Essential Business Magazine by Essential Business

AFRICA magazine

e s s e n t i a l

March 2015 VOL 1 ED 5

Swakop Uranium

Raudev

Husab forges ahead

Developing A Positive Reputation

McCormick Property Developers Centres of Growth

Aveng

A Network For Infrastructure

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Editors Letter

elcome to the March issue of Essential Business. It's been a busy month over here, and we've got a packed issue full of great stories from some of Africa's most enterprising companies. This time, our focus is very much on the continent's varied and rapidly changing infrastructure sector. Our foreword is from the Kenya Property Developers Association, a group that is doing great work in boosting the prole of the private sector in the residential, commercial and industrial property markets. Meanwhile, in our leadfeature, South Africa's Aveng tell us all about the technical challenges of running a rm with interests as varied as engineering, manufacturing, mining, concessions, public infrastructure and water treatment. There's also a great prole of McCormick Property Development, a genuinely progressive company that has been transforming the lives of those in South Africa's rural communities since the early 1980s. Similarly, both Raudev and BrTsima Construction talk to us about the changing shape of Africa's second largest economy. Finally, we also speak to Boland Pulp, a food manufacturer that's gone very much global in recent years.

Kayen Alexander Creative Director

Production Manager

Sam Wright Editor-in-Chief

Lily Bradic Associate Editor

Project Director

Maria Alempic

Sales Director

Sales Executive

Enjoy! Sam Wright Editor-in-chief

Financial Manager

Chief Operations Ofcer

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Investing in Namibia

KPDA

News Round-Up

Aveng (Lead Feature) A Network for Infrastructure

McCormick Property

Raudev

BR Tsima

Centres of Growth

Developing A Positive Reputation

Building A Better Future

Swakop Uranium

Boland Pulp

Husab Forges Ahead

Squeezing ahead

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Investing in Namibia Even with its substantial mineral resources, stable government and high quality infrastructure, Namibia has long been ignored by many investors. Yet, despite a slight recent slowdown in growth, opportunities are rife.

n a recent report, the World Bank placed Namibia's economic growth at 4.2% for 2014. While a slight drop from the average 5.1% the country enjoyed between 2011-13, it still compares favourably to the 1.4% estimated for neighbouring South Africa, the country from which Namibia gained independence in 1990. Since then, the government in Windhoek has overseen a growth on average of almost 4% per year, while living standards have climbed and poverty has eased. While there is still much to improve, particularly in rural areas — 27.6% of households are classiﬁed as poor and 13.8% as severely poor — the country still stands out as a success story in sub-Saharan Africa.

Going underground

Much of this can be attributed to Namibia's mining sector. As it stands, this accounts for roughly 8% of gross domestic product (GDP), but also crucially 50% of foreign exchange earnings. This industry is dominated by diamond production, with the country now the world's leader in deep-water mining thanks to its vast offshore deposits. At the same time, Namibia is the world's ﬁfth-largest producer of uranium, and also exports signiﬁcant volumes of lead, zinc, tin, silver, and tungsten.

Meanwhile, there is also signiﬁcant potential in the oil and gas sector. Although no commercial discoveries have yet been made, exploration is ongoing, with major names such as Royal Dutch Shell, Tullow Oil and Austria's OMV recently entering the marketplace.

continues.“Namibia is doing well in all of those aspects, which gives it a green light for foreign investment.”

While low prices are likely to mean that drilling eases off in the short term, much has been made of the geological similarities between Namibia's offshore basins and Brazil's resource-rich waters. Given that Namibia's landmass was connected to Brazil before the continents split, this should be no great surprise.

Much of this, he adds, is down to its political stability. Namibia is a secure, multi-party democracy, while corruption is seen to be among the lowest in the region. At the same time, Hand says, “it is one of the few African countries that has not been ravaged by significant internal conflicts and has avoided involvement and spillover from nearby conflicts and violence in the region. I do not see this changing any time soon.”

“Now is an ideal time to establish a business presence in Namibia,”says Jeremy Hand, the head of foreign investment consultants EMERGE Global Advisory. “It's a little off the radar of large, multi-national corporations that can sometimes dominate in emerging markets.” “When considering investing in any foreign market, it is essential to have a holistic picture of the market, such as the political, economic, governmental and environmental aspects,” he 7

Holding steady

There are other attractions, too. Last year, Namibia signed the Economic Partnership Agreement (EPA) with the European Union (EU). This has seen African member states receive customs-free access to the Europe in exchange for opening 80% of their markets to European imports. For Namibia's considerable agriculture sector, the potential food exports is huge.

Taking the chance

Of course, despite all this positivity, there are still challenges facing potential investors. “One of the largest risks is the utter dependence on the South African economy,” says Lance McNeill, director of entrepreneurship at US nonproﬁt Business and Community Lenders of Texas and a former small business advisor in Namibia. “For example, the South African rand is the legal currency in Namibia. When your commerce and banking system is at the mercy of another country's monetary and ﬁscal policy, you are putting your future economic prosperity in peril.” Given the unpredictability of the South African economy, this is a fair comment. Earlier this month the International Monetary Fund (IMF) revised its growth forecast for the country to 2.1% from a previous 2.3%, while widespread blackouts and power shortages are severely impacting both manufacturing and construction. At the same time, another risk to note is the limitation of a key resource — water.

So far this year, national forecasts have shown an increased probability of belowaverage rainfall across the region, prompting in part the World Bank's decision to cut Namibia's growth forecast. With agriculture an essential part of the economy, a partial boom and bust cycle — as seen in other African nations such as Kenya — seems unavoidable. For many businesses this may not be an issue, but as always, caution and diligence will serve any investor well.

“Currently, Namibia has a very small population in a very large desert,” says McNeill,“so water resources are adequate now, but as demand for water increases with a growth in mining, agriculture and tourism, access to this resource will become a challenge.”

KPDA was established in Nairobi in 2006 as the representative body of the residential, commercial and industrial property development sector in Kenya. As an emerging Business Member Organisation, we work in proactive partnership with policy-makers, ﬁnanciers and citizens to ensure that the property development industry grows rapidly but in an efﬁcient, economical and ethical manner. Our objectives include:

ethical standards and educational programs Ÿ Compiling focused research and analysis

to inform investment decisions, policy analysis and public education Ÿ Developing new ﬁnancing mechanisms to

help low and middle income Kenyan families own homes Ÿ Providing a forum where property

investors can share expertise and build business contacts

Ÿ Working with the Government and other

stakeholders to promote policies that stimulate the property sector Ÿ Contributing to excellence in building

through promotion of world-class 9

Ÿ Harmonising development activities with

citizen concerns, like neighbourhood associations and environmental

preservation groups. From an initial membership number of less than 20 members, we now have 92 members derived not only from the real estate management sector of Kenya, but also from some manufacturing industries and ﬁnancial institutions. Our members beneﬁt from professional recognition, information on industry issues, networking events, professional development courses, marketing opportunities and more. We are currently working together with our partners in the private and public sector to advocate for changes in legislation and processes at the Ministry of Land, Housing and Urban Development. If the Government works closely with KPDA and our partners, these processes should be smoothened out, and with our input during the implementation of any legislation, will ensure a better business

environment for our members and other industry partners as well. One of the challenges facing our members' clients (the public) is the access to affordable housing solutions. Some of our members — including Karibu Homes, Koto Housing Ltd, the National Housing Corporation and Home Afrika — have embarked on projects speciﬁcally geared towards delivering affordable housing solutions to the Kenyan market. We also have members who provide property solutions such as Optiven Ltd who are involved in providing serviced plots of land. These serviced plots have basic infrastructure amenities therefore creating options for 'value-added' plots to buyers. KPDA also collaborates with various partners to organize forums where members of the public can get information on technological advances that lower the cost of housing, as 10

well as allow them to interact with various industry players who enable home ownership. An example of these forums is the Homes Expo, an exhibition that brings together manufacturers, ďŹ nanciers, various professionals and developers to one event where the public can access information on home ownership. Elizabeth Mwangi EXECUTIVE OFFICER, KPDA

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NEWS Round-Up CONSTRUCTION

Political uncertainty and economic downturn have hit Nigeria's construction sector hard, with the recent election and low oil prices leaving many construction firms with frozen projects and large-scale layoffs. “The situation is terrible and there is more […] to come," a source in the construction industry told Reuters. Many construction firms rely heavily on government funds, and with the financial

toll that the election has taken on the country, these ﬁrms are left with unpaid bills and workforces being cut by up to a third. Meanwhile, in Ethiopia, the Ministry of Urban Development, Housing & Construction (MoUDHC) has announced plans to build 2.45 million houses before 2021. The plan will be completed by the end of this ﬁscal year, with construction set for 2015/2016.

MINING AND ENERGY

Construction has begun on three renewable power plants in South Africa, totalling 231MW. Owned by renewables ﬁrm Enel Green Power (EGP), these PV plants are a result of successful tenders in the third phase of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

Elsewhere in the renewables sector, German manufacturer Nordex has confirmed plans to fit the first Generation Delta wind turbines in South Africa. Nordex won a turnkey order to supply a 111MW wind farm, rumoured to be the EGP project in Gibson Bay.

FOOD AND BEVERAGE

The world's second-largest brewer, SABMiller, has announced plans to tap the African beer market with a strategy of low prices and locally targeted beers. SABMiller currently derives around a third of its proﬁts from South Africa, and expects net producer revenue to rise 10% over the medium term. Meanwhile, South African food retailer Famous Brands has acquired 70% shareholding in a privately owned South African frozen yoghurt producer, Wakaberry Frozen Yogurt Bar.

“This acquisition has been prompted by the strong demand of frozen yogurt as a popular sector in South Africa in the past 24 months,” says Famous Brands CEO Kevin Hedderwick.

MANUFACTURING

Black-owned phone-charging startup Booster Energy hopes to be the ﬁrst of its kind to manufacture mobile charging covers in South Africa. “We were inspired to start Booster Energy because we knew there had to be an easier solution to help people get more from their smartphones, especially with load shedding upon us right now,” explains co-owner Njabulo Makhathini. Meanwhile, Suntech — a manufacturer of solar panel modules — appears to have put the breaks on plans to proceed with a local manufacturing presence in Cape Town. After unveiling a new South African subsidiary in mid 2014, a statement from the CEO earlier this month announced their commitment only to local warehousing.

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A Network For Infrastructure Aveng Group, South Africa's leading infrastructure development company, celebrated its 125th anniversary last year. With sub-sectors across the globe, we spoke to IT manager Heinrich Kukkuk to find out how the IT department keeps all branches of the company working together.

www.aveng.co.za

s with any successful ﬁrm, strong communication is essential. But as a global player with subsidiaries ranging from mining and manufacturing to construction, Aveng Group's impressive level of diversity means that achieving this is an especially difﬁcult task. While each division has its own unique requirements, there are group-wide standards and consistencies that must also be maintained. Unsurprisingly, IT plays an important role in keeping both separate divisions and the company as a whole moving in the right direction.

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“We've got two main areas. One being the manufacturing and processing side to our business, including steel processing for example — and the other being the more project-focused area related to construction and infrastructure development. So building roads, bridges, dams and stadia,” explains Kukkuk. The FNB soccer stadium, constructed speciﬁcally for the 2010 FIFA World Cup, was completed by Aveng subsidiary Grinaker-LTA in 2009. Naturally, projects such as this have entirely different requirements to those of the steel

processing business, for example.

federated IT support model.”

“Contract-related disciplines demand project management and estimation related solutions whereas manufacturing operations require sales, distribution, logistics and inventory related competencies and our mining environment relies heavily on plant maintenance solutions,” says Kukkuk.

Aveng works primarily with propriety software, having found that custom-built applications typically have a higher total cost of ownership. With many propriety solutions being a very close ﬁt to business requirements, the group has found little reason to use custom software when the solutions are readily available and locally supported.

Heexplains that Aveng uses central support, administration and management systems for the solutions that are common across the group. “For example, there's a human capital management (HCM) solution based on SAP, because the business processes are mostly consistent and therefore lend themselves well to a centralised solution, regardless of whether or not the industry is mining or manufacturing,” says Kukkuk. “Then there are the core serviceslike uniﬁed communications and messaging, collaboration environments, and security and authentication control.There's also the Group IT Strategy including governance, compliance and risk management functions are also performed as part of the 21

“We've replaced all of our group intranets with Microsoft SharePoint, and we also use it for a lot of document management solutions and workﬂow applications,” says Kukkuk. “In line with that, we use Microsoft Lync for a lot of instant messaging, content sharing, and other online collaboration solutions.” Aveng's relationship with its service providers is incredibly important, and has in part led them to move towards outsourcing commoditized IT services. “We tend to meet with our key service providers on a monthly basis. That's why we've found it important to try and rationalize the number of our service providers as much as possible — so we're able to spend more

quality time with each, rather than trying to spend ten minutes every quarter with a myriad of them,” explains Kukkuk. “We'd like to outsource the management of our Wide Area Network and portions of our Local Area Network, as well as our desktop support, and a couple of other areas where it doesn't make sense to retain specialised skills when we could bring them in when we require them,” he continues. “So it's a balance of outsourcing and third-party technical support, and we're trying to focus more on the business value adding solutions. For example, on the BI side, we try to employ people who can work closely with the business. And those are typically the people you don't want to outsource.” South Africa's on-going power shortages have also contributed to Aveng Group's desire to outsource more of their services. “From an IT perspective, speciﬁcally on the power supply side of things, the blackouts and load shedding have led us to think differently about backups and disaster recovery. Really, that's one of the main reasons we've decided to outsource our data centres to a third party. They have to do it for many other customers, so they're 22

â&#x20AC;&#x153;

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We've got two main areas. One being the manufacturing and processing side to our business, including steel processing for example â&#x20AC;&#x201D; and the other being the more project-focused area related to construction and infrastructure development. So building roads, bridges, dams and stadia

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The second half of 2015 is looking positive for Aveng Group, too. “It's going to be a relatively tough place for the remainder of our ﬁnancial year, which is up until June,” admits Kukkuk. “Many loss-making projects are coming to an end, and hopefully we've learnt a lot from them. We've also positioned ourselves in such a way that we will be in a better position to make the most of the inevitable release of public infrastructure spend within South Africa.”

more geared up in terms of redundant power and connectivity along with the added beneﬁt related to competitive pricing as a result of economies of scale.”

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Kukkuk tells us how some sites are unable to run off backup power for extended periods, and as a result lose connectivity back to head ofﬁce. This in turn causes activities to be delayed until power is next available. “It's just an inconvenience in some cases, but in other cases could basically bringbusiness to a standstill,” he says.“Although rather uncertain, things appear to be looking up on the power supply side of things with the last month or two being a lot more stable.”

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www.mccormick-property.com

Centres Of Growth Founded in 1982, McCormick Property Development was working alongside black communities long before the Black Economic Empowerment (BEE) programme came into play. Managing Director Jason McCormick tells us more about the company's recent projects, and how its retail developments have impacted the local landscape.

hirty years ago, black people were forced to live away from the urban economic centres and had to spend a disproportionate amount of their income on travel costs in order to go shopping for basic goods. So, without two brass farthings to rub together, my father decided to set up the company in order to address some of the injustice he saw,” begins McCormick. “He went to First National Bank and got an unsecured loan to build his ﬁrst shopping centre in one of the black areas. And from that, McCormick

Property was born.” McCormick explains how his father was initially lambasted from both sides. “From the white side, they didn't like that he was helping out the blacks, and on the black side, he was often almost assaulted for being white. But he worked with communities at grassroots level, and did the first broad-based Black Economic Empowerment (BBBEE) model in Gazankulu homeland, which is now Giyani.” McCormick Property offered local communities shares in schemes from as early as 1985, and this dedication to empowering local people — and ensuring the economic benefits of its shopping centres are recirculated within those communities — has remained a cornerstone of the company since its inception. “At the time, these shopping centres were the only significant economic activity in any of the homelands. Everyone worked in the white centres and sent money back home, but there were no jobs back home. In the destitute homelands, these developments became economic beacons of hope,” he continues.

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“All the work opportunities were to be found in the urban centres as far as 100km away. It's actually incredible looking back 30 years down the line at how these areas have developed and how the urban environment has changed. The entire centre of gravity has shifted to around where those shopping centres are. It's a very gratifying thing to see.” Over the last 33 years, McCormick Property has developed 56 shopping centres in South Africa alone, with almost 40 new projectslined up and several new centres opening each year. The next to launch is the Emoyeni Mall in Mpumalanga, set to open its doors at the end of April. “It's a beautiful mall. We've got Shoprite, Pick N Pay, and all the usual suspects in terms of the South African fashion mix,” says McCormick. “It's a typical development for us. We've got two models we work with — our deep rural projects like the Lusiki Plaza are generally open strip malls, or 'reverse claw' designs where it's a U-shaped shopping centre with the supermarket anchored in the centre of the U. In the urban centres, we generally use closed malls. We enclose them when they go over about 25,000 square metres. Below that size, we tend to only have a 26

single supermarket anchor, but above, we'll have two.” McCormick Property is also active elsewhere on the continent, with projects including the largest shopping centre in Mozambique, which is currently being developed in Matola, a dormitory town of Maputo. McCormick tells us how the company's business model is slightly different in other African countries, as communities have not been racially segregated as they have in South Africa. In other African countries, the company operates on what they call the “hub and spoke” model — beginning with a big regional mall in the country's capital, and then branching out from there into smaller secondary towns.

“

All the work opportunities were to be found in the urban centres as far as 100km away. It's actually incredible looking back 30 years down the line at how these areas have developed and how the urban environment has changed. The entire centre of gravity has shifted to around where those shopping centres are. It's a very gratifying thing to see.

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“We always partner with local people,” explains McCormick. “Without a strong local partner, it's very difﬁcult to get things done — you'll be seen as someone just coming in to harvest proﬁt from the country without giving anything back. On the development side, our model is similar to the one we use in South Africa. We always use local people for the construction and the jobs are given to local people who work within the shopping centres, so that doesn't change. And we

also reserve about 10% of the shopping centre for local tenants.”

ratio is less than 1%. The industry average is closer to 6%,” says McCormick. “We've never been busier. We always facilitate local franchises, and give local entrepreneurs space within the shopping centres. It's really gratifying to be part of this. Things are going from strength to strength.”

While the economic outlook for the coming year may be bleak, McCormick Property does not appear to be suffering too greatly. “Against the backdrop of a struggling economy, we're currently building four shopping centres, and will open two this year and ﬁve the year after. We've got close to 40 developments in the pipeline, so it's just about riding them out responsibly. In terms of managing our current portfolio, one of the proudest things for us is that our current vacancy 30

Developing A Positive Reputation

As the newest division of construction giant Raubex Group, Raudev Property Developers is already making a name for itself in the affordable housing sector. Essential Business spoke to Managing Director Francois Grobler about Raudev's current projects and what they mean for the community.

“

he discussions started in 2011, when I approached the Raubex group to tender with me in my previous capacity on the Lufhereng housing project,” says Grobler. Launched in 2008, Lufhereng is a multi-billion rand mixed housing development designed to address the shortage of affordable housing in Johannesburg. When complete, the development will extend the urban edge of Soweto around 5km westward.

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“I used to work for my own consulting company called PD Solutions, which is today owned by Raudev. The Council of the City of Johannesburg issued a tender for a large-scale integrated affordable housing project, and some of the requirements made me realise that really, only the large construction companies would be able to submit tenders that would be compliant,” he continues. “We then tendered in a joint venture, and subsequent

to that the relationship grew into what it is today.” The shortage of affordable housing in Johannesburg — and also in other urban centres such as Cape Town and Durban — makes subsidised and low-end housing a particularly sustainable market. “We work closely with local governments,” explains Grobler. “Below a certain income level, housing is simply not affordable. So governments need to extend some sort of subsidy to the individual to ensure he can afford the product, even if it's not in the form of a housing subsidy — even if it's in the form of purchasing land, facilitating the creation of engineering infrastructure, or putting priority areas together where water, sewers, roads, and electricity are prioritised in terms of government agenda.” The Council of the City of Johannesburg awarded the Lufhereng project to a consortium in January 2014. As a shareholder, Raudev is part of the project's 21,000 unit rollout. The consortium is responsible for the construction of the engineering infrastructure, as well as the construction of all fully subsidised housing — around ﬁfty percent of the total number of units. “This really establishes Raudev as a major player in the affordable housing sector,” says Grobler. “ The focus there is really to do both fully subsidised housing as well as affordable housing.” On the higher end of affordable housing, Raudev is also developing the Woodwind Estates housing project between Centurion and Midrand. Woodwind Estates consists of 750 units, to be priced between R599 000 and R1,3 million. 33

“

Below a certain income level, housing is simply not affordable. So governments need to extend some sort of subsidy to the individual to ensure he can afford the product, even if it's not in the form of a housing subsidy — even if it's in the form of purchasing land, facilitating the creation of engineering infrastructure, or putting priority areas together where water, sewers, roads, and electricity are prioritised in terms of government agenda.”

“We identiﬁed the land through private initiatives,” explains Grobler. “It came to my attention three years ago. I was negotiating with the then-land-owner, and discovered his neighbour was a member of the Raubex Group. And indeed, there was a sand mine being operated on that piece of land at the time, and the operator of that sand mine was also a member of the Raubex group,” he continues. “So it was pure chance that we were able to unlock a certain amount of value from that relationship, and end up being in a position to buy the land from the previous owner, which we did in 2012. We took over of the land in 2013, and we're going to hit the ground running very soon. We're looking to proclaim the township in the next few weeks, and we then want to start

with construction immediately before the middle of the year.” Raudev plans to have the first complex occupied by January 2016. “It's a quick turnaround, but we can do it,” says Grobler. “We're going to fast track a few processes — so we're going to simultaneously construct the services and the building works, instead of the normal process whereby you first service a township and then start the construction. Thanks to an old piece of legislation under which this particular township has been proclaimed, we can do these processes concurrently.” Looking forward, Raudev's plans for the future are as large and impressive as its developments. “Our small management team allows us to be flexible and adapt to

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www.brtsima.co.za

Building A A Better Future BrTsima Construction Pty Ltd began back in 2003 as a Black Economic Empowerment (BEE) subsidiary of construction giant Basil Read. Over the last twelve years, the company has grown into a celebrated firm of its own, and is making a serious impact in the construction industry.

n entirely black-owned and managed building and construction ﬁrm, BrTsima has tackled a good many projects since its ﬁrst contract with the Limpopo Road Agency in 2003. Today, the company prides itself on the quality of its construction services, and has been commended within the industry for its professionalism and dedication. “We actually became involved with the company in 2009 when I negotiated an empowerment programme with Basil Read's then-CEO Marius Heyns, with the aim of helping our company to grow in

the industry,” begins Ndendwa. “Back then, it was a subsidiary of Basil Read, and we owned 80% of the company. Now we own 100%. In fact, as it is now, our enterprise development is not even done by Basil Read, it's being done by Group Five,” he says. “Since 2009, we have grown into a Grade 8CEPE and 7GBPE construction company, and we've done a number of projects across South Africa.”

quality and reliability in the industry.

In addition to completing several large projects last year — including the new Trompsburg district hospital in 2014, in joint venture with Basil Read — BrTsima has been busy building a reputation for

Ndendwa attributes the ﬁrm's success to its ability to work as a team, as well as its ongoing dedication to quality — both of which are core values for BrTsima.

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“We won the Govan Mbeki award for Best Quality Housing in Mpumalanga, and a Master Builder Association's award when we were building the hospital with Basil Read,” recalls Ndendwa. “I also personally won the SMME Infrastructure Development Businessman of the Year Award from Black Business Quarterly in 2014.”

“The market generally has had a strange

feeling towards black-owned firms. There's a feeling that if you work with a blackowned firm you're going to be compromising on quality,” explains Ndendwa. “We didn't just want to meet standards. We wanted to exceed the expectations and break that stereotype.” The process of doing so has not been too difficult, he tells us. “It's something that we've adopted as a second nature. Also, our teamwork helps us a great deal.” While many construction firms in South Africa are currently struggling with recruiting and retaining talent, BrTsima's dedication to quality has allowed them to avoid such trouble altogether. The firm's training programs make it possible for them to ensure a consistent supply of qualified workers — providing employment in a time when the country desperately

“

We're a construction company, so developing workers is much easier for us. You don't develop contractors in a boardroom with an air conditioner, you take them to the site where you've got projects, and you develop them there, and they are good people,”

needs it, and also avoiding the workforce issues that the skills shortage has caused for so many other South African ﬁrms. “The problem for some companies is that they are not prepared to invest in their people,” explains Ndendwa. “If you invest in your people, you can build a very good company — but if you would rather look for ready-made people, then you'll have a problem. A lot of people are unemployed and unqualiﬁed, but these people can be fully trained and developed to become very good workmen,” he continues.

is certainly busy, Ndendwa tells us they could always be busier. “We've got the Twhala Road project in Pietermaritzburg coming to an end in June, and we've got the housing project in Peddie coming to an end in April. Then we've got the construction of Taleni Senior Primary School — big, precast structures — coming to an end in another three to four months,” he says. “All of our development happens when we have real projects going on. We don't have as many projects lined up as we'd like to, but it's still looking good.”

“We're a construction company, so developing workers is much easier for us. You don't develop contractors in a boardroom with an air conditioner, you take them to the site where you've got projects, and you develop them there, and they are good people,” he says. “There are a number of people that want to be contractors, and want to sit in one of these comfortable restaurants and drink red wine, but that is not a real contractor. A real contractor has got helmet and boots and is working right on site.” In addition to training workers themselves, BrTsima maintains its high quality standards by nurturing strong relationships with its suppliers. “Suppliers are very important because they're the people that make you look good,” says Ndendwa. “If the guy says he'll deliver the bricks tomorrow, he needs to deliver them tomorrow — if he delivers in ten weeks time, we're going to be very behind. So we make sure our relationship with our suppliers is good, particularly in terms of communication and reliability.” Several of the ﬁrm's biggest projects are coming to an end this year. While BrTsima 41

Mr. Bafana Ndendwa Chief Executive Officer

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www.swakopuranium.com

Husab Forges Ahead

Swakop Uranium is constructing what will become the second largest uranium mine in the world.

wakop Uranium's Husab project is a real headline grabber and with very good reason: it has the potential to transform a nation, producing 15 million pounds of uranium oxide when fully operational. But what does that mean to Namibians you might ask? Well, besides helping to make the country the second largest uranium producer in the world (it is currently ﬁfth behind the likes of Niger, Australia and Canada), Husab is set to boost the southern African nation's exports by 20 percent and boost GDP by ﬁve percent per annum; that's in addition to the direct and indirect job creation. It will undeniably contribute to the country's development objectives, both economically

and socially.Now we have your attention, let's tell you a bit more about the project. For starters its 8km uranium mineralisation has been conﬁrmed as the highest-grade granite-hosted uranium deposit in Namibia and one of the world's most signiﬁcant discoveries in decades. Essential Business Magazine understands that the mine has a potential life of more than 20 years, with uranium resources of at least 280,000 tonnes. The forecast ore grade at Zones 1 and 2 is 518 parts per million, while the total ore resource is more than 242,000 tonnes. This is a real beast and the speed at which Husab is progressing is remarkable. The

project is in the Namib Desert about 60km from the coastal town of Swakopmund. Swakop Uranium was established in 2006 after the area was targeted as an exploration area and Husab is being developed as a low-risk, conventional, large-scale load-and- haul open pit mine, feeding ore to a conventional agitated acid leach process plant. Established by Australian company Extract Resources, the mine was acquired by Taurus Minerals Limited of Hong Kong – owned by China General Nuclear Power Company Uranium Resources and the China-Africa Development Fund – in 2012 following a successful takeover and

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subsequent delisting of Extract Resources. As per Namibian laws, Taurus Minerals has a 90 percent stake while the Namibian state-owned mining company Epangelo holds 10 percent – acquiring that stake in November 2012 in a deal valued at N$1,882 billion. Construction of the mine started that same month, while mining operations went underway last year in March, with ore mining commencing in May, according to quotes carried in several media outlets attributed to Percy McCallum, Swakop Uranium's spokesman. “We have been clearing the overburden of sand and we will start mining ore from May onwards. We expect to have stockpiled a million tons of 44

ore by December,â&#x20AC;? he said.

Chinese ownership and the nuclear debate

Swakop Uranium is, as we said, owned by CGNPC and is China's biggest single investment in Africa - CGNPC has invested more than 2 billion U.S. dollars into the

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besides helping to make the country the second largest uranium producer in the world (it is currently fifth behind the likes of Niger, Australia and Canada), Husab is set to boost the southern African nation's exports by 20 percent and boost GDP by five percent per annum

Husab Uranium mine, with its total longterm investment estimated at around 5 billion U.S. dollars. But is Chinese ownership bad? No, at least not in our view; while many will question why foreigners own the majority of mines like this, the reality is that mining is extremely capital intensive and without huge investment they simply wouldn't happen (think start-up costs, exploration costs etc). It is quite easy to imagine a scenario where ore deposits won't be mined because there is limited capital or expertise to invest in mining â&#x20AC;&#x201C; just think about that. Of course, uranium from mining is used almost entirely as fuel for nuclear power plants and an important aspect for Swakop 47

Uranium is to secure supply for the Chinese nuclear industry. That's good news for China and it is believed that through its investment in Husab, CGNPC will be able to supply sufďŹ cient uranium to feed their reactors on an ongoing basis. There is a global angle here too: the environment. While the Fukushima disaster has put many off nuclear, it is a key tool in reducing greenhouse gases. Yes, there are a lot of people that remain and likely will always be anti-nuclear, but imagine if the Chinese get to 5 percent nuclear mix, how much would that do for the planet in terms of CO2 emissions?

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It is certainly an interesting debate and we look forward to seeing the positive impact the project will continue to have on a large and sparsely populated country and indeed the wider continent and the world. Visit www.swakopuranium.com. magazine

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Squeezing Ahead Since 2005, Boland Pulp has been establishing itself as a leader in the South African purees and concentrates business. We spoke to marketing manager Kelly Turner to find out about more about what has been driving their business forward.

ased in Wellington in the Western Cape, Boland Pulp specialises in the production and exportation of quality fruit and vegetable purees and concentrates. Since its launch a decade ago, the company has seen an impressive rate of growth, and in February this year, Rhodes Food Group announced their upcoming acquisition of the company. “The paperwork is still going through. It’s a process that will take a couple of months,” says Turner. In the mean time, she explains, it’s business as usual — and for Boland Pulp, that means shipping a wide range of puree products to both international and local markets. “The largest part of our business is the export of purees and concentrates. When our CEO started the business, we were just

looking for value-add, and then we went into the pouch division. We set up the first pouch packing plant in South Africa,” says Turner, referring to the factory built on their Wellington premises in 2009. “At this point, we export to more than 30 countries in the Middle East, Europe, Asia, and America. They’re using our products in final and finished goods — from fruit juices to flavoured beers.”

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www.bolandpulp.co.za 50

Supply chain Boland Pulp is known for both the quality of its products and its excellent relationship with local farmers. The two things are intrinsically related. “Without the farmers, there would be no business, so it’s crucial that you keep that channel of communication open. We’ve got agents in the ﬁelds that know everything that’s happening on the farms. We value communication very highly, and that’s why we are where we are today,” she explains. “It’s something that we feel very strongly about. We’re involved in various organisations that look at all aspects of farming, including the Canners’ Association.”

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The largest part of our business is the export of purees and concentrates. When our CEO started the business, we were just looking for value-add, and then we went into the pouch division. We set up the first pouch packing plant in South Africa,” says Turner, referring to the factory built on their Wellington premises in 2009. “At this point, we export to more than 30 countries in the Middle East, Europe, Asia, and America. They’re using our products in final and finished goods — from fruit juices to flavoured beers.

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The South African Fruit & Vegetable Canners’ Association, or SAFVCA, is a voluntary group dedicated to protecting the interests of all involved in the fruit and vegetable canning process. As a key player in the industry, Boland Pulp is represented by the association, alongside other big brands such as Del Monte and Rhodes Food. By taking such a keen interest in its producers, Boland Pulp is able to ensure the quality of its products remains consistently high — and with the current consumer drive for healthy and natural products, this knowledge and understanding is crucial. “Consumers are a lot more savvy than they used to be. People are reading the labels, and they want to know exactly what they’re

putting in their bodies,” explains Turner. “Our core idea is quality products — you can read everything that’s in them, and you can see that there are no preservatives, no colourants, and no ﬂavourings. We’ve seen an increase in demand from international markets. South Africa has always been known for its fruit and vegetables, and we’ve exported all over the world for years. But products like purees and concentrates are deﬁnitely in more demand now.”

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Looking East Boland Pulp deals with requests from Asian markets on a daily basis, and Turner tells us how she’s noticed a deﬁnite trend for organic food in the last couple of months. Considering exported products are usually tailored to suit international tastes, this demand for unaltered products is surprising. “If you look at international and globalised marketing, it’s important how the product tastes. For example, the United States tends to prefer sweeter things, so exporters usually add a lot of sugar to their products. I think the change is related to the whole ethos of healthy living — what you’re putting into your body is what you 55

get out — and we can see the impact of that.” In South Africa and worldwide, childhood obesity is a growing problem, and this is leading healthier fruit and vegetable products to be seen as not just aspirational goods, but a necessity. “The demand for products with a healthconscious aspect has deﬁnitely increased. And as a manufacturer of baby products, you can’t add sugar, you can’t add salt, and on top of that, we’ve now got the convenience of the puree pouch,” says Turner. “In the UK and Europe, people are already familiar with it. The fruit pouch took a while to get off the ground in South Africa,

but more and more mums are seeing how convenient it is to use. We’re moving away from the standard. South Africa has always used the same products – whatever the mum uses, the grandmother used — but we’ve definitely seen the uptake of the pouch, and it’s been very positive. We’ve even had requests from overseas for our Squish Baby range.” While regulations vary from export country to export country, Boland Pulp has met this challenge by opting for qualifications that are recognised worldwide. “When we went down the organic route, with the Pure’ Organic Mini Meals, we wanted the accreditation and the certification that was recognized worldwide, which is why we went with Ecocert. We wanted to

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create a product that would be able to go all over the world, and wasn’t just for here in South Africa,” she explains. In addition to the acquisition, this next year will see the launch of a new breakfast range from Boland Pulp. “Unlike overseas, the idea of puree for adults is still quite foreign in South Africa. We want to show that puree is not just for babies. All over the world, there’s quite a big drive towards healthy pureed food. And we’re going to introduce something new to the South African market.”

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