United Kingdom and Europe has allowed the Group to expand its footprint yet further. It looks to effectuate a seamless logistical operation to transport the fruit from where it is harvested in South Africa, to the customer base throughout the UK. Karsten UK’s primary facility is located at Bowman’s Chilled Stores, a cold storage facility in Spalding, Lincolnshire, and here it is responsible for receiving, storing and distributing the product according to marketing requirements, whilst also offering re-packing services.

In 2012, the Karsten Group acquired table grape farms in the Western Cape as part of their strategy to broaden their marketing potential.

Despite boasting a product offering which also includes citrus, top fruit, stone fruit and dates, table grapes are by far the company’s headline product, and in an effort to lengthen the season it has been seeking expansion both into the Western Cape and other grape growing regions.

“The Western Cape is becoming a bigger part of the production,” says Karsten. “We needed to extend production to keep our customer base happy. 70% of our production is from the Northern Cape, but we also grow in Piketberg, the Hex River and Robertson too. We want to extend the season as long as possible but there are obviously some limitations; you can’t go much earlier because you get issues with quality and production. We start at beginning/middle of November and we can supply white grapes till the end of March, and red right into May.” The Karsten Group’s frequent expansion of all aspects of its business is a clear aspect of its plans for domination. In 2013 New Vision Fruit B.V. in Rotterdam was established to supply and deliver services to Europe, while in partnership with other South African companies it has also established a marketing structure, Hydix, to promote and market its products in the Far and Middle East.

KARSTEN FRUIT

Subsequently, the Karsten Group now has a strong logistics and international marketing structure with companies and offices in London, Rotterdam and Cape Town, as well as being backed by companies in the Northern and Western Cape.

“Our preference is to work as directly as possible with the customer,” explains Karsten, hence the need of so many different subsidiaries to serve in all corners of the globe. “There is a lot of risk for us as well as for the customer, but also there are a lot of smaller customers who need a bit more personal attention, which is hard to do from South Africa.

“We deal with other growers to bring down the cost of supply, as the value is in the product.,” he goes on. “When you rely on other service providers there is more risk involved so we prefer to do it ourselves. Service

provision is not a big driver for making profit, it is about making profit on the farms and if you don’t have the right supply chain then you won’t succeed.

It is not about the extra Euro you can make, it is about the Euros you don’t lose along the way.”

It makes perfect sense for the Karsten Group to maximise the scope of its grape operations, given that it is renowned for supplying a range of the best seedless table grape varieties available in the world. As such, the introduction of a twin-lane heat sealing machine, capable of sealing up to 200 packs a minute, marked a significant upgrade from flow wrapping to heat-sealed punnets and laid down a clear marker as to the company’s intentions to remain at the top of its field.

The introduction of the tray sealing machine, manufactured by

Packaging Automation (PA), will also serve to reduce costs and bring notable environmental benefits by making the packaging more widely recyclable, while reducing unplanned downtime by up to 90% through continued operation during repairs, routine maintenance and breakdowns. Bernie Niehaus, packaging and equipment manager from Karsten UK, concluded: “Choosing PA was an easy decision, we had to make our film work. The machine is very easy to use and PA went out of their way to get us the setup we needed to make it simple.”

KARSTEN FRUIT +27 (021) 847 2200 info@karstenfp.co.za www.karsten.co.za

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FORMSXPRESS

FormsXpress:

Inked in SA History PRODUCTION: Karl Pietersen

As your one-stop-shop for any printing related enquiry, Cape Town’s FormsXpress is now one the country’s industry leaders. 25 years old this year, FormsXpress continues to invest in growth and CEO John Donaldson is excited about the future.

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INDUSTRY FOCUS: PRINT

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It’s 25 years and counting for FormsXpress and CEO John Donaldson. The Cape Town-based printing specialist has been delighting customers since before digital, litho or variable data laser printing; since before wide format and LED UV printing; FormsXpress has been at the heart of Cape Town’s printing industry since 1992.

Now offering an all-encompassing print service, FormsXpress can deliver computer forms, lithographic, digital and variable data printing with both reprographic and laser programming facilities. ‘Utilising the best colour management and production software, we are able to produce an extensive range of products in-house and on time’ the company says.

Celebrations of reaching the 25-year milestone will be modest as Donaldson looks to the future with plans to continually invest in state-ofthe-art technology so that the company can run for at least another 25 years.

“We are looking forward to a celebration,” he says. “We haven’t fully decided on how we will celebrate but we will likely include our clients and

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suppliers. Of course, our staff members will be involved and we do have people that have been with us for almost the entire life of the business. We’ve incorporated the message into most of our recent signage and advertising – we’re proud of how far we’ve come.

“It’s taken a long time for us to become recognised but I would say that we are now known for being a serious player in the market.”

TECHNOLOGY INVESTMENT Changing with such rapid speed, the printing industry can often leave small players quickly outdated. “The pace at which technological developments are happening in the printing and packaging industry has increased more in recent years than during the past decade or two. Companies and even individuals who have not adapted fast enough rapidly become the dinosaurs of the industry,” says Stephens Thobela, CEO of Printing SA, the country’s trade association.

With this is mind, Donaldson explains that FormsXpress invests regularly in new technology, spending more than R6 million in the past

12 months alone. One of the major investments has been a new machine which will further broaden the company’s service portfolio.

“It’s the first Komori half-size to be fitted with a LED UV drive system in South Africa,” he says. “It extends our range of products quite substantially.

We regularly invest in new machinery and equipment as we are conscious that we must keep up with the times. I hope, for a time at least, we’ll be unopposed in this area.

“We’ve just moved into the LED market, and we’re also doing wide format printing. We look at the needs of the market and we try to anticipate the needs of the future. Our philosophy is to try and be a convenient, one-stop supplier.”

This approach to business has helped FormsXpress expand its reach beyond Cape Town into other parts of South Africa. even in a market where the threat of low pricing from Asian markets has caused concern, FormsXpress has maintained its business levels and has managed to grow.

“We compete successfully thanks to our location. The Chinese could

FORMSXPRESS

outrun us on price quite happily but our market is too far away from them,” says Donaldson.

“We do some work internationally but our core markets are Cape Town and other centres around South Africa.

We have a couple of customers who are present around the country and we are always on the lookout for more opportunities like this,” he adds.

CONSTANT GROWTH Since its establishment, FormsXpress has grown significantly. Starting out as a two-man operation, the company is now in a position where it creates employment and supports the lives of 120 employees. “We were initially a forms company but we’ve grown into a much more broad-based printer. It started with just myself and a driver and we’ve added around eight people every year – a trend that we hope to continue,” details Donaldson.

Of course, growing an employee base is no easy feat and plenty of money and effort is spent on developing people in the right way. Technical and product knowledge is obviously key and so the company has developed a proven learnership scheme which lasts two years and sees staff gain experience with progressively more complex machines.

“We undertake a lot of inhouse training and that is how we overcome the skills gap,” says Donaldson. “The problem is a bad education system, and that is true worldwide, and that is why we train our own people. We find this much more effective than taking people who have already learned bad habits. We like to take them fairly young, put them through apprenticeships and offer theoretical training. They gain a full understanding of what is required and we gain a well-rounded employee.”

With any growth in staff numbers, Donaldson is mindful of building a presence in other areas of the country.

“We should really have offices in Johannesburg so I think longer-term, that is a definite possibility.”

One hurdle that will have to be navigated as time goes on – the company’s BBBEE rating. Currently acting as a kind of anchor and halting the company’s access to big government jobs, improving BBBEE rating is on Donaldson’s agenda. “It does present us with challenges” he says “but we know that it means we have to run a bit faster than our competition. The future may hold a change in structure to meet new requirements but we’re not sure yet – if it happens, it happens.

Depending on how things develop politically, we will consider the BBBEE regulations and what we can do to improve.”

But right now, business remains exciting for FormsXpress. The company continues to invest in people and equipment, it continues to explore opportunities to build its customer base, its reputation one of the most admired

in the industry, and new products and services continue to be added to the portfolio.

“We have a good, large customers base and our turnover is very stable and doesn’t vary widely from month to month,” says Donaldson.

“We are doing very well and we are happy to reach our 25th anniversary.

Life goes on despite the economic situation,” he concludes.

FORMSXPRESS 021-7015530 info@formsxpress.net www.formsxpress.co.za

Congratulations FormsXpress on your 25th anniversary!

Best wishes for the next 25 years!

www.enterprise-africa.net / 83

ENDRESS & HAUSER SA

Made To

Measure PRODUCTION: Emily Ayson

Within modernity, it seems that the need to have access to a continual stream of precise information is crucial to everyday living. From the mundane, like the speedometers in our cars, to the more critical such as the temperature meters in a nuclear power plant, we have come to rely on technology to keep us safe, aware and able to complete our daily tasks. Industries and enterprises that develop such products are therefore under tremendous pressure to ensure that their goods meet or exceed expectations. One such company that is fulfilling this demand in South Africa is Endress and Hauser SA, a leading manufacturer of industrial measurement devices. Enterprise Africa speaks to Managing Director Rob Mackenzie to find out more.

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INDUSTRY FOCUS: AUTOMATION

ROB MACKENZIE, MD ENDRESS+HAUSER SA, GARTH STRACHAN, OFFICE OF THE DEPUTY DIRECTOR GENERAL, DEPARTMENT OF TRADE AND INDUSTRY, AND KLAUS ENDRESS, CEO ENDRESS+HAUSER GROUP

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The Endress and Hauser enterprise was established in Germany in 1953, but has since flourished into a worldwide operation.

Specialising in products, solutions and services for industrial process measurement and automation, the company develop and manufacture a range of instruments which gauge and record industrial processes such as flow, temperature, level and pressure. These crucial devices allow industrial plants and factories to perform efficiently, economically and without damaging the environment. The South African division came into being in 1984 and it has developed from a small level provider of measuring instruments to a R300 million business.

The company has an incredibly strong name within South Africa and notably holds the monopoly of the local marketplace. Mackenzie notes how although there are similar businesses within the country, the technology they supply is often rather basic or they cannot supply more specialist products such as radar measuring equipment. In contrast, Endress and Hauser SA can provide a full spectrum of sophisticated tools to even the most niche companies. Yet this does not mean that Endress and Hauser SA has been untouched by the difficulties presented by a turbulent economy. In 2016, net sales for the company as a whole fell by 0.2%, although sales figures in South America and South Africa generally

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showed increase.

Mackenzie notes that financial success “very much varies from region to region… We are in quite a difficult economic stage…business is challenging for sure”. He explains that the South African division may have only actually grown by 1% last year, but far from being disheartened, the company continues to set its sights on ensuring that its products deliver and enhance the businesses of its valued clients.

According to Mackenzie, the Endress and Hauser SA mantra and strategy is centred around continual product improvement and development, rather than the injection of completely new products into the marketplace. He says: “We are launching updated products all the time…but the strategy of ours is called ‘evolution not revolution’. We are not necessarily trying to change the way that we launch our products into the marketplace.”

Although the application of the company’s products could potentially span dozens of industries, they have chosen instead to focus on a core collection of seven spheres. For example, Mackenzie notes: “We’ve traditionally had a very wide industry spread… Historically, we have not been very strong in the oil and gas industry, but we have grown that industry significantly in the last 10 – 15 years.”

Indeed, this ability and drive to focus is currently being exercised, as Endress and Hauser SA begins a pioneering foray

into the implications and applications of ‘big data’. The underlying principle of ‘big data’ is that the more information that can be gathered, recorded and analysed, the more efficient human activity and existence can be. This is particularly pertinent when it comes to plants and factories where machines need to always be working to optimal capacity, as do the tools that measure this output. Disruptions to either pieces of equipment can cause financial and temporal strains and affect productivity and safety.

Consequently, not only does Endress and Hauser SA manufacture solid, reliable components, but they have also developed and incorporated into their meters ‘Heartbeat’ technology, a regulatory and recording system. The system allows measuring devices to give real-time, in situ information and diagnostics to users about their machines.

This data can even be downloaded, printed and potentially accessed remotely with cloud technology, providing a constant and tangible reference archive.

Such software eliminates the need for regular human intervention; essentially as Mackenzie notes: “With big data, instruments are able to in some degree self-diagnose themselves.”

Such a development has obvious positive industrial implications and will bring significant wealth and renown to the company. However, as Mackenzie stresses, the intention “is certainly not to help us, the intention is to help our customers”.

Such a sentimental vein flows through all projects that Endress and Hauser SA works on, with a further example evident in its contributions to leading the way in water management. Water is almost a sacred resource in South Africa and therefore positive involvement in this industry, by

ENDRESS & HAUSER SA

default, comes with a reputation for caring about the world and those it in. Endress and Hauser SA produces incredibly accurate flow meters which are used in mines to monitor water levels and quality.

Any notable changes can have drastic effects on the surrounding environment and indeed population, so perhaps in a nuanced way, the company is playing its part in protecting against such disasters.

This dedication to the welfare of others is also demonstrated in Endress and Hauser SA’s efforts to provide tutelage and jobs to often disadvantaged young people. The success of such a niche industry lies in maintaining a steady workforce to continue its good work and name. However, access to education in South Africa is not universal and has a very low emphasis on vocational or practical skills training. As such, Mackenzie explains how the company is playing a vital role in ensuring that knowledge and skills can

be passed on to the next generation. He says: “It is difficult to find the right people.

We do what we can; we have our own internship or learnership programme so we typically train up around about eight to ten people every year in instrumentation giving them the necessary skills they need to work in the marketplace.” He also goes on to note that 30 – 40% of their apprentices stay within the company and that there is high potential for climbing up the career ladder. Similarly, he explains that Endress and Hauser SA is able to act as a source of employees, providing staff with specific skillsets to the other alike or allied businesses that they build close relationships with.

We often take for granted the technologies that help us to function efficiently and stay safe; this is perhaps even more so the case for the companies that manufacture such articles. However, the importance of their work should

never be underestimated, nor should efforts that are made to have an impact on matters outside of the business itself.

Endress and Hauser SA tirelessly works to supply quality and reliable products, but with an emphasis on ensuring that clients are left satisfied and their needs met.

With a proven track record of innovative evolution, the company needs no giant fanfare or marketing ploys to secure its success; it’s clear that when it comes to being the best in its field, Endress and Hauser is already made to measure.

ENDRESS & HAUSER SA +27 11 262 8000 info@za.endress.com www.za.endress.com

Ashcroft Instruments: The Ashcroft Brand of products, are German Manufactured and have been synonymous with quality and reliability in field instrumentation since 1852.

Pressure Gauges

Pressure/Differential and Temperature Switches

Chemical seals, flushing rings, flanges, manifolds and capillary assemblies.

Temperature Indicators

Protea Automation Solutions A division of Protea Electronics (Pty) Ltd Contact: Chantelle Fisher Product Manager Ashcroft Instrumentation Cell: 082 576 6140 or 011 -719 5737 Email: chantellef@protea.co.za Web Page: www.protea.co.za

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CONLOG

Innovative Solutions to

Everyday Challenges PRODUCTION: Timothy Reeder

Conlog is a world leader in metering solutions, a Durban-based developer, manufacturer and distributor of prepaid electricity meters, smart meters and related software applications serving utilities, municipalities and property management companies across South Africa, South America, the Middle East and Africa at large.

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More than ever before, over the last decade there has been a perceptible shift in both consumer spending habits towards and consumption of electricity in South Africa.

Increasingly, homeowners and property developers are turning to prepaid electricity meters for their properties, due in no small part to the ease with which electricity can be purchased. Additionally, the use of prepaid meters makes electricity consumption infinitely more easy to track, in turn promoting awareness and action with regard energy efficiency.

In contrast to the traditional debit order system too, with the prepaid meter the consumer has all the power as to how much is spent on the coming month’s electricity, and remains in control of this expenditure. For these reasons and more, Conlog has striven over half a decade to become a worldwide leader in smart meters and metering solutions.

Conlog produces smart meters designed to assist with utility management, revenue protection, load management and demand management, while focussing heavily also on big data

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analytics and smart city solutions. Its solutions have been bought and used by more than 70 utilities who are all now reaping the rewards brought by its revenue management systems, together with households across the world which have installed a Conlog prepaid meter to become integrated into the daily workings of the home.

Conlog recently celebrated its 50th year in business, having been established in 1965 as an electronics design company.

It has been able to retain its position at the very forefront of the industry thanks to its trademark pioneering spirit which has served to keep it relevant to an everchanging market. “Since the inception of the South African prepayment industry in the late 1980s, Conlog has been at the forefront of innovative solutions that meet the needs of utilities across the world,” former Conlog General Manager Dudley Miller told Engineering News in May last year. “In fact, the majority of our revenue comes from outside South Africa’s borders.

“This comprehensive and holistic approach enables customers to reap the full benefit of their investment and

ensures sustained success, into the future,” emphasised Miller. “Furthermore, over 70 utilities worldwide utilise our solutions and consider the company their preferred prepayment provider. With systems that are available in English, Arabic, French, Spanish and Portuguese, our products have been able to reach millions,” he added. The Conlog factory, which is located at Head Office, employs mainly women, and its engineering department boasts many experts in their relevant fields, including project management, embedded software engineering, hardware design, validation, mechanical engineering, systems engineering and research and development.

It is this policy of constant innovation which has brought Conlog a number of world firsts in the industry, seeing it develop the common vending system and the first commercial scratch-card solution for prepayment. Its heritage of innovation has been recognised with numerous awards, including being named the Best Metering Company for six years out of eight, and ranked within the Impumelelo Top 300 Black Empowered Companies.

“Conlog engineers are well equipped with the knowledge and experience required to develop products that constantly outperform the rest,” Miller pointed out.

Conlog’s breakthrough into electricity prepayment, where it has gone on to make its name in the ensuing years, came only relatively recently - towards the end of the 1980s. Until this point the company had specialised in a number of diverse fields, beginning in the industrial sector and later branching out into such new industries as lighting, automotive alarms and cruise controls. All of these years of diversification were then channelled into its electricity prepayment solutions, in which it has been specialising now for more than 20 years.

In this time, Conlog has grown the world’s largest base of smart meters and prepaid solutions, and developed a footprint which spans over 20 countries across four continents. “We strive for excellence in all areas of our business and are proud of the fact that our meters are manufactured to the highest quality of

CONLOG

standards,” said Miller. “Our focus now is on smart meters, and we are especially excited to witness the value proposition that they will offer society, especially in terms of greater individual electricity empowerment and energy management.”

Conlog was recently acquired, in August of last year, by JSE-listed Consolidated Infrastructure Group (CIG), for up to R850-million. “Conlog is an ideal extension to our primary electricity infrastructure operation Conco and further diversifies our earnings into a fast-growing sector,” explained CIG CEO Raoul Gamsu. “Demand for prepaid electricity is increasing exponentially, particularly across Africa, and we believe this transaction offers the group significant upside potential.” Indeed, the addition of Conlog to CIG was forecast to raise group Ebitda - net income - by more than 35% over the financial year.

Gamsu also highlights that Conlog’s

solutions are developed specifically for cost-effectiveness and ease of deployment, and adds that its R550-million top line business is effectively managed by a young and dynamic management team, which should dovetail seamlessly into CIG’s decentralised operations model. “Conlog is, importantly, less capital intensive than existing power operation Conco and is strongly cash generative,” Gamsu explains, “which will strengthen our Power division’s business and financial model.”

The group’s strategy to operate across a wider geographic footprint enabled CIG to generate 65% of profits after tax from outside of South Africa, of which the flagship Power division contributed 61%.

In addition, Conlog’s and CIG’s geographic revenue split align well, with more than 50% of CIG’s profitability generated outside South Africa. Conlog’s own footprint across more than 20 African countries – with pole position in Southern

and East Africa – generates 60% to 70% of its revenue outside South Africa. Locally, Conlog is also one of the top suppliers of prepaid electricity meters. Conlog is also considering expansion into the Middle East and West Africa.

In CIG’s interim results published earlier this year, Gamsu summated this neatly. “During the period, our international penetration continued to progress and we saw benefits from the synergies between Conco and Conlog post the full integration of the acquisition.

We continue to see opportunities outside of South Africa and will seek to explore these going forward.”

CONLOG +27 31 268 1182 www.conlog.com

ARROW ALTECH DISTRIBUTION, SUPPLIER TO CONLOG OF ELECTRONIC COMPONENTS,

WOULD LIKE TO THANK THE ELECTRICITY PREPAYMENT SPECIALIST FOR ITS LONG AND BENEFICIAL RELATIONSHIP.

www.arrow.altech.co.za

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WIRQUIN SOUTH AFRICA

France’s Wirquin to Expand Further

in South Africa PRODUCTION: David Napier

World leading sanitary equipment specialist, Wirquin, will expand its operations in SA following an extended period of growth. New products will be added to the portfolio, manufacturing capacity will be increased and marketing activities stepped up to help the company realise the potential of the Southern African market and assist in a global push for expansion.

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Leading sanitary equipment specialist, Wirquin, was an idea developed in Western France, in the town of Carquefou near Nantes, in 1969. Dreamed up by Henri Wirquin, a sanitary ware wholesaler, the company was quick to mark its name in the industry, building a reputation for quality and innovation. In 1977, S.A. Wirquin Plastiques was officially

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established by Henri Wirquin and Daniel Le Coent, and the company moved forwards with product development and marketing, with much praise from customers.

The ensuing years saw Wirquin grow internationally, opening up in Portugal, Spain, Romania, and South Africa in 2004. The company has also moved into Russia, China and the UK,

and now has a presence in more than 80 countries around the world. 2017 marks 40 years of innovation Its vast product range is, according to Wirquin, ‘to improve the daily life of private households and professionals’.

Its four core products are the ‘MW2 3/6 mechanism’, the ‘Quick-Clac’, the ‘JOLLYFLEX pipe’, and the ‘SLIM shower waste’. “Today, these four products

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INDUSTRY FOCUS: MANUFACTURING

are known and recognized references worldwide,” Wirquin states.

Globally, Wirquin is now home to 1400 employees with 85 in South Africa.

Sales Director in South Africa is Graham Hogg and he tells Enterprise Africa that the company’s SA operation will play an important role in the group’s global expansion and, locally, Wirquin facilities and product range will be growing this year.

“All of the subsidiaries in the group manufacture components and even finished goods for each other and our sales teams in those areas will determine which products will be suitable. SA has a range of toilet seats and flushing mechanisms that can be used universally around the world,” he says. With a leading manufacturing plant based in Somerset East, Wirquin SA hopes to contribute to the company’s global push into new markets including Russia, Brazil, USA and further afield.

In terms of product range improvements, the nature of Wirquin, which is heavily focussed on innovation, means fresh ideas are regularly introduced and six new products will be introduced in South Africa in the coming months.

“This year we will bring the NANO 6.7, EASY CLIC, SO LOW, VENISIO SLIM, LOCK+ and MODUFIX to the market.

“The NANO 6.7 is an ultracompact basin waste and trap in one, available in four variations.

The EASY CLIC is a universal retrofit 3/6l flush mechanism fitted without removing the cistern and comes with a 10-year guarantee. The SO LOW is the complete DIY solution that truly simplifies the installation of wet rooms in renovation projects and is available in 210mm and 500mm lengths. The VENISIO SLIM is a slim shower channel ideal for renovation, available in 300mm and 500mm lengths. The LOCK+ holds the toilet seat in place, stops seat movement on the pan, is a registered design and has a lifetime guarantee. The MODUFIX

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is ‘One toilet seat with five hinge possibilities’,” details Hogg.

The performance of Wirquin in South Africa has been remarkable over the past few years with the company growing significantly, despite challenging trading conditions and an ailing manufacturing industry. The company’s health is so impressive that it is looking at fresh expansion strategies including increasing its factory capacity and growing into new geographical markets when positive opportunities come about.

“In the past 12 months, we have realised continued growth (+16%) despite tough economic times, and export into Africa, especially Egypt, has been positive,” says Hogg.

“Originally, our factory was 1500 m² and in 2014 was expanded to have 3500 m² under roof. As we take further South African market share our capacity has become constrained and will shortly result in a further expansion being a necessity.

“Expansion further into Africa is dependent on stability and availability of hard currency; currently we are present in SADC countries and will look at other markets as and when solid opportunities arise,” he adds.

There is also set to be further investment into marketing strategies, especially surrounding the company’s website and social media presence, and Hogg says that “social media has revolutionised marketing and will continue to do so, and market trends dictate at least a good website is needed to effectively communicate with customers”.

DEEP SA HISTORY The staff and management at Wirquin’s South African operation have a long history in the industry and, after 13 years of successful operation and growth, the company is now a highly-significant part of the global organisation.

“Between 2000 and 2004 Wirquin was imported and distributed by Actebis 356 CC, a company started by myself,” explains Hogg. “To unlock competitive pricing from the Wirquin Group, and to cement the global strategic position in the OEM industry, the shareholders of Wirquin in Europe purchased the majority share in the converted CC - namely Wirquin SA (Pty) Ltd in 2004.

“Initially this was an import and distribution company based in Somerset East in the Eastern Cape.

In 2006, Wirquin Manufacturing was formed and the process of building a factory in Somerset East was started.

The factory officially opened in 2007, initially producing flushing mechanisms and toilet seats. Today the factory manufactures toilet seats (both thermoset and thermoplastic), flushing mechanisms, plastic cisterns, solar tank cisterns and a range of components to supplement imported components to manufacture wastes and connectors.

“Orientation is given by the group board, and global targets and KPI’s are set by group in conjunction with the respective Plant Managers and Market Development Unit Managers,” he says.

The innovative products that Wirquin manufactures and sells in SA, and across the Southern African region, have vastly improved the way water is used and Hogg is proud to say that the company’s contribution to water-saving is massive.

“Currently, Wirquin saves approximately 10 billion of litres of potable water every year in South Africa due to its MW2 Dual Flush mechanisms. We estimate since the launch of Wirquin in South Africa, thanks to the 3/6L Dual flush, we have helped the country save in excess of 140 billion litres of drinking water approximately 225 days consumption for the city of Cape Town which is currently under severe water restrictions of 100l per person per day,” he says.

WIRQUIN SOUTH AFRICA

ECONOMY IN THE DRAIN? While the progress of Wirquin in South Africa has been fantastic since 2004, the uncertainty of the future has raised issues within the industry and manufacturers are finding it difficult to plan for the future with a lack of commitment to projects from clients. This combined with the health of the economy, downgraded by credit agencies and dropping into technical recession, makes for a challenging environment. But Hogg remains optimistic saying that those that are positive in tough times are those that emerge in a strong position.

“Does the current economic climate concern me? In a word – No. I believe that the opportunities outweigh the negatives. In trying times, it is the bold and resolute companies that will succeed. The biggest challenge is not to get sucked into the quagmire of negativity surrounding the levels of blatant corruption that have been exposed.

“The regulatory, and political environment increase the risks associated with capital investment and midnight cabinet shuffles that result in credit downgrades do not exactly encourage people to spend money on long term projects,” he says.

Alongside the health of the economy is the threat of cheap imports from the Far East that provide competition for Wirquin. But again, Hogg is confident. “Due to our brand positioning, there is not a direct impact, however they tend to draw the whole market lower which obviously affects margins.

“We are separated from competitors by four key elements in our business. First, innovation – it is in the DNA of Wirquin. Second, quality – which is not negotiable.

Third, our comprehensive range of products; and lastly, market penetration – we effectively serve all sectors including PRO, DIY and OEM.” Key areas that do bring about

a cause for concern are human resources and currency pricing.

“It is difficult to find well trained and educated employees, across the entire spectrum of disciplines.

The skills gap is apparent especially at middle management level,” says Hogg. “However, training is always a priority.”

In the past 12-months, the Rand has traded at anything from 17 to 13 against the Euro, and has not showed consistency for a significant period.

This creates challenges for Wirquin.

“A business can manage a declining or strengthening currency, however volatility always introduces risk – it seems that the Rand is easily moved both by international and local developments.”

However, despite these hurdles, the company remains resolute that the future is bright. It’s increasing

product range, improving facilities, strong local supply base, and ongoing growth make for an extremely robust business case.

“Going forward, our targets are between 8-12% growth year-on-year, provided that the country is not downgraded further,” says Hogg.

Globally, the international expansion of Wirquin over the past 40 years has been sensational. In South Africa, its 13 years have been equally as exciting and the growth looks set to continue.

WIRQUIN SOUTH AFRICA +27 42 243 6000 www.wirquin.co.za

CB INDUSTRIAL AND FASTENER SUPPLIERS CC

CK 2003/014025/23 VAT REG, NO : 4660144066 LEVEL 1 B-BBEE

ABRASIVES BOLTS INDUSTRIAL SPECIAL STRUCTUAL FASTENERS SANITARYWARE FIXING FASTENERS

NUTS / WASHERS SOCKET SCREWS STAINLESS STEEL FASTENERS Proud Supplier and Friend to Wirquin SA since 2009 Find out what CB Industrial can offer you: Phone No : 041-4537536 Website: www.cbindustrial.co.za email: cbindustrial@mweb.co.za

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INDWE RISK SERVICES

Risk Services Built On

Century of Experience PRODUCTION: Timothy Reeder

Indwe Risk Services is one of South Africa’s largest brokers offering personal and business insurance, with expertise ranging from pioneering solutions in personal lines insurance and innovation in commercial insurance solutions, through to creative and effective problem solving for larger and more complex businesses.

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INDUSTRY FOCUS: INSURANCE

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Indwe is a leading personal, business and specialist risk and insurance advisory business, which came into existence in 2006 as the product of a merger between Thebe Risk Services and Prestasi Brokers, both of whom had long histories in insurance. Thebe Risk Services was established in 1903 as Hoskens Insurance and in 1992 became the insurance arm of Thebe Investment Corporation, while Prestasi Brokers was established in 1972 and soon

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gained a reputation for its innovative short-term insurance offerings, becoming a fully empowered organisation in 2001.

When these two giants of the insurance world joined forces, the resultant collective took the name Indwe, which is the isiXhosa and isiZulu name for South Africa’s national bird, the Blue Crane. Since establishing its new identity, this relatively young company has continued to build on the combined strengths of its heritage. Indwe sets out to furnish clients with excellent

service, innovative products and timeless values that arise from the decades of experience it has at its disposal.

One thing that has remained constant throughout Indwe’s lifetime has been its striving to learn and grow, to improve the knowledge and expertise it can offer, constantly looking for more effective ways to provide risk and insurance solutions to its clients.

Enterprise Africa speaks to CEO Peter Olyott, who joined Indwe in 2009 and became CEO in 2014, having spent the majority of his professional life at Alexander Forbes. He explains how this desire to continually refine and hone its skills manifests in the company’s day-to-day operations. “Our main investment is into our people, rather than in offices and computers

INDWE RISK SERVICES

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and the like,” he says.

“We do have a number of new initiatives on the go as well however, all of which are in different stages of maturity - some as young as a year, some two or three years into their development.

The aim of these is to diversify the business away from some of our historic business, without totally reinventing ourselves, but to assign some of our core competencies into other areas of the sector that we hadn’t dealt with before.”

The policy of innovation within a packed and competitive industry has also borne an initiative which has had a far-reaching impact for brokers across Africa. “We initiated the Allied Africa Broker (AAB) network, which has representation in 16 countries. It represents a totally different approach to doing business in Africa than perhaps our competitors had used historically.

The network comprises solely independent operators, who are brought together by association rather than shareholding, and it has an empowerment aspect to it too.”

An integrated network of independent, African-owned and operated brokers, the aim is to provide expertise, local understanding and personal relationships to guide risk management in Africa. The AAB is a strategic response to the convergence of the global interest in Africa as a frontier market, which has attracted investments in ancillary services such as infrastructure development and services, including banking and insurance.

“We believe an African-based network can provide investors with the best of both worlds. Our members have local knowledge and experience in their particular territories,” Olyott explains. “As one of South Africa’s largest short-term insurance brokers, Indwe is the key

THE RIGHT PARTNERSHIP IS A CUSTOMER ASSET, PROTECTED And because we care about what is precious to customers, we partner with brokers who understand that our customers valuables are not only assets, but hard work and a lifetime of memories. Together, we continue to grow our business and deliver on our customer promise to do great things.

For more information visit www.ominsure.co.za

An Authorised Financial Services Provider (FSP12)

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INDUSTRY FOCUS: INSURANCE

driver responsible for establishing the AAB’s transaction platform. Indwe also co-ordinates the client base that will be serviced by this network.

“The AAB provides clients with necessary information and a standardised level of service across the African continent. With a strong underpinning of knowledgeable professionals, long-term stability and personal relationships, Indwe Risk Services is proud to have guided the growth of this network,” Olyott expands. “From our point of view, it is not merely about what is in it for Indwe, but rather making

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our partners more successful in their own right.”

The company’s knack for innovation will be a key driver in helping it to continue to forge such a strong position in South Africa’s insurance sector. Economic growth in South Africa was almost nonexistent in 2016 and it was a tough year for the short-term insurance industry, according to Neil Pather of Lion of Africa Insurance.

“With no growth opportunities, the sector saw churn more than anything else with the same business just shifting between

insurers,” he says. “A business environment such as this generally pushes premiums lower. In an already price-sensitive market, it’s an easy win to gain market share, but at the expense of margin squeeze and a race to the bottom.”

As he explains, Indwe’s approach will shield it from the turbulence which this can otherwise create. “ The dearth of growth potential in the insurance sector has meant that innovators have been able to gain an edge.

The creation of new products and new insurance solutions has led

INDWE RISK SERVICES

the path to new opportunities.”

When pressed on what specifically sets Indwe apart from the crowd, Olyott is able to instantly pinpoint several characteristics that combine to make Indwe a cut above the rest.

“Probably the biggest advantage we have over the competition is that we make our own decisions, rather than having them made overseas on our behalf,” he states.

“We are an African business, as opposed to being foreign-held, so we understand Africa - both our shareholders and our management

share this understanding.

“We are very focussed on our particular niches - we are not trying to be all things to all people. We will only take on business that fits into our targeted segments, and we are probably the closest thing to a boutique broker across corporate, individual and commercial spheres.”

Olyott concludes with the vision Indwe has for its future. “We want to transform the business into the vision we have of becoming a broad-based financial services advisory business. We want to excel in the niches we have chosen to

specialise in, and transform our business away from what we had to where we want to be. We have made a very clear decision of where we want to be and we are on that journey now.”

INDWE RISK SERVICES 0860 13 13 14 indwe@indwe.co.za www.indwe.co.za

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C CAVMONT BANK

25 Years and Counting

for Zambia’s Cavmont Bank PRODUCTION: David Napier

Zambia’s Cavmont Bank is set to open a number of new branches to help service areas of the country where its reach is limited. It is also set to enter the mobile payments sector in an effort to bring unbanked Zambians into the formal banking environment. All of this in the year of its 25th anniversary – Cavmont Bank is an extremely exciting operation and this year could be an important milestone in its impressive history.

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Cavmont Merchant Bank first opened its doors in October 1992 and the journey of one of Zambia’s most successful commercial banks began. Now celebrating its 25th anniversary, Cavmont Bank is home to around 50,000 clients and 270 employees.

It provides a sophisticated product portfolio through its branch network of 19 outlets across the country.

After its initial establishment, Cavmont Merchant Bank merged with New Capital Bank in 2004 and the new entity became the Cavmont Bank that Zambians know today. In 2007, following the search for a strategic investment partner, the Namibian group, Capricorn Investment Holdings (CIH), acquired a 44.2% shareholding. At the start of 2017, CIH increased its stake in Cavmont, taking a 97.9% effective shareholding in Cavmont Capital Holdings Zambia, which owns 100% of the share capital of Cavmont Bank.

Starting out as a relatively small operation in a relatively small market,

Cavmont has always been an ambitious organisation, continuously targeting multiple market sectors with high-quality products and first-class service. 25 years on from its original inception, Cavmont celebrates modestly.

“It’s a big deal; 25 years of operating is quite the milestone,” says CEO Charles Carey. “We’re celebrating in an understated way; we’ve advertised and sent messages out to customers; we haven’t paraded around in a marquee fashion but we’ve recognised our key stakeholders who have supported us over that quarter century and we feel that’s an appropriate way to celebrate. It’s a humble 25 years and our celebrations have been appreciated by the people who recognise our contribution.”

Carey, who joined the business in 2013, has overseen a number of changes at Cavmont and says that after 25 years of development, it is now working towards global recognition for excellence.

“Our ambition is to ensure that we continue to improve and ensure that

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INDUSTRY FOCUS: FINANCE

anyone coming into a Cavmont Bank, from whichever market, associates us with other world class financial service providers.

“There are fundamentals across the business that you’d expect to receive anywhere from high-street London to high-street Lusaka. If you went into a branch here, even if you’d never set foot in Africa before, you’d see the similarities to flagship branches of banks anywhere in the world. We’re keen on ensuring that the infrastructure supporting our products and services is as robust in Zambia as it would be London or New York – that’s where we’re still growing as we’re reliant on different service providers such as power producers or road networks which are under a lot more strain here compared to other financial centres.”

To ensure growth continues, and to guarantee outstanding service for existing clients, the next phase in Cavmont’s growth strategy comes in the form of physical expansion and the opening of six new branches, creating jobs and opportunity for Zambia.

GROWING FOOTPRINT “If you look at our origins geographically, we had a biased towards Zambia’s northern provinces. Traditionally, we’ve targeted northern areas close to Lake Tanganyika and south from there. We’ve not grown in the central and southern areas and we don’t have a huge eastern coverage so there’s large swathes of Zambia that are underserved or not at all served by Cavmont,”Carey explains.

“We have identified market areas where we know we have reputational advantage. We’ve established our credibility in the market, we have a brand that people trust and we’ve won a number of different accolades both locally and internationally. In the financial sector, we’ve picked up achievements as the second most well-recognised brand, and across all sectors we’re known as the third most recognised brand in Zambia.”

Currently, Cavmont is present with branches in Lusaka (6), Chingola, Ndola, Kitwe (2), Mbala, Mpulungu, Mwense, Solwezi, Chipata, Chililabombwe, Kasama, Mansa and Mufumbwe.

“We’ve put a lot of effort into building up

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our presence and being able to extend our brand credibility across different geographies so the six different towns that we anticipate moving into, in the southern, western and eastern areas, will help complete our footprint and will help support our customers that have a growing need for nationwide coverage,”details Carey.

He adds that the majority of the planning is now complete and all that remains is to develop partnerships with local businesses to begin the roll out of the new branches.

“We’ve done the business cases and we’re now looking at what partnerships we need to set up to develop the network. We don’t want to go in and buy land and build branches but there are a number of areas that are transforming their BTL proposition; there’s malls going up that we think fit around what we’re doing, and we want to build BOT-type (build-operate-transfer) partnerships.”

Zambia is an extremely urbanised nation (one of Africa’s most urbanised), and more than one half the approximately 15 million people reside tightly around a handful of economic zones sitting along the main transportation links. Rural areas are underpopulated, underserved and are home to higher levels of unemployment. Cavmont has had to choose its new locations carefully and, alongside its growing footprint, the company will look to attract a whole new group of customers through further innovation in its production range.

CAVMONT MOBILE PAYMENT PROGRAMME According to the IMF, Africa is poised to ‘become the epicentre of mobile payment adoption’. McKinsey&Company agrees, saying‘Sub-Saharan Africa offers tantalising potential for mobile financial services’, and the Financial Times has lauded the mobile payment industry’s ability to‘spawn entrepreneurs’. The well-documented success of M-Pesa is the perfect case study for those looking to enter the sector and Cavmont plans to launch its new mobile payment product this month with the hope that, like M-Pesa, this innovation can bring the‘unbanked’into the formal banking environment.

“Access, cost, usage and other factors are starting to redefine what banks can do for customers and that’s something that we embrace. We’re now in pilot stage of our initial foray into mobile banking and we anticipate having our product in market at the beginning of our financial year, or July 1st,” says Carey.

“Globally, branch foot traffic is diminishing significantly on a quarterly basis and therefore you can end up with a legacy infrastructure which is not being utilised at the levels they should be. We don’t suffer from that yet. Our network is reasonable but not overly burdensome. We can effectively leapfrog that capital asset position by using mobile technology which is a broadly accepted concept. Mobile technology in Africa has grown exponentially; our penetration of mobile banking is around 80-90%; there are only 40,000 landlines in Zambia but more than nine million mobiles,” he adds.

“The data in the market is shocking and suggests that financial inclusion both formerly and informally is still under 60%.

Our population is around 15 million and around three million have accounts so that means we have around eight million of age potential account holders and that’s a big opportunity to grow the business – not just by the number of accounts but also in terms of value. There’s a tremendous amount of informal trading activity, and a business sector that is almost entirely cash-based and from a number of perspectives bringing the informal economy into the formal side would benefit and stabilise the wider Zambian economy in a big way.”

The 2016 Zambian banking Industry Survey from PwC found that financial inclusion is certainly an issue that needs to be addressed.“Financial inclusion remains high on the agenda of the Government and regulator,”the report said.“The challenge facing the industry is how to provide services to the‘excluded’part of the population that are typically located in rural areas with poor social infrastructure.”The report’s author, Andrew Chibuye, suggests that technology will be a driver in this regard saying:“We believe that technology is the biggest game changer for the industry. Leveraging

CAVMONT BANK

technology to stimulate growth is a key priority for all players in the market. The banks that adapt best to technological changes and make the best use of complementary service providers, such as mobile phone companies, are likely to achieve an improvement in efficiency and customer service while growing their customer base and revenues.”

Carey agrees.“Whichever way you do it, bringing in those cash trading individuals presents a big opportunity. It’s a perennial issue but is it impossible? Clearly not, the opportunity is absolutely there. Informal markets still provide huge potential for businesses like us.”

Kenya’s M-Pesa supports livelihoods by providing access to medical insurance, bill payments and small business loans to those who would be excluded otherwise.

“We’re highly ambitious with our targets.

The more aggressive and more focussed the institution is on that opportunity, the more spoils you will take,”says the CEO.

the significance of a strong savings ethos to a strong economy. Using digital tools as well as traditional marketing methods helped Cavmont to reach its target audience, reinforcing the importance of technology in the industry.

“We’re not a deep-pocket marketing organisation and we do work with a lean budget so the creativity that we need to deploy product launches makes things more challenging.

However, we do expect a big bang when we market and we do smart things to get the coverage from media.

We’re good at what we do and other banks look at us and wonder how we achieve what we do.

“We’re among the top followed organisations in Zambia on Twitter and Facebook and that’s because we recognise the opportunities to connect with people for very low cost. We

recognise social media as a strategic initiative, and the rate of growth that we’re experiencing is significantly more than that of our competitors,” says Carey.

ECONOMIC STORM With all the brilliant work that Cavmont is doing, and has done over the past 25 years, significant challenges still remain, and the banking industry and those involved are clear that in order to move forward in the correct fashion, challenges must be faced head-on and innovative solutions must be sought.

The first, and perhaps largest, hurdle that the banking industry faces is the economic climate. Locally and globally, predicting the direction and health of any given economy is now more difficult than ever. The Zambian economy was the darling of international investors in 2012 while its neighbours were still feeling the hangover from the 2008 recession. Its debut euro bond was oversubscribed by a spectacular

PROMOTING A SAVINGS CULTURE Another arm of Cavmont’s reach into the unbanked community are its popular savings products. Launched in May 2014, the Imiti Ikula children’s savings and Imbasela accounts are directed at addressing the needs of the public by providing them cost-effective, value-driven and tailor-made solutions.

These accounts were specifically marketed towards unbanked individuals and in just two years, the products have grown to become an important part of the Cavmont stable.

“Looking at the numbers we bought in with those two accounts, it’s now just under 25% of our total customer base so it has grown significantly, and the values have also grown,” details Carey. “The cash that we’re holding in those accounts makes for interesting reading. It’s not big, high net worth individuals, they’re small accounts so we believe they are quality savings products, pitched at the right audience, with the right functionality.”

Cavmont marketed the importance of a savings culture to young people and small businesses, and emphasised

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INDUSTRY FOCUS: FINANCE

CAVMONT BANK CEO CHARLES CAREY

CAVMONT BANK

15 times, attracting orders of nearly US $12 billion, even though it was offering lower interest rates than some developed-world bonds. Investment was also coming in big from Canadian and Swiss mining companies looking to get involved in Zambia’s rich copper sector, a sector which contributed 70% of the country’s export earnings. But in 2013,‘14 and‘15, copper prices tumbled thanks to weak demand from Zambia’s top trading partner, China. Between 2004 and 2014, the economy grew at an average of 7.4% but this slowed to just 3.4% in 2015 and now sits at just under 4%.

“We’re not a huge economy”admits Carey“but we have grown considerably over the last decade. However, when we get a headwind it does slow us down considerably.

We went through, and are probably still in, a bit of a storm. We’ve seen a drop in metal prices and they’re not at levels that we need to inspire industry. We then had exchange rate volatility and we’re down by about 40% from where we were two years ago. We then had inflation moving from single digits to over 20%. We’ve also seen infrastructure setbacks as the economy’s power is largely based on hydro and we had a decrease in seasonal rainfall resulting in load-shedding.

Together, these things impacted the economy and we lost GDP percentage points. Fortunately, we have the capital base to invest in alternative power sources and we’ve always been able to ensure that our product is seamlessly delivered.”

For Cavmont Bank, Zambia’s economic plight does not go unnoticed but the company has remained largely unaffected and continues on the growth path – the sign of a well-run business and a sound strategy.

“In the last few years, we’ve grown our number of outlets and our headcount so we’ve avoided detrimental outcomes from economic challenges and that’s because our approach to business is a long-term one and we know how to be careful with our customers and prudent with our lending.

Instead of looking at unpopular short-term cost cutting, we looked at lean management principles and refined operational costs wellbefore the pinch kicked in so we were better able to survive any storm.

“Liquidity has kicked back in, the

government’s concern around exchange rates has abated slightly, cash has been released into the market, and as a commercial bank that is what we thrive on to developed economic activity,”says Carey.

Of course, the ability of Cavmont to develop successful strategies comes from its employee base, which Carey regards as the best in the industry.

CAVMONT PEOPLE “We have a developed sector and a good infrastructure for education around literacy.

The banking sector is seen as an attractive job market for graduates so there’s not a real scarcity of talent but we do operate with a high price. Because of this we’ve started to invest in developing talent rather than buying talent. If we go to the right sources, we can pick up very intelligent and educated people who may not have experience in the banking sector but with the right training and development we can make most people very good bankers.

“Looking at our capacity, a number of our bankers haven’t been formerly trained in finance but we see a level of desire to continuously develop oneself and that is particular to the Zambian market. We have a programme through which we pay for the education of our staff and from our perspective, that’s an investment well-made.

We see that as soon as someone completes an accountancy or finance qualification, they’re onto the next and there’s a constant ambition among our staff to self-improve which is very healthy,”explains Carey.

With six new branches set to open soon, a focus on people development, and a growing interest in innovation and mobile banking, Cavmont will continue to create jobs and provide Zambians with economic security – one of the five pillars of Zambia’s seventh National Development Plan.

SET FOR THE FUTURE Through mergers, changes in ownership, technology advances, recession and expansion, Cavmont has remained steadfast in its vision; to be a world class bank rated amongst the best in Zambia with a focus on partnering with all its stakeholders. Although Carey doesn’t see

this vision to be achieved just yet, he is confident that Cavmont Bank is quickly heading in the right direction.

“We are recognised as a good quality bank, whether we’d be seen as world class yet I’m not sure, but in terms of delivering quality across the market to stakeholders, I think we are on track. Everyone is ambitious for us to continue growing sustainably and the level of engagement and support we have is testament to the fact that we are on track,” he says.

Growing into the mobile payments market, delivering quality service to customers through a respected product range, and, most importantly, growing its customer base, Cavmont Bank has every reason to celebrate.

“For many years Zambia has proven itself as a robust market and an area where if you do the right things, and do them well, you can do good business and we prove that,” says Carey. “We’ve had customer growth rate of 25-30% per annum and our deposit base is growing.

If your deposit base is growing, that is an indicator of how you’re treating your customers and the level of confidence that they and the market have in you.”

25 years of successful operation and growth has seen Cavmont cemented among the market leaders and who would bet against this determined and exciting organisation growing even further and targeting the industry’s top spot? For Charles Carey, more can still be done: “This isn’t a project for me; I’m fully invested and I wouldn’t say mission accomplished. There’s still a lot to deliver and a number of challenges to bring adrenaline. I’m here to stay for as long as my board and shareholders think that I’m adding value.”

CAVMONT BANK +260 21 1360023 @cavmontbank www.cavmont.com.zm

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KIT KAT CASH & CARRY

Kit Kat Group’s Impressive

Expansion Continues PRODUCTION: Karl Pietersen

Pretoria’s Kit Kat Group is famed for its hugely successful cash and carry and Build Mart operations. But now it is focussed on rolling out its model nationwide, despite economic sloth. This is an ambitious business that is doing the right things and sticking to the values that built it.

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INDUSTRY FOCUS: RETAIL

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The importance of relationship building in business development has never been more prominent.

Building strong bridges with customers and suppliers is now one of the decisive factors in business survival. All of the major players across all industries have loyalty schemes for customers and benefits for top suppliers. In the retail market for example, international players like Tesco, Costco, Pizza Hut and Nando’s all employ loyalty programs to build relationships with clients.

In South Africa, Shoprite and Pick n Pay have their own versions, and even some of the most famous entrepreneurs of them all, Bill Gates and Steve Jobs, have been quoted saying ‘every day, we’re saying how can we keep the customer happy because if we don’t someone else will’ and ‘get closer than ever to your customers; so close that you tell them what they need well before they realise it themselves’.

But relationship building is a quickly changing idea. It’s no longer a case of simply sitting down for a meeting or sending an annual ‘thank you’ note. It’s shrouded by social media influences and competition. This is true for both customers and suppliers. Look at LinkedIn relationships or example.

Often, Directors of businesses are barraged with requests to connect but after they accept an invitation to ‘become friends’ they will never hear from connections again – the relationship is not real. American entrepreneur, Mike Muhney describes the situation in his book, Who’s In Your Orbit?: Beyond Facebook – Creating Relationships That Matter. “Social media has injected a sense of imbalance, especially in the younger generation,” he says. “I can’t rely on you to follow what I put out there on Facebook or Twitter and then think I have a relationship with

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you. I call it relational voyeurism: I want to poke around and see who’s in your network. Part of good relationship management is helping people not to forget you.” Face-toface still has a very important part to play in building trust, he says.

This is very much the view held by Kit Kat Group joint-CEO, Ahmed Gani. The Pretoria-based cash and carry operation is growing quickly and positive relationship building has been a cornerstone in the organisations strategy, held among the company’s most important values. He strives for open and honest communication with customers and the same for suppliers.

“We build up good relationships with suppliers over time,” he told Entrepreneur Magazine. “A lot of suppliers feel cornered by the large chain groups so they look for outlets of our type to leverage themselves and get into the market without being dictated to too much.

“In order to sell competitively you’ve got to buy competitively so when we sit across a table and do a deal, we fight to get the best possible price, structures and payment terms but once we shake on it, we honour it.”

And this commitment to mutually beneficial relationships counts for customers too.

“Customers see the value of dealing with hands-on type operators,” Gani said.

At the company’s headquarters in Pretoria, he ensured his office overlooks the exit so that he can see people as they leave. He wants to make sure people leave happy and smiling.

“I want to see that nobody looks unhappy as they walk out.

I want them to see me so that at least our eyes can meet and we can greet each other,” he said, highlighting the importance of personal interaction. “If you are

not satisfied you can meet the MD of the company in a minute and we can immediately try to rectify things so that you leave here as a happy client.”

This approach is clearly working for Kit Kat. In the past three years, the company has seen major growth. It started out as a small café/corner shop business in 1953 when Gani’s Grandfather started up in Pretoria’s Asiatic Bazaar. It grew to include a handful of small retail outlets, before opening up a 2000 m2 cash and carry offering. A major milestone came in 1999 when Kit Kat opened its flagship store; a 20,000 m2 outlet just a few blocks from its original store.

Today, the company is exploring international expansion have already built a presence in Dubai.

It is looking at growing its online offering, investing in its website and delivery tools. The company is also looking at increasing its footprint by further exploring franchise-style options with its Kit Kat Express model. Kit Kat Express stores are designed to be smaller than the flagship premises, 200 m2 in size, but to act as suppliers into certain regions, buying from the company’s main store. According to Gani, it’s about creating customers for themselves. “We only have a few Express stores just now but we aim to grow that that up to 100 stores in the next two to three years.”

The company’s reputation is something that the CEO is extremely proud of. “We feel highly contented that it is overwhelmingly accepted and recognised by our valued customers as a trustworthy brand. The trust of our customers in our brand constantly motivates us to offer better services,” Gani says.

But with the state of the South African economy halting many plans for growth, is now the time to pursue growth?

INDUSTRY FOCUS: RETAIL

ECONOMIC SLOWDOWN Gani admits the economy is not as strong as it could and should be, but remains upbeat, mainly thanks to the reputation his company holds and the trust placed in the business by its customers.

“The market has seen a few turbulent phases during the past year, but we believe there is an underlying improvement in the market sentiment,” he said at the end of 2016.

With conditions worsening in 2017, times are now very challenging when it comes to growth. retailers around South Africa are feeling the pinch as

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the country’s outlook remains unstable and unpredictable. After entering technical recession earlier this year, and being downgraded by international credit agencies, confidence in the market is waning.

Over the past six years, the retail sector has outperformed economic growth. However, analysts don’t expect this trend to continue this year. Edcon and Stuttafords have already seen dramatic effects of a poor trading environment. In July, IoL’s Business Report described findings from Rand Merchant Bank and the Bureau for Economic Research which indicated that business confidence in the second quarter of this year had slumped to levels last seen in 2009.

“The retail landscape has changed and I don’t think we are going to see a lot of growth in the overall sector. We will see winners and losers and right now it’s going to be about evolution,” says Stefan Salzer, Partner and Managing Director at Boston Consulting Group South Africa.

But Kit Kat Group continues to push forward and this is where its successful relationship building ability has come to the fore.

Identifying the trends around online shopping some time ago, Gani and his team quickly set about updating the company’s digital presence.

It is active across all prominent social media platforms, it advertises heavily to shoppers through Twitter and Facebook, and it creates weekly promotions to bring savings to customers. All of this comes through a well-planned digital strategy. Currently trialling a new e-commerce website, which has been in development for the past 18 months, the plan for Kit Kat Group is to have the full stock list of more than 50,000 products available to customers online. While the Kit Kat Express stores will probably only stock around 2000 products as

KIT KAT CASH & CARRY

they open, the website will allow any product to be shipped to an Express store for collection creating convenience and potential further business.

Now is the time to invest in such a strategy. The recently released Internet Access in SA 2017 study from World Wide Worx with the support of Dark Fibre Africa, shows that the South African internet user population now sits at around 21 million meaning that the country will reach the 40% internet penetration mark this year. “Reaching the point where we can say every second adult South African is connected to the internet is a major landmark‚ because internet access is becoming synonymous with economic access‚” said Reshaad Sha‚ Chief Strategy Officer at Dark Fibre.

Kit Kat Group is proving that with determination and a commitment to strong core values, you can succeed when times are tough. This is a business setting an example to follow. International expansion, opening new stores, adding to the product range, buying property, creating jobs and all the time building successful relationships with customers and suppliers – the business case is extremely strong.

“The journey has been brilliant; it’s been absolutely amazing,” says joint-CEO Riaz Gani. “We love change and we realise we have to adapt to the ever-changing economy and we have to adapt to the ever-changing world; that’s the reality of life.

“We plan on becoming a national player in the FMCG

industry of South Africa – our philosophy is very simple: go big or go home,” says Ahmed.

With many retailers being forced to hold back, or worse, Kit Kat Group is showing off its hard earned success as an industry leader, and this looks set to continue for some time to come.

KIT KAT CASH & CARRY 012 327 6100 info@kitkatgroup.com www.kitkatgroup.com

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EXHIBITION CALENDAR

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

IOO%design

South Africa

CAPE CONSTRUCTION TRADE EXPO AUG 15 | CAPE TOWN The Cape Construction Trade Expo is the ultimate marketing experience for suppliers and solution providers to the construction industry. Boasting over 100 exhibitors, this trade expo plays host to suppliers and solution providers involved

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UGANDA TRADE EXPO UMA Exhibition Centre Lugogo, Kampala AUG 09 – 11 100% DESIGN SOUTH AFRICA Gallagher Convention Centre AUG 09 – 13

®

100% DESIGN SOUTH AFRICA AUG 09 | JOHANNESBURG Launched in August 2014, 100% Design South Africa is the leading high-end curated showcase of the most inspirational designs and designers.

100% Design South Africa takes place alongside the popular and wellattended Decorex Joburg and is the perfect platform to source South African and international furniture and product design as well as lighting, interior design, surface and materials for the residential, commercial, hospitality and office sectors.

THE WEDDING EXPO Durban ICC AUG 05

in pre-construction, construction and post construction phases of the construction cycle. Chemicals, tools, equipment, finishes, materials and contracting services suppliers will be on hand showcasing their latest technologies and solutions.

SMALL BUSINESS EXPO AUG 31 | JOHANNESBURG The Small Business Expo is devoted to the development of small and medium sized enterprises, providing an invaluable platform for small businesses to market their businesses and interact with prominent business leaders and representatives from a number of corporate companies. It’s the ideal platform to stimulate business growth and motivate both current and aspiring entrepreneurs.

The Small Business Expo running alongside #BuyaBusiness Expo is sponsored and subsidised by the Eskom Foundation.

CAPE CONSTRUCTION TRADE EXPO Cape Town International Convention Centre AUG 15 - 16 KENYA TRADE EXPO Kenyatta International Conference Center AUG 18 - 21 EAST AFRICA INTERNATIONAL TRADE EXHIBITION - EAITE Mlimani Conference Centre, Tanzania AUG 22 – 24 POWER, STEEL & HOUSING Nicon Luxury Hotel, Nigeria AUG 30 - 31 SMALL BUSINESS EXPO Ticketpro Dome AUG 31 – SEPT 02

PROUD SUPPORTER OF #MANDELADAY it’s #Time2Serve

ACTIONAGAINSTPOVERTY

WHAT COUNTS IN LIFE IS NOT THE MERE FACT THAT WE HAVE LIVED. IT IS WHAT DIFFERENCE WE HAVE MADE TO THE LIVES OF OTHERS THAT WILL DETERMINE THE SIGNIFICANCE OF THE LIFE WE LEAD. - NELSON MANDELA

TM