Essential Business Magazine by Essential Business

AFRICA magazine

e s s e n t i a l

January 2015

ABB

ACWA

Wasteman

Powering Up Nigeria

ACWA Power Solarfrica Bokport CSP Power Plant

Cleaning Power

VOL 1 ED 4

Esor Limited

Powering The Future

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Editors Letter

elcome to the rst issue of Essential Business for 2015. I’m glad to say that we’ve started as we mean to go on, with proles of some of the most interesting and successful businesses from across the continent. A signicant theme for this month has been South Africa’s power sector. Several of the companies contained, such as our lead feature, Esor, and solar rm ACWA Power, are working hard to improve the country’s supply, which is one of the biggest challenges facing Africa’s largest economy. Meanwhile, we have also spoken to businesses like concrete manufacturer ReMaCon, who have battled to overcome the problem of a less than reliable grid. Elsewhere, we’ve also delved into to some of the opportunities open to investors in Namibia, a country that is often overlooked despite its solid economy, stable political system and wealth of natural resources. There’s also a look at ABB Nigeria, a major player in the country’s newly liberalised power industry, along with a Q&A session with famous Nigerian entrepreneur, Tony Elumelu. As always, we hope you enjoy the magazine, and get in touch with your feedback, comment and suggestions. Sam Wright Editor-in-chief

Kayen Alexander Creative Director

Production Manager

Sam Wright Editor-in-Chief

Lily Bradic Associate Editor

Project Director

Sales Director

Sales Executive

Financial Manager

Chief Operations Ofcer

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Generating Change Across Africa

News Round-Up

Esor Limited (Lead Feature)

Heirs Holdings

Powering The Future

ABB

ACWA

Powering Up Nigeria

ACWA Power Solafrica Bokpoort CSP Power Plant

Wasteman Specialised Industrial Cleaning services Cleaning Power

REMACON

Fly Safair

Building Progress

Head In The Clouds

5 3

Well-known global business leader, financier, entrepreneur, investment guru and philanthropist Tony Elumelu headed up a high-level list of power experts who addressed the West African Power Industry Convention (WAPIC) in Lagos last November. This interview with the Chairman of Heirs Holdings first appeared on www.wapicforum.com.

Tony Elemelu Chairman Heirs Holdings

Generating Change Across Africa What power projects are Heirs Holdings involved in that you are most excited about?

he Power Africa Initiative is an amazing opportunity to democratize access to power for Africans, and the $2.5 billion investment commitment we have made reﬂects exactly how excited I am about it. The present administration made a bold decision when it decided to affect the changes envisaged by the Power Sector Reform Act — legislation that had been on the books since 2005. And that bold step was reinforced during President Barack Obama's last visit to Africa. We felt more strongly than ever, the need to help power Africa.

is testimony to the size of the opportunity; our amazing team has taken that plant from 150MW capacity when we took over in November 2013, to 450MW today; we expect it to increase 700MW by October and to achieve 1000MW by the second quarter of 2015. At that rate, we’ll be contributing 20 per cent of Nigeria’s total power generation. To push the possibilities further, we are working on a Greenﬁeld project that will expand the capacity of Ughelli by an additional 1000MW in the next 3 to 5 years and we’ve signed an MOU with GE and Symbion Power to facilitate this.

Our experience so far at Ughelli power plant

I must add, however, that gas is an integral part

of power generation and we are pleased that our oil assets in the Niger Delta will eventually produce gas to meet our gas needs at Ughelli. At current production projections, by the end of 2015, 150 mmscf per day will be produced and that will meet about 40 percent of the gas demands for Ughelli. As you can imagine, working to literally power Africa is truly exciting. What, in your view, are the main challenges in Africa’s power industry? If you could change three things today, what would they be?

Locally, the major challenges we have are: 1. Unreliable transmission infrastructure and 2. Access to uninterrupted gas supply 3. Timely settlement of invoiced payments. In Nigeria, one of the biggest challenges to power generation is transmission and in fact, while Ughelli Power Plant generated at full capacity for the ﬁrst time in July, we’ve been asked to scale down generation because of the outdated transmission systems; for every 100MW generated and sent to transmission companies, 40 per cent is lost, in part because of this infrastructure issue. And the challenges go beyond transmission; many plants in the country can produce more than they currently do, but the limited availability of gas makes it difﬁcult to produce according to the companies’ individual capacities, which affects the total supply and explains why

the average Nigerian hears reports of increased capacity which is yet to be translated to increased power availability in homes and places of work. Also, power generation is capital intensive and as it stands, we send the power we generate to the transmission company as soon as it’s generated and we count on the government to pay in a timely manner, but that has posed a bit of a problem. What’s more, while regulation isn’t a key challenge, it is an issue within the sector that if addressed, has the potential to speed sector growth exponentially. We need pragmatic regulation that recognizes that within Nigeria, the sector is nascent and so policies must be designed to encourage growth. In fairness, the federal government is confronting these challenges head on. It has introduced incentives for gas producers so that they can invest more in production; it is improving the gas pipelines and planning a transmission market for October. The federal government is also making ongoing investments in upgrading the transmission infrastructure and that will make all the difference. So while the challenges exist, one must continue to plod on in anticipation of the changes to come. What is your vision for this industry?

I believe the power industry is a catalytic sector and the development of our country and our continent cannot happen without ﬁxing it. Our Group has the ambition to generate at least a quarter of Nigeria’s power consumption needs 6

in the next ﬁve years. I realize that as we steadily increase our output, the base will change, but we are committed to keeping pace. I am an avid believer in the capacity of the private sector and the discipline it can bring to bear. I know that we will deliver on the promise of abundant power, which in turn will help address the pent up demand for access to electricity that our vibrant economy needs to keep growing at an even faster pace. A healthy, well regulated, and largely private power sector is possible and will form one of the cornerstones of true economic development. What surprises you about doing business in Africa?

It’s less about surprise and more about what spurs me to do more and invest more. For perspective, we are invested in oil & gas, agribusiness, hospitality, real estate, health insurance, medical services and power. We do this because of the attractiveness of returns in these focus sectors and the opportunities that can be created for the people of Africa. The size of the opportunities in Africa is big and that

may be surprising to others, but not to us. What has recently brought a smile to your face while doing business in/for Africa? I am a big believer in Africa and Africans. I often look back in amazement when I think about the progress that has been made in recent years and the pace of that change. The fact that I believe we are at a tipping point is a constant source of happiness as I look forward to what I expect will be a very exciting and rewarding future for the continent and its people. Your philosophy of Africapitalism, where did it originate and how has it changed the way you do business? My years of living and working in Africa and learning from each success and failure have helped to shape my business outlook and my operating philosophy. That philosophy is encapsulated in what we call Africapitalism. Africapitalism is an economic philosophy that places more weight on long-term investments in key sectors that drive growth. My personal experience also suggests that sustained economic prosperity must be inclusive and must create social wealth. Our group and those we partner with are building thriving businesses that generate healthy returns and transforming the lives of ordinary Africans on the continent. So, Africapitalism is my attempt to advocate and promote what has worked for me. We as Africans are uniquely qualiﬁed to take the lead and develop Africa. I think we need to be more self-conﬁdent in order to create the sort of future our children deserve. All the ingredients for success are here in Africa and

investing for the long term in key sectors, our people, and processes, will help to solve our problems and retain wealth within the continent. This is what underpins Africapitalism-by creating jobs and improving livelihoods, we are creating social wealth.

You are married and have ve daughters, what has living with so many women taught you? Did you also grow up in a household with many women?

Well I have always had strong women in my life. My mother, who is still active and is over 80 years old, was a strong inﬂuence. My daughters, particularly my oldest have always challenged me. Being surrounded by women at home and talking with my daughters everyday provides me with insight into the female perspective on problem solving and my wife is a multitasker. I guess that has resulted in my conﬁdence in women and has informed and encouraged some of the appointments I’ve made. It’s no coincidence that three of our Board Chairs in the Group are women and that some of my top CEOs are womenincluding my wife, Dr. Awele Elumelu, who happens to be the CEO of Avon Medical Centre.

NEWS Round-Up CONSTRUCTION

Construction has begun on a R84-billion city in eastern Johannesburg, financed by Chinese firm Shanghai Zendai. The city is set to become a financial hub, providing jobs for 100,000 people — the “New York of Africa,” according to Zendai founder Dai Zhikang.

Meanwhile in Algeria, the world’s tallest mosque -with an 870ft (265m) tall minaret-is under construction on the Bay of Algiers. The complex will be able to accommodate 120,000 people, and will be the largest mosque in Africa. "It's one of the projects of the century," says Ouarda Youcef Khodja, a senior ofﬁcial at the ministry of housing and urban planning.

MINING AND ENERGY

This week kicked off with the news that Eskom has announced a revised deadline for the operation of the Medupi Power Station in Limpopo. While the original deadline to bring one power unit online passed in December, Eskom announced that this is now expected to happen sometime in February instead.

and businesses receive credits for routing surplus power from rooftop solar panels back into the electricity grid.

Meanwhile, the National Energy Regulator of South Africa suggested that it may be tentatively considering a framework that would allow electricity buy-back from the residential, industrial and commercial sectors. In the draft discussion paper, it was suggested that homes

FOOD AND BEVERAGE The Fairtrade Foundation and Fairtrade Africa announced earlier this month a collaboration aimed at empowering female coffee farmers in Kenya. Called “Growing women in coffee,” the three-year project is backed by a £389,000 Big Lottery Fund grant. “By working with the women in these cooperatives to roast, grind, package and sell their beans as 'women's coffee', we hope they will be able to increase the amount they sell on Fairtrade terms, which will bring beneﬁts for their whole community,” says Fairtrade Foundation's fundraising manager David Finlay.

Elsewhere, in Mpumalanga, South Africa's ﬁrst black diamond trufﬂe has been discovered and could lead to a new and lucrative agricultural industry. "I've been telling people that it would grow in South Africa but a lot are not willing to invest money on a venture that has not been proven. Now we know it's actually possible and there will always be a market for them," says agricultural scientist Neil van Rij.

MANUFACTURING

Data from the World Steel Association shows a 1.2% increase in world steel production between 2013 and 2014. Algeria, Egypt, Libya, Morocco and South Africa were listed as some of the top steel producers in the world, despite the disruption caused by Eskom's power cuts, which are said to have resulted in 2.5% contraction in the steel industry last year. Finally, in Nigeria, the Federal Government has revealed that the private sector has invested $5 billion in fertilizer manufacturing in the last three years. â&#x20AC;&#x153;Banking lending to seed companies and agro-input dealers expanded from $10 million in 2012 to $53 million in 2013; while bank lending to fertilizer companies expanded from 100 million in 2012 to $500 million by 2014,â&#x20AC;? says Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina.

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Powering The Future In late 2013, civil engineering group Esor Limited, then called Esorfranki, sold the geotechnical division to Keller for R578 million. The streamlined group now focuses on civil engineering and pipeline developments. We spoke to CEO Wessel Van Zyl to discuss the effects of this move and to find out more about their flagship civil project, the Kusile power station.

“Starting January 2014, it was a completely new company. We sold about 33% to 35%of the company through the disposal of the Geotechnical business and we changed our name back to Esor. So yes, it is quite a different company to the one of the past decade when we were Esorfranki,” says Van Zyl. “We ﬁnalised the loss making legacy N4 Mooinooi road contract, where we reported a loss ofZAR150 million. With group revenue of about ZAR1.6 billion, this equated to approximately 10% of revenue,

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s one of South Africa’s benchmark civil engineering and construction groups, Esor has faced a lot of challenges in the past year.

putting working capital under pressure. However, as a diversiﬁed company the pipelines, pipe-jacking, building, civils, earthworks, and other divisions stepped up to the plate.” Half way through 2014, Esor made some changes at board level. When the company listed on AltX, the alternative index to the Johannesburg Stock Exchange, in 2006, its non-executive directors were already in their late sixties and well experienced business people. “It is good to rely on the wisdom and experienceof directors who have seen a number of business cycles. But it meant

that nine years later they were looking to retire,” explains Van Zyl. “They all committed to remain in ofﬁce until the ﬁnalisation of the Franki sale to ensure a smooth transition.”

“

As part of the board shuffle CEO Bernie Krone stepped down from his executive position and was appointed as Chairman. Van Zyl, chief financial officer at the time, took his place as CEO. “This was a natural progression from a succession plan which had been discussed when I joined in October 2012.”

claims in October 2014 and received settlement in November 2014,” explains Van Zyl.

Thiswas also a big year for Esor’s ﬂagship civil project, the Kusileterrace underground facilities works contract. “We settled on some claims dating back to March 2011, particularlyrelated to disruptions, delays and changes. We successfully ﬁnalised the

When you want to grow your economy and you want to attract investment, you need power. So these projects are essential.

Kusile, a coal-fired power station in the Mpumalanga province, is owned by Eskom and is set to consist of six 800MW units, giving a total capacity of 4800MW andmaking it one of the largest coal-fired plants in the world. The plant is due to be commissioned during 2015 with first fire expected the same year. While there may be protests over the environmental impact of a coal

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ﬁred plant, it is hardto deny that South Africa is desperately in need of additional capacity given the growth potential and the frequency of outages.

We’ve been looked after by Eskom through a predictable payment cycle, and we’re in the process of trying to settle all the issues we’ve had.”

“It’s something thatis imperative for South Africa. The power infrastructure needs additional capacityand the current investment in coal and renewables is to get it back up to where it should be,” says Van Zyl.

As for the year to come, Esor is anticipating a period of recovery and increased stability, as South Africa continues to recover from the global ﬁnancial crisis.

“When you want to grow your economy and you want to attract investment, you need power. So these projects are essential. Wind, solar, they’re all good initiatives, and they give you back-up, but they don’t give you the 4800MW that the coal power does,” he continues. “Three or four years ago, South Africa was ready to investigate and possibly invest in nuclear as an alternative for base load, but the whole process was halted after what happened in Japan. And now there’s talk again about nuclear — about having a mix between nuclear, coal, and sustainable wind and solar. That’s a good solution. At the moment, South Africa is heavily reliant on coal as the main source for power generation. That’s where we are.” “You need to constantlywork at relationships with your clients, as we’re still working on Kusile for another two years, so there’s no point in a broken relationship. You both have to work at it.

“The whole world went into crisis in 2008, but because of the 2010 Soccer World Cup and all the related construction in South Africa, we held out until about 2011 before the full impact was felt in the local construction industry. As an industry we were therefore somewhat protected through the work on hand, but then in 2009, Eskom experienced severe power supply problems that further impacted negatively on the construction industry,” says Van Zyl. “Between 2008 and 2011Esordoubled in size. However in 2011 everything in our sphere came to an abrupt stop,” he continues. “My big challenge this year is to restructure the group to the size that it should be. Let’s just consolidate a bit and see what we are, who we are, what appetite we have, and how big we can be. It comes with a bit of pain, going into a restructuring process, but things change. And it will give us stronger footing as a consolidated group.”

Powering Up Nigeria As the world’s largest builder of electricity grids and related equipment, ABB is among the rms leading the way following the recent liberalisation of Nigeria’s power sector.

increase industrial productivity in a sustainable way. Based in Zurich, Switzerland, the rm’s shares are traded on the stock exchanges of Zurich, Stockholm and New York. Its business is comprised of ve divisions that are in turn Formed in 1988 by the merger of two organized in relation to the long-established engineering groups, customers and industries they serve. ABB has about 145,000 employees The group is particularly proud of and operations in more thanof100 its record for innovation, which is As the world’s largest builder electricity grids and countries; Nigeria Switzerland’s inclusive andABB in is among widely recognized through countless related equipment, the firms every region of the world. Today, awards leading the way following the recent liberalisation of and scientic accolades. Nigeria’s power leader sector. in power and ABB is a global Many of the technologies we take for automation technologies and one of granted today, from ultra-efcient the world’s leading engineering high-voltage direct current power companies, helping customers to use transmission to a revolutionary electrical power effectively and to approach to ship propulsion, were 19

developed or commercialized by ABB. Today ABB is the largest supplier of industrial motors and drives, the largest provider of generators to the wind industry and the largest supplier of power grids in the world. With a 125 year heritage of technology innovation, ABB continues to shape the grid of the future.

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or Africaâ&#x20AC;&#x2122;s newly crowned largest economy (Nigeria assumed the title from South Africa, a nation that is well known for its own issues with electricity, late last year), it is clear that much work still needs to be done.

Opening Out Back in 2013, in a bid to breathe new life into the power sector, the Federal Government of Nigeria privatized the Power Holding Company of Nigeria (PHCN), formerly known as National Electricity Power Authority (NEPA), and unbundled it 20

into 18 new generation, transmission and distribution ﬁrms. The privatization of the power sector will bring about more efﬁciency in the entire value chain from the generation, transmission and distribution. This will create more opportunities for OEMs (original equipment manufacturers) like ABB to support the new owners with quality equipment and renowned expertise.

Partnerships

The privatization of the power sector is already bearing fruit. ABB has signed agreements with local distributors who will stock ABB products and act as authorised distributors of ABB’s products in Nigeria.

“

But technically I believe it’s in the right direction and on the right track, because when you turn distribution companies into privately owned entities, this means that they need to have a return on their investment. And having a return on their investment means that they’ll be seeking high quality products and reliable suppliers, and this gives ABB more chance and more edge over the other competitors.

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Opportunities Looking further ahead, ABB has launched its Africa 2020 program, a new strategy aimed at strengthening the company’s presence across the African continent. The kind of strategies that empower the local presence are positive for ABB because ABB is trying to, as it is said, “think globally but act locally”. ABB is currently reinforcing its local presence in Nigeria by recruiting, empowering, and training more local people. ABB is committed to meeting and following up local content laws and supporting the local market, and these kind of incentives — especially in the oil and gas sector — will foster strong local presence when partnering with indigenous organizations.

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ACWA Power Solafrica Bokpoort CSP Power Plant

he result of a joint venture between ACWA Power and Solafrica, the Bokpoort development won the second CSP bidding window of South Africa's Renewable Energy Independent Power Producer Programme (REIPPP). With a projected commercial operation date of 6 December 2015, work has progressed rapidly, with construction now having past the peak. As an emerging market utility company with more than 16,000MW in operation or construction, ACWA Power develops, owns and operates a range of power and water assets around the globe, with the Southern Cone of Africa being a key strategic growth market. At the forefront of this is the Bokpoort facility, which is set to be the only storable renewable energy facility with 27

utility-scale “load-following” capability, due to its 9.3 hours thermal energy storage capacity, in the region. “It's been fantastic so far. We had some issues with regards to the national metal industry strike that has caused some delays, but apart from that we've been doing reasonably well with the progress,” says Nandu D Bhula, CEO of ACWA Power Solafrica Bokpoort CSP. “I think, the biggest challenge we have had to overcome, was the ability to get local skills to the level that is expected in order to be productively employed and meet our socio-economic development objectives. We do have tough economic development obligations, and the initial hurdle was to get around that,” he continues. “But we

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successfully did, and we are doing reasonably well in terms of getting a very large proportion of our workforce from the local community, the !Kheis Municipality.” The skills shortage in South Africa has, unsurprisingly, presented some issues during the construction phases of the project. “On the one hand, you're trying to fulfil an economic development obligation and have a large proportion of the local community involved, but on the other hand, they don't necessarily have the skill sets at this stage for this type of construction and subsequent operations. It's a very rural community,” explains Bhula. “Difficulties finding the necessary skill sets nearby meant greater effort in on-the-job training and focus in upskilling through sponsoring technical training

courses at the existing local training center.” “The language barrier was also challenge. The EPC contractor and their supervision staff speak mainly Spanish, so it's difﬁcult to communicate and develop the staff that is largely Afrikaans speaking. From a health and safety supervision perspective, it has been a challenge for us,” he explains. “We've put effort into having multilingual presentations done, and bringing in local health and safety individuals who understand the local legislations and then we've shared that from a management level down to the supervision. We've had to use different types of media to spread health and safety messages,” he continues. “That includes setting up things like animated story books that have speciﬁc site safety 28

messages in it. So we've complemented our multilingual communication efforts with pictorial tutoring; and that has aided us in our efforts.” Once completed, the plant will have the largest amount of thermal energy storage in the world in its class. “We've got heat transfer fluid travelling around 180 loops of solar field with 658,000m2 of reflective surface or mirrors, with a large quantity of molten salt storage which is new for this country in terms technology. So, from that perspective, I think it is very important that we have really welltrained operators to mitigate the risks in terms of managing the operation and maintenance of the plant,” explains Bhula. “The rest of the power block is stock-standard steam power generation, and South Africa has sufficient power plants in this area for us to be able to get experienced operators and 29

maintainers. It is just the thermal energy storage and solar field heat transfer that requires us to put a little more effort into getting people trained up so that we are confident that we can manage those going forward safely.” The Project's major shareholder is ACWA Power from Saudi Arabia, and the group values are aligned towards dealing with socio-economic issues in the areas they are investing in, aimed at addressing poverty and contributing to social upliftment. “The ACWA Power model is not one where the owner comes in and builds a project and then runs away with the profits,” says Bhula. “Furthermore, projects of this nature, typically start injecting funds into communities as part of their CSI commitments after revenues start coming in but not in our case, we have started investing in our community from the onset and plan to contribute for the long-term.” ACWA Power's attention in this respect has been primarily on boosting skills — providing computers to schools, training the local communities, and giving out bursaries to start technical training in the area. Furthermore, given the rural nature of the communities, there were many families in the local areas without water or electricity, a matter of high importance that ACWA Power naturally addressed when they first focused their attention on the area. “We've done a full analysis on the socioeconomic challenges in the area. There were kids who could not study because they had no lights, and essentially their whole lifestyle were constrained as a result. So, with the donation of PV panels to a local Duineveldt community, we've brought

“

I think, the biggest challenge we have had to overcome, was the ability to get local skills to the level that is expected in order to be productively employed and meet our socio-economic development objectives

light into their homes, people's lifestyles have changed, kids can study at night without needing candlelight, they are doing better in school and already have possibilities of improving their livelihoods. Aside from this, our topline water reticulation project has delivered potable water for the ﬁrst time to the homes of over 77 residence in the area. This is ACWA Power's mission through projects like Bokpoort and others to follow. It's not just about solar development, it's about a longterm commitment to the community.” Looking to the future, ACWA Power has a well-developed strategy towards building a multi-fuel, multi-technology generation portfolio of around 4,000 MW in the Southern African region. For scale, South Africa's generation target for the entire REIPPP scheme is 3,725 MW. “It is ambitious, but I don't think that it's seriously out of our reach because we have a very aggressive stance in that respect. Furthermore, if you ask me if 4,000 MW of solar energy development alone, in the Northern Cape and surrounds is ambitious, I say no. There is nothing stopping South Africa from doing so. We have a huge abundant solar resource, a hunger for renewable energy and the technology itself has high localisation potential and will only get cheaper and cheaper. This will bring

increased knowledge and competency in the industry and more importantly, jobs. We expect to spend over R1.6 billion in local content through the Bokpoort project alone,” says Bhula.

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Chris Ehlers, business director for ACWA Power Southern Africa further highlights ACWA Power's strategy going forward: “ACWA Power's focus countries are Mozambique, Botswana, Namibia and South Africa. We are fully committed as a private utility company with a very longterm approach. This includes the required capital as well”. He continues, “South Africa is seen as a hub for us to develop economically and expand our footprint. We have already committed to multiple projects in this region.”

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Cleaning Power The Specialised Industrial Cleaning division of Wasteman Holdings (Pty) Ltd has a strong focus on matters of safety, health, environment and quality (SHEQ). As an industrial-scale cleaning contractor, this means that Wasteman is extensively involved in the South African oil and gas industry, and offers services ranging from asbestos removal to oil-spill cleanup.

ver 30 years ago, Wasteman Holdings was established in Cape Town, where it operated with only a single truck. Despite these humble beginnings, the company has grown dramatically over the past three decades, expanding into new areas of expertise and expanding to provide total waste management solutions to communities across the whole of South Africa. The Specialist Cleaning Division was established in 2002, through the acquisition of

several Mpumalanga-based cleaning companies including Vektor Services and JCM. By 2010, Wasteman had added Emergency Spill Response to its range of services. Today, Wasteman is known not only for its waste management, removal and treatment operations, but also for its expertise in areas of heat exchanger cleaning, chemical and fuel tank cleaning, asbestos removal, bio-remediation of polluted environmental areas, and emergency spill response. Cleanup in the oil and gas industry can be a dangerous and complicated process, and requires plenty of technical expertise and specialist equipment. The environmental consequences of an oil spill can be devastating, bringing death and illness to the areaâ&#x20AC;&#x2122;s wildlife for years after the

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incident. The ďŹ nancial impact of any lost oil also means that the economy suffers, with the inevitable dip in tourism causing further monetary losses. Immediately responding to an oil spill and beginning cleanup operations is of high priority, then, although the complexity of the job can often mean that government assistance is required. Cleaning fuel spills is dangerous work, and if not carried out by skilled professionals like those at Wasteman, can cause serious health problems for those involved in the operation. And cleanups are not quick jobs. On December 23rd last year, a DurbanJohannesburg pipeline operated by Transnet burst open along a weld-line and gushed 220,000 litres of diesel into the suburb of Hillcrest. The value of the lost

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Cleaning fuel spills is dangerous work, and if not carried out by skilled professionals like those at Wasteman, can cause serious health problems for those involved in the operation.

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diesel is estimated at 2.4 million Rand. The cleanup is expect to take up to a year, and that is without taking into account repairing damage to land and property in the area. Wasteman offer specialised services that could be used in similar situations, and in some cases are able to recover liquid losses after a spill. Generally, however, spill response operations are focused on waste minimisation and disposal, and pollution rehabilitation where possible. In addition to minimising the environmental impact of oil spills and conducting large-scale cleanups, Wastemanâ&#x20AC;&#x2122;s Spill Response division also offers training courses, giving companies the opportunity to train staff in identifying hazards, minimising risk, rescuing colleagues and treating the injured. As most incidents are the result of human error or failure to notice potential problems, the occurrence could be greatly reduced by proper safety awareness and training.

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Building Progress T

he construction industry has certainly seen some challenges in the past ten years. Since ReMaCon first began operating in 2004, the company has experienced first-hand the effects of serious labour and unemployment issues, as well as the interruptions caused by power outages that put numerous plants out of operation. ReMaCon appears to be successfully navigating these difficulties, and has remained one of the leading manufacturers of pre-cast concrete retaining blocks throughout. “When I started the company, we didn’t have the money to invest in one of these fully mechanised sort of facilities. So instead we started with a very labourintensive plant, which does benefit us in many ways - the government gives you grants for all sorts of things when you 41

As a leading manufacturer and distributor of precast concrete retaining blocksin the Gauteng province mostly, ReMaCon has been committed to accelerating the growth of urban infrastructure across South Africa for more than a decade. Owner Silvio Ferraris tells us about the company, the industry, and the effects of the rolling blackouts on the concrete subsector.

invest in manufacturing equipment and the employment of more people,” explains Ferraris. “Things have now changed, almost to a disadvantage from the labour intensive perspective, mainly because we’ve had so many strikes over the years. Strikes in the mining industry, strikes in the steel industry - everybody wants to go on strike because everybody wants higher wages, and the effect that has is that many factories are tending to move towards mechanisation. So one wants to reduce one’s reliance on labour because it’s on strike so often. And you know, that’s a problem,” he continues. “We all understand that they want more money, but at the same time, we also now have a 25% unemployment rate amongst mainly poorer people.”

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Another change ReMaCon has faced over the past few years is changes in safety standards within the construction industry. Ferraris explains that South African’s safety standards are not necessarily applied so vigorously as they would be in the UK, Europe or America. “It allowed a little bit of ﬂexibility, because you could apply things with a little more ease and you didn’t have to spend a fortune to try and get things approved. But that’s changing now, because many of our standards are being taken from, for example, the UK standards and the European standards.” Retaining wall blocks are very popular in the South African construction industry due to the fact that they are more economical to manufacture and install than conventional reinforced concrete walls. 42

However, there are inherent risks associated with their installation, which makes it particularly important for manufacturers to carry these safety standards. ReMaCon hold the SABS mark standard, and is a member of the Concrete Manufacturers Association. “You’ve got to have the standard, because otherwise you can’t insure your product, and you can’t insure your supply to remain within the Consumer Protection Act legislation,” explains Ferraris. “I carry the standard because it means that engineers and end users are comfortable using our products, and many manufacturers don’t have the standard — they claim to supply products made to the standard, but they don’t actually have the mark certificate for it.” While adhering to safety standards is no trouble for ReMaCon, the company is experiencing difficulties with factors out of its control — primarily, the national power shortage. Eskom, South Africa’s stateowned electricity utility, has been struggling for some time now to provide enough power for the nation’s 50 million people. Last year, Eskom scheduled a number of blackouts to avoid more serious power cuts in the country. The first of this year’s rolling blackouts arrived earlier this month. “We weren’t hit that dramatically last year, but I believe, come February, we’re going to be seriously affected. Eskom has got a problem,” says Ferraris. “They try not to flip industrial areas. The mines have been asked to reduce their power consumption, as have the huge smelter plants — many of the huge consumers of electricity have been asked to reduce it.” It has been reported that South Africa uses approximately 8% less power than it did in 45

2008, but the blackouts continue. “Everybody’s become more efﬁcient, with the kind of lights we use and all sorts of energy saving strategies, but in spite of that, we still have rolling blackouts because the new power stations have not come online yet and the old power stations have lacked the necessary maintenance. And they’ve conﬁrmed there will be rolling more blackouts, so we know we’ll be affected,” he continues. “When we had the blackouts in 2008, they seldom cut off the industrial areas. So back then, occasionally there’d be a problem and we’d lose half the day. But actually, this year’s going to be worse.” The solution favoured by ReMaCon is to acquire a generator. While this would minimise the loss of productivity during the blackouts, it doesn’t come without a cost. “We could have standby generators, but we’d have these for the next six to twelve months perhaps, and then the new power stations come online and we’d have gone and spent a fortune on a generator that’s going to stand idle, however that may not be the case and we could be experiencing these problems longer than that”, says Ferraris. Despite these setbacks, 2015 is set to be an exciting and diverse year for ReMaCon. “First of all, I’m looking for any special application precast concrete products that will diversify my business. I started supplying new products last year already,” says Ferraris, referring to a new type of modular free standing concrete wall, branded YFEL due to its resemblance to the Eiffel Tower, used for the separation of any dry bulk products, and for high security applications with the “anti-climb”YFEL.

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“We’ve speciﬁed on a number of big orders. It’s a full engineered product made from concrete, but it’s not necessarily used by the construction industry. It’s used for applications in the agricultural industry, ports, waste recycling, in mines, airport safety and to protect electrical installations, for example. ‘‘Specialised” concrete products seem to be ReMaCon’s focus for the next year, with Ferraris on the lookout for new products to further diversify the company. “Self-compacting concrete technology means that you can have steel moulds in very intricate shapes. In the past, when they used conventional materials, there’d always be a problem but more modern concrete technology has been developed which allows for greater diversity and high concrete strengths. I am really strategising to go into differentiated products with special applications so we can grow further.”

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Head in the clouds? Meet South Africaâ&#x20AC;&#x2122;s newest passenger airline, FlySafair.

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www.flysafair.co.za

hatever you do, don’t call FlySafair a low-cost airline - they prefer “high value airline.” And the new kid on the block, founded by Safair, has certainly been ruffling a few feathers, finally taking to the skies with flights between Cape Town and Johannesburg in October last year. Flights to and from Port Elizabeth and George followed soon after. “Our aim has always been to not only bring affordable fares to the market, but to also allow new flyers to experience the love of flying,” says Lorna Terblanche , VP of Passenger Services for FlySafair, which has cracked the Mango (South African Airways) and Kulula (Comair) duopoly. “We’ve certainly received a warm welcome from the South African flying public,” she continues.

FlySafair offers passengers a base one-way ticket between Johannesburg, Port Elizabeth, George and Cape Town for around R499 and R399 between Cape Town, Port Elizabeth and George, including taxes. The fare secures your seat and allows you to board with two pieces of hand luggage, provided they don’t weigh more than a combined 7kgs. Any extras, like a seat with more leg room, additional luggage, onboard catering, etc., is charged for separately and FlySafair says it is this – an unbundling which is common among low-cost carriers in Europe but a new concept in South Africa – that “gives passengers the freedom to determine the price of their ticket”. “We have seen a significant number of first-time flyers join us onboard thanks in large part, we believe, to our value fares 48

and the ability to tailor make your ticket,” says Terblanche. “Our aim has always been to not only bring affordable fares to the market, but also allow new flyers to experience the love of flying… we believe that we are opening up the opportunity to fly to many more people.” What’s great about FlySafair is that it offers affordability on routes that were previously dominated by high prices-and it is all part of its commitment to keeping ticket prices as low as possible. “FlySafair’s entry into the domestic market offers passengers a welcome alternative to the previously high prices for air travel. At FlySafair we believe in offering our

passengers affordable value by allowing them to tailor make their ﬂight experiences,” explains Dave Andrew, CEO of FlySafair. Although a new entrant into South Africa’s commercial market, the airline is backed by nearly 50 years of aviation experience from Safair. “We welcome the opportunity to prove that as a proudly South African and true lowcost carrier, our brand is synonymous with safety, affordability, quality, and of course, choice,” says Andrew. And the airline will need all of that experience: South Africa is a difﬁcult market with three other budget airlines–

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Velvet Sky, 1Time and Nationwide–all closing their doors in recent years. But then FlySafair hasn’t had to buy or lease new aircraft, one of the major market obstacles for newcomers, and its major costs are fuel and maintenance, which all airlines have. And it is very much looking forward to 2015. FlySafair initially planned to launch in October 2013 but a last minute interdict brought by direct competitors Kulula and Skywise Airline, which is itself planning to enter the market, saw the business grounded for the best part of a year. It quickly resolved ownership issues by giving South African employees a 25.14% stake in the airline following a shareholding restructuring exercise, and its licence was reissued in March-they waited until the warmer months to launch, however. Now, the future is bright. “Our model is based on international lowcost best practice and is one we believe 51

Our aim has always been to not only bring affordable fares to the market, but to also allow new flyers to experience the love of flying

that the South African market can truly benefit from,” says Terblanche. With huge interest from business travellers, FlySafair is confident that passenger numbers will continue to grow; its aim is to hold the same market share that the nowdefunct 1Time airline had. Euromonitor International says demand for air travel in South Africa is “expected to remain fairly high”–music no doubt to FlySafair ears. But as Skywise prepares to launch there is a risk the South Africa domestic market could quickly swing back to overcapacity. And remember, fastjet is also eyeing South Africa’s dynamic domestic market. Consumers will obviously benefit and we look forward to seeing how this one plays out. For now we’ll let FlySafair have the last word. “We like to think of ourselves as South Africa’s oldest newest airline,” it says. “Because we’ve

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been around for over four and a half decades, we’ve got a certain old-world quality you won’t ﬁnd on other low cost airlines. We think the kind of person who will ﬂy with us at FlySafair is someone who appreciates quality, good old-fashioned values and attention to detail.” For further information or to book your ticket visit www.flysafair.co.za. Source: Flysafair.

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