KZN Invest 15 by famouspublishing

KZN SUMMER 2021

INVEST CONNECT COMMUNICATE COLLABORATE

ISSUE 15

Imtiaz Sooliman

Building Bonanza

Sandile Zungu

Not Skinny

The gift that keeps on giving in a land hungry for hope

Charles Thompson cuts a trail creating a new Durban suburb

Find out more about the man pioneering black empowerment

Meet the Phatt chef in the mountains

Intra-African Trade Fair Special

BUY LOCAL INVEST LOCAL Let’s come together and heal as a nation. Let’s focus on renewing, restoring and rebuilding successful partnerships and investment opportunities so we can get back to promoting our city as the ideal destination for business and pleasure to the rest of the world. Your support coupled with our world-class infrastructure, innovative business environment and ever evolving investment opportunities, means we can get back to ‘connecting continents’ in no time.

Tel: +27 31 311 4227 Email: invest@durban.gov.za web: invest.durban

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The city of Durban (eThekwini Municipality) is South Africa’s second most important economic region

Extensive first-world road, rail, sea and air

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Dube TradePort and King Shaka International Airport - 60year Master Plan - driving growth of aerotropolis, or airport city

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Rated in top 5 ‘Quality of Living’ cities in Africa and Middle East by Mercer Consulting in 2015

Named one of the New 7 Wonders Cities by the Swiss-based New 7 Wonders Foundation in 2014 1

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W H AT ’ S I N S I D E

Issue 15 SUMMER 2021

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- 06 - - 08 - - 12 Guest column

Sandile Zungu: Black Economic Empowerment – a developmental imperative in SA

Property pundits

A networking property dinner with FNB and KZN Invest

Morphing property dynamics

Making good of a bad situation

- 16 Thumping Thompson

Turning the property market on its head

- 18 - - 28 Stop. Start. Build. Move?

The way forward for commercial space

An era for self-starters

With unemployment levels soaring, is entrepreneurship a way to survive?

Issue 15 SUMMER 2021

KZN

W H AT ’ S I N S I D E

INVEST

EDITOR Greg ArdŽ PRODUCTION EDITOR Lorna King DESIGNER Kyle Griffin ADVERTISING Jenni McCallum 082 411 6401 GENERAL MANAGER Doody Adams CONTRIBUTORS Shirley le Guern Mlungisi Mbele Jon Ivins Val Adamson Copyright: All material in this issue is subject to copyright and belongs to Famous Publishing unless otherwise indicated. No part of the material may be quoted, photocopied, reproduced or stored by an electronic system without prior written permission from Famous Publishing. Disclaimer: While every effort is taken to ensure the accuracy of the contents of this publication, neither the authors nor the publisher will bear any responsibility for the consequences of any actions based on information contained herein. Neither do they endorse any products/services advertised herein. Material which appears under ‘Advertorial’ is paid for.

Published by Famous Publishing www.famouspublishing.co.za Printed by Novus

COVER: DURBAN PROPERTY PUNDITS. CREDIT: VAL ADAMSON

In compliance with the Protection of Personal Information Act 4, if you do not want to receive KZN Invest magazine for free, please email sarah.mackintosh@ famouspublishing.co.za For more information visit: www.famouspublishing.co.za

- 34 - - 36 - - 42 - - 44 - - 48 Navigating the rapids

Business coach Darryn Le Grange offers sound advice for success

Harnessing a joint future Hesto Harnesses – manufacturing excellence

Soothing Sooliman

Offering help where help is needed

A revelation

A Durban photographic exhibition about people’s daily lives

Mountain man on a mission Simon Kerr

Issue 15

SUMMER 2021

ED’S LETTER

he sight of Cyril’s cherubic cheeks cheered me no end the other day. I saw a picture of the president visiting Durban to tour the Toyota factory and cut a ribbon to celebrate expansions at the plant that could see 4 000 hybrid cars manufactured in eThekwini every year. I read it as symbolic of the triumph of good over evil and how the tryranny of a few can’t last forever. Of course, as I’ve written in this column before, I can be a bit of a pollyanna. I was having a good day when I saw Ramaphosa, it coincided with other rallying news about a R500-million expansion at the Tetra Pak plant in Pinetown and an

endorsement of the economy in a region battered and bruised by unrest and service delivery failures is like manna from heaven. Waqas Ali, Tetra Pak’s Pinetown plant boss said the upgrade would enable 80% local content in manufacturing. Stefan Fageräng, Tetra Pak South Africa MD said: “While the

investment is primarily a business decision, it cannot be ignored that it also represents a timeous morale booster for KZN.” Tetra Pak’s commitment, while significant, is probably small potatoes compared to overall investments by Toyota. I read somewhere that the automotive sector

spite of how woeful politics can be. Broadly speaking, firms with an international presence are under scrutiny and behave responsibly (it goes without saying that some behave abominably – a certain chemical company comes to mind). The investments offer another perspective that many of us lost amid the emotional trauma of unrest: this province we call home is viable and has great prospects. We can (and I often do) fixate on corruption scandals, the dire lack of political leadership across all parties and government ineptitude. Those won’t ever disappear, but maybe business and civil society will increasingly find more common ground, demand

A bit of PERSPECTIVE

announcement that a 300-seat call centre was launched in uMhlanga. Let me linger on the detail for those who who don’t know. Tetra Pak is a global outfit that employs 25 000 people. The company said the Pinetown investment reinforced its commitment to local growth. The build will take a few years with investments in new packing technology, which, the company promised, would produce less CO2 emissions by using less energy and water and increase green sources of electricity. Naturally politicians leapt upon the Tetra Pak opening with wild cries of glee. Who could blame them in the pre-election period. Such an

TOP: PRESIDENT CYRIL RAMAPHOSA SPEAKS TO A CROWD OF PEOPLE INSIDE THE TOYOTA MANUFACTURING PLANT AT PROSPECTON. ABOVE: STEFAN FAGERÄNG, TETRA PAK SOUTH AFRICA MD.

includes seven light-vehicle producers who invested a record R9,2-billion in 2020. The Webhelp story is another trophy. The firm said it would create 300 jobs in Durban in a “people-first work environment” that would boost its national staff quota to 4 000. The company said it was part of a “fun-loving, global community of more than 95 000 passionate people who work across 190 locations in more than 55 countries”. Companies do like to crow about their growth – much like politicians bleat on about changing the world – but I’m dwelling on these stories because I like to think they could be representative of how businesses prosper in

better accountability and drive a new agenda. You only have to read the stories in this edition about the entrepreneurs, the artists and social leaders like Imtiaz Sooliman to be inspired.

gregarde@gmail.com

CONNECT CONNECT GLOBALLY GLOBALLY

2 SECTORS: SECTORS: SECTORS: AGRICULTURE/ AGRICULTURE/ AGRICULTURE/ BUSINESS SERVICES/ BUSINESS SERVICES/ BUSINESS SERVICES/ MANUFACTURING/ MANUFACTURING/ MANUFACTURING/ ENERGY AND WATER/ ENERGY AND WATER/ ENERGY ANDBENEFICIATION/ WATER/ MINING AND MINING AND BENEFICIATION/ MINING AND BENEFICIATION/ TOURISM AND PROPERTY TOURISM AND TOURISM AND PROPERTY DEVELOPMENTPROPERTY DEVELOPMENT DEVELOPMENT

Trade & Investment KwaZuluTrade & KwaZuluTrade is & aInvestment Investment KwaZuluNatal South African Natal is a South African Natal is a South African trade and inward investment trade trade and and inward inward investment promotion agencyinvestment (IPA), promotion (IPA), promotion agency agency (IPA),the established to promote established to promote the established to promote the as province of KwaZulu-Natal province of KwaZulu-Natal as province of KwaZulu-Natal as an investment destination and an investment destination and an investment destination and to facilitate trade by assisting to trade by assisting to facilitate facilitate tradeto byaccess assisting local companies local companies to access local companies to access international markets. international international markets. markets.

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G U E ST CO LU M N

BEE - the orderly answer Black Economic Empowerment is a developmental imperative in South Africa, one that irritates many people, often because of its application rather than its intent. KZN INVEST spoke to Sandile Zungu, regarded as the father of BEE

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G U E ST CO LU M N

ungu, born and raised in Umlazi, graduated from Vukuzakhe High School in 1983 and went on to complete a year of post-matric at Hilton College. He has degrees in mechanical engineering and business administration. Now he heads up Zungu Investments Company and is president of South Africa’s Black Business Council. What did your mother and father do? My mom was a nurse. She worked at a clinic in Umlazi and then Prince Mshyeni. After she retired she continued to work with some NGOs. My father was a factory worker, and worked for Mobil refinery his entire life. What do you count as your biggest failure in business? When I worked as a project engineer at Engen refinery I was an impatient young man and felt I was due for a promotion and an increase. My boss, Clive Dunbar, was a great man. He sat me down and said I had to be patient and learn from others. It will stand you in good stead, he said. My response was classically dismissive, and he replied, “Don’t want to learn from others?” It was near-fatal blindsight that Clive brought to my attention early and I have been very conscious of learning from others since. It helps you avoid pitfalls. Having said that, there have been times when I have defied my instinct. I lost about R25-million on an investment and I should have listened to one of my executives who said, “Don’t trust these guys”. I should have prodded my colleague to understand his heart and see if there was something objective in his concerns. Who are your mentors? I have had active mentors and passive mentors. There’s not a single person I have spent hours with or learnt everything from. I would like to mention Peter Wrighton.

LEFT: KNOWN AS THE FATHER OF BEE, SANDILE ZUNGU HEADS UP ZUNGU INVESTMENTS COMPANY AND IS PRESIDENT OF SOUTH AFRICA’S BLACK BUSINESS COUNCIL.

He used to be the chairman of the Premier Group. When I did my MBA he had retired to a farm in Franschhoek and I’d go from UCT to pick his brain on complex business challenges. He and his dear wife were very welcoming. Although I never sat down with Sizwe Nxasana for coaching, he also grew up in Umlazi and the way he lived his life and the choices he made impacted me. What has been your best investment? The one I made recently in AmaZulu Football Club. I have not seen a cent back and probably won’t see one for a while. I see it as a business investment and a return has to be made. But its social impact is double all the investments I have made. It is a club named after a nation. When you see the team win, you have

BEE is not a stick. It is an orderly redress to ensure we turn the tide against exclusion no idea how much it contributes to the happiness index in Zulu people wherever they are. It talks about the pride of people of Zulu heritage. It is very affirming. What would you do if you didn’t work? I will work until God invites me to heaven. People of my ilk at any one time will be useful to some causes. I would be involved in philanthropy. I would go to the villages and meet with leaders and identify the needs of the village, whether it be creches or support for a business. I would talk to my friends and raise money for this community. It would be about sustainability and giving back and leveraging relationships. Philanthropy around sustainability would be the prize. What do you believe is imperative to BEE? People are frustrated by it. People have forgotten where we’ve come from. This country could have been up in flames. There could have been a violent overthrow

SUMMER 2021

of the government. We avoided that by having a political settlement. Most of the conditions in the economy have not changed much – the majority of South Africans don’t have much to lose. They don’t own much. You can try and pacify them up to a point, but they live from hand to mouth. They don’t own factories or land. Give historically marginalised people a stake in the economy. That is BEE. It is orderly. Progress black people to become CEOs and bring them to the boards so their voices are heard. Make them owners so they can see wealth appreciation. There are so many models, and all serve to give black people ownership in the economy which contributes to the welfare of society. BEE is not a stick. It is an orderly redress to ensure we turn the tide against exclusion. Many people see the wealth of the elite (black and white) and ask how that impacts on your last comment. What is your response? Unfortunately, in South Africa there is so much inequality. Less than one million people own 90% of the wealth. I have done very well and will never smell poverty and nor will my children’s children. Unfortunately, we are not on an island. The global influences around what we aspire to fuels the way we behave. Money is an enabler. Some people want more simply because they don’t trust the government to do enough. Bill Gates is investing in the fight against malaria. He can do that because he has lots of money and can afford to play the role of government but without the bureaucracy, so 98 cents of every dollar he spends goes to fight malaria. He and Warren Buffett have agreed to give most of their money away to good causes. Are the wealthy doing enough? I am not sure. As for politicians, I am not sure a social conscience is cultivated sufficiently. We need to extend the discussion around this and include climate change. Tackling inequality requires a social conscience. Poverty is a man-made condition. We should fight it with the same zeal and determination as we fought Covid. Imagine that.

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PA RT N E R S H I P

STORY SHIRLEY LE GUERN PICTURES VAL ADAMSON

uests included leading business people with interests in property and FNB’s Preggie Pillay, John Loos and Malusi Mthuli. The property sector in KZN is in recovery after the unrest. It is a trying business beset by challenges. Security costs are enormous. Businesses damaged in the unrest are waiting for SASRIA insurance claims that seem to be taking forever to pay out and this threatens to put small and mid-sized, independently owned firms out of business. To add to the mix are the global supply chain crisis, colossal increases in shipping costs, the sluggish turnaround of ships at the Durban harbour; load shedding and the scarcity and exorbitant cost of steel.

Guests at the dinner, while invested across a wide and nuanced market, noted many positives: there’s an insatiable demand for social housing, a strong push upwards from the bottom of the market that offered great prospects for recycling property as older, smaller families moved to more secure estates Plus, the construction mafia are now demanding a stake in the rebuild business. Loos reminded guests to remember property was part of global financial super cycles. Ageing infrastructure impacted on economic performance and, broadly speaking, the temptation of governments was to spend more. Property owners riding the highs of valuations done in the boom years had to adjust their expectations in line with economic fundamentals. Economies, like South Africa, that

Property PUNDITS KEEP CALM AND CARRY ON

The challenges facing the property sector might feel unmatched, but there are still fortunes to be made in a business more characterised by good prospects than sad grind. That was the upshot of a discussion hosted by FNB and KZN INVEST at The Oyster Box in Durban recently

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SUMMER 2021

2 6

8 were off the boil, were vulnerable to social and political volatility. But, economic stagnation and difficult times generally drove positive change, nudged on by the demands of a vibrant corporate sector. The country’s mineral sector accounts for around 7% of GDP so it couldn’t be relied on to save South Africa in a crisis. This meant a healthier growth of the service economy. Loos said change was often ugly and trying. Guests at the dinner, while invested across a wide and nuanced market, noted many positives: there’s an insatiable demand for social housing, a strong push upwards from the bottom of the market that offered great prospects for recycling property as

10 1. NAZRANA PREMLAL (GROWTHPOINT). 2. VANESSA BLEVINS (LA LUCIA MALL). 3. THEMBA NGCOBO (MAYISHA CAPITAL). 4. GAVIN STRYDOM (EDSTAN). 5. MALUSI MTHULI (FNB). 6. OWEN NXUMALO (AJPH). 7. RUSSELL HAMPSON (HAMPSON INTERIORS). 8. CHICO PREMJI (TRAPEZOID). 9. MOSES TEMBE. 10. MELISSA TRUSCOTT (AECOM KZN).

older, smaller families moved to more secure estates. While interest rates would go up, people were spending more of their income on their homes since Covid, and thrifty developers were making do with much less space and higher costs. “In spite of all the doom and gloom we’ve seen sales pick up,” one developer said.

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14 17

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11. PREGGIE PILLAY (FNB). 12. SUN MOODLEY (BIGFOOT EXPRESS). 13. ANDREW BARNES (BARNES PROPERTIES). 14. DOODY ADAMS (FAMOUS PUBLISHING). 15. CHRIS NAIDOO (ALLPARTS). 16. LORINA PRATO (BEIERSDORF). 17. GREG ARDE (KZN INVEST EDITOR). 18. JENNI MCCALLUM (KZN INVEST). 19. JOHN LOOS (FNB).

Preggie Pillay: Commercial Property Finance FNB

“We are seeing resilience. We are seeing a commitment and a renewed energy and focus on rebuilding. We are committed to getting the economy moving.”

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be in a more secure place. Then you get the other end of the spectrum – youngsters who are trying to establish themselves. That means starter level apartments, but the average apartment has reduced in size.”

Chris Naidoo: Allparts

Owen Nxumalo: AJPH

“We do turnkey developments. This is cost-saving, low risk and efficient. This has seen our turnover grow from R10-million to R70-million in the last five years.”

“There are still gaps and opportunities in all sectors of the market – residential, retail, commercial and industrial – where we do a lot of our business. Essential to our business is helping you realise your big opportunities. The big word is appetite – where should we be going, and we want to get those out of our conversation. A crop of billionaires has emerged from investing in the CBD. The question is, who is among the next crop?”

“There are sweet spots across the entire range of the market. I have confidence in South Africa and in Durban and, because of that, I will continue to invest. The market is very cyclical, but as an investor, you can’t back out because of one down cycle. We’re in for the long run and I think there is money to be made in KZN.”

“The whole property sector has been affected by Covid. A lot of projects – especially large infrastructure and industrial projects – have been put on hold. But the positivity is starting to come back. The market is turning and investment is coming through.”

Chico Premji: Trapezoid

“We have noticed the shift from an investor market to an end-user market. People are selling big homes because their kids have left and they want to

Nazrana Premlal: Growthpoint

Gavin Strydom: Edstan

Melissa Truscott: Aecom Africa

“There has been a rebound in retail. The spend per head is up by about 30 to 40%. Trading densities have also increased but this may be a short-term spike. There’s a global supply chain crisis and many issues are impacting us, from political instability to load shedding. So, we are heading into interesting times.”

“The challenge of looting and getting more stock when supply chains have been affected has increased due to problems at the Durban port. It has meant an increase in prices. What we need to look at is how to bring more people into the property market. We need to look at how we can provide the finance. The aspirations are there.”

“We heard a lot of negatives. Everyone got together after a long time and a lot of reality came out. Things may seem to be not too bright but there is so much hope. The Foschini Group is sourcing locally and there are a lot of Covid success stories. There’s hope for local job creation and improvement in industry. We cannot sit back. We have to look at what we can do.”

Malusi Mthuli: Valuations FNB

Vanessa Blevins: La Lucia Mall

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PA RT N E R S H I P

Moses Tembe: Tembe Investments

ABOVE: WINES FOR THE DINNER WERE SPONSORED BY BOUCHARD FINLAYSON.

Russell Hampson: Hampson Interiors

“We knew that this would be a tough year. But things are picking up with a lot of work nationally. For the first time ever, those putting out tenders are asking for financial stability reports. Whereas, before, awarding of tenders was based on price; now it is a matter of whether a contractor can manage a contract. There’s nothing worse than a contractor on site going out of business.”

“One of the specific attributes that makes humans survive is adaptability. The demand for social and gap housing seems to be insatiable. There’s an opportunity in taking what is one man’s poison and making it your food. There will be both good and bad but the ability to see the good and exploit that is where the opportunities are.”

Andrew Barnes: Barnes Properties

“People are migrating to centres they used to use. Malls that survived will capitalise on additional trade. There are always opportunities in adversity and once-in-a-lifetime opportunities for government to look at improving manufacturing capacity. With the right leadership and strategic thinking we could unlock many opportunities.”

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hile world financial markets are jittery and retailers continue to reel from the coronavirus pounding, property entrepreneurs know adversity brings opportunity. It breeds resilience, says Preggie Pillay, CEO Commercial Property Finance at First National Bank, regardless of how much the world changes. Retail is a function of the economy and South Africans are struggling. But there are defensive segments in the retail sector and some players are responding valiantly. There was an urgent and essential response to the virus in 2020, but we are now seeing the more gradual change – the consequence of constantly morphing property dynamics. Pillay says owner-operated neighbourhood malls – that are smaller and trade on convenience and location – are generally more resilient

There is no doubt the challenges will continue – Covid grants are drying up, businesses are struggling, and unemployment is rising at the moment. These malls are closer to commuter nodes and thrive off consumer changes that see more frequent, smaller shopping trips. “Shoppers want choice, opportunity and convenience. Unlike the previous generation who did monthly shops, modern shoppers visit malls more, are better informed and have less wastage. They are locally rooted and loyal.” The owners of these neighbourhood malls are mostly entrepreneurs. They have more direct relationships with their tenants and are able to keep costs, rentals and vacancies down. Decision making is quick and flexible making them less vulnerable. One such company that seems to be flourishing is Exemplar REITail, headed by CEO Jason McCormick who has been involved in property development and

CO M M E R C I A L P R O P E RT Y

Morphing property DYNAMICS Coronavirus and unrest turned our lives upside down, but some property entrepreneurs have been able to seize the opportunity to make good of a bad situation management for 19 years.  McCormick Property Development is a family-run business that was established by Jason’s father, John, in the early 1980s. The company listed 20 of its retail assets on the JSE in 2018 seeking better access to capital and Exemplar was born. McCormick Property Development continues to run as a private development arm and has more than 30 secured projects in its pipeline. Focused solely on township and rural retail, Exemplar now owns 23 shopping centres across five provinces ranging in size from a 4 997m² convenience

centre in Atteridgeville to its 44 781m² flagship in Thembisa, Gauteng. The average size of the assets in the portfolio is 20 800m² per centre. Nationally, key tenants include Shoprite (Exemplar’s Shoprites account for 2,9% of the grocer’s global turnover), Pick n Pay, SuperSpar and all the major fashion retailers. Importantly, the banks and financial institutions are also seen as a cornerstone of the tenant mix serving their communities. Exemplar’s assets in KZN were extensively impacted in the riots of

CO M M E R C I A L P R O P E RT Y

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RETAILERS REBUILDING The carnage left behind after rioting and looting in July has left the South African Special Risks Insurance Association (Sasria) with an expected bill of around R20-billion. On the back of the coronavirus pounding, this could be a step too far. But, retailers and landlords have to carry on. What’s most important is that both landlords and retailers are rebuilding and that money invested to repair the damage will ultimately trickle down into the broader economy. Massmart, one of the hardest hit, is already getting on with restoring the damage to 43 of its stores and warehouses. Massmart chairperson Kuseni Dlamini explained: “We are rebuilding what has been destroyed in KZN, the Makro store that has been destroyed in Pietermaritzburg, as well as Springfield and our redistribution centre. We are still very committed to investing in the growth and development of KwaZulu-Natal and the Gauteng province.” SA Corporate Real Estate (SAC), the JSE-listed Real Estate Investment Trust which owns Springfield Value Centre, confirmed that the badly damaged mall would be up and trading again by September 2022. The repair bill was an estimated R400-million – the majority of SAC’s R558-million SASRIA claim. Sharmaine Ramsahai, Centre Manager at Broll, which manages Springfield Value Centre, says demand for space at the near gutted centre remains. “Our current tenant mix is strong and our tenants wish to return to trade as soon as possible. With the rebuild, we have an opportunity to further strengthen our tenant mix with new tenants,” she said.

ABOVE: EXEMPLAR REITAIL, HEADED BY CEO JASON MCCORMICK WHO HAS BEEN INVOLVED IN PROPERTY DEVELOPMENT FOR 19 YEARS. TOP: THEKU PLAZA. LEFT: EDENDALE MALL.

July 2021. Greater Edendale Mall in Plessiesier suffered extensive looting and fire damage and remains closed to date. Two other KZN assets were also damaged – Mandeni Mall in Mandeni had a number of stores looted but structural damage was limited. It was the first mall in the KZN portfolio to partially re-open for trade in the last week of July. Theku Plaza in Newcastle also faced extreme looting and fire damage with all tenants in the 14 159m² plaza impacted. The centre is currently being rebuilt and will re-open for trade at the end of November in time for the festive season. Two centres in Gauteng, namely Chris Hani Crossing in Vosloorus and Diepkloof Square in Soweto, were also

negatively impacted by the rioting. With the exception of Greater Edendale Mall, all centres will be fully operational again by December 2021. Despite the impact of the coronavirus and the recent riots, Exemplar continues to be community driven. “We remain dedicated to providing essential and convenient retail to the communities that need it most,” says McCormick. “Now, more than ever, we need to continue to drive community upliftment, development and employment. These communities stood up and protected the remaining assets in our portfolio and that makes us even more committed to driving real, positive change for them.” Pillay says the outlook for bigger shopping centres, mainly owned by funds, is currently more challenging. “They have more pressure points. Operational costs are higher, big brand retailers are negotiating rentals down and the effects of the coronavirus run deep, slowing foot traffic markedly in some malls.” Pillay predicts a repurposing of big mall space for accommodation and hotels. He says online shopping – while a factor affecting retail – is not as significant as is estimated because brands still need a point of presence. However, he says the future of retail points to smaller malls. “The buying power of their shoppers runs into billions and the spaces are at the forefront of community problemsolving. For example, they stay open later to cater for people working in the cities and commuting home. They show that the situation affecting retail

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isn’t all bad. They have tailored an offering and are responsive to market changes, which is more important now than ever,” Pillay said. McCormick says he is “very bullish” about the company’s future, in spite of the economic climate, the virus and unrest. “The platform we have is unparalleled and we are strongly on the acquisition trail. The number of people we serve and the locations of our centres allow us to get stuck in and create positive change by impacting our communities on a daily basis – and when one sees the positive impact you’re having, how can one not remain inspired and motivated to keep pushing?” Pillay says there is no doubt that the challenges will continue – Covid grants are drying up, businesses are struggling and unemployment is rising. But, he says, the situation is not dire. Some businesses have been resilient.

CO M M E R C I A L P R O P E RT Y

“Now, more than ever, we need to continue to drive community upliftment, development and employment. These communities stood up and protected the remaining assets in our portfolio and that makes us even more committed to driving real, positive change for them” “People want to get back. In Durban, for example, Florida Road, uMhlanga Village and La Lucia Mall are thriving and spaces are filling up, and there are tenant waiting lists.” The spaces are changing and tenants might not be paying top dollar, which Pillay says is in line with a general

trend witnessed by FNB around rightsizing and leaner operations as a result of the pandemic. “We could be blind-sided again, and I am not sure how much the economy can stomach, like more retrenchments, for example. But we have seen outliers accurately predict long-term changes in business and consumer behaviour. “People might spend less but they won’t stop shopping entirely. Covid has been like the water shortage in the Western Cape. In an approach to be sparing, it forces the discipline of saving and looking at alternatives. The conservative psyche has not stopped people from doing business. We have seen good market activity. Pillay says there are many conversations around re-gearing loans and getting loan-to-value ratios right. There were also funds wanting to offload big assets and investors keen to buy.

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P R O P E RT Y D E V E LO P M E N T

Thumping THOMPSON

even years ago Charles Thompson was the youngest partner in a medium-sized Durban construction company. He had the back office at the Red Hill headquarters of Construction ID. And then he seemed to come blazing out of left-field as a developer in his own right. Backed by powerful businessmen and with an uncanny eye for detail, supercharged Thompson took on a host of landmark projects that have changed the Durban skyline, including The uMhlanga Arch and most of the seaside at Sibaya near uMdloti. In less than seven years Thompson has spearheaded R5-billion worth of construction, including 720 houses and apartments at the top end of the market. His next development, Salta, on 110 hectares of sugar cane land around uMdloti, will be worth upwards of R8-billion and will involve 1 000 new residential units and 65 000m² of shops and offices. Another phase, across the M4 highway and about the same size as Salta, is likely to keep Thompson busy until he’s 50. The 42-year-old quantity surveyor qualified at Natal University and is possibly the biggest residential developer in Durban. The son of a salesman and a secretary, Thompson

In only a few short years developer Charles Thompson has turned the KZN property market on its head. KZN Invest caught up with him

ABOVE: CHARLES THOMPSON BELIEVES DURBAN HAS MUCH GOING FOR IT. TOP RIGHT: OCEAN DUNES AND PEBBLE BEACH AT SIBAYA. RIGHT: HILTON GARDEN INN AT THE UMHLANGA ARCH.

attended Kloof High School. After graduating he did a spell in the United Kingdom where he worked on big projects like the Swiss Re Building, informally known as The Gherkin.

Back in South Africa, it seemed like he catapulted into the big league overnight, but the growth was organic and then exponential. He grew because he was younger than his peers and less riskaverse. He attributes a lot to fortuitous timing, but others credit him with being bold and manically energetic. “I love what I do. I really

wanted to do well because we weren’t wealthy when I was growing up, so I was driven – but it is just in my nature to get stuck in.” Thompson’s experiences in London and then at Construction ID were formative. He worked with good colleagues on great projects. Thompson has kept strong ties with Construction ID and built his own Devmco team, which is now 140 strong. An unofficial company rule is to employ people who pull together in a flat structure and are empowered by accountability. Thompson has had his share of challenges in the last seven years, some are typical of construction: struggling through red tape, having a crane collapse and dealing

P R O P E RT Y D E V E LO P M E N T

with mafia-style work stoppages. “My wife, Simone, says I’m gifted with low EQ (emotional intelligence) so things don’t really get to me. I just carry on.” The husband and father of three girls spends a third of his day planning new projects, a third on sales and marketing, and a third “keeping the car running and the road

clear, helping unblock problems and doubt”. Thompson’s total commitment to what he does is palpably evident. While he doesn’t deal with the minutia of every aspect of his business, he seems to know it. When the Covid lockdown started, he was one of the first developers to go online and (dressed in a T-shirt and shorts) hosted

lively webinars, engaging with clients, suppliers and industry specialists. Thompson believes Durban, unrest aside, has so much going for it, and he is marketing it like there’s no tomorrow. “This place is kiff, the people who

In less than seven years Thompson has spearheaded R5-billion worth of construction, including 720 houses and apartments at the top end of the market live here really smaak it. People who can afford it are opting for smaller, safer places with all the amenities they need. Convenience is everything.” Thompson says his best lesson in property has been learning to read the market. “Don’t be arrogant and think you can impose your ideas. You have to understand

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the market and cater for it.” That, for him, means working the detail, training sales staff a year in advance of launches, and being immersed in his product. “I will meet anyone who wants to see me. I am at every sales event and every property handover. I read the market from all these interactions and it helps me adjust a few clicks to the left or the right, which can mean everything.” So how does he really feel about Durban’s property market post unrest? “People were really frightened. But most of us can’t leave so we all have to work at it. We have some really good, honest people in government, who know what they are doing. We have to help them look after the golden goose. “Businesses invest and create jobs, but this goose will flee if all don’t activate change to improve service delivery, security and opportunities. This means focusing on keeping the water flowing and the lights on, not getting distracted by all the negativity.”

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CO M M E R C I A L S PA C E

Stop. Start. Build. MOVE? Since the unrest, there has been a scramble for stop-gap premises by affected businesses, but what does this mean for the commercial property sector in KZN? Shirley le Guern reports

ike the businesses they serve, most brokers feel further upheavals remain a possibility. It will take time to rebuild confidence in the regional economy. All property experts foresee a shortage of industrial space – and especially large A-grade warehousing – for the next 18 to 24 months.

“It’s still too early. Things are too raw. Many insurance assessments are still being completed or companies are waiting for approvals and payouts. Until we see how insurance companies react and get a true picture of the damage, we won’t know if it will be viable for many businesses to continue,” Portfolio Properties’ brokers Bradley Hancock and

CRAIG WOODS

Yianni Pavlou said. They drove the streets of the burning city in July and shared two key observations – the attacks were targeted, although many key properties in hot spots like Cornubia, Briardene and Westmead

ANTHON VAN WEERS

were seemingly overlooked. Others in these areas as well as Hammarsdale were hit hard. The damage was far more contained than initially thought, they said. “(What we do know) is that this is not great news for KZN. It doesn’t bode well for confidence but it also doesn’t mean the death knell for the city’s economy. Not every single industrial property in Durban got torched and not every shopping centre was burnt. “A lot of businesses were already in trouble because of Covid. Some might take the insurance cheques and walk. On the flip side, I am getting enquiries from investors looking to continue or even increase their investments in the city. They see this as an opportunity,” said Pavlou. They expect greater emphasis on security

CO M M E R C I A L S PA C E

YIANNI PAVLOU

and less enthusiasm for locating close to notoriously troublesome communities and suggested that businesses paying higher rentals in the north might look to relocating to the seemingly safer and less expensive ones in the south. But Pavlou and Hancock believe areas that were popular in the past will remain so. The problem is outlying areas. “Right now there is very little interest in investing in township economies. No one can guarantee that this will not happen again. Some are bitterly disappointed because they have put a lot of money into the communities only to have the same people they have supported seen on camera looting their shops. The model of building township economies was a good one, I

KELLY TOMLINSON

TREVOR MARTIN

think. But it took a long time to build up the confidence of investors and that confidence has now been eroded,” Hancock said. He said it was likely that banks would be more cautious when lending to businesses in these environments and whether insurers would be prepared to cover businesses in high risk locations. Trevor Martin from Chalupsky Properties said the impact of the violence on commercial office space had been negligible with minimal damage to buildings except, perhaps, in the CBD. Instead, the movement towards working from home in the wake of the Covid-19 pandemic had had a far greater negative impact. On the industrial side, there was already a shortage of good industrial stock in Durban, and Martin’s

guesstimate was that at least 15% of Durban industrial property had taken a hit. Martin said unlike retail, where the majority of damaged properties could be up and running in a relatively short time, it would take far longer to

“Security is a huge issue … volatility surrounding unemployment remains a huge risk” repair industrial properties. He, too, was receiving a growing number of requests for short-term leases. “This doesn’t help the economy,” he said. Martin said he expected companies that were well insured and

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BRADLEY HANCOCK

corporations that could cushion the blow to their businesses to carry on. Smaller businesses, many of which were probably under insured, were less likely to return. He also expected a knockon effect. Already, stressed businesses who had lost clients to the violence but not been damaged themselves, had closed. He also said businesses were switching with business owners preferring to sign leases than own their own properties. Yet, Martin said, he had also seen amazing determination to rebuild. Tenders are already going out and some projects were already underway which would impact positively on struggling construction and engineering sectors. But many businesses

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and commercial brokers are concerned about the re-emergence of Durban’s notorious business forums. Companies that weren’t targeted have been approached for protection fees while those starting to rebuild have warned that they will not tolerate interference. Both business and property professionals are calling for strong government leadership to put a stop to threats that could frighten away businesses. Kelly Tomlinson, a commercial property broker with Swindon Property Group, said enquiries from both smaller businesses and larger corporates looking for short-term leases had picked up, but promising deals from businesses looking to expand had been put on hold because they had been impacted by violence and looting. Broll’s Anthon van Weers said there was a shortage

CO M M E R C I A L S PA C E

of smaller manufacturing spaces. Cornubia and Springfield Park had filled the gap for these but they had been badly damaged. Another concern was that there would be a lack of highly skilled construction companies and building materials for A-grade facilities. Even new developments that were already under construction in the city would take some time to complete – leaving businesses desperate for short-term facilities in limbo. Managing partner at Tyson Commercial in Durban, Craig Woods, said his division had been inundated with enquiries from people looking for warehousing. “All of these are mainly looking for short-term leases while their premises are being rebuilt. Some are looking to relocate as they feel the area in which they are currently, is no longer a viable option.” Although many companies

wanted to remain in Durban to be close to the port, many were considering relocating to areas that were perceived to be safer. “Security is a huge issue … volatility surrounding unemployment remains a

Many businesses and commercial brokers are concerned about the re-emergence of Durban’s notorious business forums huge risk.” Preggie Pillay, FNB Commercial Property Finance CEO, also anticipates a shortage of commercial property in KZN and possible relocations. “There’s likely to be an issue with big box industrial space in KZN considering the number of boxes that have been

totally decimated. Industry has always garnered great support in KZN. However, for some businesses there might be a hesitation to rebuild, with other provinces offering better property incentives and commitments on security.” He said that despite Covid and the violence, retail had rebounded quickly with most real estate investment trusts (REITs) across the board committed to rebuilding. “However, the recent unrest has put further pressure on many small businesses who were already struggling as a result of the Covid-19 pandemic. But, as an innovative and resilient country, there’s no doubt that we will recover, with some businesses also identifying opportunities to get into prime trading centres. Durban is still very attractive from an investment perspective provided this can be prevented in the future,” he said.

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A D V E RTO R I A L

IATF2021

NOVEMBER 15-21 DURBAN ICC

Welcome to the

INTRA-AFRICAN TRADE FAIR 2021 More than 80 South African companies, supported by government, will have an opportunity to showcase their products and services at the Intra-African Trade Fair 2021 (IATF2021) that will take place at the Durban ICC in KwaZulu-Natal from November 15-21, 2021

he Intra-African Trade Fair is a trade show that provides a platform for linking international buyers, sellers and investors as well as allowing for participants and visitors to profile and share market information and investment opportunities in support of intra-African trade and the economic integration of the continent. IATF2021 will be hosted by African Export-Import Bank (Afreximbank) and the Government of South Africa, with the theme focusing on the newlylaunched African Continental Free Trade Area (AfCFTA) and is expected to draw more than 10 000 visitors and buyers. According to the Deputy Minister of Trade, Industry and Competition, Ms Nomalungelo Gina, the IATF2021 will provide a unique and valuable platform for South African businesses to access an integrated African market of over 1,2-billion people with a Gross Domestic Product of over US$2,5trillion created under the African Continental Free Trade Area (AfCFTA). “The trade fair will offer us an opportunity to profile and market proudly South African goods and services, build lasting networks and establish collaborations that will increase South Africa’s goods and services exports into the continent and position South Africa as the partner of choice,” says Gina.

ABOVE: KZN PREMIER SIHLE ZIKALALA.

“It will further highlight the best of South African local manufacturing capability in the agriculture and agroprocessing; automotive; construction and infrastructure development; consumer goods; energy and power; engineering; footwear; leather and

A D V E RTO R I A L

textiles; heavy industries and light manufacturing; healthcare and pharmaceuticals; Information and Communication Technology and Innovation; logistics; and mining sectors,” says Gina. She adds that beyond positioning the country as a major player in the continent and as an attractive and competitive business, investment and tourism destination, South Africa is committed to promoting intraAfrican trade and the growth of the African continent through the AfCFTA

IATF2021 will provide a unique and valuable platform for South African businesses to access an integrated African market of over 1,2-billion people towards delivering opportunities for all African countries. “Our common destiny joins us at

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the hip with the sons and daughters of Africa who want this 21st century to be a story of shared prosperity for the people of Africa. We welcome IATF2021 which kick-starts Africa’s rebirth as we recover from the devastating effects of Covid-19. On behalf of the province of KwaZuluNatal we also welcome the delegates and representatives of business, exhibitors and traders to this important gathering,” said the Premier of KwaZulu-Natal, Mr Sihle Zikalala.

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A D V E RTO R I A L

IATF2021

NOVEMBER 15-21 DURBAN ICC

WHY Invest in KwaZulu -Natal?

The MEC of Economic Development, Tourism and Environmental Affairs, Ravi Pillay, reflects on the investment advantages of KwaZulu-Natal and what the Intra-African Trade Fair (IATF2021) delegate should get from the event

waZulu-Natal (KZN) plays a significant role in South Africa’s economy and is the second largest contributor to the country’s Gross Domestic Product. The diversified nature of the KZN economy is a key strength and has enabled a resilient response to the economic challenges brought about largely by Covid-19. KZN is a prime investment location with good infrastructure, a great climate and a diverse social offering. It is an ideal place to work, live and play. The ideal harbour location on the Indian Ocean seaboard serves as a gateway to Africa, and combined with a quality lifestyle, the province facilitates a strong work-life balance. These are key characteristics that make KZN a worldclass investment location. There are massive opportunities across the value chain to contribute significantly to economic development. This is made possible by strong private and public partnerships and a diversified economy.

Richards Bay ports which handle almost 60% of SA’s cargo. Most bulk export operations occur in Richards Bay which produces over 4% of the global exports of aluminium. One of the world’s largest sand mining operations also resides in the province. The province consists of a highly diversified agricultural sector. KZN is the country’s main producer of timber and accounts for a significant percentage of wood exports; as well as sugar cane (0,84% of SA GDP), with some of the country’s largest sugar processing plants. KZN also has the highest export propensity in the country and a fairly high level of industrialisation (measured by manufacturing output). KZN is also home to King Shaka International Airport (KSIA) – the thirdlargest airport in the country which is directly connected to more than eight international destinations. KZN boasts two industrial zones – Dube TradePort and Richards Bay Industrial Development Zone. Since its inception, Dube TradePort SEZ has attracted investment of R1,8-billion. There are currently 41 operational investors employing 3 300 people. The development of an automotive supply park in the south of Durban is envisaged to stimulate the sector, and work is underway to develop a clothing and textile SEZ in the province. KZN is a key tourist destination that boasts two World Heritage Sites – the Drakensberg Mountains and the iSimangaliso Wetland Park.

What does Africa Integration and IntraAfrican trade mean for KZN?

ABOVE: RAVI PILLAY, MEC FOR ECONOMIC DEVELOPMENT, TOURISM AND ENVIRONMENTAL AFFAIRS.

KZN’s comparative and competitive advantage

KZN is the second largest contributor (approximately 16%) to the South African GDP after Gauteng. The province is home to the Durban and

The African Economic integration process allows for African nations and regions, including KZN, to co-operate in order to maximise resources, promote trade and boost investment. The expansive form of integration currently applicable on the continent is the Free Trade Area, otherwise known as the African Continental Free Trade Area Agreement (AfCFTA), with South Africa as a signatory to the agreement. As a province within South Africa, KZN will also benefit from preferential rates. The AfCFTA eliminates barriers to trade. Barriers to trade are imposed

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KEY SECTORS TO INVEST IN

in the form of rules and regulations that are fixed for non-members. The Agreement allows for KZN businesses to maximise trading opportunities in African regions with no existing regional agreements (such as the ECOWAS, ECCAS, AMU). This presents untapped export opportunities for KZN products and will boost the market share of KZN exporting companies. The Agreement enables KZN companies to be more competitive by buying cheaper inputs and producing with better economies of scale. KZN companies will gain access to a bigger market and improved prospects for the African continent to attract investment. The AfCFTA presents a potential to boost intra-Africa trade and build an integrated market in Africa, that will see a market of over 1-billion people with a combined GDP of approximately US$3,3-trillion. It presents prospects for enhanced trade in services which are key for global trade and industrial development. Improved intra-African trade will help create jobs, and reduce poverty. It will allow for more manufactured and processed goods to be exchanged between KZN

¥ Finance, Real Estate and Business Services (contribution to Provincial GDP in Q2 2021 with 19,1%). ¥Manufacturing (contribution to Provincial GDP in Q2 2021 with 15,1%). ¥Wholesale and Retail Trade, Hotels and Restaurant (contribution to Provincial GDP in Q2 2021 with 12,0%). ¥ Transport and Communication (contribution to Provincial GDP in Q2 2021 with 10,0%). ¥ Agriculture, Forestry and Fishing (contribution to Provincial GDP in Q2 2021 with 5,8%).

KEY DRIVERS OF THE FUTURE ECONOMY OF KZN ¥ Industrial Economic Hubs and SEZ’s (ICT and Broadband Hubs) and Smart Cities; ¥ Telecommunications and Digital Economy; ¥ Manufacturing ¥Agriculture; ¥Tourism and Property Development; ¥Maritime and Blue-Economy; ¥Aerotropolis and Aviation Parts and Components Manufacturing; ¥Rural and Township Economies; ¥ Renewable Energy; ¥Sports Culture and Creative Industries.

and other countries and enhance knowledge transfer. It supports a shift from an over-dependence on metals and commodities exports to higher value-added products and services. It will boost economic diversification, allowing for more inclusion of small and medium-sized enterprises in exports as they innovate and increase productivity to compete. The AfCFTA also offers potential for KZN agricultural products to be exported. In 2015, African countries spent about $63-billion on food imports, largely from outside the continent. AfCFTA will increase intraAfrican trade in agricultural products by between 20 and 30%, with the highest gains in sugar, vegetables, fruit, nuts, beverages, and dairy products. African raw materials are mainly exported to regions and countries like the EU, China and India, and are sold back as finished products in the continent. Most African countries are not industrialised and anecdotal evidence shows that manufacturing (unlike agriculture) is not considered a priority for some countries due to poor access to start-up capital and more urgent socio-economic challenges. With South Africa being the most industrialised country on the continent, and KZN being the second most productive provincial economy in the country, KZN companies will definitely benefit from improved intraAfrican trade and exports.

What should an IATF investor walk away with?

We want the IATF2021 delegate to leave with the feeling that they want to come back and explore more. We want the delegates to feel our connectedness to our sister countries – Mozambique, Lesotho and Swaziland – and realise potential opportunities this market collectively presents. Importantly we want the IATF2021 delegate to consider KwaZulu-Natal as their next investment destination, spurred on by our unmatched infrastructure, connectivity and technology, air transportation, location and untapped opportunities.

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A D V E RTO R I A L

IATF2021

NOVEMBER 15-21 DURBAN ICC

waZulu-Natal is gearing up towards building smart cities through the rollout of broadband and Wi-Fi connectivity and turning our towns and townships into tech and innovation hubs of the future. This will open up opportunities for the youth to explore and leverage the advantages brought about by digital transformation. Our new smart cities architecture is not isolated from the continental and global trends. We are responding to rapid urbanisation spurred on by the visible growth of the African middle class and mobile connectivity. The airport city, as encapsulated in our Special Economic Zone (SEZ) – the Dube TradePort aerotropolis masterplan, and our airlift strategy attached to this strategic SEZ – are just some of our key competitive advantages, which are catalysts for growth. These position KwaZulu-Natal literally as a gateway to the African continent. The design of the KwaZulu-Natal future smart cities will be characterised by the green economic model for the sustainable livelihood of KZN citizens. The green economy is part of the provincial key priority sectors aimed at protecting humanity and the environment from the adverse impact of climate change and thus improving citizens lives. Reduction of our carbon footprint forms the cornerstone of the future carbon-free province as per the Paris Agreement

Building BRIDGES It gives us immeasurable pleasure to host the second Intra-African Trade Fair in Durban KwaZulu-Natal. We welcome our African brothers and sisters’ home to the Kingdom of the Zulu, where we have it all. We are indeed the province of diverse offerings

ABOVE: NHLAKANIPHO NKONTWANA, HOD OF EDTEA. RIGHT: IATF2021 ROADSHOWS.

resolutions. The province will carry this mandate as it has sent its delegation as part of the SA delegation to CoP 26 in Glasgow, Scotland. With all this sophistication and futuristic characteristics, KwaZulu-Natal can also say with conviction that, nowhere else in the world will you find such a unique fusion of raw natural beauty, modernity, cultural diversity and pulsating energy – all in the most breathtaking natural setting, all underpinned

by our people, our most precious and strongest currency. KwaZulu-Natal is indeed a construction site. In his State of the Nation address earlier this year, President Cyril Ramaphosa announced that South Africa will be embarking on a massive rollout of infrastructure throughout the country, increasing local production and rapidly expanding energy generation capacity, among other things. That is well and truly underway. The private sector has to take advantage of the opportunities that emerge from these programmes. We are driving a very strong industrialisation and investment programme supported by agriculture, logistics, maritime and transport. This is borne out of the need to beneficiate our products so that we create new jobs for the future driven by innovation. The province has programmes that are aimed at supporting youth-based, womenled businesses as well as persons with disabilities and military veterans. It is

the province’s considered view that the hosting of the IATF2021 will open opportunities for these groupings to do business in other parts of Africa. The government will indeed play its part in ensuring that our policies are not only inward-looking, but are able to support a conducive environment for intra-African trade. The project of Economic Social Inclusion is what characterises the developmental trajectory of the province and will go a long way in ensuring diversified and inclusive economic growth. Through CANEX, the province will ensure that the provincial talent is unearthed and emerging SMMEs find expression on the continental stage. The IATF2021 is well-positioned to unveil local talent for the whole world to see and marvel at. We are proud to mention that the province is home to the current Miss South Africa which brings to the fore the prominence of this province. The reigning Miss SA, Ms Lalela Mswane, comes from Sokhulu Tribe in Richards Bay. This province is ready to compete with the world. It is good to see all of you in Durban, KwaZulu-Natal South Africa.

From the Head of Department, KwaZulu-Natal Economic Development, Tourism and Environmental Affairs: NHLAKANIPHO NKONTWANA

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ENTREPRENEURS

An era for SELFSTARTERS Nearly two years after the pandemic took a swipe at our fragile economy, and with unemployment at a staggering 34,4%, more South Africans have started up their own enterprises in a bid to survive

growing number of South Africans have turned to entrepreneurship because of the economic crunch brought on by Covid-19 – it beats the despair of rejection in a shrinking job market. But is the environment enabling for entrepreneurs? RIGHT: ALLON RAIZ: AN ENTREPRENEUR DEVELOPMENT SPECIALIST WITH RAIZCORP.COM.

closing down than being started, there was evidence of entrepreneurship taking hold at grassroots level, the report said. Allon Raiz, an entrepreneur development specialist with Raizcorp.com, has nurtured hundreds of entrepreneurs. He says the GEM report is regarded as controversial because of its country comparisons, adding that entrepreneurship is

Entrepreneurs play a vital role in job creation and innovation around challenges. Even though unemployment is high at 34,4%, South African’s entrepreneurial activity is said to be low. According to a 2019 report by the UK-based Global Entrepreneurship Monitor (GEM), 11,9% of the population was involved in early-stage entrepreneurial activity, compared to the average of 40% in the rest of Africa. GEM rated the South African entrepreneurial ecosystem as one of the most challenging in the sample of participating economies in 2019, however, the report said there was an increase in the number of South Africans who saw entrepreneurship as a good career choice. And, while more businesses were

ENTREPRENEURSHIP THE CHALLENGES

With the number of unemployed people in South Africa growing, entrepreneurship is increasingly the only option for many. But there is a debate about the romanticisation of entrepreneurship, survivalism and the challenges placed on poor people. Often entrepreneurship is posited as an elixir and the surrounding narrative suggests that with enough gumption, poor people can overcome the odds.

But entrepreneurship and even survival is difficult in the context of mass unemployment. The barriers to starting a business include the consequences of general impoverishment, and yet millions soldier on, driven to entrepreneurship out of necessity, rather than choice. Caroline Skinner, left, a researcher at African Centre for Cities at the University of Cape Town argues that the informal sector has long fallen through policy gaps. She says the Statistics South Africa Quarterly Labour Force Survey

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ENTREPRENEURS

“Apprenticeships in things like plumbing and electrics offer relatively quick skills transfer. Older tradesmen often sell their businesses to people who they apprenticed.” Lindiwe Kunene, a management and entrepreneurship lecturer at the University of KwaZuluNatal, says more needs to be done by corporates to nurture entrepreneurship and by the state to improve education. “We have definitely seen more people turning to trading to supplement their income in a tough economy

ABOVE: LINDIWE KUNENE: A MANAGEMENT AND ENTREPRENEURSHIP LECTURER AT THE UNIVERSITY OF KWAZULU-NATAL.

born out of opportunity or necessity, and is on the increase because of Covid-19. “We are in a crisis and we are going to see a huge amount of necessity entrepreneurs.” Entrepreneurs, he argued, don’t need an enabling environment so much as they need less red tape and less rigid employment laws. “Authentic entrepreneurs are not too perturbed about

an enabling environment. They often see a restrictive environment as a challenge.” He believes the government’s approach to Small Medium and Micro Enterprises is problematic because it lumps an array of vastly different businesses together, all with different challenges. He says if the government wants quick wins to foster entrepreneurship, it ought to change its generalised approach, relax labour laws and encourage apprenticeships.

shows that 30% of all employment in South Africa is regarded as informal, while those in very small enterprises equates to 20% of all those employed, or three million people. Data on employment noted a small recovery in job numbers in the post-lockdown period, and selfemployed people (particularly women), were disproportionately hard hit by the Covid-19 lockdowns. Skinner says little government support made its way to informal sector workers, and few informal worker leaders knew of anyone benefitting from the Department

“If you don’t have a strategy for local, convenience or a personal touch, you will have a problem” made more difficult by Covid-19. At the height of lockdown, almost everyone was cooking something at home and selling it.” Kunene says awareness around entrepreneurship and self-reliance is good. But, she believes it is important to stress that entrepreneurship is not just being in business and trading. “It is about constantly adapting to the

of Small Business Development’s Township and Rural Entrepreneurship Programme, for example. Relief funds were difficult to access and the distribution of this money was unwieldy. But, relief funding and social grants have helped sustain livelihoods and fund small businesses. “To avert chronic hardship, increased grants and relief needs were extended. In the absence of sustained business support measures aimed at informal enterprises, evidence suggests the

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environment, identifying gaps and filling them.” Demand for entrepreneurial training was steadily increasing but an understanding of how to teach it was needed. “Teaching entrepreneurship is about harnessing entrepreneurial intention. Because it is a popular topic now, people want to say they have ticked that box – but we don’t have the correct curricula or enough people well trained to teach it. It is about innovative and creative thinking, which our education system doesn’t adequately prepare us for.” Kunene said entrepreneurs learnt best from example and experience. The state and corporates could do a lot more to encourage entrepreneurship by procuring locally and moving away from a reliance on big brands. “They could do a lot more to nurture entrepreneurs by relying on local content – this doesn’t automatically mean that local procurement is at the expense of quality.” Kunene says the celebrity element of entrepreneurship is both “good and bad”. It motivated people but at the same time it set people up for failure and created unreasonable expectations around success.

relief and grants allowed some informal workers to restock and start up their livelihoods again as lockdowns eased.” Skinner says most government officials are disconnected from the informal sector and the needs of workers. She says the resilience of the informal sector is overstated and the sector is not resistant to the shocks felt by the formal sector. Economic development researcher Glen Robbins says despite high structural unemployment South Africa does not have a great shift of people to the

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ENTREPRENEURS

RIGHT : GG ALCOCK: AN INFORMAL SECTOR SPECIALIST.

GG Alcock, an informal sector specialist who has written three books on the subject, says many people earn a decent living and support families, yet they are not recognised as entrepreneurs. Alcock argues that traders who sell sweets, cellphones and vegetables, and people who run spaza shops, are a self-reliant bedrock of the economy. They are self-financed or funded by community-based savings or stokvels. Alcock says many corporates are blind to informal sector entrepreneurs which meant they were not open to the “inclusivity and economic redress” to be had from supporting these people. The government was also seized with regulating the informal economy, rather than stimulating it. Specialists advocate a wider engagement around poverty and entrepreneurship. Various studies cite the obvious correlation between unemployment and associated psychological distress of joblessness that is often scarring. Alcock says lockdown has shown the resilience

Entrepreneurs don’t need an enabling environment so much as they need less red tape and less rigid employment laws

informal economy. He says experts offer a range of reasons for this. ¥ The legacy of apartheid damaged the entrepreneurial spark and left people with few assets to leverage starting a business. ¥ The country’s economy is concentrated with powerful large firms that squeeze out new entrants and often crowd out smaller players. ¥ Government regulations make it challenging to start a business and banks are not small business friendly. ¥ Weak education and training and

of entrepreneurs. “I know of a bakery that was delivering to hospitals and big fast-food outlets before Covid. Come lockdown the youngster who owns the bakery put his offerings on Facebook, and asked customers to send their orders and their location via WhatsApp. He now has several guys walking

high costs also put a damper on new business formation. Skinner says SA’s informal sector is small compared to other developing countries, in part because of the low returns for long hours and hard work, high levels of crime and saturated markets. Robbins says there could be greater support for procurement reform, but often cutting up contracts into too many slices pushed up administration, supervision and oversight costs. “In general terms small businesses tend to do better in a context where there

around doing deliveries.” Vegetable traders who sold their produce at taxi ranks and intersections had gone mobile, doing home deliveries using trolleys or bicycles. “There has been a proliferation of this service and customers are enjoying the convenience of home deliveries.” Alcock says the increased competition hurt bigger businesses rather than smaller operators who picked up on the demand for localised, personalised services. “If you don’t have a strategy for local, convenience or a personal touch, you will have a problem – this was happening before, but Covid just propelled this growth.” Government could engender this growth by reducing red tape and encouraging microfinancing, Alcock says. “In South Africa it takes 40 days to register a business. In Rwanda it takes four days. Another big issue is the cost of borrowing. Worldwide it has been shown that a small loan at a reasonable rate can be transformative. I work with colleagues who have lent R8-million to 200 spaza shops and these loans have allowed traders to double their monthly turnover.”

is growth – they can then find gaps in services or products that have not been filled by slower large businesses. “In times of growth the number and value of niches grow. In a context of a weak economy, often both business formation and failure is high. This can squeeze margins as more people enter the market trying to do the same things. That said, all contexts offer opportunities for entrepreneurs to differentiate themselves. In a very challenging context the number of successful cases will be whittled down to a small number.”

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Systems lead to SUCCESS Sbonelo Mbatha knows better than most that good systems serve entrepreneurs

he two decades that have seen Sbonelo Mbatha’s incredible rise from pump jockey to entrepreneur owning 10 fuel stations have been marked by systems. In addition to his petrol stations, Mbatha and his partner run a franchise business, PetroCONNECT, that services entrepreneurs. Mbatha shares his thoughts with us. How has your business changed since Covid? I thought my business was resilient. I never thought I would operate at 20% or 30%, but we have bounced back nicely to pre-Covid performance. How much does luck play in entrepreneurship? I want to believe you can make your own luck. Yes, you may happen to be at the right place at the right time, but people who never took the opportunity wouldn’t be exposed to that. What has been the biggest blunder in your entrepreneurial journey? I have made a few blunders, some stand out: I thought I could make millions from mining. It worked on paper, but I had absolutely no background in the business. I didn’t know the value chain and I tried to build a business on daydreams. It ended in

worked well within those boundaries. There is still room for the personal touch and you still enjoy support, discounts and branding and marketing that would otherwise cost you quite a lot. Franchising also makes the entrepreneurship journey feel less lonely. The system can give you confidence and support you often don’t have on your own. Also, South Africans are very brand conscious.

Q A Q A Q A

It is good to hold on to a dream but sometimes the wisest thing is to quit

ABOVE: ENTREPRENEUR SBONELO MBATHA BELIEVES FRANCHISING MAKES THE ENTREPRENEURSHIP JOURNEY FEEL LESS LONELY.

tears. Then I got involved in a distribution business copying an Indian model that didn’t work here. I didn’t thoroughly research it and it was a nightmare. What’s your best counsel for aspiring entrepreneurs? You get caught up in the dream and every entrepreneur has to have that. But how do you differentiate between the one to follow and the one you might burn your fingers on? You can only do

Q A

that by being honest with yourself and knowing when to draw a line if you have made a mistake. It is good to hold on to a dream but sometimes the wisest thing is to quit. You place a lot of value in systems – why? I learnt that from franchising. There are pros and cons to it. Some entrepreneurs who are very innovative don’t enjoy the prescriptive arrangement and get frustrated by a franchise environment. I

Q A

If I had started Sbonelo’s Petroleum it would have taken decades to build a brand to be as credible at the ones I am involved in. How big an obstacle is finance for entrepreneurs? Financially-savvy people will use debt to their best advantage to grow their business if the bank is willing to loan it. I discourage startups from loaning money to start a business where the concept is not tested. It is much easier to get loans for a business where the entrepreneur has shown some level of commitment to their idea or who has tested it.

Q A

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ENTREPRENEURS

Doing it for THEMSELVES

Food is always a good bet – as two young entrepreneurs have found out for themselves

The Pizza Guy

habani Dube, 22, lives in a little house in Umlazi where a steady stream of neighbours beat a path to his door. In this suburb pizzas are a luxury, yet locals part with R100 for Dube’s delicious pizzas. Dube is the Pizza Guy, a name that has become synonymous in his community with a youngster who wears a catering hair net and a big smile. Neither the sweltering heat nor his cramped kitchen curbs his enthusiasm. “I always wanted to start something of my own,” Dube told us. “I needed to do something to provide for myself. I worked for a while as a packer and a cleaner at a store, but I didn’t like that.” Dube describes himself as a pizza fan, and while he always wanted to buy pizza, he knew they were expensive and not easily available. Realising there was a gap in the market, he figured he would try and make his own – thus modifying a bread recipe his mom had taught him. “The secret is in the dough,” he says, adding that his favourite toppings are chicken and mushroom or pepperoni and bacon. Dube enticed his neighbours with the tantalising aroma of his pizzas wafting round his ’hood. When he first started in June last year, “people were amazed,” he says. “That’s when I posted what I was doing on Facebook and everything just happened from there. I wasn’t expecting this support.” Dube knocks together his pizzas in a jiffy. He started out alone in his galley kitchen and still uses a makeshift pizza oven which he assembled from old stove parts. He employs two assistants and takes orders on WhatsApp. “I feel so proud. I get my friends to deliver. I work from early until late, but I am doing this for myself. One day I will have a big restaurant of my own in Umlazi.”

ABOVE: THABANI DUBE’S PIZZAS HAVE NEIGHBOURS QUEUEING OUTSIDE HIS HOME.

BELOW : KEEPING IT IN THE FAMILY – WENDY GUY WITH A BATCH OF HER DELICIOUS BISCUITS.

Got It From Gogo

n December 2020 when Durban graphic design graduate Wendy Guy, 21, realised the chances of getting a job were slim, she took to her computer and came up with a logo for “Got It From Gogo” and turned her attention to baking. From the kitchen of the flat she shares with her father, she bakes yummy biscuits – recipes she learnt from her grandmothers, this turning her brand of biscuits into a heart-warming reminder of people who love her. Since starting her enterprise she has filled hundreds of hand-me-down plastic containers to sell to family, friends and neighbours. “The chances of me getting a job in this economy are slim. I needed to get up every day and do something.” The challenges related to baking , consistent quality and deliveries in her neighbourhood have kept her upbeat and engaged. “It makes me a bit of money, but mostly it keeps me busy and learning.”

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LEFT: FOR GCINA ZONDI WHO STARTED IMBEWU CAPITAL PARTNERS, A PRIVATE EQUITY FUND, LEARNING CORPORATE DISCIPLINES AND PERSISTENCE CAN GO A LONG WAY TO BECOMING A GOOD ENTREPRENEUR.

mbewu Capital Partners is a private equity fund started by Gcina Zondi, an accountant who formerly worked in investment banking. He started the fund in 2005 and set his entrepreneurial sights on quiet, offthe-radar deals that “bring home the bacon”. Imbewu means “seed” in Zulu and the fund has stakes in NPC-Cimpor, RCL Foods, Hulamin, Richards Bay Minerals, Icon Construction, IFS (a facilities management services company), Container Conversions, and Isegen SA (a company that produces chemicals). The Imbewu portfolio value runs into billions of rands, and shareholders include big business hitters, Ata Capital, the Multiply Group, and Omame Investments. Zondi says there is a lot of hype about entrepreneurship, but there’s a lot of virtue in learning corporate disciplines, including persistence. While Zondi might be an entrepreneur, he learnt a lot from the perseverance of his father who, over 35 years, worked his way up the ranks at Hulamin. Reflecting on his entrepreneurial journey, Gcina says his

“Spend wisely and get maximum benefit. It doesn’t take away risk – it helps you handle risk better”

Focus is KEY Entrepreneur Gcina Zondi has learnt the hard way, but has weathered the storm

worst mistake was not sticking to his knitting. “The worst mistake I made was not staying close to an investment we got into. There was a change of management and I assumed everything was fine. It wasn’t. Make sure you know who you are in business with and stay close to them so you can detect any problems that arise.” Zondi considers his biggest success as an entrepreneur has been his focus (barring the aforementioned lapse). “Know what you are good at and be happy to walk away from something that falls outside your mandate. It is about focus. Stay close to your customers. Cementing your position will give you a level of comfort and allow you to understand cycles. Spend wisely and get maximum benefit. It doesn’t take away risk – it helps you handle risk better.” His advice to wannabe entrepreneurs? “Have a really detailed understanding of what you are going into before you get into it. Ask all the questions. Try and think about everything in your assessments. Look at the structure and tasks and what personnel you will need and what you can outsource. “And give yourself a proper runway. If you think you need working capital for 12 months, be aware of how easily that becomes 36 months. Plan for things taking three times longer than you expect.” Being light and nimble is held up as a mantra in business. What does that mean to you? “It goes back to knowing what you are and what you aren’t. It helps you manage your circumstances and the environment. Keep your expenses down. Be clear, specific and disciplined. Don’t chase deals you aren’t going to do. The world is distracting. Manage your expectations and try to work at a steady pace. It helps you handle turbulence.”

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SUMMER 2021

CO A C H I N G

Navigating the RAPIDS The business landscape has been very difficult for KZN firms over the last few months. KZN Invest sat down with Kloof based international award-winning business coach, Darryn Le Grange from ActionCOACH Ignite to get his thoughts on how companies are navigating the current climate

for you. We will push and encourage you to achieve more than you could on your own and will help you in the areas of marketing, sales, finance, systems, managing your team and customer service to name a few areas of focus. What sort of results can a business owner expect from coaching? Our main aim is to help you build a “Commercial, Profitable Enterprise That Works Without You”. Our first priority is to make you more money than you are paying us, so we become “free” to the business. Like with anything in life, what you put in is what you get out, so your results will be dependent on the amount of effort you apply and the level of action you take. We have helped many businesses improve their profits by hundreds and even thousands of percent. What should one look for when choosing your business coach? The most important thing would be to ensure you connect with the coach and that they are a good fit for you. Do some homework on their track record, ask for testimonials and be clear about their methodology and how they plan to assist you to reach your desired results. What is the process should someone be interested in business coaching? We would start off with a complimentary coaching session to get an understanding of your business, its challenges and opportunities, but most importantly both prospect and coach will get to see if they are a good fit for each other.

A Q

How would you describe the environment and what are the biggest challenges businesses face? We work mainly with owner managed businesses, so my answers will be based very much with this in mind. The current landscape has been challenging for some and exceptional for others. We see pockets of struggles and pockets of success. While Covid was a big challenge for many businesses, the KZN looting added to that with businesses being destroyed or damaged, supply chains being

disrupted, challenges with imports and massive spikes in raw materials pricing having a knock-on effect on cash flow, margins and profitability. What has led to certain businesses doing so well despite these challenges? Overall, people and businesses are resilient and the adage “find a way” or “find an excuse” has never been truer. We have had a number of clients experience their best ever months in the history of their businesses and this is due to them remaining positive, looking for

ABOVE: ACTIONCOACH IGNITE TEAM DARRYN LE GRANGE, CHENAL BRUMMER, DEBORAH COSKEY AND NATASHA SWARTZ.

alternative ways of doing business and embracing change where it has been required. What can coaching do for a business? We help you to set goals for your business and then come up with a plan to achieve these goals. Your coach will hold you accountable to the action you agree to take, will help you identify the blind spots in your business, and will be a sounding board

darrynlegrange@actioncoach.com

16 CONTRIBUTIONS TO GDP BY THE KWAZULU-NATAL PROVINCIAL GOVERNMENT. A POPULATION OF 11,5 MILLION RESIDENTS, ACCOUNTING FOR 19.35% OF SOUTH AFRICA’S POPULATION IN 2020.

INVEST WITH CONFIDENCE

QUICK FACTS

SECTORS: -AGRICULTURE AND AGRO PROCESSING/ BUSINESS SERVICES/ LOGISTICS AND TRANSPORT/ MANUFACTURING/ ENERGY AND WATER/ MINING AND BENEFICIATION/ TOURISM/ PROPERTY AND INFRASTRUCTURE DEVELOPMENT, AND CONSTRUCTION/ CLOTHING, FOOTWEAR, TEXTILE AND LEATHER/ HEALTH SERVICES/ MARITIME AND OCEANS ECONOMY

Trade & Investment KwaZulu-Natal is a South African trade and inward investment promotion agency established to promote the province as a premier investment destination and to facilitate trade by assisting local companies to access international markets.

20 21

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M A N U FA C T U R I N G

Harnessing a joint FUTURE

esto Harnesses is a story of unusual stakeholder collaboration that promises huge investment and an increase in employment. They make the wiring and instrument clusters for vehicles like Toyota Hilux and Isuzu bakkies – the wiring harnesses are often referred to as the veins and nerve centres of cars. For example, it is the instrumentation and wiring system that turns the back brake light on when you tap the brake pedal. The firm – based in KwaDukuza (Stanger) – is the biggest vehicle harness manufacturer in South Africa and the biggest

Few people in KZN are likely to have heard of Hesto Harnesses, which is a pity. It seems to be one of the province’s best kept business secrets and a sterling example of manufacturing excellence

ABOVE: ILEMBE CHAMBER OF COMMERCE CEO COBUS OELOFSE.

employer in Stanger, with 2 600 staff there alone. The name “Hesto” is derived from Hella, Smiths and Toyota, the early investors. It opened its factory in 1989 with 183 employees and has since grown exponentially. Hesto is jointly owned by Metair, South Africa’s biggest component manufacturer, which is listed on the Johannesburg Stock Exchange (74,9%) and the

Japanese headquartered Yazaki group (25,1%), the world’s biggest wiring harness manufacturer. Yazaki has 306 000 employees across 596 sites in 46 countries and its partnership with Metair in KZN has had a profound impact on the local economy, according to Ilembe Chamber of Commerce CEO Cobus Oelofse. The company’s success since 1989, with regular expansion, caught the attention of Yazaki in 2006 and the subsequent investment and exposure to world-class technology and systems has seen the company ramp up production and claim a space in global auto components manufacturing.

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stakeholder co-operation. “In Ballito I don’t think anyone knows who we are. We fly under the radar, but in KwaDukuza we are an integral part of the community. We have a strong relationship with the municipality and have a workforce that has three generations of families who have worked in the business. “Our staff know the business intimately. They know how critical our components are to road safety and they are committed to the success of the company. If we need staff to work seven days a week, 12 hours a day to fulfil an order, they do so willingly. We have 2 600 people pushing in one direction.

Hesto Harness’ managing director John Chandler briefed Ilembe Chamber members on the R1-billion investment in a 40 000m² new plant in Stanger, adjacent to the existing factory, where they have signed a long lease with Transnet for a 100 000m² chunk of land for the development. There is a tight deadline to finish the new factory, and company projections based on new business secured in January 2020 could see the workforce doubling by 2022. According to earlier reports, the new business is to produce harnesses for Ford, as the local arm of the US vehicle maker prepares to launch new vehicles. Chandler told Chamber members the successful investment was down to a number of things, including being part of an internationally competitive manufacturing process and strong local

“If your customers, investors, employees and local government are agreed on joint objectives it makes for a much easier conversation”

“We have a strong relationship with the municipality and have a workforce that has three generations of families who have worked in the business”

There is a high skills set and low staff turnover.” Chandler said the firm was competitive on the global manufacturing cost index and much of the work is done by hand, with about 70% of the workforce being women and the defect rate is 24 per year. Hesto invested heavily in skills and training – not to tick compliance boxes, Chander said, but to ensure its low defect rate. The deep company integration in the local community bred loyalty and a stable workforce. Hesto has never had a strike. “We have managed to

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M A N U FA C T U R I N G

ABOVE: KZN TRADE AND INVESTMENT CEO NEVILLE MATJIE.

align with our stakeholders. If your customers, investors, employees and local government are agreed on joint objectives it makes for a much easier conversation.” The company is involved in local education, skills development, and healthcare. Chandler told Chamber members the story of a roadside welder who the company had commissioned to make burglar bars for a local school. With Hesto’s assistance the welder was upskilled and will now be a contractor for iron works at the new factory. The company’s growth was spurred on by global demands. “It is a good industry to be in. Each year vehicle accessories get more and more complex.” Ilembe Chamber CEO Cobus Oelofse said Hesto’s presence on the KZN North Coast was indicative of the strong manufacturing culture there. “I attribute Hesto’s success to the international nature of the business, the company’s

that secondary municipalities are ready to receive large scale investments such as this one.” Glen Robbins, the research head of Durban based TWIMS (The Toyota Wessels Institute for Manufacturing Studies), applauded Hesto’s growth. “The company has undergone an amazing transformation in recent

“South Africa certainly needs many more large manufacturing companies to help support any economic recovery

leadership, its people and Hesto’s strong local commitment.” KZN Trade and Investment CEO Neville Matjie said the agency had partnered with KwaDukuza Municipality and benefitted from the support of

Premier Sihle Zikalala, the Department of Trade and Industry’s Lionel October, and Transnet Freight Rail’s CEO Sizakele Mzimela. “We are pleased that the final decision was KwaDukuza (to establish the new factory there). It shows

years to strengthen its status as a world-class producer. The leadership team and investors at Hesto have worked tirelessly to demonstrate that labourintensive manufacturing can be competitive in South Africa, even in areas outside the major cities. “South Africa certainly needs many more large manufacturing companies to help support any economic recovery, and those making policy could learn a lot from understanding the needs of firms like Hesto.

S E R A B E L L A – M E A N I N G A B E AU T I F U L E V E N I N G I N I TA L I A N – I S A N E W D E V E LO P M E N T I N T H E H E A RT O F I Z I N GA I N U M H L A N GA C O N S I ST I N G O F M O D E R N C O N T E M P O R A RYI N S P I R E D V I L L AS T H AT E M B R AC E A S E N S E O F S PAC E A N D E L EGA N C E A N D F E AT U R E STAT E - O F -T H E -A RT F I N I S H ES W I T H I N I TS AU T H E N T I C BA L I N ES E A EST H E T I C S .

No transfer duty payable Stunning architecturally designed modern contemporary / balinese inspired homes embracing a sense of space and elegance situated in a prime position in the prestigious Izinga open suburb, Umhlanga making it one of the most sought after addresses in the area. Gated with an electrified perimeter fence and surveillance cameras with a 24 hour security guard manning the access control from the guardhouse providing residents with absolute peace of mind. The guardhouse area will also incorporate domestic help washrooms, change rooms and toilets. Only a few kilometres away from the famous Gateway Theatre of Shopping complex, as well as in close proximity to some of KwaZulu Natal’s most prestigious schools and hospitals. A short drive to the Umhlanga coastline beaches.

Location, security and privacy translates to peace, happiness and a coveted lifestyle that only SeraBella can provide. Peace of mind: Situated within a double gated security precinct, in addition to patrolled security and tactical presence, Sera Bella also has an electrified perimeter fence with surveillance cameras and a 24-hour security guard manning the access control from the guardhouse.

Location is key: Sera Bella is ideally located to Gateway Theatre of Shopping, hospitals, prestigious private schools, King Shaka International Airport, restaurants and beaches.

Privacy is paramount: Ranging from two- and three-storey villas to three-bedroom apartments, each villa’s garden is totally private and fenced off, offering total seclusion. Within the complex there is also a communal pool and braai area.

TO FIND OUT MORE Website: www.serabella.co.za / Email: sales@serabella.co.za Mobile number: +27 83 786 8999 / Address: P.O. Box 22115, Glenashley, Durban 4022

ith the South African and global economy showing early signs of some recovery following 2020’s devastating economic slump, eThekwini Metro’s Team at Invest Durban has ramped up their vigorous drive to improve Durban’s positioning as one of Africa’s prime business destinations and to improve investor confidence in the City. This being an addition to the “Buy Local – Invest Local” myriad support being given to Durban’s existing businesses. Durban enjoys many investment opportunities, and via eThekwini’s Economic Recovery Plan, the Economic Development & Planning Cluster has doubled down on their efforts to engage and support business in the

Durban’s expanded investment marketing initiative, most recently at the main airports, eThekwini Municipality Mayor, Cllr Mxolisi Kaunda, said: “As one of the major Metropolitan Cities in South Africa, we knew we had to react quickly, decisively, and impactfully to support our businesses, the economy, and our people. Over one year into this pandemic, I am proud to confirm we have been doing just that. I therefore applaud all efforts by my teams, and those in business plus community structures whom have all pulled together to make the differences we now see.” The thrust of Invest Durban in this particular campaign is to improve investor confidence

eThekwini Economic RECOVERY PLAN I N V EST D U R BA N & “ B U Y LO CA L – I N V EST LO CA L” City, across South Africa, and across the world. Invest Durban is a unit within that cluster of the eThekwini Municipality, and works in partnership between the public and private sectors to stimulate, plus facilitate investment within the Durban metropolis. It is geared to delivering world-class investor support services, inclusive of investment promotion and marketing, foreign investment identification, attraction and facilitation, existing investment after-care and expansion, plus investment advocacy to improve the business environment. Commenting on Invest

in the City, position the City as a pro-active business destination, one with a great work-life balance, plus access to a host of identified catalytic projects across multiple sectors, in turn leading to additional prospects regarding the expansion of formal industrial clusters and the development of value chains, from the townships to the “high streets”. The eThekwini Municipality Mayor further commented that Durban has been working hard on a number of largescale projects which have the potential to make a significant regional impact. “Our catalytic projects

have been selected and accelerated for their scale in terms of employment creation, investment value and potential for revenue generation.” He cited the Point Waterfront as a catalytic project example, indicating that projections point to a potential investment value of R40-billion and the number of permanent employment opportunities to be created as close to 6 750. “This is an ambitious plan, with development to date linking the city’s beach promenade and Durban harbour. The 55ha site – which has already attracted significant investment – offers

a property use mix of office space, retail shops, residential dwellings and leisure options and is located immediately adjacent to the development of the new cruise line terminal in the harbour, backing on to the Waterfront, dovetailing well with the Waterfront precinct.” He further stressed that work was being undertaken to optimise the growth and operations of not just particular economic sectors and catalytic projects, but also in key nodes such as CBD urban renewal and building upgrades, tourism attractions and events, beachfront maintenance, and

township nodal upgrades. These were confirmed to be done according to a sustainable Town Planning & Environmental Framework package of approved plans. As the economy begins to reopen, Invest Durban’s goal is to robustly bring new levels of investment to Durban from across South Africa and the world. As Durban’s “First Stop Shop”, they are ideally positioned to introduce, support and facilitate investment into the City and its surrounds. Invest Durban collaborates closely with fellow eThekwini Units and other like-minded organisations, such as the Department of Trade & Industry – including Invest SA, TIKZN, the various Chamber of Commerce organisations, the KZN Growth Coalition and several State-owned enterprises, such as Dube TradePort, Transnet, and others. Mayor Kaunda further confirmed: “Collectively, we have one single-minded mission, which is to put Durban, KwaZulu-Natal firmly on the national and international investment agendas, and to vigorously

promote our region and her projects as premium investment destinations, ripe with opportunity.” Other flagship projects include the GO!Durban Transport Oriented Development system, regarded as a great enabler of transport and trade. This includes the CBD’s Centrum

partnership between Tongaat Hulett Developments and various spheres of Government. On Cornubia’s northern border there is also the Dube TradePort Special Economic Zone, a large-scale multi-modal business platform adjacent to King Shaka International Airport and in the heart of an

Precinct, which aims to expand business in the node between the Durban International Convention Centre, a related hotel, library, Council Chambers and the re-development of nearby Gugu Dlamini Park. Further major investment opportunities vest in the massive 1 300ha Cornubia mixed-use development north of Durban, a

emergent aerotropolis. Underpinning these property investments, there is further co-operation between the public and private sectors via formalised development of industrial cluster initiatives, and township business support. These all aim to draw together experience and expertise from commerce and industry, community and labour organisations,

Government and academia. Exciting new opportunities may be found within these innovative business and investment approaches. Current industrial cluster programmes include the KZN Clothing and Textile Cluster, Durban Automotive Cluster, Durban Chemical Cluster, eThekwini Maritime Cluster, KZN Furniture Incubator, plus the expanding Agri-business development programme. “The wealth of KwaZuluNatal is often consumed or exported in its raw or intermediate state. However, much more could be done to add value through further localised investment and processing. That is what our various industrial and project partnerships are focusing on,” Mayor Kaunda observed. Durban’s priority investment sectors include automotive and allied industries, logistics and logistics management, ICT and BPS, agri-processing, life sciences – inclusive of pharmaceuticals, medical device manufacturing and health facilities, as well as further tourism asset development. eThekwini Municipality Mayor, Cllr Mxolisi Kaunda confirmed: “The prospects for investment in these priority sectors is truly vast and encompasses tourism business opportunities and, crucially, the emergent oceans’ economy as well. In essence, Durban – with its strategic coastal location, excellent climate, ample land availability, the busiest seaport in southern Africa and an enviable lifestyle – is an exceptional travel, trade and investment destination. A destination we are taking to the rest of South Africa, Africa and the world, via this new airport marketing campaign.”

031 311 4227 invest@durban.gov.za www.invest.durban

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PROFILE

Soothing SOOLIMAN In the nation-building stakes, few people are in the league of Imtiaz Sooliman. In a country craving hope, but besieged by corruption, service delivery failures, unrest and the woeful divide between rich and poor, he is a balm for the soul

wenty-nine years ago the Pietermaritzburg doctor shut down three medical practices to found Gift of the Givers on the advice of his Turkish spiritual mentor. Some might have considered him crazy, but his journey has been divinely inspired. Aged 30, Sooliman met and engaged with Sufi Sheikh Muhammed Saffer Effendi al Jerrahi who said: “My son, you will form an organisation. The name will be Waqful Waqifin, and that name is translated into ‘Gift of the Givers’. You will serve all people of all races, of all religions, of all colours, of all classes, of all political affiliations and of any geographical location. You ABOVE: FOR NEARLY 30 YEARS IMTIAZ SOOLIMAN, FOUNDER OF GIFT OF THE GIVERS, HAS BEEN SERVING PEOPLE WORLDWIDE. RIGHT: HANDING OUT FOOD PARCELS IN NEPAL AND DARKOUSH IN NORTHERN SYRIA. LEFT: ITHLOKOMELENG OLD AGE HOME.

will serve them unconditionally.” And so, Sooliman formed a small outfit that has grown in three decades to deliver R3,8-billion in humanitarian assistance to millions in disaster zones from Bosnia to Syria. What was warily regarded as an obscure Muslim charity is now internationally trusted for its response to trauma and desperation regardless of victim identity. Few people could have achieved what Sooliman has. He is brutally honest

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mentally challenged. The organisation is helping upgrade state hospitals and schools, delivering fodder and nutritionally enriched pellets to animals, providing food parcels to the hungry, and it was at the forefront of a lightning-fast response to the civil unrest. Part of Sooliman’s appeal has been to attract a diverse set of donors and to brand Gift of the Givers as patriotic, altruistic, and all-encompassing. “Our diversity should not be an impediment to development nor an instrument for conflict or disorder but rather an opportunity to draw on our strengths.” Sooliman stresses that the hallmarks of “spirituality are caring, compassion, generosity, sharing, ethics, integrity,

Cabinet ministers seek Sooliman out because his harsh words are tempered by praise and backed up by solutions

and yet is feted by captains of industry, politicians, civic leaders and people wanting to contribute to his causes. Sooliman is a trim, neatly attired man, and wears a trademark Gift of the Givers shirt with the South African flag emblazoned on the left arm. He thinks fast, talks fast and acts smartly. He carries four cellphones and yet seems unflappable – like the cellphones are hotwired to his brain? He chuckles. One phone is for WhatsApp; another is for local staff (there are 100); another is for global staff (there are 450 outside of South Africa); and the fourth one is a backup. Sooliman’s sanity comes from his Sufism. When he encounters problems, he says they are miraculously

resolved, allowing his organisation to offer 30 services in a range of sectors solving a host of problems. In South Africa alone it is providing water to drought-stricken areas,

“People come into my life in response to problems. There’s no way to explain it. It is in the hands of God Almighty” dealing with Covid-19 requests from multiple health facilities, supporting orphanages, old age centres, and institutions for the physically and

honesty, forgiveness, annihilation of ego”. All this might sound like it is out of a prayer book, but the piety hasn’t stopped Sooliman’s stinging criticism of state failures. His organisation brought water back to Grahamstown residents after a ridiculous struggle against government bureaucracy, for example. His persistence won the day and now cabinet ministers seek Sooliman out because his harsh words are tempered by praise and backed up by solutions, be it for victims in war zones, drought besieged farmers or impoverished shack dwellers. Sooliman doesn’t feign modesty when asked about what seems like the organisational magic of Gift of the Givers. He says: “People come into my life in response to problems. There’s no way to explain it. It is in the hands of God Almighty.” The successes energise Sooliman and his team. And the certainty that “spirituality never fails, it fosters good deeds and will help South Africans find one another, sincerely and permanently in harmony rather than destruction and discord”.

Issue 15

SUMMER 2021

P H OTO G R A P H Y

A REVELATION The grittiness of KwaZulu-Natal was beautifully represented at an exhibition at the Durban Art Gallery recently, featuring the work of local photographers, Cedric Nunn and Samora Chapman

P H OTO G R A P H Y

evelations took visitors on a journey of people’s daily lives. From rural towns to the pockets of diversity in downtown Durban, these photos revealed snippets of life in the mundane and the exceptional. It documented the ordinary and unusual and it exposed suffering, poverty and exploitation.

These photos revealed snippets of life in the mundane and the exceptional Nunn and Chapman were both born and raised in KZN. Their first-hand experiences of injustice, happiness

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SUMMER 2021

and hope are all part of the revelation. It was a visual feast, be it images of a children’s playground, gangster’s paradise, catwalk, dancer’s stage or one man’s soapbox. The project was initiated by the Alliance Française de Durban and curated by Dr Ingrid Bamber from the Centre for Visual Methodologies for Social Change at the University of KwaZulu-Natal.

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SUMMER 2021

A D V E RTO R I A L

he latest research by Chas Everitt International shows that buyers aged 36 to 49 are currently dominating most real estate markets in KwaZulu-Natal, and that home prices across the province are rising steadily as sales recover following the Covid-19 lockdowns of 2020 and the July 2021 unrest. And in response to that, we have significantly expanded our footprint in the province over the past year to extend our service to many more home sellers, buyers and renters, especially in Durban and along the North Coast. Our research shows that the average prices of both freehold and sectional title homes in most parts of KZN are now all ahead of the averages achieved in 2020 – and also ahead of the averages achieved in 2019. One exception is uMhlanga, where the average freehold home price is still behind that achieved in 2020 – and where there are currently some excellent buying opportunities as a result. Overall, prices are being supported by the fact that the number of homes available for sale has been declining since March this year, even though the number of new listings in some areas has risen since July. This indicates that the oversupply of stock is steadily being absorbed, and most areas seem to be on track after the first nine months of 2021 to equal or even exceed the unit sales numbers achieved in 2020, which recovered nicely postlockdown due to a combination of low interest rates and an influx of

Bernadine Roos (Ballito) 082 857 5861

GROWING in KZN As the market recovers, Chas Everitt International are expanding their footprint in KZN

semigrants from other parts of SA. Indeed, KZN appears to have been a major beneficiary of the massive shift to remote working during the Covid-19 lockdowns and the accompanying freedom that many people now feel to move away from big cities to their favourite country and coastal towns. It is of course still a top choice for

We believe unit sales numbers could be much greater if sellers had better information about current market trends retirees from around SA. Meanwhile, the surge in first-time buying that followed the steep drop in interest rates during the first Covid-19 lockdown has also boosted sales numbers, especially in both the lowerpriced areas and in the sectional title sector of the market. There is, however, still a marked differential in all areas between sellers’

Sue Bamber (Zinkwazi Beach) 072 940 6699

asking prices and the selling prices that are being achieved. We believe unit sales numbers could be much greater if sellers had better information about current market trends, what buyers are actually able to afford and what the banks are prepared to finance. It is to this end that we have set up several new operations in KZN in 2021 and recruited many more highlyqualified and experienced agents who are able to provide clients with this information – and help sellers set asking prices that will attract the most potential buyers and ensure a sale in the shortest possible time. On the North Coast, for example, we now have offices in Ballito/uMhlanga, Richards Bay and Zinkwazi, as well as resident agents in top estates such as Mount Edgecombe, Simbithi and Zimbali. Sources: Chas Everitt International, Lightstone, Property24 Trends

Wade Latham (uMhlanga) 082 466 9902

Manuela Botha (Zimbali area specialist) 083 415 0177

TIKZN

Trade & Investment House, 1 Arundel Close Kingsmead Office Park, Durban, 4001, South Africa +27 (0) 31 368 9600 info@tikzn.co.za

YOUR KNOWLEDGE PARTNER IN BUSINESS PUTTING KZN ON THE MAP Trade & Investment KwaZulu-Natal plays an instrumental role in promoting the province as the premier investment destination through promotion and packaging of investment opportunities, as well as providing professional expertise to potential international and local investors.

KWAZULU-NATAL SOUTH AFRICA KWAZULU-NATAL

29° 0’ 0” S, 31° 0’ 0” E

INVESTMENT OPPORTUNITIES 2019 – 2021

Tasked with sustainable growth in KwaZulu-Natal for the benefit of all its citizens, Trade & Investment KwaZulu-Natal’s main responsibility is to enhance sector and industrial development through trade, investment and exports. The strategically-located province is a catalyst for global trade and a portal between KwaZulu-Natal and the world.

www.tikzn.co.za

GROWING THE PROVINCE THROUGH INVESTMENT With two of the hemisphere’s largest and busiest ports within its border, locally acclaimed attractions which enjoy an all-year-round idyllic climate, a magnificent coastline, heritage sites steeped in rich culture and the African township experience which have emerged strongly; KwaZulu-Natal’s tourism sector is the main contributor to the local economy. Not only is KwaZulu-Natal’s year-round sub-tropical climate a major attraction, but investment has come in a variety of guises, inclusive of Durban’s Point Waterfront Development, the Gateway Theatre of Shopping, the development of Umhlanga Ridge, La Lucia Office Park, Suncoast Casino, Sibaya Casino, the Liberty Midlands Mall and Dube TradePort, which are considered to be some of South Africa’s top 10 investment opportunities.

As the only facility in Africa that combines an international airport, a dedicated cargo terminal, warehousing, offices, retail, hotels and agriculture, Dube TradePort has stimulated growth and investments in surrounding areas. All these constitute investments of R1 billion or more, with investment opportunities such as the Richards Bay Industrial Development Zone offering potential investments in excess of R12 billion. The ideal position to be the trade gateway to Africa, KwaZulu-Natal enjoys a large labour pool, competitive land and building costs, world-class transport and telecommunications infrastructure and diverse cultures.

A WORLD-CLASS BUSINESS LOCATION A leader in export trade, KwaZulu-Natal engages with various stakeholders involved in international business relations, including intergovernmental agencies such as the Department of International Relations and Cooperation, the Department of Trade and Industry, South African Missions Abroad, Foreign Investment Promotion and International Diplomatic Missions. Trade & Investment KwaZulu-Natal’s Destination Marketing Unit works closely with various National and Provincial Departments, ensuring KwaZulu-Natal is positioned for direct air access which is critical in growing KwaZulu-Natal’s economy. www.tikzn.co.za ISO 9001 Certified

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SUMMER 2021

PROFILE

Mountain man on a MISSION Simon Kerr has bushy eyebrows and an enormous personality. The hospitality legend and his wife Megan run the Phatt Chef Roadside Diner and B&B from a magnificent sandstone complex atop Oliviershoek Pass on the R74 between Harrismith and Bergville. KZN Invest chatted to him

err is a hospitality veteran who got the Midlands Meander going in the 90s and discovered Clarens along with artist Simon Addy in the 2000s. In 2013 the Kerrs downscaled from Clarens to the Northern Drakensberg and established their seven-room guest house of extraordinary warmth and character near the Sterkfontein Dam. Previously known as The Caterpillar Catfish Cookhouse, Kerr has rebranded it as The Phatt Chef Roadside Diner and B&B. The couple run a wonderful spot that is off the beaten track but centrally situated for road trippers between Johannesburg, Durban and Bloemfontein. It is also the ideal base to explore the Northern Drakensberg or visit the Sentinel hiking route to the top of the Amphitheatre. Simon Kerr is an intrepid hospitality entrepreneur. A charming, ruddy faced raconteur who speaks his mind, he has amassed a wealth of experience. Greg Ardé had a drink

and the kitchen was the best I’ve ever worked in. Sadly, it was too seasonal to be sustainable. You have been in the business for decades – what are your three golden rules? Firstly, while your customer might not always be right, the customer is still king! Secondly, as a small business, do not get into debt – unless absolutely necessary, and if you do, then get out of debt as soon as possible. And thirdly, every so often, stand back from your business and look at it as others see it and see what you can do to make it more clever, quicker, neater, smarter. If you were the minister of tourism what would your priority be? I’d leave the marketing of our country to the hospitality and tourism industry (via tax breaks) and spend my budget on paying for mentors to help grow small/emerging/grassroots tourism and hospitality. Where does the name Phatt come from? American slang for GOOD, BIG. Good, attractive or desirable; as well as fashionable, especially relating to the fashion styles of hip hop. No, we are not talking about a new spelling variant of an adjective meaning “overweight”. “Phat” is an informal term for expressing general approval for someone or something, and can be used in expressing admiration of various qualities, including being fashionable, intelligent, cool or sexy.

with Kerr, solved all the world’s problems and asked him the following: Where were you born and what did your parents do? I was born in Estcourt. My dad originally farmed in the foothills of the Drakensberg, but later moved to Durban where he worked in the wool industry. My mom was a teacher for a long time at Berea Road Girls, and then at Maris Stella. here did you go to school?

ABOVE: SIMON AND HIS WIFE MEGAN KERR.

DPHS and Estcourt High School. What was your first job? I was supervisor at the pool deck of the Beverly Hills Hotel in uMhlanga. I set out the sun beds and handed out towels. What was your best job? I opened, ran and closed my first restaurant/ nightclub in Margate in the 80s. It had the best decor,

CONTACT SIMON KERR: 071 696 3000 or phattchef@gmail. com or www.phattchef.co.za

www.thepaperstory.co.za

@paperrocksza

Financing Commercial Property Entrepreneurs Downtown

Where others see decline, we see investment opportunities 086 000 TUHF (8843) • www.tuhf.co.za