FEB
2013 ISSUE 6
Edison Power: Ground-breaking renewables IndustrySA speaks with the country’s oldest electrical contractor about their energising work at the Van Stadens Wind Farm, in the Eastern Cape.
Simba
A ROARING SUCCESS
Natsure
FLYING HIGH WITH LLOYD’S OF LONDON
Harmony Gold
OUR PEOPLE ARE OUR GOLD
ChianoSky
HUNGRIER THAN EVER
E
EDITOR’S PAGE
EDITORIAL EDITOR Joe Forshaw WRITERS Colin Renton Tim Hands Roland Douglas Christian Jordan PROJECTS MANAGERS Tonnie Geddes Hal Hutchison Lauren Grey Leslie Kemp Janis Billington ADVERTISING SALES David Hodgson Chris Bolderstone STUDIO STUDIO DIRECTOR Vishnu Joory LEAD DESIGNER Ian Williams STUDIO MANAGER Michelle Cassidy OFFICE MANAGER Tricia Plane ACCOUNTS Mike Molloy, Jane Reeder IT DIRECTORS Daniel Sizeland, Dionne Smith ECP LTD MANAGING DIRECTOR David Hodgson OPERATIONS DIRECTOR Chris Bolderstone FINANCE DIRECTOR Scott Warman Ferndale Business Centre, 1 Exeter Street, Norwich, NR2 4QB If you would like more information about ways in which IndustrySA can promote your business please call +44 1603 618000 or email info@industrysa.com East Coast Promotions Ltd does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher.
Welcome to the sixth issue... The start of the New Year has bought many new things with it. A new CEO for Anglo American, a new African Cup of Nations tournament, a new set of fantastic innovations and entrepreneurs and a new optimistic outlook for many business sectors.Nelson Mandela continues to recover from gallstone surgery and a lung infection, adding to the enthusiastic, hopeful outlook for 2013. We are told constantly that if you fail to innovate then you will fail altogether and in this New Year we will be looking closely at what companies are doing to innovate. Innovations are often described as new methods, ideas or products, and it is through these that business is allowed to move forward, so we ask you, what innovations have come out of your company recently? Are there any set for the early part of 2013? The innovative CSR projects that companies have become involved with, such as the Trekking for Trash initiative supported by Nampak, are great examples of how organisations have been supporting innovation with positive effects. We have again spoken to fantastic businesses, from all industries - science, power, finance and food and they are all innovating on a daily basis in order to progress and make a New Year charge on the ultimate business goal – profit. Simba have an innovative CSR project underway and Airspace Africa Underwriters, a division of Natsure, are ready to launch their innovative, new product which will see them partnering with one of the world’s insurance giants, Amlin. Both of these initiatives are discussed in this month’s edition of IndustrySA. All of this proves that innovating makes the difference, that difference between big and small, the difference between good and great so get online and tell us stories of innovation on facebook facebook.com/ECPindustrysa or twitter @industry_sa
Joe Forshaw
editor@industrysa.com
© East Coast Promotions Ltd 2012
FEB 13 PAGE 3
CONTENTS
14
3 EDITOR’S PAGE
Innovation is the future
6 NEWS All that’s happening in South Africa 10 ENTREPRENEUR The art of music 12 INNOVATION To the moon and back 14 AUTOMOTIVE EXCELLENCE Speed, power and beauty 16 SPECTREM AIR To mine or not to mine? 18 CHIANOSKY Composing and creating – the sky’s the limit
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18
44 20 METROWIND/BASIL READ
62 ZAMBEEF
22 EDISON POWER
72 HARMONY GOLD
Winds of change, read all about it A generation’s power
32 SIMBA
A roaring success
44 HIK ABALONE FARM
Feeding a growing nation Searching for harmony in challenging times
80 PLUMBLINK
Innovation that will not run dry
50 NATSURE
86 ETHEKWINI MUNICIPALITY DEPARTMENT OF WATER AND SANITATION
56 AEG POWER SOLUTIONS
94 INDUSTRY RECOMMENDED
Catching the abalone market Be sure with Natsure A bright future
Clean living
This month’s showcased organisations
COMPANY REPORTS
CONTENTS
FEB 13 PAGE 5
NEWS All that’s happening in South Africa - By
Lauren Grey / For more news stories visit industrysa.com
Orange sees a bright future in South Africa Global telecommunications provider, Orange has launched a new subsidiary in order to seek out business opportunities in developing markets, with the first of these projects operating within South Africa The French brand launched its new subsidiary, Orange Horizons in January, targeting the South African market with an e-commerce website selling telecoms-related devices and accessories, combined with a country website providing a variety of online content tailored to the new market. The launch of these services coincided with the start of the Orange Africa Cup of Nations 2013 (Afcon) football tournament, sponsored by Orange and hosted in South Africa. To increase interest and visibility, South African residents connecting to the website were able to enter a contest to win tickets to several matches, including the final. Ellie Girard, Senior Executive Vice President of Strategy and International Development says that Orange Horizons is ‘a very exciting project that fits perfectly in the Group’s overall Conquests 2015 strategy.’ “Due to traditional migratory flows or cultural and professional ties, there are many countries where Orange is already very well-known despite not having an operational presence. We think there is strong potential to create a new source of revenues in these countries by leveraging
awareness of the brand to propose very simple mass-market offers” says Girard. The Group’s footprint currently covers around 10% of the world’s population, leaving 6.2 billion people who could potentially become customers through Orange Horizons activities. The Group plans to launch business ventures in several other countries in 2013 in Europe and Africa, and will also look at opportunities in South America in order to leverage existing content-related assets such as starMedia, a South American internet portal.
Adcock Ingram invests in India In a deal worth R745 million, South African Pharmaceutical company, Adcock Ingram, has completed the acquisition of Indian firm Cosme Farma Laboratories Limited. The acquisition forms part of the firm’s growth strategy into new territories, particularly emerging economies. JSE listed Adcock Ingram formed 120 years ago as the EJ Adcock Pharmacy in Krugersdorp, west of Johannesburg, the company has grown to a market capitalisation of approximately R9-billion and occupying a 10% share of the private pharmaceutical industry in South Africa. With brands such as Panado, Compral, Corenza Para-C, L.C.C, Cepacol and Medi-Keel A as part of its portfolio, Adcock will be
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looking to expand and increase this stock in new emerging markets. “We are pleased to have concluded the purchase of the business and we look forward to developing a solid business in India, as a part of our international revenue streams,” said Mr. Andy Hall, Deputy Chief Executive and Financial Director at Adcock Ingram “Adcock Ingram will now assimilate over 1000 formerly Cosme employees, and will look to build a growth base in the country,” the company said in a statement. Cosme Farma is a healthcare company based in Goa, and was started as a small retail pharmacy known as the Cosme Matias Menezes Group (CMM) in 1910. It has since become a conglomerate with international collaborations and strategic alliances with eight multinational companies and a global presence in 20 countries.
NEWS
Theron celebrated for humanitarian work South African actress, Charlize Theron was one of three ‘exceptional cultural leaders’ to be awarded at the opening of this year’s World Economic Forum (WEF) for her contribution to entertainment and humanitarian work. The annual meeting took place in Davos, Switzerland, drawing more than 2,500 participants from over 100 countries, including nearly 50 heads of state or government, 1,500 business leaders, and representatives from civil society, media, academia and the arts. Theron was presented with the Schwab Foundation for Social Entrepreneurship’s Crystal Award 2013 by Hilde Schwab, wife of WEF founder and executive chairman Klaus Schwab. Artist Vik Muniz and Pakistani documentary filmmaker Sharmeen Obaid Chinoy were also celebrated with the same accolade. The Social Entrepreneurship’s Crystal Award is granted to those ‘artists who not only excel in their art but also help to improve the world’, and has previously been received by South African singer and humanitarian Yvonne Chaka Chaka. Prior to the meeting, Theron, a U.N. Messenger of Peace and founder of the Charlize Theron Africa Outreach Project, wrote in a piece for The Huffington Post that she was attending the WEF’s annual meeting as an ‘advocate for the millions of Africans whose lives depend on programs funded by the Global Fund to Fight AIDS, Tuberculosis and Malaria.’ Theron told the gathering that she aimed to use the
spotlight she attracted as an entertainer to draw attention to the HIV epidemic in South Africa and sub-Saharan Africa. Theron explained that South Africa had made considerable progress in tackling the pandemic, with the eradication of mother-to-child HIV transmission in particular being an ‘incredible stride’, but said much work remained to be done to ensure that young people had ‘the resources, skills and life-saving information to lead a HIVfree life.’ Cultural leaders, Vik Muniz and Sharmeen Obaid Chinoy, expressed similar views on how they intend to bring about change through their chosen art forms; Chinoy, a documentary filmmaker, told delegates that film had the power to change lives, with a recent documentary of hers impacting on legislation in Pakistan, causing acid attacks to be treated as terrorism and punished with prison terms. “My mission as a filmmaker is not only to expose all the things that are happening around the world, but also to become a voice for those who cannot tell their own message,” Chinoy says. Artist Vik Muniz said that he is working to ‘use art as an element of inclusion’ and towards making art ‘a right, not a privilege.’ To achieve these goals, he was taking art out of exclusive exhibition spaces. One such project, his work with Brazilian garbage pickers, became an award-winning documentary film, Waste Land. This year’s WEF meeting ran until 27th January under the theme “Resilient Dynamism”.
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NEWS All that’s happening in South Africa - By
Lauren Grey / For more news stories visit industrysa.com
R1bn investment for Unilever A new home care factory, operated by Unilever South Africa, will open in South Africa in 2014. In addition to the R800 million investment by the company, Unileve will also invest R200 million in upgrading and improving existing facilities. The factory will be built in Anderbolt, Boksburg – east of Johannesburg, adjacent to Unilever’s main distribution centre and will produce popular brands like Omo, Skip, Handy Andy, Domestos, Comfort and Sunlight amongst others. Marijn van Tiggelen, Unilever SA Chairman said about the project: “This factory forms part of a multi-year, multi billion investment plan by Unilever SA to cater for our growth. It will enable us to better serve South African consumers with innovation and green technology, as well as improve service levels to our retail customers. The R800 million project is one of Unilever’s largest investments globally and underscores our commitment to the long term future of South Africa and the continent as a whole.” This investment is supported by
the Department of Trade and Industry’s 12-I Tax Allowance Incentive scheme and follows on the opening of the Unilever Savoury dry foods factory in KwaZulu-Natal by Minister Rob Davies during December 2011. Unilever has a vision to double the size of its business while reducing the size of its environmental impact and this new factory is another step towards that goal. The facility wwill use state of the art technology to create a low energy, environmentally efficient factory with zero waste to landfill.
Chinese tourism booms in SA South Africa’s tourism sector saw a 63.5% increase from Chinese visitors in 2012, making China the country’s fourth-biggest overseas tourism market. Over 96 000 Chinese tourists visited South Africa between January and September, up from the 59 187 who visited over the same period in 2011. “China is now one of South Africa’s most important and valued partners for tourist arrivals, and a market the South African government is committed to investing strongly in,” the Tourism Department said in a statement. Tourism Minister, Marthinus van Schalkwyk, says that an increase in trade relations between China and South Africa has been noted since the country took its place among Brazil, Russia, India and China in the BRICS in 2011. The increase also follows South African Tourism’s launch of promotional activities to promote brand-
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awareness, as well as the hosting of its 2012 annual trade workshops and participation in tourism exhibitions in China. “In 2012 we concluded joint marketing agreements with seven trade and marketing partners in China to build education and understanding of our destination here in China, to package and promote a larger variety of products and experiences and to make South Africa as affordable and accessible as possible for Chinese travellers,” says Van Schalkwyk. “In January 2012 we also saw the introduction of non-stop flights between Johannesburg and Beijing as part of a code share agreement between South African Airways and Air China, providing Chinese tourists with convenient access to South Africa.” The introduction of two new visa application centres in China has also enhanced the attractiveness of South Africa as a destination. “We are confident of continuing our exciting growth in a market set to become one of the world’s most important tourism markets in the future,” he says.
NEWS
South Africa’s Standard Bank in ‘top 100’ South Africa’s Standard Bank has been ranked 98th in the Global 100 Most Sustainable Corporations in the World, according to a range of sector-specific sustainability measures. The list of 100 top-performing worldwide stocks was announced during the World Economic Forum’s (WEF’s) annual meeting in Davos, Switzerland in January, with Standard Bank coming in as one of nine banks, and the only African company on the list. The list, published annually by Canadian Media and investment research company Corporate Knights, commissions independent data collection for the project through direct engagement with the 350 companies that make the project’s shortlist, chosen from approximately 4 000 global midand large-cap stocks worldwide. Canada and the United States led the way in country representation, each with 10
companies on this year’s list, followed by Australia, Britain and France, each with nine. Overall, the Global 100 drew companies from 22 countries on six continents. Standard Bank has been making significant investments in renewable energy projects whilst working in partnership with the United Nations Environment Programme to develop the use of carbon credits. Toby Heaps, Corporate Knights CEO, says the Global 100 companies ‘are leading a resource productivity revolution, transforming waste into treasure and doing more with less. They are steering our civilization away from ecological overshoot and back to a place of balance with our planet.’ Topping the list was Belgium-based materials technology and recycling company Umicore, followed by Brazil’s Natura Cosmeticos, Norwegian energy firm Statoil, Finnish energy firm Neste Oil, and Danish pharmaceuticals and biotechnology company Novo Nordisk.
Dimension Data and AirWatch announce global partnership South African services and solutions provider, Dimension Data (Didata) have announced a global partnership with American mobile giant, AirWatch. In a statement released in January, Didata said the partnership is set to benefit customers’ who want to move towards mobility in the workplace, “clients in South Africa and Europe have cited the growing need for solutions to manage corporate and employee-owned mobile devices, protect corporate data, distribute enterprise applications and secure mobile access to corporate documents.” Matthew Gyde, Didata’s Group General Manager for Security Solutions says that security will remain the most critical consideration in the move to mobility because, if not effectively managed, it creates the biggest area of corporate risk. Given the multi-geography nature of Dimension Data and
its clients, Gyde says that AirWatch is the perfect partner to help combat corporate security issues due to its ‘powerful technology platform’. “What further sets AirWatch apart is its advanced API framework that allows for close integration with Dimension Data’s telecom expense management offering, Xigo Enterprise, to deliver even greater value to our clients” he says. To showcase the partnership and Dimension Data’s extended enterprise mobility offerings, the firm will participate in the AirWatch Connect 2013 conference in Barcelona, Spain from 25 to 28 February. President and CEO of AirWatch, John Marshall, recognises Dimension Data as a ‘significant provider of security services’, “This, combined with their focus on providing clients with end-to-end mobility services around the world, makes the partnership a natural fit” he says.
FEB 13 PAGE 9
ENTREPRENEUR
Cutting edge, boutique guitar making Editorial Roland Douglas Interview Hal Hutchison
Marc Maingard is one of the world’s greatest guitar makers. He studied yoga and ayurvedic medicine in India as a young man. His vast experiences of life and music have given him all the tools to run a superbly successful business straight out of Scarborough, Cape Town.
Every month we feature entrepreneurs with astonishing stories and this month is no different. Marc Maingard is not a typical business man. He does not work in a high-rise and get chauffeured about in a dull silver or black saloon. His story is rather more noteworthy. In fact, for the last 40 years Marc has devoted himself to the construction and restoration of guitars. Now, one of South Africa’s finest wood craftsmen, Marc’s story is one of passion, wisdom and unrivalled expertise. As a youngster Marc was trained as a pianist and a violinist. After playing in the Natal Youth Philharmonic, he eventually took up the guitar and performed as a professional musician in South Africa and across Europe. In the 70s, Marc was looking for someone to repair his guitar and after an unsuccessful search he undertook the work himself, unwittingly starting out on a journey that would see him become a renowned repairman. Marc developed his skills further through an apprenticeship with a cabinet maker, learning marquetry and French polishing, among other things. He combined this experience with a year of making violins and cellos before eventually moving to the USA and working with Santa Cruz guitar company on acoustics, Jimmy d’Aquisto on jazz and Martin, Gibson and Ovation on electrics. He is now their only authorised repair person in SA.
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Marc is an expert in concert guitars after spending three years in Spain and the attention to detail is immense with each guitar being made with a specific user in mind. Looking back at an impressive set of testimonials, Marc tells IndustrySA that his guitars are something a little bit different. “There is no doubt about it; I make quite a special guitar. Whether it’s a superstar or not, whoever picks up one of my guitars will feel that they are holding something a little bit different. There is nothing factory about what I do. “A lot of popular guitar makers live in the UK or the USA and they feed off each other. Living right down here I didn’t have that. I grew a sound and a guitar out of what I was feeling as a good wood worker and as a player. “I’m a musician, I have two CDs out. My children are musicians so I know what a good guitar should sound like and feel like.” In a recent industry magazine Marc was called ‘one of the top five on the planet’ when it comes to custom guitar building and, of course, that is good for business he says. “I always realised, in the early days, there was no one who had my skills and there was no one who had worked in the USA with the top companies like I had. I came back to SA highly skilled. “I was getting expensive guitars to repair coming from across Africa but I had to put that to the side to focus on making guitars. The making has always been my passion. I have one in the making right
MARC MAINGARD now, set to leave for the UK soon, which will be sold for R150,000.” The reputation of Marc’s guitars is now widespread among serious players and celebrities and he has worked with some notable names including Crosby, Stills and Nash, Earl Klugh and Steven Seagal. “Top SA musicians use my instruments but my reputation is bigger in other countries. Steven Seagal is really an electric guitar player. He wanted a guitar that had a very light action but with a lot of punch and volume so that was a challenge. “I went through a lot of sound boards before I found the right one for him and he eventually came back and bought another so it must have been good!” So why are Marc’s guitars so good? He explains it helps to use the best wood available. “Someone said to me ‘if I don’t have one of your guitars in my collection then I don’t have a full collection’, and that meant a lot. “I mainly go to Europe for my wood. The people I deal with have had wood cutting in their families for 200 years. The best wood comes out of the alps, the Austrian, Swiss and Italian alps. I use wood from close to where Stradivari cut his wood. The pines in the high slopes tends to be incredibly accurate. “I use spruce for tops and for backs and sides I tend to use Brazilian rosewood which is CITES certified and is all legitimately harvested and ecofriendly.” Marc’s business is exemplary in the way it is run and the passion which surrounds it. The expert craftsmanship and attention to detail that goes into every project is remarkable. If you are a guitar maker, music enthusiast or budding entrepreneur then look no further than Scaborough, Cape Town for your inspiration. ●
“ There is no doubt about it; I make quite a special guitar”
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INNOVATION
An innovation with staying power By Joe Forshaw
Pratley Putty was developed by George Montague Pratley in the 60s. Today, it remains the only South African product to visit the moon.
This month we take a closer look at one of South Africa’s more legendary innovations – the Pratley Putty. Invented by George Montague Pratley in the early 60s, the product is widely recognised as one of the most user-friendly, high-strength adhesive products to ever reach mainstream distribution. So what is Pratley Putty? In essence it is an insulator and also an adhesive agent for fixing brass terminals which were located inside cast iron cable junction boxes. Eventually, the mouldable putty was changed into a gluey paste with much stronger adhesive qualities and after time the product was being manufactured in the USA and New Zealand. The product is an epoxy resin, similar to many other industrial adhesive solutions. Epoxy adhesives can be developed to suit almost any application, something which Mr Pratley was only too aware of. They can be used as adhesives for wood, metal, glass, stone, and some plastics. They can be made flexible or rigid, transparent or coloured, fast setting or slow setting. Epoxy adhesives are better for resisting heat and chemical pressure than most other common adhesives. Since the development of the original Pratley Putty, many related products have been marketed to suit different areas of industry but one thing is for sure – Pratley Putty Original was the first of its kind in the world. George Montague Pratley, nicknamed ‘Monty’, was born in Johannesburg in 1917. After attending Wits University and Rugby College of Technology and Arts in England, Monty was employed by British Thomson-Houston, famous for production of the Whittle Jet Engine. He served in the Second World War
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before being repatriated to South Africa in 1946 and working in Durban, in the mining industry. The Pratley Manufacturing and Engineering Company was founded in 1948 serving small and large mining companies and Monty hired his first two employees who would remain with the company for decades to come. The company was involved in many activities from the import of tractors to the production of rubber toys. In the early days the company was based in Hillbrow, Johannesburg before relocating to Luipaardsvlei,
Krugersdorp. As the company grew, the premises grew and eventually a laboratory was opened in the late 50s where the infamous Pratley Putty was developed. The Pratley business claims a number of world firsts for its
INNOVATION
“One of my father’s most unique attributes was his total belief in his ability to succeed” adhesive products and the use-ability of the Putty is usually demonstrated through the three most notable stories in the company’s history. Firstly, Pratley Putty is the only South African product to go to the moon, being used in the first American module to land there in 1967. Secondly, the Putty was used to stop cracking in the Golden Gate Bridge in San Francisco. Thirdly, two sunken ships off the coast of South Africa had Pratley Putty treatment to repair the holes which sunk them. With the Putty holding strong, the ships were eventually raised and sailed again. Two other highly publicised moments for the company have come as part of the Putty product launches. In 1983, George Pratley passed away and his son, Kim, took over the business. After developing a further adhesive product, Pratley Wondafix, Kim was so confident in the power of the product that he used it to suspend a bulldozer from a crane while standing underneath. In 1993, the company developed Pratley Wham, the world’s fastest setting adhesive. This time, to demonstrate the product’s ability, Kim suspended a VW Beetle from a crane
using nothing but Pratley Wham and stood proudly underneath with no fear of the vehicle falling and crushing him. This product was later taken off the market because it worked too fast for most people to handle. The growth of the company and the wonderfully innovative products, that have all come directly out of South Africa are a testament to the Pratley family. Kim says of his father: “One of my father’s most unique attributes was his total belief in his ability to succeed. Failure was not in his vocabulary. I think his success can be ascribed to the fact that he dealt entirely in the realm of reality. In business he considered only the facts – everything else, with exception of his entrepreneurial gut feel, was rejected. “In later years, he resisted approaches by large companies to buy him out, as well as the temptation to go public. This would have made him immensely wealthy, but would have deprived him of his independence and freedom to pursue innovative ideas. He found all new technologies exciting and was always eager to implement them.”●
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AUTOMOTIVE EXCELLENCE
Motorcycles:
The big four
By Joe Forshaw
Have you ever thought about buying a motorcycle or upgrading your current bike? If the answer is no you may change your mind after reading about our big four. At some point in everyone’s life there is a moment where the decision of whether to jump onto a motorcycle or not has had to be made. For some people this moment has yet to come but when it does the adrenaline rush will either push you through the fear barrier and get you on the bike or make you shy away with the terror of something so fast and so free. For many people riding a motorcycle is the ultimate in thrill seeking and adrenaline pumping action. MotoGP is the world’s top motorcycling competition and the bikes used by the racing superstars are replicated by the constructors and legalised, ready for road use. We have taken a look at four of the best on the market right now. While they come with hefty price tags they provide nothing but speed, thrills and lashings of coolness.
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A superbike is probably not the best way to get into the office everyday but for the weekend and the race track the following models will make you the envy of the rest.
HONDA 2012 CBR1000RR FIREBLADE The CBR1000R Fireblade offers the perfect balance between power and control. Made by Honda, with Japanese engineering at its heart, you can be sure that you will be buying quality and expertise. For around R150,000 you can buy a
AUTOMOTIVE EXCELLENCE
Overall this offering is as close to perfection as you’re going to get Fireblade and use the 1000cc engine to evoke nothing but jealousy in your colleagues. With massive breaks and a diamond; die-cast aluminium twin-spar frame this is perhaps the most suited to road-biking of all our four featured bikes. With 20 years of development in the CBR series, this Honda is one of the most advanced machines on the market.
SUZUKI GSX-R1000 The Suzuki GSX-R1000 is another bike from Japan. With a 1000cc engine this is perhaps suited more to racers or track drivers. The company branding offers owners the chance to ‘own the racetrack’. With edgy looks and a lightweight body the bike offers top of the range speed and top of the range stopping power with innovative radialmount Brembo monobloc calipers. Everything on the road version of this bike is ‘raceproven’, demonstrating the company’s commitment to optimal performance, on and off the track. It costs R160,000 but for that you get over a decade’s worth of experience from the GSX brand line. Still recognised by many as the greatest sports bike ever made, it would make ideal spending for your annual bonus.
The bike costs around R240,000 and you will also have to consider shipping costs. So what do you get for this kind of cash? Well, to answer simply, you get the Superquadro – the most powerful twincylinder production engine on the planet. It produces 195hp and is again, full of racing technology. The 1198cc engine is also one of the most expensive ever developed for a bike and the company state that overall this offering is as close to perfection as you’re going to get. With titanium piston rods, carbon fibre bodywork, Ducati Performance racing exhaust the bike is set for the track but is also road legal and ready for the everyday rider (with a lot of money).
YAMAHA YZF-R1 WGP 50th ANNIVERSARY Yamaha, founded in 1887, was originally a piano and organ manufacturer in Japan. After World War II the company turned its expertise to manufacturing machinery and eventually motorcycles. The YZF-R1 WGP is the latest superbike from the world renowned organisation and coming in at R180,000 it is not cheap. For your money you get a 998cc liquid-cooled in-line 4-cylinder 4-valve engine and a host of other fantastic features. The bike features an innovative crossplanecrankshaft with an uneven firing interval offering high levels of linear torque for superior traction. The compact aluminium Deltabox chassis delivers precision handling , perfect for optimised high speed performance. The bike is heavily influenced by Yamahas Grand-Prix heritage and the new traction control system allows you to unleash the full potential at the flick of a switch. Perfect for the street or the track, the look of this bike will intimidate anything else on the tarmac. ●
DUCATI 1199 PANIGALE S TRICOLORE The Ducati is from Italy, the home of crazy motoring. The company is owned by Lamborghini and Audi.
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SPECTREM AIR
Research from the skies By Christian Jordan
Spectrem Air is pushing the boundaries of mineral exploration and environmental investigation. After 15 years the technology is becoming more important as deposits become increasingly difficult for miners to find. Mining in South Africa is one of the most vital industries to the economy, a huge provider of jobs, a large contributor to GDP and an attractive venture for foreign investors. The word ‘sustainable’ is one which is found around mining more and more, and as the burgeoning industry continues to grow, the question of how much more valuable
a competitive advantage when it comes to commercial surveying. The Spectrem project fundamentally involves flying over prospective land in the Spectrem Basler conversion DC-3 while using the Spectrem2000 electromagnetic (EM) system to search for buried paleochannels, sulphides and kimberlites. The Spectrem2000 system (officially The Spectrem2000 Airborne Electromagnetic Time Domain), ironically named the ‘Bird’, is essentially towed behind the aircraft and allows for continuous mapping of the earth’s magnetic field up to depths of 900m depending on the type of surface and soil. The crew always deploy a larger EM bird first, suspended 124m behind and 34m below the plane. A smaller magnetometer bird flies 41m behind and 19m below and all information is sent up to the plane through specially designed cables made from Kevlar and nylon, protected by an aluminium casing. Sprectrem2000 (for fixed-wing aircraft) and the ExplorHEM (for helicopters) are the two systems developed so far by Spectrem Air. They are described by the company as ‘the most modern and arguably the best systems available’. The ExplorHEM project was suspended in 2009 and full
“ The Spectrem2000 bird is a high powered, multi-instrument platform capable of high resolution geological mapping” material can be found and how we get to the more difficult deposits is becoming more prominent. To help with exploration and prospecting, Spectrem Air, an Anglo American company, has developed two innovative systems that can be used in mineral exploration and environmental investigation. Over the past 15 years, Anglo American has invested around $20 million into the development of the two projects with the purpose of gaining
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SPECTREM AIR
SURVEY APPLICATIONS Diamonds Precious Metals Uranium Base Metals Geologic Mapping Ground Water Shallow Gas Oil Sands
SYSTEM SPECIFICATIONS Transmitter Moment: 420,000 Am2 RMS Transmitter Height: 90 m Receiver Height: 54 m Base Operating Frequency: 25, 30, 37.5, 45, 60 or 75 Hz Data Sampling: 5 Hz Receiver: Triaxial (X, Y, Z)
focus was given to the Spectrem2000 project. The Spectrem2000 bird is a high powered, multiinstrument platform capable of high resolution geological mapping and direct detection of conductive targets simultaneously. In addition to the very powerful EM system it conducts both magnetic and radiometric surveys. The broadband capability of Spectrem allows for significant reductions (reported as 80%) in the time and cost required to carry out exploration. There is also, always the possibility of discovery. Spectrem made two discoveries in its first year of operation. Thanks to real-time processing, Spectrem is able to turn around data very quickly, producing field quality maps within 24-48 hours for exploration staff to review. For geophysical work, the aircraft operates at 300 feet above ground level at a speed of 100 knots. The Spectrem plane can carry 10,000lbs of fuel allowing an endurance of eight to nine hours flying time. The survey crew consists of two pilots, an aircraft engineer and a system operator. Apart from conducting the geophysical surveys, the activities of the survey crew vary from helping Inuit people build igloos in the Arctic Circle to research in the tropical jungles of South America. Other uses of this remarkable technology have included
ground water modelling and pollution monitoring, potable water drill hole siting, bathymetry, detailed structural mapping and potentially for oil exploration. In the last 15 years Spectrum2000 has flown over one million line km, proving the reliability of the system. The actual aircraft is a converted Dakota with a wingspan of 95 feet. The original radial piston engines proved to be at fault for a number of engine failures in early missions and after Basler revamped the design, two Pratt and Whitney turbine engines were fitted. This, along with other tweaks, improved reliability greatly and provided a vehicle perfectly suited to airborne surveying. Without all the kit on-board, this is one of the fastest DC-3 aircraft in the world, helping to quickly cover large amounts of ground below. The Spectrem Air business is headquartered in Johannesburg and is managed by a team of South African geophysicists and engineers. After recent projects in Australia and Canada the aircraft and the technology is now back on South African soil, conducting tests for its parent company Anglo American who have also recently invested further in the development of superconducting interference device (SQUID), the most sensitive type of magnetic sensor known, to allow for more investigation through EM systems. â—?
FEB 13 PAGE 17
CHIANOSKY
Hungrier than ever By Joe Forshaw
The dream is just beginning for 19 year old ChianoSky who released her debut album ‘Hungry’ through EMI Records in July. ChianoSky’s mix of seductive jazzy pop has seen her racing up the airplay charts in South Africa, showcasing her as one of the country’s most exciting, fresh and talented new discoveries. She recently took the time to speak to IndustrySA about her journey so far… Q: What has life been like since the album release? Do you live a completely different life to what you lived two or three years ago? Obviously things are different but I don’t feel any different apart from growing up and looking after myself independently. I still enjoy all the creative activities I did before and I would take a night in with DVD’s over any wild night out, I’m still me except now I’m lucky enough to be living my dream. Q: The album ‘Hungry’ was released in July and has received such a positive response, what are the plans for the next album? In my first album I had a lot of fun experimenting with my favorite sounds and genres. I was happy for it to be my introduction into the industry showing that I’m ‘Hungry’ for this journey so going forward onto the next album I still want to show the same strength, pushing the limits and leaving everyone with a surprise. Q: Is it a challenge for someone so young to have such success or do you just take it all as it comes? I definitely take it as it comes, you really just don’t know what to expect, I have tried to stay realistic throughout this journey as well as grounded, taking it all as it comes. Q: The story of where your music career began is amazing. Working in a restaurant, meeting a DJ and then signing a deal… Was it really that quick? Well... yeah. Getting the deal together happened rather quickly but it took months and months of writing, hard work and preparation before anything actually got released so technically it wasn’t all that quick, I really had to prove to EMI that I deserved this opportunity. Q: So many people try and fail in the music industry. What
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has made you succeed and helped you get the break? To be honest I don’t know the recipe to success. You really never know if you going to be liked or not in this industry so all you can do is work hard, stay focused and push for the ideas that you believe in - let your passion drive you. Q: Some corners of the media have compared you to major superstars including Amy Winehouse. Do you welcome such comparisons? These comparisons always come as a surprise as these are the artists that I have admired for years so when someone lines you up next to them it is a wonderful feeling but at the same time it just motivates you to work harder so you don’t fall out of line. Q: Where do you think you will be in 20 years’ time? WOW, quite scary to think of yourself when your 39! Well I guess I would hope to be internationally successful through living a comfortable lifestyle with many awards of achievement and supporting fans. Q: Is it true that you love to be involved in every part of the creative process from video concepts and song writing to artwork design and photo shoot arrangement? Yes. I know who I am, what I want and how I want to be perceived. I have also always been creative - painting, drawing and I took part in school productions so I think it comes naturally. Q: Are there any South African artists out there that you would love to work with? Micasa and Goldfish really are amazing South African artists, they would be my first pick - their live performances are great and they make music for the people. Q: Has your modeling work helped you to feel comfortable and confident on the stage and in front of the camera? Modeling has really, in my opinion, helped me to be more comfortable in my own skin, more confident and most importantly accept criticism, which has helped prepare me for the music industry. Q: Finally, what is the ultimate goal for you? No.1 singles? No.1 albums? Sold out tours? Inspired fans? ChianoSky dolls? Hmm… that’s exactly it! I would love No.1 albums, not only in SA but internationally, sold out tours around the world, many inspired fans that keep your music alive, collaborating with some of my favorite artists like Diana Ross, Frank Ocean, Kylie Minogue etc. There are so many goals that I have in mind, it’s hard to put a finger on it. ●
CHIANOSKY
“In my first album I had a lot of fun experimenting with my favorite sounds and genres. I was happy for it to be my introduction into the industry showing that I’m ‘Hungry’ for this journey.”
Keep up to date with ChianoSky online: www.chianosky.com www.facebook.com/ChianoSkyOfficial @ChianoSky
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COMPANY REPORT
Heralding and harnessing South Africa’s wind Editorial – Joe Forshaw Production – Lauren Grey
MetroWind’s Van Stadens Wind Farm is a world-class project under development in the Nelson Mandela Bay Municipality in South Africa’s Eastern Cape Province. IndustrySA speaks to some of the Directors at the project to see how construction is coming along.
On the edge of the Eastern Cape, not far from Port Elizabeth, one of the country’s more remarkable renewable energy projects is well underway. The project is the brainchild of renewable energy specialist company, MetroWind. Officially known as the Van Stadens Wind Farm, this project is being hailed a success, but the area is still yet to see the erection of one single wind turbine. Apart from the obvious environmental benefits incurred through using wind as an energy source, this project is set to provide benefits to the local community, inspire a generation in the middle of a renewable energy boom, and pave the way for similar initiatives in the region in the future. Van Stadens Wind Farm is situated 30km west of Port Elizabeth, conveniently known as South Africa’s ‘windy city’, on the Klein Rietfontein farm, at the south-western extremity of the Nelson Mandela Bay Municipality (NMBM). The area within a 20km radius of the project site is rural, mainly farmland, with settlements including
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Blue Horizon Bay, and the communities of Fitches Corner, Shamrock, Van Stadens and Witteklip. The project is part of the governments push towards renewable energy solutions and all of the companies involved are experts in the renewables industry. Since this project was no more than an idea, every care has been taken to ensure that it turns out to be nothing but a productive success. Locations, technical specifications, environmental impacts, economic conditions and legal considerations have all been taken into account and as we enter the final stages of this project, all of the organisations involved are excited and eager to begin harnessing the power of the wind. MetroWind, the 100% South African company, is a specially formed entity designed specifically to develop the Van Stadens Wind Farm. After the government announced its IPP (Independent Power Producer) programme and MetroWind was selected as a preferred bidder in the tender process, the company formed another new entity - Rubicept
BASIL READ ENERGY/METROWIND
“ Most importantly, wind is cost competitive; it does not have the environmental factors that coal has. You produce clean, sustainable, renewable energy while coexisting with rural, agricultural land.”
(Pty) Ltd, the project company for the Van Stadens Wind Farm. Rubicept will be responsible for the development, operation and maintenance of the wind farm. Rubicept is a company made up of five major shareholders: Afri-Coast Engineers, Spilled Water Renewable Energy, Metrowind Community Trust, Old Mutual Life Assurance Company (South Africa) Ltd and Basil Read Energy. The expertise of all of these shareholders will prove invaluable as the company moves forward with the R550 million project, financed through 80% debt and 20% equity.
CONTRIBUTORS One of the businesses holding shares with MetroWind in the Van Stadens Wind Farm is Basil Read Energy, a divisional sub-sector of the South African construction giant. Manny Singh, MD for Basil Read Energy says the company is “a unique entity that understands the importance of simultaneously utilising the value of
renewable and non-renewable energy to achieve the optimal energy mix.” One of MetroWind’s directors, Ian Curry, is also a director for Basil Read Energy and he is understandably excited about the project as it moves into the heavy construction phases. “It’s about clean, renewable energy that’s being generated. The country’s in dire straits when it comes to generation capacity. We’re adding another 27mw onto the grid. 80,000mw hours of electricity that will provide electricity, close to source, to around 5000 to 6000 homes. That energy will be reducing our carbon footprint and saving a lot of water as well,” says Mr Curry. The actual construction of the Van Stadens Wind Farm will be completed by Basil Read Matomo, a design and project execution business offering EPC (Engineering, procurement and construction) turnkey solutions to the market with respect to renewable energy and process projects. > continues on pg.26
FEB 13 PAGE 21
POWER FOR GENERATIONS The people behind Edison Power Gauteng offer anyone seeking electrical contracting over 350 years of mature, distilled experience that has withstood the stringent tests and challenges of the construction industry. In times where energy is one of the hot topics, on the tip of everyone’s tongue, businesses are starting to make significant strides towards making their operations increasingly energy efficient. In South Africa, one of the primary elements in the energy mix is electricity and the country’s leading specialist electrical contractor is the Edison Power Group. The company specialises in electrical installations in all aspects of the electrical industry including commercial, industrial, HV and LV reticulation, township reticulation, fibre optic installations, live line installations, smart metering, wind and solar EPC and substation and transformer installations. Edison Power is literally the electrical specialist that can spark life into your home, business, community and country! Having been operating in South Africa for 34 years, Edison Power is the oldest electrical contracting company in the country, making them the obvious choice when experience is what you need. “We are driven by our determination to be the leading, culturally diverse company in the electrical industry through the provision of cost effective, efficient services and a commitment to increasing shareholder value whilst improving the quality of life of all South Africans,” says the Edison Power CEO Bazil Govender. A key attribute to the company’s success has been the ability to constantly deliver work of the highest standard, without exception. “In our 34 year history the business has never once attracted any form of negative sanction for failure to meet the foregoing criteria of performance.” Some of Edison Power’s most recent projects have seen the company providing end to end electrical services in the country’s largest developments including: Shopping centres, hospitals, casinos, sports stadiums, airports, hotels, golf estates, theme parks, luxury apartments and national monuments. Similar to many companies in the energy industry, Edison Power has seen opportunities arising in the market for renewable energy. The company’s most recent involvement in this booming market came after they were named the electrical contractor for the MetroWind Van Stadens Wind Farm, a project that will see the company provide electrical services to the EPC contractor responsible for construction of the farm – Basil Read Matomo.
The company says: “The way we use energy must change as is the way we generate energy. Edison Power is committed to playing a major part of this worldwide social responsibility act.” Edison Power’s Chairman and founder, Vivian Reddy, has healthy business interests in wind energy among other things, making it clear that the company has a commitment to wind power transcending through the organisation, right from the top. It is the vision of Mr Reddy, and the entire company, to be the biggest and best in Africa by 2017 and this will be done through the group’s thousands of employees, who comprise a team of qualified professionals with experience in various disciplines, able to meet the stringent tests and on-going challenges of the construction industry. 6 years ago, the company formed a new entity, Edison Power Gauteng (Pty) Ltd. Although Edison Power has competed in the Gauteng market for many years through its associates, a new strategy and the conditions in the market catalysed the formation of a regional division. The company now, is in advanced stages of becoming the contractor of choice throughout this, the most urbanised and populated province.
The way we use energy must change as is the way we generate energy. Edison Power is committed to playing a major part of this worldwide social responsibility act
www.edisonpower.co.za
Edison Power
At the forefront of renewables Edison Power is responsible for installation of transformers, switch gear, substations, control instrumentation and SCADA systems, which will reticulate wind energy back onto the national grid.
T +27 (0) 11 - 452 0024
Physical Address
F +27 (0) 11 - 452 0131
69-71 Terrace Road
E bazil@edisonpower.co.za
Edenglen
Contact
1613
Bazil Govender
Johannesburg
1. V an Stadens wind turbines rotate a generator, creating electricity from wind energy.
2. Transformers increases voltage for transmission to substation
3. Substation increases voltage for transmission over long distances 4. Transmission onto the grid
www.edisonpower.co.za
COMPANY REPORT The site of the Van Stadens Wind Farm
from pg.21> To find out more about the construction process at Van Stadens and more about the project as whole IndustrySA recently spoke to John McGillivray, senior project manager for Afri-Coast, the engineering specialists working alongside Basil Read Energy on the development. “We started construction at the beginning of November and we expect our COD (commercial operating date) to be on February 1st 2013. “We’ve been involved in this project since 2006, before the whole REFIT (Renewable Energy Feed-In Tariff) program came about. We are very happy to have it finally under construction. “We are going to install nine Sinovel SL3000/113-HH90
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turbines. They are three mw turbines with a hub height of 90m and blade diameter of 113m, so fairly substantial turbines. “The beauty of this project is that we are connecting directly into the NMBM grid. It’s part of the whole NMBM ‘Go Green’ campaign so we will contribute about 50% of the regions target for renewable energy.” Marius von Wielligh, Director of Energy at Basil Read Matomo, said: “One of our biggest milestones was to secure the Turbine Supply Agreement (TSA) with our international suppliers, Sinovel, who are one of the largest manufacturers of wind turbines in the world.” The early stages of construction were not as
BASIL READ ENERGY/METROWIND straightforward as you might imagine. There were stringent practicality evaluations to be undertaken, especially surrounding the subject of location. “One of the constraints was to be within the metro boundaries but we wanted to be outside the urban hub. We went through an extensive evaluation procedure, one of the most comprehensive site selection processes ever in terms of wind identification, putting up high wind masts in various places throughout the NMBM, taking all the environmental constraints into account and one of the big challenges was finding a site that was not visible by the airport or CAA (Civil Aviation Airports) radar,” says John. “We are in a fairly rural area and we believe there is a nice synergy between wind farms and other farming activities. “Instead of going through a rezoning process we worked with the NMBM and we believed it was best to get special consent to preserve the agricultural nature of the land. With the presence of the wind farm, the farmer gets additional generation income to boost farming activities as well, a win-win for both sides. “The location is ideally suitable from an environmental perspective, from a wind resource perspective and from the perspective of the land owner.” To date, construction on the site is moving quickly.
With major parts of the turbines beginning to arrive, all the way from Shanghai, the project is now visibly starting to take shape. “The construction is moving rapidly right now so there is a lot happening on site. We have constructed around 80% of the roads, we’ve done sub-layer works for five of the nine platforms, we’ve done the reinforcing for the first platform and some of the foundation rings are arriving on site so things are moving up. “It’s very cool to see things coming along so well after working on it for all these years,” says John.
OWNERSHIP STRUCTURE John McGillivray’s brother, Donald is a Director for AfriCoast and MetroWind and has been heavily involved with the Van Stadens Wind Farm from the start. He recently explained the ownership structure of the project and highlighted the benefits of the development to the local community. “We started considering this project just over 10 years ago. We were working with the NMBM and we realised that we needed to start looking at alternative, cleaner, more sustainable, renewable energy options. “After the project had received record of decision and the environmental authorisation Basil Read Energy bought in
Sinovel manufacturing facility
FEB 13 PAGE 27
COMPANY REPORT
“ We’re adding another 27mw onto the grid. 80,000mw hours of electricity that will provide electricity, close to source, to around 5000 to 6000 homes. That energy will be reducing our carbon footprint and saving a lot of water as well.”
and acquired 35% of the company MetroWind. Before this stage Afri-Coast Engineers owned 70% and CCD (Carbon Cycle Developments) owned 30%. “When we took the project to financial close, the project company (Rubicept) was formed and Old Mutual acquired 35%, Basil Read retained 23% equity, Afri-Coast Engineers took 13% equity and Spilled Water Renewable Energy (a 100% BEE company) has a 25% stake. “Because we are structured in this way, we operate as a 100% South African organisation. “We’ve looked at benefitting the local community as much as possible, we’ve had early involvement with the local community trust and we’ve done different projects with some really disadvantaged communities within the area, putting up solar lighting and creating employment near the site.”
KEY PLAYERS Obviously, with the project at an advanced stage, concerns are now with construction of the farm, an area where Basil
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Read Energy will become a major contributor. “The project will be complete at the end of this year and will be feeding in 80,000mgw hours of electricity into the NMBM grid for the next 20 years as part of a fixed power purchase agreement contract with Eskom,” says Donald. As discussed above, construction is moving along nicely with no signs of falling behind schedules and no sign of going over budget. This is largely due to the efficient and effective construction procedures of Basil Read Energy and their subcontracting partners. “Rubicept gave an EPC contract to Basil Read Matomo to build the wind farm. Under the EPC contractor there are various sub-contractors and suppliers and one of these is Edison Power who are handling the electrical work on the project,” says Donald Edison Power Group is the oldest electrical contracting company in South Africa and specialises in wind and solar EPC. While providing unrivalled electrical expertise to this project, Edison Power is also benefitting by moving one step closer to its goal of being the biggest and best electrical
BASIL READ ENERGY/METROWIND
Sinovel 3000 in offshore farm near Shanghai
contractor in Africa by 2017. A project of this size and value needs expert service from top to bottom and with reputable companies like Basil Read and Edison Power on board, that is exactly what they have. The fact that construction is moving on so smoothly is a proof of the skills of the contracted companies. Basil Read has been further entrenching its name as the construction leader in South Africa after it was awarded a R3 billion contract to build a state of the art airport in St Helena, one of the world’s most remote islands and the first phase of this project was named Project of the Year 2012 by Construction World Magazine. The company was also named as one of the Best Employers in South Africa by the CRF Institute and it became a member of the Green Building Council. Because Basil Read as a group operate to such a high standard, Donald tells us that there are future partnership arrangements on the horizon between Afri-Coast and Basil Read Energy. “Afri-Coast together with Basil Read and other partners,
has a number of projects that we are actively pursuing and developing at the moment, both in wind and solar.”
CORPORATE SOCIAL RESPONSIBILITY The Van Stadens Wind Farm will bring more than just clean energy to the region and praise to the companies involved. The project is set to have big socio-economic effects on the area including: Frst-time electrification for 300 families, increased power to the grid, reducing regular blackouts, 1.5% of MetroWind’s annual revenue committed to socioeconomic enterprise, more than 120 direct jobs will be generated, 80,000 litres of water saved each year, members of the local community will be trained as conservation officers and employed to protect the biodiversity of the area and, as John McGillivray told us earlier, other projects, such as the construction of solar lighting for the local community, will emerge. Fitches Corner was the first area to receive solar lighting through the project and Shamrock and Witteklip have now also been illuminated as a direct result of work from the
FEB 13 PAGE 29
COMPANY REPORT
“ We are going to install nine Sinovel SL3000/113-HH90 turbines. They are three mw turbines with a hub height of 90m and blade diameter of 113m, so fairly substantial turbines.”
Van Stadens project. The lighting was made possible by a generous donation of funds by Basil Read Matomo. In addition to the funds donated for the solar lighting, Basil Read Matomo invested in excess of R400,000 to support and develop some previously disadvantaged, small and medium business enterprises in the NMBM in 2012. These construction and engineering enterprises that were identified by Basil Read Matomo will continue to receive not only financial support, but mentorship and professional advice to further develop their businesses. Marius von Wielligh stated: “Small and medium sized enterprises are the incubators of job creation in South Africa. The growth of the renewable energy industry in the Eastern Cape and particularly the wind farms being developed in and around the Nelson Mandela Bay Municipality are a catalyst for economic growth in one of the most impoverished provinces in the country. The Basil Read Group is proud to be able to contribute to the growth and development of communities and businesses in this region and hopes to make a meaningful and sustainable difference over time.”
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AN INDUSTRY ON THE UP? The industry of renewable energy is one that would seem to be on the up, especially in South Africa following the governments push towards alternative energy sources. Internationally, in some developed countries, the renewable energy industry is in a stage of maturity and solutions have gone through a phase of popularity to a phase where their actual long-term effectiveness has been questioned. Both of the McGillivray brothers involved in this project firmly believe that renewables have a place within the energy mix and both are happy that South Africa is now within touching distance of an energy industry in which renewables play an important role. “The government has a drive towards renewables with good policies in place. I firmly believe in it and we need to look at sustainable solutions to our energy problems in this country. “The beauty of renewables, especially wind and solar, is the speed at which they can be constructed. South Africa is in an energy crisis so renewables are seeing the immediate demand. We will always need a mixture of energy sources to keep a balance in the network, I don’t
BASIL READ ENERGY/METROWIND
Sinovel 3000 wind turbine
believe the solution is to rely solely on renewables but there is room for a very high percentage to come from these sources. “I am proud of South Africa for its initiative with renewables and getting the IPP program set up,” says John. Brother Donald reiterates this message saying: “We have a need for renewable energy. There is a misconception in this country that renewable energy is expensive, unreliable and intermittent and that’s based on business in other countries where wind resources are not as good. “If you talk about cost of electricity, we are now generating renewable energy from wind below the cost of Eskom’s new build coal and nuclear stations. “In the future, the cost of wind power will be way below that of coal. Wind power is a cube of wind speed meaning if you double wind speed you get eight times the energy output. If you increase you average annual wind speed from seven meters per second (mps) to nine mps, you will more than double your output. “In some areas, such as Germany, they have an average wind speed of seven mps and in South Africa we have
averages of nine mps in good areas meaning double energy output, double electricity generation and double the benefit of the project for the same capital cost. “Most importantly, wind is cost competitive; it does not have the environmental factors that coal has. You produce clean, sustainable, renewable energy while coexisting with rural, agricultural land.” With the technology at our disposal in 2013, it is clear that renewables can play a major role as part of South Africa’s energy mix. The government has recognised this and the companies with expertise in the industry recognised this a long time ago. The country, and the world, is gradually realising the undoubted potential of renewables and all we can say is the sooner the better. This project acts as an example of the range benefits that can be encountered from renewables so unless one of the technically advanced companies involved here can invent a time machine and take us into the future where renewables are recognised as the prominent figure in the energy mix, we would love to see more and more projects like the Van Stadens Wind Farm continue to pop up, all over the country. ●
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COMPANY REPORT
Simba potatoes:
More local than ever Editorial – Christian Jordan Production – Hal Hutchison
Simba Chips are one of South Africa’s favourite snacks. We take a look at their community potato farming projects to understand more about where these delicious delights come from.
Our food industry focus this month comes from one of South Africa’s leading food companies. A company with one of the country’s most recognised icons. A company with an intriguing history, dating back to 1939. It is, of course, Simba – the multi-billion Rand company that was born from the visions of one inspirational lady living in the Eastern Cape. The remarkable story that is the history of Simba is one of the more unique tales of ‘zero to hero’, that any business in the country has to offer. In Molteno, Eastern Cape, Mrs Greyvenstein affectionately known as Ouma Greyvenstein, was feeling the plight heaped onto the world from the imminence of World War Two. Instead of wallowing in despair, Ouma started making the now famous Ouma Rusks. As word of this fantastic new snack spread, orders began to grow, providing funds that the local community
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desperately needed. Eventually, the snack became so popular that Ouma was regarded as one of South Africa’s top bakers and her family were also becoming famous. For 13 years the family business continued to run, making the nations favourite Rusks until 1952 when Ouma’s son, Leon, met Herman Lay (a pioneer of the potato chip industry and founder of Lay’s, one of the major manufacturers of chips in the world) and decided to
SIMBA
diversify. This is where “ The potato farming initiatives from the idea for Simba Chips Simba are community farming projects was born. In 1956, Simba Chips hit the stores of whereby communities have the land South Africa with Simba the lion, the icon of the company, fronting the marketing push. but do not have the finance or the Over the years, Simba Chips have tried relationships with companies to procure to stay up to date and current with their products, boasting a flavourful and fun anything that was made on the farms” experience for all customers. Contributing the success of the brand is the fact that Simba presence and today their production methods are heavily manages to provide snacks that encapsulate a local feel and scrutinised to ensure sustainability is at the core of the answer demands from the local market. process. PRODUCTION IN 2013 IndustrySA recently spoke to Simba’s transformation In 2013, production of Simba chips remains a driver of the manager, Arnold Selokane, who told us a little bit more snack food market. Manufacturing PepsiCo’s snack brands about the company’s community involvement. in South Africa makes Simba a local player with a global Obviously, the key to good Simba chips is good potatoes
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COMPANY REPORT
and to ensure that is what the company are getting, Simba have established community farming projects in various regions around the country. These projects, started in 2009, were created to supply Simba with potatoes and also to educate and uplift communities by up-skilling local people and creating jobs. “The potato farming initiatives from Simba are community farming projects whereby communities have
SIMBA
the land but do not have the finance or the relationships with companies to procure anything that was made on the farms “In 2009, Simba came together with these communities and created a partnership between established farmers, the community and the company. This started in Ga-Matlala in Limpopo. “The project had the support of the local provincial
“ The first of these community projects should produce around 4000 tons. This is a significant amount for a community that has only just started planting potatoes” PAGE 34 FEB 13
COMPANY REPORT
government and extension officers from the Department of Agriculture “We realised for this project to be sustainable we had to ensure we get students from these communities trained and given skills relevant to the agricultural industry. They were registered with the Lowveld College of Agriculture for a three year diploma in plant production. The first five of these students graduated with their diploma in 2011 and they are now being registered with the Tshwane University of Technology to study a B-Tech in agriculture. They will
SIMBA
do this for one year to complement their diploma in plant production,” says Mr Selokane. Education is a key theme in these projects and is a large part of why they are supported so strongly by the government and local communities. “The communities came out and said they had the land but they did not have the expertise or any procurement contracts for the potatoes when they had been planted,” says Mr Selokane. “This saw the birth of a three pronged relationship between the established farmers who have the
“ In Makuleke, the land is resting as they have planted continuously for the last three years but they will soon start to plant again” PAGE 36 FEB 13
inperspective Successful brands like Simba invest in understanding their shoppers’ and how to engage them in-store.They use these insights to build profitable Shopper Marketing Strategies. Many organisations are spending more in-store but not winning with shoppers. So where does it all go wrong?
• We do what we did last year • We invest in the wrong type of activities • We try to do too much • We often don’t get the exposure • We don’t create links for shoppers and so our activation lacks relevance
• We try to get too creative
Traditionally shopper initiatives have focused on quick wins, but these do little to change shopper behaviour in the longer term or drive growth. Shopper Marketing is more than just common sense there is a science and art to developing successful shopper marketing campaigns. We need to understand where to prioritise, how to activate across the 5P’s and how we can change behaviour. In order to do this we need to understand our shoppers’ needs and how to differentiate our Shopper Marketing Strategy across different Retail Environments. The challenge is that shoppers are becoming increasingly difficult to engage so how do we connect with 11 million households when demographics do not define who they are? Inperspective talked to shoppers across 1600 households and collected over 110 000 till slips from them so they could get insight into ‘who they are’ and ‘how they shop’ (Shopper Diary Survey). The shopper insights from this study will give you a competitive advantage in the trade, help you achieve your targets and improve your ROI on trade spend. Over 900 billion Rand is spent on food and groceries in South Africa every year. You can get a bigger share of your shopper’s wallet if you know how to connect with your target shoppers.
COMPANY REPORT
skills, machinery and seed, the community who has the land, and Simba who will procure the potatoes. “The first of these community projects should produce around 4000 tons. This is a significant amount for a community that has only just started planting potatoes. “To prove that we are 100% behind this project we have invested money. We want to make sure that learners are given the skills, thus we have 17 students at college, five of which have just completed the diploma and are moving on to university. That in itself is the most exciting thing and proves the project is a good investment for us.” The projects have an inspiring longevity attached to them. The future has been carefully considered with both the company and the community in mind. “It is the plan for these students to go back to their communities with their expertise and continue with the
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SIMBA
farming projects. “Without us giving them the skills, those farms would not be sustainable. With these skills, the farms will one day be able to stand on their own, without assistance from anyone,” says Mr Selokane.
CREATING JOBS The Simba community farming projects are set up to help communities grow, as well as providing the company with those special, local made ingredients. All of the current projects are in areas that have been previously disadvantaged through lack of education, lack of resources or lack of capital and Mr Selokane tells us that while Simba is very much behind upliftment in these communities, the product has to be quality and that is where the students play a big role.
Broco is proud to be a preferred logistics service provider for Simba South Africa. BROCO Service offering: • identifying and analysing customer’s logistics needs • developing and implementing best-fit logistics solutions • coordinating and managing all day-to-day logistics processes from our Operations Centre • measuring performance and driving continuous improvement • capturing data and using business intelligence to monitor and improve processes and solutions •staying abreast of the latest technologies BROCO is an asset-light Logistics Management Company offering tailor made logistics solutions through skilled and motivated people, leading operational systems, best of breed technology and a service driven business approach. We procure logistics service providers (LSPs) of choice. We combine and package their separate service offerings, fleet counts and distribution networks into one comprehensive logistics service. Leveraging our procurement power with our resources, our expertise, our people, our experience and management capabilities enable us to build true logistics solutions.
BROCO is an operating company of IMPERIAL Logistics and as such we offer our customers and service providers access to the resources, skills, expertise and experience of one of Africa’s leading logistics groups. IMPERIAL Logistics Southern Africa is a multibranded business, categorised into five key divisions, namely Transport and Warehousing, Consumer Products, Specialised Freight, Integration Services and Africa. Its extensive operations span 14 African countries including Botswana, DRC, Malawi, Mozambique, Namibia, Tanzania and Zambia. Through IMPERIAL Logistics International, customer reach is extended from Europe to the USA, India and the Far East.
www.broco.co.za www.imperiallogistics.co.za
BROCO(Pty) Ltd 5 Termo St,Techno Park, Stellenbosch, 7600 PO Box 12804, Die Boord 7613 T +27 21 880 5200 F +27 21 880 0771 E info@broco.co.za W www.broco.co.za VAT no: 4240172140 REG no: 2001/009562/07
COMPANY REPORT
“Simba is committed to procuring from previously disadvantaged areas. It has to be quality product that we get from them. The only way to get that quality is for us to help them gain the skills required for the production of quality product. “At Simba we hold an interest in the education of the wider community. At the Lehwelere Secondary School in Matlala we established a computer room because we realised that learners were coming out of the community without computer skills. The computer room itself was full of computers with internet function. “In some of the communities we have established libraries because we feel it’s important to provide skills and education as well as boosting the local economy financially.” Harvesting and production of quality potatoes is more
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SIMBA
labour intensive than you might think. Even with todays advanced farming technology, we still require people to ensure everything is done correctly and this is where the jobs are created. “During planting there is a lot of job creation. The planting process, even though it is mechanically done, is labour intensive. “When you need a lot of people is during harvesting. We have to lift the potatoes, pack the potatoes, load the potatoes and send the potatoes to the factories for production into chips,” says Mr Selokane. “In the past four years we procured potatoes from community farms at Ga – Matlala, Mbhahela, Makuleke, Badplaas and Malelane.” These projects all make up part of a greater ‘social responsibility’ programme that Simba has in place. Other
COMPANY REPORT
social projects that the company places a large emphasis on include; providing support to orphaned and vulnerable children, running school road shows, promoting World Aids Day and encouraging a healthy lifestyle for employees through wellness weeks in regional branches. The community farming projects also contribute significantly to BBBEE, through which Simba is a certified, compliant company.
WORK IN PROGRESS The community potato farming projects have been active for four years now but the work is far from finished. As we mentioned above, the first students to become a part of this scheme have only just graduated and they have a long way to go before they can put their newfound expertise to full use. Established farmers in each region still assist with production and in Makuleke the hectic farming cycle has slowed to allow for the land to recuperate before another intensive push begins.
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SIMBA
“In Makuleke, the land is resting as they have planted continuously for the last three years but they will soon start to plant again,” says Mr Selakone. As production levels increase for these community farming projects, their importance will become more apparent to not only Simba but to the industry as a whole. Ten years from now, when each region has a team of well educated, experienced and most importantly, local, agricultural experts, Simba will be able to rely more and more on these, previously unusable, areas. It is refreshing to see a multi-billion Rand company investing so heavily in the community and using their powerful position to bring about change in local economy, rather than endlessly pursuing reductions in cost that do not benefit customer or supplier. Hopefully, the success of this project will spark other companies into action, pursuing similar, mutually beneficial programmes. ●
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Audio Auditing is an independent, privately owned company which has patented the technology to provide an accurate and continuous computerised monitoring service of the broadcast of pre-recorded radio and television advertisements with MediaMark as well as music and music videos with MusicMark We have been operating in South Africa since 1992 and enjoy relationships with media owners such as E-TV, DSTV, Primedia, Radmark, United Stations and the SABC. Some of our clients include Simba, Standard Bank, KFC, Shoprite Checkers, to name but a few Whether you are a large corporate advertiser, small ad agency, media buyer, recording studio, music and jingle composer or voice artist, AudioAuditing’s watermark technology has benefits to offer you. HOW IT WORKS Our patented watermarking technology MediaMark and MusicMark allows instant recognition by decoding equipment of a unique code embedded in the audio. This inaudible code is repeated every two seconds throughout the watermarked audio, and is therefore tamper proof and extremely robust. This is a technological progression of the digital pattern matching system which has been successfully used by Audio Auditing to monitor radio and television broadcasts. For further information, please visit our website www.audioauditing.com or contact us directly on 011-463-8667 41 Stratton Avenue Bryanston T 011-463-5895 E report2@audioauditing.com
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COMPANY REPORT
Where science meets business Editorial - Joe Forshaw Production - Tonnie Geddes
HIK Abalone Farm is one of the most innovative, sustainable, responsible and successful aquaculture businesses in the country. Operations director Louise Jansen talks to IndustrySA about what makes them so special. One of the industries making waves in South Africa right now is that of Aquaculture. Only over the last 30 years has this industry begun to move into the mainstream. It is no surprise that there are now some major players operating within the industry and even new industries forming as a result of the success of aquaculture businesses in the country. One industry that has seen growth over the last two decades is that surrounding the farming of abalone. Abalone is the common name given to edible sea snails or molluscs that fit into the Haliotidae family. Sometimes referred to as perlemoen and Venus’ ears, abalone are a popular delicacy in the Far East, namely China, Japan, Korea, Taiwan and Singapore. HIK Abalone Farm (Pty) Ltd is one of South Africa’s most successful and influential abalone farming businesses. Founded in 1997, HIK Abalone Farm operates from Hermanus in the Western Cape. Now recognised as the abalone farming capital of the country, the town boasts a perfect marine environment and temperature for production of top quality abalone. Louise Jansen is the operations director for HIK and she recently spoke to IndustrySA about what it takes to be successful with abalone and what the future holds for the company. “The company was originally started with private funds by a local construction company in South Africa called Haw and Inglis (H&I) Construction and it was actually a trio that got together, Rick Haw and Peter Inglis of H&I Construction along with Roger Krohn, who was a biologist. This is where the HIK name comes
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from. “Abalone farming was still in its infancy in those days, it was around 1995/96 when they first came up with the idea. There was big demand so they took a leap of faith and went ahead and started the company.
CUSTOMERS IN THE EAST HIK’s main customer base is in the East, as mentioned above, where abalone is seen as a luxury food. Once reserved for special occasions, commercial farming has made abalone more common but the food is still widely regarded as a delicacy. “Abalone is a status symbol and a niche product so there will always be demand, but pricing continuity will be concomitant on supply,” says Ms Jansen, “we just have to keep ourselves competitive when it comes to the spread of products.” Nurturing relationships with customers and actively looking to involve them so that needs are met is important to HIK as they look to grow. “I like abalone. The typical South African palate prefers abalone tender and juicy, a little like calamari. In the East they often eat it raw and prefer a texture that is firm and chewy with more of a crunch. As a farmer it is crucial to understand the product and the taste associated with it. “This is the perfect example of how important it is to understand your customers. If we went over there and put out a product for SA tastes then we would have no sales at all because the palates are different. As the company look to build stronger relationships with customers, Ms Jansen tells us about a recent
HIK ABALONE FARM
FEB 13 PAGE 45
COMPANY REPORT
“ Abalone is a status symbol and a niche product so there will always be demand”
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HIK ABALONE FARM
“ At the moment we are building our marketing and branding arm, entrenching the farm’s name in the market” marketing decision that will allow for easier and more flexible communication. “We were involved with another two farms through a marketing company but we have decided to break away and go out on our own. This is to form stronger alliances with our customers in all the Eastern markets and really entrench the HIK name. “These guys are the major consumers of abalone so we are looking to bring a bit more of that Asian intelligence into the business. With us, the customers have always been number one. This has sometimes been to the detriment of our own stock where we have often bent over backwards to meet demand. This has however, helped us forge great relationships with all our customers. “We just want to build on that now, sustainably, taking into account our stock health. We will work with our customers and find out what they need so we can develop new products and brands so we can really start making a name for ourselves in the East.
BUILDING THE BRAND With the majority of their customers located in the Far East, HIK has placed a significant emphasis on differentiating their products from the rest and making sure their abalone is known for its quality. The decision to expand marketing strategy is part of the push towards making HIK abalone the stand-out South African farm. “At the moment, in Asia, the product is seen as South African abalone which is already perceived as a superior brand. We want to go one step further by positioning HIK as the preferred supplier of abalone products from South Africa.” says Ms Jansen. She reinforces the importance of the Asian market, telling us that hardly any of the product is sold in local markets and the serious competition is coming from abroad where costs are considerably lower. “In China and Korea they farm out in the sea with baskets so they can get their product to the market much cheaper than we can, making it important for
us to distinguish our products. “Right now, very little is sold locally. We supply a local distribution company who mainly sell to restaurants. This only amounts to around 100-200kgs each month where our total sale
would be around 15 tons. “Over the last 12 years we have learned to remain flexible and creative in order to meet the demands of our customers.”
LAWS AND LEGISLATION There are plenty of regulations in place to govern the abalone farming industry but the proactive relationship between HIK and the government means that the company does not often feel constrained. “We remain closely involved with the government and ensure that we have key people actively involved with meetings relating to the various Government Departments. We strive to assist government in policy development rather than be resistant to regulation. We are also actively involved with Government research and development programs that are often run together with local universities. Since R&D is a key component of our development strategy, we have a full time R&D manager who runs internally funded programs together with a wide range of universities. “When it comes to abalone farming South Africa is one of the top most regulated countries in the world. In terms of legislation, there are a lot of things in the pipeline especially concerning abalone health and movement of abalone,” explains Ms Jansen. “Quality control and health management is going to be a big thing. Like any modern country we will have to look at consumer health, animal health, animal friendly practices and environmental safety,” says Ms Jansen. “We believe strongly that the welfare of the animal is paramount to the production of healthy and natural tasting abalone, so our whole business is operated in a manner in which the abalone are well taken care of.” She adds. “Despite the red-tape there is much government support for aquaculture and specifically abalone farming. HIK is part of the Farmed Abalone Export Council which is responsible for internationally promoting South Africa and the abalone it produces. The council is funded
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COMPANY REPORT
50/50 by the participating farms and the Department of Trade and Industry (DTI).”
2013 AND BEYOND The future for HIK Abalone Farm involves growth - expansion is the main target. The marketing plans discussed above along with changes to processes and cooperation with the government mean that the company will look to increase its output over the next few years. “We are busy with an expansion program,” says Ms Jansen, “we want to increase our output and are exploring different methods for expansion. At the moment we are building our marketing and branding arm, thereby entrenching the farm’s name in the market. We are also working on quality assurance and control on the farm, right through to creating standard operating procedures for every aspect of the business. Increasing our social footprint is also a serious priority at HIK, initially focussing on our employees and then expanding that to the wider community. Expanding and growing is only a dream without the
appropriate resources available and one of the key resources required is labour. Ms Jansen tells us that a content workforce is at the top of the list of priorities. “Like any business, we are here to make money but the business involves more than just farming abalone. We have an awesome team of people who would be able to farm anything. We strive to make a brilliant working environment for our people so the farming business comes naturally.” At HIK Abalone Farm, which now employs over 100 people, research and innovation enables the business to remain competitive and overcome the various challenges. As we move into 2013, the company is sitting in a strong position as an industry leader and as ties with customers in the Far East look set to grow, this specialised business will continue to make a big splash in the competitive aquaculture industry. “Close customer relations, a strong product and top quality, in terms of the product and the supply chain, are the key factors for us,” concludes Ms Jansen. ●
GAMCO SERVICES is a marine engineering and diving services business. Over the last 17 years we have grown with the abalone industry and pelagic fishing industry. Today we offer expert services in the following areas: ABALONE INDUSTRY Concrete grow out tanks, sea water intakes, underwater pipelines, suction strainers, underwater surveys, underwater construction, deepening of sumps, underwater environmental blasting and stainless steel manufacturing e.g. drum filters, basket washing machines, etc. PELAGIC FISHING INDUSTRY Specialist manufacturers of fishing equipment e.g. net haulers, long line haulers, hydraulic systems installations. STEELWORK Specialised steel shuttering for the civil industry & boiler making. T +27 28 384 0086 F +27 28 384 0373 E info@gamco-sa.co.za
www.gamco-sa.co.za
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HIK ABALONE FARM
THE FARMING PROCESS: The HIK farming process involves many detailed stages. The first stage, the hatchery, is divided into four sub sectors. • Broodstock – Here, abalone demonstrating superior appearance and performance characteristics are selected as brood animals. In a tightly regulated environment, an intensive spawning program takes place, from which the highest quality fertilised eggs are selected. • Larvae - Within hours of fertilisation, a freeswimming trochophore larva emerges from the egg membrane. These larvae are housed in tanks with highly filtered seawater, and are allowed to develop into competent veliger larvae over the next couple of days. Again, only superior specimens are selected to move onto the next stage of rearing.
• Settlement – Veliger larvae are moved to settlement tanks where satisfactory specimens will attach themselves to the food source (micro-algae grown on polycarbonate plates) and metamorphose into perfect baby abalone called spat. • Weaning – After being sorted by size the baby abalone are transferred to a special weaning tanks with a special diet. While being nurtured by dedicated staff, the spat grow to 10mm and are then transferred to the grow-out. In the grow-out, abalone are grown, over a period of 36-45 months, to market size. HIK’s grow-out area currently supports over five million individual animals with a collective biomass of approximately 150 tonnes. From start to finish, the whole process is carefully monitored and analysed in order to develop and optimise production technologies.
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COMPANY REPORT
AAU ensuring a high flying future for Natsure
Editorial – Christian Jordan Production – Chris Bolderstone
Bertus Visser, head of business development for Natsure and Jamie Illing, MD of Airspace Africa Underwriters speak to us about a giant new product launch scheduled for January 30th.
In 2012, professional services firm, KPMG, reviewed the South African insurance industry to find that although the established, big names are still dominating, smaller niche firms have taken a significant chunk of market share (10%) away from the heavyweights through their unique, specialised products and services. One of the primary, niche insurance specialists in the country is Natsure. Now 45 years old, the business has come a long way since its inception in 1968. IndustrySA recently spoke to Natsure’s head of business development, Bertus Visser, who explained how the company is developing and what new, innovative business we can expect in 2013. “This year Natsure is 45 years old. The company originated through a local bank called Saambou which was consolidated some years ago. When that consolidation took place, Natsure was the company within Saambou that handled property insurance. “After the consolidation, there was a management buyout of Natsure. That was led by Dr Piet Botha, who is today, still the Chairman of the company. “Knowing that Saambou would not be a part of the future, Natsure had to diversify the business and we decided to go down the underwriting management route where we partner with different providers with expert skills to start underwriting management agencies (UMAs). “Our prime business is working through UMAs but we also have a few divisions that are connected to
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Natsure and are not external Pty’s. “We do everything from aviation, engineering and construction to micro-lending, property and caravan insurance.” The company specialises in short term, niche insurance solutions and operates mainly through UMAs with the vision of becoming the preferred partner for successful UMAs. “Another part of our business is our risk and compliance services. We have a top notch team of people with a lot of expertise. There was a new binder regulation passed on January 1st and we were one of very few providers to get all our contracts in place and be fully compliant in that regard.”
PARTNERSHIPS The business model of Natsure means that the relationship between the company and UMAs is vitally important. Because of this, Natsure fosters an environment that promotes long-term partnerships and mutual success for all parties. Mr Visser tells us that the company is always on the lookout for new partners who can help to build on the already sterling reputation of the organisation. “Partners can become a division of Natsure or they run as a UMA and we then take a stake in that business. We operate on the basis where we pay them a management fee and a profit share. “The reason we take stakes and offer profit shares in different businesses is to make sure that we align
NATSURE
interests with one another and create a win-win situation, right through the value chain. “We firmly believe in very strong partnerships. If you create win-win opportunities in business you will only become stronger. The partnership theme is critical to us.” This culture of partnership and aligned interest has proven to be successful so far for Natsure. Their business partners (listed below) cover a diverse range of risks and the company, because of its size, can bring about actions and results quickly, as Mr Visser explains: “We are a small organisation; we have fewer than 30 employees. There are very few organisations in SA that have the agility that we have. If you were to approach
any of the big providers with a new concept or product it could take them over a year to provide a solution. If we get all the relevant information we can produce something in four to six months. “We try to focus on niche businesses. We are a small provider of insurance solutions so we try to focus on areas that other insurance providers do not have the expertise and skills to service. “We provide a full turn-key solution. We offer IT solutions, we have an actuarial department for pricing and research, we put reinsurance deals together, we have a finance department for accounting solutions, we have a new business underwriting and claims department and we also provide support from a distribution perspective.”
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COMPANY REPORT
We firmly believe in a very strong partnership relationship. If you create a win-win in business you will only become stronger
AIRSPACE AFRICA AND AMLIN One of the most significant milestones in Natsure’s history was realised recently when Airspace Africa (a division of Natsure) signed a partnership agreement with Amlin – the third largest syndicate at Lloyd’s of London. Airspace Africa Underwriters (AAU) is one of the leading aviation insurance underwriters in Southern Africa and this deal sees them tribunalised as an Approved Coverholder of Lloyd’s. As a result, all new aviation business written from January 1st will have been written by AAU in its capacity as an Approved Lloyd’s Coverholder through a comprehensive general Aviation Binder with Amlin. This deal is going to contribute greatly to the reputation of AAU and Natsure, providing global expertise and knowledge to compliment the valuable local understanding that AAU already enjoy. The partnership was officially announced at the end of January, at a special product launch event that was
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headed by AAU MD, Jamie Illing. Mr Illing tells IndustrySA: “The partnership will entrench our position as the leading aviation underwriter in Southern Africa and also create further growth opportunities throughout Africa. “We believe that this partnership will unlock the true value that we can offer our valued broker partners and their clients, thus creating a solid, sustainable African aviation insurance industry.” Amlin were recently voted the Insurance Company Team of the Year at the Reactions London Markets Awards 2012 and having ties with such a name is something which excites Mr Illing. “We are excited about the significantly improved overall aviation insurance offering that we will now be able to offer our clients through our broker partners. “The partnership combines the global expertise, strong brand, international credit rating and experience of Amlin with our highly experienced team, customised
NATSURE
product offering, Southern African footprint, and superb service and claims paying ability.” Mr Visser is also enthusiastic about working with a global insurance giant, saying: “Just to be associated with Lloyd’s of London is a privilege. They are a reputable, global player. Their market size by far exceeds that of any one of the top players in South Africa so from a reputation and creditworthy point of view the partnership is invaluable. “In SA we conducted our aviation business through AAA rated company, Guardrisk, but because of their size, capacity was limited. “With Lloyd’s of London we can compete for local business that we could not compete for before. “Currently, quite a bit of business is written directly with off-shore partners, in the USA or the UK, because of the limited capacity that exists here, but because of Lloyd’s of London we will be able to compete for business that the South African market could not even
sniff at before because it went directly off-shore.” As a result of this ground-breaking deal, AAU can now offer Hull capacity of $3.75 million (up from $2.5 million) and Liability capacity of $50 million (up from $10 million). Mr Illing suggests that the deal will not only bring benefits to the industry but also to the economy, saying: “By introducing this partnership to the market, we will positively contribute to the overall welfare of the SA economy. “Also enhanced will be our ability to extend our product offering, particularly in the field of risk management, focussing on areas including pilot safety and awareness.” Miles Taff, head of aviation underwriting for Amlin says: “South Africa is an emerging market with a wealth of natural resources and well educated population. It is an engine for growth to its contiguous countries and we are excited about growing our presence in these markets
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COMPANY REPORT through our partnership with AAU.” As well as having the reputable name of Amlin behind them, providing great benefit, Natsure and AAU will now be able to grow and growth on the continent is the first target. “They’ve given us a mandate to operate in Southern Africa - in markets that we previously could not compete in like Namibia, Swaziland and all the SADC nations. “I think people prefer to deal locally with an off-shore partner and that is what we bring to the table,” says Mr Visser.
A SOFT MARKET In the current tough economic climate, KPMG have stated that survival has become the number one priority for many insurance companies around the world. However, they did state that the South African insurance industry is healthy. Locally the industry is mature, well established and sustainable but Mr Visser still has concerns about the difficulties faced by the economy. “The concern I have is the softness of the market. There is an attitude that everything must become cheaper and that will indirectly affect everybody. When the consumer refuses to pay a price and a business goes under, this consumer will only become another business’ problem. We all swim in the same ocean. “In business, when you go through tough times you just have to make sure you align your expenses with your revenue. You have to remain relevant and as a small organisation we have managed to do that.
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NATSURE “You have to keep on focusing on innovation, client service and technological development as this reduces expenses and increases productivity. “The target for Natsure is to continue with our strategy, focussing on our existing businesses and strengthening partnerships with the aim of working sustainably. “We also want to target new businesses. We have two new businesses starting in February. One is a ‘goods in transit’ UMA and one focuses on loss of provident funds.” The KPMG report also suggested that great opportunities exist to expand into fast developing African countries and with this as one of their primary goals, one which they now look certain to achieve, it looks as though the Natsure business will be ensured a bright and buoyant 2013 and beyond. Natsure UMAs and Product Partners: Natsure Property Insurance C & G Underwriting Managers Namibia Special Risk Acceptances (NASRA) Airspace Africa Underwriters Rubio Risk Leisure Lifestyle and Leisure Vehicle Insurance Hlano Integer PSG Konsult Nucleus Aeronautica Underwriting Managers
COMPANY REPORT
Shining Renewable Energy Solutions Trevor de Vries of AEG Power Solutions speaks to IndustrySA about renewable energy and the company’s growth tactics for 2013.
Editorial - Joe Forshaw Production - Lauren Grey
AEG Power Solutions is one of the world’s leading energy companies. The group is present in all of the key global markets with 17 subsidiaries and competence centers across the world employing around 1700 people. AEG Power Solutions’ vision is leading innovative power management in the green energy revolution. Always leading through innovation, the company aims to continually deliver improvements to power solutions across the globe. In South Africa, the group’s operations are relatively young and, right now, are focused on the solar energy market. There are two main divisions of AEG, Energy Efficiency Systems (EES) and Renewable Energy Solutions (RES). MD for Sub-Saharan Africa, Trevor De Vries, tells IndustrySA that the focus has shifted away from EES and now lies heavily on RES. “I’ve been running AEG for the last three years out of Stellenbosch. We made a decision in October 2011 to invest in a factory to build solar invertors, specifically for the SA IPP (Independent Power Producer) market. “In the first two years we focused on EES and industrial business which concentrated on large UPS’s (uninterruptible power supply) and power systems for the industrial market. The idea was to introduce those
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products into SA but we soon realised that this is a very competitive market with big names that have been entrenched here for many years so we gained some traction but it just wasn’t enough for us to continue and that is when we saw the gap, when the government announced the IRP (Integrated Resource Plan) 2010, we took the view that we need to move forward with renewables and focus on that market.” So what is the IRP and how has it affected the work of AEG? By the year 2030, the government want 8.4gw of solar power and 8.4gw of wind power to contribute to the national grid. At that time, they hope that around 30% of power on the grid will be from renewables. The IRP details ways of moving forward with renewables in SA and how to complement the existing base load of power. AEG is in a strong position to serve the renewable energy market so an increase in the uptake of solar power will only benefit the business. “Subsequently, the government launched the independent power producer’s tender, a three round process which asks for companies to bid for renewable projects ranging from solar to wind to bio-gas and various other technologies. We looked at the market and made the decision that it would be worthwhile investing mainly because of the high local content requirements
AEG POWER SOLUTIONS
which enable bidders to tender for this business. 70% of the bid is based on price and 30% is based on a local content and economic development scorecard,” says Mr De Vries.
SOLAR INVERTERS
“ AEG is the first company to invest in an inverter factory in South Africa”
“Solar invertors are responsible for converting DC energy supplied by the solar panels into AC energy that can be put back onto the grid,” says Mr De Vries. “The panels make up the biggest cost of a solar farm but the invertors are where the intelligence lays, converting energy in the most efficient way.” Because of the governments push towards adding renewable energy to the grid, projects like this have become part of the mainstream and have helped in the development of a strong manufacturing sector in the country. “AEG is the first company to invest in large utility scale solar inverters in South Africa. A lot of companies are looking at investing in SA, especially on the solar panel side. There is already a manufacturing plant for wind turbines in Cape Town as well. “The growth of this manufacturing industry is partly down to the government’s legislation about local content.”
“Solar power parks will be deployed in the Northern Cape and traditionally poorer areas. There will be significant investment in those areas. There has been local skills development, local business development and overall it is just a very positive development for SA and we see it increasing over the next couple of years,” says Mr De Vries. The government made changes to its local content guidelines in 2011. To be considered as a supplier in the renewable energy market, products must be made with a certain percentage of local content. This has given SA companies a boost and encourages local skills development. With so many foreign companies investing because of the independent power producer’s tender, it is important to know how to calculate local content. The government defines it as: “total costs attributed to the Project at the Commercial Operation Date, excluding finance charges,
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COMPANY REPORT
land mobilisation fees of the Operations Contractor and imported goods and services.” The tender process for renewable projects has seen its deadlines constantly pushed back. Mr De Vries explains: “We have been busy building stock for the IPP tender, but not central inverters yet. The government has delayed the financial close of the three rounds of bidding. The second round was due to close in June 2012 and now it will close in March 2013. Because of this we were not able to supply the local market earlier. “The winners for the first two rounds have now been announced so 2013 is seen as the year that renewables will take shape in this country.”
A BOOST FROM THE SLOWDOWN Businesses in SA have seen varied effects from the global economic downturn and Mr De Vries tells us that AEG has, in fact, seen positives where so many others have struggled. “Our investors are predominantly international so the economic slowdown has had some effect. We have seen the benefits of it though. As these European markets become more mature they look to the emerging markets for their projects so we see a huge demand and uptake
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AEG POWER SOLUTIONS
in markets such as China, India, South Africa and South America, where renewables are just taking shape. “Europe is declining but emerging markets are booming, renewables is a niche market and we have seen evidence of this in the number of clients investing in the region, it has increased dramatically. “There are still significant returns to be made in the South African market place and in a way; the slowdown has provided a real boost for the renewable market in this country.” Even after the worst of the recession in the USA and Europe, SA has still seen investment coming from these areas. In the last six months we have seen solar farms opened or approved in Ekurhuleni, Upington, Pofadder, Jeffreys Bay, Bloemfontein, Kimberley, and other locations in the Northern Cape. All of these projects have been fronted by companies from Europe, countries like Spain and Ireland, and the USA and China.
FUTURE GROWTH Three years ago AEG had only one employee in South Africa. There is now 15 people working for the company and the new factory has produced 15mgw of locally made inverters. This growth looks set to continue as Mr De
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ontact us for all your transformer requirements.
more information please contact our Power or Distribution Transformer sales For more information please contact our Power or Distribution Transformer sales artments. departments.
annesburg : +27 11: 835 Johannesburg +27 1011 11 835 1011 e Town Cape Town : +27 21: 534 +27 2681 21 534 2681 Pretoria : +27 12 318 9911 oria : +27 12 318 9911 www.pttransformers.co.za w.pttransformers.co.za info@pttransformers.co.za @pttransformers.co.za
COMPANY REPORT
2013 is seen as the year that renewables will take shape in this country
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AEG POWER SOLUTIONS Vries says that the base in Milnerton can act as a gateway into the rest of the continent. “Countries like Botswana, Namibia, Zambia and other Southern African nations are putting REFITs (Renewable Energy Feed-in-Tariffs) in place, following the SA example and that market, the export market, is certainly a market for us to tackle as these countries come online. “We also planned to use this new factory as a springboard into the rest of Africa, who are slowly coming online with regards to renewable energy, and in our case, specifically solar.” There is also potential for the company away from solar technology on the continent and more markets that AEG will be able to enter, as Mr De Vries explains: “A bigger part of the market is the off-grid market. If you look at southern Africa the market for off grid power solutions is enormous. Africa is the world’s largest user of diesel generators so the potential there for off-grid and mini-grid power systems is enormous. As we become mature in these markets we will export our technology into Southern Africa, up to Kenya.” The factory, near Cape Town, has the capacity to produce 200mgw of solar inverters each year and it can
also manufacture Skytron monitoring, mangement and control systems so there is more to come as the company attracts more business and increases its service portfolio. This is something that will undoubtedly happen as AEG, internationally, has worked on more than 800 solar installations, giving the company invaluable experience and a competitive advantage when it comes to RES. ●
“THE HOME OF QUALITY AND AFFORDABLE SHEETMETAL” R and G Sheetmetal Workers (PTY) Ltd, is one of the leading sheetmetal fabrication companies in South Africa, boasting amongst others, six CNC punch machines, two laser and ten bending break machines. Founded in 1987, R and G Sheetmetal specialises in sheet metal fabrication, powder coating, tooling, ridgidizing and tube bending. The company manufactures the Unirack range of I9 “cabinets and enclosures. Recently R and G Sheetmetal has branched out in the field of CNC machining and turning, making it a one stop shop, capable of completing the most complex jobs in-house. R and G Sheetmetal are proud of its staff upliftment program and now have 47% black ownership. This is made up of its own production staff and management, thereby showing the companies real commitment to black economic empowerment. The company has partnered with many international and local companies on numerous varied and important contracts and projects, for example the Medupi and Kusile power stations.
With state of the art machinery and equipment, dedicated ownership and a skilled work force, R and G Sheetmetal offer a comprehensive service to our customers.
73 Brunton Circle Founders View South Modderfontein T 011 452 8055 F 011 452 8151 www.rgsheetmetal.co.za contact@rgsheetmetal.co.za
Reg number: 2005/005324/23 FEB 13 PAGE 61
COMPANY REPORT
All systems go at ZamBeef We speak to ZamBeef for the second time, to find out how the investments of the Zambian agricultural giant, discussed with us in April 2012, are coming along and what we can expect in the future. Editorial – Joe Forshaw Production – Chris Bolderstone
Zambia has an estimated population of 14.5 million people. These people, like any others, love good food. Because of this, ZamBeef, one of the country’s largest agricultural businesses, continues to thrive, even during tough global economic times. In April 2012, IndustrySA spoke with ZamBeef Chief Operating Officer, Mike Ledwith, who told us that largescale investments were underway to step up production and improve processes in order to meet the substantial demand being placed on the company by the whole Southern African region. We recently had the chance to speak with Mr Ledwith again to find out how the improvement projects are coming along and he told us that the future is bright for ZamBeef and that the upgrades have provided much needed increases in capacity. In April, Mr Ledwith explained that $40 million worth of expansion plans had just begun. This time around we started by asking him if all the money had been spent. “The money hasn’t all been spent yet. We’ve spent around 75% of it so far with capital expansion. The major project was the upgrade of Zaminita, the edible oil seed crushing plant and refinery. “That is now complete and the refinery came back
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on stream in October, returning the profitability that we hoped for. “We spent just over $6 million adding to, and upgrading our retail chain but there’s still another $4 million to be spent on this up until the end of September this year. “The feed mill is three quarters complete; that will be done in October or November this year. We are taking capacity of the feed mill up by 40-45%. “The other focus was on upgrading our dairy and milk processing facilities and that is also three quarters complete. That will be fully operational by early May.” The success of the upgrades has made sure that these investments will not be the last for ZamBeef. “After the end of this financial year there will be further reinvestment. We have a couple of very big projects coming up that we are not discussing just yet.” In April, Mr Ledwith explained that as part of the company’s expansion, a step up of operations in Nigeria and Ghana was necessary. While operations in these areas are still underway, growth has not been as quick as the company hoped for. “We’ve been in Nigeria for nearly seven years but only as a small presence. We moved there to service
ZAMBEEF
the SA retail chain Shoprite, just as we do in Zambia but their roll out has been much slower than anticipated because of various political and logistical reasons so our growth there has matched their slow expansion. Over the last seven to eight months we’ve really pushed there. We’ve completed an abattoir and processing plant so our expansion there is still going on. “We’ve found Nigeria a difficult place to do business. Logistically it’s a nightmare but the market represents a huge opportunity so we are pushing there. The next 12-18 months will be important for us in Nigeria. “Ghana has a smaller population so the growth potential is not as attractive but we are operating there.”
“We spent just over $6 million adding to, and upgrading our retail chain but there’s still another $4 million to be spent on this up until the end of September this year”
THE FUTURE ZamBeef’s core business involves the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed, flour and bread. The organisation also has large row cropping (primarily maize, soya beans and wheat) operations, with approximately 5000 hectares of row crops under irrigation and 1500 hectares of rain-fed/dry-
land crops available for planting each year. The company is, of course, looking to grow in all these areas and that growth is currently underway. When we featured ZamBeef in 2012, Mr Ledwith told us that the demand for their products was so high that, in some areas, they were still failing to match supply with demand. Fortunately, production levels have increased and this is no longer a problem. “We have managed to get enough products on the shelf in all areas apart from eggs but by April this year we will have doubled our egg production. We have established new hen houses which we will start stocking soon,” says
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COMPANY REPORT
ZAMBEEF
“We still have the same number of outlets, they’re still going very well and they have achieved growth of about 25% in sales over the last 8 months. It’s profitable, popular and part of big plans for the future.” Mr Ledwith Other projects that were predicted to bear significant fruit for ZamBeef when we spoke to the company first time around were investments in a palm plantation and a ‘fast food style’, chicken outlet chain. The chicken restaurants, ZamChick, were only a very small part of business last year, contributing only 1% of company turnover. Since then the brand has grown, as Mr Ledwith explains. “We still have the same number of outlets, they’re still going very well and they have achieved growth of about 25% in sales over the last 8 months. It’s profitable, popular and part of big plans for the future.” The palm plantation was established, with the assistance of the government, to help Zambia reduce the amount of edible oils it imports. For ZamBeef, it has become a very profitable division. The ideal location for growing palm trees is within eight degrees of the equator. ZamBeef’s palm plantation is located at around 12 degrees from the equator but despite not being in the perfect location, the project is still proving relatively successful. “We have established a palm plantation to produce palm oil. Zambia imports around 70% of its edible oil and we think, although we are not in the ideal location to grow palm oil, we would still be better off producing it here rather than transporting it from Malaysia and Indonesia, even if we do get lower yields. “This is a long term project which is progressing quite nicely,” says Mr Ledwith. “Sometimes palm oil gets a bad name because of its ties with deforestation. Sometimes people will cut down established forests in order to plant palm trees. What the government gave us was complete savannah, no trees at all, so we are actually contributing to afforestation.” The government realised that a project like this could
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COMPANY REPORT
only benefit the economy by reducing agricultural import values and fully supports the palm plantation project. Mr Ledwith told us in April that it was, in fact, the government that gave ZamBeef the land in which to operate the plantation. While the plantation is still in its infant stages, all is going well explains Mr Ledwith. “We have 2300 hectares planted already from the 20,000 total. “There is a remote town called Mpika in the north of Zambia and because of ZamBeef establishing business there, a thriving economy has emerged. We have provided work for anything between 200 and 600 people, depending on the season. “We probably won’t earn any money here until 2015 when we get the fly crop and even then it will be very little. We hope over the next decade we can contribute to the country becoming more self-sufficient with the production of oil.” The agricultural industry in Zambia is one of premier importance. Accounting for over 21% of GDP and over 80% of employment, the industry shows great potential for growth. Exports from the agricultural sector now attract similar values to those of the mining industry in foreign receipts, and as only 20% of farmable land is cultivated, there are significant opportunities for
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expansion in this sector. With unemployment levels high and family incomes down since the country’s independence in 1964, Zambia is now recognised as one of the world’s poorest nations. Projects like the palm plantation, which provide employment and income, are sincerely welcomed, especially in the areas of the country that lay further away from the economic hub, Lusaka. While the tough economic climate has bitten many agricultural businesses around the world, ZamBeef, through their innovative ideas and bold approach towards growth has continued to thrive. “It’s been a successful year. Our results came out at the end of November. Our revenue for year ending September 30th increased by 23%, gross profit increased by 34%, profit after tax 33% and EBITDA (Earnings Before Interest Tax Depreciation and Amortisation) by 43%. Turnover for the period was $255 million so times are exciting,” says Mr Ledwith. With support from the government, reinvestment promised and current projects flourishing, we expect nothing but success from ZamBeef when we speak again in 2014. ●
ZAMBEEF
“ We hope over the next decade we can contribute to the country becoming more self-sufficient with the production of oil”
FEB 13 PAGE 71
COMPANY REPORT
“ Our people are our gold” Editorial Colin Renton Production David Hodgson
How Harmony Gold is changing attitudes, meeting new expectations and still thriving during tough times in the mining industry … by putting its workers at the core of its activities.
It’s been a tough time for the mining industry – perhaps one of the toughest for a business that is used to facing myriad practical and logistical challenges every day in its gold fields deep under the Witwatersrand Basin and beyond. Wildcat strikes, violence and, tragically, a number of deaths have hit the reputation of the industry as a whole in South Africa, harming the country’s attraction as an investment destination and even leading to credit downgrades and share falls. And Harmony has not been immune to any of this.
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On top of this, the worldwide recession has resulted in a shift in the balance of global economic power and businesses like Harmony Gold have had to shift with it. So on all fronts, home and away, Harmony’s executives have been busier than ever making sure the company stays well ahead of changing times and expectations, growing and developing the business and its people to ensure continued success. The new challenges facing Harmony are summed up by Chairman Patrice Motsepe in the company’s latest report.
HARMONY GOLD
He says: “We are witnessing a gradual but discernible shift in global economic power and activity from west to east as the global economy slowly recovers from its first recession in over six decades. “Simply put, the rules of the game have changed in the mining industry. With restructured balance sheets, mining companies are looking for new opportunities and the shift is to emerging markets. “Demand continues to be stoked by growth in these markets as supply becomes more challenging, given declining grades and new mines in remote locations.”
And referring to events closer to home, he adds: “The mining industry is also confronted by increased demands and expectations from governments and communities living near our mines. “In the past year, investors have voiced concerns about the security of their investments in the mining industry, particularly in South Africa after reports about mooted initiatives ranging from nationalisation, excessive taxes and, most recently, the tragic events in Marikana [when 34 striking workers were killed during a protest at another company’s mine near Rustenburg in August] and
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COMPANY REPORT Graham Briggs, CEO
labour unrest and strikes in the mining sector.” He explains how important it is to the nation and its people that the mining industry remains innovative and successful. “It is a significant and strategically important sector in South Africa’s economy, generating around 18% of the country’s GDP and 50% of its total foreign exchange earnings. The industry also accounts for around one million jobs directly and indirectly. “I have no doubt that the South African government is aware of these mining success stories and recognises the
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crucial importance of maintaining the confidence and trust of the investment community.“ Through it all, Harmony continues to innovate, diversify and reap rewards – as evidenced by figures that show an operating profit of R5.9 billion – up 80%. Mr Motsepe says proudly: “The Harmony of today is a significantly better company than the Harmony of a few years ago. “We have a strong balance sheet and a portfolio of world-class assets which generated free operating cash
HARMONY GOLD flow of over R2.5 billion for the year to 30 June 2012, comfortably funding the required capital expenditure for the year and significantly reducing net debt.” Production at the company’s four world-class mines in South Africa continues to increase after major capital investment in the past financial year. Meanwhile, one of the company’s big decisions has been to look beyond South Africa – to Papua New Guinea, one of the world’s most promising new gold regions. Exploration results have vindicated Harmony’s investment, the Chairman says, with gold equivalent reserve ounces there now representing 42% of Harmony’s total reserves, compared to 11% a year ago. While crucial business decisions in the changing world aim to underpin Harmony Gold’s continued growth, the company knows that the foundation of its success lies in the people it employs. To this end, there is a drive within the company to create closer ties to its most valuable asset - its workforce. In the past year Harmony invested over R75 million in improving the living standards of many communities in South Africa and Papua New Guinea (PNG). For example, the Harmony environmental programme in PNG is aimed at giving local communities access to clean water. And in August 2012, awards were made under the first Harmony employee share ownership plan – the Tlhakanelo Employee Share Trust - which was well received and builds on the performance bonus system already established. Through the Trust, more than 33,000 employees and their dependants will directly benefit from the restructuring and repositioning under way to ensure Harmony’s growth and continued success. It means that, as shareholders, Harmony Gold employees now benefit from the growth of the company but, more importantly, gain a deeper understanding of the composite elements of that growth. There is also a major initiative to improve safety on and around mine sites, with Harmony’s target an injuryfree workplace. The South African mining industry has dramatically improved its safety performance. In the past ten years, fatalities have declined by almost four per cent despite employees working at greater operational depths. It’s “commendable progress” says Mr Motsepe. But he adds: “We still have a long way to go.” “Harmony is fortunate to enjoy very healthy relationships with its unions and employees, and considerable effort is devoted to continually
COMPANY REPORT
HARMONY GOLD
“ The Harmony of today is a significantly better company than the Harmony of a few years ago”
strengthening these relationships to ensure all stakeholders work together in adopting leading global practices. “Initiatives like these recognise the value our workforce adds to building a sustainable business and ensure we retain the scarce skills on which our operations depend.
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“The key message we are driving is that safe production equals sustainable profit. We will not rest until we achieve our target of seeing every member of every team returning home safely every day. “The collective effort of over 40,000 people is reflected in Harmony’s results for the year and we thank each and every one of them for their commitment
COMPANY REPORT
HARMONY GOLD
“ Harmony is a mining company capable of managing change – adept and nimble in capitalising on opportunity, proactive in addressing challenges and able to generate value for all stakeholders globally”
and contribution to the growth and development of Harmony” The theme is taken up by Harmony Gold’s Chief Executive Officer Graham Briggs, who says: “Our people are our gold.” “We are steadily creating a culture where people are more connected and engaged in living the vision and values of Harmony which, in turn, will support significantly improved safety and production
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performance.” And when it comes to mining that valuable resource – people – the company is looking much closer to home than it used to. Mr Briggs explains: ”Two thirds of our workforce is now drawn from surrounding areas in contrast to the migrant labour system that typified the South African mining industry for decades. “Using local labour strengthens the societal fabric of a community, supports the regional economy and creates opportunities for emerging entrepreneurs, collectively benefiting entire communities.” He adds: “Now 44% of Harmony’s managerial positions are held by black people, an important pool of talent for sustainable growth. “By engaging with our people at every level, we have secured the bottom-up commitment to common goals, based on a negotiated value system that will underpin sustainable progress for the benefit of all. “Globally, the ecosystem that is Harmony has expanded considerably over recent years: some 40,000 employees support around 400,000 dependants, plus a broad base of suppliers, our communities and our shareholders. “Every one of these people contributes to our continued success and our sustainability; we reward these contributions through safe, healthy working conditions, fair remuneration and benefits, continual development and, most importantly, by unlocking our full potential as a premier global gold mining company that delivers value, both financial and social. Mr Briggs concludes: “Harmony is a mining company capable of managing change – adept and nimble in capitalising on opportunity, proactive in addressing challenges and able to generate value for all stakeholders globally.” ●
Since 1998, Timrite has been the preferred supplier of underground support solutions to Harmony Gold Mining Company Ltd. This relationship commenced with Timrite successfully tendering for the supply of underground timber support products to the Harmony Free State Operations. Between 1999 and 2003, the extensive range of products and services offered by Timrite lead to the extension of the supply contract to all Harmony operations, excluding the Free Gold Region which was supplied by Mondi Mining Timber (MIMS). After the merger in late 2005 between Timrite and MIMS, Timrite became the largest supplier of timber based support product into the South African deep level mining industry and the official supplier to all Harmony operations. Whilst Timrite’s origins are firmly based in the utilization of timber in their underground support products, the range of solutions supplied include non-timber products such as polymer bags for bulkhead and pillar mining and other logistical services. Timrite’s research, development and surface testing centre, based at their Westonaria operations, is one of the most advanced in Southern Africa. Key mining challenges of enhanced safety and a deeper ore body are met with the design engineering skills of Timrite and contribution from our clients rock engineering and production experts.
Over 120 patents and trademarks have been registered by Timrite for the mining industry which is testimony to the success of the cooperation between Timrite and it’s customers and the number of challenges successfully resolved. More specifically, the partnership between Harmony and Timrite has resulted in extensive development of support products and unique services including Timber Yard & Stock Management, Underground Product Assembly and SupportRite, which is an underground support monitoring and control management information system focused on safety and cost optimisation. In the south, Harmony Free State operations are serviced from Timrite’s Friedesheim depot and assembly plant while the Northern operations, Kusasalethu and Doornkop, are serviced from on-shaft depots and assembly plants. This on-going and mutual beneficial relationship between Harmony and Timrite has resulted in Timrite’s supply contract being extended for a further five years to mid-2017. The management and staff of Timrite value this opportunity to continue our relationship with Harmony and wish Harmony every success in the future.
UNDERGROUND SUPPORT SOLUTIONS UNDERGROUND SUPPORT SOLUTIONS TIMRITE info@timrite.co.za HEAD OFFICE: 011 475 1600 GOLD DIVISION: 011 754 1261 PLATINUM REGION: 014 592 8599
www.timrite.co.za
COMPANY REPORT
Plumblink – Keeping South Africa Running Editorial – Tim Hands Production – Hal Hutchison
Plumblink has worked ceaselessly to establish itself as the leading plumbing, kitchenware and bathroom merchant in the country, its 36 stores serving its diverse range of clients throughout South Africa. Armed with a clear social conscience too, it has put its name to some of the most significant environmental and developmental programmes currently in evidence, to ensure that its inexorable growth is achieved sustainably. Ours is undeniably an age where image is paramount; not just that which we exude to those around us through our daily exchanges, but also, notably, in the way we undertake the presentation of that domain we come to call our home. No longer can it be said that a mere construction, habitable and functional, will suffice in performing the role of said home. We are, as a whole, far more demanding of ourselves and our space than this - the home is something of which we continually wish to be increasingly more proud, an exceedingly versatile canvas through which we can express ourselves and create a space worthy of sharing with those closest to us. It is not a case of ‘showing off’, or any such vulgarity, more a product of a world of inexorable advancement, one which continually throws up new opportunities to develop a living space and benefit to the highest degree possible from that most important of locations. Operating from its 36 stores, placed strategically throughout South Africa, Plumblink’s exhaustive range of over 12,000 products renders the complete personalisation and optimisation of the home immeasurably less traumatic than could be expected traditionally. Key to its success is Plumblink’s insistence on catering for the whole spectrum of its diverse customer base, concentrating equally on both the most basic and most state of the art, exclusive ends of its product lines. Plumblink has supplied plumbing services to many of the country’s largest contracts, while a loyal and burgeoning customer base of over 5,000, numbering within it clients from the worlds of government, commerce and housing, speaks of the company’s influence in, and
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importance to South African plumbing and the associated products therein. While it is inescapable that the exclusive, high-end sector of Plumblink’s range represents an ideal for many households, all of this quality and precise workmanship would count for nothing were its products not ultimately and completely reliable. Plumblink’s key values are indicative of such a wish to ensure the deliverance of both quality and reliability, promising as it does such facets as honesty, equity and accountability - solid foundations for a company in whom is placed an extraordinary amount of trust each day, and whose services are those right at the heart of some of the most vital, core functions of any operation, be it domestic or global. Conscious of the need to ensure that these operations can be kept running without ever creasing, Plumblink and its team of knowledgeable experts in turn achieve the value added service for which it strives with an operational performance vital to its performance delivery, keeping at the forefront of its collective mind the unequivocal dependability of its client services. Its sustainability commitment is a concern that Plumblink approaches with that self-same determination and refusal to be bested as evidenced in its day-to-day operations, particularly in its nascent country. Being both a wholly owned and passionately South African business, the introduction of its ‘Support South Africa’ initiative speaks volumes of a company with a long term bond and commitment to the people and business enterprises of its home country and an obvious drive to ensure that the
“Plumblink will look to bring to the fore any technology concerned with conserving water, as well as recycling and clean energy.”
PLUMBLINK
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COMPANY REPORT development of enterprise therein is approached with the utmost dedication. One facet of its transformational mission is the active encouragement and support of using local suppliers, but it is perhaps more significant even than the promotion of South African resources is the development of the personnel therein. Plumblink uses to the full the fortuitous position in which it finds itself, able as it is to pick out and nurture the very best of the homegrown talent at its disposal. As such, the development of the talent and potential of the South African workforce can only, as the wealth of shared experience grows and diversifies, lead to yet further success for the country’s business on a global scale. Fair, ethical and competitive business practice neatly sums up a company with an obvious desire to continually best serve the dynamic South African market. The clients who employ Plumblink’s services are able to work safely in the knowledge that their dealings have taken place with a company for whom social responsibility investment takes the highest priority. In keeping with its policy regarding the inclusion and promotion of home-grown materials and staff, Plumblink is cognisant of the important role that the community in which it operates plays in gaining and maintaining its hard-fought success. On a wider scale, the way in which it continues to develop and grow runs in harmony with the social needs and priorities of the country as a whole. Through its involvement in various small, but specific upliftment and assistance programmes, the company consciously acts to add value to the local communities in which it operates, with some direct
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PLUMBLINK financial investment even being offered to exceptionally deserving projects, those which align closely with education and charity or welfare initiatives. In addition, Plumblink has steadfastly adopted an integrated and balanced approach to Corporate Social Investment, which is in turn a crucial component of its broad-based economic empowerment programme. With all the influence and success a market leader such as Plumblink enjoys, comes another massively important set of responsibilities surrounding the way in which it fulfils its services. Clearly, the very nature of its business signifies that the environmental impact of Plumblink’s operations is fairly insignificant when compared to, say, the industries of mining or agriculture, but its approach to business is nonetheless imbued with a deep sense of corporate responsibility and environmental awareness. These practices apply both within the company, through the prevention of pollution and the responsible usage of energy throughout the chain of operations, even down to implementing the most environmentally conscious method of paper consumption in its daily dealings. However, extending such an ethos to a wider scale again allows Plumblink to profit from the influence and scope to effect change that it has accrued as market leader. Actively promoting products and services that are not harmful to natural ecosystems and promote “green” principles, this plumbing monolith is able to deliver that ideal for which so many strive but whose attainment in many cases proves unreachable; business activities have no direct negative impact on biodiversity, protected or sensitive
COMPANY REPORT areas, avoiding too the danger of impacting on fresh water resources and heritage sites. Plumblink’s strong sense of environmental responsibility plays a key role in informing its future developments, with a sharp focus on projects geared toward the conservation of energy and water. One arm of this comprises the promotion of the solar eater heating systems gradually being released onto the South African market, a drive that is aided further by the support of electricity provider Eskom and the lucrative rebates with which it has committed to reward customers who choose this method. With only two or three South Africa-based companies yet registered to implement such systems the future will
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PLUMBLINK bring with it a growth in their number, while Plumblink also focuses on another vital aspect of its environmental responsibility. Evidently, sun is a resource in great abundance in South Africa, but conversely, water and its availability is becoming a growing concern. Plumblink will thus look to bring to the fore any technology concerned with conserving water, as well as recycling and clean energy. With Plumblink itself naming the plumber as the first link in the conservation chain, the company is now perfectly placed to apply itself to helping create and save valuable resources, and spark a change that will follow on from its work until now, and resound throughout the whole of South Africa. â—?
COMPANY REPORT
Demand for water
outstripping supply in eThekwini Neal Macleod, head of water and sanitation for eThekwini Municipality, tells IndustrySA about how the department plans to meet fierce demand for water services in 2013. Editorial – Roland Douglas Production – Chris Bolderstone
Water is something which is quite often taken for granted. Although it is the simplest of elements, its journey to tap or toilet can be complicated and difficult. In Durban, the country’s third largest city, water and sanitation are top of the agenda right now, as the city continues to expand and the population continues to increase. The eThekwini Municipality Department for Water and Sanitation is responsible for the provision of water and sanitation services to all customers in the municipality and, as part of an on-going improvement process, the department is undertaking several upgrade programmes. IndustrySA recently had the chance to speak with the head of the department, Neal Macleod, to discuss projects that are currently underway and plans for the future as the constant demand for usable water looks set to increase. “In 2000, this city had a population of 3,000,000. We are now at 3,500,000. There is a rapid rate of movement
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of people into the area. There is a lot of housing being built for everyone right across the spectrum, rich and poor. We still have 800,000 people who are not living in formal housing. There are people in shacks or in the backyards of other housing. These people will all have to find housing over the next 10-15 years. “There is also a lot of industrial and commercial development. The new airport is just being finished, the industrial area is being opened up and they all need water supplies to be able to exist. “There is economic development and a movement of people into the area which drives the demand up,” says Mr Macleod.
WESTERN AQUEDUCT One of the major projects underway right now is construction of the Western Aqueduct network. It is the largest water infrastructure project ever undertaken by the council and aims to improve capacity in the eThekwini region. “The project is divided into a number of sections,”
eTHEKWINI MUNICIPALITY – WATER AND SANITATION DEPARTMENT
says Mr Macleod. “The first is now finished. It was about R130 million. The alternate project has two huge sections. The first is about 60km long, brining water from the boundary of our region to the north, and the second phase which is yet to be finalised, which will distribute water through the suburbs in the north of our area. “The whole project will cost in excess of a R1 billion. “The second phase is being broken into a number of sections, the first of which has been advertised for tender. The tender has recently closed and construction will start shortly. The other five or six sections will roll out over the next four years. “It’s complicated because it runs through developed areas. It’s not like laying across open countryside so we have to manage the way we do things. Because of the extreme value of the project, measures have to be taken to ensure that finances are accounted for. “We also have to manage the impact on our operating account. You can’t spend that sort of money all in one
year so we are spreading it over a number of years and extending service to different parts of our supply area,” says Mr Macleod. This sort of project does not supply a short term fix. Mr Macleod tells us that this upgrade will serve the city for the next three decades. “The purpose of the aqueduct is to meet the water demands of the region for the next 30 years. Around every 30 years we do one of these major bulk water scheme investments.”
LOSS MANAGEMENT Something which has become a problem for the department over the years is loss of usable water, whether it is to leaks or burst pipes or to illegal connections. Managing loss of good water and ensuring that lost water is redirected to paying customers is now a priority as Mr Macleod explains. “We have projects underway to help manage our losses. There are a lot of people connecting to our services illegally so we have quite high losses. It would
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COMPANY REPORT
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eTHEKWINI MUNICIPALITY – WATER AND SANITATION DEPARTMENT
“ We claimed two certificates and R120,000 in prize money” be a lot worse if we were not able to take some of these losses and convert them into sales. “Converting losses is all about fixing leaks, fixing illegal connections and putting in meters which reduces wastage and makes more water available for sale.” One specific measure being taken by the department is the upgrading of an important piping network, using new materials to combat against burst pipes. “We have a piping system, asbestos cement water piping, which is now starting to fail so we will be replacing thousands of kilometres with new, plastic piping and that reduces burst frequency, which reduces losses,” says Mr Macleod.
DEMAND AND SUPPLY Meeting demand with sufficient supply is one of the fundamental economic problems of any operating market place and for eThekwini Water and Sanitation it is a problem which refuses to go away. This is mainly because of the way population figures continue to rise. “At this very moment we are in a situation where demand exceeds supply. It will change in six months’ time but right now, the demand exceeds the sured yield of the dams that supply the area,” says Mr Macleod. The department are working hard to rectify this situation and have plans in place for the future. “As demand continues to rise we need to look at other schemes. We are looking at things like recycling, re-use of sewage effluent, reducing losses and then there is another dam but that is 20 years away just now, a massive project (R20 billion) that we will avoid for as long as possible. “The re-use projects will increase capacity by 150 mega litres per day and will be much cheaper than the dam. “Short supply is a real concern but we have projects in the planning phase and feasibility phase which will help to bring us back to a parity situation where demand matches supply. An example of this is a dam to be commissioned in June this year,” says Mr Macleod. In mid-January the effects of high demand and low supply were seen in the north of the municipality as the department issued warnings about potential water shortages in Kwamashu and Tongaat. On this occasion
the supply was limited because of delayed construction work on new water lines and the popular time of year for the region. “The area in the north is on the limit of what the existing aqueducts can carry. The upgrades there were delayed by a year and that area has seen a huge influx of people. There are a large number of illegal connections and because people aren’t paying for water they don’t worry about how much they use or waste. This is a target area for us to reduce losses. “The reservoirs literally run dry because demand is so high. It is especially bad around christmas because everyone goes home and we are a tourist city, on the beach so we have a lot of guests and that pumps up consumption,” says Mr Macleod.
GREEN RIVERS Aside from the effective provision of water, the department is also responsible for sanitation in the municipality and one project relating to sanitation is the Green Rivers Project. Established in 2007, the aim of the project is to bring all rivers in the municipality up to a certain level of cleanliness. While the project was successful for the first few years, it has lost ground in the last 12 months thanks to heavy rains and an increase in the population figures as Mr Macleod explains. “The Green Rivers Project is about restoring the water quality in the rivers to a recreational level, where you can swim in them without worrying about pollution. We dabbled in it in 2007 and started properly in 2010. The quality of the water improved for three years and then last year we went backwards. “The reason we lost ground was because of record rainfall and lack of toilets for everyone who is moving into the area. We are building 20,000 toilets each year but when there are 30,000 families moving in you fall behind. With no toilets, people use pits or the bush and the rain washes the waste into the rivers.” Another problem is dated sewage works. When floods occur because of heavy rains, people will open manholes to drain the water, this puts pressure on the pump stations by the rivers and they eventually burst, affecting the quality of the water.
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COMPANY REPORT
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eTHEKWINI MUNICIPALITY – WATER AND SANITATION DEPARTMENT
“ Converting losses is all about fixing leaks, fixing illegal connections and putting in meters which reduces wastage and makes more water available for sale.” “We are still recapitalising old sewage works that we inherited when we were formed as a metropolitan entity. Some of these are still not working to high enough standard; this is another massive capital expenditure,” says Mr Macleod. All the good work that the department is involved with has not gone unnoticed. The Impumelelo Social Innovation Centre honoured the department before Christmas, with two awards for performance excellence. “We claimed two certificates and R120,000 in prize money,” says Mr Macleod.
Although in the future Durban will see more and more people flooding into the area as the country sees its population shift from rural to urbanised areas, the projects that the department of water and sanitation have in place will help to reduce stress on the burgeoning market for water and sanitation services. “We are a fast developing city in a developing country,” says Mr Macleod and while the city and country continue to develop, there will always be a need for the department of water and sanitation to be innovative and fast developing as well. ●
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Are you paying more than you should for your domestic water? To ensure that there is no underground water leak, the following simple test is suggested: 1. Ensure that all waterworks and fittings on your property are working correctly and are watertight when closed. 2. Ensure that all water-consuming devices (geysers, toilets cisterns, taps, etc.) are switched off or closed, during the test period. 3.
Take a reading of the meter and after an interval of approximately 10 minutes take another reading.
4. If the meter has advanced during the test period, a leak may be present on your property and you should call a plumber.
This message was brought to you by WESTWOOD INSURANCE BROKERS, brokers to the eThekwini Municipality’s Water-loss Insurance scheme.
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INDUSTRY RECOMMENDED
This is the latest installment of our Industry Recommended directory, a list of companies across a range of industry sectors over SA.
YOUR INDUSTRY, THEIR FUTURE, OUR SOUTH AFRICA AGRICULTURE ZAMBEEF One of the largest agricultural businesses across Africa producing, processing and distributing a wide range of products. +260 211 369 000 www.zambeefplc.com GWK GWK is a sustainable agricultural business that delivers an excellent service to agriculture in the Northern Cape province of South Africa. +27 53 298 8200 www.gwk.co.za AQUACULTURE HIK ABALONE Under the banner of the HIK Group Companies, HIK Abalone Farm is recognised as a leader in abalone aquaculture and a major role player in the development of aquaculture industries and products in Southern Africa. +27 28 313 1055 www.hik.co.za GAMCO Gamco Services is a marine engineering and diving services business. Over the last 17 years they have grown with the abalone industry and pelagic fishing industry.
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+27 28 384 0086 www.gamco-sa.co.za AUTOMOTIVE AUTOMOTIVE EXPORT A UK based company dedicated to providing a range of spare parts covering most European manufactured trucks. +44 1772 623 234 www.automotiveexport.co.uk CONSTRUCTION BASIL READ Basil Read stands out as a JSE-listed blue chip company and is widely recognised as a formidable leader in South Africa’s competitive construction sector. +27 11 218 3000 www.basilread.co.za ENGINEERING TENOVA BATEMAN Tenova is a worldwide supplier of advanced technologies, products, and services for the iron, steel and mining industries providing innovative, integrated solutions for complete process areas. +27 11 543 7800 www.tenovagroup.com FOOD SIMBA Simba chips are South Africa’s
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INDUSTRY RECOMMENDED techniques to bathroom aesthetics. The methods and culture that are Wirquin’s strength are present in the Group’s different companies. All our staff have a common goal: innovation at our clients’ service www.wirquin.co.za INFRASTRUCTURE DURBAN WATER & SANITATION eThekwini Water and Sanitation is a unit of the eThekwini municipality and is responsible for the provision of water and sanitation services to all customers in the municipality. +27 31 311 1111 www.durban.gov.za LOGISTICS BROCO We are a growing logistics management company, offering logistics solutions to all industries, specialising in fastmoving consumer goods (FMCG) +27 21 880 5200 www.broco.co.za MARKETING AUDIO AUDITING Audio Auditing offers content management and broadcast monitoring and verification for the music and advertising industries. www.audioauditing.com BLOOM MARKETING Bloom Marketing is an award winning marketing, advertising and activation agency with headquarters in Durban, KwaZulu-Natal and a regional office in Johannesburg, Gauteng. +27 31 303 4090 www.bloommarketing.co.za IN PERSPECTIVE We talk to shoppers and measure their behaviour through their till slips to understand who they are, where else they are shopping, what they are buying and how you connect with them to get them to spend more on your category and / or in your stores. +27 11 467 0012 www.inperspective.co.za
METALS R & G SHEETMETAL R and G Sheetmetal Workers (PTY) Ltd, is one of the leading sheetmetal fabrication companies in South Africa, boasting amongst other things, six CNC punch machines, two laser and ten bending break machines. +27 11 452 8055 www.rgsheetmetal.co.za MINING HARMONY GOLD The fifth largest gold producer in the world, primarily based in South Africa. +27 11 411 2000 www.harmony.co.za REATILE The Reatile Group focuses on three main industrial areas: energy, chemicals and mining services. +27 11 514 0587 www.reatile.co.za POWER EDISON POWER Edison Power has participated in the Gauteng market for many years via its associate companies and other joint ventures. In an industry that demands exacting standards of delivery and professionalism, performance is a critical factor that determines the business’s ability to secure contracts and sustain its viability, and growth. +27 11 452 0024 www.edisonpowergroup.co.za RENEWABLE ENERGY AEG The AEG Power Solutions Group is a global provider of power electronic systems and solutions for all industrial power supplies, and it offers one of the most comprehensive product and service portfolios in the area of power conversion and power controlling. www.aegps.com POWERTECH Powertech comprises of a large number of individual operations which specialise in the manufacturing and
delivery of world class products, services, expertise and solutions to address diverse needs for electrical and power equipment in South Africa and beyond. +27 11 706 7184 www.powertech.co.za RISK MANAGEMENT NATSURE Natsure is a niche, specialist short term insurance business that operates mainly through Underwriting Management Agencies (UMAs). +27 12 430 9700 www.natsure.co.za SASRIA Africa’s foremost special risks insurer for over 30 years. +27 11 881 1300 www.sasria.co.za WESTWOOD INSURANCE BROKERS Westwood represents all major insurers within the market and enjoys the freedom of not being reliant on any single source in preparing your portfolio www.wwib.co.za STEEL SCAW METALS An international group that manufactures a diverse range of steel products principally operating in SA, South America and Australia. +27 11 621 1555 www.scaw.co.za TOOLING ROTHENBERGER Since its foundation in 1949, Rothenberger has been synonymous with developing innovative and technologically ambitious products. +27 11 372 9631 www.rothenberger.co.za For more information about how your company can be recognised for excellence across many areas please get in touch. Your Industry, Their Future, Our South Africa FEB 13 PAGE 95