Sep25

ISSUE

48

www.industrysa.co.za

ISSUE 48

Now is the Time for SA Entrepreneurs This month, Dragons’ Den South Africa is coming to our screens for the first time.

The show will attempt to find and support budding local entrepreneurs who have innovative product, service and business ideas. IndustrySA speaks to Dragons’, Vusi Thembekwayo and Gil Oved to find out whether these super-successful entrepreneurs will see potential in any of the ideas put in front of them.

Sneaker Snacks

Rhys Evans Group

Confection perfection

A true agricultural success story

Arrowhead Properties

Siya Xuza

Growing income for you

Rocketing to the top

Shaping unique

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Emerald Risk Transfer (Pty) Ltd (Reg. No. 1998/025512/07) is an authorised financial services provider (FSP No. 13893). Emerald is a wholly owned subsidiary of Santam Limited.

EDITOR’S PAGE

EDITOR Joe Forshaw SUB-EDITOR Harriet Pattison WRITERS Colin Chinery Tim Hands Roland Douglas Christian Jordan Helen Lake RESEARCH DIRECTOR Chris Bolderstone PROJECT MANAGERS Ajuanne Payne Emily Woodhall Hal Hutchison ADVERTISING SALES SALES DIRECTOR Andy Williams SALES MANAGER Daniel Marshall SALES EXECUTIVE Holly Graham SALES EXECUTIVE Daniel Gillespie STUDIO STUDIO DIRECTOR Martyn Oakley DESIGNER Harvey Tarlton ACCOUNTS Mike Molloy, Jane Reeder ECP LTD MANAGING DIRECTOR David Hodgson OPERATIONS DIRECTOR Chris Bolderstone FINANCE DIRECTOR Scott Warman 2a Ardney Rise, Norwich, Norfolk, NR3 3QH, United Kingdom If you would like more information about ways in which IndustrySA can promote your business please call +44 1603 411568 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. © East Coast Promotions Ltd 2014

Welcome to issue forty eight...

This month we celebrate the 25th edition of IndustrySA – a real landmark and quite the milestone in the publishing industry these days. I talked to IndustrySA’s managing director, David Hodgson and reminisced about the early days and how we have managed to stick to the core values of the business right from the beginning.

“The most important thing is that we remain inspirational,” he said. “We like to showcase what can be done when people put their minds to something even without big funding.

“It all comes down to inspiring people to climb the ladder.”

I like to think we have managed to do just that and we will certainly continue to do so.

“In the beginning it was clear that there is so much potential in SA; lots of innovative people and lots of good ideas and if we could create a way to showcase all of this, being 100% positive, we would undoubtedly be successful; and that is what we’ve done,” said David.

“We have to say thanks to all the companies that helped us in the beginning – from JSE listed to single man operations; every little counts.”

In the future, IndustrySA will not deviate from its fundamental principles and we will always continue to talk business – positive business.

“Going forward, we’ll continue to lead from the front, supporting innovations and entrepreneurs and always showcasing people and businesses that make positive contributions. If someone shares genuine business excellence with us and that inspires someone else, perhaps in a different industry, then we have succeeded,” David explains.

“The most important thing is that businesses create progression, excellence, equality and opportunity and we can definitely help with all four of those areas.”

And considering all that, this month we carry on as normal, exploring the fantastic work being done by Gauteng based Sneaker Snacks and Arrowhead Properties – both of whom demonstrate exactly the values we love; entrepreneurship, innovation and visionary forward thinking.

Get in touch with us online @industry_sa to tell us your own story of business excellence!

Joe Forshaw

editor@ecp-ltd.com

sep 14 PAGE 3

CONTENTS

3 EDITOR’S PAGE A milestone for IndustrySA

6 NEWS All that’s happening in South Africa

12 EnTREPRENEUR Business woman of the year

14 Innovation Clean, sustainable transportation

18 Inspiration SA Tobacco in the air

20 Siya Xuza Rocketing to the top

24 Dragons’ Den Do you dare enter the den?

PAGE 28 SEP 14

66

CONTENTS

36 Sneaker Snacks Confection perfection

74 Ukhuni Furniture Becoming part of the furniture

44 Arrowhead Properties Focussed on distributable income

78 Biligom International The future is eucalyptus

50 Nulaid

82 tasa

Where eggs always come first

Industry development at its best

54 Rhys Evans Group

84 Retecon

Nuts and bolts of agriculture

Engineering excellence

62 Boltfast

88 Nissan SA

Holding the world together

Increased production for Africa & beyond

66 ska

92 Grindrod Intermodal

Containing RFI

Ensuring supply chain security

COMPANY REPORTS

20

SEP 14 PAGE 29

NEWS All that’s happening in South Africa

Department of Basic Education builds over 70 schools The Department of Basic Education has built 74 schools, helping to change the experience of learning and teaching for thousands of pupils and teachers.

Earlier this month, the department said: “As at 18th August, we have built 70 new schools in the Eastern Cape and four in the Western Cape.”

The schools were built under the Accelerated Schools Infrastructure Delivery Initiative (ASIDI) which aims to restore dignity to education through the building of new schools and delivering much needed facilities to schools around the country, particularly in the Eastern Cape.

The department said Samson Primary School in the Eastern Cape, built from alternative construction technology, will join the long list of schools that have received new facilities by December this year.

The department has procured 78, 240 double combination desks, 5, 292 teachers’ tables and chairs from the Department of Labour to the value of nearly R60 million.

To date, 53, 948 desks, 5, 292 teachers’ chairs and 1, 134 teachers’ tables were delivered to schools in the Eastern Cape.

More than 73, 084 desks were also ordered from the Department of Environmental Affairs to the value of R42.8 million.

The first group of 252 schools in the Libode district in the Eastern Cape has received its consignment consisting of 24, 535 desks. A further consignment of 24, 000 desks is currently being delivered to schools in the Eastern Cape.

The Treasury has finalised a further contract to supply furniture from Grade R to 12 for the period August 2014 to July 2016. Furniture provision is an ongoing programme.

PAGE 30 SEP 14

The department of Basic Education is building close to 500 schools nationally under the ASIDI programme with the majority of the schools are being built in the Eastern Cape to replace mud or inappropriate structures. It can take 10 to 15 months for a state-of-the art school to be built, if no delays are encountered.

During construction learning is not interrupted as the learners are housed in temporary mobile classrooms and move into the school as soon as it is ready.

Standard facilities for newly built schools include classrooms, administration blocks multi-purpose centres, science and computer labs, nutrition centres, libraries, decent sanitation, electricity, rain water harvesting tanks and a fully resourced Grade R centre, complete with jungle gym and sand pit.

The ASIDI program also provides basic services of water, electricity and sanitation to schools that previously had none.

To date, 266 schools have been provided with sanitation, while 339 schools are at various stages of procurement of contractors and construction. Two hundred and twenty-four schools have been provided with water, while 685 schools are at various stages of procurement of contractors and construction of the works.

Under the programme, 265 schools have been provided with electrification, while 212 schools are at various stages of design and procurement of contractors.

Schools are initially assessed to establish infrastructure needs.

The department appoints implementing agents that manage projects on its behalf. The implementing agents in turn procure and appoint professional service providers and contractors who carry out the work.

NEWS

Billions invested to move commuters from road to rail Over the next three years The Department of Transport will invest billions of rand in the country’s transport infrastructure in a bid to reduce road deaths.

Commuter rail infrastructure, identified as the safest mode of transport, will receive the lion’s share of the allocation, as the department makes a push to shift passengers from road to rail.

Transport Minister, Dipuo Peters said in a statement that R51 billion will be spent on commuter rail infrastructure and new rolling stock over the next three years.

A further R14 billion will be channelled towards bus subsidies in the 2014/15 financial year to encourage a shift from private cars to public transport and reduce road congestion.

A total of R9.3 billion will be spent during the 2014/15 financial year and a further R9.9 billion in the 2015/16 financial year to upgrade the ageing road infrastructure to ensure quality and safer roads.

“The National Development Plan (NDP) diagnostic report states that the commuter rail fleet needs to be renewed. It provides the lowest cost service in metropolitan areas and is safer than cars,” Peters said.

The Minister explained that such investments were crucial for public transport as it would assist in shifting commuters from road to rail, and therefore reducing congestion on the roads, seen as one of the causes of road accidents.

The National Household Transport Survey 2013 shows that the percentage of car ownership has risen from 22.9% in 2003 to 32.6% in 2013.

Peters also stated that various Information Communication Technology (ICT) initiatives have contributed to reducing road congestion and promoting safer mobility on the roads. The introduction of mobile applications and communicating road incidents on social media platforms such as Twitter, which has guided motorists to using safer or alternative routes to avoid road incidents.

“For instance, the SA National Roads Agency (SANRAL) has deployed the Freeway Management System in three large metros,” explained Peters. “The system enables monitoring and communication of realtime traffic condition. It allows for the early detection of road incidents and subsequent deployment of

emergency services. It empowers drivers to anticipate road incidents and avoid congestion.”

The Minister also said an hourly traffic update by SABC radio channel SAfm played an important role in reducing congestion and hence promoting the safety of drivers.

The Minister said road safety operations have led to several actions taken by enforcement officials, which includes an estimated 1.3 million vehicles being verified for compliance against safety rules, some 3.9 million notices of road traffic offenses being issued, a total of 42, 116 traffic offenders were arrested, vehicles that were impounded amounted to 28, 767 and a further 38, 626 vehicles were removed from the roads due to unworthiness.

SEP 14 PAGE 31

NEWS All that’s happening in South Africa

South African Airways increases African flights In response to “tremendous growth” in demand for premium travel in Africa, South African Airways announced this month that it will increase its Airbus flights between Johannesburg and Lagos, Nigeria to eight times a week from the beginning of September.

This increase to SAA’s “already extensive African flight schedule” aims to offer customers more travel options on the continent as well as meeting increased cargo demand.

It will also offer “seamless travel” for passengers en route to Perth, Australia, Hong Kong and mainland China. Kendy Phohleli, SAA’s acting general manager commercial said in a statement: “The increase on the Lagos route follows on previous increases to the airline’s Africa route network, in keeping with SAA’s Gaining Altitude strategy, where the focus is on strengthening our presence in Africa. All flights will be operated with a long-haul Airbus aircraft offering lie-flat seats in business

PAGE 32 SEP 14

class.”

SAA has also made changes to its international route network, where the Johannesburg-Mumbai route has been reduced to six weekly frequencies. The same number of seats are still on offer as SAA is using a bigger aircraft. “The Tuesday Mumbai departure will no longer be operated as this flight historically shows low demand,” Phohleli said.

Phohleli also stated that frequencies on lowperforming routes were constantly being adjusted to achieve and maintain commercial sustainability, “while supporting South Africa’s development agenda”. Other Africa routes on which weekly frequencies were recently increased include Johannesburg to Harare from 18 to 19 flights a week, Johannesburg to Lusaka from 20 to 21, Johannesburg to Kinshasa from four to six and Johannesburg to Nairobi from 10 to 11.

NEWS

SA tightens alien species regulation The Department of Environmental Affairs has set aside R200 million to further regulate invasive alien species. The amount budgeted over the next three years is in addition to the R4.2 billion budget to control alien species through the Working for Water Programme.

Invasive alien species are species that have been introduced into an area and are able to out-compete and displace indigenous or useful alien species. These may be plants, animals or microbes, including diseases, and are widely regarded as among the biggest threats to the productive use of land and water, the ecological functioning of natural systems, the populations’ health and the economy.

Edna Molewa, Environmental Affairs Minister has warned that pine trees from Europe, Asia and North America that are invading South Africa’s mountain catchments could have unaffordable consequences for water security as they use far more water than the indigenous plants they displace.

In August the department published the amended regulations on Alien and Invasive Species (AIS) in terms of the National Environmental Management: Biodiversity Act. The AIS Regulations are aimed at preventing the introduction of more species that may be potentially invasive. This includes monitoring the deliberate and accidental introduction of species through airports, harbours, land borders and mail.

In a statement Minister Molewa said those who want to bring species into the country will be required to have a risk assessment done to establish the potential harm from introducing the species.

One of the 559 invasive species listed in the Regulations is famine weed (Parthenium hysterophorus), which is an inconspicuous, daisy-like plant from South America that is spreading across northern KwaZulu-Natal.

Famine weed has the potential to invade the driest parts of South Africa and most of Africa and Minister Molewa has warned that neither South Africa’s stock nor game species can survive in these invaded areas.

“Crop production will be unaffordable. Allergies and skin lesions in humans will abound and respiratory diseases will worsen. It is truly a Frankenstein plant, an unwanted and relentless gate crasher in our country,” explains Molewa.

Although still an emerging species in many parts of the country, famine weed is so invasive that it is already classified as Category 1b. Minister Molewa is, however, optimistic that suitable biological control agents will be found to combat the threat of famine weed.

South Africa currently has tens of thousands of alien species, most of which are not necessarily a problem.

“A relatively small percentage of these have become invasive. Nevertheless, the impact of these invasive species on the country’s economy is estimated in the hundreds of billions of rands, and the impact is rapidly increasing.

“The most difficult category is the Category 2 species.

These are species that have value, such as plantation trees and fish-farming species, and yet can invade with very negative consequences outside of where they are being utilised,” Minister Molewa said.

The department wants to optimise the economic benefits of these species, while minimising the damage they cause.

Permits are granted for their utilisation, but they must be controlled outside of what is allowed in terms of the permit.

Minister Molewa stated that the department is striving to take a balanced approach for species that have value.

For example, many invasive gum (Eucalyptus) species from Australia have a negative impact on water, biological diversity and in terms of the spread of wild fires but it is also an excellent source of wood, shade, beauty and food for bees.

“The regulations make provision for optimising their benefits, whilst curtailing their most negative impacts,” said the minister.

She also said the department has accommodated public sentiment by not listing the much-loved jacaranda tree from South America in urban areas, and allowing large specimens within 50 metres of farm homesteads.

“In these urban areas, there will be no control required for the species. It will be as if we are treating urban areas as plantations and the trees can continue to be grown as street trees and ornamental garden trees.

“This is not a battle that government can win on its own.

These regulations, coupled with the investments made through the Working for Water programme, have the potential to reverse the cancer of invasions in our country,” Minister Molewa concluded.

SEP 14 PAGE 33

NEWS All that’s happening in South Africa

Government ready to monitor safe shale gas exploration Government says it is ready to regulate and monitor companies that have expressed an interest in exploring shale gas in the country.

Thibedi Ramontja, the Director-General of the Mineral Resources Department, said the draft regulations will, once finalised, be effective to deal with the risks that exploration might pose to the environment.

The Director-General said this when briefing the Portfolio Committee on Mineral Resources on its progress in finalising the regulations for petroleum resource development.

“The draft regulations, once finalised, will result in a regulatory framework that ensures safe extraction of gas, which will contribute to diversification of South Africa’s energy mix, energy security supply, significantly boost South Africa’s economy and have positive effects on the Gross Domestic Product,” he said.

The department first halted new applications for exploration rights in 2011 to investigate the impact that the process would have on the environment, and an interdepartmental task team was set up to head this process.

PAGE 34 SEP 14

The investigation also looked at ensuring that fracking would not affect astronomy research projects linked to the Square Kilometre Array (SKA) project in the Karoo – the world’s biggest telescope that is currently being built in the country.

After the investigation, the draft regulations for petroleum exploration and exploitation were published for public comment in October last year.

Ramontja said government would consult interested and affected stakeholders next month, before finalising the regulations to allow exploration to begin.

He said while it was too soon to estimate the gas reserves, economic contribution and how many jobs the projects would create, he said companies – local and international – would not have shown interest if they did not anticipate to make profits.

The Director-General also said that once shale gas will not only create a new industry, it would present South African higher education institutions with research opportunities that are expected to produce Masters Degrees and PhDs.

NEWS

SA pumps R100m into tourism industry Government will spend R100 million to market South Africa’s tourism industry, Tourism Minister Derek Hanekom announced on last month.

“These marketing efforts will include the continued rollout of the Nothing’s More Fun than a Sho’t Left campaign.

“The campaign, launched at the start of Tourism Month last year, drives home the message that travel in South Africa is fun, an investment in your relationships and yourselves, as well as being both accessible and affordable,” Minister Hanekom said.

He was speaking in Johannesburg during the launch of Tourism Month, which will focus on encouraging South Africans to explore the country.

“We are committed to ensuring that the wonders we boast and the unique heritage we have been endowed with are shared by an ever growing number of South Africans,” Minister Hanekom said.

Last year, domestic tourists contributed R24.3 billion to the economy, up from R21.8 billion spent by domestic

tourists in 2012.

According to Tourism Satellite Account statistics, released

by Statistics South Africa for the period ending December 2012, direct tourism contribution to GDP was R93 billion or 3% of GDP in 2012, with tourism contributing approximately 617 000 direct jobs in 2012.

The Minister said they will work harder to reach the target of 18 million domestic tourists by 2020, as set out in the National Tourism Sector Strategy. This, he said, could be achieved by making domestic tourism more affordable and accessible to all South Africans.

South African Tourism CEO Thulani Nzima said the country has initiatives in place to develop domestic tourism.

A campaign about the benefits of tourism will be created

by South African Tourism. The campaign is aimed at educating people about the accessibility of tourism and it will try to dispel the myth that tourism is for the elite.

“We need to make sure that those that are aware of the need to travel have access to tourism facilities (and) the packages,” Nzima said.

SEP 14 PAGE 35

Entrepreneur

Johannesburg’s most important CEO?

Editorial: Harriet Pattison

With three law degrees, a Yale World Fellow and voted South Africa’s Business Woman of the Year in 2003, Nicky Newton-King is no stranger to the world of business. In 2012 Newton-King secured the most prestigious of positions, CEO of the Johannesburg Stock Exchange, becoming the first woman to do so since its inception over a century ago…

Nicky Newton-King is not your average South African entrepreneur. With a BA and LLB degree from the University of Stellenbosch and graduating with a 1st Class Honours in Master of Laws (LLM) from the University of Cambridge, England in 1994, Newton-King has a serious head for business.

EARLY DAYS Whilst studying at Cambridge, Newton-King was awarded the Foundation Scholarship for Academic Achievement by Queen’s College. It was during this time that she decided to specialise in corporate finance, administrative law and securities regulation; subjects that no doubt helped to secure a very successful future for Newton-King.

Upon returning to South Africa with three law degrees under her belt, Newton-King went on to become a partner at one of South Africa’s most reputable law firms, Webber Wentzel. Working in the Financial Services department, Newton-King advised clients within the securities and financial services industry.

Whilst working at Webber Wentzel, Newton-King developed one of the first derivatives law practices in South Africa and was instrumental in advising the JSE on varying business models including its deregulation and the amendments of rules and listings requirements.

AFRICA’S BIGGEST STOCK EXCHANGE Newton-King joined the JSE in 1996, a year of change for the JSE with news of an insider trading scandal and at a time

PAGE 36 sep 14

when the company was then a predominately male-staffed environment.

Just seven years later, in 2003, Newton-King became Deputy CEO. Her duties included the management and responsibility of various teams and accounting for its ecommerce initiatives and the strategic development and management of the company’s data vending business.

Newton-King also acted as a key contributor to the company’s income stream and became a valued member of the Financial Marketing Advisory Board.

Newton-King was in charge of a team of lawyers helping to advise the JSE on how different laws affected how the stock exchange was both operated and regulated. NewtonKing also held the responsibility of leading and managing a professional team that handled many of the JSE’s legal issues, media and corporate transactions, investor relations and important strategies.

Additionally, as Deputy CEO, Newton-King was also responsible for helping to lead the JSE’s Human Resources team. This role especially came into play when the company embarked on long consultative processes to introduce its Affirmative Action Policy. Newton-King was also responsible for the Employment Equity Plan, which involved consulting all employees about its implementation.

Newton-King’s duties as Deputy CEO did not stop there, also helping to draft a large proportion of the Insider Trading Act of 1998, a world leader of its kind, it provides for people who have perhaps suffered loss as a result of insider trading to receive compensation. Newton-King also helped to develop

Nicky Newton-King

and draft the Securities Services Bill, which replaces existing legislations helping to regulate the financial markets industry across South Africa.

With a clear entrepreneurial flair, Newton-King was instrumental in developing the JSE’s Socially Responsible Investment Index, a vital program which helped to guide the company’s evolution and was, in fact, the very first index of its kind, at the time, in the world.

BUSINESSWOMAN OF THE YEAR With such an impressive and business-minded approach, it is no wonder Newton-King was one of three South Africans named as 100 Global Leaders for Tomorrow by the World Economic Forum and in 2003, awarded Business Woman of the Year in South Africa. In 2006, Newton-King was selected as a Yale World Fellow.

Subjected to a rigorous selection process, Newton-King became CEO of the JSE in January 2012, making her the first woman to run the company in its 124-year history. Impressive considering the JSE is Africa’s largest stock exchange and is ranked within the top 20 exchanges in the world.

YALE WORLD FELLOW Speaking at the Yale World Fellows event, Newton-King spoke of the JSE’s importance to Africa and plans for expansion: “The JSE is the largest exchange on the continent. 66% of Africa’s market capital in the southern part of the continent, we end with JSE being about ten times the size of Egypt and trading about six times Egypt’s value every day. The JSE is about 60 times the size

of the Kenyan Exchange and is trading 300 times what Kenya trades every day.

“The JSE in a single trading day trades more than six other African Exchanges…but the JSE is a minnow in the context of the global market. London Stock Exchange, which is in the same time zone, is four times the size of JSE. It trades five times the value of the JSE every single day.

“The New York Stock Exchange on its own, is five times bigger than London and trades between seven and ten times more in value a day, than the London Stock Exchange. So clearly the African exchanges are going to have to fight very hard to get a space in the global investment landscape.

“The first thing exchanges need to realise is no one owes them a living, exchanges only have a right to exist if they provide a service to the issuer and the investor. If they aren’t providing a way to bring the issuer and the investor together, people will bypass an exchange.”

It certainly seems that the Johannesburg Stock Exchange is in very good hands for the future with Nicky Newton-King behind the wheel. Not only is she managing and stabilising the market but she is also trying to improve it and perhaps, one day in the future, the JSE will move into the top 10 exchanges in the world.

For now at least, this Cape Town born businesswoman has come to manage one of the most powerful stock exchanges in the world. Responsible for negotiating and implementing the JSE’s major corporate transactions in addition to the development of corporate strategy, it’s clear Newton-King has enough entrepreneurial spirit to make a real difference to the future of the South African market.

.

sep 14 PAGE 37

Innovation

Filling the gap Editorial: Harriet Pattison Neil du Preez has created a revolutionary and innovative design that will not only make travelling in South Africa’s busiest cities much easier but it is hoped it will also drastically reduce CO2 emissions.

The high-tech electric pedicabs will offer micro journeys to commuters whilst providing an interactive onboard experience. Du Preez has high hopes of bringing Mellowcabs to cities all over the world…

With South Africa’s existing taxi industry carrying an estimated 60% of the country’s commuters, it seems as though there is a large gap in the market. In busy cities, commuters often travel just a few miles from the train station to get to work or to a conference and it is these short journeys which contribute greatly to urban congestion.

The pedicabs industry has been successful across the world, especially in European countries, for over 20 years. So in 2012, entrepreneur Neil du Preez decided to update this increasingly popular industry and bring it to the busy South African cities. Speaking to IndustrySA, du Preez explains: “I’ve always been really interested in public transport systems, and what it can mean for an individual and the economy.

Growing up in South Africa we didn’t have access to public transport. Then, after living abroad for a few years I started seeing transit systems in a new light and started working and developing ideas around micro transport.”

THE MELLOWCAB Mellowcabs are high tech electric pedicabs, manufactured from recycled materials, they are able to provide micro

PAGE 38 sep 14

distance journeys within a three kilometre radius. Small and nimble, Mellowcabs integrate seamlessly into the existing transport system so they are not in any direct competition with buses, cabs or trams.

The majority of commuter journeys in South Africa are less than four kilometres, which du Preez explains is actually true for many of the world’s cities: “Short urban trips are an extremely inefficient use of internal combustion engines, but would be ideal for electric vehicles. Our vehicle’s performance is on par or exceeds that of a normal taxi in some cases, which means we are quite at home in traffic. We’ve gone through extensive roadworthy testing, and comply with United Nations roadworthy standards, meaning we can operate legally and safely on just about any road.”

Speaking of South Africa’s existing transport system, du Preez explains: “We are vastly different. Mellowcabs’ manufactures and operates new, super cool electric mini-cabs that provide on-demand and affordable taxi services in cities.

These services can be provided, through our mobile app, call-centre or website. Mellowcabs will typically operate in a limited urban radius of three to four kilometres, and can provide over 120km of transport per day. These vehicles are

Innovation

aimed at providing affordable, efficient, and emission free transport in cities.”

Each Mellowcab is powered by both pedal and an electric motor and operates on monitored pre-planned routes offering quick connections between stations, hotels and conference centres. Its innovative technology on board includes regenerative banking, hydrogen fuel cells, human powered charging and illuminated body panels.

TWO YEARS IN THE MAKING Production began back in 2012 and is purely self-funded with R870,000 put into the business for the initial eight cabs.

“We’ve been working on it for two years now,” explains du Preez, “We had basic prototypes after about eight months which were intended as test models. We are now in the final pre-production stages of a new generation of Mellowcabs, featuring a brand new shell design, drivetrain and a host of other technological features, which will be revolutionary and a world first for micro cabs.”

The best bit about this South African innovation however, is that it is funded almost purely through advertising. “Our Mellowcabs have been designed to be very safe and extremely

visible, and to offer optimum advertising space on an aesthetically pleasing design. Urban advertising is a lucrative market, and we believe will play an important part in our revenue model.”

Not only do Mellowcabs sell advertising space on the outside of each cab, but on the inside too. Providing first and last mile transport in cities, connecting people with existing transport hubs, restaurants, hotels, schools, universities, conference centres and homes, the company hopes to attract large scale advertisers. The second income source is passenger fares, which provide a much more affordable option compared to traditional city cabs.

THE NEW MODEL This September, Mellowcabs is launching its brand new model: “All the previous models were just prototypes,” du Preez explains, “The new model is ground-breaking in every way, from the tech we use to the way it’s going to be operated.”

Added interactive extras on board for customers will revolve mainly around technology and social media channels allowing passengers to connect and share, helping with brand

sep 14 PAGE 39

Innovation identification. “Social media will play a large part of the Mellowcab experience. Selfie campaigns in cabs will feature quite strongly; all cabs are Wi-Fi hotspots and feature mobile device charging facilities” explains du Preez.

Each Mellowcab also hosts an on board tablet computer that will run geolocation software. This innovative addition will mean that when the cab approaches a restaurant the tablet will display and promote special offers of that specific destination. A virtual tour guide on board also means Mellowcabs are the perfect tourist attraction, displaying relevant and historic information when passengers hold up a tablet to different attractions around the city.

INNOVATION AWARDS Mellowcabs has recently been named a finalist in the Smart Cities category of The Challenge Cup after winning the Smart Cities category of 1776DC Challenge Cup with its innovative design and revolutionary technology for the new Mellowcab vehicle, launching this September.

This is a global competition which identifies and celebrates the best start up ideas which face big challenges along the

PAGE 40 sep 14

way. The competition is divided into four primary categories, Education, Health, Energy and Smart Cities. The last is the search for innovative ideas that will make our biggest cities much more sustainable, convenient and safe, especially concerning transportation, public safety and government.

Mellowcabs has also been selected as one of three finalists

“The new model is ground-breaking in every way, from the tech we use to the way it’s going to be operated” for the Global Innovation Award, which will be held in Berlin in October this year. South African company, Solar Plus Energy Investments Ltd and SpellAfrica from Nigeria are also competing for the award which recognises the most promising and innovative start-up companies outside the EU.

Innovation A GREENER SOLUTION

A FUTURE OF EXPANSION

With sustainability and greener energy becoming increasingly important to South Africa and to businesses, reducing CO2 emissions especially within the transport industry has become a real social challenge.

“Transportation produces approximately 23% of the global CO2 emissions from fuel combustion. More alarmingly, transportation is the fastest growing consumer of fossil fuels and the fastest growing source of CO2 emissions,” explains du Preez.

By using greener initiatives, du Preez explains the company is doing its best to help reduce its carbon footprint: “Mellowcabs provide emissions free, electric transport. Our vehicles are made from recycled materials, in a carbon-footprint sensitive environment, connected with a carbon sensitive supply chain. The vehicles are also completely recyclable, and we make use of sealed eco-friendly Lead Chrystal battery technology. We aim to construct and operate at least one Mellowcabs charging station that makes use of renewable energy sources, such as solar or wind power, every 12 months.”

Although Mellowcabs has only been running for a few years, du Preez is already looking to the future and for ways to bring Mellowcabs to multiple cities. “The transport sector is arguably one of the biggest in the world, people from firstworld high-income zones to run-down, dirt poor cities need efficient transport. We have a clear vision, which is to bring Mellowcabs to every major city in the world.”

This is not only an innovation that will help to reduce congestion and CO2 emissions in cities but one that will surely go down in history as making a real difference to the transport industry and to the economy. Du Preez has designed and developed a true revolution and I, for one, look forward to taking a ride in one.

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“We have a clear vision, which is to bring Mellowcabs to every major city in the world”

sep 14 PAGE 41

gADGET BOX

STRAPLINE

Green fuel?

Editorial: Harriet Pattison

Some of the world’s biggest airlines are involved in a revolution: A tobacco plant that could provide a much more sustainable and alternative jet engine fuel. Solaris is not only more environmentally friendly but it might just help to boost South Africa’s rural development too.

Biofuels have been found to work just as efficiently as fossil fuels but are derived from a much more sustainable and organic source, including algae, plants and agricultural waste. Helping to reduce pollution, it is estimated biofuels could reduce carbon emissions by up to 80% in the future.

The US aerospace giant, Boeing, South African Airways (SAA) and the Amsterdam based biofuel company, SkyNRG, have been in talks since last year to develop a greener solution to aviation fuel for South Africa. Signing a Memorandum of Understanding in October last year, SAA and Boeing agreed to implement a sustainable biofuel for use across South Africa, which would make it a first for the continent.

In a statement last month, J Miguel Santos, Managing Director for Boeing Africa, said: “It’s an honour for Boeing to work with South African Airways on a pioneering project to make sustainable jet fuel from an energy-rich tobacco plant.

South Africa is leading efforts to commercialize a valuable new source of biofuel that can further reduce aviation’s environmental footprint and advance the region’s economy.”

THE SOLARIS PLANT The hybrid tobacco plant, Solaris, has the potential to

PAGE 43 sep 14

create this alternative and much more sustainable jet engine fuel. It is already being produced by SkyNRG and can be grown by South African farmers for biofuel rather than its traditional and more commercial use. Maarten van Dijk, Chief Technology Officer at SkyNRG, said: “[We] strongly believe in the potential of successfully rolling out Solaris in the southern African region to power sustainable fuels that are also affordable.”

Presently oil can only be taken from Solaris seeds, which contain almost no nicotine. It is hoped in the future that the whole plant can be used for biofuel means. Ian Cruickshank, SAA’s group environmental affairs specialist explains: “By using hybrid tobacco, we can leverage knowledge of tobacco growers in South Africa to grow a marketable biofuel crop without encouraging smoking.”

The environmental benefits concerning biofuels are no doubt appealing to the aviation industry. The International Air Transport Association estimate that the airline industry contributes 2% of manmade CO2 emissions on a global scale and so, in 2009, it announced that the industry must cap these emissions and improve efficiency by at least 1.5% every year for the next decade.

South Africa alone, is aiming to reduce its carbon emissions

APRIL 12 PAGE 43

STRAPLINE

by 34% by 2020 and up to 42% by 2025 with the aim to use home grown biofuel within the next few years.

WHY TOBACCO? Although there are many more established biofuels currently on the market, tobacco remains a prominent choice for a number of reasons. Sourcing biofuels locally is a much more environmentally friendly choice helping to minimize transportation costs and ensure a much lower carbon footprint. Tobacco also helps to ensure problems between land and water use are not raised. The debate between fuel and food remains an ongoing challenge in the development of biofuels.

And whilst the South African biofuel industry has faced challenges in the past, largely due to concerns for food production and the increase in food prices, both Boeing and SAA want to ensure a biofuel is developed that will benefit the rural community, not endanger it.

A SUSTAINABLE FUTURE The Solaris plant has the potential to grow in several regions where traditional tobacco is currently cultivated, including parts of Asia, Europe and Latin America. “Test farming of

PAGE 44 APRIL 12

gADGET BOX

the plants, which are effectively nicotine-free, is under way in South Africa, with biofuel production expected from large and small farms in the next few years,” both companies said in a statement last month. It is hoped that by October 2015, South African fuel producers will begin the process by blending petrol and diesel with biofuels to save having to rely on imported fuels.

The new sustainable jet fuel alternative has already caused waves within the airline industry, with dozens of international airlines having already tried and tested biofuels. Boeing currently have biofuel projects running across six continents in a bid to help the development.

In 2012 alone, it is estimated that the world’s airlines spent $209 billion on fuel which is a staggering 33% of overall operating costs. Despite environmental and rural development benefits, some figures have shown that biofuels aren’t in fact, much cheaper than fossil fuels but advocates have confirmed that expanding the supply of biofuels would help in reducing these costs.

With airline fuel expenditure at an all-time high and worries for dangerously expanding carbon footprints, this new breed of tobacco plant might just be the answer for the future of greener flying.

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sep 14 PAGE 44

Siya Xuza

From Mthatha to Harvard Editorial: Joe Forshaw

Siyabulela Xuza fell in love with engineering when he was five years old and he saw a Cessna plane flying low over his home town, Mthatha. Since then he has gone on to create a new rocket fuel, he has presented in front of dignitaries such as Steve Wozniak and Michelle Obama, met the King of Sweden, attended a Nobel Prize ceremony and studied at Harvard University. He also has a planet named after him, 23182 siyaxuza, by the MIT Lincoln Laboratory. All of this and aged just 25, Siya is a remarkable South African now using his talent to address Africa’s energy problems.

Q: We often ask, what does it mean to be an Audi Ambassador? What do you actually have to do?

An Audi Ambassador is an individual who embodies at least one of the following qualities: sportiness, progressiveness and sophistication.

My duties of an ambassador range from supporting Audi at major sporting events; like the Le Mans 24hr race; representing Audi at functions; like the Nelson Mandela Foundation Lecture; as well as delivering innovation keynotes across the country

Q: How are you finding the Audi A4 2.0T quattro? Considering Audi’s historic culture of innovation and creative approach to design, do you feel at home in your car?

I absolutely love my Audi A4 2.0T Quattro and as an innovator, I certainly feel at home.

PAGE 20 Sept 25

Q: The Head of Audi South Africa, Ryan Searle, called you a ‘motivating South African role model’. In your work, do you try to be inspirational and act as a role model, or is that a by-product of the type of work you do?

It is definitely a by-product of the work that I do.

Q: Of your many many achievements and accolades, is there a standout moment in your life where you think you were most proud?

I wouldn’t have a particular moment but I feel a deep sense of pride when I am able to inspire others through my work. I am less motivated by achievements and accolades and more motivated by achieving significance in the world.

Siya Xuza

Q: Tell us more about your first innovation – creating a new rocket fuel. Where did you get your understanding of the chemistry involved? Did you have help from friends or family? Did you know at the time that the idea would have such an important impact on your life?

I surrounded myself with great mentors who assisted me with the chemistry involved. I had no idea where the project would end up. I was ruthlessly curious and deeply passionate about the project.

Q: Do you think it’s difficult for a young person growing up in South Africa today, especially in more rural areas, to access the type of training needed to follow a career like yours?

I think it is difficult but it is certainly not

impossible for young people in rural South Africa to follow in my footsteps.

Q: When you hear people talk about South Africa’s ‘skills gap’ do you think that more needs to be done to address the problem?

Absolutely. There isn’t a single solution to such a complex problem but I think we ought to encourage more expatriates to return to South Africa to make a positive contribution.

Q: What do you make of the news that Mandla Maseko will be the first black African launched into space, with dreams of planting the SA flag on the moon?

It is inspiring to hear about Mandla Maseko and I can’t wait for the day he plants the SA flag on the moon.

Sept 25 PAGE 21

Siya Xuza

Q: Do you think that in the future there will be more young South African’s attending Harvard University? How much of a benefit is a foreign education for any young African?

I hope so and I will do my best to assist young South African’s who want to study at Harvard.

My studies overseas, exposed me to new ideas and cultures which were immensely beneficial to my development.

Q: While there is a drive around the country towards improving energy efficiency in general, do you think that the improvement will ever be realised enough to make a real difference to overall CO2 emissions?

An improvement will be realised to make a difference to overall C02 emissions by aligning energy technologies with effective policies and finance.

Q: What progress has been made with the efficient storage of energy for domestic use? Do you think that there will be a viable option available for a mass market in the next five years?

Bloom energy is a US based energy start up that has made considerable progress with solid oxide fuel cells for residential and industrial applications.

I don’t think that there will be a viable option for mass market within the next five years.

Q: Do you think that storing solar energy for night-time use is going to change lives in Africa? What technology have you researched that could help with this development?

Have you received enough support from governments?

It will definitely change lives and as it decentralizes energy supply. I developed solid oxide fuel cells and demonstrated a breakthrough in the field, which was published in the Journal of Electroceramics.

PAGE 22 SEPT 25

Q: Where is your focus right now?

Do you hope to continue working on energy solutions? Do you think you’ll be able to continue developing innovative rocket fuels?

My focus right now is on establishing a diversified energy holding company that will be my primary vehicle for developing and investing in energy projects across Africa. The rocket fuel project ended in 2007 when I won a top award at the Intel ISEF Fair. When I started at Harvard, I shifted my attention to micro fuel cells for portable power strorage.

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Siya Xuza

SEPT 25 PAGE 23

Dragons’ Den

Who dares enter the Dragon’s Den?

Editorial: Harriet Pattison

The five Dragons have been announced for the South African version of the hit TV show which airs this September. Notoriously hard to please, the Dragons have a combined flair of entrepreneurialism and perhaps more importantly, wealth, to help mentor and invest in budding entrepreneurs brave enough to appear on the show.

Debuting in Japan, Dragons’ Den has now aired in countries all over the world.

Showcasing eager entrepreneurs with innovative business ideas and products, they each try and convince a panel of highly successful, wealthy and business minded tycoons to invest in their big business ideas.

Originally ‘Tigers’ in the Japanese show and ‘Sharks’ in the hit US panel show, the Dragons in South Africa will listen to each pitch before determining and negotiating how much of their own money to invest in the venture and what their stake in the entrepreneur’s company will be.

The first South African series will air on September 23rd on Mzansi Magic, with the five notorious Dragons announced earlier this

PAGE 26 sep 14

month. Nkateko Mabaso, M-Net’s Director for Local Interest Channels said of the Dragon panel: “We really have pulled together a very impressive collection of Dragons for the firstever south African Dragons’ Den. The diversity of entrepreneurial spirit and individuality of each of the five Dragons is certainly upping the stakes and is likely to play a big part in making Dragons’ Den unmissable viewing.”

“These are people who have travelled the entrepreneurial journey, either as champions themselves or as advocates of the cause, and they will bring incredible insight to the show. But also their individual experiences add a level of diversity that will make for some entertaining and informative viewing,” adds Enzo Scarcella, Chief

Dragons’ Den

Marketing Officer at Telkom.

Joining the panel is self-made millionaire Lebo Gunguluza, South African motivational speaker Vusi Thembekwayo, Chief Executive of Identity Partners, Polo Leteka Radebe, CEO of The Creative Counsel Gil Oved and Vinny Lingham, internet entrepreneur and co-founder of Gyft.

With a particularly poor upbringing, Lebo Gunguluza’s story is one of entrepreneurial flair, drive and successful networking. Awarded a bursary to attend university, it was here that Gunguluza discovered his talent for sales and negotiating working for a clothing store on campus. After graduating, Gunguluza became the Sales Executive for broadcasting giant SABC before becoming marketing manager of Metro FM

radio, all before his 25th birthday.

Gunguluza tried his creative hand at many other projects, including selling media space and starting his own restaurant before he found his current and increasingly successful venture, Gunguluza Enterprises and Media (GEM).

“I had grown up so deprived that I was determined to make a lot of money and never experience poverty again,” explains Gunguluza. “I set three goals: to become a millionaire by age 25, a multimillionaire by 35 and a billionaire by 45.”

Motivational speaker and business inspiration, Vusi Thembekwayo seems to be the more humble of the Dragons, offering advice to those wanting to reach their career potential. Speaking to Fin24 after the first week of filming the new series,

sep 14 PAGE 27

Dragons’ Den Thembekwayo explained: “I left the process feeling very optimistic about our country’s future. The level of education, thought process and attention to detail was really impressive and there were some really good business opportunities.”

Thembekwayo is the CEO of Watermark PanAfrican Capital Ltd and through his investments, holds directorships that give him influence of over R4, 32 billion in capital. Appointed as a nonexecutive director of listed property developer RBA Holdings in 2013, Thembekwayo is currently the youngest director on a JSE listed company.

Thembekwayo explains that many South African entrepreneurs want to achieve that successful end goal without working hard for it, which of course in the world of business is not a viable attitude. “So many people want to start at A and then get to Z without any process. They think Virgin happened in a day. Richard Branson started one business, then a few more. He had some failures and closed some businesses down. Then he started building again and eventually became successful. That’s how it

PAGE 28 sep 14

works.”

Polo Leteka Radebe, the only female on the Dragon’s panel, co-foundered Identity Partners in 2007. Now Chief Executive, the company helps to support and advise small and medium enterprises.

Radebe has previously worked with South African entrepreneurs through the Identity Development Fund.

Determined not to quit amid struggles through adversity is Gil Oved, the fourth Dragon in the den. Although Oved is Co-founder and CEO of hugely successful, The Creative Counsel (TCC), he admitted to Entrepreneur Magazine back in 2012 that the road to get there has been a bumpy one.

“People look at this company and are impressed by its growth, but in our minds there is always a degree of disappointment because we know how much bigger it could be and how much further down the line we would be had we not made many, many mistakes.”

Although the company now makes an estimate R500 million turnover, employing over 650

Dragons’ Den permanent staff, the success is impressive considering The Creative Counsel began with no capital or clients. Despite repetitive setbacks, Oved has helped in making a hugely successful company, investing and partnering with many businesses and is now recognised as South Africa’s biggest advertising group.

Oved recently assumed the role of Young Presidents’ Organisation’s Chapter Chair for Johannesburg and in 2013, he and long-term business partner Ran Neu-Ner were both awarded the Absa Unlisted Company Award for business excellence and entrepreneurship.

With such perseverance and experience in creating something from virtually nothing, it seems that Oved will be a valuable mentor to the budding entrepreneurs venturing onto Dragons’ Den. Lastly, joining the fiery Dragons’ nest is internet entrepreneur Vinny Lingham who funded his first technology business at just 24. Dropping out of university, he sold his house for a R125 000 profit and racked up R75 000 on his credit cards to start his

company, incuBeta, an investment holding company for online marketing companies. Its subsidiary, Clicks2Customers, remains the leading South African Search Marketing company and generated over $10 m/year in revenues within 4 years.

Lingham is also the co-founder of Silicon Cape Initiative which is a South African organisation hoping to transform the Western Cape into a thriving technology hub. In 2006 Lingham was awarded Top Young ICT Entrepreneur in Africa.

So it seems Mabaso, M-Net’s Director, is not mistaken as these five Dragons are certainly a force to be reckoned with. Although primarily an entertainment show, it will be an interesting watch, showcasing South Africa’s entrepreneurial spirit and creativity when it comes to business and innovation.

In countries across the world, Dragons’ Den remains a popular show with young entrepreneurs securing funding, recognition and the all-important mentorship from some of the country’s best business minds.

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sep 14 PAGE 29

Dragons’ Den

The rock star of speakers…

Editorial: Harriet Pattison Often referred to as the “Rock Star of Speakers”, Vusi Thembekwayo is one of South Africa’s top business and motivational speakers. Today he is the CEO of Watermark Pan-African Capital Ltd which holds interests in East & West Africa. The youngest director on a JSE listed company, Thembekwayo now has an influence of over R4, 32 billion in capital through his business investments. As one of South Africa’s most prominent Dragons, he reveals what we can expect from the new series: “It’s going to be a perfect reflection of the South Africa we live in and the South Africa we’re all trying to build.”

Q. What was your background like growing up and what you were doing prior to joining Dragons’ Den? When did you first discover you had a talent for public speaking?

I did public speaking at school and I won a couple of competitions. I got to go and compete internationally and I did really well. I travelled pretty much all around the world to do public speaking, to the USA and Australia, all while I was still at school.

I went to college to study ecommerce and got my postgraduate degree in business. Whilst I was studying I started my first business. I was kicked out of university when I was 19 for financial exclusion, which means that you can’t afford to pay your fees. So I built up a career in public speaking and I had a love for finance so I went and studied it part time in my own time.

I then got employed in corporate finance, which was the most amazing experience and exposure and whilst working there I was approached by the CEO to join the business, which was a fundamental shift to what I was doing at the time. When you work in corporate finance you get really good at cognitive work.

I took up the job and they wanted me to come up with a strategy for how to grow the business. They wanted a new frontier so I was the Business Developer and my job was to find new markets which I did. I

PAGE 30 sep 14

then became the General Manager for new business before becoming the additional Director sitting on the operations board in charge of all new markets and the business. So I was 25 years old running a R480 billion top line business, it was extraordinary and I built it from zero.

I employed a young, dynamic team and we literally built it from the ground and learnt a lot of important skills. When I was 25 I got tired of it, so I asked for the board’s opportunity to buy this business. At first I was met with a lot of resistance because it was the highest business contribution EBITA in the group, so whilst it was the smallest in turnover, our percentage EBITA was more than anyone else’s because we were operating in a new market. A couple of months down the line I get them to agree so I raised enough capital and we bought the business as a stand-alone. I ran it for about 18 months and then sold it to one of the large players here in South Africa.

One of the conditions I always had was I must be allowed a day a week to go and speak, it’s one of those things I’ve always done. I grew up doing it, I love doing it, it’s not like a job to me, and it honestly is a calling.

It puts me into environments I wouldn’t normally be in and I get to interact with so many different people and if you’re trying to grow a business, there’s no better way to do it.

Dragons’ Den

Q. What would you say the three main points are to be a successful and professional motivational speaker?

1) Track record and credibility are very important. In South Africa, I am told by the agency that I am amongst the busiest and highest earning in the country. One of things that’s important is credibility and if it wasn’t for my business, I don’t think I’d be having the kind of success I am in public speaking. My clients are businesses and executives who invite me to come and talk about business, about strategy and change. They ring me because I’ve got the credibility and proven track record and I can see precisely from their point of view. I’m not a speaker who has read a book about business, I am speaker who every single day works in business.

2) You must have the ability to hold an audience, have a command of the language and be able to connect with the people. I find it is either a mix of one, so either you have a speaker who has a great track record and credibility but who aren’t really great on stage or you have a speaker who is fantastic on stage but really they are just empty vessels with a lot of helium. They say a lot of stuff but they say nothing because they don’t have the credibility. I think I’ve been really blessed and

fortunate to marry the two successfully.

3) For the third I must say knowing your value.

I’m not the cheapest speaker around, in fact I’m probably one of the most expensive but I’m also one of the busiest. I think once you know your value and you know how to communicate your value, it’s very interesting what happens and people buy it. For me, I understand my value, I’m probably double the value of the average speaker in South Africa but that’s precisely because the audience want that thing that’s dynamic, so they invite me.

Q. How did you find the process of Dragons’ Den? Was it what you were expecting?

On the first day one of the directors said, ‘Please remember that TV is 95% behind the scenes and 5% action so you’re going to spend a lot of time here.’ I walked into the studio and I absolutely loved it, I loved every single second, I could do it for the rest of my life. I loved the ambiance, I loved the environment, I loved the entrepreneurs who came to pitch, I loved their stories, I loved the ones who were prepared and the ones who weren’t, I loved the ones who came in with numbers that didn’t match up or margins they hadn’t thought through, those who said they had a set of financials

sep 14 PAGE 31

Dragons’ Den when they didn’t and I loved the guys who came in with absolutely no clue of how business works.

I loved equally, the people who came in and really impressed me, there was a young man who came in, who is a first year student who raised one of the highest amounts in the series. He was just so impressive, he was the right kind of person with a track record of being an entrepreneur, albeit on a minute scale, but he was doing the right thing. He came in prepared, he understood his market and his numbers. He was just such an impressive young man.

The contrast is, we had a woman who came in asking for money and when we asked her what her revenue was, she didn’t know what it meant. When we explained, she gave us a ballpark figure and said ‘I think it’s going to be between R1-R2 million!’

I must say I dug into her and I can be quite candid, which its gets me into a lot of trouble. I was the guy who when someone came in taking a chance, everyone would say, ‘Vusi, get him!’ I suppose because as a young black person, raised by a single mother, there weren’t always a lot of opportunities to get a decent education, so I have high hopes for my people and for young black people. So when they came in, I was prepared for them not having done the work, I was the first one to claw into them, saying ‘You can do better than this and I know you can do better than this!’

So it was a week and a half and we were there from 7am and left at 7pm. I spent a week and a half with four incredible entrepreneurs, I literally came out of Dragons’ Den a transformed person. I resigned from two boards at two companies, I’ve completely changed the structure of our business and I’m starting two new businesses as we speak and all this from the experience I had, it really was life changing.

Q. How did you find the experience of working with the other Dragons? Did you get on well or did you find yourselves fighting over some of the more impressive entrepreneurs?

People would come in and pitch and we’d see things completely differently, and we argued and we fought. It was amazing just to see how, even though we’ve all done fairly well as individuals, we all saw the world from a completely different view.

We were looking at the same picture but we saw it

PAGE 32 sep 14

from a completely different perspective.

One of the things which we, as Dragons, are very passionate about is the education process.

Because of the challenges we have around education, it gave us a platform to educate with the entrepreneurs. Even the language we used, such as revenue and gross margins, the reason we used this language was for the would-be entrepreneurs watching the show at home so they would think, ‘I need to find out what this is before I start my business.’

Q. Before you went on the show, did you have any innovations or specific industries in mind that you wanted to invest in? Similarly, were there any industries you didn’t want to invest in?

We came from different perspectives, Gil runs the largest advertising marketing agency in the country, so he came with an advertising and PR feel. He runs a mammoth business and I have a lot of respect for him. Vinny is more of a tech guy so he came in looking to invest in tech businesses. I come from retail, cash and carry so I was looking at those opportunities but I also know that it’s a dog industry, the margins are thin and there’s nothing new in it. I came in with the view that if it’s exciting and I have the propensity to learn it in a reasonable time, I’m going to look at it very seriously.

I knew that I wasn’t going to look at anything to do with cigarettes or alcohol, I was completely out because I don’t agree with either of those industries. Anything else I was more than happy to look at, as long as the margins were fair and you had an opportunity within a reasonable amount of time to realise the money being spent on that transaction.

Q. Was there a limit on how many investments you were able to make?

There were no limits, you could do as many or as little as you wanted. The main cardinal rule of Dragons’ Den is that the amount the entrepreneur comes in looking for, they must leave with the full amount or they get nothing. The only real flexibility you have is surrounding the equity portion of the transaction but the amount they come in looking for must be the amount they exit with.

Dragons’ Den Q. What can South Africa expect from the first series of Dragons’ Den? I’ll tell you exactly what they can expect: a complete reflection of South Africa as a society, anyone who has ever had doubts on the impact the past has had, more specifically on black people, or the impact of the poor levels of education on young people, or anyone who has ever had doubts on the extent to which our economy remains the exclusive reserve of only a certain group of people will see that all reflected in this season of Dragons’ Den. It was almost as if the show did that deliberately.

It was uncanny how the issues and social issues we speak about came to fore in the Dragons’ Den about people’s confidence and their ability to understand business, their ability to understand numbers and to take themselves seriously, it all just came together.

So what I can promise to any South African watching the show, if you wanted to hold up a mirror of our country, this is probably the show you should watch.

I don’t like to think we were unkind, but if

somebody came and there was an opportunity to have a go at them, we certainly did that. There were people who pitched their businesses and in the moment, for whatever reason, you had to laugh because it’s a reaction. Of course it’s been captured by the cameras, but it was incredibly funny. The spirit of people was absolutely incredible, it’s going to be a perfect reflection of the South Africa we live in and the South Africa we’re all trying to build.

Q. Lastly, will you be watching the show?

I do intend to watch it, I want to see every single episode but I will not be on Twitter when it does air because I am going to absolutely crucified by the twitter police in South Africa. I suppose when you have fairly high standards in terms of the work, then people who don’t necessarily agree with that are going to have something to say about it. I’m going to go on a sabbatical on all my social media platforms until it ends because I just don’t want to see what people are going to be thinking!

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sep 14 PAGE 33

Dragons’ Den

The advertising genius…

Editorial: Harriet Pattison

Getting into business at just 15 years old, Gil Oved has come a very long way, creating a hugely successful and admirable journey along the way. 14 years ago, he started The Creative Council which today is South Africa’s biggest advertising agency. His advice to entrepreneurs? “Bite off more than you can chew and then chew like hell!”

Q. Growing up, when was your first venture into business and what challenges did you face along the way?

I started working at the tender age of 15, whilst still at High school. I was a presenter on a TV show for five years. It was a teen magazine program, it was like a Blue Peter for South Africa but I soon found that my real fascination was behind the scenes, it’s way more fun to direct and have a vision than being told what to do and say.

I then ventured into my first real business which was a TV production company which I started with a co-partner called Vusi (a different Vusi!).

We made TV programs for a few years, I loved it and we were good at it but it is always difficult to get a company like that off the ground, especially when dealing with a national broadcaster. I didn’t want that inconsistency and reliance so I partnered up with my current partner, we were high school friends.

It was the days of the internet boom so we

PAGE 34 sep 14

decided to set up an internet portal so we raised a few million rand and we developed that for about two and a half years but unfortunately in 2000 we lost everything. It was devastating at the time but little did we know it would be very beneficial as a means of growing and learning. Often, when I invest in entrepreneurs now, I ask how many time they have failed and the more times they have failed, the more likely it is that I’ll invest behind them.

In 2001, on the back of yet another failed venture, we decided to start a creative council which was about 13 years ago.

Q. What is The Creative Council and why do you think it’s so successful?

We got involved in The Creative Council which initially was an in-store promotions company which meant we found promoters to stand in stores to promote detergents, toothpastes, cheese and yogurts. At the time, we knew nothing about

Dragons’ Den

advertising but it seemed like a fairly low barrier to entry business and the industry at the time was fairly primitive. At the time we just needed enough money to pay for the petrol to get us to the office so that’s how it all started.

What we were unaware of is that we entered an industry which was about to go through a revolution. So this whole idea of below the line marketing, on non-traditional advertising so we found ourselves unexpectedly in the midst of this revolution and so we took the opportunity and pioneered it. So I guess fortune favours the brave and now 13 years later, we are the biggest advertising agency in the country from a revenue and staff compliment perspective. What’s really interesting is that it’s the first time a nontraditional ad agency is in the number 1 spot and perhaps what’s more interesting is it’s an independent as it stands.

It’s a combination of a lot of luck, the right place right time and pioneering this industry of

non-traditional advertising, otherwise known as real consumer engagement. What we focus on as an agency is not just a standard 30 second TV commercial or radio advert but anything that engages consumers on a very real and relevant basis and gets them to either act or transact. We’ve never won a creative award in our lives so if we’re creative it’s for the purpose of creating an objective.

Q. What advice would you give to budding entrepreneurs?

How much time do we have? If I had to summarise it into a few points, I’d say the first, is to find something that you are passionate about.

All too often I see entrepreneurs getting involved in industries they do not really care for but think they are great opportunities. If you’re passionate about an industry then you’ll find success within it automatically because you’re interested in it.

Secondly, immerse yourself in homework, ensure you understand your competitor’s environment and

sep 14 PAGE 35

Dragons’ Den that you understand the risks.

Thirdly, surround yourself with brilliant people. You cannot be a master of all trades, as an entrepreneur you’ll more likely have to be a Jack of all trades. There are going to be people out there who will be better than you at pretty much everything. Entrepreneurs always worry that there are people around them who are better but I say: “You’re the one who’s putting it together, you’re the one who’s taking the risk. The other guys may be smarter, or more knowledgeable in certain elements but you’re the one taking the initiative.”

There’s huge value in that. Often entrepreneurs undervalue themselves, but they’re the ones who are creating brilliant opportunities, growing economies and margins, they’re the innovators. So surround yourself with brilliant people but trust yourself. All too often other people will believe in you more than you believe in yourself. I often say: Bite off more than you can chew and then chew like hell!

Q. How did you find the process of Dragons’ Den? Was it what you were expecting? Did your previous experience of TV help you?

We do quite a few TV work and interviews now so in that respect, there was nothing out of the norm but I found the process much more professional than I expected. The production company that run it, Rapid Blue, are consummate professionals, coupled with the fact that the format has had years to ensure the process is perfected.

What was amazing, from an insider’s perspective is how similarly in economics you have models, you keep everything constant bar one thing and then you see how relative to the controlled environment that one thing has an impact on the rest of the environment. The same thing applies to Dragons’ Den, in the sense that everything is the same except for the investors. It’s a real insight into a country’s culture. What I found in a few other series of the show is because of the more developed economies, the Dragons’ could afford to be more cut-throat and decisive. In South Africa we have the concept, ‘Ubuntu’ which is like a brotherhood and a sense of community. So that, coupled with the fact we feel so strongly about mentorship, is although it looks similar on the outset to other series of Dragons’ Den, the kind of interaction we had was different.

So we’d say, “I’m sorry, I’m out” but then spend

PAGE 36 sep 14

about 20 minutes explaining why and guiding this entrepreneur as to why it didn’t work and who they should contact. Even when we would break for lunch, we would talk to these failed entrepreneurs on how they can pick themselves up again.

Another observation, that bar Vusi, we didn’t know each other. We met each other in the wardrobe area for the first time but it was absolutely uncanny and something magical happened. We sat down and each one of us had an amazing connection with the other. It was beyond the sweetness that you experience at the beginning of a relationship, it was as if we had known each other for many years so as a result; we fought a lot, we bonded a lot and we partnered a lot. It was like a very advanced and mature relationship that we had!

We did a lot of deals together and all the deals I did was with at least one of the other dragons.

Once or twice I did try and get in on a deal, knowing I had no value to add but I trusted the other dragon so I tried to get in on their coat-tail but on one occasion, one of the Dragons’ said: “Gil, I really don’t need you, I like you a lot but I don’t want you as my partner on this!”

We agreed from the beginning that we must say it how it is and be authentic because our own personal money is on the line. We’re taking big risks so you need to know that the people you’re partnering with are people you trust.

Q. Before you went on to Dragons’ Den, were there any industries you were particularly interested in investing in?

I’ve never actually thought about that until now but before I got on the show, my business philosophy is that I’m not a banker. I don’t really care for businesses that just need my money, I need to feel that I can add value and use my industry experience and contacts, otherwise it’s cheaper for an entrepreneur just to get money from a bank. I feel quite strongly about that, so I thought I’d only get involved in businesses that I know which is actually quite limited. I often say to people, honestly, that I know a lot about very little, unfortunately!

It’s a very niche industry, so I thought I would look for media, advertising agencies, marketing and sales but ironically, there were very few businesses in those industries. From what I learnt on Season 1 on Dragons’ Den is that 80% of business is the

Dragons’ Den same, it’s about certain fundamentals. It’s about the jockey not the horse. Horses change over time and companies change but you buy and invest in a business for the people, for the jockey and not for the horse. So 80% of it is about the right people, making sure they have the passion and are innovative. The remaining 20% is very technical.

I found that I was investing behind people that I liked and wanted to be involved with so in terms of industry, I was totally open. Now I’m involved in really wild industries that I have no idea about but I’m learning very quickly!

Q. What can South African’s watching Dragons’ Den expect to see?

Not only will it be highly entertaining but more importantly, it will be informative. We invested a lot of energy, time and effort in feeding back and mentoring and we felt it incumbent on us to set the standard and the tone. Some would argue that we were overly harsh, others that we pandered

too much. We live in a country where there is rife unemployment and education that is sorely lacking and entrepreneurial opportunities that are not as common as other countries. So we’re hoping to stimulate that kind of thinking and raise the bar and give back in the form of information, but of course, as always, to entertain.

Q. Are you excited to watch the series?

The production company mix and match all of the entrepreneurs to make it as rich with content and entertaining as possible so we have no idea which investments will be coupled with which or which tone the show will take. I’m highly anticipating the premier, I have coordinated a mass gathering of my family and friends and we’re going to have a party but we’re yet to decide whether it be a celebration or commiseration! I plan to be very active on Twitter and social media, so hopefully I can add some extra entertainment and information during the show.

.

sep 14 PAGE 37

company profile

Fancy a snack?

Editorial: Harriet Pattison Production: Hal Hutchison

With Nax, Sniggles and Wiggles, Sneaker Snacks is one of South Africa’s best-selling snack companies.

With new product lines on the horizon and plans to expand further into Southern Africa, it’s easy to see why this company has experienced such exponential growth in just 15 years…

When we tend to think about the day ahead, what we have planned and where we need to be, having lunch at a set time is not always feasible. This is often where snack-time comes in. Whether you have a sweet tooth or a savoury one, snacks help us through the day until our next main meal.

In 1998, partners Boris Popovic and Geof Main spotted a gap in the South African market for tasty, convenient and moreish snacks. Today, Sneaker Snacks has grown into a reliable and customerfocused company, selling both hard and soft extrude maize-based products, potato chips and maize based sweet snacks.

Soft extrude products are made from maize grits using a different process to that of the hard extrudes.

Whilst the former is baked with flavourings applied through slurry methods, hard extrudes are crunchier

PAGE 38 sep 14

and are fried before flavours are added.

Speaking to IndustrySA, Co-founder and Managing Director, Boris Popovic, explains the reason for starting the company: “There was some consolidation among some of the bigger players and we saw there was a gap for smaller to medium companies to come into the market. So we came in to primarily serve the mass market in South Africa.”

Popovic admits it was “a big career change” as both came from completely different backgrounds before starting up Sneaker Snacks. While Popovic was in the commercial property development sector, business partner Geof Main came from a computing background.

EARLY EXPANSION “We started off small with one product line,” explains Popovic, “This was the hard extrudes product, the

Sneaker Snacks

Sneaker Nax. Over the years we’ve added a number of new lines and expanded our production capacity.

At the moment, we produce potato chips and whole range of extruded maize products in various flavours and packaging configurations .We also produce maize based sweet product lines in the form of “Craze Pops” and “Fruities.”

Starting out in a modest factory, at just over 1000sqm, Popovic explains that as production grew and the company continued to expand, it outgrew many other factories along the way. “Five years ago, we bought our own property and built a new factory on it. We are bursting at the seams again so we are looking to expand and at acquiring another property.”

INDUSTRY COMPETITION Since the company’s inception 15 years ago, competition in the industry has continued to grow

but by increasing its product range, maintaining competitive price points and maintaining high quality, Sneaker Snacks remains a key industry leader.

In an interview with The African Business Journal, Geof Main explains: “When we started, we had a handful of players in the market; you could count them on one hand. Almost 15 years down the line, there are upwards of 150 competitors, so we rely on our diverse product range, high service levels and producing a quality product.”

Popovic explains that Sneaker Snack’s brand image was a vital step in setting it apart from the competition: “A lot of our competitors tried to pirate and copy established brands in the existing market but we moved away from that, we established our own identity through our logo and through the branding of our products.”

sep 14 PAGE 39

company profile

Expanding into bigger premises and into neighbouring African countries has also helped to establish the company as a big name player in the industry. Popovic explains: “We cover most of Southern Africa in terms of our footprint. We are looking at expansions, additional snack lines and have ordered new equipment. We will be offering another product range by the end of the year too. We are also expanding our existing lines and increasing our capacity. In the next year or two, we are adding additional lines which are complementary to our snacks and are more in a general food line category.”

Despite more competition emerging in the market, Popovic explains that “through our volumes we are

PAGE 40 sep 14

able to keep our prices competitive and still focus on product quality and growing our brand in the market.”

Many of Sneaker Snacks’ products are sold to wholesalers and cash and carry businesses who in turn sell it on to smaller stores and the hawker market. “When we started we only packed into 1kg or 2kg plastic bags and then hawkers would decant this into smaller packaging sizes and onsell to the end consumer,” Popovic explains. Over the years the mass market has become much more sophisticated and quality packaging and branding has become important. Today, Sneaker Snacks provides conveniently-sized snack packets, perfect for school

Sneaker Snacks lunch boxes, sealed in quality foil packaging for freshness.

QUALITY FOCUSED Popovic explains that in the early years, much of the competition tended to focus on price points rather than quality of the product. To help raise the bar even further, Sneaker Snacks decided to steer away from this and attract the top end of the market, focusing on those who were willing to pay for good quality.

“Quality focus was always at the forefront of our business, especially in the early years because a lot of our competitors competed on price alone and the quality was the secondary issue. We decided to target the top end of the mass market, the people who would be prepared to pay a premium for quality.

“This has always been the cornerstone of our business and still remains today. We’ve invested in the best equipment money can buy, state of the art packaging machines and in house, we’ve developed technology and processes that enable us to maintain that quality and continue to improve it,” explains Popovic.

SOUTH AFRICAN FAVOURITES The company has two major lines which continue to be popular across South Africa and into neighbouring countries. Popovic explains that Nax remain the company’s best seller with flavours ranging from cheese to chilli tomato and Sniggles, the soft extrude puffs which are available in white cheddar and spring onion, butter-fried corn or chilli-fried corn. The baked soft extrude products “are very well received,” says Popovic, adding: “We’d like to grow the potato chip line in the future.”

Coming up with new products that will be just as popular to consumers is not always an easy process but Popovic explains it is all about trial and error.

“The mass market in South Africa is very difficult to read, a lot of companies get it wrong and a lot of it is trial and error. You come up with an idea, but until you push it into the market, it’s very difficult to gage if it’s going to work or not. We do market research and samplings but there’s nothing like putting the product into the market and seeing what happens.

Over the years we’ve introduced lots of new products, some of them worked but some of them haven’t worked and that’s the nature of the game.”

Supplier of corn-based snack food processing equipment.

MADDOX ADAMS INTERNATIONAL SA

Address : Cnr. Lamp and Lantern Roads, Wadeville, Germiston, South Africa Email address : maddoxad@iafrica.com Telephone number : +27 (0)11 824 2847 Fax number : +27 (0)11 824 2849

SEP 14 PAGE 41

company profile

PAGE 42 sep 14

Sneaker Snacks RUNNING 24 HOURS A DAY With such exponential growth over the last 15 years, Sneaker Snacks now has 350 employees, all playing their part in ensuring the company remains customer and quality focused.

“The manufacturing is where it all starts, our factory manager looks after all the factory production and we run 24 hours a day, either five or six days a week, depending on demand. Within production there’s quality control, dispatch and distribution. We have a fleet of our own trucks which we use for distributing our own product to service our customers. We are also using contract transport, especially for long haul and export business.”

With Geof Main head of Sales and Marketing, Popovic explains the sales division ensure contact is kept with the customers on a regular basis. “Our business relies heavily on our relationships with our customers and Geof ’s primary task is to establish and nurture these relationships. We have sale reps on the road and telesales that are in contact with customers on a daily basis, seeing what their requirements are

and taking orders. We also have merchandisers and promoters that ensure our products are merchandised and displayed correctly.”

Of course, like so many food products, specific times of the year are busier than others with school holidays a particularly quiet time for the company, while the beginning of the year sees an increase in both sales and activity.

With healthier snacks becoming much more of a trend in the market, Popovic explains that through use of latest technology and best manufacturing practices, the company produces fried snacks with one of the lowest oil contents

“We cover most of South Africa in terms of our footprint. We are looking at expansions, additional snack lines and have ordered new equipment”

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company profile in the market. New, baked products with very low oil contents will be launched soon to cater for the health conscious segment of the market.

The company is also working very closely with flavour suppliers to reduce the salt contents of its products.

A SUCCESSFUL FUTURE Building on such a successful company, Popovic attributes its ongoing success to four main factors: dedicated staff, the quality of the Sneaker Snacks’ product, ensuring price competitiveness and focusing heavily on customer service.

Looking forward to a successful future, Popovic explains it’s all about expansion: “We definitely see more growth potential in our existing lines, with potential to expand our product range. We don’t just want to be leaders in our existing lines but the leader in other lines too.”

.

A multinational success at the tender age of 16.

FNB is proud to congratulate Sneaker Snacks on 16 years of outstanding success.

MetropolitanRepublic/15340/E

From a modest factory with a single production line, they’ve grown into a multinational manufacturer producing almost 1 300 tons of maize products monthly. And we’ve been with them every step of the way.

Here’s to a future of success!

If your business is going far we can help you get there.

For more information, contact Jacques Mendes on (011) 263 5281, 082 860 2876 or email jacques.mendes@fnb.co.za First National Bank – a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).

PAGE 44 sep 14

Passionate, Creative, Colourful

Sneaker Snacks SA

SUPPLIER OF FLAVOURS AND COLOURS TO THE SOUTHERN AFRICAN AND SUB-SAHARAN AFRICAN FOOD INDUSTRY

Versachem is a proud supplier of Colours & Flavours to Sneaker Snacks Versachem is a well-established ethical manufacturer.

Our facility achieved FSA Good Manufacturing Practicecertification in 2012 to give our customers peace of mind in terms of consistent product quality, safety, and traceability.

We are also able to manufacture and supply Kosher and Halaal-certified colours and flavours on request.

Our qualified Food Technologists & Flavourists develop innovative colours & flavours in our laboratory and we produce consistently high quality products at competitive prices We are members of the South African Savoury Snack Food Organisation (SASSFO), South African Association of the Flavour & Fragrance Industry (SAAFFI), and South African Association for Food Science & Technology (SAAFoST).

We supply Colours & Flavours to the following industries:

• Extruded Snacks

• Bakery

• Potato Chips

• Beverages

• Processed Meats

• Candy

• Sauces, Gravies & Soups

• Confectionery

• Nuts

• Dairy

• Soya

• Pet Food

• Agricultural

Tel No. : +27 12 653 4447 | Fax No. : +27 12 653 7561 e-mail : info@versachem.co.za | websitre : www.versachem.co.za Address : 5 Marconi Nook, Hennops Park, Centurion, 0157, South Africa

sep 14 PAGE 45

company profile

Acquiring valuable assets…

Editorial: Harriet Pattison Production: Hal Hutchison

Since its inception in 2011, Arrowhead Properties has shown exponential growth.

CFO, Imraan Suleman, tells IndustrySA that the company plans to venture more into the residential market with hopes to create a standalone listing and grow its commercial assets to the value of R15 billion within the next five years.

When IndustrySA last spoke to Arrowhead Properties in March last year, the growth and potential of this company was already shining through, considering it was only started in 2011.

This month we speak to Imraan Suleman, Chief Finance Officer who explains why, just 18 months on, Arrowhead Properties has come on leaps and bounds, with further exciting growth plans for the future.

“Since March last year there has been huge movement forward within the company, it is largely a very different company to what it was last year. In terms of property value and number of properties, our total portfolio value in March last year would have been about R2.8 billion, we now have an asset base of R7.2 billion, so we have grown significantly

PAGE 44 sep 14

in that time.”

Within the last year Arrowhead has been a prominent player in the industry consolidation that has been taking place. Suleman explains that this consolidation had been called for by industry watchers for a couple of years and as a result, Arrowhead has acquired a competing fund: “We have acquired Vividend Income Fund Limited, which was unconditional two weeks ago and paid for two weeks ago. It was a share for share transaction and we acquired a portfolio of R2 billion. In addition we acquired a further R2 billion from various other parties.”

INVESTING IN RESIDENTIAL PROPERTY Arrowhead’s main focus tends to be more on the commercial side, across retail, industrial and office

Arrowhead Properties

space but in the future there will be equal focus on residential and commercial. Suleman explains that within the South African property sector, there are multiple commercial players but fewer in the residential market.

“There hasn’t been a focus on residential fund, Mark Kaplan (COO) and I attended the NAREIT (North American Real Estate Investment Trust) conference in the US last year, we had a look at the properties within the United States and saw that around 11% of the total market capital was sitting in residential properties, so we came back with the vision to start up our own residential arm.

“What we found was there was significant appetite from both institutional funders and equity capital to fund these types of acquisitions so we went about looking for residential property. To date

we’ve acquired R600 million worth of residential property. We’re now looking to aggressively grow that portfolio in the next 12 months to R2 billion.

I think that’s quite a significant move on our side, we would hope that in time to come we could build a portfolio that would be large enough to be a standalone residential fund.”

STRONG STRATEGIES What continues to set this company apart from industry competition is its unfailing strategy to only look at a potential acquisition if it offers a yield in excess of the company’s costs of funding and is enhancing to the company’s existing distribution. This remains true whether the company is dealing with commercial or residential property.

sep 14 PAGE 45

company profile Johannesburg Housing Company, he’d been there for seven years and was second in charge to the CEO. He was responsible for managing 4,000 residential units that the Johannesburg Housing Company own, he’s very experienced in his field.”

VIVIDEND INCOME FUND In December last year‚ Arrowhead bought 31.7% of Vividend Income Fund’s linked units from Coronation Asset Managers in a deal valued at about R430 million. The transaction added R2.3 billion worth of commercial, industrial and retail properties to Arrowhead’s current portfolio.

“In terms of the Vividend fund, we looked across the sector and we looked at yields that were trading above Arrowhead, it was in keeping with our strategy to acquire at yields in excess of our cost of funding,” Suleman explains. “We approached one of the larger shareholders, Coronation Asset Management, who held a 31.7% stake in Vividend.

“In the last 18 months, we’ve bought between R3.5-4.5 billion worth of property, R600 million of that was on the residential side, so the way we look at residential at present is an extension of Arrowhead’s strategy,” explains Suleman. “Our strategy is to buy yield enhancing assets and we would assess those in whatever sector the opportunity would present at that point in time and we see residential as an extension of that. This gives us more opportunity to buy property and grow the fund.”

CONTINUED EXPANSION Starting out with just 84 properties, Suleman explains that Arrowhead’s portfolio has continued to grow in the three years since it began: “We’re now approaching the end of our third financial year, obviously our property portfolio has grown significantly, up to R7.2 billion and 185 properties in total and the average property size has grown to R40 million.

“As the property portfolio has grown, we’ve added asset managers and legal resources. We’ve also brought on one specialised person for the residential side of things, he was from the

PAGE 46 sep 14

“In terms of property value and number of properties, our total portfolio value in March last year would have been about R2.5 billion, we now have an asset base of R7.2 billion, so we have grown significantly in that time” “Over the course of a year, we’ve engaged in discussions with them where we have proposed a swap ratio, so for all of the Vividend unit they held, we proposed issuing them with new Arrowhead A and B link units at a ratio that was accretive to Arrowhead from an income perspective. Over the period of a year those negotiations have taken place and initially we proposed a ratio that would give us the accretion that we were looking for and that didn’t suit Correlation so it was turned down. After a year or so we agreed a swap ratio that was satisfactory to both parties.

“What attracted us to Vividend was the quality

Arrowhead Properties

of the portfolio, it had strong retail bias and its biggest asset was in access of R500 million, Access Parking in Cape Town. We really thought it was the type of asset from which Arrowhead could attract serious value. It was a perfect fit for us and it offered us yield accretion whilst improving the quality of our overall portfolio,” explains Suleman.

PROMISING PROPERTY PRICES Last month, real estate counters reported listed property prices had rallied at about 5%. Keillen Ndlovu, Stanlib’s head of listed property funds, said in a statement that the recent rally in property share prices meant the sector’s total return of 11.8% for the year to date had exceeded predictions. Property analysts expected a total return of no more than 8%-10% for the year. The Stanlib figures place Arrowhead in the top five for year to date figures among the 38 counters within the R300 billon listed property sector with a total return of 21% for B units.

Of the results, Suleman says: “It’s very positive – we are trading at a forward yield of around 9.5%, the sector range is about 8% so we are

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company profile

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Arrowhead Properties trading at a discount to the average sector. We believe Arrowhead should be rerated to at least the sector average. We’ve consistently paid growth distributions in excess of the sector averages and we’ve grown significantly.

“In March this year we released interim results, we performed a calculation on the properties we owned over 2012 that we still owned in October 2013 and we mapped out the performance for the six months from end of March 2013 versus the six months end of March 2014 and we showed that the core properties had grown at a property level at 7% net growth, before gearing. Including the effects of gearing, the performance of that portfolio would grow in excess of 9% which again, was above the market average of 8%. We believe there is a case for the average share price to be at least that of the market average.”

A SUCCESSFUL FUTURE With such an impressive portfolio to date, Suleman explains Arrowhead has no intention to move out of South Africa at present: “We’re

finding enough opportunities in South Africa to achieve our objectives. We may look to expand our horizon if we find that the pipeline we’re currently enjoying has started to dry up.”

Speaking to Mark Kaplan last year, he explained that looking to the future the company was hoping to achieve a R10 billion asset base by 2016. 18 months on, Suleman explains: “We’re well on track to achieving that. We’re three years into that five year plan and we’re 70% there already. We’ve got an asset base already at R7.2 billion and we’ve got pipeline that could potentially take us up to R8.5 billion.”

In addition to the company’s five year plan, Suleman explains Arrowhead is looking to increase its residential assets within the next few years too: “In a period of 12-18 months we’d like to see the residential side increase to R2 billion at least. Once it reaches a critical mass we’d like to spin that off as a standalone listing. On the Arrowhead commercial side, our new five year plan from here would be to take asset value in excess of R15 billion.”

.

Imraan Suleman

sep 14 PAGE 49

company profile

A fresh egg is…

Nulaid Editorial: Harriet Pattison Production: Hal Hutchison

Producing an estimated 2.7 million eggs every day, Nulaid has come a long way since its inception. With products ranging from freerange eggs to liquid eggs and day-old chicks, Nulaid continues to place a large emphasis on the importance of animal welfare and food safety which will, no doubt, secure its place as South Africa’s single biggest egg farmer for many more years to come…

Over the decades, the egg industry has become a highly developed and successful one. With new modern technologies

single age farms or sites on larger farms with an allin, all-out replacement program.

and cost effective production facilities, egg farmers are able to produce hundreds of thousands eggs every single day on just one farm alone.

Up until March 1989, Nulaid was developed under the ownership of Premier Milling, and Lemoenkloof was developed under the ownership of Bokomo. Nulaid was later formed as a result of the amalgamation of the two companies under the sole ownership of Bokomo, who saw a market opportunity for chicken farming.

From its inception, Nulaid’s philosophy has remained consistent: to develop separate specialised pullet rearing farms, improve biosecurity measures and to convert the layer farms as far as possible into

EXPERIENCE SPANNING THREE DECADES

PAGE 50 sep 14

Roelof Viljoen, Executive Manager at Nulaid, explains the successful set up of the company which has shown such impressive growth over the last three decades.

“We farm with the Lohmann breed and import grandparents from Germany. We have a grandparent facility where we produce day old parents which are transferred to our parent rearing and breeding farms where they produce fertile eggs. At our two big commercial hatcheries we produce day old chicks which are reared for 18 weeks on one of our six rearing farms. From here, at 18 weeks we then

Nulaid

transfer the point of laying hens to a commercial layer farm. �

With eggs gathered daily, they each undergo a strict and rigorous grading process. The quality of the eggs is determined by means of the candling method without having to break the shell. Each egg is rotated under a harsh light and the quality of the egg yolk, the egg white and the air space is monitored.

The eggs that do meet these special requirements are then sold as a checked quality egg. A number of eggs do not go through the process however and these are classified as ungraded and are sold fresh from the farm direct to the customer.

Naturally, the graded eggs are more expensive as they go through a more costly process. These are sold to more formal retailers and wholesalers where

ungraded eggs are sold to separate markets. While the eggs are not sold directly to the public, Viljoen explains its biggest customer base are the four national retailers; Shoprite, Pick ’n Pay, Spar and Walmart South Africa.

In addition to selling free-range eggs and canola eggs, with the latter the chicks are fed a balanced feed with added canola and therefore the egg is higher in certain omega oils, Nulaid also sell dayold chicks and point of lay hens to other farmers.

Liquid eggs are sold to industrial customers, including mayonnaise manufacturers.

SPREADING THE COMPANY’S FOOTPRINT Despite nearing 25 years since its inception, Viljoen explains that the industry has faced challenges but

sep 14 PAGE 51

company profile

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the company is still hoping to increase its footprint further into neighbouring African countries in the coming years: “In South Africa our industry has been through fickle times with high maize and soya prices which make up a big proportion of the cost of chicken feed.

“At this time we do not plan any big expansions on the commercial side in South Africa. In terms of moving to Africa, the Quantum foods business of which Nulaid is part, owns two operations, one in Zambia and one in Uganda. Both of these are built around parent farming. In both Zambia and Uganda, these were started as parent farming businesses so the product they sell there is day old layers and day old broilers. In Uganda and Zambia this is the current business plus we have a commercial layer operation in the Copper Belt. We are looking into future expansion with increasing our footprint in Zambia and Uganda.”

Nulaid has ensured that it remains competitive with a philosophy to ensure it is fully integrated with its own breeding farms, hatcheries, pullet rearing and commercial egg laying farms to grading, packing and marketing of eggs. This business ethos was based on the view that the balance between supply and demand and therefore profitability in

PAGE 52 sep 14

the commercial egg industry was always going to be cyclical.

THE SINGLE BIGGEST EGG FARMER “Competition in the egg industry has always been and still is tough,” explains Viljoen. “Consumers are under pressure and if the consumer is under pressure then demand for our product is also under pressure.

We are focusing and concentrating on supplying the retail market, so in order to do this we must adhere to a certain quality standard set.

“All of our premises and our grading facilities are audited to ensure we are compliant to quality standards that are required by the retail market.

Further to that it is important to have the correct administrative systems to interact with the retailers” As the single biggest egg farmer and only national producer in the country, Viljoen explains the industry remains very fragmented with a large number of smaller farmers: “In certain regions there are relatively big farms but in general, the industry is characterised by around 300 smaller farms so it is not dominated by three or four big players.

“Not all of the smaller farms are able to concentrate on sales, distribution, administrative systems and quality, so that’s where we focus, to supply a certain segment of the retail market. The egg industry is supply and demand driven and daily stock management is of vital importance to be successful.”

THE IMPORTANCE OF STAFF TRAINING Showing such exponential growth, Viljoen explains that the company has a mixture of both old and more modern farms. As with many industries, advancements in technology have led to automation of facilities. Within one of its automated farms, Viljoen explains that only one farm worker is needed in a shed housing 40,000 birds.

However in one of the older farms where neither the feed or egg collection is automated, one farm worker will be responsible for 6,000 birds.

With such a large number of birds across each farm within the company, Viljoen explains the importance of animal welfare and food safety is imperative: “Our farm workers are trained externally and internally on how to handle the birds and animal welfare issues. Everyone who works with animals is trained to animal welfare standards, this is important as we are farmers with a love for animals.”

Nulaid

“Grading stations are automated too but we use labour to do certain functions and these employees are trained on how to handle the product related to food safety regulations. We are involved with tertiary institutions and we accommodate trainee farm managers, trained on the different types of farms. As opportunities present itself some of these trainees will then be permanently employed.”

AN ICON BRAND Earlier this year, Nulaid received an award for “Icon Brand”. Despite over 8,000 brands in the running and a total of 31 brands awarded icon status, Nulaid came 12th, improving on the 15th place Icon status achieved in 2013, cementing the importance of its company values and prestigious role within an increasingly popular industry. “We are proud of the performance of the brand and in terms of the exposure the brand has to the market,” reflects Viljoen.

With an estimated 2.7 million eggs produced every single day across the company in South Africa and plans to expand further into African countries, the future is looking to be an extremely positive one for Nulaid.

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SEP 14 PAGE 53

company profile

Precision, conservational, sustainability!

Editorial: Roland Douglas Production: Hal Hutchison

The Rhys Evans Group, based in Viljoenskroon, Free State, is constantly growing. With investments into new pieces of modern machinery and also into its workforce, there is no stopping this crop, meat and nut producing industry-leader. General Manager, Arno Cronje tells us more…

Over the years, the South African agricultural sector has developed into one of the world’s most productive and innovative industries of its kind, supplying global markets with a number of important products.

According to the Food and Agriculture Organisation Corporate Statistical Database (FAOSTAT), South Africa is one of world’s largest producers of; chicory roots, grapefruit, cereals, white maize, castor oil seed, pears, sisal, and fibre crops.

Significant employment is created by the farming and agricultural industry, some figures suggesting around 10% of the country’s formal employment. The industry also contributes approximately 2.6% of the country’s GDP meaning that agriculture is vitally important to South Africa’s economy.

But there are changes afoot in the industry and, as we are also seeing in other industries, the drive for improved efficiency and sustainability is forcing farmers to think

PAGE 54 sep 14

about their methods and change their approach to a more conservational mind-set.

And it’s not just small scale operators. Large, established farming operations have investigated ways to become more sustainable and address some of the country’s most challenging agricultural issues including water shortages, top soil qualities and availability of land.

And just last year, Agri SA executive director, Hans van der Merwe told Business Day that it wasn’t just sustainability issues that need addressing, but also labour issues and infrastructural issues too.

“In many instances the basic infrastructure is totally lacking in deep rural areas and previous home land areas so that requires attention,” he said.

But one company operating across the agriculture and farming industry is seeing the benefits of investments and new ways of thinking and that company is the Rhys Evans Group – a seasoned member of the farming community in South Africa and a company that has been operating under

Rhys Evans Group

the guidance of the same family for over a century.

Rhys Evans Group specialises in crops, meat and ground nuts for both the export and local markets. IndustrySA recently spoke to general manager, Arno Cronje and he tells us more about the history of the company and how it is changing with sustainability in mind.

“The company is 110 years old,” he says. “It is a family business, currently with the third generation in charge. The current CEO, Anthony Evans took over the business from his father in 1967. Currently our main products include maize and peanuts; we are in the centre of the maize and peanut producing areas; and we also produce sunflowers and soy beans. Some year ago we also produced dry land potatoes, but it was not sustainable with increasing input costs.

“It’s an extensive farming business and apart from the crops we have the very well-known Huntersvlei Sussex stud, which has been operating for 69 years and is currently the oldest registered Sussex stud in South Africa. It has 220 breeding cows and a total of over 600 animals.

“We also have a commercial beef cattle operation of over 800 animals and we run two small beef feedlots of about 1000 head each. Apart from that we also have a 550 sow piggery from which we market about 250-280 baconers per week.

“In 1997, we purchased the local abattoir in the town of Viljoenskroon. It’s predominantly a pig abattoir where we slaughter about 800 pigs per week and 60-100 beef carcasses per week and around 50 sheep per week.

“On the farming side we employ about 100 permanent people and during the season we may add around 50 temporary employees,” he says.

PEANUTTERS Split into three main divisions (arable farming, non-arable farming and ground nuts) the company’s most recent focus has been on its peanuts. Its mission is to “offer the South African and the export market a consistently high quality, handpicked, selected product backed by excellent service and continuity of supplies.”

sep 14 PAGE 55

company profile

Peanuts have, for a long time, been a big contributor to the Rhys Evans Group and the company has seen significant growth in this area. Located right in the centre of South Africa’s peanut growing hub, the group produces traditional Spanish type peanuts.

“In 1996, we built a peanut shelling plant from scratch and we’ve been enthusiastic about value adding to our products and there was an opportunity on the peanut side. It was also the first bulk handling peanut shelling plant in South Africa, and currently we come under one of the ten biggest shelling plants. We take in around 6000 tonnes of peanuts per year.

Three years ago we expanded our operations at the peanut plant by doing our own processed peanuts for peanut butter and different flavours of peanut snacks, under the brand name Nutty P,” explains Cronje.

“The market for peanuts is both local and export, for European and Far Eastern countries, mainly Germany and Japan. We also have a strong local market.

“On the meat side, beef is sold in a 300km radius around us. Pork goes nationwide and sheep is sold locally. On both sides of the business we have our own vehicles for transportation but for the abattoir, for long distance journeys, we make use of sub-contractors.”

BIGGER IS BETTER Over the years, the company’s growth has been fantastic, benefitting both the business, from a commercial point of view, and also the local community. Cronje suggests that taking into account all of its operations, Rhys Evans Group is probably one of the biggest agricultural firms in the region.

“In our region we are probably one of the largest as far as the diversification of our operations are concerned. There

PAGE 56 sep 14

are a few other big companies especially on the peanut side but they don’t have the meat offering to the same extent that we do. Our divisions on their own would not be the biggest in the industry but the strength of the group is in its diversity of operations. For example; we are the biggest Valtra Tractor fleet owners in the country.”

And one thing that comes with a sizeable organisation is the ability to be flexible and try new ideas. One of the popular concepts that has been filtering into farming in South Africa over the past 10 years is no-till farming. No-till farming, sometimes called zero tillage or direct drilling, is a method of farming that involves growing crops or pasture from year to year without disturbing the soil through tillage. It has been reported that no-till farming increases the amount of water that infiltrates into the soil and increases organic matter retention and cycling of nutrients in the soil. In many agricultural regions around the world it can reduce or eliminate soil erosion. It increases the amount and variety of microbial activity in soil. The most poignant benefit of no-tillage farming is improvement in soil biological fertility, making soils more resilient which improves efficiency of operations.

Rhys Evans Group has invested in these methods of farming in a bid to become more sustainable and maximise returns from the land. Cronje explains the approach saying: “The biggest thing on the farming and agricultural side is the so called precision farming concept whereby you manage your farm much more optimally per soil type, or as we like to call it ‘management zones’.

“You do an analysis of the physical soil properties and this more or less determines your soil potential. You then, every three years, do a chemical analysis on a one hectare

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company profile grid where, followed by corrections on the fertility of the soil according to prescription maps. Then what you have is a yield mapping monitor that is mounted on the combine harvester and that records your actual yield data. Our ergonomist puts all that info together and uses this ‘normalised data’ to compile variable rate plant population as well as variable rate fertilizer application maps per management zone. We have taken our date from 2003, which gives you an accurate reflection of the soil potential over different seasons. Each year we will add more data which will contribute to the accuracy of the system.

“it’s been done in South Africa for 20 years but the capital outlay in terms of equipment is so large that we started out just doing tests and when we got in, we got in boots and all” “In other words the management zones are divided in five or six categories of yield potential. You then plant and fertilise accordingly, with a map that you upload onto the tractors computer – the tractor sends the data to the planter and the planter reacts accordingly,” he explains.

This process does require hefty investments in the early stages but the result is more sustainable production and an increase in profitability.

“If you take a combined saving of your input costs and your net increase in yield by using this method, you should increase your profitability of about 5-10%. For us, that still needs to be confirmed as we have only taken this approach for one year but we have so far seen over 5% difference in what was a fairly difficult year,” says Cronje.

Recent investments have allowed the company to further enhance its capabilities when it comes to the precision farming concept and the general manager expects this investment to continue.

“It’s the latest technology of tractors out of Finland, the latest planter technology out of Brazil and in Brazil and South America they’ve been in the game of conservational agriculture equipment much longer and that is why we chose to buy from there,” he says. “It’s being done in Australia where conditions are similar to ours, it’s been done in South Africa for 20 years but, but only started in our area about eight years ago. Initially we were reluctant to change until more

PAGE 58 sep 14

research was done on our specific soil types. This, combined with the capital outlay in terms of equipment, prompted us to gradually change over to the new system, but we are now in boots and all.

“As far as the equipment is concerned, we talking around R3 million for one tractor and planter unit that we use. At the moment we have three and will need another three or four over the next few years.”

Now, the soil on Rhys Evan Group land is not disturbed at all and the only machines to move over the land are the no-till agricultural planters. “They put down the seed and the fertiliser and you follow up with chemical weed control and combine. By doing so, you reduce your compaction, you reduce your fuel by about 30% and due to the increased stubble on the land, you have hardly any run-off rain water, you have less weeds germinating and you have a much better chance in dry years,” explains Cronje.

With the weather and climate being one of South Africa’s most prominent challenges in the agricultural industry, this more sustainable approach to operations means that farmers will have a much better chance during dry seasons and Cronje believes that farmers who do not work with a conservational mind-set will struggle. “Over the next few years, in our part of South Africa, it will be difficult to survive if you do not go down the sustainable conservational agriculture route,” he says.

As well as cutting down on fuel consumption, the precision farming approach means that the number of chemicals used on the soil should reduce over time, providing further savings and improvements in efficiency. “In the long term, the conservational agricultural approach that we take will reduce our chemical fertiliser application to the soil and it will reduce the herbicides applied to the soil. A concern of ours is the amount of chemicals that we need to use for weed and pest control and this method will also reduce a lot of that in the long run but it won’t be without challenges.”

STILL GROWING 2014, like the past ten years, has been a year where growth has received a lot of attention at Rhys Evan Group. As well as the investments that have been made relating to sustainable farming, the ground nuts side of the business has also been an area of focus, where we expanded our bulk drying capacity at the shelling plant, which allowed us to take in more peanuts in a shorter period of time.

And growth is not just coming through capital investments in Viljoenskroon; the company is also looking at expanding its market place and the African continent is an area where Cronje sees potential.

“It’s certainly something we have investigated. Africa is a very difficult market, I don’t have a great deal of knowledge

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sep 14 PAGE 59

company profile about it but we have been to other African countries, especially our peanut people, so it will definitely be something to consider,” he says.

Importantly, growth has not been stunted by a lacklustre economy, as has been the case for other companies who trade internationally. The global economic slowdown, which kicked off around 2008, put paid to many companies’ growth plans but the Rhys Evans Group saw little impact – again a testament to the wide-ranging portfolio of products and services.

“We do all of our maize trading on SAFEX. This means we’re dependent on the international market, mainly the Chicago price, and the exchange rate. I think one of that the biggest influence on our maize market is the amount of white maize that we are able to export. This can have an impact on the price and cause it to change quickly.

“The peanut side is really up and down. This year we have almost doubled the national peanut crop compared to last year and the problem of over supply means we have to battle

PAGE 60 sep 14

to sell the product.

“The peanut market fluctuates a lot. Sunflower and soy beans are similar to maize, we are dependent on the US price and the import/export parity.

“As far as sheep are concerned, stock theft is such a big risk in South Africa, and some farmers have now started switching to game farming. With pigs, you need to work on economies of scale. We’ve seen smaller farmers close their doors as it can be difficult to compete with the bigger role players in the industry. You have to be able to stay competitive,” Cronje explains.

The company is even reviewing opportunities to expand its local footprint; opportunities which have arisen as a result of the sale of land.

“What some people see as a threat, others see as an opportunity. The big buzz word in South Africa today is food security. If I look at the amount of farms around us in the market, a lot of them are just selling the land. Land owners who are not directly involved in farming themselves are

Rhys Evans Group selling their farms and we are certainly looking at this as an opportunity to expand our own operations.

“If someone gets out, it creates an opportunity and we are certainly not negative about that,” says Cronje.

PEOPLE POWER All of this progression and growth does not just happen overnight. It comes from planning and development and continued positive performance and all of this comes from the company’s team of employees.

The group has a large workforce and each member of the team is afforded every opportunity to develop and grow.

Cronje explains that he is an example of how the company fosters its internal talent.

“Coming out of agricultural college in 1986 I joined the Rhys Evans Group in 1991. I wanted to be part of a big organisation where people are treated well and where there are prospects to improve yourself. I joined here as a junior farm manager and worked my way up. I studied part-time for a business degree and became general manager in 2006.

I’m a crop farmer at heart.”

And even after a long career in the industry, Cronje suggests that he is still very much enjoying his work and the way that the group approaches business further enhances that enjoyment.

“This is not like a job for me, I enjoy it as much as one enjoys a hobby, he says. “The fourth generation of Evans, David, joined two years ago to follow in the footsteps to his father. He is young, and fresh out of university. He now works with me and, together with his dad, we will mentor him over the next few years. This is something which I enjoy very much. The way that we approach it - seeking out opportunities, staying on top of technology, trying to be leaders in the industry - makes it very exciting. We challenge ourselves to be better and better and that makes it so enjoyable and I just love it.”

As for building a workforce for the future, Cronje says that the company’s in-house training is extensive and includes not just working skills but life skills as well to ensure that employees have everything they need to succeed.

“I would like the people who work here to come to work every day like I do,” he says. “What we’ve always tried to do is focus the training that we deliver. We have in-house training and we have a permanent human resource manager who coordinates that together with all of the health and safety requirements. We have technical courses and courses on financial skills and other life skills which we hope uplift the people.”

But it’s not just employees that the Rhys Evans Group is focussed on uplifting. There is a drive within the company

to assist in the community and also with educational institutions.

“We also participate in learnerships where third year agricultural students from state agricultural colleges come and work on the farm. We host between two and four of these students every year. That affords us the opportunity to appoint those guys and take them further through the ranks if we wish. We have appointed at least seven of these people over the past few years and one has grown into a junior farm manager and there is another who is a precision machine operator and they will all have the opportunity for career development in the future,” explains Cronje.

“One of the local technical colleges visit us twice a year and we deliver a course where second year students will go to the abattoir and also learn about crop production and beef management. We give a lot to these institutions with the hope that we will be able to employ some of these young people in the future,” he says.

But it’s not just about contributing to people with the view of employing them. The company also works with the community, providing services which result in no commercial gain but make a real difference to daily life.

“We plough a lot of effort back into the community,” explains Cronje. “For example, we help local schools to maintain their sport facilities. We will also donate peanut butter and other products to hospices and other institutions.

There is no return involved for us at all, we consider it goodwill and we like to be seen as a good citizen. We hope that the community will see that we value people and in the long run we will then have the opportunity to employ top class people who want to work here.”

We have heard many times before that people are the real drivers behind business excellence and it seems that Rhys Evans Group is the perfect example of this. As we move into the future and the company continues to grow, taking on bright young people and always investing in sustainability, there is no reason why we won’t see further growth as the business comes into its fourth generation of Evans family ownership.

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“We challenge ourselves to be better and better and that makes it so enjoyable” sep 14 PAGE 61

company profile

Holding the world in one piece since 1983 Editorial: Christian Jordan Production: Hal Hutchison

In its 31 year history, Boltfast has always offered a comprehensive product range backed up by a highly efficient, skilled team of people. The company is a leader in the supply of high quality nuts, bolts, fasteners, studs, washers and screws, but Managing Director, Daneel Herselman says that all of the company’s success is down to its people…

The common fastener is not much to look at; not much to talk about; it doesn’t have much stature; in fact, can you remember the last time you even thought about fasteners or their use? Unless you are in a specific trade and you use fasteners, nuts and bolts all day, why would you think about them? But this is where the excellence of the fastener is most important – in its ability to provide results and performance, without the end user having to worry about anything.

And this is important considering the extent to which fasteners, nuts, bolts, screws and all the similar are used in daily life. Think about your home or workplace; there are fasteners in the computer you use, in the desk and chair you sit at, in all of the facilities around you; even in the structure of the building that shelters you. Without these miniature but magnificent inventions, we would probably live a very different lifestyle altogether.

Considering all of this, you have to wonder; the size of the majority of fasteners is small but they are so widely used – the production of these pieces of kit must be immense.

PAGE 62 sep 14

Reports suggest that in the US the fastener industry runs 350 manufacturing plants, employs 40,000 with more than 200 billion fasteners used every year because of its strong ties to the production of automobiles, aircraft, appliances, agricultural machinery, commercial construction, and infrastructure.

In South Africa, a nation which also has significant automotive, agricultural, construction and infrastructure industries, the common fastener and its family are used on a similar scale. There are many places to get hold of products like this but one of the industry leading outlets is Boltfast, headquartered in Cape Town.

The company was founded in 1983 by former owner, Eric Hasselbach, and acquired in 2007 by Overberg Agri but every day since its establishment, the company has been delivering an ever-increasing product range to clients all over the country.

“The vision of Boltfast is to be the leading distributor of industrial fasteners in South Africa and Sub-Saharan Africa and to be the preferred partner to all our stakeholders. We strive to build relationships and provide solutions to our clients through excellent service and deliver high quality products and

Boltfast

Daneel Herselman

providing our clients with assistance, training and various other services to ensure our client can also grow their businesses. Our core values include mutual respect, trust, honesty and delivering on our promises,” explains Managing Director, Daneel Herselman who joined the company in 2007 from Overberg Agri as the Financial Manager and was appointed as the MD in 2012.

“During the years after Boltfast’s establishment, additional companies were acquired as branches to extend our footprint throughout South Africa, these included Durban, Johannesburg and Pretoria. Today, Boltfast has branches in Vredenburg, Epping and Montague Gardens in Cape Town, Port Elizabeth, Durban, Pretoria and Johannesburg and we are well established to provide our service to any company in South Africa and throughout Africa. We are also ISO9001:2008 registered with a level 4 B-BBEE rating and are certified as a value added supplier,” he says.

24,000 PRODUCTS As the demand for differing products grows, the Boltfast

product range grows with it and the company likes to emphasise that quality and service is at the top of its agenda.

When asked what is the key to the company’s success, Herselman states: “Focus on excellent client service and building lasting relationships with our clients and also our suppliers to ensure we can deliver on our promises. We are an ethical company with strong values and large focus on going the extra mile for our clients and providing not only products, but solutions. We value our staff through mutual respect and appreciation and will always strive and work as a team to better ourselves.”

The company boasts one of the biggest product ranges of any of its competitors and is the largest stockist of stainless steel fasteners in South Africa. The range includes; stainless steel, brass, high tensile, mid steel, socket head fasteners, roofing fastening systems and other specialised products.

These products go out to Boltfast’s primary market sectors which include the mining, construction, manufacturing and marine industries and Herselman explains that because of the size of the product range and the differing needs of the various

sep 14 PAGE 63

company profile

“Thank you Boltfast for your loyal support. We wish you a successful and prosperous future.”

our footprint even further. Africa is a developing continent with large potential for growth and development,” says Herselman.

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industries in different locations, the popularity of the products varies accordingly.

“We specialise in all industrial fasteners of all materials and plating and the popularity of the various items are mostly linked to the different geographical areas of the branches. As we are a national supplier to all major industries there is no ‘most popular item range’ in total,” he says.

Importantly, the quality of Boltfast’s products is demonstrated by the range of industries and project in which they are used. From small DIY jobs to major national projects, Boltfast products are at home in application.

“We have been involved in many large projects over the years, including projects like Medupi and various large construction projects and developments,” explains Herselman.

And this is no fluke; there is strong competition in the fastener market in South Africa but time and time again, Boltfast is chosen because of its commitment to quality and service and because of this success the company is expanding into neighbouring countries.

“Boltfast is one of the largest suppliers of industrial fasteners in South Africa. There are various competitors in the market with the other large companies including BMG, Bolt and Engineering Distributors, Eureka etc.

“Boltfast is already active in the Sub-Saharan countries bordering South Africa and we are always striving to extend

PAGE 64 sep 14

Although the company has a strong history and now a leading product portfolio, there is no resting on laurels.

Herselman makes it clear that continued expansion is the goal.

“We have undergone a process of consolidation and restructuring in the last two years and have structured our processes and systems to ensure we can provide our clients with better than expected service. We have also added new related product lines, including the Titan Hardware range, silicon ranges and protective clothing to enable us to provide our clients with a larger basket and to be the preferred partner. We have successfully launched a small packs range for the DIY market and this range is part of a social responsibility initiative where we support an organisation that provides work to disabled individuals in a safe and protected working environment.

Through training these individuals are given the chance to then be able to work in companies like Boltfast.

“These changes have ensured that Boltfast is wellpositioned to capitalise on future growth opportunities.

Our focus for the next five years is to increase our market share and returns through building further on our drive to provide high quality products and building long term relationships with our clients and also suppliers to ensure we can deliver to our clients. We are also looking to increase our footprint further through additional branches and franchise options and to extend our retail and DIY markets. New related product lines will consistently be added in our effort to provide a full package solution to our clients,” he explains.

Boltfast But all of this growth, development and expansion means that the Boltfast people will have to adapt to a busier, more complex working day but Herselman doesn’t foresee any problems, calling Boltfast’s people “our most important asset” and saying that every person has “endless potential”.

“Our staff will always be our most important asset and we strive towards providing an environment for our staff to grow and develop,” he says. “Boltfast are always looking for dedicated individuals to also provide the best to our clients.

We strive towards the development and training of our staff and have various internal and external training programs and bursaries for long term studies. Our staff are always expected to always give their best and to go the extra mile for our clients and be the best team we can be. I believe that every person at Boltfast has endless potential and together as a team we can overcome any challenge and be the best in our industry.”

THE FUTURE Considering how the company has grown over the past 31 years, it would seem that Boltfast is well equipped to deal with any challenge that is thrown in its path – after all, in that time there has been political change to a democratic nation, two recessions, a construction industry surge and a move seeing the

country change to a ‘medium developed’ economy.

As for the fastener industry, and other complimentary industries, there have been two issues that continue to pop up and present challenges – the ‘green’ issue and the price of steel.

“The steel prices and availability of quality steel is always a concern, but our excellent teams are constantly monitoring the steel prices, market conditions and availability to make sure we act pro-actively and ensure that we can service the demands of our clients.

“I think the ‘greener’ drive should always be seen as a positive change towards building a better and sustainable future and we all must take the responsibility towards changing our companies and also our personal lives to preserve what is around us. Boltfast is in the process of looking at various options and projects to promote our ‘greener’ business,” says Herselman.

And as Boltfast continues to grow; becoming more green, more efficient, bigger, more productive, and more helpful to customers; the amount of projects underway in Southern Africa will also continue to grow thanks to a developing economy and the governments NDP. So it seems there will be endless opportunities for Boltfast to expand and as long as the company’s dedicated people remain at its heart, who would bet against this service driven organisation becoming a continental success in the very near future?

.

Tel: 0861 76 76 76 Email: info@freightmore.co.za Web: www.freightmore.co.za

“We are proud to be associated with Boltfast”

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Road Freight Express Road: Provides delivery before 5pm the next day Economy Road: provides delivery before 5pm within 24-72 hours

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Johannesburg Malcolm Moodie Crescent, Jet Park, 1459 Durban 95, Goodwood Road, Mahogany Ridge, Westmead Pinetown, 3608 Port Elizabeth 289, Grahamstown Road Deal Party, 6210 East London Unit 6, Breezyvale Road Woodbrook, 5201 Cape Town (Head Office) Rome Road, Brackengate, Business Park Brackenfell, 7560

SEP 14 PAGE 65

company profile

SKA and MeerKAT the RFI and

other challenges Editorial: Christian Jordan Production: Emily Woodhall

With the inauguration of MeerKAT in March this year, the installation of the first MeerKAT dish and the official opening of the specialised MeerKAT Karoo Array Processor Building was celebrated. The building is a cutting edge data centre for the MeerKAT telescope that has been built in an underground bunker at the Karoo observatory site. MeerKAT Project Manager, Willem Esterhuyse tells IndustrySA that the building is vital for containing the radio frequency interference (RFI) generated by all of the electronic equipment required for the data processing and control of the telescope.

Radio frequency interference (RFI) is a common phenomenon in modern life. It is all around us; it comes from electrical devices and has an effect on the radio frequencies that we monitor. It has been a problem for many organisations in the past; the military, the telecommunications industry and of course, the scientific community, but over the years ways to manage RFI have been developed.

At the site of the MeerKAT telescope in the Northern Cape, an innovative idea is helping to deal with the problem of RFI, a problem which can obviously have a serious impact on the science produced by MeerKAT. The MeerKAT radio telescope is a precursor to the Square Kilometre Array (SKA) telescope and will be integrated into the mid-frequency component of SKA Phase 1. The SKA Project is an international enterprise to build the largest and most sensitive radio telescope in the world, and will be located in Africa and Australia.

So clearly, RFI is a problem that has to be addressed

PAGE 66 sep 14

early and MeerKAT Project Manager, Willem Esterhuyse tells us that the new MeerKAT Karoo Array Processor Building is providing a perfect solution.

SEALED IN “An important milestone was the site selection,” he says.

“The main reason for our successful SKA site bid was not just because we have been doing a good job on MeerKAT, KAT7 and the site bid proposal – but because we had an inherent good site. It is one of the last low RFI sites and that is really key because as I always say; having RFI on a site is like shining a torch into an optical telescope – it just wipes out what you want to observe. With all the effort around SKA and the site, scientists have definitely started to realise that the future of radio astronomy is in Africa and Australia.

“We have a very good radio quiet site. Your problem in many instances is not just existing RFI but also RFI that you create during construction and operation - so called

SKA SA

self-generated RFI. All of the electronic equipment and computer equipment generates RFI so, to an extent, you can become your own worst enemy and this is why we have a very stringent procedure with any equipment that goes to site. All components and subsystems such as motors used to drive the antennas have to go through rigorous RFI testing.

Obviously we have gained a lot of experience on solutions that will work. For example, your antenna drive motor has to be a brushless DC motor, which does not cause sparking and therefore does not cause RFI.” Ensuring that RFI does not interfere with the telescope is vital as otherwise the science capability will be significantly diminished with the result that expensive and time-consuming design modifications will have to be done and implemented.

“You have to verify that any radiation is below the level that will impact on radio astronomy. Those levels are extremely low – in the order of 10,000 times lower than what is used in some of more rigorous military

applications,” Esterhuyse explains. “We refer to the SARAS (South African Radio Astronomy Service) levels, which has been signed into law and gives the minister of science and technology the power to intervene with any activity that will jeopardize the operation of our radio telescopes.

Strictly speaking we are breaking the law if we do not comply too this requirement.”

Equipment that does radiate is located inside a shielded room – the so called KAPB (Karoo Array Processor Building). It is a room that is cladded on the inside with metal panels, with special provision made where apertures are required. There is a double shielded door with copper fingers in order to allow getting in and out of the room without breaking the RFI seal. Special attention needs to be paid to cable, fibre and coolant entries as well as the joints between the panels to ensure that the RFI integrity of the building is not compromised in any way. The radiating equipment is firstly designed to emit as little radiation as possible by following best practice RFI design

sep 14 PAGE 67

company profile

principles and is then housed inside this room, which results in minimum interference with the telescope.

“You have to be very disciplined with RFI design and implementation, since you’ll compromise the entire instrument if the SARAS levels are exceeded. This is particularly important for long integration observations,” Esterhuyse says.

The building, which sits five meters below ground level, will be used to house all the racks of digital data processing systems and the electrical power equipment. Being underground also enhances the RFI performance of the building as the soil provides additional attenuation.

LIGHTSPEED PROGRESS When talking to Esterhuyse about the general progress of the project in South Africa, you get the sense that this is a project that is moving quickly.

Back in October 2012 when we spoke to Esterhuyse for the first time, the project was still at a stage where designs were being finalised for the antenna structure and

PAGE 68 sep 14

all of the additional sub-systems. Then, in April 2013, infrastructure was being finalised and foundations were being planned. Today, all of the infrastructure is complete and the first MeerKAT antenna is on the ground with the second to come shortly. The focus right now is on testing and qualifying to ensure that everything is in good working order before full production of antenna and complimentary systems begins.

“The second antenna is being manufactured, but has not been installed yet. The first antenna structure was installed in March 2014 and now we are busy with fitting the rest of the equipment to the antenna; the receivers, the optical fibre and other equipment to transform it into a working radio telescope that we can control remotely. Then we will run a series of stringent tests on it in order to qualify the antenna level design as well as all the sub-systems.

Once qualification has been completed you can proceed to manufacture 64 of the antennas and the processing units. If you don’t do proper qualification before going into production you run the very real risk of costly and

Diesel Electric Services is proud to be associated with the SKA Project

SKA SA

Diesel Electric Services was awarded the contract for the design (along with Aurecon), manufacture, installation and commissioning of the Secure Power Supply for SKA Meerkat Radio Telescope.

The site is located Âą90km from the town of Carnarvon, in the Northern Cape. The plantroom for the equipment is immersed in the ground to lower the interference it might have with the telescope.

The scope included the Supply of the incoming 33kV domestic supply (indoor switchgear), from Eskom, stepped down by two 2500kVA Transformers to 22kV. The supply is then fed to the Dynamic rotary UPS (Euro Diesel No Break KSÂŽ) 22kV distribution Board, where the supply is conditioned and secured.

The Dynamic Rotary UPS Plant consists of (x3) and future (x2) 1250kVA 400v units stepped up to 22kV, complete with 22kV input and output switchgear, all controls, ventilation and diesel supply system.

The 22kV supply is then distributed through the ring network for the radio telescopes (stepped down at various places via 22kV mini-subs) and two 1600kVA transformers to the 400V supply for all the building requirements.

The plant was commissioned in May 2014, and is online at present.

22kV MV Board, this will supply the load and the 400 transformers.

AUG 14 PAGE 69

company profile time-consuming re-work. One of our system engineers has summarized the system engineering development process as follows: ’you do development through this process as it is the quickest and easiest way of getting the desired result’.”

A disciplined development approach and thorough testing is a very important part of the process and could make or break the SKA project as a whole. Without proper attention to detail and comprehensive testing and qualification, there could be some inconsistencies in the performance and this is why there are currently around 80 engineers working on site ensuring that testing is exhaustive.

“The first antenna should be operational in the middle of September so we are pretty close to start system level testing. We should have the second antenna by the end of the year and antennas three and four should be installed by March 2015 at the latest. By that time we will have done all the testing and we will be going into full production. The infrastructure for the telescope has been completed – this refers to all the roads, shielded rooms, power facility and distribution, fibre duct reticulation, landing strip, construction camps and support buildings.

With the ducting completed we are now in the process of installing the actual fibre to all antennas – this is required to communicate with and control antennas as well as to

PAGE 70 sep 14

transport the data back to the central processor building.

“One can’t perform system level testing on telescope level before you have an installed antenna, but wants to eliminate as many risks as possible before you get to that point - for that reason we do a lot of lab testing and component or subsystem testing. As an example all of the components that will be installed on the telescope that has any active electronics will have gone through RFI testing in a reverberation or anechoic chamber (RFI testing facility) so they will already be qualified for RFI performance. If you consider the data and science processor we would have done lab tests where the entire signal path has been simulated with the use of test data to verify that data processing is performed accurately and that automated RFI flagging for example has been implemented correctly,” Esterhuyse says.

“The best case scenario is that there will be no modifications required after testing and we can go straight into production. Realistically, there will be some re-work but we are confident that this will be minor detail changes as we have followed a disciplined development process.

Once the qualification has been completed and the required updates has been done, manufacturing can start and then the prototype (1st antenna) will be retrofitted to production status.

“We have planned the project well and execution so

SKA SA

Through SKA things are looking up.

We are extremely proud to deliver our West Africa Cable System ( WACS) capacity to a project of significant scientific discoveries. Let Broadband Infraco assist your discovery even more with its vast product portfolio. Contact Broadband Infraco for your national and International bandwidth requirements: Business@infraco.co.za

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Connect. Growth, UNLOCKED. www.infraco.co.za AUG 14 PAGE 71

company profile

PAGE 72 sep 14

SKA SA far has followed the plan closely so at this point we don’t foresee that there’s a significant risk of anything serious going wrong,” explains Esterhuyse.

KAT-7 KAT-7 is the seven-dish MeerKAT precursor array and is the world’s first radio telescope array consisting of composite antenna structures. It was completed in 2010 and has already delivered images of the Centaurus A, a galaxy 14-million light years away.

During development of the MeerKAT project, KAT-7 has proved to be a useful tool. Obviously, its scientific value is significant and the experience that have been obtained with the roll-out, testing and commissioning of the instrument has been invaluable during the advancement of MeerKAT. “KAT-7 has been used for science observations and additionally it has been very useful for the project team in developing the CAM (Control and Monitoring software) and on an operating level. We have essentially developed the KAT-7 solution further to arrive at a solution for MeerKAT and have been careful to ensure backwards compatibility in order to allow us to roll out and test these developments on KAT-7. It’s a great test bay and when we deploy the software on MeerKAT we have a high level of confidence that it will work.

“On the science processing side KAT-7 has been equally useful as we have been able to successfully test our algorithms for features such as automated RFI removal.

There is also a high level of interest from scientist (that will eventually be involved on MeerKAT) to do observations on KAT-7 – this has the benefit that science data interfaces are defined and a working relationship with your stakeholders are established early in the life of your premier instrument,” explains Esterhuyse.

MeerKAT development remains on track with Esterhuyse expecting between 10 and 12 antennas to be installed by June 2015 and 30 installed by the end of 2015.

After March next year, full production should be underway.

interest from radio astronomers to be involved in the MeerKAT project,” says Esterhuyse. “When we started out with MeerKAT we requested formal input from the science community as to the fundamental, cutting edge science that could be performed with an instrument like MeerKAT. The high-impact science cases were selected by a group of international scientists and over 5000 hours of time on MeerKAT has been allocated to these programs.

These science cases are then used to drive your high-level system requirements. This process was completed in October 2010 – our system requirements were finalised in January 2011 and the system level preliminary design review was passed in July 2011. That was followed with allocation of requirements to the various subsystems and the development and testing of these systems that are now being integrated and tested on a system level.”

All of these challenges and ups and downs that is inherent to an extended technically challenging project such as this, Esterhuyse says there is no time to be bored.

He is still excited to come to work every day and happy that a number of his colleagues are longstanding members of the team.

“We definitely still enjoy it a lot,” he says “primarily because we realise the long term objective. For an engineer, if you work on a project like this, your ultimate satisfaction is to have the instrument completed and get the first observation off the full array. Of the guys that started this journey at the beginning, just about everybody is still here and we’ve been very lucky to keep the key people involved.

I can’t talk for others but I am confident in saying that most of the key personnel see themselves involved till at least the successful completion of MeerKAT.” In just two and a half years’ time, the full SKA project will be underway; MeerKAT will be delivering science, and the focus on South African science will have grown even further. It’s quite the achievement and has a long way still to go and IndustrySA will be following everything in the future very closely!

.

SCIENCE, MORE SCIENCE

RFI is any source of transmission that is within the

Since the site selection for the SKA project back in 2012, the scientific community has been drawn closer and closer to South Africa and Australia as they realized that would be where premier radio astronomy science would be performed in the coming decades. The wider scientific community has been vital in the development of the project, providing ideas and notions for exactly how the telescope should be used.

“We have definitely seen a pick-up in momentum and

observed frequency band other than the celestial sources themselves. Even the sun and some other natural sources can cause RFI. For more information on the SKA project, check back to IndustrySA’s Oct 2012 and Apr 2013 editions.

SEP 14 PAGE 73

company profile

Building a successful framework Editorial: Harriet Pattison Production: Hal Hutchison

With two decades of experience behind them, Ukhuni Business Furniture is increasing its footprint, moving into neighbouring African countries and building a successful reputation as far afield as Europe. Managing Director, Michael Stein attributes much of the company’s success to its employees and the dedication they have shown from the very beginning…

It’s only when you start to think about the variety of office spaces, desk spaces and work stations across South Africa that you realise how imperative these are to the day to day running of a business.

The initial model of Ukhuni Furniture began over 20 years ago in 1993 when Managing Director, Michael Stein started looking for a little business in which he could hone his skills as a salesman, having previously worked in the steel industry.

BUILDING A SUCCESSFUL REPUTATION Stein explains that while it took time to become a reputable and respected company, it wasn’t long before Ukhuni Furniture started to attract corporate customers: “We found a small catalogue dealership called Business Furniture Centre and we took over the business in 1993. From there, we had a corporate sales capability so we started growing the business and

PAGE 74 sep 14

started to land some corporate customers.

“This necessitated a need for product development and a design for more systemised office furniture. We then started to develop our own manufacturing plant and from there, we commissioned some industrial designers to develop a product for us which we then invested in.”

With a little help from a very well-known designer, Stein explains the company began to develop its own systems and products, attracting a larger customer base.

“We commissioned some really fantastic South African designers, one of the most well-known and best in South Africa, Brian Steinhobel. I didn’t even think he’d take my phone call but he did and we developed our first major chassis base desking system and we started learning the skills and started buying the machinery and developing our manufacturing capability.

Ukhuni Furniture

“It took a while to get our reputation going and our products going but people really loved our service and our way of doing business and we started to land a few contracts,” explains Stein.

Today, Ukhuni Furniture’s client base is largely the corporate interior design, architectural, project management and space planning market. Producing on average about 15,000 work stations, storage units and seating units, Ukhuni Furniture also handles corporate campuses, new projects and refurbishment throughout South Africa and Africa.

Stein explains: “That further developed into branch roll out requirements, so we have the corporate systemised furniture which are open plan, work stations, work partitioning and cabling requirements, with all the necessary green requirements. That’s very different from say branch banking which would require telecounters and personal banking pods.”

Providing such a wide variety of products and

services across a multitude of industry sectors, Ukhuni Furniture now employs nearly 300 people but Stein insists it still remains very much a family-run business and environment.

“We commissioned some really fantastic South African designers, one of the most well-known and best in South Africa, Brian Steinhobel” “The average service of our staff is ten years. We have two types of training, one is the in-house training program that is both company related and department specific. We also place quite a high investment, for a small family business, in external training where we are either bringing in facilitators or we are sending staff to specific training such as upholstery training.

sep 14 PAGE 75

company profile

“Number two is with regards to development. My head of Human Resources is a lady who started as a sander in our spray booth area and today, she’s head of Human Resources. She has two children in University and owns her own home. Another example is my head of Board Production, a guy who started on the factory floor and was probably the most militant shop steward you could meet as a representative of the Union. Today he owns his own car, has his own home and runs our Board Production Plant.

“So the growth and opportunity available and the success stories of people within our business has been amazing and that has resulted in a long length of service, growth and retention of skills. It has also resulted in less than 1% staff turnover in a year, so it’s a very proud record that we have built up,” says Stein.

BIG GROWTH OPPORTUNITIES With substantial growth throughout Southern Africa, Stein explains that this has necessitated the need for additional premises and the growth of Ukhuni Furniture’s manufacturing and marketing investment.

“In 2013 we achieved about 15% of our sales north of Southern Africa into Africa, so that is a big growth opportunity,” he says.

In addition to increasing its footprint further onto African soil, Stein explains the company has also built up a reputation a little further afield: “We’re having the quality of our service and products being confirmed in Europe and we’re finding now that the

PAGE 76 sep 14

global corporates are switching the buying to us and appointing us to do their roll outs throughout Africa rather than importing the products from Asia, Europe or America to improve on logistics costs.

“So we’ve developed relationships with manufacturers, for example in Lagos in Nigeria, we’re doing quite a big project for Standard Charter Bank where all the board components were in fact locally manufactured.”

INTEGRAL CUSTOMER SERVICE Of course, in an industry which provides the frame work for many businesses, it is in high demand. Stein explains that in order to remain at the top, you must remain focused on what it is you first set out to do. For Ukhuni Furniture, it was to provide consistent, flawless and valued customer service.

“There is a lot of competition,” says Stein. “We have worked very hard on building a brand, developing products of integrity and a service level of integrity and have tried to operate at a high level of corporate governance.

“We are competing with a range of people who don’t necessarily have the range or scope of what we do so that’s resulted in us diversifying our business. We’ve had customers who have been with us from the day we started. We offer a consistent service, irrespective of the quantity they buy, we could be doing a project for 3,000 work stations or two, but each will receive the same level of love and service.”

Ukhuni Furniture BUILDING A FRAMEWORK FOR THE FUTURE For a company that has built upon such an impressive reputation and service history throughout Southern Africa and beyond, Stein explains that the challenging economy can have an impact on business: “The economy is under pressure and we need the economy to grow in order to grow our business. In the short term, maintaining our business and becoming sustainable would be critical, even before we look at growth.

“The protection of the level of employment we have is critical to our business, the staff really need to trust that this is their home. We see growth in the form of our diversified products and department like the branch type roll out business.”

Looking to the future, it seems this family focused business will continue to remain just that. Stein attributes much of the company’s success to its employees and the commitment they have shown from the very beginning: “I’ve often thought if I had to write a book about the success of business and I think one can put it down to looking after your staff but I think the basic answer is you have to show up.

“My management team have been with me a long time, through thick and thin. You have to be there for your staff and be there for your suppliers and your customers. You have to build a balance sheet, you’ve got to look to drive the good things in business, manage your stock, look for cash flow and you can’t do any of this if you don’t show up.

“We have all sacrificed a lot to build this company, day in and day out you must show up.

You have to work hard at the balance,” concludes Stein.

.

“My management team have been with me a long time, through thick and thin. You have to be there for your staff and be there for your suppliers and your customers”

Sheet Metal Design and Manufacture CIS provides design and manufacture services to the sheet metal consumer market, primarily with Mild Steel, Stainless Steel and Aluminium. We make the following services available to our customers

Design:

• • •

Fully equipped drawing office with a team of qualified engineers and designers utilising the latest 3D CAD packages Research and development of customer products to their specification & requirements With many years of experience in sheet metal and related products we are able to offer custom solutions to our customers’ needs

Laser Cutting:

• • • • •

High Speed Automated machinery ensures quick turnaround time A wide variety of material is readily available with special materials processed on request Up to 20mm in Carbon Steels Up to 12mm in Stainless Steels Up to 8mm in Aluminium

Punching:

• • •

Latest in Automated equipment allows 24hr operation Maximum sheet processing size in 3000mm x 1500mm Punching up to 4.0mm in Mild Steel, 3.0mm in Stainless & 6.0 in Aluminium

Bending:

• • • • •

We offer Fully Automated Robotic Bending as well as conventional CNC Bending 3D CAM software ensures accuracy and repeatability Maximum work piece length in 3100mm Processing from 0.5mm up to 12.0mm thick material Specialised press brake tooling allows bending of intricate & complex components

Welding

• • •

Automated Robotic MIG Welding offers excellent repeatability and high output

Aluminium Processing:

• •

Specialised saws for accurate cutting of Aluminium Extrusions & Sections Profile Machining Centre for Milling / Drilling / Tapping of Aluminium Extrusions & Sections

CNC Turning:

• •

CNC Lathe with Y-axis allows us to manufacture complex parts in a single operation

46 Andries Street, Wynberg, Sandton | P.O. Box 635, Bergvlei, 2012 Tel 011 887 8399 | Fax 011 786 4882 Emails gary@crestinfo.co.za ian@crestinfo.co.za Reg. No. CK1997 020607/23

Automated Bar Feeder ensures high output levels

Metalworking Machinery:

• •

Auto Feed Band saws for processing Section and Tubing Drilling / Tapping machines

Sheet metal Inserts / Fasteners:

• • • •

We stock and install as wide variety of sheet metal inserts & fasteners Round and Hexagonal Rivnuts for Sheet Metal and Tubing Captive Nuts, Studs and Stand-offs for Carbon Steels, Stainless & Aluminium Weld Studs for Carbon Steels, Stainless Steel & Aluminium

Surface Treatments offered:

• •

Powder Coating – wide variety of standard colours available, custom colours upon request Zinc Electroplating – Blue & Yellow Passivate

Assembly:

• •

Partial and full assembly of customer products.

Packaging and handling according to customers specifications

MIG, TIG and Spot Welding of Carbon Steels, Stainless Steels & Aluminium Handling – Overhead Crane and Manipulators

SEP 14 PAGE 77

company profile

A revolutionary timber alternative Editorial: Tim Hands Production Ajuanne Payne

In the face of the looming national timber shortage facing the construction and building industry, Biligom International (Pty) Ltd has come up with an internationally patented process for moist Eucalyptus timber, giving an alternative to structural pine which will pioneer a platform for entrepreneurial opportunities, as well as provide solutions to some of the industry’s commodity challenges.

The growing of pine which is suitably mature for construction timber purposes is a process which typically takes around 30 years, and as such constant efforts need to be made to ensure the abundance of its supply. However, the very absence of such measures means that the industry can expect the situation only to worsen, and is a principal factor in leading Biligom to step in, in a bid to find an appropriate alternative. Spencer Drake, the company’s Director and Inventor, gives a run-down of the Biligom’s history so far, as well as of his own extensive experience in the field.

“I myself have been in the saw-milling and forestry industry since 1972. One of the things that has puzzled me, right from those early days, is why nobody uses eucalyptus timber in roofing structures or construction wood, or anything like that. I would assume that it is due to the fact that, when you cut eucalyptus boards in long lengths, it is prone to twisting and cracking, and all sorts of funny things occur in the drying process.

“Over time, back then, I discovered some things about eucalyptus – how to begin to combat that core problem of cracking, for example, and what followed was a lot of research on our part before we were able to find a way to get rid of the tension that causes it and resolve this long term problem. That’s

PAGE 78 sep 14

how we eventually ended up with Biligom International, with patents all over the world now for this particular product.”

The looming shortage of pine in South Africa in the present day was a principal factor behind the company’s formation.

“What has happened before now is, because of this looming problem, is a change to the national rotation; instead of the 30 years, most of these guys are cutting into timber of around 18 years old. As a result, we’re getting immature timber coming in, and all the commensurate problems that go along with it – it’s softer wood, it has a lower density – it’s all part of the problem. If you’re making structural wood out of that you really aren’t going to get good grades out of it.”

Drake explains how Biligom’s innovations are providing a real alternative to settling for below-par materials such as the aforementioned. “Now, with our timber using eucalyptus, it’s fast growing – we’re using timber that’s between six and eight years old – and so on average we get three rotations per hectare of planted material. This is a great advantage pragmatically, as if you consider a plantation full of 35 year old timber and the whole thing is burnt down, then it’s completely lost, it’s a very precarious situation. Should the same thing happen with our timber then we merely start up again, knowing we’ll get another two rotations

Biligom International

out of the same plantation.”

Originating in Australia, eucalyptus is a genus of more than 600 species, and proves exceptionally cost effective due to its ability to become established in conditions which are very marginal for other uses, such as agriculture or farming. This is a very young species in terms of human development, having been commercially used in the world for just four or five generations of improvement, and so still has huge potential for finding the very best genotypes for commercial plantations.

Drake goes on to explain how the land given by the government to previously disadvantage people is not necessary being used to its full potential, and how Biligom are thus stepping in to offer a more effective solution: “There are some that are doing ok with these huge tracts of land, but, on average, the timber is just not being exploited correctly and as a result, ends up on the informal market at prices which are way below par. Because we now have the ability to make this a business ‘kit’, we can really focus on helping these previously disadvantaged individuals, or indeed anyone who wants to take part in this, who can approach us for help in putting in these plants.”

A central aspect to Biligom’s vision is the way in which it goes about putting together its workforce of around 600, as Drake

explains. “We pride ourselves on bringing our guys through the ranks, which is a very important principle in the business.

Anything to do with forestry, be it growing the timber, or building roads, production processes or our plots, they have all worked their way up. In our workshop, for instance, we’ve got a couple of young fellows from the local population here who have been trained up to be excellent artisans. We have supervisors and production managers all over the place, all of whom are from the local people here, a product of the mentor system that we operate.”

Biligom is now, having accrued thousands of successful cubic metres of implementation of its product in the informal market, perfectly placed to enter the formal market, as Drake explains: “We have the full backing of the South African Technical Auditing Services, a body which oversees the production processes in the country, and with that we treat to South African national standards, which is the treating process which is done immediately after these boards are manufactured. This timber then goes, in treated form, into the market.”

While strongly positioned in South Africa, Drake makes clear that Biligom is aiming worldwide with this product: “We want to get this used around the world, because our research shows that

sep 14 PAGE 79

company profile

there is not a single municipality or village council or city council anywhere today that has on its protocols approvals for putting moist eucalyptus into their roofs. When you look at this potential it is simply mind-boggling; anybody that has suitable areas to plant eucalyptus could, within a matter of seven or eight years, have the raw material available.

“Take Brazil for example – there is four and a half million hectares of eucalyptus growing there, while Uruguay has about two million hectares. So we’ve registered these patents across the world, in Europe for instance, with a patent pending in the UK, and it’s a really exciting new thing for us. The whole idea is to license new Biligom factories with this technology throughout the world,” he says.

While a certain amount of scepticism might be expected in response to such a potentially huge-scale innovation as this, Drake suggests that the opposite has been true. “The response has been overwhelming. I am sure there are people who may see this as a threat, and that’s only natural – it is cheaper than pine, much stronger, and a hardwood as opposed to a softwood - but the myth that Biligom will not stand up to having a nail hit into it is nonsense, Biligom will take a nail just as easily as other pine timber. Just don’t try to remove the nail, that’s the problem!”

Biligom’s success so far has entailed improvements to the company’s production facilities, and Drake details how this helps strengthen its position in the market. “The first completed boards came off the production line three years ago. Obviously, with the production process came all sorts of teething problems which we were able to resolve, and subsequently put up a brand new factory which is now operating at full steam. These were production hassles like speeding up the whole process, finding ways to get better quality out, which have all been overcome and we’re running now at full production.

PAGE 80 sep 14

“Make no mistake, the pine industry is going to have to sit up and take notice of this,” states Drake, on Biligom’s potential to revolutionise the construction and building timber industry, “they just have to, because in South Africa’s formal market around 1.5 million cubic metres of structural timber was sold last year and this market is ready to be serviced as soon as the new Biligom plants going up all over the country start taking off.

There’s more area in South Africa planted to eucalyptus than there is to pine, and the price for eucalyptus raw timber is very low, almost a pulpwood price. This particular product is a valueadded product, and it’s absolutely beautiful – first class to work with, easy and simple – the only difference between this and pine apart from its strength is that it is heavier than pine, due to its higher density, but that’s a small problem to overcome.”

Drake finishes by underlining the environmental benefits Biligom also offers, particularly when placed next to its alternatives. “Roof truss manufacturing is going over to steel at present, in a big way. With that steel, the only ‘green’ you get is from inhaling the smog which comes out of the smelting works!

Per square metre of roof area with steel, as opposed to Biligom, it’s ridiculous how environmentally unsound steel is.

“Of course, on top of this, any forester will tell you that water usage of a fully grown 30 year old pine on a hectare of timber as opposed to that of a young eucalyptus of, say, four or five years, is much, much higher. Furthermore, because it’s older, its absorption of carbon dioxide is much less than you see with a younger tree, which will ‘digest’ far more carbon dioxide, another huge plus in terms of the product coming out of a growing scenario.”

Finally, Drake says: “Biligom in manufactured from a raw material source that is infinitely renewable and there are very few companies in the world today that can say the same.”

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Biligom International

Pressure Treated Timber Timber with a moisture content below 20% cannot rot. This may not always be possible when used outside in exposed conditions as it requires proper application and maintenance of a suitable penetrating and water repellent wood sealer.

‘

The options are to use either naturally durable but expensive exotic hardwoods, or less costly locally grown non-durable Pine or Eucalyptus (gum) timber or poles, that have been pressure treated with a suitable wood preservative to the desired exposure or hazard class.

The H class system is a guide to help you buy the correctly treated timber for your project.

Be sure to look for the required H class on the timber as well as one of the two quality marks given below.

Sustainable Timber Resource Timber is the most sustainable building product available to man. It’s naturally renewable. Over 90% of plantations grown in South Africa are FSC certified.

Hazard classes: H2— dry interior above ground H3— exterior above ground H4— in ground contact H5— in contact with fresh water and wet soil H6— in contact with marine waters

®

For more information on preservative treated timber, or where to find a SAWPA member contact us on 011 974 1061 or sawpa@global.co.za or visit our website at www.sawpa.co.za A member of AUG 14 PAGE 81

company profile

Tooling for tomorrow Editorial: Helen Lake

IndustrySA speaks to TASA Gauteng Secretary, Henk Snyman, about how TASA is working with businesses in the tool, die and mouldmaking industry to up-skill the toolmaking labour force and create and support sustainable toolmaking enterprises in support of the manufacturing base in South Africa.

The Toolmaking Association of South Africa (TASA) was established in 2006 as a way of addressing challenges faced by the tool, die and mouldmaking (TDM) industry.

TASA members realised that there can be no growth in manufacturing without a strong internationally competitive local tooling industry. The growth and capability of the local tooling industry drives the long, medium and short term wellbeing of the South African manufacturing industry.

TASA has, since its establishment, initiated and led the activities that forms the basis of the revitalisation programme for the TDM industry.

The first step was partnering with the Department of Trade and Industry (DTi) and the establishment of the National Tooling Initiative (NTI) – a not for profit organisation, that focuses on implementing programmes to revitalise the industry.

The NTI activities can best be described as a three pronged revitalisation drive of the Toolmaking industry. To close the skills gap an Artisan Development programme has been developed and implemented countrywide. To assist toolmaking companies, an Enterprise Development programme to enhance organisation efficiencies is in full swing. Finally TASA is maintaining dialogue with the Government on behalf of the Toolmaking industry.

CLOSING THE SKILLS GAP As the Secretary of TASA Gauteng, Henk Snyman points out: “You cannot work without skilled people.” That is why TASA, through the NTIP activities, is spending R134 million (2014) on a training programme that aims to get more skilled people back into the industry. “There has been

PAGE 2 sep 14

the realisation that the training is just so much better if the industry takes charge. We are assisting the vocational colleges where TDM training takes place with the relevant curriculum content development. There is now a focus on relevant technologies and skills required in the workplace.”

Snyman explains. It is not only academic based training these graduates have received either. “The tool, die and mould making industry in South Africa, according to my knowledge, is the only industry where all the apprentices are 100% guaranteed that they will have on-the-job training during their apprenticeship.” says Snyman.

Snyman explains that there are significant benefits to the industry: “In Gauteng, 101 tool, die and mouldmakers qualified as artisans in 2014. We had 42 qualified machinists that came off the programme.” Snyman explained the impact on industry: “We have had an instances where a toolmaking company has taken 17 of these graduates. The newly qualified toolmakers were immediately effective. This allowed this company to go onto a double shift, being able to reduce their pricing to the market and nearly doubling their turnover.

“The graduates from the programme are virtually guaranteed a job. They are being snapped up by industry.”

ENSURING ENTERPRISE SUCCESS It’s not only the artisans that are gaining skills through TASA’s initiative. “We are also up-skilling individual companies management in how to run their businesses effectively, efficiently and profitably. This process starts with a benchmarking exercise that allows us to identify the improvement opportunities in the individual companies.

At this point in time our main focus is on developing the

Tooling Association South Africa: Gauteng

organisations in the broad sense. In other words, doing the planning correctly, doing the quoting correctly etc. On the enterprise development side - getting the small companies to function efficiently is the main aim. We are encouraging our members to use the standardised approach that we have developed. The NTI programme has managed to secure funds for the implementation of best practices and therefore it is free of charge to the participating companies.” Snyman explains.

In Gauteng, the local tooling initiative office (Gauteng Tooling Initiative), also provides some assistance in terms of legal aspects of running a toolmaking business. “We also know that the way businesses contract can make or break the smaller companies. In Gauteng there is a ‘lawyer on call’ mechanism in place.”

By providing companies with this assistance, TASA through its execution agencies (NTIP and the Regional Tooling Initiatives) ensure that not only the quality within the industry remains at high level, but also that individual businesses will be successful. That will ultimately enable them to provide better tools and services to the manufacturing industry. In addition, it creates the opportunity for manufacturing companies to choose local tool suppliers, supporting the local economy.

“In South Africa, we have identified certain niche markets within the tool, die and mould making industry where those niche toolmakers are already as competitive as China or India. Through the enterprise development portion of what we are doing, we have assisted those companies to focus.

They have now changed from being generalist to focusing on specific tools using appropriate technologies,” Snyman tells us.

South Africa has a significant tool consumption.

Therefore there is a huge untapped market currently being served by imports. “Only 20% of the tooling used in South Africa is currently being made in South Africa. That means there is a massive local market that the local toolmakers are starting to service with success,” says Snyman.

TEAM WORK Snyman stresses that much of its success, especially in terms of the training programme, is attributed to the continual support of the Department of Trade and Industry.

“There is a super relationship between us (TASA) and the DTi at National level and the Department of Economic Development in Gauteng. These institutions are the funding sources.

“While apprentices are on our programme (which is currently running until 2019), the training is free. The training of the apprentices is project managed by the NTIP. Maximum use is made of existing infrastructure and capacity available in the formal training and development space.

As far as funding goes, businesses within the industry contribute machine time and guidance input during the onthe-job training period. Approximately 30% of the total cost invested in the apprentices can be considered as industry contribution.

TASA and the government are in continual dialogue to ensure that through the development of the TDM industry the manufacturing sector in South Africa prospers. Snyman concluded by saying that “the positive impact of assistance of the Department of Trade and Industry in being a full partner in this road to fully revitalise the TDM sector in South Africa is incalculable.”

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sep 14 PAGE 3

company profile

Keeping SA manufacturing welloiled since 1971 Editorial: Roland Douglas Production: Hal Hutchison

When it comes to metal working in the manufacturing industry, you won’t go far in 2014 without access to high quality CNC machines. One of the industry leaders in the supply of this type of machinery is Retecon and the company now has a country-wide footprint to complement a top of the range product portfolio.

One of South Africa’s successes of the past 20 years has been the development of the manufacturing industry. The country has developed an established, diversified manufacturing base that has shown its resilience and potential to compete in global markets.

Manufacturing is so important because it is not only a driver of GDP, with the obvious benefits of employment creation and economic empowerment, but it is also a catalyst for other areas of industry including services.

The manufacturing industry is dominated mainly by the agri-processing, automotive, chemical, ICT and electronics, metal and textiles sectors and over the years, these sectors have developed, becoming more efficient, more productive and, importantly, more automated.

PAGE 4 sep 14

This move to an automated approach is in line with many industry sectors all around the world.

After all, the benefit of automation is that it saves labour, however, it is also used to save energy and materials and to improve quality, accuracy and precision.

But when automation becomes more prominent, so does the need for skilled personnel to operate the complex machinery so the industry is in fact creating opportunities for people to develop.

A growing need for automated equipment is good news for the countries machine tooling businesses and one company in particular has seen the benefit of the growth of both manufacturing and demand for machine tools. That company is Kempton Park headquartered, Retecon.

The company markets a range of machine tools,

Retecon

accessories, tooling, consumables and services to the metal working industry and has been doing so for the past 43 years.

Established by Burkhard Herrmann in 1971, the Retecon name comes as an abbreviation of REliable TEchnical CONsultants.

Among the company’s product range are popular brand names including Trumpf, DMG MORI, Ficep, Hexagon, Kasto and in their sister company Puma Machine Tools the supplier DOOSAN. Trumpf, DMG MORI and DOOSAN are among the world’s largest machine tool companies leading the field in technology and development.

All 3 brands have supplied over 800 machines into the South African market over the years.

CNC machines, which now play a major part in all sectors of the manufacturing industry, are where

Retecon’s focus lies. Activities including machining, gear cutting, grinding, sawing, pressing, induction heating and hardening, plate rolling and sheetmetal working are just a few that Retecon’s product range caters for.

This product range, which is ever expanding, was bolstered last year when the new monoBlock and CTX ecoline series of machine tools from global machine tools manufacturer DMG/Mori Seiki were added.

Retecon has been supplying DMG machines since its establishment in 1971 and was awarded the sole representation of the MORI Brand to it in 2011.

Of the CTX ecoline series, Neth told Engineering News: “The CTX ecoline machine practice-orientated SLIMline user interface, which is available with Operate 4.5 on Siemens

sep 14 PAGE 5

company profile

840D solution line or Heidenhain CNC Pilot 640, makes it easy for new customers and experienced professionals to operate the technology and, therefore, receive maximum performance from the machine.

“This product is all about developing the fastest path from the drawing to the finished workpiece and this is realised by the fast servo turret and modern motion-control technology, with rapid traverses of 30 m/min,” he said.

The CTX ecoline series is built using highefficiency cast iron beds, high-quality ball screws and linear guides to achieve the best rigidity and vibration characteristics suited to the most demanding production requirements.

The fact that DMG/Mori Seiki has sold more than 1000 monoBlock machines worldwide since 2010, demonstrates that this is a company producing quality products and Neth says that the monoBlock system is complimented by other technological advancements.

“Technological integrations, such as millturn technology and laser, or ultrasonic machining,

PAGE 6 sep 14

pallet changes and automation solutions, round off the monoBlock’s system,” he said.

The result of this deal is that South Africa now has further access to what are being hailed as ‘user friendly machine tools’ – and this ‘user friendliness’ is vitally important according to Neth.

TWO-WAY RELATIONSHIPS For a company like Retecon, the ability to communicate effectively with clients is paramount.

And it’s not just clients but also suppliers and employees; all of these count towards the welloiled running of the country-wide machine that is Retecon.

“We strive to understand our customers, to emphasise and to support, to develop our customers’ personnel, as well as our own employees to the very best we possibly can. We are committed to train our employees to ensure that they can deliver the best possible services in sales, service and their administrative duties,” the company states.

“We are most grateful for the trust and

Retecon confidence of our many customers and principals who have supported us in the past and who are willing to entrust their future plans to us.

“We look back to the period of transfer from conventional machines to computer numerically controlled (CNC) machines as a challenging one. It has tested us and our clients alike.

“We are committed to thrive in the effort to anticipate and satisfy our customers’ needs. Our highly motivated team has grown in expertise and number and is fully prepared to meet your challenging demands of the future.”

A ONE STOP SHOP When it comes to machine tooling needs, Retecon can supply everything a business may require, and also provide ongoing maintenance and support after a sale has been made.

“Our capability of supplying tooling and measuring equipment allows our customers to purchase most of the requirements from one source, Retecon,” Neth told wcbn.co.za in 2010.

Now with branches in Johannesburg, Durban, Port Elizabeth and Cape Town, the whole company is

always looking to grow its footprint and Neth says: “With improved infrastructure and technologies we will be in a position to better serve our customer base.”

And as South African manufacturing, and South African tooling in particular, becomes more and more important to the economy and to the worldwide supply chain, Retecon remains perfectly positioned to aid further in the development of technology and the development of people.

“As predicted, South Africa’s international competitiveness in manufacturing has started to materialise due to the utilisation of new technologies.

Retecon takes pride in having aided in the successful transfer of these technologies to South Africa.

“Our youth development program in apprenticeships and learnerships has and will continue to serve the company well into the future.

Continuing the learning process with overseas training at principals as well as regular in-house training will add to our individual’s knowledge and prosperity,” concludes Neth.

.

For more information on how Retecon can help your business, see www.retecon.co.za

Here’s to a relationship cast in steel.

FNB congratulates Retecon on 29 successful years.

MetropolitanRepublic/15349/E

Mention the South African metal and engineering industry and one name immediately comes to mind: Retecon. Retecon is one of the biggest suppliers of machine tools to the industry. And they’ve achieved this not only because of the outstanding quality of their products, but because of the way they do business. The fact that the Retecon Group is entirely owned and managed by employees is just one of the ways in which they set themselves apart. FNB is proud to have been associated with Retecon for the past 29 years. We wish you many more years of success.

If your business is going far we can help you get there.

For more information, contact Carli Venter on (011) 856 2303 or 076 242 8992 or email cventer2@fnb.co.za First National Bank – a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).

SEP 14 PAGE 7

company profile

The fuel for improvement Editorial: Christian Jordan Production: Hal Hutchison

Through continuous improvement and investment, Nissan SA and the automotive industry more widely are ramping up their activities to meet future demand. With increased production capacity and a focus on ‘green car projects’, Nissan SA is a front runner in a very competitive industry.

Kaizen; Japanese for ‘good change’; is a concept that has been applied to business for many years. Although it’s literal translation has no reference to the English words ‘continuous’ or ‘philosophy’, it has become common practice for businesses in Japan, and around the world, the label any industrial or business improvement techniques with the word kaizen. People will often refer to continuous improvement plans as kaizen or ‘taking the Japanese philosophy’ but whatever the translation, kaizen refers to activities that continually improve all functions, and involves all employees from the CEO to the assembly line workers.

Many theorists suggest that the first time kaizen was used on a mass scale was in the Japanese automotive industry when Toyota began focussing

PAGE 8 sep 14

on continued improvement in small groups, supervised by a manager who integrates the improvements made by the group into other groups in pursuit of over ‘total quality management’.

The kaizen concept was made popular by famous Japanese organisational theorist, Masaaki Imai in his 1986 book, Kaizen: The Key to Japan’s Competitive Success and today in 2014, we are seeing the concept rolled out on a larger scale than ever. Although in many businesses, kaizen takes a different name, the concept remains the same.

South Africa holds strong ties with Japan, just last year the Department of Trade and Industry and Japan’s Mizuho Corporate Bank announced they would work together to promote business co-operation between the two countries. There are many Japanese firms operating in South Africa in

Nissan SA

last year President Zuma said that 200,000 South African’s are employed by more than 100 Japanese firms.

And one of the most prominent is Nissan South Africa. Employing over 1900 people, Nissan SA is one of the country’s largest automotive organisations and has impressive facilities that are continuously being upgraded.

ROSSLYN Nissan’s factory in Rosslyn, home to other automotive giants including BMW, is one of the most impressive in Africa. The plant is a leader in South Africa with regards to sound environmental practice in its manufacturing process and has won many awards and recognition both locally and internationally for its environmental efforts.

These include the exclusion of chlorofluorocarbons and other harmful chemicals from all phases of its manufacture, chemical and other waste management; water and power savings efforts; a man-made wetland which is a catchment area for storm water; recycling; and working closely with its numerous suppliers and dealers to ensure sound environmental practice.

Nissan SA’s facilities are a CNC machine enthusiasts dream with everything from an autospray facility, to give Nissan vehicles a quality paint finish in line with the best in the world, to a highly automated production line which ensures consistently high levels of quality.

Importantly, to meet the growing demand for its vehicles, especially from Africa, Nissan announced in 2012 that it would increase production at the

sep 14 PAGE 9

company profile this increasingly important African market, as part of the wider Nissan Power 88 plan,” explained Nissan SA managing director, Mike Whitfield.

“Nissan South Africa has demonstrated its competence in key deliverables — improvements in quality, cost and productivity — and we are confident in its capability to meet anticipated demand, and increased production is expected to during financial year 2014,” he said.

Toshiyuki Shiga said: “Global markets are pivotal to Nissan’s growth strategy and Africa, in particular, is a strategic region.”

Production capacity has already increased at the Rosslyn plant to 50,000 from its production capacity of 25,000 in 2008.

Whitfield suggested back in 2012 that total investment in the Rosslyn facility would come to R1 billion and would create 800 new jobs directly and around 4000 indirectly, through the supply chain.

In 2011, Whitfield said that exports into Africa, Russia, Turkey and other western European countries, and a strong local market would fuel the production ramp up.

FUELLING CHANGE

Rosslyn plant; creating jobs, and allowing the facility to potentially produce 100,000 vehicles each year by 2016.

The announcement of the capacity increase came during a visit to the South African operation by the chief operating officer of Nissan Motor Company Limited, Toshiyuki Shiga.

With vehicle sales on the continent contributing more than 90,000 units to Nissan’s global 2011 vehicle sales, Africa is a key strategic region.

Sales will be driven by a new 1-ton pick-up to be produced at the Rosslyn plant, along with the current NP200, NP 300 Hardbody, the Nissan Livina range and the Renault Sandero under the Renault-Nissan alliance.

“The local industry’s APDP (Automotive Production and Development Programme), which encourages individual manufacturers to increase production levels above 50 000 units per annum, is completely in tune with our own ambitions within

PAGE 10 sep 14

Away from the challenge of increasing production at the Rosslyn plant, Nissan SA has been laying out other hurdles for its tool room and manufacturing people. There is a now a significant drive underway in South Africa, and around the world, to develop the market for electric vehicles.

In February 2013, Nissan South Africa and the Department of Environmental Affairs launched a pilot project to test the feasibility of electric vehicles in South African conditions, using the Nissan Leaf, the world’s first mass-produced electric car “The fundamental motivation for embarking on this project is the urgent need for South Africa to transition to a job creating, sustainable, low-carbon and green economy as clearly outlined in the National Development Plan,” said Environmental Affairs Minister, Edna Molewa.

“The transition to a low-carbon and sustainable economy can create large numbers of green jobs across many sectors of the economy and indeed can become an engine of development,” she said.

But what does this mean for manufacturing?

While we are all aware that the drive towards electric cars and lower emissions is, on the whole,

Nissan SA a good thing; are we aware of the effects on the manufacturing industry? For Nissan SA there will be no slowdown, in the short term, of production of cars with traditional combustion engines and there will be an increase in the production of electric vehicles so this means a net increase in production overall – a good thing. But in the long term, if there is a dramatic shift towards manufacturing electric motors to go into cars, the manufacturing process at Rosslyn will have to adapt slightly to cater for the differences between electric and petrol powered engines. And who’s to say electric motors won’t be imported from China, South Korea or Japan where they are already produced to a high spec for low prices? Well, that is the reason for the establishment of the ‘green car project’ and stakeholders; Nissan SA, the Environmental Affairs Department, the Departments of Trade and Industry, Transport, Energy, Science and Technology, Eskom, and the South African Revenue Services; are all working to ensure that production, skills, money and development remain in South Africa.

“This electric vehicle industry strategy prepares

for the future transition into design and production of alternative propulsion systems in order to maintain or increase South Africa’s global market share in the automotive sector while still responding to its commitment to decrease its carbon footprint,” Molewa said.

One thing that is for sure, as production and automation does increase in the automotive industry, as a whole but especially for Nissan, there will not be a shortage of skilled labour to fill roles that require specific abilities and this is thanks to the commitment from the Tooling Association South Africa who are running very successful training initiatives that help create opportunities for both companies and individuals. It’s because of these training programmes and the growing demand for products from African and other export markets that there is a sense of optimism in automotive tooling right now. And as long as the automotive companies continue to follow kaizen style strategies, the country’s burgeoning industry will have no trouble growing even further in the future with Nissan acting as one of the frontrunners.

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SEP 14 PAGE 11

company profile

Innovative supply chain solutions Editorial Tim Hands Production Chris Bolderstone

Grindrod Intermodal, a division of Grindrod SA (Pty) Ltd., combines considerable experience across the freight industry to offer its customers a complete solution for containerised cargo, also providing storage and transportation of bulk mineral products.

Grindrod Intermodal (GIM) represents the logistics and shipping section of Grindrod Limited, the holding company of a JSE securities exchange-listed organisation, itself with over 100 years of experience in South Africa’s freight movement and related industries. A global business, with representation in more than 37 countries worldwide, it holds a unique position from which to service African trade flows.

The main concern here is moving cargo by road, rail, sea and air, alongside providing integrated logistical and specialised services en route. Grindrod Intermodal’s formation came about six years ago, following the consolidation of the CMC Grindrod depot company, Cross Country Containers transport company, warehousing company Grindrod J&J Logistics and Unitainer, and was bolstered yet further last year by the addition of road transportation specialist Grindrod Stock. The complex warehousing

PAGE 92 sep 14

and distribution services on offer at Grindrod Intermodal span cross-dock and bonded warehousing, full service countrywide and cross-border transportation of containerised cargo by road and rail, through to comprehensive empty and full container depot services, alongside container sales and leasing.

A household name in shipping and logistics for over a hundred years now, Grindrod’s story can be traced back through the annals of time all the way to 1911, when Mr Leon Renaud and Captain John Edward Grindrod purchased a 150-ton steamer as she lay disabled on the Durban breakwater.

After work to re-float and re-equip the vessel, the Frontier began trading to Port St Johns and East London, at the time carrying sugar, oil, timber, hides, wool and, on occasion, livestock. Their company, then called the SS Frontier Co., was the predecessor to founding company Unicorn Shipping, which was to later become the Grindrod Group.

Grindrod Intermodal

The crux of the business is all about moving cargo seamlessly from point of departure to final destination, by providing customers with simple and convenient solutions to what might otherwise prove complex operational exercises. Today, the group’s head office is in Durban, South Africa, and is represented by subsidiaries, joint ventures and associated companies in 24 countries.

Never a company to rest on its laurels, further growth and development is a central aspect to the company’s vision, and goes hand in hand with its objective of being the leading service provider in the containerised freight industry. CCO George Georgiev suggests that GIM is already a frontrunner within the industry; “Given the number of tonnages we do on an annual basis and the sheer number of containers we move around, we are definitely one of the industry leaders. We are probably the second biggest user of intermodal freight rail services in South Africa.”

Grindrod Intermodal’s operations fall under four broad main categories: Depot, Warehousing, Transport and Sales and Leasing. The transport division specialises in the provision of all landside transport needs, whether by rail or road, taking advantage of the vast rail network in place in Southern Africa. The company’s comprehensive warehousing and depot services are available at all major operating centres in South Africa, with most of its Container Freight Stations (CFS) also having bond facilities, and fully compliant with customs requirements, while its specialised container sales and rental service serve both the international and domestic markets.

Rail is extremely important to the continued success of GIM’s operations, particularly in the movement of goods from ports. A strong relationship with Transnet Freight Rail has made rail-based operations that much easier, as Georgiev explains.

sep 14 PAGE 93

company profile

“It is not a secret that South African rail has had its ups and downs over the last couple of years, but we have a very good relationship with Transnet Freight Rail, and meet on a regular basis. They understand our strategies and we work together to make the transition smooth for our customers.”

At its core, intermodal freight transport is generally defined as the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation, without any handling of the freight itself when changing modes – as such reducing damage and loss, and improving security and transportation times.

Of these four divisions, transport is by far the busiest at present, although a recent drive in the warehousing sector has proven very successful for the company, as Georgiev explains. “Transport and warehousing are the most active and probably currently the biggest of our four divisions, but our

PAGE 94 sep 14

success is very much related to the fact that we have the four different legs. A couple of years ago we took the decision to concentrate our work around our warehousing capabilities and alongside warehousing offer depot and transport services. That contributed a lot to our success because in logistics you always have ups and downs, with the four different divisions helping to smooth out any fluctuations.”

In partnership with Mozambique’s Maputo Port Development Co., Grindrod plans to invest $1.7 billion over the next five years to upgrade ports in Mozambique, in line with the growing demand currently being seen in the country. This will more than triple capacity at the Maputo and Matola ports, to 50 million tons by 2020, from its current capability of 15 million tons, according to the MPDC. The Maputo Port Development Company (MPDC) is a joint venture, whose ownership is divided between CFM, Grindrod, DP World and local partners, who

Grindrod Intermodal each hold 49%, 24.7%, 24.7% and 1.6% respectively.

This venture comprises approved investments of $355 million in 2013 and 2014 in order to boost capacity at the Matola port terminal. The coal terminal aims to be handling 7.2 million tons by the end 2014, from the its previous capacity of six million tons per annum, while completion of its phase four improvements will see this expanded beyond 26 million tons. The nature of this development phase will necessitate much complex excavation and land reclamation, however, as well as the construction of two new berths, a stockyard and railway infrastructure.

Upon completion, this will give the terminal a final footprint in the region of 120 hectares. Significant investment is also planned by both MPDC and the sub-concessionaires, in line with a Port Master Plan, which details a strategy for the future development of the Port and provides a framework for berth and channel improvements, as well as the development of landside facilities and expansion of service corridors and other associated infrastructure.

A further aspect of Grindrod’s expansion plans includes significant development of its car terminal at

Powerhouse Security Service have partnered with Grindrod Intermodal for almost a decade, thus ensuring a greater understanding and the implementing of specific security measures in place to achieve our goals in protecting and in the smooth running of Grindrod Intermodal operations.

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www.powerhousesecurity.co.za SEP 14 PAGE 95

company profile

the Maputo port in Mozambique, which is emerging as a strong competitor to Transnet’s car facility in Durban. This follows the second phase expansion of Grindrod’s car terminal, only commissioned last July, which brought an increased annual capacity of 121,000 units, a significant rise from 52,000 units previously.

“In logistics you always have ups and downs, with four different divisions helping to smooth out any fluctuations” Encouragingly, Alan Olivier, Grindrod’s chief executive, said its Maputo terminal was operating at full capacity despite the recent expansion, adding that this third phase expansion, to increase annual capacity to about 191,000 units, had been originally planned

PAGE 96 sep 14

when the terminal was developed back in 2007.

Grindrod’s car terminal still lags some way behind Transnet’s annual capacity of more than 500,000 units, but last year in particular saw a significant increase in volumes through Grindrod’s Maputo car terminal, which Olivier put down to increased volumes from the export contract signed with BMW and other vehicle imports into the terminal.

Depending on their final destination, these vehicles would come to the terminal from Europe or Asia, be offloaded and reloaded onto another ship going to Australia, Europe or other locations. However, clearly the challenge in this instance is to find a company like BMW to contract with, with Olivier explaining that if BMW had a good experience from using the Maputo car terminal, “everybody will come to talk to you”. Confident that Maputo’s success so far is but the precursor to increased volumes, he added: “Most of the motor manufacturers want some volume to go through Maputo, either from an export point of view or importing units. I suspect over the next while we

Grindrod Intermodal will contract more.” This is a viewpoint supported by figures from the National Association of Automobile Manufacturers of South Africa, which has projected that exports of locally produced vehicles will increase by almost 30 percent to about 361,000 units this year from 277,893 last year, with Bodo Donauer, BMW SA’s managing director, stating that about 20 percent of its exports, or 14,000 vehicles a year, would be exported using the Maputo car terminal, despite BMW SA remaining committed to working closely with Transnet.

Construction of Grindrod Intermodal’s new multi-purpose logistics site in Denver, Johannesburg, commenced during April 2013, and is of characteristically impressive scope. Spanning an area of approximately 13.2 hectares, the facility comprises an 18,000m² warehouse as well as a container yard spanning 70 000m² capable of storing approximately 3400 empty containers and 500 full containers. Additionally, a two-storey office building featuring approximately 4200m² of office-space will

accommodate the Gauteng team, alongside certain key customers. This state-of-the-art facility has over 1000 tons of structural steel in its design, with roof-sheeting and side-cladding spanning an area of approximately 30,000m², giving GIM the perfect base from which to undertake its quest to become the very best in the field. Additionally to its own expansions, Grindrod-Intermodal’s partnership in March this year with St Anne’s Education in Partnership Programme (STEPP) underlined its unending commitment to its social responsibility. Louise Taylor, STEPP Director, detailed how the company, “undertook the logistics and seamlessly coordinated the arrival of the container of books at the Durban Port to delivering them to the door of STEPP,” in an operation which saw Grindrod Intermodal subsidise the delivery of 22,000 books to disadvantaged children. Ideally positioned to help in this way, GIM worked closely with various sistercompanies within the Grindrod Group as well as service-providers, with its staff orchestrating a colossal project to further the lives of thousands of children.

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SEP 14 PAGE 97

#BeInspired

Every month we discover awe-inspiring stories of successful entrepreneurship, world-leading innovation and universal inspiration.

In the future we will bring you further stories of business excellence and highlight the hard work that is going on in South Africa to grow the nations industries into global leaders.

Your success is our inspiration

APR

JUN

2012 ISSUE 1

DEC

2012 ISSUE 2

2012 ISSUE 5

CAMERON VAN DER BURGH

OAK VALLEY AN AWARD WINNING FAMILY LEGACY

THE BEST STROKE

REZIDOR HOTELS RESOUNDING QUALITY

A.S. VILJOEN BOERDERY

JOSIE FIELD EVERYTHING IS AS IT SHOULD BE

A FAMILY AFFAIR

FORESTRY SA

DAN PATLANSKY

BRIDGESTONE EARTH MOVING INNOVATION

REFORESTATION OF THE RAINBOW NATION

BRINGING THE WORLD TO ITS KNEES

SOUTHERN AFRICAN

CELLUCITY

SHIPYARDS

THE ORIGINAL RETAILER, STILL LEADING THE WAY

EXPLORING UNCHARTERED TERRITORIES

ALTECH UEC DRIVING DIGITAL MIGRATION IN SA

COCA-COLA DOME ENTERTAINING A NATION

The Sky’s the Limit

Mining’s Golden Boys

We meet The Denel Group, the largest manufacturer of defence equipment in South Africa.

Engineering the Future IndustrySA speaks with DCD mining Mining & Energy group marketing manager, henk Henk Schoeman, about the towering successes of this highly regarded engineering and manufacturing company.

Harmony Gold - IndustrySA talks with CEO Graham Briggs about the challenges facing the mining industry

#Innovation www.industrysa.co.za MAR

NOV noV

2014 ISSUE 19

ISSUE 15

Embracing People Power One of the most progressive companies in the country, BMW SA recently launched the 2-Series and 4-Series. However, one of the world’s most recognised automobile brands is more than just a manufacturer; it is in fact a committed and engaged corporate citizen. MD, Bodo Donauer explains more…

MAY

2013

2014 ISSUE 21

Ultra-Heavy Capabilities Genrec, a division of Murray and Roberts, has played a huge part in the development of the Medupi and Kusile power stations. Business Development Manager, Michael Mamotte tells IndustrySA that the company’s ‘ultra-heavy capabilities’ set it apart from the rest.

Global Presence, Local Knowhow

Benteler South Africa is the local division of the global steel processing company, Benteler International AG. According to management, the business is looking to grow and “show the world what we can do here in South Africa”.

Lyle Stewart ADDRESSING AFRICAN AUDIENCES

Pienaar Bros WORKING HAND-IN-GLOVE WITH SA INDUSTRY

Howden Africa LEADERS IN ENVIRONMENTAL CONTROL

Rolfe Laboratories UPLIFTMENT IN THE KAROO

ChianoSky

Midvaal Municipality

NEW AUDI AMBASSADOR

DEVELOPING SAVANNA CITY

DetNet

V&A Waterfront

BUSINESS WITH A BANG

CELEBRATING NO.1 SILO

Jeannie D

Forestry SA

DISPLAYING EntrEprEnEUrIAl DISplAyInG ENTREPRENEURIAL SpIrIt SPIRIT

NO SUBStItUtE no SUBSTITUTE for FOR wooD WOOD

De Keur

Colcab

SOWING thE SowInG THE SEEDS of OF SUCCESS

OPTIMISING DISplAy optImISInG DISPLAY EXCEllEnCE EXCELLENCE

Are you an entrepreneur? Do you have an innovative idea that has the potential to change lives? Is your company celebrating a milestone? Get in touch with us and let us know.

Some of the country’s biggest company’s use IndustrySA to promote their success and we look forward to hearing more stories of development as South Africa continues to grow. Your industry, their future, our South Africa.

@industry_sa

© Michael Poliza

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