South African Business Integrator
South African Business Integrator
Issue 5
A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N March/August 2017
March/August 2017
How the JSE has changed over time
The future of
Troubled waters
renewable energy for Africa
Digital exclusion may lead to greater inequality www.sabusinessintegrator.co.za
sabusinessintegrator.co.za
Lost production hours COVER STORY
iX engineers: Experts in business
unusual
Current Affairs I Economic Development I Business Integration SABI Vol 5 Issue.indd 101
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ADVERTORIAL: REDISA
Waste is not a liability, but a future resource Manufacturers are happy to make products and consumers are happy to buy products, but the full monetary cost of a product is not being taken into account because it excludes the cost of remediation. At the end of a product’s life, there is no-one to take responsibility for it and it becomes waste that is dumped. Extended Producer Responsibility Organisations (EPRO) are a solution for the challenges we face. An ‘insurance’ policy for manufacturers, EPROs remove the onus of ensuring products, from the individual producers, do not damage the environment at the end of life. This has already been achieved in South Africa as tyre manufacturers and importers pay a waste management fee directly to REDISA. REDISA has created a model of Extended Producer Responsibility in the waste tyre industry that can be understood as a form of environmental insurance that stabilises and supports the tyre recycling industry and is on target to reach 100% collection by the end of 2017. The money collected is applied to building and supporting collection and recycling systems and processes. The plan not only mitigates the environmental and resource consumption burdens of an industry but also allows brands to manage the liability that can arise from their daily business of meeting consumer needs and wants.
Independence It is not Government’s role to create jobs, clean the environment, or create circular economies – an approach that is now recognised worldwide as the best way to unlock the economic potential in waste, and to create entirely new industries much needed in growing economies. Government’s role should be to create an environment in which the private sector can thrive. The REDISA Plan provides Government with an environmental solution at no cost to the fiscus, with its core mandates being both environmental and socioeconomic upliftment through the development of entrepreneurial and job opportunities.
Overcoming challenges One of the biggest challenges in the country is educating people about the opportunities that can be found and created in waste, all by creating a circular economy of which extended producer responsibility forms a part. We have successfully defeated the biggest hurdle faced in encouraging circularity, namely funding. If it were easy to recover and reuse materials profitably, then business would be doing so. We argue that at a macro level it is not only a necessity but also profitable once you consider all the externalities that effectively subsidise a linear economy.
The socio-economic benefits With waste comes opportunity and, by looking at waste differently through a circular economy lens, there can be sustainable businesses and economic growth. We have seen the results of the successful implementation of a circular economy approach in our organisation, though this is not to say there have been no challenges. In 2015 The McKinsey Report used REDISA as a case study to show how major economic and environmental benefits can be gained from turning waste into worth. The report showed that by 2020 the REDISA tyre plan would deliver an annual net benefit to the economy of over R80 million before even considering the environmental benefits, estimated at an additional R380 million. The results from the report show that, given the massive change in technology, consumer behaviour and business models, the circular economy is both viable and attractive. n
Public private collaboration By collaborating with government on the one hand, and tyre manufacturers and importers on the other, REDISA has helped create over 3 000 new jobs and start 200 small businesses in just over three years, simply by seeing used tyres differently – not as waste but as worth.
REDISA T +87 35 REUSE (73873) W www.redisa.org.za
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Contents n Environment A future resource..................................................................... 1
n Supply chain
n Cover story
Can international certifications stimulate local success?.....................................................................54
iX engineers: Experts in business unusual......................... 8
n Safety & security
n Corporate social investment
Megatrends set to disrupt defence and security............59
CSI is good for business.....................................................13
n Corporate governance Reconsidering CEO terminations......................................16 Incentives for whistle-blowers.............................................18 Walk your talk and improve your reputation.....................22
n Communication & media Free speech in the digital age.............................................24
n Environment SA’s first industrial Green Star rating................................27
n Energy Excess electricity power’s SA’s economic growth.........30 The future of renewable energy for Africa .......................32 Mobile containerised PV plant............................................34
n Entrepreneurs A business in the business of growing others................36
n Human resources Lost production hours...........................................................38 Take it or leave it.....................................................................40 South African’s don’t trust their workplaces....................42
n Real Estate Best Real Estate Agent Internationally..............................62 Supporting profit objectives................................................63
n Investment How the JSE has changed over time................................64 A fresh approach to investing in 2017..............................67
n Insurance Executive liability: A managerial tightrope........................70
n Import & export SBS Tanks named Exporter of the Year...........................72
n Mining & Minerals At the core of Wesizwe’s operations................................ 74
n Marine & maritime New-age pioneers in the maritime industry......................76
n Environment Africa’s first green village.....................................................78
n Water & sanitation Troubled waters......................................................................80
n Finance Proposed sugar tax: not only doom and gloom..............43
n Travel & tourism
n Health
High expectations for SA’s tourism sector in 2017......................................................................86
SANRAL ups its fight against HIV/AIDS..........................44
n Retail
n Skills development Excellent education through innovation............................46
Online shopper: Lessons from 2016................................90
n Science & technology
n Legal
Digital exclusion may lead to greater inequality..............49 2017: The year of data literacy?.........................................50
Unemployment Insurance Amendment Act at a glance.............................................................................92
n Manufacturing
n Education
New app for stainless steel’s lifecycle costs...................52
Student support management............................................94
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South African Business Integrator
South African Business Integrator
Issue 5
A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N March/August 2017
Publisher
March/August 2017
Media XPOSE excellence in exposure Tel: +27 21 424 3625 | Fax: +27 86 516 7277 PO Box 15165, Vlaeberg, 8018
How the JSE
Editor Emma Dawson editor@sabusinessintegrator.co.za
has changed over time
The future of
Troubled waters
renewable energy for Africa
Digital exclusion may lead to greater inequality www.sabusinessintegrator.co.za
sabusinessintegrator.co.za
Lost production hours COVER STORY
iX engineers:
Experts in business
unusual
Current Affairs I Economic Development I Business Integration
Photographer: Adore Photography - Jackie van der Berg Cover picture: Lebo Leshabane
Editorial Contributors Bongani Gosa Dan Sommer Danie Venter Dr Miriam Altman Geoff Blount Jonathan Hall Josiah Montsho Liezl Groenewald Marlinie Ramsamy Mthokozisi Radebe Mungo Park Prof Piet NaudĂŠ Regine le Roux Tertius Troost Vanessa Gibb Content Manager Melanie Taylor artwork@mediaxpose.co.za Online Advertising & Marketing Coordinator Maurisha Niewenhuys marketing@mediaxpose.co.za Design & Layout CDC Design carla@cdcdesign.co.za Project Manager Elroy van Heerden elroy@sabusinessintegrator.co.za
Pictures: 123rf.com
South African Business Integrator @SA_Business_Mag
Advertising Sales Consultants Granville Isaacs granville@sabusinessintegrator.co.za Micheal Makhawu micheal@sabusinessintegrator.co.za Rashiedah Wyngaardt rashiedah@sabusinessintegrator.co.za Chief Financial Officer Shaun Mays shaun@mediaxpose.co.za Distribution/Subscriptions Janine Mays distribution@mediaxpose.co.za
South African Business Integrator A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N
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Disclaimer: The views expressed in this publication are not necessarily those of the publisher or its agents. While every effort has been made to ensure the accuracy of the information published, the publisher does not accept responsibility for any error or omission contained herein. Consequently, no person connected with the publication of this journal will be liable for any loss or damage sustained by any reader as a result of action following statements or opinions expressed herein. The publisher will give consideration to all material submitted, but does not take responsibility for damage or its safe return.
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OUR INDUSTRIAL RELATIONS SERVICES Disciplinary and Grievance hearings chaired by our highly qualified IR Specialists and conducted on your premises Representation at CCMA, DRC and Labour Court. Free telephonic IR advice on labour and employment issues by expert Specialists. Drafting and filing of various legal documents including Rescission, Variation, and Review Applications A free practical and user-friendly labour guide (IR Kit) Training seminars focused on Industry Rules, Collective Agreements, Labour Laws, and Regulations that affect the retail motor industry businesses. Resolving MIBCO-related queries. Industry wage- and substantive negotiations.
Tel: (011) 886 6300 Website: www.rmi.org.za www.facebook.com/retailmotorindustry Retail Motor Industry Organisation - RMI @AutomobilSA
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Editor’s L E T T E R
Risking the unusual
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If you’re not willing to risk the unusual, you will have to settle for the ordinary.” – Jim Rohn
I thoroughly enjoyed getting to know Lebo Leshabane, CEO of iX engineers, during our interview for this edition’s cover story. A civil engineer with 15 years’ experience in infrastructure services design, and project, programme and business management, Leshabane is driven to succeed. She hails from rural Limpopo where she wasn’t exposed to much career information or guidance. However, she had a deep love for maths and a wise uncle who encouraged her to study engineering. She chose civil engineering because, as she says, ‘this field deals with developmental issues. You create structures from nothing – when you arrive there’s nothing there, when you leave there’s life’. Talking to Leshabane, it’s clear that conceptualising, developing, implementing and realising something completely new excites her. And it’s this driving force that propels iX engineers to succeed. ‘My drive is not business as usual but rather to become innovation leaders in the infrastructure space,’ Leshabane pointed out during our interview. Don’t miss this fascinating glimpse into the biggest black-owned consulting engineering company in Africa on page 8. Widely accepted as global megatrends (see page 59) – the shift in global economic power, demographic shifts, accelerating urbanisation, the rise of technology, and climate change and resource scarcity – are also much reported in the media and discussed around boardroom tables. One of these megatrends has recently been brought into sharp focus in South Africa with the implementation of water restrictions. While the severe drought conditions have abated to some extent, here in the Western Cape we’re still looking to the skies and praying for rain. The Organisation for Economic Cooperation and Development (OECD) projects that, at the current pace, demand for water will increase by 55% globally by 2050. This increase will mainly come from manufacturing (+400%), electricity (+140%) and domestic use (+130%). In fact, the World Bank has cited a 40% global shortfall between forecast demand and available supply of water by 2030. Add to this competition from agriculture to feed growing populations, and the gap between supply and demand results in very challenging consequences. Don’t miss PwC’s report on page 80 that explores the risks for business associated with water and how to collaborate with stakeholders to achieve a common goal – to share water successfully. Enjoy the read!
editor@sabusinessintegrator.co.za
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COVER STORY: IX ENGINEERS
Business unusual Established in September 2016, iX engineers may still be in its infancy but the people driving this dynamic firm are far from novices. Emma Dawson talks to the company’s CEO, Lebo Leshabane, about her team’s non-traditional approach to infrastructure challenges. iX engineers was established in September 2016 following a partial merger between WorleyParsons’ Public Infrastructure business and the consulting business of Black Jills Engineers. The firm provides professional services for the design, development and through-life support of infrastructure, including airports, roads, rail, dams, water supply, water treatment, wastewater, buildings, human settlements, engineering training, structural, electrical and mechanical engineering, power transmission, distribution infrastructure, environment, infrastructure and project management, health and safety, and risk management (SHERQ) services. Photo credit: Adore Photography, Jackie van der Berg
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COVER STORY: IX ENGINEERS
In the driving seat At the helm of iX engineers is CEO, Lebo Leshabane, a civil engineer with 15 years’ experience in infrastructure services design, and in project and programme management, and business management. Leshabane is the former Managing Director of Black Jills Engineers, and was the Deputy President of the National Society of Black Engineers (NSBE). She served as a Council Member of the Engineering Council of South Africa (ECSA), and sat on the boards of Spectrum Valuations and Asset Solutions, and the Gauteng Partnership Fund (GPF). Her career took her from BT Mongwe & Associates and Transnet Freight Rail before she joined SAA as an Executive Manager responsible for SAA’s global property portfolio worth approximately R2.5b and the (outsourced) contract for the movable and immovable assets worth about R1.5b. In 2008 she was promoted to Head of Department where, in preparation for the 2010 soccer world cup, she was responsible for project and programme management for upgrading SAA business class lounges at all local airports. In July 2011, Leshabane was appointed Managing Director of Black Jills Engineers – a start-up consulting engineering firm that quickly grew. During the partial merger between the WorleyParsons and Black Jills Engineers, Leshabane took the reins as CEO of iX engineers. When asked what drives her, Leshabane is quick to respond: ‘I love a challenge, and the idea of conceptualising, developing, implementing and realising something completely new excites me. I’m also driven by the things we can do differently, by creating new approaches or developing new products, or using new materials.’ Leshabane notes that it’s this driving force that focuses iX engineers to position itself as the leading innovator in its industry. ‘My drive is not business as usual but rather to become innovation leaders in the infrastructure space,’ she adds.
Eco engineering ‘Innovative engineering solutions’ is the company’s tag line and this is where the team focuses much of its attention. ‘We’re intent on using less material and more sustainable options wherever possible,’ Leshabane insists, noting that key focus areas include water harvesting and recycling, and natural energy sources. Sustainability is at the heart of iX engineers and the company is registered with the Green Building Council of South Africa. ‘We’re responding to more and more customers that are interest in sustainable energy solutions – for new and existing buildings,’ Leshabane says.
A success story Although iX engineers is still in its infancy, its team of experts – located at offices in Cape Town, Port Elizabeth,
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My drive is not business as usual but rather how to become innovation leaders in the infrastructure space.”
Durban, Pretoria, Bloemfontein, Kimberley and Upington – have many years’ combined experience. Also key to note is that the majority of the company’s equity is held by black employees; and 36% of its shares are held by black women in the company. The balance of shares is held by former WorleyParsons’ employees in the PI business and by Black Jills Engineers employees who have moved over to iX engineers. ‘This is a success story not only for enterprise development but also for our employees who now have a stake in the biggest black-owned consulting engineering company in Africa,’ Leshabane points out.
A lifecycle approach Through its divisions – Buildings & Services, Environmental & SHERQ, Infrastructure Management, Transport, Human Settlement and Water – the company’s 300 employees have hit the ground running with the continuation of 500 contracts they’re currently serving. A major ongoing project being undertaken by the Building & Services division is the extension of the international terminal bussing gates at ACSA OR Tambo Airport. Valued at R130-million and spanning three years from 2016, the project comprises the extension of the existing Terminal A bussing gates building, which forms an aesthetically pleasing and iconic focal point from the nearby motorway. The scope of this project involves all engineering stages from inception to design, tender and construction monitoring. Last year, outside South Africa’s borders, a multidisciplinary team from a number of iX engineers’ divisions completed St Helena Island’s new airport. Valued at R4.3-billion, the scope of work for this greenfield project included design, construction monitoring and commissioning of the new airport, as well as appurtenant works to support the airport’s operations. The Transport (Airports, Roads and Rail) Division also has many successful projects under its team’s belt, including the rehabilitation of the N2, section 22 between Murchison and Marburg. iX engineers was responsible for the design and construction supervision of the 11km road upgrade. With a contract value of R356-million, the focus of this project was to find solutions for the high accident zones and improve road/pedestrian safety. The project was successfully completed within budget. Also with many projects successfully completed, iX engineers’ Water Division undertook the preliminary, detail and process design of the Zeekoegat Waste Water Treatment Works for the City of Tshwane as a member of the BAKV3 Joint Venture. This upgrade and expansion project, valued at R600-million, increased the capacity of
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COVER STORY: IX ENGINEERS
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The majority of the company’s equity is held by black employees; and 36% by black female employees.”
A helping hand Since her time as Deputy President of the National Society of Black Engineers (NSBE) – an organisation that promotes engineering disciplines to high school learners, mentorship to undergraduate tertiary students and new graduates – Leshabane’s belief in the value of education and mentoring South Africa’s youth continues. ‘We’re currently implementing an internship programme to provide work experience for students,’ she enthuses. ‘We also sponsor children from disadvantaged backgrounds by providing their school uniforms, from head to toe. Additionally, this year we’re paying school fees, purchasing books and stationery, paying for safe transport and providing school uniforms for six learners. We also have plans to expand our involvement with local schools in the areas in which we have projects. We plan to visit disadvantaged schools within our project locations to promote engineering, expose children to the industry, and hopefully motivate them to study harder and develop an interest in engineering,’ she notes.
A local company with global experience ‘iX engineers is a local company with global experience,’ says Leshabane. ‘We’ve completed projects around the globe as well as in South Africa and on the continent. We have a deep understanding of local, regional and international conditions.’ When asked what sets iX engineers apart from its competition, Leshabane insists that it’s their nontraditional approach to business – business unusual – and that her company is the largest black-owned consulting engineering firm in South Africa. n
the existing water treatment plant from 30Ml/d to 85Ml/d in four stages. Construction stages one to three (a new 40Ml/d activated sludge plant, a new 85Ml/d sludge handling facility, and a new 85Ml/d tertiary treatment facility) have been completed. The team is currently working on stage four – to increase the capacity of the existing 30Ml/d plant to 45Ml/d. ‘We offer a lifecycle approach to all our projects. For us, it’s not just about what we build but also how it’s maintained and that it serves the end user,’ Leshabane insists. She explains that this includes identifying problems, packaging solutions, assisting customers to raise the finance and making the project bankable, and extends to project implementation and management.
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IX ENGINEERS HEAD OFFICE Eastwood Office Park, Protea House 270 Lynwood Service Road, Lynnwood Ridge Pretoria, 0081 T +27 012 745 2000 W www.ixengineers.co.za
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CORPORATE SOCIAL INVESTMENT
CSI is good for business A new study, conducted by the Bureau for Economic Research and commissioned by the Nation Builder Trust, reveals that businesses can profit from engaging in Corporate Social Investment (CSI). The report, entitled The Case For Corporate Social Investment in South Africa, states that at worst the effect of is simply neutral, but probably positive. This is an important point to note as many senior executives often see CSI as a compliance exercise that carries costs. Furthermore, if spent even more effectively, CSI might have a highly significant economic impact on the country. ‘So often, social investment is seen as a non-strategic activity that is either a compliance issue or a heart issue. But if you want it to be effective, you need to implement it in a similar manner to investing in capital,’ insists KeriLeigh Paschal, executive director of Nation Builder. The report looks at the importance of CSI in terms of its impact on economy-wide output, GDP, number of jobs created, and labour income. The business case for CSI is grouped into four main categories: Cost and risk reduction: There is growing evidence that companies with strong sustainability reputations find it easier to recruit, motivate and retain high-quality employees. CSI activities directed at managing community relations may also result in cost and risk reductions (through a better understanding of stakeholder concerns). Positive community relationships may decrease the amount of regulation imposed on a company. Gaining competitive advantage: Consumers value CSI engagement and tend to be more loyal to companies with a good record. CSI activities may also lead to improved
innovation as feedback from diverse stakeholders can be a source of ideas for new products, processes and markets, resulting in competitive advantages. Developing reputation and legitimacy: Reputation, or brand equity, involves trust, credibility, reliability, quality and consistency. Good CSI performance allows companies to build their reputations and brand value. Seeking win-win outcomes through synergies: CSI can provide a business with valuable input into strategic planning thanks to insights and understanding as it engages with different markets, and is exposed to the needs and consumption of products by these markets. It is estimated that R8.1 billion was spent on CSI in 2015. If these funds were invested effectively, this could result in R25 billion being added to South Africa’s economic output. In effect, businesses will experience a societal return of R3.2 for every R1 spent annually on CSI. This same value of CSI spend would sustain almost 63 000 jobs and generate R7.7 billion in labour remuneration – ultimately reducing unemployment and impacting our economy positively. GDP increases by R12.5billion if the investment is done efficiently. CSI plays an important role in creating an environment that allows for more inclusive economic growth, and the report shows that the potential impacts of already existing expenditure is highly significant in the current South African context. For more information, visit www.proudnationbuilder.co.za. n
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CORPORATE GOVERNANCE
Reconsidering CEO terminations Executive pay is a hot topic for shareholder and stakeholder activists, but nothing gets people’s blood pumping faster than a CEO who walks away from a disastrous performance with a substantial golden parachute. ‘Companies need to reconsider the way they handle CEO terminations to avoid arousing controversy and appearing to pay for failure,’ says Martin Hopkins, Executive Committee Member at the South African Reward Association (SARA) and a partner at PwC in the People & Organisation practice. For example, a prominent South African company recently paid its CEO a golden handshake of more than R20 million following a disastrous event on his watch. ‘We must recognise that there may be sound commercial reasons why companies take the pragmatic course of essentially paying a CEO to leave, but it is not recommended from a governance point of view because it sends the wrong message to staff and shareholders, and severs the vital link between pay and performance,’ Hopkins insists.
Well-defined process required It is important to recognise that the issue of CEO termination pay-outs is not necessarily as clear-cut as it may initially seem. South African labour law is extremely employee-friendly; dismissing a CEO for non-performance would require a proper process to be followed. It is likely to take between one and two years to dismiss a CEO, during which time the company would be disadvantaged by having no proper leadership. ‘It’s a process that involves lawyers and intense media scrutiny with all the reputational and other risks that
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implies, so you can see why it makes business sense to shut down that particular circus and avoid a prolonged, public washing of dirty corporate linen,’ he adds.
Legal factors to consider Another factor is that CEOs who are dismissed would be entitled to substantial pay-outs in terms of the law. At a minimum, a termination package includes notice pay – for CEOs, six months is best practice – plus two weeks’ salary for every year worked. Share awards that have not yet vested would also be paid out on a prorated basis. Frequently, the notice pay is subsumed within a ‘lossof-office’ payment which, while not mandated, is generally considered reasonable. Hopkins says that around one year’s salary is considered acceptable. ‘In other words, a CEO who is dismissed or asked to leave would leave with a substantial sum of money based on perfectly legitimate grounds. But what must be avoided is any implication that executives are not subject to the same strictures as other employees who are penalised for poor performance. ‘All employees, including CEOs, need to be treated fairly but it may be time for companies to bite the bullet and go through due legal disciplinary processes leading to dismissal in the case of poor performance of senior executives,’ Hopkins concludes. For more information, visit www.sara.co.za. n
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CORPORATE GOVERNANCE: OPINION
Incentives for whistle-blowers: Weigh up the options carefully By Liezl Groenewald, Manager: Organisational Ethics Development, The Ethics Institute
Offering rewards for whistle-blowing can yield results, but should not replace the creation of an ethical culture.
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CORPORATE GOVERNANCE: OPINION
Canada’s Ontario Securities Commission recently announced that it would begin paying incentives to whistle-blowers. The scheme allows for payments of up to $1.5 million, or more if high amounts are collected. The US Securities and Exchange Commission (SEC) is the flag-bearer for this approach, paying famously high rewards to those uncovering corporate wrongdoing. Should South Africa, with its high levels of corruption, be considering a similar approach? This approach has generated results for the US – complex frauds have been uncovered and the pay-outs help to compensate whistle-blowers, many lose their jobs or find their careers in free-fall after coming forward. For example, former Enron Vice-President Sherron Watkins, who helped uncover accounting irregularities at the company 14 years ago, has been unable to obtain a corporate job since. However, British regulators decided not to go this route. They argue that only a small number of whistle-blowers – perhaps as low as 1% – qualify for a pay-out; no such protection is afforded to those whose information does not result in a concrete outcome but who may still suffer negative consequences. The introduction of financial incentives has not only created the need for complex and expensive governance frameworks, but it could also undermine existing corporate whistle-blowing mechanisms.
Exemplary protection
This could be justification for considering some sort of incentive to encourage whistle-blowing. At the same time, though, care must be taken to craft the approach lest it undercut efforts to build an ethical culture in our businesses and more generally.
Changing the ethical culture That said, an incentive scheme could play a valuable role in foregrounding ethical behaviour and promoting the concept that ethical actions yield positive results. It may also help to reverse implicit cultures that prioritise loyalty to fellow workers above loyalty to the organisation. Based on international experience and the requirements of the Protected Disclosures Act, it’s important to emphasise that whistle-blowers should only be allowed to contact regulators, other authorities, or the media after having exhausted internal reporting avenues. Not only could it strengthen the ethical culture within corporates, but employees will be protected by the Act. As important, companies should make concerted efforts to praise those who act ethically by blowing the whistle, and should be meticulous about reporting on what actions they have taken on each reported misconduct. The key to halting corruption is to create a situation in which acting ethically is the default behaviour pattern. Clearly, as a business community and a nation, we are far from reaching that goal. Therefore, some form of incentive for whistle-blowers might have a role to play. For more information, visit www.tei.org.za. n
Photo Credit: The Ethics Institute
South Africa is generally credited with an exemplary protection framework for whistle-blowers, anchored by the Protected Disclosures Act. However, The Ethics Institute’s South African Business Ethics Survey 2016 shows a decline in the number of South African employees who report observed misconduct. In 2016, only 48% of those who observed misconduct reported it, down from 64% in 2013 and 66% in 2009. The most prominent reasons for not reporting misconduct are a fear of victimisation at work (36%) and a belief that the company would take no action (32%). Locally, there have been a number of high-profile instances where whistle-blowers have suffered severe consequences or even death. One such was Moss Phakoe, a councillor in Rustenburg who was gunned down after giving evidence of municipal corruption. Another is Mpumalanga politician, Jimmy Mohlala, who was shot dead after blowing the whistle on corruption linked to the building of a 2010 Fifa World Cup Soccer venue, the Mbombela stadium in Nelspruit. Another factor for the decline in reporting misconduct could be that the profile of perpetrators has shifted, with 41% categorised as senior managers, up from 17% in 2009, according to PwC. It seems that employees are less willing to blow the whistle on their seniors despite the protection afforded by internal whistle-blowing policies and the Protected Disclosures Act, and because most corporates have a hotline run by a third party where reports can be made anonymously.
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The key to halting corruption is to create a situation in which acting ethically is the default behaviour pattern.”
Liezl Groenewald, The Ethics Institute
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CORPORATE GOVERNANCE
Walk your talk and improve your reputation Leaders need to walk their talk, and operational governance is an important building block in managing a lasting, positive reputation. Regine Le Roux, Managing Director at Reputation Matters, shares insights on how this key element exemplifies your reputation to your stakeholders.
Building a strong corporate reputation is all about consistency, which is fundamental in successfully running an organisation. To ensure consistency, it is vital to align operational governance – organisations’ rules, processes, procedures and policies – to strategic intent and ultimately having leaders walk their talk. ‘Operational governance essentially establishes the ground rules for conducting your day-to-day business. Its purpose is to clarify the intervention scope of some areas, defining reporting and decision flows, what needs to be done and by whom, and who the buck stops with,’ explains
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Businesses don’t fail, leaders do.”
le Roux. ‘It is the organisational component that establishes the frontier with operational activities. In our line of work we often see that there is no alignment between the strategic levels of an organisation and their operational levels. They might have good intentions to give excellent service or provide quality products without having the necessary operational governance in place,’ she adds.
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CORPORATE GOVERNANCE
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The task of the leader is to get his people from where they are to where they have not been.” – Henry A Kissinger
Le Roux motivates that a two-way conversation enables feedback from key stakeholders to raise and address any uncertainties before issues arise; in this way the processes can be refined even further. ‘Leadership within the organisation needs to be seen as “walking the talk” and leading by example. Leaders need to be seen following protocol when it comes to company rules to ensure business continuity,’ le Roux maintains. ‘It is also important to have operational governance structures in place for all stakeholder groups, including external groups such as customers, suppliers, distributors and the media, to name just a few. The first step is to identify key stakeholder groups, each with its own set of governing structures and communication platforms in place,’ she adds. ‘It is essential that everyone within the organisation is familiar with company rules for each of the stakeholder groups so that they can speak with the same voice when engaging with different stakeholders.’ Echoing the same message from within is crucial for organisations. It eliminates confusion and inconsistency; and ultimately builds trust in how the company operates. As an example, having clear and consistent payment terms and conditions outlined across the board for customers and suppliers from the outset of the relationship will level the playing field and let everyone know what the expectations are right from the start. This will allow everyone to plan accordingly. Without procedures in place, an organisation sets itself up for a catastrophe. As Benjamin Franklin once said, ‘If you fail to plan, you are planning to fail.’ Le Roux concludes: ‘When it comes to corporate governance, communication is the glue that brings it all together. Consistent communication about operational governance builds reliability, which ultimately builds trust and positively impacts corporate reputation.’ n
Photo credit: Reputation Matters
Communicating policies and procedures ineffectively poses a colossal threat to an organisation’s reputation, especially on internal governance structures. It is therefore crucial to not only have procedural structures and policies in place, but also to communicate these internally so that all parties understand what they should be doing, how they should do it and why it is important.
Regine le Roux, Managing Director, Reputation Matters
Reputation Mattes is a corporate reputation management agency specialising in relevant, customised and effective strategic communication solutions. The company uses its unique strategic research tool, the Repudometer®, to quantify its customers’ reputations, identify and bridge organisational gaps, and strengthen their reputation through customised communication initiatives. For more information, visit www.reputationmatters.co.za.
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COMMUNICATION & MEDIA
Free speech in the digital age How do we strike the balance between safety and freedom of speech on the Internet? Can good intentions muffle constructive content? These were the topics being discussed late last year at the IAB SA’s panel discussion on Free Speech in the Digital Age. The panel brought together experts that represented different views on the contentious topic. Sipho Risiba, Chief Operations Officer, Film and Publications Board (FPB), was present to defend the classification body’s draft Online Regulation Policy and the Department of Communication’s proposed Films and Publications Amendment Bill, while Justin Spratt, Head of Business, sub-Saharan Africa at Uber, provided arguments against it. As Public Policy & Government Relations Manager for Google South Africa, Fortune Mgwili-Sibanda spoke in detail about the nature of content being indexed locally, while Ant Brooks, Special Advisor to the Internet Service Providers’ Association (ISPA) and Founding Member of the Future Foundation, provided deep insight on the
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involvement of ISPs in the regulation of content. The panel was facilitated by Head of Regulatory Affairs for IAB SA, Andrew Allison, who has been instrumental in representing the IAB in its engagements with the FPB and the Department of Communications about online content regulation.
How the policy will impact regulation Risiba argued that there has been confusion over the true nature of the FPB’s policy. ‘There is a feeling that the FPB is trying to regulate the Internet. However, we are regulating the behavior on the Internet not the platform,’ he explained. He added that they have clearly distinguished between commercial and non-commercial players. In
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terms of commercial legislation, this will extend primarily to films and games. Non-commercial content will be monitored through complaints.
Self-regulation is key ‘The key lies in self-regulation, with the Online Regulation Policy providing a framework for uniformity of standards,’ said Ribisa. He emphasised collaboration between all parties so that the FPB does not prescribe what content is harmful but works with the industry to self-regulate. Brooks noted that self-regulation is nothing new. Since 2002, any member of the public can approach ISPA to remove offensive or illegal content. Awareness of this is growing – 246 notices were lodged in 2015, and 249 notices were lodged in 2016. Mostly, these notices deal with copyright infringement.
How big is the harmful content problem? Spratt argued that the need for regulation only applies to fringe cases. Most commercial content creators are incentivised to self-regulate already. The open web is very clean. The problem lies in the dark web, where communication is concealed over SMS, WhatsApp or Snapchat. Brooks added that the largest collective host of pornography is not Google (as the Department had previously claimed) or any other search engine, but ordinary individuals taking pictures of themselves. Any attempt at regulation spawns unintended consequences. What pornography is being regulated – transmission or one-to-one? If South Africa chooses to regulate oneto-one material, does that mean the legislation reaches beyond the Internet and into GSM technology?
Digital literacy is critical Children are accessing the Internet on mobile phones from a young age, with 80% of them doing this on a device they own. While classification will help impede the publishing of local harmful content, public education is paramount. ‘If you read our [Google’s] online community guidelines and the [South African] Constitution, you will find they read almost word for word. We all agree on the limitations of free speech and there are no vast differences in what different countries view as bad content. With 600 hours of content uploaded every minute, digital literacy should be at the core of helping the public to use the Internet constructively,’ insisted Mgwili-Sibanda.
In support of this argument, he used the example of Google working with schools to educate learners on the safe use of the Internet. On this point, Spratt added: ‘Digital literacy is currently funded by private companies. This is something the government needs to get involved with. It has been proven that just a 10% boost in Internet access adds to GDP growth. In this sense, the Internet is a positive force and with increased access to the right content our continent will be unstoppable.’ MgwiliSibanda echoed this sentiment, citing the example of Saudi Arabia that saw an increase in foreign investment when they introduced online regulation and digital literacy in the country.
Education extends beyond the classroom It is not only the youth of South Africa who need to improve their digital literacy. Legislators at a ministerial and departmental level need to understand the space so they can regulate effectively. A law enforcement manual is being compiled by the FPB to ensure that cases are not struck off the roll because the legislators do not understand the nuances of the policy. Teachers need to be educated, as do parents. While some devices are created for kids, many log into their parents’ phones using their credentials. The device recognises the user as an adult, which gives them access to restricted content.
The impact of regulation on business Brooks voiced a concern about the impact legislation will have on the growth of small businesses. After running a workshop for ISP businesses, he found that – individually – laws and legislative obligations may not themselves be overly problematic, but combined they made the barrier to entry too high for a new ISP business to succeed without significant difficulty. Risiba acknowledged that the fee structure for small businesses needs to be reviewed, and that the FPB is currently doing a study with the University of Pretoria. The panel provided a constructive discussion and affirmed that while the industry may not yet have all the answers as to how best to regulate (or not) content in an increasingly online South Africa, the FPB is open to discussion and collaboration, and there is a genuine willingness on the part of business to play a role too. n
The Interactive Advertising Bureau (IAB) South Africa is an independent, voluntary, non-profit association focused on growing and sustaining a vibrant and profitable digital industry in South Africa. The IAB South Africa represents the digital industry across all sectors including the media, the marketing community, government, and the public, as well as acting as the channel through which international bodies can enter the South African digital market. The IAB South Africa currently represents over 200 members including online publishers, creative, media and digital agencies, brands, and educators, between them accounting for more than 43 million local unique browsers, and 1 267 802 page views. The IAB South Africa strives to provide members with a platform through which they can engage, interact, and address digital issues of common interest, thereby stimulating learning and commerce within the South African digital space. For more information, visit http://iabsa.net/.
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ENVIRONMENT
SA’s first industrial Green Star rating Growthpoint Properties’ Greenfield Industrial Park in Cape Town has been awarded South Africa’s first ever Green Star SA rating for an industrial property. In a milestone achievement for green building in South Africa, Greenfield received a 4-Star Custom Industrial As-Built Green Star SA certification from the Green Building Council South Africa (GBCSA). Engelbert Binedell, Growthpoint Properties Industrial Division Director, comments: ‘We are delighted Greenfield has become the country’s first certified green industrial property. Growthpoint is proud to be part of creating a greener, more sustainable built environment for South Africa.’ Growthpoint owns or co-owns the largest portfolio of Green Star SA certified buildings of any company in South Africa, comprising 50 properties. It holds an entire quarter of South Africa’s 200 office, retail and properties independently certified to date. Greenfield is the latest property to join Growthpoint’s brilliant constellation of Green Star SA rated buildings. Congratulating Growthpoint on its achievement, Brian Wilkinson, CEO of the GBCSA, comments: ‘Earning South Africa’s first Custom Industrial As-Built Green Star SA rating for Greenfield continues Growthpoint’s track record of exceptional green building leadership. Growthpoint’s commitment to sustainability and resource efficiency has introduced innovation to the sector and can be seen in the sheer number of certified properties in its portfolio.’
Meeting the needs of modern business Designed with sustainability in mind, Greenfield is a quality, efficient and upmarket industrial park on a prime 3.4ha site in Airport Industria near Cape Town International Airport. Greenfield includes 21 000m2 of space, designed to meet the needs of modern business. It is the landmark redevelopment of the former Wasteman site. It enjoys easy access with good proximity to the N2 highway, and excellent visibility with prominent signage exposure. Riaan Munnik, Development Manager at Growthpoint Properties, explains: ‘From the start, we prioritised sustainability for Greenfield. As we progressed with the project we realised it had the potential to achieve a ground-breaking Green Star SA certification.’ Growthpoint’s green building consultants for Greenfield, Sally Misplon, from Misplon Consulting, and Francois Retief, from Sow & Reap, further examined this opportunity. Collaborating with GBCSA, they jointly
Greenfield Industrial Park building in Cape Town, South Africa’s first ever Green Star SA rating for an industrial property.
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ENVIRONMENT
Riaan Munnik, Development Manager at Growthpoint Properties; Manfred Braune, GBCSA Chief Technical Officer; and Engelbert Binedell, Growthpoint Properties Industrial Division Director.
developed a custom new-build certification for the industrial facility – a progressive approach to ensuring more building types can be certified by the GBCSA. The custom process uses around 80% of existing Green Star SA tools, making minor changes to allow application to other sectors for which tools have not yet been developed. To ensure robustness and relevance, the custom process goes through an independent peer review before it is finalised as a rating tool for the project. The Greenfield project was a wonderful opportunity to apply this process, which proved successful thanks to, among other things, the Green Star experience that Misplon and Retief added to the process. Additionally, Architect, Stuart Anderson from Loudon Perry Anderson Architects, played a significant role in ensuring the green building rating was achieved through architectural design that incorporates many sustainable design principles. True to its name, Greenfield provides innovative green industrial space. It achieves this with features including sustainable energy from solar photovoltaic panels, waterwise landscaping, waterless urinals, recycling, and lowenergy light fittings that complement its smart design that uses natural light to save on lighting costs. What’s more, it creates a healthy and appealing working environment with breakaway areas for staff, and shower facilities for cyclists and runners. Setting new benchmarks for sustainability in the South African industrial sector, Greenfield achieved full scores for energy efficiency for its rating. It will be a key
pilot project for net-zero energy buildings in the country because the base building (excluding tenant loads) produces as much of its own energy as it consumes over the course of a year. GBCSA has pledged to introduce a net-zero building certification scheme and is targeting 2 500 commercial green building certifications and 10 000 residential green building certified homes in South Africa by 2020. It made this commitment at the United Nations’ Conference of the Parties (COP21) in December 2015. For GBCSA, Growthpoint is a key partner in achieving these commitments. Binedell says: ‘We constantly pursue energy- and water-efficient projects to make our buildings more economical, sustainable and attractive to customers. With Greenfield, we have created a landmark industrial property that is respectful of the environment and saves its occupants money.’ Binedell notes that Growthpoint recognises the significant benefits of green building and is committed to driving it forward in its own substantial portfolio of industrial properties, including taking the lessons from its work at Greenfield and applying them to other industrial properties across South Africa in future. ‘Green building is the future of industrial property. Green buildings provide lower total occupancy costs for tenants, are proven to deliver higher returns for owners, and are designed to have positive impacts on their users, their surrounding communities and the environment,’ he adds. n
Growthpoint is the largest South African primary listed REIT and strives to be a leading international property company providing space in which to thrive. It creates value for all its stakeholders with innovative and sustainable property solutions. Growthpoint is a Platinum Founding Member of GBCSA, a member of the GBCSA’s Green Building Leader Network, and has been included in the FTSE/JSE Responsible Investment Index for seven years. It owns and manages a diversified portfolio of 526 property assets including 467 properties in South Africa, 58 properties in Australia through its investment in Growthpoint Properties Australia (GOZ), and a 50% interest in the properties at V&A Waterfront, Cape Town. For more information, visit www.growthpoint.co.za.
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ENERGY
Excess electricity capacity to power SA’s economic growth Eskom’s improved generation performance and new build programme have delivered excess capacity for the country. South Africa’s power system remains stable thanks to Eskom’s rigorous plant maintenance that has seen an improvement in plant availability – which has moved to 77.3% from 70.3% leading to 3 103MW being added to the national grid. The improvement in generation plant availability has re-enabled Eskom to dispatch the least cost stations ahead of the more expensive stations. Projections for the year end show that there will be a cost saving of R238 million. New capacity will fuel the growth of the South African economy. Since the build programme started in 2005,
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Eskom has added 8 030MW to the national grid and, over the next six years, a further 9 103MW capacity will be added from the Ingula pumped storage scheme that will be fully commissioned later this year, Medupi that will be fully commissioned in 2020, and Kusile in 2022.
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Eskom’s power system has progressed to a position of surplus capacity that will positively impact the SA economy.”
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ENERGY
Eskom currently has a surplus of 5 600MW at peak thanks to improved plant performance and new additional capacity that meets any increase in demand until 2021. Eskom’s Chairman, Baldwin Ngubeni, comments: ‘Our system status update follows on the backdrop of positive interim results for Eskom, but also follows the departure of Brian Molefe – an extraordinary leader whose legacy will be that of turning Eskom around. ‘Our system status update reflects the vision, dedication and hard work of thousands of men and women at Eskom and its Interim Group Chief Executive, Matshela Koko. Through their tenacity and capabilities, the company has turned things around to deliver solid and sustainable financial and operational performance, positively impacting the South African economy.’ Koko adds: ‘On average, surplus capacity every day during the peak for this financial year is the size of Matla Power Station (3 600MW), this excludes a 2 000MW operational reserve. Eskom will continue to focus its efforts on increasing electricity demand and ensuring sustainable revenue collection.’ Eskom has increased cross border sales by 25% and aims to further increase domestic and export sales.
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Eskom currently has a surplus of 5 600MW at peak, thanks to improved plant performance and new additional capacity that meets any increase in demand until 2021.”
Koko also highlights gains made with the electrification programme. ‘In the past nine months, Eskom has connected 162 104 new customers to the grid, with 150 747 customers energised and already using electricity. We hope to electrify all households in South African in the next two years,’ he insists. Other highlights include the decreased usage of open cycle gas turbines (OCGTs) thanks to improved generation availability. The OCGT load factor for the second quarter of the financial year was 0.06% and for the third quarter, 0.11%. ‘We expect minimal use of Eskom OCGTs to manage the system for the rest of the financial year,’ Koko notes. The Distribution division continues to exhibit sound technical performance and has exceeded the targeted installation for smart meters for the third quarter, with actuals of 17 561 installations versus a target of 12 000 installations. Some of the key challenges facing the distribution industry are huge under-investment in electricity infrastructure, high energy losses as a result of inadequate revenue management systems, and some utilities consistently defaulting on their negotiated payment arrangements because of systemic failures. ‘The effects of these shortcomings are detrimental to the economic growth of the country and addressing these challenges is key to ensuring future financial sustainability. We wish to acknowledge cooperation with Premiers and MEC’s in helping Eskom to find lasting solutions to the distribution challenges,’ says Koko. ‘Since the start of the Promotion of Administrative Justice Act (PAJA) process in November 2016, Eskom has managed to collect R979 million from the municipalities. This is testament of the ability of South Africans to work together during tough times,’ he maintains. The Transmission division has had zero major incidents in terms of system performance. There were high levels of maintenance execution with 98.8% of planned work executed. There has also been excellent line fault performance achieved year-to-date. ‘Eskom’s power system has progressed to a position of surplus capacity that will positively impact the SA economy. The availability of excess capacity allows Eskom to meet demand more cheaply than through the purchases of renewable energy. As a priority, both domestic and export sales must be further increased. Eskom will continue to focus efforts on the increasing growth in demand in electricity and ensuring sustainable revenue collection,’ Koko concludes. For more information, visit www.eskom.co.za. n
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ENERGY
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Green innovations and disruptive technologies are making it possible to quickly roll out integrated microgrid solutions.
The future of renewable energy for Africa Everything you want and need to know about renewable energy and the future of energy development and growth in Africa comes under the spotlight at Energy Revolution Africa 2017. This co-located event to African Utility Week is being hosted for the first time in Africa at the CTICC in Cape Town. Located at the Cape Town International Convention Centre, from May 16 to 18, 2017, Energy Revolution Africa provides a dynamic meeting place for solution providers, consultants, renewable energy producers, and the African and global energy minds of the future. Most of the more than one billion people living in Africa are unserved by traditional grid supply. This energy landscape is changing as consumers, independent power producers, and other stakeholders change the way in which energy is generated and distributed. Green innovations and disruptive technologies are making it possible to quickly roll out integrated microgrid solutions. ‘In this context it made sense for us to move with the market and introduce a platform focused on the future of green energy,’ explains Evan Schiff, event director of African Utility Week and Energy Revolution Africa. Focusing on community-scale projects and innovation in
the sectors of renewables, future technology, microgrids, energy efficiency and energy storage, Energy Revolution Africa showcases the latest technology, practical solutions and examples from successful community and commercial projects. ‘It is a powerful opportunity for new energy purchasers and large power users – from commercial property developers and the agricultural sector to mines and metros – to discover the exciting opportunities and technologies emerging in a fast-growing renewable technology sector,’ he adds. The programme includes a three-day Energy Revolution Africa strategic programme as part of the sessions, three days of focused Continuing Professional Development (CPD) accredited technology workshops and case studies freely available on the exhibition floor, real-life project experience, and exhibitions by more than 60 service and solution providers. n
Over the last 16 years, African Utility Week has been recognised as the most comprehensive exhibition and conference for power and water utilities in Africa by exploring business opportunities and sharing knowledge about Africa’s power and water sector planning, technology and engineering. Co-located Energy Revolution Africa explores the transitioning energy landscape in Africa. With a focus on small-scale and off-grid projects, Energy Revolution Africa provides a unique platform for solution providers to meet with developers and customers in the transitioning energy landscape in Africa. For more information, visit www.african-utility-week.com/era.
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WWW.RENPOWER.CO.ZA
WE ARE SPECIALISED IN BOTH ROOFTOP PROJECTS AND GROUNDMOUNTED, GREENFIELDS SOLAR PROJECTS. OUR CUSTOMERS CHOOSE BETWEEN A VARIETY OF FLEXIBLE OPTIONS:
WE STEP IN AT ANY STAGE, WHEREVER YOU NEED US:
· Own your own solar plant
· We are specialists in Project Development, right from the beginning in identifying the project and preliminary design.
· Rent out your roof or property for a RENpower solar power installation · Use the electricity yourself in your own home or business · Feed the electricity into the electricity transmission network
· We assist and advise in project selection and, with the help of our proprietary software, perform a detailed evaluation of the underlying roof structure or ground site chosen for the solar project.
To find out more what RENpower can do for you please contact Marius Bekker, mbekker@renpower.co.za CONTACT DETAILS:
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Tel: 021 035 0345 E-mail: mbekker@renpower.co.za
Address: 10A Carpe Diem Offi ce Park, Quantum Street,Techno Park, Stellenbosch
Web: www.renpower.co.za
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Advertorial: RenPower
Photo credit: RenPower
Mobile containerised PV plant Founded in 2013, RenPower Group (Pty) Ltd (RenPower) develops rooftopand ground-mounted photovoltic (PV) projects for the agricultural, industrial, large retail/logistics, and mining sectors. RenPower’s management and technical teams have extensive experience in the mature European PV market, as well as in the developing South African PV market and its accompanying regulatory environment. RenPower is based in Stellenbosch in the Western Cape.
Service offering RenPower offers a service that spans the development, implementation, and operational chain of a PV plant from the initial site audit to monitoring and maintaining the plant. This includes, among other things, load profile and bill analysis to get to the right size of the PV plant, designing and planning the plant’s layout, selecting power and ancillary equipment for the plant, assisting with the utility application to connect the plant, managing the plant’s installation, and performing ad hoc due diligences required from site to site.
Funding The decision on whether to invest in a PV plant is often weighed against smaller capex projects that contribute directly to the production output of the facility – which are usually realised in very short periods of time. In contrast
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to the direct contribution of these smaller projects to the production output, the contribution of a PV plant is indirect because the impact that the plant has is on the facility’s electricity account. Although the benefit of the plant is real from the onset, it only becomes pronounced in the medium to long term. Weighing a PV plant up against smaller projects is one example of the financial barriers that PV plants face, and there are a few others. To ease the breach in these financial barriers, through international multilateral funding agencies, RenPower offers funding to the value of 70% of the project’s costs at fixed interest rates as low as 2.5%, and at repayment periods of up to 15 years, resulting in very low annual repayments in terms of both the principal amount and the interest on the loan. This substantial source of funds for projects sets RenPower apart from its competitors, particularly as local banks have shied away from these types of projects because of small project sizes and often a lack of technical knowledge.
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The relatively small container can be transported to remote, hard to access locations via small trucks or 4x4 trucks.”
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Advertorial: RenPower
Innovative solutions RenPower offers innovative solutions that are well suited to address the needs of rural end users, including farmers, mines, and military bases, that are looking to invest in, or to make use of, renewable energy. RenPower’s PowerSafe is a containerised PV plant that runs with or without the electricity grid or a backup generator – it is a mobile, easily transportable small container that allows for: • On site electricity production via solar panels • Electricity storage via installed battery systems • If required, water purification What this technical detail means is that the relatively small container can be transported to remote, hard to access locations via small trucks or 4x4 trucks. In contrast to other suppliers of similar containers, where a significant portion of the modules are attached to the outside of the container and are prone to damage during transport, all modules in this system are transported inside the container. To unload the container, a standard forklift is sufficient – the container is specifically designed to accommodate the teeth of the forklift so no special crane is required, significantly saving time and money. No ground works or foundations are necessary, just an even-graded surface is required. No specialist tools or knowledge to set up the container and the panels is required. Consequently, the truck driver and an assistant can set up the PowerSafe container within a maximum of two hours. And, thanks to it being fully cabled internally, this plug-and-play solution provides electricity or drip irrigation within two hours of the container’s arrival on site.
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To unload the container, a standard forklift is sufficient – the container is specifically designed to accommodate the teeth of the forklift so no special crane is required.”
The deployment of the PowerSafe is quick and effortless, and it can be combined in a modular fashion in blocks of 10kW with 19kWh of battery storage to build up larger PV plants at a very reasonable cost. The areas of application for the PowerSafe are not restricted to irrigation, plant power, and camp power. The PoweSafe can also be used for desalination and irrigation plants, cell phone towers and radio stations, charging stations for electric vehicles, rural and deep rural electrification, and much more. The PowerSafe comes standard with thermal insulation and air conditioning, which increases the life of the batteries and the inverters. n
Marius Bekker, COO
I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that. I wish I had more years left.” – Thomas Alva Edison
Because of South Africa’s current drought period, long established sources of water are no longer available and ever deeper boreholes need to be drilled to get the water to the surface. With established diesel-driven pumps that must to be refuelled and serviced quite intensively, the deeper the well the more diesel and servicing of the pump – or even larger pumps – are required. However, with PowerSafe no cost for diesel or frequent servicing is necessary. We monitor individual containers remotely and, in the event of a problem, we can determine what the problem is from our offices and send a technician with the required tools and replacement materials to the site to minimise down time.
RenPower Unit 10A, Carpe Diem Building Techno Park, Stellenbosch T +27 021 035 0345 C +27 079 523 3657 E mbekker@renpower.co.za W www.renpower.co.za
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ENTREPRENEURS
A business in the business of growing others It was Henry Ford who said, ‘If everyone is moving forward together, then success takes care of itself.’ Demonstrating a steadfast commitment to growth, Bongani Gosa is proving the famous words of Henry Ford. Bongani Gosa is the Owner and Creative Director of BWD Advertising (BWD), which he founded in 2006. Today, BWD is a full-service digital communication agency, helping clients leverage digital communication as one of the most powerful tools in driving substantial business results. Under Bongani’s leadership, the resolute agency has achieved noteworthy growth and success and boasts a litany of exceptional achievements. BWD has an impressive portfolio and produces awardwinning work. Its clientele includes conglomerates such as T-Systems and the University of Witwatersrand. In 2015, the agency created a promotional video to help The University of Johannesburg grow its alumni member base. This resulted in it being awarded a MACE (Marketing, Advancement & Communication in Education) award for the video. Gosa’s entrepreneurial drive began to surface at an early age. At 16, began selling cattle dung as a fertiliser to his neighbours and surrounding community. He then went on to complete his B Tech Degree in Information Technology. It was during this time that he founded BWD.
Big ideas
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Future transformation BWD is encouraged by the number of other advertising, digital, PR and communication agencies that are black owned. As with BWD, many of them appoint and develop previously disadvantaged individuals. He also recognises the value and impact of the procurement of creative and other services being regulated by BBEEE requirements. This ensures that these enterprises are supported. However, Gosa does believe that much more can be done to promote and implement sustainable transformation and is hopeful that we’ll see this become a reality in our lifetime. Gosa is also the chairman of the Each One Teach One Foundation, a non-profit organisation focused on fast-tracking the growth of small and medium companies through mentorship. The Each One Teach One programme empowers up-and-coming entrepreneurs and owners of SMMEs. They learn from others, ask questions, and get expert business advice from other established business owners. Bongani was inspired to establish this platform after he read Black Diamond by Dr Tshidi Gule. In the book, Gule shares how her mentorship with former beauty queen, Basetsana Khumalo, impacted her life. Bongani’s drive and determination to succeed and his ability to recognise potential and gaps in the market are traits required to start and grow a thriving business. ‘Being on your business instead of in it makes a big difference between failure and success. Appointing the right people who are qualified in their fields allows your business to run even when you are not physically present,’ says Gosa. For more information, visit www.bwdadvertising.co.za. n
Bongani Gosa, Creative Director, BWD Advertising
Photo credit: BWD Advertising
Gosa recognises that big brands need big ideas to achieve meaningful results. Determined to create the ideal platform where intelligence and imagination merge to produce extraordinary, inspired solutions, he assiduously put together a team of specialists able to bring big ideas to life. Originally a one-man band run from Gosa’s home, BWD originally offered website design services. Gosa landed his first client, a law firm, by making a cold call from a public phone. Today, BWD offers the total continuum of digital communication services, from the research and development of digital marketing communications strategies to the development and rollout of the relevant digital tools that drive and support marketing strategies. The agency is now fully established with offices in Fancourt Office Park. BWD has 10 permanent employees, an established network of specialist associates, and takes in interns throughout the year. Gosa believes that the knowledge torch you pass down to the next generation of leaders is the legacy you leave behind. He is passionate about sharing his experiences with other entrepreneurs and imparting insights with
growing businesses about leveraging digital marketing to broaden brand awareness.
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HUMAN RESOURCES
Lost production hours By Jonathan Hall, Tower Bridge
Every day, South African companies lose 400 hours of productive time per 100 employees. How do you get that back? Research by workplace design firm, Tower Bridge, finds that South African employees are interrupted or distracted at the office around 30 to 40 times per day. In an era where businesses are focused on maximising productivity and efficiency without compromising quality or service, these findings point to significant opportunities for better performance by reducing workspace disruptions and disturbances. Tower Bridge’s survey encompassed just under 1 000 employees working for 40 firms. It reveals that most interruptions are between three and seven minutes long, and that it takes about the same time again for a worker to return to the task and refocus. At a conservative average of 10 minutes per disruption, including the time it takes to refocus, thirty disruptions steal around half a day of productive time per employee, every day. The research finds that a firm loses about 330 hours of productive time per 100 employees every day. At an average cost of R120 an hour per employee, that translates into approximately R8 000 wasted per employee per month. The most frequent interruptions are caused by on-thefly requests for help or information, using up just over 61
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hours per 100 employees per day. Checking inboxes is the next most productivity-draining activity, using 56 hours per 100 employees per day, followed by changes in work priorities, and general office disturbances and social distractions, each at a little more than 50 hours per 100 employees per day. Interruptions aren’t good for an employee’s wellbeing either. Employees who are under more pressure to do more work faster are increasingly frustrated with the high volume and range of disturbances and distractions that require them to attempt to multitask. The stress that these frustrations cause drive up cortisol, the neurotransmitter responsible for lower cognition, reduce creativity, lower energy, and leads to poor health and wellbeing. The study’s findings are more conservative than the results produced by similar Gallup, Gensler and Steelcase studies, suggesting that the negative impact of disturbances might be even bigger. Given that studies on human concentration levels show how fickle the human mind is, at best, it’s likely that the already alarming statistics are understated. Disruptions and distractions are a reality of the modern open-plan office and a technology driven ‘always-
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HUMAN RESOURCES
on’ world. While some distractions fight for scarce concentration capacity, many more are subliminal, taking additional process power and energy from employees’ brains all the time. These include movement, noise, temperature, light, ventilation, and even smells. High levels of workplace distraction demand continuous attention switching (disguised as multitasking) that fatigues the human mind quickly, resulting in reduced quality of thought, higher levels of errors and stress and sleepiness. While businesses criticise their distracted employees’ lack of productivity, Tower Bridge’s research shows that most employees want to get on with the job – and they know what changes they need in their workplace to achieve this. They need spaces where they can focus on work without interruptions, and they need spaces that allow for and encourage different types of collaboration and sharing. Tower Bridge has identified that office workers typically function in six different modes of work, and businesses that seek to achieve the greatest productivity from their employees need to bear this in mind when they are designing their workplace. Creating spaces for people to function optimally reduces distractions and interruptions, giving people the space that they need to get on with the job. The six modes of work include: • Task mode – undisturbed space to concentrate • Interact mode – space to interact with others • Collaborate mode – space and tools to meet and interact in internal groups • Communications mode – quiet or private space to make or receive phone calls • Present mode – space and tools to receive or present information, such as learning, teaching or presenting • Social mode – space to refresh, socialise or work informally. The research reveals that typical office workers spend an average of 50 to 70% of their time in task mode, followed by 20 to 30% of their time in interact mode. They spend 10 to 20% of their time in each of collaborate, communicate, and presenting modes, with 10% spent in rejuvenate and social mode. Workplaces that work for employees, and are the most efficient and productive for businesses, are the ones that take these splits in the working day into account. They show employees that their employers understand their needs, and are prepared to respond to them – something that is often far more motivating and profitable than a cash incentive. n
Tower Bridge designs and fits out workplaces that work. The firm’s turnkey service combines science, art and artisanship to deliver unique work space solutions that drive human effectiveness up, costs down and brand image apart from the competition. For more information, visit www.tower-bridge.co.za.
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HUMAN RESOURCES
Take it or leave it By Vanessa Gibb, People Operations Manager, NATIVE VML
Employers should be encouraging staff to take their leave and not making it difficult for them or, worse, forcing them to work through their holidays. work-life balance can cause strain on your personal relationships and your health. People often overlook the danger of fatigue; job-related accidents and car accidents can be the result of fatigue. While you may think you’re productive by not taking a break, it’s proven that productivity decreases in this situation. We have a finite pool of cognitive resources that, when drained, reduce productivity. And then we see performance decline. Taking a break gives employees the opportunity to reenergise body and mind and return to work with renewed vigour. After a good break, employees generally approach tasks with a fresh mindset and better efficiency. n
Photo credit: NATIVE VML
Many companies have a ‘use it or lose it’ leave policy and I am often surprised that people are prepared to forfeit leave that they have earned. People seem to think that we need to work longer hours and take fewer days off in these difficult financial times. In South Africa, the Basic Conditions of Employment Act provides for annual leave on completion of a year of continuous service with an employer. A worker is entitled to 21 consecutive days of paid annual leave so, for most of us, 15 paid work days off. In Europe, many countries offer more than this, and many jobs in the US offer no paid vacation time. Some companies – especially where creativity is of the essence – are now offering unlimited paid leave. However, initial findings show that people are taking less leave as it doesn’t feel endorsed, or for fear that they may look bad or lazy. In a study conducted by the Society for Human Resource Management (SHRM), it was found that employees who take most or all their leave each year perform better, are more productive, and more satisfied with their jobs than those who do not. 58% of the HR professionals questioned in this survey said that employees who take all or most of their leave are likely to take fewer sick days. The effects of working long hours without breaks or being ‘married to your job’ are immense. An unhealthy
Vanessa Gibb, People Operations Manager, NATIVE VML
NATIVE VML is Africa’s leading full-service agency for the Digital Age, working as a strategic partner for South Africa’s most-loved brands and looking to thrive in this continuously connected world. The cornerstone of our work is to create ‘purpose-driven work that lives in people’s lives’. For more information, visit www.vml.com.
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HUMAN RESOURCES
South Africans don’t trust their workplaces South Africa’s first National Corporate Trust Index reveals that employees experience a low level of trust in their working environments. The Index shows a national trust score of 57 out of 100, with a score below 60 viewed as very low by global research standards. Trust Index - Management Level 70
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Junior & Middle Senior & Top Management Management
‘We have found that this difference in perception is the result of top management not connecting their people strategy with what is applied in their work environments, and middle management acting as gate keepers to critical information,’ explains Ramsamy. The Deloitte’s Human Capital Trends Survey 2016 shows that 82% of the respondents realise culture as a potential competitive advantage, which is a business issue and not an HR only issue. A winning culture means increased levels of trust that drives sustainable organisations. n
Photo credit: FranklinCovey South Africa
Breaking down the National Trust Index score reveals that 52% of respondents gave their organisation a low trust rating overall, with 15% saying that there was either very low or no trust in their place of work. The National Corporate Trust Index provides a national benchmark of the perception of trust in corporate South Africa. It is a composite score evaluated from a detailed questionnaire with over 1 000 employees responding from private and public South African companies. The research was conducted by Consulta Research on behalf of FranklinCovey South Africa using a robust scientific and globally accepted analysis methodology. ‘An absence of trust in the workplace impacts negatively on innovation, engagement, team cooperation and agility,’ says Marlinie Ramsamy, CEO of FranklinCovey South Africa. ‘Organisations that operate at a low level of trust do not enjoy business confidence, sustainability or financial success. Building trust is a long-term strategy to achieve sustainability – you can achieve quick results in a culture of fear and mistrust, but these results won’t be sustainable and you rarely retain your most talented human resources,’ she notes. ‘The ability to establish, extend and restore trust with all stakeholders, whether they’re customers, business partners, investors or co-workers, is the key leadership competency of the new global economy,’ adds Ramsamy. ‘Leaders of sustainable and profitable organisations are looking beyond the common view of trust as a soft, social virtue, and are learning to see it as a critical, highly relevant performance multiplier.’ In a more positive light, the research revealed that there are some organisations that enjoy high trust as 24% of respondents said that they work in environments where trust is a visible asset, with a further 9% saying that they enjoy world-class trust in their place of work. 15% of respondents said that trust is not an issue in their working environment.
Marlinie Ramsamy, CEO, FranklinCovey South Africa
Trust at different management levels The Index reveals that the lowest level of trust is among South African junior and middle managers, with a score of 50, and with their staff displaying a trust level of 50. The highest score of the Index is found among senior and top management at 65.
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FranklinCovey South Africa is a leading performance improvement company that helps organisations achieve results that require a change in human behaviour. Its purpose is to positively influences the operational ethos, paradigms and practices of the African leader. For more information, visit www.franklincoveysa.co.za.
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SABI Vol 5 Issue.indd 42
2017/02/27 11:00 PM
FINANCE
Proposed sugar tax: not only doom and gloom The proposed sugar tax is being hotly contested by industries faced with major changes if the tax is implemented. Most recently, job losses have been indicated as a consideration to not go ahead with the implementation of the tax. However, the flipside of the coin is the growing health risks and its costs to the economy. ‘The future workforce is under threat of serious illnesses because of the overconsumption of sugar,’ warns Ettiene Retief, Chairperson of the National Tax and SARS Stakeholders Committee at The South African Institute of Professional Accountants (SAIPA). ‘Serious intervention is needed to ensure that today’s taxpayers are around to pay their taxes and boost the economy of tomorrow.’ A recent study presents interesting data, showing South Africa ranked as the second highest, ahead of the USA, nation when it comes to the number of deaths attributed to sugar. Heart disease, cancer, and type 2 diabetes are all common diseases linked with the high consumption of sugar. A sugar tax should not only be regarded as another tax, nor that obesity is the only risk.
Photo credit: South African Institute of Professional Accountants
Hindering economic growth Government’s plans for national growth is hindered by the costs related to high incidents of sugar-related illnesses as taxpayers spend on healthcare instead of other areas, resulting in limited economic growth. This limited economic growth has far greater impact on a larger number of people than the reasons held against implementing a sugar tax in South Africa. There have been no reports of massive job or financial losses from countries where sugar tax has been implemented. On the contrary, in 2014, the introduction of a one peso per litre tax on soda and other sugary drinks by the Mexican government saw a drop of 10% in the purchase of soda and other similarly taxed drinks, balanced by an increase of 13% in purchases of bottled water. In many cases, the manufacturers of sugary drinks also have bottled water and sugar-free drinks options.
Healthier choices Consumers will continue to purchase beverages but may now make healthier and more informed decisions. It was recently reported by Cancer Research UK and the UK Health Forum that a 20% tax on sugar drinks could reduce the obesity rate in the UK by 5% by 2025. It is unlikely that job losses would be as significant as the claimed 60 000, which is published without any
supporting evidence. Doing nothing has an increased burden and cost to healthcare. Let’s not forget that the companies making drinks with added sugar also make the sugar-free alternative. The beverage industry has known for many years that a sugar tax was likely to be introduced, and companies should have planned accordingly. Traditionally we have thought of sin taxes as not having any significant impact on changing people’s behaviours and habits. Empirical evidence suggests that people won’t stop smoking because of a tax, but we have seen a significant reduction per capita consumption of 40% in the consumption of tobacco products over a ten-year period, attributed to increased taxes and regulations.
Consumer awareness We can’t simply apply a sugar tax to make the highsugar products more expensive, we need to also focus on consumer awareness and the comparative pricing of alternatives. Additionally, the sugar taxes collected should be used to fund aggressive education campaigns on healthier alternatives. Marketing, advertising and packaging practices could also be regulated, with an introduction of warnings about the levels of sugar in certain foods and drinks, and the health risks, similar to the warnings on tobacco products. Selling of high-sugar drinks should be limited at schools. This would be enormously beneficial in South Africa where levels of education impact on understanding around how sugar can damage health and well-being. One thing is certain – we can’t simply ignore the problem. For more information, visit www.saipa.co.za. n
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HEALTH
SANRAL ups its fight against HIV/AIDS The South African National Roads Agency (SANRAL) has substantially stepped up its commitment to its fight against HIV/AIDS with its landmark wellness programme now accessible to more than 2 000 workers on its national Routine Road Maintenance (RRM) projects.
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Photo credit: SANRAL
The national construction industry is adversely affected by the depletion of skills, most notably caused by HIV/AIDS and opportunistic infections such as Tuberculosis. As such, SANRAL is championing industry workers – among the most at risk given their work circumstances – by taking a landmark step to eradicating the impact of disease on its Routine Road Maintenance (RRM) workers. The implementation of this national programme is designed to assist with workers’ general wellness management by providing tools, one-on-one counselling with a wellness champion, and a hotline they can call. The programme training material varies from substance abuse and alcoholism, lifestyle diseases management and prevention, and broader wellness communication campaigns and wellness days. ‘As a key player in the roads construction industry, SANRAL has an important role in leading the sector in promoting the wellness of our workers through education and providing opportunities for regular testing for HIV/ AIDS, TB, and maintaining a treatment programme post diagnosis,’ says Kobus van der Walt, SANRAL’s Western Cape Regional Manager. ‘Poverty and the lack of access to proper healthcare in rural areas means that people aren’t always aware of the dangers of ill-health or the impact it has for the broader community. HIV/AIDS is a societal issue because families lose bread winners – the pandemic is not over and is not limited to individuals. We are not able to break the poverty cycle and South Africa is prevented from closing the industry’s already widening scarce-skills gap with essential jobs such as graders and digger-loader operators.’ The prevalence of HIV/AIDS, TB, and preventable substance abuse is often a result of poor social awareness and is linked to structural factors inherent in the construction sector, such as solitary work environments, extended periods spent away from home, and inadequate access to healthcare services. The programme now covers all construction workers, including sub-contractors and their immediate families, working on SANRAL’s roads’ maintenance projects nationally. Over the last three years, workers from both the Western and Northern Cape provinces have already
benefitted from the programme as part of a successful initial pilot project. Now, all RRM workers are provided with free training, counselling and testing for a range of illnesses and are provided with access to healthcare professionals for treatment. Some 17 Wellness Champions have been appointed and undergone SETA-accredited peer educator training during the pilot project. The roads agency has appointed CareWorks HIV Management to manage and facilitate the programme within the Western and Northern Cape region because of its proven track record in carrying out wellness programmes in South Africa. They will be responsible for training outcomes, ensuring that all HIV and TB-positive staff gain access to life-saving treatment, and that HIV and TB-negative employees acquire adequate knowledge to be able to manage their status. For more information, visit www.nra.co.za. n
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Advertorial: Training at Work
Excellent education through innovation Established in 2001, Training at Work is a private company that specialises in training and consulting. In 2011 Training at Work was registered as a Private Further Education and Training College with Department of Higher Education and Training. Our central vision is to deliver ‘excellent education through innovation’ and contribute towards human capital development. Training at Work develops and offers a flexible range of learning solutions that meet the specific needs of individuals, government, private and non-profit organisations. A range of these solutions is aimed at developing the competencies of young people, local communities, unemployed, corporate agencies, officials in local government and local development agencies. The company’s flexible approach is customer/client centric and modelled around a four-staged process centred on Training at Work’s quality management system. Since inception, Training at Work has operated as a mobile training provider using various facilities as training venues across the country. This method is highly dependent on third party training facilities as part of our delivery channel. To minimise this dependency and contribute to social upliftment, Training at Work deployed a forward integration strategy by directly getting involved in training facilities activities. Our goal was to reflect on social entrepreneurship and scale up the growth of Training at Work learning solutions. This necessitated a hybrid business model, combining non-profit and for-profit goals that strive to strike a balance between social and commercial objectives. The hybrid business model operations are integrated and driven by the training and development cycle. Training at Work College’s attributes include providing an accessible education and training centre that delivers priority and relevant learning solutions to contribute to employment creation, and alleviation inequalities and poverty for the targeted communities. Training at Work Colleges work closely with local and provincial education and training institutions, state agencies and employers.
Our accreditations • Service SETA • LG SETA
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• MICT SETA • Agri SETA • SASSETA • CETA • ESETA • ETDP SETA • MERSETA • FP&M SETA • TETA • HWSETA • MQA • UMALUSI
Our services We provide training, skills development, learnerships, facilitation, assessment and moderation on courses that we offer: • Consulting services • Printing materials • Compiling material as per SETA and SAQA requirements • Register learners on SETA database • Recruit learners for training and skills development • Placement of learners for workplace experience
Some happy clients • South African Police Service • Department of Environment Affairs • Mpumalanga Provincial Government • Boikgantsho Consulting and Event • Department of Correctional Services • South African National Defense Force • Gert Sbande TVET College • Ehlanzeni TVET College • City of Matlosana • Service SETA • SASSETA • Gauteng City Region Academy n
Training at Work 15 Leonie Street, Winchester Hills, Johannesburg T +27 011 433 9318 E info@trainingatwork.co.za W www.trainingatwork.co.za
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Excellent Education through Innovation Our Services We provide training, skills developement, learnershio, facilitation, assessment and moderation on courses that we offer: n Consulting services n Printing of materials n Compiling of material as per SETA and SAQA requirements n Resgister learners of SETA database n Recruit learners for training and skills development n Placement of learners for workplace experience
Miss PM Chiloane Founder and CEO
15 Leonie Street Winchester Hills Johannesburg 011 433 9218 info@trainingatwork.co.za www.trainingatwork.co.za
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When accidents happen be ready It’s a fact. Workplace accidents are going to happen. When your employees complete a comprehensive St John First Aid training course they’ll be able to: • recognise when first aid is needed • provide first aid at an emergency scene • know when more qualified medical assistance is necessary We know the importance of having proper, professional skills in an emergency, which is why we continually revise our courses to ensure they are: • learner centred • suitable for employees with limited reading and writing skills • supported by on-screen presentations and lots of hands on practice • accredited with the Department of Labour • accredited with the Health and Welfare SETA.
Our First Aid training courses include: • First Aid Level 1 – Emergency Level • First Aid Level 2 & 3 – Standard Level CPR / AED Courses • • Basic Life Support (BLS) Accredited with the Resuscitation Council of SA Fire Safety • Health & Safety in the Workplace • St John supplies a wide range of regulation first aid kits suitable for the office, shop, factory and car.
Contact us to book your first aid training course today:
REF: SABI/0117
Bloemfontein Cape Town Durban East London Fish Hoek Grahamstown Johannesburg Kimberley Port Elizabeth Somerset West
051 444 6276 021 461 8420 031 305 6588 043 722 9840 021 782 3306 046 636 1650 011 403 4227 053 838 2519 041 364 2701/2 021 851 7394
www.stjohn.org.za St John is a Level 1 contributor to B-BBEE with 135% procurement recognition.
SABI Vol 5 Issue.indd 48
2017/02/27 11:01 PM
SCIENCE & TECHNOLOGY
Digital exclusion may lead to greater inequality In the view of Dr Miriam Altman, Commissioner of the National Planning Commission in the SA Presidency, South Africans must become digitally enabled or they will be left behind economically, exacerbating inequality in the country. According to Dr Altman, the negative implications of digital exclusion are far reaching and require urgent action. ‘Digital inclusion has to be delivered urgently. Either it can help us drive a new source of competitive advantage for industrial development and job creation, or Africa can be consumers of foreign technology and foreign capability,’ said Dr Altman. Speaking at AfricaCom 2016, Dr Altman and other industry leaders highlighted the necessity for all levels of the population to be able to access, utilise, communicate and transact over the internet to fully partake in the new economy. However, efforts are still hamstrung by smartphone penetration, data costs and internet accessibility. Skills development and education are some of the key drivers. Nurturing the skills that can enable Africans to develop African-specific solutions must be a priority. Charles Murito, Google Country Manager for Kenya, added: ‘Education is a critical component for us. What holds Africans back is the lack of digital skills.’ In 2015, Mckinsey reported that by 2020 Africa could benefit to the tune of $340 billion of GDP value thanks to the growth of the eCommerce and digital ecosystem, and the equivalent of an additional $340 billion in productivity gains. Karen Nadasen, CEO of PayU South Africa, an online payment provider, believes that accessing digital platforms to buy and sell goods and services offers the biggest opportunity in South Africa and across the continent. ‘Real grassroots upliftment can occur once people are able to transact easily and securely. If companies make it easy for users to buy and sell online, we will see the ecosystem grow and communities flourish,’ she maintains. Dr Altman asserts that we need a firmer push towards broadening the scope of digital uptake, something likened to a roadmap to digital roll out. ‘Government is going to have to step in, not on the back of universal service obligations but to roll it out the way they roll out other infrastructure. Countries that have successfully embraced digital have done it this way,’ Altman insists. He proposes implementing measures to compel people to get online and get familiar with the digital
world. Enforcing the use of digital material in, for example, schools, at home affairs and health services registration will drive the transition at the required levels. What is clear among industry experts is that the current situation could give rise to global centres of excellence on African problems, just as South Africa’s industrialisation developed off the back of solving problems for the mining industry. The goal being to solve local problems that offer niche capabilities that can be exported. For more information, visit www.payu.co.za. n
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SCIENCE & TECHNOLOGY
2017: The year of data literacy? What will change to see culture-wide data literacy become a reality? Here are some predictions provided by Dan Sommer, Senior Director at Qlik. Over the past twelve months we’ve seen an explosion of data, an increase in processing it, and a move towards information activism. This means the number of employees actively able to work with – and master – the huge amounts of information available, such as data scientists, application developers, and business analysts, has become a valuable entity. However, there still aren’t enough people with the expertise to handle the ever-increasing, vast levels of data and computing. You would assume, with all the information currently being produced and held by businesses, that 2017 would see us in a new digital era of facts. But, without the right number of specialists to consume and analyse it, there’s a gap in resources. Data is, unfortunately, growing faster than our ability to make use of it. For many business leaders, this means a reliance on gut instinct to make even the most important decisions. Unable to hone in on the most important insights, they’re presented with multiple – and sometimes conflicting – data points, so the most important ones seem unreliable. The situation needs to change. Yes, that will mean upskilling more data scientists in 2017, but there will be a greater focus on empowering more people more broadly. That will go beyond information activists and towards providing more people with the tools and training to increase data literacy. Just as reading and writing skills needed to move beyond scholars 100 years ago, data literacy will become one of the most important business skills for any member of staff.
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So, what will change to see culture-wide data literacy become a reality? Here are my predictions: 1. Combinations of data – Big data will become less about size and more about combinations. With more fragmentation of data and most of it created externally in the cloud, there will be a cost impact to hoarding data without a clear purpose. That means we’ll move towards a model where businesses have to quickly combine their big data with small data so they can gain insights and context to get value from it as quickly as possible. Combining data will also shine a light on false information more easily, improving data accuracy as well as understanding. 2. Hybrid thinking – In 2017, hybrid cloud and multiplatform will emerge as the primary model for data analytics. Because of where data is generated, ease of getting started, and its ability to scale, we’re now seeing an accelerated move to cloud. But one cloud is not enough because the data and workloads won’t be in one platform. In addition, data gravity also means that on premise has long staying power. Hybrid and multi-environment will emerge as the dominant model, meaning workloads and publishing will happen across cloud and on premise. 3. Self-service for all – Freemium is the new normal so 2017 will be the year users have easier access to their analytics. More and more data visualisation tools are available at low cost, or even for free, so some form of analytics will become accessible across the workforce. With more people beginning
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SCIENCE & TECHNOLOGY
6. Visualisation as a concept will move from analysisonly to the whole information supply chain – Visualisation will become a strong component in unified hubs that take a visual approach to information asset management, as well as visual self-service data preparation, underpinning the actual visual analysis. Furthermore, progress will be made in having visualisation to communicate our findings. The net effect of this is increased numbers of users doing more in the data supply chain. 7. Focus will shift to custom analytic apps and analytics in the app – Everyone won’t, and cannot be, both a producer and a consumer of apps. But they should be able to explore their own data. Data literacy will therefore benefit from analytics meeting people where they are, with applications developed to support them in their own context and situation, as well as the analytics tools we use when setting out to do some data analysis. Open, extensible tools that can be easily customised and contextualised by application and web developers will make further headway. These trends lay the foundation for increased levels of information activism, as well as data literacy. After all, new platforms and technologies that can catch ‘the other half’ (ie less skilled information workers and operational workers on the go) will help usher us into an era where the right data becomes connected with people and their ideas – that’s going to close the chasm between the levels of data we have available and our ability to garner insights from it. Which, let’s face it, is what we need to put us on the path toward a more enlightened, information-driven, and fact-based era. n
Photo credit: Qlik
their analytics journey, data literacy rates will naturally increase – more people will know what they’re looking at and what it means for their organisation. That means information activism will also rise. 4. Scale-up – Much a result of its own success, user-driven data discovery from two years ago has become today’s enterprise-wide BI. In 2017, this will evolve to replace archaic reportingfirst platforms. As modern BI becomes the new reference architecture, it will open more selfservice data analysis to more people. It also puts different requirements on the back end for scale, performance, governance, and security. 5. Advancing analytics – This year, the focus will shift from ‘advanced analytics’ to ‘advancing analytics’. Advanced analytics is critical, but the creation of the models, as well as the governance and curation of them, is dependent on highly-skilled experts. However, many more should be able to benefit from those models once they are created, meaning that they can be brought into self-service tools. In addition, analytics can be advanced by increased intelligence being embedded into software, removing complexity and chaperoning insights. But the analytical journey shouldn’t be a black box or too prescriptive. There is a lot of hype around ‘artificial intelligence’, but it will often serve best as an augmentation rather than replacement of human analysis because it’s equally important to keep asking the right questions as it is to provide the answers.
With more than 14 years’ experience in the IT industry, Dan Sommer is the global lead for Qlik’s Market Intelligence Program.
QlikView South Africa is the local representative and distributor for Qlik® a leader in visual analytics. Its QlikView Business Discovery solution bridges the gap between traditional BI solutions and inadequate spreadsheet applications. For more information, visit www.qlikview.co.za.
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SABI Vol 5 Issue.indd 51
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Advertorial: SASSDA
New app reveals stainless steel’s lifecycle costs The Southern Africa Stainless Steel Development Association (SASSDA) launches a world-first app that proves stainless steel’s ability to ensure a far lower overall lifecycle cost. The powerful combination of stainless steel’s attributes is what makes it the material of choice in many uses. Unfortunately, one of the biggest obstacles to the specification of stainless steel in certain applications is the ongoing misperception that it’s more expensive in comparison to other, initially cheaper options. In the short term, that may be the case considering upfront costs but its durability and ease of maintenance compensate for the sometimeshigher initial purchasing costs; and it is often the least expensive choice in a lifecycle cost comparison. Its ability to provide long-term performance with a minimum of downtime and cost associated with maintenance is determined by calculating the material’s lifecycle costing (LCC), which is of particular importance to the stainless steel industry. LCC is a technique developed for identifying and quantifying all costs, initial and ongoing, associated with a project or installation over a given period. The technique uses the standard accountancy principle of discounted cash flow, so that total costs incurred during a lifecycle period are reduced to present day values. This allows for a realistic comparison to be made of the options available. As far as material selection is concerned, LCC enables potential long-term benefits to be assessed against short-term expediency. Materials costs are assessed with their related implications, such as initial outlay, maintenance and its frequency, downtime effects and production losses, repair and replacement costs, and other operationally-related costs such as manpower and energy consumption.
The app was created to assist engineers to calculate total LCC so that total costs incurred during a life cycle period are reduced to present day values. This allows a realistic comparison to be made of the options available. The app also enables potential long-term benefits to be assessed against short-term expediency. Throught this app, SASSDA hopes to educate the market on the inherent benefits of stainless steel that include minimal maintenance, a minimum 60-year lifespan, and significant green benefits. n
World-first app To assist with this process, a world-first app from SASSDA is set to lift the lid on the bigger picture – stainless steel’s ability to ensure far lower overall LCC. The benefit of this app, available on the Google Play Store and in the Apple iStore, is that it allows for the almost real-time calculation of the LCC of stainless steel via an easy-to-use pre-programmed calculator. This requires the entry of key top-line data, followed by the simple click of a ‘calculate’ button that generates a breakdown of the relevant costs and the ability to e-mail this to various recipients.
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SASSDA 1st Floor, Block D, Homestead Park 37-41 Homestead Road, Edenburg, Sandton John Tarboton T +27 011 883 0119 E john@sassda.co.za W www.sassda.co.za
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SABI Vol 5 Issue.indd 53
2017/02/27 11:02 PM
SUPPLY CHAIN
Can international certifications stimulate local success? By Mungo Park, President of SAPICS
Developed countries are usually the source of globally-recognised certifications, yet local industry professionals face challenges typically unique to South Africa. Are these programmes designed for their own advanced economies, or can they address conditions outside their borders? Supply chain management (SCM) professional accreditation provides a suitable case study. Developed countries can consider innovative approaches to supply chain efficiency, such as drone delivery or logistics driven by Artificial Intelligence. However, countries such as South Africa still contend with fundamental issues and challenges.
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A lack of supply chain skills and expertise is a major contributor to the supply chain challenges faced in South Africa.�
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SUPPLY CHAIN
Technology is embraced in some areas of the supply chain, such as logistics tracking, but is often underutilised or incorrectly applied in optimising supply chain efficiencies – in many cases because of inadequate or a lack of supply chain knowledge and skills. According to 2012 studies carried out by KPMG, South African supply chain management fared better than other African nations, better in only some respects than other BRICS members, but poorly compared to developed countries. A lack of supply chain skills and expertise is a major contributor to the supply chain challenges faced in South Africa. Many individuals are skilled in certain aspects of logistics but few have the knowledge and experience to see beyond their scope of responsibility and understand the upstream and downstream impact of their decisions. This inhibits supply chain efficiency and improvement initiatives. The value of a consistent internationally recognised and reputable certification cannot be underestimated to build supply chain capability and provide a yardstick against which to test candidates applying for supply chain positions.
Principles over conditions The skills gained in certification courses are internationally recognised because of their ubiquity. Although local variables may differ, the management principles persist. Therefore, regardless of South Africa’s challenges, international certifications still offer some of the best solutions for addressing them.
National Qualification Framework integration Certification doesn’t exist in isolation. For example, the current TETA (Transport Education & Training Authority) Career Guide, Volume 3, advises that the entry-level requirement for international SCM accreditation is NQF Level 6. Candidates must first achieve a SCM qualification with an entry-level requirement of NQF 4 (matric level). Such gateway courses are provided by national universities and lecturers. The indication is that international certification must be preceded by local training.
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The skills gained in certification courses are internationally recognised because of their ubiquity.”
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We need to prepare for the future, and that means gaining the required expertise before it becomes critical.”
Synergy of qualifications South African professionals can enjoy the best of both worlds as a mix of local education and international training can produce a broader and more balanced range of skills than found in developed countries. In terms of SCM, accredited locals will often have more to offer South Africa than their international counterparts.
Global assurance International certification assures global customers that, regardless of constraints, a high level of industry expertise is being applied. Global vendors have more confidence when integrating their supply chain with one managed by accredited professionals, so it’s good for business.
Future proofing As investment in South Africa grows, infrastructure and technology will continue to catch up with first world countries and the demand for professionals who understand the complex dynamics of advanced supply chains will increase. We need to prepare for the future, and that means gaining the required expertise before it becomes critical.
Global network International certification provides secondary benefits such as linking graduates to a global alumni network. Local supply chain managers can collaborate with those in developing nations who have faced the same problems and share solutions. Such a resource can help us leapfrog problems. International certification – such as the APICS CPIM, CSCP, and CLTD designations for SCM professionals – augments local expertise rather than replaces it. Overall, it offers South African professionals access to the leading principles and practices that are essential to addressing local constraints. It validates the skill level of supply chain resources. But most of all, it provides us with a robust base of supply chain capability from which we can compete with global markets. n
SAPICS is a professional knowledge-based association that enables individuals and organisations to improve business performance. SAPICS builds operations management excellence in individuals and enterprises through superior education and training, internationally recognised certifications, comprehensive resources and a countrywide network of accomplished industry professionals. This network is ever expanding and now includes associates in other African countries. For more information, visit www.sapics.org.za.
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SAFETY & SECURITY
Megatrends set to disrupt defence and security Global megatrends are set to have a profound and disruptive effect on defence and security environments around the world, reveals a new PwC report. The impact of global megatrends poses a need for more agility and accountability from governments, and greater collaboration across the whole of society to combat risk, warn PwC’s global defence and security leaders. The five megatrends that are widely believed to be shaping the future of our world are the shift in global
economic power, demographic shifts, accelerating urbanisation, the rise of technology, and climate change and resource scarcity. These key trends and their potential impact is analysed in a new report from PwC, entitled Five Megatrends and Their Implications for Global Defense and Security.
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SAFETY & SECURITY
Shift in global economic power The shift in global economic power will create more powerful national economies in different regions with greater resources to protect, and greater resources available to invest in defence and security. The shift could also decrease the dependence of some nations on the traditional power projectors, such as the US, for protection and increase burden-sharing to ensure economic trade routes and free navigation are protected from hostile actors. Extensive and complex supply chains will become increasingly vulnerable to disruption from cyber criminals engaged in industrial espionage, theft, or terror-based disruptive activities.
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The depth and complexity of the security challenges posed by the global megatrends will demand ‘whole of society’ solutions.”
Demographic shifts Demographic changes mean that as populations in the West age, the demand for social services and healthcare will put severe pressure on budget priorities that could compete with or even crowd out defence and security expenditures. In contrast, the growth in the youth populations in emerging markets could create increased radicalisation and civil unrest, and a greater likelihood for disruptive transnational movements to take hold in these societies. This could create both internal and external security issues that will require greater investment and innovative strategies to combat.
Accelerating urbanisation Accelerating urbanisation could mean that the aggregate power of the growing megacities will rival that of national governments because of the sheer size of their constituencies. The explosion in urbanisation will present tremendous challenges for law enforcement, intelligence and internal security agencies, as well as traditional defence organisations. Providing adequate police and security for these areas will be costly and will require a higher level of interagency information-sharing and collaboration.
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We should anticipate these changes, take them seriously, and apply creativity and resources to stay ahead of the critical issues they will present.”
The rise of technology The rise of technology offers exciting new technological advances that promote even greater automation, analytics, and communications. However, it also creates new vulnerabilities that will challenge law enforcement, security, and defence organisations like never before. The combination of the internet, mobile devices, data analytics, drones, artificial intelligence, and cloud computing will provide defence and security organisations step-function increases in capabilities to address and respond to threats that will be using the same, commercially available tools to do harm. The challenge for defence and security organisations will be to develop and adapt these tools at the speed of business – not the traditional speed of government.
Climate change and resource scarcity Meanwhile, climate change and resource scarcity will increase tensions between nations over access to natural resources. As the global population continues to grow, these disputes will become more acute and more critical to national survival, particularly when it comes to very basic resources such as food, water, and energy. This will undoubtedly lead to regional and potentially global confrontations over water, oil, wind, fishing, hunting, and other mineral rights. Says Tom Modly, PwC’s Global Government Sectors Leader: ‘The depth and complexity of the security challenges posed by the global megatrends will demand “whole of society” solutions. And these must leverage the technological, collaborative and commercial benefits that the megatrends themselves will enable. ‘However, we must not fear the megatrends or their resultant defence and security challenges. Rather, we should anticipate these changes, take them seriously, and apply creativity and resources to stay ahead of the critical issues they will present.’ n
PwC’s purpose is to build trust in society and solve important problems. PwC is a network of firms in 157 countries with more than 223 000 people who are committed to delivering quality in assurance, advisory and tax services. PwC has a presence in 34 Africa countries and 66 offices. With a single Africa leadership team and more than 400 partners and 9 000 professionals across Africa, PwC serves some of the continent’s largest businesses across all industries. Find more information, visit www.pwc.com.
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REAL ESTATE
Best Real Estate Agent Internationally International Best Real Estate Agent, Debra Maddocks of Tyson Properties, scores a hat trick in London.
Photo credit: Tyson Properties
Winner of three of the most sought-after titles in the property industry, the prestigious International Property Awards 2016 Best Real Estate Agent, South Africa; Best Real Estate Agent, Africa; and – announced at a gala event in London in December – the Best Real Estate Agent Internationally, Debra Maddocks’ achievement is as much a win for South Africa as it is for herself and Tyson Properties. ‘Twelve years ago, Gavin Cunningham and I founded Tyson Properties to provide exceptional agents and a platform to succeed that is fair for both the agent and the company. This award is testament to the company we’ve built,’ explains Tyson Properties’ Managing Director, Chris Tyson. Maddocks puts her achievements down to care, commitment and gutsy determination. It took her three interviews and a leap of faith to secure her first job in real estate. Even then the principal told her she was cheeky. Little surprise, as with no experience whatsoever she’d begged for the opportunity, promising she’d ‘walk’ if she didn’t make a sale in her first month. It was the same guts and determination that had Debra buying a car (she needed one to get a job as an agent) before she had a driver’s license, and buying a house before she had a salary. ‘I thought the motivation of having monthly bond repayments would be good for me,’ she laughs. It was. Debra is a driving force in Tyson Properties’ Westville offices where she not just ‘owns the hood’ in which she works, motivating and empowering those working with her, but was also recently awarded Tyson Properties’ Top Estate Agent countrywide for the fourth consecutive year, Top Supporting Metro Agent, and Top Agent, Westville. Classified by the former apartheid government as a woman of colour and coming from a previously disadvantaged background, Debra thinks it was precisely these roots that drove her. ‘Born and schooled in Sydenham, Durban, from a divorced background, and moving a lot during these years, I think my passion for property comes from my childhood and my desire for a secure family home.’
Debra Maddocks from Tyson Properties was recently awarded Best Real Estate Agent Internationally.
Debra is never far from her humble beginnings. ‘Care is such a small word, but it’s so meaningful. If you care about the people around you – your clients, colleagues, team – it’s a win-win situation. To be a successful agent you can’t worry about money. If you care about the people around you, the money will come.’ And care she does. Throwing herself into numerous community causes including charities, Rotary events (receiving a Paul Harris Award for commitment) and the Westville Cares Fun Day that she initiated. ‘I don’t think of myself as an agent but rather as a business, and a business that must stand out.’ Debra is fervent about marketing and building her team. The ‘A Team’ she calls it. ‘I believe in motivating and uplifting those around me, and enjoy working in a team. My team changes all the time and I employ interns and work closely with them, and agents who feel they are struggling, until they have wings to fly on their own,’ she notes. ‘I completely buy into Tyson Properties’ commitment to transformation, which both empowers agents from previously disadvantaged backgrounds in a way that prioritises women, and ensures that staff are proportionally represented in relation to the South African demographic,’ she says. ‘We understand that while there is always room for improvement – lasting transformation is a journey rather than an overnight revolution.’ n
Established in 2005, Tyson Properties has an extensive portfolio of residential, commercial and rental properties. Tyson Properties is a national brand with offices in KwaZulu-Natal, Gauteng and the Western Cape. For more information, visit www.tysonprop.co.za.
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Advertorial: Knight Frank South Africa
Supporting profit objectives Knight Frank South Africa highlights the need for practical real estate solutions to optimise spend and efficiencies within business spaces. At Knight Frank South Africa, our Occupier Services team works with global businesses to understand their portfolios, looking for efficiencies where possible to reduce the property overhead to support profit objectives. Knight Frank South Africa is the leading independent, global real estate consultancy that provides an integrated prime commercial and residential offering, operating from 417 offices in 58 countries. One of our strengths is our focus on technology to help us understand the greater market. Our team of researchers and commercial agents populates our systems with key benchmarks that allow us to analyse the market quickly. Some of the metrics to consider when evaluating office space include space efficiency, utility charges, parking ratios, heat loading and aircon configuration, as well as market rental, tenant incentives
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and proximity to services. Security in buildings is also an important consideration. At Knight Frank South Africa, we build long-term relationships that allow us to provide personalised, clear and considered advice on all areas of property in all key markets. We believe personal interaction is a crucial part of ensuring every client is matched to the property that suits their needs best – be it commercial or industrial. n
Knight Frank South Africa T +27 011 783 1195 50 Old Kilcullen Road Bryanston, Johannesburg, 2191
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INVESTMENT
How the JSE has changed over time By Geoff Blount, MD, BayHill Capital
Looking at the JSE super sectors, it is extremely interesting how their contributions to the JSE Top 40 Index (Top 40) has changed over time. In part, this reflects the changing fortunes of the sectors in the South African economy, but there are other factors at play here too. From this graph, we can see that Industrials went from 31% of the Top 40 Index to a peak of 70% in 2015. The key drivers of this were our large global industrial firms (notably SAB, Naspers and Richemont), as well as investors favouring firms that have offshore exposure. At the same time, the Resource share weighting in the Top 40 index has shown a completely inverse trend to Industrials, falling from over 50% in the early 2000s to a low of 12% in 2015, and slowly ticking up to reach just over 20% in October 2016. This move was propelled by recovering resource prices and the removal of SAB Miller from the index (AB InBev, while listed on the exchange, is not in the index, nor is BAT).
Over this period, Financials’ share of the market has been mostly flat at about 15% of the index after coming off the high of the financial services bubble that burst in the last 1990s. And, of course, Property stocks have slowly risen as the property sector has mushroomed, with some large property stocks making it into the Top 40. These trends are instructive and speak to the changing nature of our economy and investment markets, as well as providing some insight into lost opportunities and offering some future lessons. Firstly, they indicate that South Africa missed the global commodity super cycle boom, largely as a result of policy uncertainty and a lack of reliable infrastructure – a point that was made by Mineral Resources Minister, Mosebenzi
Graphic credit: BayHill Capital
JSE Top 40 Super Sector allocation over time. Shown here is the percentage split between the four super sectors – Financials, Industrials, REITs (property) and Resources – from 1999 to date.
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INVESTMENT
Zwane, at last year’s Mining Indaba. Investors have shied away from South African commodity companies, opting instead for global competitors. During the global commodities boom – which lasted from 2004 to 2011 – in South Africa, Resources’ contribution to the Top 40 Index actually slipped. And things have not improved. On the contrary, from having been above 50% at one stage, Resources are now down to a shockingly low 20% of our investable universe, this in a commodity-driven economy. And worse, although commodity prices have risen somewhat recently, further upside seems limited by low global growth. With investors and company management spooked by corruption and government policy post the 2009 Zuma administration election, they have looked to externalise their business and investment as much as possible. While the listed industrial sector on the JSE ostensibly grew, our economy de-industrialised. In 2006, manufacturing accounted for 16.3% of GDP. Today it accounts for just 12.5%. Increasingly, the market no long looks like the actual composition of our economy. And so, while it appears that the recent fall in industrial stocks and rise of resource counters in the index signal the opposite, I believe the trend to externalise our listed corporate earnings will continue until policy pragmatism
and certainty returns. Unfortunately, we are not seeing this. A good example is the Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill, No. 15 of 2013 that empowers the Minister of Mineral Resources to designate ‘strategic minerals’ and then set their selling price to support local manufacturing. Even government understands that BMW would not build any manufacturing plants here if the Minister of Trade and Industry reserved the right at his discretion to set the price of BMW cars, yet this is exactly what policy is doing in one of the most critical sectors of the economy. Over the past 10 years, the JSE has increasingly become an ‘externalised’ exchange given the local political and economic environment. This can be seen in the nature of firms listed on the bourse. If we are to achieve the goals of inclusive economic growth, which will also propel the prominence of local business in the market, we need policy pragmatism and stability. n [This article does not consider the needs or circumstances of any person or constitute advice of any kind. It is not an offer to sell or an invitation to invest. BayHill Capital Proprietary Limited does not accept any liability whatsoever for any loss arising from reliance on this article.]
BayHill Capital is a niche investment company that offers bespoke portfolios for private clients, enabling the firm to build unique and exciting client offerings. This is complimented by the team’s deep knowledge and skill in the small mid-cap market, as well as its strong capabilities in the use of CFDs. For more information, visit www.peregrine.co.za/BayHillCapital.
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info@egoligas.co.za / (011) 356 5000 SABI Vol 5 Issue.indd 66
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INVESTMENT
A fresh approach to investing in 2017 By Danie Venter, CFP®, Advisory Partner, Citadel
What is indisputable is that the world is seeing a move away from ‘business as usual’. But ultimately, as much as things change, they have a way of staying the same and the sun will continue to rise and set – plus ça change…
Graphic credit: Citadel
‘The world is going mad’ and, to some extent, I agree that holds merit. Yes, 2016 began with the looming Brexit vote, and boy did that surprise us. Moving to more recent history, we’ve seen Mr ‘The Donald’ Trump win the US election, and that’s just on the global front. Closer to home, South Africa’s lucky packet has provided a script that even Hollywood couldn’t have conceived of. So, set goals for 2017 and plan accordingly. Cash is king and cash flow even more so. Paying off your debt sooner than later will allow you to establish that investment portfolio you’ve been putting off. ‘Good idea,’ I hear you say. So, what are your options? You can invest in an actively managed unit trust portfolio which, simply put, allows a bunch of similar investors to put their money together to buy a combination of investments such as shares, bonds, listed property, or even cash. Alternatively, you can acquire a passively managed Exchange Traded Fund, more commonly known as an ETF, which generally track one asset class specifically.
It is also key to consider what expectations and risks are associated with each asset class over the medium term (ie five years) and how the uncertainty associated with recent events locally and globally might affect your investment.
South African equities When you buy a share (or equity), what you are paying for today is the future earnings the company will generate for you as a shareholder. The South African market finds itself in a peculiar scenario as current earnings (as illustrated below) are under pressure. However, bear in mind that the majority of South African-listed companies sell goods to the international market and often in US dollars. As the South African rand weakens, higher than expected earnings when converting back to rand can be expected. So, there may be a glimpse of hope within SA Equities. Expect muted performance from SA equities with a few hail-Mary stories of star performance by certain companies.
Earnings level from 2007 (local currency).
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INVESTMENT
Global equities Investors hate uncertainty and have become extremely skittish towards unexpected news headlines. For example, consider the day Trump was elected. As the US election results were announced and it emerged that Trump was probably going to win, US equities dropped off a cliff, losing around 5.5%, only to do an about-turn several hours later and recover 6.5% from the low point by close of the trading day. Similarly, post the Brexit vote, the UK market was under considerable pressure as global investors feared the worse. Several weeks later, the market stabilised. Earnings have been under pressure in both the UK and the European region since 2007 and you can expect a bumpy ride in equities as lacklustre economic growth is set to continue. Why is economic growth so important? Well, if an economy grows there is more business to do. This translates into more sales that should result in higher earnings levels. This, in turn, enables you to conduct more business and so on.
South African property Over the past ten years, South African Property has been the blue-eyed-boy everyone has fallen in love with. And it’s not surprising – it has returned 17.6% per annum and claimed the winning seat for domestic assets. Late last year, property achieved fresh highs and was tracking relatively sideways as local economic conditions were challenging. However, local property as an asset class has remained largely stable in comparison to its global counterpart. Nonetheless, you should be cautious when including the asset class in your portfolio.
South African bonds TINA (the investment acronym ‘there is no alternative’) describes a world in which returns are muted and investors are willing to take on more risk to generate positive returns. We have seen many foreigners snapping up SA bonds,
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Understand the impact of the investment decisions you make and consult a qualified financial advisor to guide you and your family through these turbulent times.”
and generating impressive results for the asset class despite much uncertainty on the home front. However, just as fast as the funds have flowed into the market, so too they may leave. This could have a knock-on effect on the rand that could stumble somewhat against other international currencies. It is also important to consider the tax implications on holding this asset in your portfolio.
South African cash Year to date, before considering tax, cash has shown stellar returns given the limited risk associated with holding funds in a money market account. Cash will be affected by interest rate decisions taken by the Monetary Policy Committee (MPC). Given all the uncertainty surrounding the South African climate at present, the MPC will have a challenging time balancing interest rates and inflation. However, over the long term, holding cash does not pay as it is highly unlikely to maintain its purchasing power (ie to combat against the effects of inflation). So, in this uncertain world, what should your fresh approach be for investing in 2017? Remember, investing is about time in the markets and not timing of the markets. Understand the impact of the investment decisions you make and consult a qualified financial advisor to guide you and your family through these turbulent times. n [Kindly note that this article does not constitute financial advice. All information and opinions provided are of a general nature and are not intended to address the circumstances of any individual.]
Citadel is a specialist wealth manager with over 20 years’ experience providing bespoke solutions for high net worth individuals. Through character-rich engagement and building strong relationships based on mutual respect and trust, Citadel enables its clients to explore the true potential of their hard-earned money. The best fiduciary, risk and asset management expertise is used to strategise, implement and manage a financial roadmap for its clients and their families. For more information, visit www.citadel.co.za.
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INSURANCE
Executive liability: A managerial tightrope New risks – such as cyber incidents or data privacy, rising regulatory and shareholder activism, and the influence of third party litigation funders – are putting corporate leaders under more pressure than ever of falling foul of investigations, fines or prosecution over alleged wrongdoing, According to Allianz Global Corporate & Specialty (AGCS), a leading provider of Directors and Officers (D&O) insurance globally, directors and officers are walking a managerial tightrope as executive liability continues to increase annually. There is a growing trend towards seeking punitive and personal legal action against executives for failure to follow regulations and standards that could result in costly investigations, criminal prosecutions or civil litigation, putting the company’s assets or their own at risk, warns AGCS in its new report D&O Insurance Insights: Management Liability Today. ‘While the legal landscape differs strongly from country to country, increasing shareholder or regulatory action has become a global phenomenon that needs to be given top priority within companies’ internal risk management departments,’ says Bernard Poncin, Global Head of Financial Lines, AGCS.
D&O litigation – lengthier and more costly According to AGCS analysis, non-compliance with laws and regulations is now the top cause of D&O claims by number, followed by negligence and maladministration/ lack of controls. The average D&O claim for breach of duty costs over $1 million. However, in large corporate liability cases, D&O claims can be valued in the hundreds of millions of dollars. AGCS observes a general trend for D&O claims to be dismissed or resolved more slowly, meaning lengthier litigation, increased defense costs, and higher settlement expectations. The influence of third party litigation funding is also changing the global litigation map, with it being pivotal in the development of collective actions against financial institutions and commercial entities and their directors and officers. Litigation against companies and their officers is on the rise. In the US, the number of security class action filings is rising and, at mid-year (2016), was on course for its highest annual total for 12 years. Many Asian countries such as Japan, Hong Kong, Thailand and Singapore are also moving towards a more litigious culture. The increase in claims has also been pronounced in Germany where the number of D&O claims for AGCS alone has tripled in the past 20 years.
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D&O developments in Africa In Africa, D&O insurance is on the rise because of developments in corporate governance legislation and codes, which have codified directors’ liability. In general, the directors of a company in most African countries can be held personally liable for their executive actions where such actions are not in conformity of Memorandum of Incorporation. However, because a company may not indemnify its directors and officers, there is no guarantee that the company will pay the heavy financial burden of defense costs in prolonged legal proceedings or damages awards. The company may also not have the financial resources to indemnify the directors and officers in the event of a claim. ‘There has been a recent trend towards shareholders seeking to hold directors liable for losses as a result of the negligent or reckless conduct. The statutory underpinning for such claims is the Companies Act No. 71 of 2008 that codified directors’ liability in South Africa,’ says AGCS Africa Head of Financial Lines, Nobuhle Nkosi. ‘The environment for directors appears to be toughening and the more frequent use of class actions may also expose directors to more claims, particularly with the new King IV report, which states that shareholders and institutional investors should hold the board accountable on the application of voluntary codes of governance. Failure to meet an established corporate governance practice, albeit not legislated, may invoke liability. The use of derivative actions as envisaged by section 165(2) of the Companies Act may also increase.’ In Ghana, the Companies Bill 2013 has been developed and is currently being progressed through parliament. It aims to increase clarity and to protect shareholder rights. Kenya’s Companies Act 2015 provides duties that are onerous with tough fines and jail terms for directors and officers. The Insolvency Act 2015 aims to have managers and directors who failed the entity prosecuted. The Companies Act of Uganda, which commenced in 2013, stipulates that there are penalties for non-compliance. Mauritius has a modern Companies Act. It provides details regarding director duties for public and private companies. It has a commercial court that deals with corporate and bankruptcy matters. In Nigeria, the
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Graphic credit: Allianz Global Corporate & Specialty
INSURANCE
directors of a company can be held personally liable for their executive actions where such actions are not in conformity with the company’s charter as set out in its Memorandum and Articles of Association. Also, directors are personally liable for executive actions aimed at a particular group of shareholders where those actions are fraudulent or illegal.
Cyber risks on the board agenda The landscape for executives is further complicated by emerging perils, such as liability around cyber-attacks and data privacy. In the US, several class actions have already been filed related to data breaches. Data protection rules around the world are becoming increasingly tough with severe penalties for non-compliance. Consequently, AGCS experts anticipate cyber security-related D&O litigation more widely in the US, but also in Europe, the Middle East and Australia – if there has been negligence in any failure to protect data or a lack of controls. ‘Many directors saw cyber as an IT issue and not an exposure for the board to consider,’ explains Emy Donavan, Regional Head of Cyber Liability North America, AGCS. ‘But there’s no escaping cyber risks and directors need to be adequately informed or they will leave themselves exposed.’ Other new management risks include negative disclosures or allegations around environmental pollution,
climate change and modern slavery that could result in reputational risks and shareholder activism, public outcry or governmental action. Mergers and acquisitions (M&A) continue to be a key driver of D&O litigation and is predicted to continue at rapid pace in future. ‘M&A, but also divestitures, belong to the more riskier moments in the life of a company,’ says Poncin. ‘Expectations are always high and synergies are easier planned than realised.’
Highly sophisticated risk management required To tackle the increase in executive risk in future, directors need to develop a highly-sophisticated risk management culture. Examples include instilling first-class cyber and IT protection, keeping records of all information relevant to a managerial role, and maintaining open communication with authorities, investors and employees. Executives should ask tough questions about compliancerelated topics such as sanctions, embargoes, domicile registrations, price-fixing and fraud, and also learn more about ‘classic’ D&O exposures such as M&A, capital measures and IPOs. The AGCS report contains best practice advice and checklists outlining how executives can mitigate risk. For more information, visit www.agcs.allianz.com. n
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IMPORT & EXPORT
Photo credit: SBS Tanks®
Daphne Govender, Mava Gwagwa, Portia NdlovuNzama, and Charmaine Israel from SBS Tanks® with their KZN Exporter of the Year Award.
SBS Tanks named Exporter of the Year ®
SBS Tanks®, a premium product made by SBS® Water Systems, has been named winner of the Medium Category at the 16th edition of the KZN Exporter of the Year Awards, presented by the Durban Chamber of Commerce & Industry (DCCI) and Transnet Port Terminals (TPT). The KZN Exporter of the Year Awards highlight successful exporters in KwaZulu-Natal and were adjudicated by an independent judging panel and audited by PricewaterhouseCoopers. As winners of the Small Category in 2014, SBS Tanks has achieved tremendous growth over the last two years, resulting in it advancing into the Medium Category in 2016. According to SBS Tanks®’ Managing Director, Delayne Gray, winning this award is testimony to the company’s progressive growth. ‘Winning this title is a huge accolade and is affirmation that our various investments are being acknowledged on a broader level. As proud members of the DCCI, we recognise the vital role that exports play in the growth and development of our economy, and have greatly invested in our manufacturing facility in the last 18 months to increase production to service both local and export markets.’ Using advanced design facilities and a team of in-house engineers and specialised project managers, SBS® tanks are suitable for the harsh South African climate and ideal for export into Africa and worldwide. The company remains a preferred supplier in the municipal, mining, fire,
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food and beverage, agriculture and water conservation industries. Mava Gwagwa, SBS Tanks®, New Business & Key Accounts Director, explains that recent investments have seen a progressive effect on transformation, both internally and externally. ‘Our investments have resulted in a positive effect on transformation in terms of employment, job retention, upskilling, infrastructure and the local economy as a whole. A key component of our export strategy is the knock-on effect on job creation, capacity building and globalising a Proudly South African brand.’ As a Proudly South African company with more than 18 years’ experience in the water storage industry, SBS Tanks® has its roots firmly entrenched and invested in South Africa and is proud of its significant contribution to the global water storage industry. ‘The significance of taking a business from humble beginnings into the international arena is proof of strategic business focus, sound business principals, high customer focus, and continuous research and development,’ concludes Gray. For more information, visit http://sbstanks.co.za. n
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SABI Vol 5 Issue.indd 73
2017/02/27 11:19 PM
Advertorial: Wesizwe
At the core of Wesizwe’s operations Company profile
Wesizwe primarily focuses on the successful development of the Bakubung Platinum Mine (BPM) and its surrounding community of Ledig. With 17 000 residents, Ledig lies directly north of the mine. The project encompasses an underground mine that will comprise twin independent vertical shafts and a shorter third shaft. The main shaft will be for miners and materials, with a second shaft for ventilation. The third shaft is intended for support functions, added ventilation and as an escape route. The main shaft is intended to have a hoisting capacity of 250 000 tonnes of ore and 15 000 tonnes of waste per month. An initial 230 000 tonnes per month will be mined from the Merensky Reef, with 20 000tpm coming from the secondary Upper Group 2 (UG2) Reef. After the Merensky Reef is depleted (between 10 to 15 years from the start of production), the full 265 000tpm will comprise UG2 ore only. The Merensky Reef and the UG2 ore will be mined through semi-mechanised or hybrid methods using conventional methods on the face and mechanised ore-handling and development.
Photo credit: Wesizwe Platinum
Wesizwe Platinum is a public company incorporated in the Republic of South Africa with its shares listed on the JSE Securities Exchange. Our intention is to enter into PGM mining in South Africa as the launch pad for growing into a significant multi-commodity mining company that sets new benchmarks for sustainable mining practices. The development of a new underground mine to access one of the last remaining sizeable and viable Merensky and UG2 Chromitite layer PGM ore bodies is our flagship project. The BPM site is home of our flagship project.
Complex in the North West province of South Africa. The BPM will include an underground mine with a twin vertical shaft system – a main shaft and a ventilation shaft that will also function as the second escape route – and a process plant. The Merensky Reef will be mined using conventional stoping methods, and the UG2 using semi-mechanised methods also known as hybrid methods. Crushing will be done underground from where the reefs will be separately conveyed to stockpiles at the concentrator plant. The concentrator design has emanated from the results of the test work conducted during the bankable feasibility study and is based on a standard PGM plant layout. Options for collaboration in developing a joint concentrator plant with neighbours, Maseve, are being investigated to exploit benefits from economies of scale and sharing capital infrastructure costs. n
Bakubung Platinum Mine The BPM project site is situated directly adjacent to the western side of the Royal Bafokeng Platinum Styldrift project, and immediately north of Maseve’s Project 1, owned in partnership with Canadian group, Platinum Group Metals (PGM). These properties are all located on the western limb of the mineral-rich Bushveld Igneous
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Wesizwe Platinum Limited Wesizwe House Devcon Park, 9 Autumn Road, Rivonia, Ext 3, 2191 T +27 011 994 4600 W www.wesizwe.com
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SABI Vol 5 Issue.indd 74
2017/02/27 11:20 PM
SABI Vol 5 Issue.indd 75
2017/02/27 11:20 PM
Advertorial: KwaZulu-Natal Sharks Board
New-age pioneers in the maritime industry The KwaZulu-Natal Sharks Board Maritime Centre of Excellence safeguards 37 beaches on the KwaZulu-Natal coastline with shark safety gear that it owns and maintains. The organisation positions itself as ‘the only organisation of its kind in the world’.
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KZNSB scientists are actively involved in many spheres of shark and dolphin research, including maintaining the South African section of the International Shark Attack File and funding alternative methods of protecting bathers. KZNSB also undertakes awareness programmes for the public in bather safety by using boat tours, static display areas on site, outreach programmes, website, external exhibitions/displays, social media, radio interviews, publications and advertisements. KZNSB has embraced several CSI avenues – primarily its on-going Outreach Programme that delivers a solid marine education to learners throughout South Africa, and especially for those who do not have the opportunity to visit the coast and know very little about the sea, sharks, and other marine life. Advice on safe bathing and reducing pollution in rivers and on the beaches is part of the programme. n
Mthokozisi Radebe, CEO at KZNSB.
Photo credit: KZNSB
Established in 1964 by the KwaZulu-Natal Provincial Government, the KwaZulu-Natal Sharks Board changed its name in 2012 when it introduced its Maritime Institute of Sectoral Occupational Excellence. Now called the KwaZulu-Natal Sharks Board Maritime Centre of Excellence (KZNSB), the organisation’s mandate is to be a global leader in bather protection against shark attack while minimising environmental impact, thus promoting tourism. KZNSB’s mission is to strive to be a leader in environmentally-sensitive protection of bathers against sharks and capacity building in the maritime sector. The organisation has achieved distinguished accomplishments, defining its successes towards achieving its mission. The KZNSB Act requires the organisation to provide measures to reduce the risk of shark attack and attempt to reduce the environmental cost associated with those measures. The organisation facilitates skills development for sectors that include ocean and coastal shipping, inland waterways, aquaculture, port activities, maritime security, boat building, boat repair, and associated landbased activities with a focus on youth and previously disadvantaged communities as beneficiaries of these skills. The KZNSB is a registered ICDL training and assessment centre and works closely with various SETAs and accredited training service providers. As part of the organisation’s drive towards reducing environmental impact, measures have been implemented that include net reduction, introduction of drumlines, beach clean-up campaigns, and the introduction of pingers to deter dolphins and whales. The KZNSB received a permit from the Department of Environmental Affairs to test the Shark Repellent Technology (SRT), well known as the shark repellent cable. This technology is the brainchild of the KZNSB. The 100m-long cable emits a low frequency pulsed electronic signal that repels white sharks. The success of this innovation will provide the basis of developing a barrier system that protect bathers without killing or harming sharks or any other marine animals.
KwaZulu-Natal Sharks Board Maritime Centre of Excellence T +27 031 566 0400 E nombusom@shark.co.za W www.shark.co.za
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SABI Vol 5 Issue.indd 76
2017/02/27 11:20 PM
SABI Vol 5 Issue.indd 77
2017/02/27 11:20 PM
ENVIRONMENT
Africa’s first green village Swisatec’s architects and project managers believe in the reality of electric vehicles at Blue Rock Village – Africa’s first green village being built near Somerset West in Cape Town. Globally each year, the transport industry contributes around 23% of all carbon dioxide emissions, second only to electricity generation, which accounts for +-42%. It is estimated that vehicles throughout the world burn around 960-billion litres of fuel annually, and this figure increases as 100 million new vehicles are manufactured every year. Research conducted by the uYilo e-Mobility Technology Innovation Programme at Nelson Mandela Metropolitan University found that running an all-electric Nissan LEAF for a year can cost R18 000 less than a petrol vehicle, based on the average South African annual mileage of 30 000km. A car with a fuel economy of approximately six to eight litres per 100km at R12.40 for 95 ULP translates to the following annual cost: 6 litres/100km costs R74.4 = R22 320 annually and 8 litres/100km costs R99.2 = R29 760 annually. For an electric car, it would cost approximately R4 620 to charge over the period of a year. Swisatec plans to include EV charging stations in the design of Blue Rock Village, especially in key areas such as underground parking of the five-star envisioned Blue Rock Hotel and Conference Centre, the Dollar House (a high-end corporate office space), the Wellness Centre
and Spa, and the 40 000m2 Santa Luzia Lifestyle Centre. Phase one of the village: Giovanni Luxury Terrace Apartments is already selling, starting from R3.3 million. ‘Electric vehicles are a step in the right direction. Being the first green village in Africa, or achieving the first 6 Star Green Star Communities rating in Africa, means nothing if we cannot transform people’s lives. Our objective is to be a truly green village – we need to think and plan 20, 40, 60 years from now and make provisions for the future.’ Soon Swisatec plans to make Blue Rock Village the first to have an electric shuttle vehicle to service the whole village. Residents can summon the electric shuttle with a mobile app, as you do with an UBER ride, and they will be transported to their destination within the village. Cars powered by batteries are nothing new. The fist vehicle was invented between 1832 and 1839, and the first commercially available car with rechargeable batteries was sold in 1881. After the end of the first world war, because petrol cars were more reliable and petrol was more available, the electric car died out. The likes of Nissan, BMW and soon Tesla, have tested the South African market and are proving to be successful. For more information, visit www.bluerockvillage.co.za. n
Photo credit: Blue Rock Village
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SABI Vol 5 Issue.indd 78
2017/02/27 11:20 PM
SABI Vol 5 Issue.indd 79
2017/02/27 11:20 PM
WATER & SANITATION
Troubled waters PricewaterhouseCoopers warns that increased water demand presents a high risk to business. The Organisation for Economic Cooperation and Development (OECD) projects that, at the current pace, demand for water will increase by 55% globally by 2050. The increase will mainly come from manufacturing (+400%), electricity (+140%) and domestic use (+130%). In fact, the World Bank has cited a 40% global shortfall between forecast demand and available supply of water by 2030. Add in competition from agriculture to feed growing populations, and the gap between supply and demand results in very challenging consequences. This means that water has moved to the top of the business risk agenda – according to the World Economic Forum’s Global Risks Report 2015 – and is a major concern for society as a whole. With business sharing
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water with communities, industry, farmers and other users, securing the right quality and quantity of water at the right time is set to become a serious production and reputational issue. PwC’s Collaboration: Preserving Water Through Partnering That Works report explores the risks for business associated with water and how to collaborate with stakeholders to achieve a common goal – to share water successfully.
Risks for business The risks for business from having too much or too little water, water that’s too dirty or too expensive are increasing. Whether used to cool, heat and/or clean, or as
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SABI Vol 5 Issue.indd 80
2017/02/27 11:21 PM
WATER & SANITATION
an ingredient, it’s also a critical factor in the supply chain and can cause disruption in storage, damaging stock, and imposing detrimental impacts on distribution. Even financial services is touched by water, investing in and insuring a business with an unknown or unquantified exposure to water risk. Water permeates right across the world. Jayne Mammatt, Partner in Charge of PwC’s Sustainability and Integrated Reporting Department, says: ‘Continued effective water management is becoming more complex and costly for business. Identifying and managing the potential material risks both in direct operations and in the supply chain – for example, pollution, flooding, irregular or reduced supply, governance, regulation, climate change, disaster threat, and reputational issues – is an important step to managing the bottom line and avoiding sudden costs. ‘Ultimately, securing water will come down to effective collaboration with other users in the water basin. However, when stakeholders come together, even with the best intentions to work together, they often have huge differing perspectives and demands. PwC recognises the complexities of collaboration and is able to offer an independent perspective.’
More than oil or talent, water is increasingly the most problematic of resources because of inconsistency of supply, quality, pollution, drought and flooding. These issues have not gone unnoticed by the business world. According to PwC’s annual CEO survey, 46% of CEOs agree that resource scarcity and climate change will transform their business in the next five years. In many instances, economic development is expected in regions and countries where there is already a significant water shortage, such as the Middle East and Africa.
South Africa’s available water resources South Africa is a semi-arid and water-scarce country with a mean annual rainfall of 450mm (compared with a world average of 860mm), and only 9% of that rainfall is converted to river runoff. Water resources are unevenly spread across the country – 21% of the country, mainly the arid west, receives less than 200mm per year and 65% of the country, less than 500mmm per year. Additionally, evaporation rates can be extremely high – for example, in the northwest of the country evaporation losses can exceed 2 750mm. This places significant pressure on water supply for agriculture and human consumption as high evaporation rates reduce levels of run-off and availability of surface water. Of the economic sectors in South Africa, the agricultural sector is by far the largest water consumer. The sector is heavily reliant on irrigation – only 12% of South Africa’s land is considered suitable for growing rain-fed crops and even a smaller portion of land (3%) is considered fertile. Water is not only vital for food production and domestic use, it is an integral element of the industrial, mining and power generation sectors that use about 10% of South Africa’s freshwater. Most of South Africa’s electricity supply is dependent on water-intensive coal-fired power stations, which use substantial amounts of water for cooling. As the country experiences continued population and economic growth, South Africa is approaching full utilisation of available water resources as an everincreasing demand for water resources will eventually outstrip supply. The decline in water quality because of urban and industrial effluent discharge into river systems, poorly maintained waste water treatment works, salinity from irrigation return flows, acid mine drainage, and inadequate facilities poses another water challenge for South Africa. Mammatt concludes: ‘Water has a place on the risk agenda for every business – either as a direct operational issue or in the supply chain. Businesses need to have effective monitoring and management in place, both from its own perspective and that of its stakeholders. ‘Not only is production at stake, reputation and licence to operate are too, so the decisions around water have far-reaching consequences.’ For more information, visit www.pwc.co.za. n
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SABI Vol 5 Issue.indd 85
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TOURISM
High expectations for SA’s tourism sector in 2017 South Africa’s tourism industry could be referred to as the country’s proverbial pot of gold. Based on the most recent preliminary visitor figures released by top tourist destinations and Cape Town International Airport, it is expected that tourism will, once again, provide an invaluable contribution to the country’s national GDP this year. According to Josiah Montsho, General Manager at Pepperclub Hotel & Spa, a 5-star luxury hotel in Cape Town’s CBD, the country’s tourism industry plays a
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major role in contributing towards economic growth, and witnessing the industry perform beyond expectations is an encouraging sign for the local economy.
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SABI Vol 5 Issue.indd 86
2017/02/27 11:23 PM
TOURISM
‘After experiencing the biggest decline in six years in 2015 because of changes to visa and immigration policies, the industry has made an exceptional recovery,’ notes Montsho. He points to the milestone of 10 million passengers recorded by Cape Town International Airport in 2016, the highest number ever recorded. The airport also showed an 8% year-on-year increase in December 2016, recording over half a million arrivals during the month. ‘Cape Town in particular reported a bumper peak season – with most of the popular tourist attractions reporting record preliminary visitor numbers for December 2016,’ he adds. Montsho points to the preliminary figures for visitor traffic recently released by five of Cape Town’s major attractions, all reporting record year-on-year figures in December, including increases for Table Mountain Aerial Cable Way (0,3%), Cape Point in Table Mountain National Park (15%), Kirstenbosch National Botanical Gardens (6%), Robben Island (4%) and Groot Constantia (25%).
‘As South Africa offers international travellers a variety of experiences at an affordable price, it comes as no surprise that the country has quickly regained its popularity among travellers,’ comments Montsho. ‘We can expect this trend to continue into 2017 with more developments planned to attract a range of travellers to our shores, for both business and leisure.’ He continues to explain that, according to the 2017 Virtuoso Luxe Report, South Africa is the number one destination for adventure in the world, as well as the second spot for best global destination and fourth for top emerging destination. The report also revealed that key reasons for travel in 2017 are to explore new destinations, enjoy authentic experiences, to indulge in rest and relaxation, personal enrichment and to seek adventure. ‘South Africa, and in particular the Western Cape, caters perfectly for all of these types of experiences and the sector is working hard to provide even more opportunities for local and international travellers alike,’ says Montsho. He refers to recent commentary made by Western Cape Economic Development MEC, Alan Winde, on expected trends for tourism in the Western Cape in 2017 – such as a number of new tourism and hospitality developments for Cape Town’s foreshore area, a new cycle tourism route and a new Madiba Legacy Route – all with the aim of adding value and new experiences for visitors in Cape Town, while creating 100 000 new jobs for the Western Cape tourism sector. ‘Overall, we can expect tourism to continue to meet annual targets and positively contribute to the muchneeded growth of the South African economy,’ concludes Montsho. n
Photo credit: Pepperclub Hotel & Spa
Josiah Montsho, General Manager at Pepperclub Hotel and Spa
Developed by Solomon Brothers Property Holdings, Pepperclub is a R400 million luxury hotel and spa situated in the heart of Cape Town. The 20-storey hotel caters for discerning business and leisure travellers. For more information, visit www.pepperclub.co.za.
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SABI Vol 5 Issue.indd 87
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SABI Vol 5 Issue.indd 89
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RETAIL
Online shopper: Lessons from 2016 2016 Was a turbulent year for consumers. However, as the online environment became more flexible and secure, it is online shoppers who may have escaped with the least scars.
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Photo credit: PayU South Africa
While the estimated R8.9 billion spent annually online in South Africa may not be on a par with the UK or USA, things are changing as demographics and perceptions shift. Karen Nadasen, CEO at PayU South Africa, says: ‘eCommerce growth is being driven by an increasingly sophisticated consumer market that values the convenience of online shopping and recognises the layers of security that surround online payment solutions. Our business, for example, has witnessed a 15% increase in volumes over and above our projected year-on-year increase for November – largely thanks to Black Friday and Cyber Monday. We have also seen a 76% decrease in the number of chargebacks processed in 2016 versus 2015, through effective fraud monitoring tools.’ According to a survey undertaken by Urban Studies for the South African Council of Shopping Centres, security – especially around credit cards – was a major concern in 2013 but this has reduced significantly over the past three years. The survey found that credit card security dropped from the second biggest issue in 2013 to one of the lowest in 2016. Now, the primary consumer concerns are being unable to touch or see a product and uncertainty around quality and size. Leading payment gateways recognise that consumers want to enjoy a host of payment methods (credit card, debit card, EFT and scan), and there is a decline in consumers carrying sums of cash. ‘People want a variety of payment solutions they can trust,’ adds Nadasen. ‘For instance, we have seen EFT as an online payment method grow by over 92% year on year, coupled with a 183% increase in EFT as a payment method for November 2016 versus November 2015.’ It seems that the hard work put in by financial institutions and payment solution providers has paid off – 2016 was the year when Black Friday and Cyber Monday took flight in South Africa. In an interview on IOL, Takealot’s Chief Marketing Officer, Julie-Anne Walsh, revealed that the site saw 300% of the usual traffic, while Facebook showed it to be the biggest online shopping day of 2016 in the country. The trends that truly shaped online shopping in 2016 were an increased demand for variety and free delivery. The biggest drivers of online shopping are convenience and time – people are increasingly frustrated with queues, traffic and delays when heading out to spend money, whether on groceries or gifts.
As trends go, the new Amazon offering hits the proverbial nail on the head. Recognising that shoppers don’t want queues and inconvenience while still wanting to experience the tactile pleasures of the items they purchase, Amazon has created a store with no checkout. Consumers simply download the Amazon Go app, enter the store, take what they want and leave. It’s a unique blend of the physical store with the convenience of the online shop and it will be interesting to see how successful it is when it launches to the public in 2017. However, back on the African continent, innovation appears to be redefining local eCommerce trends. The PwC Total Retail 2016 report showed that innovation is where consumers are spending – people want the omni-channel experience that seamlessly carries them from social media to online store to product, and playing at home. ‘It could be that when we look back at 2016 we will see the year when innovation and consumer trust turned the eCommerce corner in South Africa,’ notes Nadasen. For more information, visit www.payu.co.za. n
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SABI Vol 5 Issue.indd 90
2017/02/27 11:24 PM
SABI Vol 5 Issue.indd 91
2017/02/27 11:24 PM
Advertorial: Unemployment Insurance Fund
Unemployment Insurance Amendment Act at a glance The Unemployment Insurance Amendment Act, which was signed into law, is widely expected to have a positive effect on the country’s workforce. It also has the potential to help stimulate the economy. Changes brought on by the new Act strengthen the economy and widen the safety net for employees as it forces the Unemployment Insurance Fund (UIF) to free up more capital for more people; and makes claiming easier. The UIF has done well with contributions collections, resulting in a R90-billion surplus in 2016. This financial stability enables the UIF to ringfence about R400 million to fund labour activation schemes, assisting to train unemployed people and preventing job losses by reskilling those on the verge of retrenchment. Section 5 of clause 2 of the new amendments emphasise the utilisation of a portion of the surplus in employment creation schemes, such as the ‘Training Lay-Off’ scheme, Training of the Unemployed, and Turn Around Solutions. The good news is that changes to the Act are not going to affect the 2% levy paid to the Fund, despite the likely increase in the payment of claims resulting from the extension of scope to all benefits and coverage of learners and public servants. Once in effect, after the President has promulgated it through the government gazette, the new amendments in the UI Act bring the following changes: • Contributors can claim unemployment benefits for up to 365 days, instead of 238 days, if they have worked for a continuous four-year period. • Contributors can claim benefits if they have built up credits, regardless of whether or not they have claimed within a four-year cycle. • Maternity benefits will be paid at a fixed rate of 66% of your normal salary. • Public servants at national, provincial and local government level are entitled to unemployment benefits. • People undergoing learnership training in terms of the Skills Development Act are eligible for unemployment benefits once their learnership contract ends. • Benefits are paid to employees who lose income resulting from reduced working times. • Excess cash in the UIF is being invested in jobcreation and other schemes aimed at keeping workers at risk of losing their jobs in employment. • Contributors are entitled to benefits even if they receive a monthly pension from the state, or a benefit from the Compensation Fund or any unemployment
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fund or scheme established under the Labour Relations Act. • Contributors have 12, instead of six months, from their last date of employment to submit applications for unemployment benefits. • Contributors can claim illness benefits if they’ve been sick for seven consecutive days, instead of 14 days. • Contributors are entitled to full maternity benefits for 121 days, instead of six weeks, in the event of a miscarriage during the third trimester, or a stillbirth. • Contributors may apply for maternity benefits from eight weeks before the baby’s due date to 12 months after the child’s birth and not, as previously, four weeks before childbirth. • Following a breadwinner’s death, contributors may apply for a dependant benefit within eight months, instead of six months. • Contributors may nominate their beneficiaries in the case of death benefits. • No agency or person who purports to act on behalf of an applicant may charge a fee for applying for benefits. • After consulting with Parliament, the Minister of Labour is empowered to issue regulations that change the income replacement rate and the period over which benefits are paid. n
Unemployment Insurance Fund T +27 012 337 1680 E makhosonke.buthelezi@labour.gov.za W www.labour.gov.za
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SABI Vol 5 Issue.indd 92
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SABI Vol 5 Issue.indd 93
2017/02/27 11:24 PM
Advertorial: Bulichule
Photo credit: Bulichule Training & Consulting
Linda Ngambu
Graduates from the Bulichule program
Student support management Established in 2006 and based in Johannesburg, Bulichule is a 100% black female owned and administered company. Operating nationally, Bulichule is structured to deliver new and innovative tailored customer services in a timely and cost effective manner. Some 11 years ago, Linda Ngambu, now the Managing Director of Bulichule, was forced out of employment through unfair dismissal. ‘I had two mouths to feed, bills to pay and it was hard to conceptualise what I was going through. I am grateful to those that contributed to my unemployment as I would not have achieved my purpose in life of giving back to the community,’ she says. ‘Through desperately trying to find employment, which was not coming fast enough for me to put bread on the table for my children, I opened a company not knowing what services I would offer my potential clients. After a good soul searching of my activities while I was a Human Resources Manager, I realised what I enjoyed the most was being involved with a student support management programme,’ she notes. That is when Bulichule Training & Consulting was born. ‘Through Bulichule’s efforts and willing donors we have managed to support young adults who are thirsty for education but do not have means to further their education. Our concept is simple, “to alleviate poverty through education”. This can be achieved through the CSI initiatives that are aligned with companies/organisations’ strategic plans of changing the education dynamics of this country. We do not change or take away existing processes from these companies, but merely add value by means of visibility, support and ensuring companies get returns on their investments.’
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Our programmes • Casting the recruitment net wide • Assistance with navigation of suitable candidates • Matching donors with deserving bursars • Academic mentoring and evaluation • Socio-economic intervention • Tracing bursars • Exit strategy programme • Workplace readiness Our successes • 95% pass rate • Enhance culture of learning • 80% permanently employed • Individual sense of achievement • Excellent relations with all stakeholders Our vision is to ‘learn, evolve and be inspired through education’. Our mission is to ‘succeed through excellence and remain above it all’. Our approach is to ‘teach one and alleviate poverty’. This initiative can be achieved if everyone saved through this process comes on board to make it a success. n
Bulichule T +27 011 312 4741 (Linda Ngambu) C +27 079 434 7620 E linda@bulichule.co.za W www.bulichule.co.za
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SABI Vol 5 Issue.indd 94
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2017/02/27 11:25 PM
ADVERTORIAL: KÄRCHER
New trigger gun for high-pressure cleaners Kärcher redefines the most important control element. For its range of commercial cold and hot water high-pressure cleaners, Kärcher is introducing the EASY!Force trigger gun in a brand new design. The main feature is the trigger, which is pushed into the handle with the ball of the hand. When the trigger is operated, the recoil of the water jet automatically presses the trigger into the hand, which contributes to effortless use. The reduced force action prevents hand and finger strain and, in turn, muscle cramps. Accidental operation is prevented by a yellow safety lever in the handle. This can be released again after briefly operating the trigger. Kärcher has used this new trigger gun design as an opportunity to introduce further improvements. As a result, both interfaces from the trigger gun to the lance and high-pressure hose have been redesigned. A quadruple trapezoidal thread, EASY!Lock, allows a tight and reliable connection with only a single turn (360°). Further connections – from lance to nozzles and from hose to high-pressure cleaner – also feature the new EASY!Lock thread. In this way, all components can be changed quickly and easily. A total of 476 accessory parts have been converted to the new screw thread. Thanks to special adaptors, the new trigger gun can be connected to existing high-pressure cleaners. The adaptors can also be used to connect newly purchased high-pressure cleaners with the new thread to existing components.
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The valve has been substantially improved, both main components – ball and valve seat – are now ceramic. This ensures a lasting and reliable seal. The EASY!Force trigger gun is suitable for all Kärcher cold and hot water high-pressure cleaners with a maximum pressure of up to 300 bar. EASY!Force, the new trigger gun for professional hot and cold water high-pressure cleaners from Kärcher. The yellow and black trigger is visible at the back of the handle. The recoil of the water jet presses the handle into the ball of the hand. The trigger gun can be used in continuous operation without additional force and effort. A yellow safety lever in the handle prevents accidental operation of the trigger gun. n
Kärcher (Pty) Ltd Cnr. Mount Joy & George Allen Rd. Wilbart Ext.2, Germiston (South Africa) T +27 011 657 7300 (Switchboard) C +27 082 904 4694 W www.karcher.co.za
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