Essential Business Magazine

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AFRICA AUSTRALIA NORTH AMERICA

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Company South Africa September 2014 InAirport the business of moving people VOL 1 ED 1

Yingli

Passenger Rail Agency of South Africa

Lighting up your world

Meeting South Africa’s need for speed

Exxaro Resources

Digging Deep


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Take advantage of an essentially committed business partner

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...essentially your business


‘Kayen Alexander Creative Director Samuel Wright Editor-in-Chief

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Bitcoins

CryptoCurrency, The New Money

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Bitcoins CryptoCurrency, the New Money The effects of digital money in Africa and the world

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hen everything is becoming smart, from mobile phones, to TV's watches to glasses why should money be left out? Bitcoin is the new currency on the block, a peer-to-peer software-based online payment. Selling fast on the digital space and widely accepted by many. Created in 2008 by Satoshi Nakamoto (which apparently is an alias) and introduced as open-source software in 2009. Payments work peer-to-peer without a central repository or single administrator, this allows people to buy merchandise anonymously. This means transactions will not involve banks, no transaction fees and the freedom to withhold your true identity. Although it has been seen as a welcome 7

development by many users, the US Treasury however calls bitcoin a decentralized virtual currency because there is no regulatory body to monitor it. Although its status as a currency is disputed, media reports often refer to bitcoin as a cryptocurrency or digital currency. Bitcoins can be used to purchase anything from webhosting services, pizza or even manicures. It has caused a global stir and is gradually growing on the African market. With different mobile money platforms and applications currently in operation in Africa Bitcoin is making its way to further strengthen online payment options in Africa.


One of Kenya's major mobile operators, Safaricom, introduced its digital payments system called M-PESA way back in 2007. The “M” stands for mobile, while “Pesa” is Swahili for money. Since the launch in 2007, by 2012 it has over 14 Million users in Kenya, South Africa, Tanzania, Uganda as well as India and Pakistan. The major effect will be that of Western Union especially for Africans in diaspora who send money using this platform which means long queues in banks. According to the World Bank Africans throughout the Diaspora send home $32 billion a year using Western Union payment platform. This number will drastically fall with the growth and acceptance of Bitcoins, because there will be no more charges to send money when all you need is a

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standard-feature mobile phone. PayFast, a leading payment processor in South Africa has fully accepted and integrated Bitcoins as a valid payment option. It becomes the first payment processor in South Africa, and one of the first anywhere, to offer the cryptocurrency as an option.

The major effect will be that of Western Union especially for Africans in diaspora who send money using this platform which means long queues in banks. According to the World Bank Africans throughout the Diaspora send home $32 billion a year using Western Union payment platform 8


The System The most important component of the bitcoin system is that it is a public ledger that records financial transactions in bitcoins. This is accomplished without the intermediation of any single, central authority, as long as mining is decentralized. Instead, multiple intermediaries exist in the form of computer servers running bitcoin software. By connecting over the Internet, these servers form a network that anyone can join. Transactions of the form payer A wants to send B bitcoins to payee C are broadcast to this network using readily available software applications. Bitcoin servers can validate these transactions, add them to their copy of the ledger, and then broadcast these ledger additions to other servers

The Block Chain Bitcoin transactions are permanently recorded in a public distributed ledger called the block chain. Approximately six times per hour, a group of accepted transactions, a block, is added to the block chain, which is quickly published to all network nodes. This allows bitcoin software to determine when a particular bitcoin amount has been spent, a novel solution for preventing double-spends in a peer-to-peer environment with no central authority. Whereas a conventional ledger records the transfers of actual bills or promissory notes that exist apart from it, the block chain is the only place that bitcoins can be said to exist. To independently verify the chain-ofownership of any and every bitcoin amount, full-featured bitcoin software stores its own copy of the block chain. 9

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The most important component of the bitcoin system is that it is a public ledger that records financial transactions in bitcoins. This is accomplished without the intermediation of any single, central authority, as long as mining is decentralized


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There is an on-going debate about the success of Bitcoins in Africa and the world in general as governments are looking at the safety of the platform with no regulatory body, with more risk to the user and its untraceable feature.

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Like anything new it will face scrutiny and subjected to criticism, since inception it has recorded a significant success.

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Using an online exchange to obtain bitcoins entails some risk, and according to one study, 45% of exchanges fail and take client bitcoins with them.

Mining Maintaining the block chain is called mining, and those who do are rewarded with newly created bitcoins and transaction fees. Miners may be located anywhere in the world; they process payments by verifying each transaction as valid and adding it to the block chain. Bitcoins can be bought and sold with many different currencies from individuals and companies. Bitcoins may be purchased in person or at a bitcoin ATM in exchange for cash currency. Participants in online exchanges offer bitcoin buy and sell bids. Using an online exchange to obtain bitcoins entails some risk, and according to one study, 45% of exchanges fail and take client bitcoins with them. Since bitcoin transactions are irreversible, sellers of bitcoins must take extra measures to ensure they have received traditional funds from the buyer. There is an on-going debate about the success of Bitcoins in Africa and the world in general as governments are looking at the safety of the platform with no regulatory body, with more risk to the user and its untraceable feature.

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Meeting South Africa’s Need For Speed Transformation For A Better Transport System

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outh Africa has continued to blaze the trail in infrastructural development, the African economy making it an investment hub in the African sub region. Transportation plays a major role in the development of any economy, It is no longer about just getting from point A to point B, but getting there on time and with minimal cost. The public transport system faced an alarming decay, especially the rail transport system. Therefore the need to restrategize and re-evaluate the need for speed. In 2009 that need was tackled through the formation of the Passenger Rail Agency of South Africa (PRASA) The merger of the 11

operations, personnel and assets of the South African Rail Commuter Corporation, Metrorail, long-distance rail service (ShosholozaMeyl),Intersite Property Management Services and the long distance bus company Autopax (comprising of Translux and City to City buses). The institutional bodies that governed the passenger rail and public transport system in the past did not promote efficiency not to mention little or no innovation nor accountability. Clarifications of individual roles each of these bodies had to be worked out as there was a confusion in the system. Due to the integrating these entities, the roles of Intersite were redefined in order to support to pave the way for a more robust, efficient and accountable service which is in line with PRASA's new strategic direction.


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www.prasa.com A major factor that affected the system was funding, which is the story for most highly driven public infrastructures such as the rail system. The next step to curb this dysfunction by the government was to proffer a way to find sustainable funding solutions as part of its efforts to deal with the steady decline in commuter rail services and support broader Government infrastructural investments in public transport. The National Rail Plan has called for funding and investment for passenger rail over the next ten years. PRASA, which is now at the forefront of government efforts to transform the public transportation system in South Africa, is developing new ways to integrate inter-model facilities and services into public transport solutions that optimize the performance of the whole 12


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The institutional bodies that governed the passenger rail and public transport system in the past did not promote efficiency not to mention little or no innovation nor accountability.

transport system. The merger could not have come at a better time as the country was hosting the world's biggest sporting event in football, The 2010 FIFA World Cup, an efficient transport system had to be in place to ensure the successful hosting of the mundial. It had to address the lackluster performance of the passenger rail service, and give investors reason to make worthy investments in the sector. Beyond all this, it was also deemed necessary to provide a lasting solution to South Africans and their need to proper and effective transportation system. 13

The Investment Trail With the Metrorail responsible for transporting over 2.2 million passengers daily and the country's biggest station (Park) moving over 160,000 passengers every day, PRASA recognized the urgency to update their old and outdated system and assets. The current plan is to modernize both the stations and the signaling equipment, and with their 20-year investment outlook, PRASA hopes to invest 150 billion rand in order to buy new trains and locomotives. According to the Group Executive of Strategic Assets Development, Piet Sebola, the PRASA team hopes to create something special for all South Africans to be proud of, a rail-system that is safe and efficient, with a modernized signaling system to give better capacity and safety for all passengers. Another area where PRASA hopes to improve its railways is in the connectivity side of things, with a fragmented rail network, the team is looking to invest in better connectivity within their 20-year investment outlook. PRASA is now


finalizing a feasibility study for the Moloto Rail Corridor which consists of 118 km of track, which will connect three provinces (Gauteng, Mpumalanga and Limpopo); this is a large project that is set to better the lives of many South Africans.

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It is not good enough anymore to solely provide customers with just a modern train, we want the best for them, and we want to give them the best experience possible”

The Commuters Choice One of the main goals of PRASA is to modernize their stations, by giving them a totally new look and feel for their customers, who won't see public transport as just a means to an end but a wellrounded shopping and dining experience as well. “It is not good enough anymore to solely provide customers with just a modern train, we want the best for them, and we want to give them the best experience possible”, says Sebola. In the next three years, PRASA is expected to invest 3 billion Rand to re-vamp some of its bigger stations to include more dining options, as well as full commercial and retail centers that are accessible to customers. 14


We look for people who will put their customer first, have high-levels of respect both for passengers and for colleagues and individuals who are willing to work hard and smart.

In Good Hands When it comes to hiring at PRASA, the team looks for high-performance individuals who would understand the motives and objectives in such an organization. “Introducing a new business into an existing one, which is based on 1950's technologies that is soon to be updated, means we not only want but need energetic, modern day workers who have the talent to push themselves in order to achieve the best”, says Sebola. With over 16,000 employees, PRASA is continuously investing and developing the skills of their workers, because they understand that it's the employees of 15

PRASA who will push the organization to unprecedented new heights. When it comes to choosing these individuals, Sebola maintains that one of the best-regarded qualities is integrity and honesty. “We look for people who will put their customer first, have high-levels of respect both for passengers and for colleagues and individuals who are willing to work hard and smart.


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Introducing a new business into an existing one, which is based on 1950's technologies that is soon to be updated, means we not only want but need energetic, modern day workers who have the talent to push themselves in order to achieve the best

The Road Ahead PRASA's objective is to offer a service of excellence that is safe and secure and serve the people that use the public railway systems. There is a growing consensus that things can no longer be done as they have in the past, there is a need for change, that is being led by PRASA. The bold step by the Government with their creation of PRASA in an effort to broaden the strategic leverage that can be deployed in support of the government's transport objectives. Simply put, PRASA is about mobility, convenience and accessibility. The movement of people while providing them access to real opportunities to help better their lives, in conjunction with PRASA's financial objectives, the union of the two seems to be a recipe for success.

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In the business of moving people Twenty one years since inception and still growing strong.

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he Airports Company South Africa (ACSA), South Africa's leading Airport authority is making the African skies a must enter through its airports. Formed in 1993, Airports Company South Africa (ACSA) under the Companies ACT of 1973 The ACSA has seen tremendous growth although majority of its shares are government owned the company is in full control of its finances operating fully under commercial law. ACSA owns and manages nine key South African airports, including the three main international gateways of O.R. Tambo, Cape Town and King Shaka International Airports. The company aims to offer outstanding, secure infrastructure for 19


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www.airports.co.za airlines to transport both people and goods. As part of its roles the ACSA seeks to advance tourism, fast economic growth, job creation and the protection of the environment. Most of ACSA’s revenue is generated from aeronautical and non-aeronautical sources. The aeronautical revenue is derived from government-regulated charges, tariffs paid by airlines, while the non-aeronautical income is derived from multiple sources including retail sales, concession fees, property leases and revenues from involvement in international activities. The ACSA believes that every component of an airport is as important as the other; you could say they have personified the airports therefore injecting life to every

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every component of an airport is as important as the other; you could say they have personified the airports therefore injecting life to every aspect giving airline operators, travelers and business people a welcome and friendly environment.

aspect giving airline operators, travelers and business people a welcome and friendly environment. Technology has been a major part and will continue to be what sets this African hub apart from the others. Airport applications that help travelers ease of the stress of making a trip much simpler, routes to and from the airport are being looked at to ensure travelers have the best flying experience from ground up. 20


The Business Plan For every business there is a plan and that plan for ACSA is a simple one. Peoplecentric! That's how they have achieved their goals and are still achieving them by keeping the flying customers satisfied.

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synergy with key industry partners, investments in technology, human capital and systems are all the necessary ingredients needed to see its vision of a customer focused business achievable.

Their strategy is to build a customerfocused business, working hand-in-hand with airline operators who also have a commitment to the flying public form a synergy to align with the ACSA's vision to be a world class airport authority as well as running a class A airport business.

South Africa like many urban economies is faced with unemployment challenges; ACSA is true to its people-centric vision by providing jobs for every level of education in South Africa.

South Africa being one of Africa's' largest tourism destinations in the world, with visitors teeming its airports, sights and cultural heritage which South Africa is built on, nothing but the best quality service offerings can suffice to ensure a memorable stay. ACSA has in its armory quality, and prompt service delivery operating an inexpensive infrastructure to meet the many demands the South African tourism industry requires to be the best for South Africa and Africa as a whole.

Working with the private sector and strategic investments and partnerships has helped stem and face this challenge. Infrastructure development programmes of the ACSA has led to socio-economic growth of communities proving way over 300,000 job opportunities within the three major airports. It is therefore believed that future developments in regards to both passenger and cargo growth will in turn result to more jobs evaluated at 150,000 within the coming years.

Through effective brand management the skies are truly becoming friendlier. ACSA's

In its commitment to developing its peoplecentric programme the ACSA is also

Ground Spacing


involved in several Corporate Social Responsibility programmes. One of such programmes is the ACSA's social investment fund, which is centered on the areas where their business concerns are in operation. Education, Youth empowerment and Women empowerment programmes are all part of the elements where the ACSA's impact will be felt. The ACSA has carried out a number of Women’s volunteer programmes, education and training of women and children, and its focus on the disabled in the community. The ACSA has been recognised by being awarded the National Disability Champion Award for its contribution and commitment to improving lives of people living with one disability or the other. The primary focus of their mobility project is to create access of resources and relevant support systems to people with disabilities.

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The Road Ahead The journey is a long one, but steady steps are growing into steady strides, with more partnerships to be formed with the ACSA and a consortium made up of GVK (India) and Bidvest, a South African listed company has won the bid to manage Mumbai International Airport (MIAL). This marked a significant boost for the ACSA considering it as a viable investment. With concessions won and lives being touched, the ACSA is certainly building bridges within and outside South Africa. It intends to certainly build on the successes it has today to ensure better service for all its customers, business partners, the Country, the continent of Africa and the world as a whole.

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Digging Deep

www.exxaro.com

Sustainability is the name of the game

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xxaro Resources is rapidly growing to become a pride of South Africa and Africa in general when it comes to mining. Being one of South Africa's largest diversified resource groups, with invested interests in the coal, titanium dioxide and renewable energy markets, with a presence in South Africa, Botswana, Mongolia and Australia. There is little wonder why the company is the second largest coal producer in South Africa with current production of around 40 million tons per year. It is listed on the JSE where

is a constituent of both the Top 40 and Socially Responsible Investment Indices. Though the company has been in operation for just 7years, its history and abundance of skills and remains undaunted. With know-how that stretches back over decades as a company rooted in South Africa and respected amongst its colleagues for originality, reliability and ethics. Based on a well-executed strategy, solid returns, access to resources and funds, If you are familiar with the term "giving you a run for your money" Exxaro is that company. 24


Exxaro is a unique listed investment opportunity, named as one of the top 10 mining companies globally in terms of total shareholder returns in 2012, investors are bound to strike gold with such a company.

Looking the Exxaro Way Built on a strong vision; everything that they do in the present should help others realize their vision for the future. With a team of seasoned professionals, the future is what they see using the tools of today to build the desired future that will benefit people everywhere in the world. With constant study of effects the impact of their operations and commodities will have on the future of the planet and its people is never far from their minds. They are in constant competition with themselves striving towards being the best in their industry leaving no stone unturned. Exxaro boasts of leaders in different fields combined to make this more than just mining of minerals but of great minds people. When you have the best the result will be nothing short of overwhelming greatness. Exxaro, was formed by the merger of some industry leaders. Exxaro's managers aim to build on the accomplishments of before while creating new opportunities and push the group into new horizons. It is always tough to get it right the first time, but when all the ingredients for success are in place with the right people then you would have created a brand, one that will stand the test of time, policies, environment, people etc. This is what sets Exxaro up to be one of the greatest South African Companies to date. 25

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Built on a strong vision; everything that they do in the present should help others realize their vision for the future. With a team of seasoned professionals, the future is what they see using the tools of today to build the desired future that will benefit people everywhere in the world. The Right people for the Job

Exxaro has a rich tradition of pushing the envelope and setting the bar high for others in their industry to follow. As an organization that appreciates it is only as strong as its people. The desire and imagination of its workforce is the company's most valuable asset and helps them see opportunities in the future. Not everyone can hold a significant title, but the dynamic working environment at Exxaro offers room for growth and to development of greater skills. This way, one of the most highly qualified workforces in the country will become the leaders of their industry.


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It is through their people that Exxaro delivers on their promise their brand essence. They are the ones who have been and still are powering possibility. The Exxaro promise captures the nature of the business and its unique benefit. As a resource business the company are the starting point of the value chain and their products affect all industries in one way or another. Exxaro powers industries and businesses creating possibility striving to ensure that they deliver innovative and sustainable products for today and for the benefit of future generations. These improvements include safe, conducive working conditions for employees, renewable energy sources for industries and a clean and green environment for all.

The Client is The Business In the words of the Sustainability Manager Mongezi Veti, the philosophy at Exxaro is to value and cherish their customer's to the utmost degree. “We drive the whole company towards customer relationship management and orientation,� says Veti. With a client like Eskom, with presence in different African Countries getting it right is key to sustaining the business and the relationship built on trust and service delivery.

The Exxaro Client list is a long one, some in Africa and Energy company's in Europe, it is safe to say they keep them digging and working timelessly to meet the growing requirements of such impressive clients. Veti mentioned that all Exxaro employees are trained to prioritize the needs of their customers in terms of quality products, speed and communication, listening closely to the needs of each individual project. If change is needed, the team is quick to react, altering specifications where necessary and doing the best job they can to provide a smooth and easy process for their clients. These improvements include safe, conducive working conditions for employees, renewable energy sources for industries and a clean and green environment for all. 26


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We drive the whole company towards customer relationship management and orientation, downturns, the challenges are endless. Exxaro, is looking at 30years from now trends that tip the balance in favour of all mankind, hence the company's thinkinglong term to realize the Exxaro Vision. The strategy is simply staying true to their objectives, focus on achievable and sustainable goals applying global best

The Client is The Business South Africa's prosperity lies largely in its world-class mining sector, a sector that contributes almost one fifth of the country's GDP. Blessed with abundance of mineral resources, Exxaro is play a major role to see that it ensures a thriving sector as well as cater the hopes of thousands of unemployed citizens that a business such as Exxaro has helped along the way. A major challenge for this sector stems from environmental issues such as climate change and water, stricter regulatory environments, ageing infrastructure and new technological advancements to industrial relations unrest, social development demands and economic 27

practices, with a commitment owes to the communities and their stakeholders. Their business philosophy recognizes that the company exists within the context of a society, which is beneficiary to the activities of the company. Their business development and growth efforts balance a portfolio of social, environment and economic objectives. Mining is a critical and a main stay in stimulating economic activity, Exxaro's investment activities will therefore make a significant impact on the country's socioeconomic development goals. Guided by formal charters that mold their goals and commitment to stakeholders in the industry and the country in general. These charters are guided by South African


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staying true to their objectives, focus on achievable and sustainable goals applying global best practices, with a commitment owed to the communities and their stakeholders

legislation, the JSE Socially Responsible Investment (SRI) Index requirements and international benchmarks such as the Global Reporting Initiative (GRI), the United Nations Global Compact, and the International Council on Mining and Metals. The team at Exxaro recognize that sustainability is an important element in ensuring the future is secured for every one of its stakeholders. So it is safe to say that their focus is sustainability. Sustainability forms a pattern for appraisal of its implementation process guided by the five-capitals model — a well-documented sustainability framework used globally, which is an integral of both their strategy and the way they measure the performance of their work, people and the society.

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Digging Into The Future With a clear path, a good team at Exxaro Resources there is nothing but success awaiting them. Their aim is beyond just being a home grown business but a leader in exploration, a go to source for governments, a reliable investment choice and a socially responsible brand that is working round the clock for its society and the world.

This framework is tailored to meet the nature of our business and the needs of its stakeholders. The model is followed to support Exxaro's strategy and ensure its continued sustainability for generations

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Powering Africa & the world Affordable green energy for all

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hen it comes to solar energy provision and manufacturing, Yingli Solar is undoubtabley the world’s largest solar panel manufacturer and a global solar energy industry leader. With over 20 offices in countries around the globe, Yingli Solar has customers all over the globe and with their efficient customer service record backed by global production capabilities and experience. In the African market Yingli Solar Africa is both an emerging and strategic market to approach. The Managing Director Christopher Steinbach, talks about how the company has been actively engaged in the South Africa before the Country won the bid to host in 2010. The move was Strategic, in the sense that 29

the company wanted to invest in the country setting up a legal entity that would be research and understand the market in order to gain further ground in Southern and Sub-Saharan Africa, using South Africa as a springboard. Renewable energy is fast becoming of great interest in the world, it is also making its way to Africa and growing steadily. Yingli Solar recognizes the continent’s lack of reliable energy sources, therefore enabling Yingli to be part of the change that will give people access to clean green energy. Though the market for renewable energy sources and products are relatively saturated, South Africa and Africa is less so says Steinbach, due to lack of policy encouraging Commercial PV installations and a lack of understanding of the benefits


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www.yingli.com and working of PV technology. The key to differentiating themselves is through their customer services provision and having the right networks in place that are fundamental to unlocking the doors to the decision makers says Steinbach.

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Renewable energy is fast becoming of great interest in the world, it is also making its way to Africa and growing steadily. Yingli Solar recognizes the continent’s lack of reliable energy sources, therefore enabling Yingli to be part of the change that will give people access to clean green energy.

Aside from that, Yingli has a world-class product that is certified, qualified and exceptionally bankable. Combining these two elements, Yingli works together with their customers to make their lives easier where possible.

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Listening to our customers When it comes to forming good relationships with customers, the key is the ease of doing business says Steinbach, “Listening to our customers, engaging with them is incredibly important”. South Africa’s renewables market is still in its infancy, so there are huge barriers in terms of government policy, a lack of education, accessibility and financing. Yingli aims to make the lives of their clients easier, supporting the bigger risks and ensuring that their product is always readily available. The crucial factor here is just to listen says Steinbach, understand and adapt to meet those needs. At present, outside the SA REIPPPP program, the company’s biggest clients are in the commercial and industrial sector, where they see Yingli’s product and offerings matching their needs. Solar PV can help many of these businesses reduce their energy consumption from 30-60% (or more) says Steinbach. Another major driver is the need for energy security which is also present in the residential market, this will be a major push in favour of PV technology in the future says Steinbach.

A Corporate Family and working of PV technology. The key to differentiating themselves is through their customer services provision and having the right networks in place that are fundamental to unlocking the doors to the decision makers says Steinbach. 31

Aside from that, Yingli has a world-class product that is certified, qualified and exceptionally bankable. Combining these two elements, Yingli works together with their customers to make their lives easier where possible.

Solar the best option With countless critics of PV technology, many ask why use this technology versus another? Steinbach touches on a few points, from efficiency to dropping costs. Firstly, PV is a great technology for businesses because it provides energy at peak business hours, even if it needs support, it is adaptable and can be hybridized with other sources of energy such as wind, coal or diesel. Besides the cost benefit, the energy source can be rolled out relatively quickly and is reliable. PV technology, with or without grid infrastructure power can be rolled out in a matter of months compared to hydro


stations or coal stations, which can take years, and require extensive infrastructure. “To sum it all up, choosing PV is quite simple because it is versatile, reliable and quick�, says Steinbach.

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Hopefully, with more understanding of the technology and more financial support in place, the region will see a number of exciting projects taking shape on the African continent, with Yingli Solar playing a critical role in several of them, supplying, Affordable Green Energy for All!

A Bright Future Though the industry as a whole is facing a number of challenges that include a lack of supporting policy, financing for the initial capital investment, Yingli is hoping to counter it by putting on emphasis on knowledge transfer and awareness. As of now, the company is very excited for the future; within the next year or so, the South African market will unlock policies and see a big growth in the local market as well as neighbouring countries where there is already a strong movement says Steinbach. 32




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