Essential Business Magazine Issue 18 - 2017 by Optic Juice

Africa

www.essentialbusinessmag.com|Issue 18

s g n i Silver Lin A strategic overhaul for 2017

Also in this issue: DuPont p48 Milkor p52 CC Crane Hire p62

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P R O D U C T I O N Scott Jameson

Publisher sjames@essentialbusinessmag.com

Zain Millington

Production Manager

Sam Wright Editor-in-Chief

James Macnamara Deputy Editor

Rob Harding

Staff Writer production@essentialbusinessmag.com

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P R O J E C T S David Taylor

Head of Projects dtaylor@essentialbusinessmag.com

Amelia Nazer

Senior Projects Manager amelia@essentialbusinessmag.com

Armin Dizdarevic

Project Manager armin@essentialbusinessmag.com

Lucrecia Salie

Project Manager lsalie@essentialbusinessmag.com

S A L E S Adam Caan

Head of Sales acaan@essentialbusinessmag.com

Johann Van Wyk

Sales Executive jvwyk@essentialbusinessmag.com

F I N A N C E Miah Dizer

Finance Manager accounts@essentialbusinessmag.com

E X E C U T I V E

D I R E C T O R S

hile there were many things to celebrate in 2016 when it came to African business, it was still one of the more challenging years of recent times. However, 2017 is new and presents an opportunity for fresh starts and the reversal of fortune. Our first profile is of Sage, currently undertaking a strategic overhaul in the face of new markets. Another company doing things differently this year will be Milkor, branching out from its incredibly successful product, the Multiple Grenade Launcher, into new more and more specialist equipment. Big changes in Africa go hand in hand with big development, and CC Crane Hire is a company to watch out for along the way. As well as this we have profiles on irrigation specialists Inyoni, and a look at the protective equipment arm of big US investors in Africa, DuPont. A new year, and a new time for African business. We hope youâ&#x20AC;&#x2122;re looking forward to it as much as we are.

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Sam Wright, Editor in Chief

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PART OF

16 – 18 May 2017 Cape Town, South Africa www.african-utility-week.com

Contents A new year ahead 6 looks at the outlook for economies across Africa in the coming year.

Invested development 10 An interview with Richard Edwards of Nedbank, discussing investment in real estate.

News round-up 14

Milkor

Business news from the continent, including the continued situation in The Gambia.

Continuing the sportswear theme, Essential Business looks at Kappa, another European giant at the forefront of the African market.

Sage

Inyoni

Sage provides business management and accounting software, driving a huge number of African businesses. interview Keith Fenner, VP of Sage Enterprise Africa, on the company’s success in numerous markets.

With frequent droughts and harsh terrain, agribusiness in southern Africa has to invest in good irrigation. Gordon Vermaak, Director of Inyoni, tells about the company’s solution.

CC Crane Hire DuPont

A major US investor in Africa, DuPont’s lines in protective equipment are making Africans safer. Allen Chimhandamba, Regional Business Leader at DuPont’s sub-Saharan branch, speaks to .

Many sub-Saharan companies and countries are expanding their infrastructure and taking on more heavy construction projects. looks at one of the key players of this expansion.

Attacq

speaks to the CEO of Attacq, one of South Africa’s leading capital growth companies in the real estate sector.

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OnTopic

Looking back

The sudden fall in oil prices hit many countries hard last year, particularly key producers such as Nigeria, Angola, Algeria, Egypt and Libya. Nigeria’s economic struggles have been the most widely publicised, with the Naira falling to historic lows and the country’s embattled leadership under fire on social media for their handling of the crisis. While the slowdown has been financially difficult, some consider it a vital wakeup call, one which demonstrated that national economies based entirely around commodities aren’t viable in the long term. Foreign direct investment has helped, as has a constant fall in commodity prices in the past few years, but now many countries, particularly in sub-Saharan Africa, are developing their service sectors, and in most cases economic growth continues despite the oil shortfall. Politically, on the other hand, it has been much more of a mixed bag. The ongoing leadership dispute in The Gambia is the most well-known internationally, with the ex-president Yahya Jammeh stubbornly refusing to leave office 2016 was a turbulent year for many until the threat of an imminent of African economies. As conflicts ECOWAS intervention to remove him seemed too great to raged in the north and falling oil stomach. Under Jammeh, the prices forced rapid reevaluation of Gambia became one of several priorities, many states may seem on countries that announced that it would withdraw from the the surface to have stepped backwards. International Criminal Court, But beyond the grim headlines there along with South Africa. The were significant positives which should African Union’s own courts had a number of victories this year, continue into the coming year. however: the former Chadian dictator Hissène Habré was charged for crimes committed during his rule – and, eventually, found guilty, was required to pay millions of dollars in compensation. Elsewhere, Nigeria saw a renewal of hostilities in the Niger Delta even as the threat posed by Boko

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On Haram recedes in the north, while Ethiopia remains in a state of emergency, although it may be lifted soon. Civil unrest against ZANU-PF in Zimbabwe has moved online, Mugabe’s government passing increasingly draconian laws to attempt to restrict slippery online protest communities. On the other hand, in Rwanda Paul Kagame remains popular enough that citizens have voted to remove the constitutional block on his taking a third term, and in the DRC Joseph Kabila is

has offset this number in real terms, there are still positive signs on the horizon. Access to the internet has been revolutionary for people across Africa, and the new digital frontier looks set to carry on its expansion in 2017. Home-grown services like Kenya’s M-PESA “mobile money” system have lifted people out of poverty and allowed the grassroots economy to grow at a considerable rate. Some studies suggest that at least one person in 96% of Kenyan households now uses M-PESA, and Kenya has more than 120,000 agents for the company.

“While the slowdown has been financially difficult, some consider it a vital wakeup call, one which demonstrated that national economies based entirely around commodities aren’t viable in the long term. approaching the end of his term, although given the country’s history it’s depressingly unlikely that he’ll go quietly.

Making progress

Despite all this uncertainty, the majority of Africa’s citizens are now healthier than ever before. According to the World Health Organistation, life expectancy across across the continent has now risen by 9.4 years since 2000. The percentage of those in poverty has continued to decline too, and while population growth

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African internet services still struggle with “lastmile” connections and soaring bandwidth costs, but a historic lack of infrastructure and internet architecture is actually proving to be something of a benefit as African users aren’t hamstrung by vested interests hanging on to obsolete hardware. Nonetheless, African nations that want to fully take advantage of the boom need to invest in infrastructure and sharply drop taxes on the industry- high bandwidth tariffs mean that many areas are simply too expensive to connect.

A greener future

Despite the projected shift against environmental concerns in the US, many African countries and sectors are realising the value of renewable energy as an economic investment, too. Senegal, Kenya, Nigeria and South Africa are all leading nations in the drive for renewables, and Africa as a whole has enormous potential, with biomass, hydropower, wind turbines and solar plants as the most prevalent technologies. With generation costs per kilowatt getting lower all the time, many countries look set to expand their renewables programmes. Furthermore foreign investment, particularly from China and India, continues to pour in to countries all over the continent, albeit not without some controversy. Potential recoveries on the oil prices, driven by higher Asian demand and the OPEC agreements, could mean prosperity for countries which properly diversify their economies away from resources, and recovery for those that have not. In the short term though, the IMF has cut its 2017 forecasts for Nigeria and South Africa, with the former contracting by 1.7% while the latter only grows by 0.8%. With the world facing uncertain times ahead, there’s everything to play for in Africa.

OnTopic

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Expert

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ExpertInterview

Corporate and Investment Banking, responsible for the Western and Eastern Cape Regions. Our Regional Office is based in the V and A Waterfront, Cape Town. We are involved in the granting of loans in respect of both investment and development fi nance in the office, retail, industrial and residential (development funding only) commercial property markets. Nedbank Property Finance also participates as equity providers and partners usually via minority stakes in commercial property projects through our Property Partners Team. Nedbank Property Finance is the market leader in commercial property fi nance with a market share of 33-35%.

Investment from organisations like Nedbank is what keeps the continentâ&#x20AC;&#x2122;s most exciting real estate projects afloat. In this monthâ&#x20AC;&#x2122;s expert interview Richard Edwards, Divisional Executive for Property Finance, discusses recent projects and potential opportunities for large-scale development.

Letâ&#x20AC;&#x2122;s start with some background about the work in the real estate and infrastructure sphere that you do at Nedbank.

I am Divisional Executive for Property Finance at Nedbank

Are there any specific projects that you are involved in that you are particularly excited about at the moment?

We are spread across the broad commercial property market but tend to focus on sectors that are strong at any one time. The residential development market is extremely strong in the Western Cape at the moment and we are involved in numerous sectional title residential schemes covering areas such as Kenilworth, Claremont, Newlands, Green Point and the Atlantic seaboard. Residential security estates are in strong demand and we are involved in schemes in Century City, Burgundy Estate (as major shareholder), Clara Anna Fonteyn (Northern suburbs) and Sitari Country Estates (Helderberg area). A strong focus is also in the

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development of student accommodation and we are involved in numerous funding projects across the broader South Africa close to campus sites of the major universities. We are also a shareholder in CampusKey, a provider of nationwide student accommodation. Another strong focus is in the financing of the development of neighbourhood

Shopping Centre in Somerset West (R400m).

What in your view are the main challenges to the real estate & infrastructure sectors in South Africa (and Africa)?

Main challenges especially in the Western Cape include the lack of availability of zoned and affordable land for development and distance from transport hubs and places of work. This makes the provision of affordable housing for lower to middle income workers close to their places of work difficult. Congested and expensive transport costs means that the provision of safe, reliable and affordable public transport is a must for any large city in South Africa. These are large and expensive projects that cities do not have funding for given their broad focus on many other social requirements as well.

“Main challenges especially in the Western Cape include the lack of availability of zoned and affordable land for development and distance from transport hubs and places of work. and convenience retail shopping centres in previously disadvantaged areas as well as outlying towns with small, modern retail shopping centres. Industrial focus is primarily around distribution and logistics and the provision of new and clean, efficient industrial buildings. Major individual projects currently funded include the new Tsogo Sun hotel in the Cape Town CBD (R650m) and the Sanctuary

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And the opportunities?

Great opportunity exists in the re-development of “brownfield sites” such as Woodstock and Salt River being

close to the CBD and public transport hubs. Favourable planning approval, rate rebates and municipal/local government and developer joint ventures could play a role in unlocking these opportunities. Also the provision of cheaper government or municipal land for affordable housing schemes is a key imperative. Nedbank is one of the major providers of funding in the Affordable Housing market. Promotion of mixed use development schemes known as “live, work, play” would lessen the strain on already congested transport networks.

What is your vision for this sector?

I would like to see the commercial property sector as a key driver of employment both in the development/construction phase as well as the provider of permanent employment in shopping centres and mixed use schemes. Commercial property is also a key contributor to economic growth. Also the promotion, funding and development of affordable housing is key. A key market player like Nedbank could act both as facilitator, funder and partner in many joint initiative projects to address some of the areas covered above. I would also like to see the commercial property sector becoming a key driver of wealth creation and empowerment in previously disadvantaged communities.

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News T

he dramatic aftermath of the elections in The Gambia catapulted the tiny country to the POLITICS international headlines as its former president Yayha Jammeh refused to concede to international pressure to resign after his electoral defeat. Demanding a recount, Jammeh also successfully legislated a 90-day state of emergency and refused to leave office, forcing the new president Adama Barrow to be inaugurated in exile in Senegal. After Senegalese and Nigerian forces entered the country, however (with the backing of ECOWAS and the UN Security Council), the Gambian army refused to defend Mr Jammeh, who subsequently accepted an ECOWAS-agreed exile on the 21st of January. ECOWAS troops will remain in the country to support Adama Barrow, the new president, for six months, at his request.

Elsewhere, Chad’s Moussa Faki Mahamat was named the chair of the African Union Commission following seven rounds of voting in Addis Ababa, defeating candidates from Senegal, Botswana, Equatorial Guinea and Kenya. He succeeds Nkosazana Dlamini-Zuma, the South African who was the first woman to lead the 54-state bloc. The first order of business for the new leader will be re-admitting Morocco, which became the only country on the continent to leave the AU following a dispute over Western Sahara.

mid tumbling commodity prices and financial woes, Nigeria now faces another problem – renewed tensions in the militant-plagued Niger Delta. As reported by Nigeria’s Guardian newspaper, the Ijaw Youth Council has issued a warning to the oil giant Shell over the multinational’s plan to move its corporate headquarters out of Port Harcourt and into Lagos. The IYC described the plan as “anti-Niger Delta” and raised concerns that the move, which would remove the economic and associated benefits of the oil giant’s presence and result in a depression in the area, could escalate the security situation in the volatile region. The move comes as the federal government in the country continues to search for non-oil commodity exports to restore its balance of trade. The current target is for Nigeria to position itself to get 5% of the total global export earnings.

Despite renewed tensions, Nigeria has once again overtaken Angola to become the top producer with production rising back to 1.77 million barrels per day. This is partly thanks to the agreements between OPEC and others to cut supply in an attempt to boost prices. Nigeria also retains its exemption from OPEC cuts thanks to militancy in the Niger Delta, which may give it an advantage when others are cutting back, if an extended period of peace can be observed.

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O I L

News

he rift created last year between the IMF and the Ugandan government is healing. Christine Lagarde, the IMF’s managing director, is reportedly “impressed” by the country’s economic growth after a recent visit to the country. Lagarde praised the government’s ‘sense of urgency’ and advances in poverty reduction, public investment, inclusive growth, financial inclusion and transparency in the oil sector. The mood wasn’t all positive, however: Lagarde also added a word of caution about the poor fund absorption in the country, with estimates suggesting that up to 40% of the borrowed funds may not be being utilised by the government, and criticised other implementation challenges including poor project appraisal and corruption.

frican agribusinesses are increasingly shifting away from the cash crops of the last century and branching out to find opportunities in less common local produce. In East Africa, for example, consumption of the mild stimulant qat is booming among Ethiopians and Kenyans, leading to many choosing to cultivate it for sale in more-accessible local markets. While qat is restricted worldwide (classified as illegal in the UK despite the advice of the country’s own drugs advisory council), in East Africa factors like better roads (which allow the perishable leaves

Uganda’s 30-year relationship with the IMF has often been a rocky one, with all funding suspended in 2016 following concerns about absorption ECONOMICS capacity. Lagarde’s closing statement suggests better time ahead, however, and the IMF’s reports suggest that the Ugandan economy may be set to grow further in the coming months. In South Africa, private sector confidence remains weak despite recovery from the droughts of 2016 and improvements to the electrical grid. Rising debt means that the country is at risk of losing its investment-grade credit rating, which will lead to a tepid recovery. Elsewhere, the effects of Donald Trump’s new administration in the United States remain unclear. While only three African countries are affected by direct travel bans at time of writing, others are likely to feel the squeeze from trade tensions between the US and China.

to be delivered to a wider audience) a diaspora of Somalis (for whom qat is a cultural institution) and government support (Kenya declared the plant an officially sanctioned cash crop) mean that the trade is booming. Ethiopian farmers are switching from coffee, the country’s biggest export, to qat production, and it’s now the country’s second-largest source of currency.

Elsewhere, coffee and tea prices are rising as producers and governments attempt to fight the results of the poor rains last year. Farms are changing as well, with more farmers turning to technology to support their operations, be it embracing mobile money and online banking

O D & AGRICULTURE

or setting up better irrigation systems. Some technologies are simpler – farmers in many countries are planting more trees on their land, or investing in cover crops and other techniques to increase yields. African agribusiness continues its perpetual evolution.

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Sage Enterprise Africa

w w w . s a g e . c o m / z a

Sage is one of the biggest names in business management spoke to software. Keith Fenner, Vice President of Sage Enterprise Africa and Middle East, about the companyâ&#x20AC;&#x2122;s worldwide strategic overhaul and the strategies taking them into a new period of growth.

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ICT

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S a g e

t Sage, times are changing. CEO Stephen Kelly has promised to “shed the shackles of conservatism” and overhaul the company to compete in the ever-changing tech markets. The latest effort involves a string of mobile

accounting apps to let business owners run their books from tablets and mobile devices, a move away from the company’s traditional boxed software releases. Keith Fenner, Vice President of Sage Enterprise Africa and Middle East, is confident about the new regime and its potential impact.

E n t e r p r i s e

A f r i c a

“When Stephen came in, he arrived with a broader outlook: ‘Listen, we need to become ‘One Sage’, therefore we need to put some money on different horses for our overall product strategy with a cloud first philosophy.’ Our previous strategy was to have a few leading products dominating local markets. However, we’re

CMY

“CEO Stephen Kelly has promised to “shed the shackles of conservatism” and overhaul the company to compete in the ever-changing tech markets

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A Leading Platinum Sage X3 Business Partner

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S a g e

Good to Great: Mucheki Consulting Humble Beginnings to SAGE PLATINUM RESELLER Established in 2012, Mucheki Consulting has a long standing and fruitful certified business partnership with Sage Enterprise, characterised by successful implementations across the length and breadth of the African continent and a host of new customers. Based in South Africa with presence in Zimbabwe and Kenya, Mucheki Consulting is a trusted provider of customdesigned, end-to-end enterprise resource planning solutions. Mucheki believes the emerging ICT market is in Africa thus focus is on the African market. A recent growth trend in local support for the market-leading product has meant that a sustainable, confident market for Sage X3 is steadily developing and promising to hit the top. Starting as a one man band Mucheki Consulting, is now the only Sage Enterprise Platinum certified partner in Southern, Central and East Africa, attributing this achievement to unwavering work ethic, quality service delivery and patience of Mucheki Sage certified team, as well as continued belief in Sage X3 as the business solution of choice for mid-sized to large businesses and institutions in Africa. The prime focus as a business solutions provider is not only software but the provision of practical solutions to real business problems. Mucheki Consulting is under the leadership of Engineer Churchward Mucheki CPIM, CSCP, an APICS certified professional with over 20 years’ experience in the implementation of Enterprise Business systems. Churchward is regarded the leading Sage X3 expert on the African continent. Mucheki Consulting is set to play as contributors towards making African companies globally competitive through structured business intelligence that will improve product and service delivery. In addition to the many benefits of Sage X3, Mucheki Consulting underlines an emphasis on creating a good and long lasting relationship with all its customers. Mucheki Consulting fosters a commitment to transferring as much knowledge as possible to customers and follow an implementation methodology that encourages customer participation and a sense of ownership for the project. Already having successfully signed off Sage X3 in 16 African countries for Alliance Media, one of our key customers, Mucheki is geared to take the ICT industry to greater heights with more than 30 customer sites in Africa and Europe and a preferred partner for one of the big five consulting firms in South Africa.

Testimonial Mucheki Consulting successfully implemented Sage X3, Sage CRM and the Workflow system for Alliance Media. The solution has been deployed in all our African operations covering 16 countries. Mucheki Consulting work was very professional and of high standard – Peter Magora (Group Commercial Manager)”.

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trying to be ahead of the curve in every market in which we operate. For example, we are now developing a world-class industry leading cloud strategy. We are thrilled to announce that we are now fully cloud ready, scaling from start-up, and scaleup to Enterprise segments.”

Cloud computing in Africa has always been a contentious subject. While there’s certainly the capital and huge potential benefits for African businesses in cloud adoption, there’s also a lack of interest, and the onthe-ground reality of limited connectivity and bandwidth holding the technology back. According to Fenner, however, these are increasingly problems

CMY

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S a g e

“While there’s certainly the capital and huge potential benefits for African businesses in cloud adoption, there’s also a lack of interest, and the on-the-ground reality of limited connectivity and bandwidth holding the technology back

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of the past, and indeed his organisation has already begun preparing around them. “We’re seeing a huge shift towards cloud in Africa and Sage is well positioned for this, because the product’s already completely web and mobile capable. It’s a testament to our tech strategy and compliance with the third platform. That

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A f r i c a

strategy is driving us into some new market areas; historically there are not many ERP players in the African market because of the high cost to entry, whereas we’ve been here for over 25 years. All we need to do is release the right product, at the right time, to enable us to win in the market and provide a platform to support our customers for life”.

CMY

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SynergERP The key to a successful ERP implementation is quite simple. Upgrading your current enterprise software or migrating to a new system can be a nightmarish rollercoaster ride that goes on for way too long. Before long, you have fired your integration partner and bought a beach bar in Fiji whilst recovering from mental breakdown number four. But it doesn’t have to be so dire. At SynergERP, we understand the major (and minor) pitfalls of a new or upgraded system. That’s why we have developed our signature Plus One system. It’s simple; We ask our clients to tell us what the one mission-critical thing is that will make their enterprise resource planning life easier today and work systematically from there.

Sage’s new business model operates in a two-pronged approach to revolutionise business. The first is aimed at what Fenner calls “true enterprise customers”, who will be running the software with hundreds of users and typically across multiple regions and countries. This segment has seen some interesting developments over a timescale as short as the last six months, with many more customers simply asking for cloud-based platforms and forgoing the additional infrastructure headache. “We used to have larger businesses who would just buy the kit, put in the infrastructure

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“IT teams have essentially become less technical. It’s less about fixing broken printers and more about developing new strategies around ‘how can I deliver the growth this company requires at the cost model they require it to happen at’

Ashley Regenass, CEO of SynergERP explains: “The rigid project plan is outdated and inefficient. With our client’s long-term goals in mind coupled with agile project planning, we improve their systems one functionality at a time. This gives us the flexibility to prove that the functionality works and that it will make a positive impact on their bottom line.” Established in 1993, Synergy, a Sage Platinum Partner, has been implementing the Sage ERP range of enterprise resource planning software for more than two decades. From manufacturing to mining, two users to 1 000 users, it has established itself as one of Sage’s leading partners with vast experience in rolling out successful projects for various industries.

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S a g e

and pay for an IT team – but that’s changed now. It’s partly because big CAPEX investment is tough in this climate, so OPEX models have become more attractive. It’s also to do with retaining staff – especially in South Africa, where we’ve got a resource drain into Europe and Australia – but more importantly we’re seeing IT departments becoming service centres responsible for delivering new business strategies. IT teams have essentially become less technical. It’s less about fixing broken printers and more about developing new strategies around ‘how can I deliver the growth this company requires at

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the cost model they require it to happen at’. They don’t want to worry about the kit, they want to worry about delivering value back into the business.” This trend speaks to the general improvement in computer literacy across the African market, but also mirrors developments in other regions, including Sage’s native UK. With more and more employees able to fix their own printers, (or Google the problem for the same result) dedicated IT departments are going from trouble shooters to efficiency multipliers. This is already reflected in Sage’s strategy for customer support, not

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to mention its efforts to acquire new customers, a field in which Fenner is confident about. “I think we’re very strong with new customer acquisition as well. Our approach is to hand the keys to the castle to our customers: we want them to own and maintain their own products moving forward, giving them the capacity to grow. Other vendors tend to keep teams on site permanently, which drives up the total cost of ownership, and that’s not our strategy. We keep our consulting rates at a midmarket level for all our customers, whether enterprise or not – that is the Sage way.”

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Datacentrix

“Our approach is to hand the keys to the castle to our customers: we want them to own and maintain their own products moving forward, giving them the capacity to grow Why the cloud?

Although the company has traditionally built software that works oﬄine on premise, and cloud-based software might seem like a poor choice in the face of the endemic connection issues found in many African countries, Fenner believes that looking to the past risks leaving a tech company fundamentally unsuited to the future. “To take a step back, the way X3 is built is probably the most fundamental point of the strategy. If you look at what’s driving ERP business today, you’ll see billions of dollars going into SMAC – Social, Mobile, Analytics and Cloud. These new platforms are really hard to get into if your business management software

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... is a leading ICT solutions provider. We enable compute power, more prudent operations, knowledge creation, and business insight in an environment that demands flexibility and efficiencies. Recognised for our agility, in-depth industry knowledge and proven capability, Datacentrix provides the integration services that are needed to modernise organisations.

Kieth Fenner, Sage

The Group offers a deeply specialised skills component and is endorsed by the world’s foremost technology partners. Our advanced, flexible solution design and implementation responds to our customers’ unique business requirements, helping to drive their performance and growth sustainably. Our delivery and execution capability ensure an excellent total customer experience:

isn’t optimised for this new way of working. If you haven’t got the technology ready now, you won’t be in a position to expand with your customers and help them unlock the benefits down the line. Four years ago Sage was already designing our new UIs for these problems, so we’ve already been through the teething issues. We’ve delivered a system that works on any browser, any device (as long as it’s a major supported one) – a system that’s platform independent.” Sage’s new platform is also heavily designed to work with new analytics systems. Analytics data is the most exciting of the SMAC technologies, with the potential for what Fenner calls “a fourth industrial revolution,

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the internet of things”. He suggests that even traditional manufacturing can be optimised like software, sensors across the plant feeding data into centralised analytics hubs, which can then be used to modify the manufacturing process for greater efficiency, making full use of the new technology and infrastructure developments, allowing Africa to become better connected. Sage looks set to be very involved when it comes to this buzzword of the moment.

Keeping up with the industry

Part of the reason for Sage’s new global strategy is the rapidly changing nature of both the industry and its user base, each driving the other. Extensive mobile development was perhaps the least predicted aspect of the current tide of change in the industry, with its accompanying decentralisation of the office space. Fenner talks about the challenges of developing for mobile:

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“When developing for mobile we took a step back and looked at what our customers really want, all over the world in all the different markets. They want to work online and oﬄine and to build apps using a toolset residing in the ERP solution. We have delivered exactly that, with a core set of mobile applications and then given the toolkit to our customers and our partners. This enables them to build any apps that they want and deploy them any time that they want, online and oﬄine. That’s a huge bonus

“Analytics data is the most exciting of the SMAC technologies, with the potential for what Fenner calls “a fourth industrial revolution, the internet of things moving forward because then you’re not buying apps that are custom written, which causes challenges when the software gets upgraded because the apps also need to be upgraded. With Sage X3 embedding mobility in the single web platform, it self-upgrades.” However, convenience isn’t as simple as upgrading some

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Multisoft Solutions ...(Previously known as SCG Consulting) was established in 2002 as an accounting services firm. In 2002, the firm secured a dealership license from Softline Pastel to sell, implement and support the Sage Pastel range C

of products. M

if you put them in a green screen mainframe with function key shortcuts and multiple keystrokes to do something, you’ll quickly lose your talent as that is not the way a millennial works. They believe in touch, mobile and collaboration and they only understand these new ways of working. The real digital natives – they want to work in that way. We designed the architecture of the X3 platform with that in mind, as retaining talent is essential in the competitive marketplace of Africa.” infrastructure and creating connections. Mr Fenner’s experience of the technology sector, particularly in the African markets, is one where the people are changing as fast as the machines, if not faster. “Now if you’ve ever employed someone born after 1992, you’ll realise that

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A second strategy and traditional markets

While the enterprise-focused version of Sage allows full customisation, development and integration, not all customers are looking for such a powerful and versatile system. For many, the sheer customisability of Sage X3

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is essentially unnecessary. For these firms priorities are different, and the second prong of Sage’s business strategy caters to them. “The traditional market is for products between 20 and 50 users, where they probably have a product that they’ve invested in and haven’t changed in the last 5-10 years. They’re probably recruiting millennials and need to make their business competitive

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and provide a platform the new staff can use. They want all this in the cloud at a low cost and with a contained scope – ERP implementation can spin out of control, and no business can afford that. They want fixedscope implementation, and we offer that with X3 Fast Start.” Cost overruns and scope creep are familiar to any business that has embarked on an

“They want to work online and offline and to build apps using a toolset residing in the ERP solution. We have delivered exactly that, with a core set of mobile applications and then given the toolkit to our customers and our partners

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“Cost overruns and scope creep are familiar to any business that has embarked on an ERP project, and many of the true mid-market customers can’t afford the high prices or lack of control that comes with a customised solution

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ERP project, and many of the true mid-market customers can’t afford the high prices or lack of control that comes with a customised solution. Sage X3 Fast Start is a template-led version of the full X3 solution, not a downgrade. As Fenner says, it is essentially the same software, but designed to be rapidly implemented to save on time and installation costs, without the full customisation scope. The product is designed to be deliverable over 20 days, with all its core modules delivered in the cloud, and is pre-configured to the customer’s business environment. Customisation isn’t impossible but is reserved for the end of the project. Indeed Sage’s pricing model has allowed for customer-focused modifications – which is

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almost always used after the initial go-live. The design is intended to provide customers flexibility and the option to customise without compromising the fixed scope of the project, to ensure overruns aren’t an issue. It’s a strategy that seems to have paid off.

customers, we give them an attractive migration option. We manage this using their OPEX budgets and give them a bulletproof Business Management Solution and technology platform for the future, to last well beyond five to ten years.”

“If you look at Sage’s penetration into the mid- and enterprise market place in Africa, it’s become massive in a very short space of time. However, we increasingly see new vendors coming to occupy this space. As a result, what we need to do is to make sure we have a solid customer-for-life strategy, so when we detect these

Piracy is a problem faced by every software company, and some consider it as almost inevitable. In Africa, digital piracy is quite common, as the costs of buying software are often prohibitive and enforcement weak. Failure to adjust its prices to an African market can often see a business losing much of its revenue.

A question of piracy

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Fenner is relatively relaxed about pirated versions of his company’s software, however. “If we look out there in Africa today, we’d probably find a lot of Sage products which are unlicensed and not paying maintenance. That’s not pirated software, that’s software that’s not on the latest version and is a major concern. There’s a huge potential with those customers to bring them into the fold of our Customer for Life strategy that would include upselling and cross selling from our portfolio of products per market segment. Have we got unlicensed, unpurchased software in Africa? I’m sure we have.

“If you look at Sage’s penetration into the mid- and enterprise market place in Africa, it’s become massive in a very short space of time

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ICT

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“Piracy is a problem faced by every software company, and some consider it as almost inevitable. In Africa, digital piracy is quite common, as the costs of buying software are often prohibitive and enforcement weak However, as we engage customers and demonstrate value to their business, we will bring them back.”

thanks to the cloud and last mile connectivity is prevalent across the continent in major hubs.”

The hope is that that some of these unlicensed users will eventually end up purchasing and licensing the software due to the benefits of the cloud, or to take advantage of actual support now that their business has grown to the point where the software is affordable.

It’s safe to assume that the nature of Sage’s business, both in terms of its multinational reach and position in the market, protects it from many of the macro challenges of operating in African economies. The challenges of commodity prices, political instability and currency devaluations doesn’t mean that it simply rides out the downturns. It strategically prepares for them.

“That said, I think there were two things in Africa that were holding back growth in the IT industry – the concept of security and last-mile connectivity. The security side of it is becoming less of an issue

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Thriving in adversity

“Let’s take the oil crisis,” says Fenner. “When it hit we did not cut back. Instead, we went and

sold to many oil companies in a very short space of time. Every cloud has a silver lining for us, and because we span the market from bottom to top, we pick up the growing customers because they’re still covered by our Customer for Life strategy. In such a crisis, some companies won’t buy, but bigger ones will probably want to save costs and those are the ones we pick up and sell to as they move to a Tier 2 strategy, either replacing Tier 1 ERP or complementing it – like we did with Aramco.” Sage’s flexibility as a business means that it can easily respond to the many opportunities across the continent, but that’s not the only secret to its success.

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Although headquartered in the UK, it has been careful to establish a local presence and works to gain trust based on actions rather than reputation.

fact that we’re literally delivering an enterprise product with a technology stack, and a cloud first strategy that is second to none.”

“We’ve been here for 25 years and we understand Africa. Not just that, but with our offices in Lagos, Nairobi, Johannesburg, Cape Town and established partners all over the continent, we’ve got a trust factor. Everyone knows who Sage is, we’ve been here for so long. In addition, we have the Sage French and Portuguese teams, with export divisions that service French and Portuguese-speaking Africa, breaking the language barrier. So if you add up the power of the actual Sage businesses in Africa, it’s absolutely vast, and that’s what I believe we’re capitalising on now, as well as the

A bright outlook

“Sage’s focus in 2017 is the execution of its cloud strategy,” Fenner continues. “Sage X3 is delivered cloud first but the on premise and cloud versions are the same – we have not split the products as the technology allows us to offer monthly updates in the Cloud and deliver these to our on premise and Enterprise cloud customers once or twice a year to minimise upgrade disruption. And what I’ve described to you is exactly how we’re going to do that in Africa. We’ve got 70-odd partners, still selling the same product but it’s spun up in the

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cloud. They still consult the same way, and we’ve retrained them on how to deliver the product in the Cloud and transition themselves to a Partner of the Future.” Sage is also now working with Amazon Web Services, which boasts incredible processing power (NASA have chosen to use its services), and a couple of smaller local services offering better connectivity across Africa. 4G networks are also in place too – many African countries jumped the whole fixed line straight to 4G. The mobility aspect is vital to Sage because it represents the way people are working today. Fenner concludes on a positive note, with the new year looking promising: “I’m confident in the work we’ve done in the last four years in cloud development, and you can see that we grew by 74% last year, so we’re outperforming the market, gaining share and looking at high double-digit growth in the next five years.”

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DuPont

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Defence

S A division of the US giant DuPont, DuPont Protection Solutions supply protective gear to industrial, medical and military customers across the world. spoke to the Regional Business Leader: Life Protection at DPS’ Sub-Saharan Africa branch, Allen Chimhandamba, about DPS’ recent operations in the area, including their role in containing the 2014 Ebola outbreak.

ince one of their researchers, the chemist Stephanie Kwolek, invented the Kevlar® synthetic fibre, DuPont have been at the forefront of the personal protection market, providing both military equipment like bulletproof vests and more civilian gear like Biohazard and Chemical suits, thermal and electrical protection and even architectural materials and sportswear. Chimhandamba joined DuPont three years ago, and has since risen to oversee the entire protective segment in Sub-Saharan Africa. His focus now is growth for the Kevlar® portfolio in SSA and growth of DPS in East Africa. “DuPont Protection Solutions consists of several protection technologies. You’ve got Nomex®, which is your flame protection garment, Corian® which is a solid surface material, Tyvek® which is your particulate protection and Tychem®, the chemical/biohazard protection. Tyvek® is also used for other industrial purposes. Within Sub-Saharan Africa these four brands are segment leaders.’

Making Decisions to Save Lives

DuPont’s Tychem® personal protective suits were put to the test in Sierra Leone, Liberia and Guinea during the 2014 Ebola outbreaks, widely used to protect health workers and burial teams dealing with contaminated corpses and infected people. Demand spiked as thousands of people were sent into quarantined areas, and the WHO officially recommended DuPont’s suits for use against Ebola, a mixed blessing for the manufacturer. “Because the outbreak was unanticipated and at such large scale, we had such high demand. Everyone was clamouring for the product, and we actually had to make a conscious decision to say ‘We will give humanitarian efforts a preference over our industrial requirements.’ You can imagine that it was a challenging decision with regards to

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D u P o n t

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our industrial customers as they still had their targets to meet. With concerted effort between the regions we managed meet our humanitarian objective and support the industrial requirements. It literally took us up until the end of 2015 to get our stock back up to a level where was normal.”

from experience in the field including a rear zipper and ‘cocoon style’ removal, both of which make it easier to change out of the suits without risking infection from contaminants left on the outside of the fabric. The new garments will be field-tested in Liberia.

A comprehensive PPE program developed for health workers involving Tyvek® and Tychem® suits was one of the key factors in reducing their mortality rates and ultimately containing the outbreak. In the aftermath, DuPont has been refining the suits in collaboration with the USbased Johns Hopkins University. The new project, funded by USAID, includes several innovative features developed

Kevlar® has been at the heart of DuPont Protection Solutions’ operations worldwide since its invention, and it will come as no surprise to anyone familiar with the realities of politics and policing in Sub-Saharan Africa that the company’s bulletproof vests and vehicle armour solutions are in demand in several markets. South Africa is the most frequent customer, with the South African police force

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A More Kinetic Market

issuing bulletproof vests to all their officers as standard practice. “On an annual basis the South African Police service buys a significant number of bulletproof vests, thanks to their continual recruitment and also retirement of old vests. They are our biggest customers, after that it’s various private security sector contracts and after that the military. Now the SADF isn’t a very big client because South Africa isn’t at war with anyone, and body armour is currently not standard issue to all personnel. It’s mainly used when they’re going on peacekeeping missions, but those missions are not very large so they aren’t currently a big user.” DuPont’s role in supplying their clients is less about

Defence

manufacturing actual body armour and more about providing the Kevlar® yarn to local a partner who then weaves it into ballistic fabric. DuPont supplies the Kevlar® yarn and a local South African firm, Gelvenor Textiles, (Africa’s largest weaver of aramid fabrics for ballistic protection) manufactures the fabric. These local partnerships bypass both import difficulties – many countries classify body armour as military equipment and restrict its transport across their borders – and the difficulties of setting up a supply chain in an unfamiliar country, and are used all over the world.

New Markets

While largely active in South Africa for the time being, DuPont Protection Solutions plans to

expand Kevlar® reach across the region to attain the status the other DPS brands enjoy in the region. Tyvek® Tychem® and Nomex® are well established throughout the SSA region. With the expanding industrial bases of several countries, they are ripe for civilian and military marketing. “We are getting quite involved in Nigeria, what with the large size of the military and law enforcement there, it’s a key market. Our approach involves looking at potential local partners and seeing what’s possible. With regards to Kevlar® In body armour, we have expertise in terms of ballistic protection, and clients benefit from the support and close collaboration with DuPont.” When asked about their plans for Africa as a whole for the next

12 months, Chimhandamba said that his company was aiming to consolidate across the broader sub-Saharan region and looking at countries such as Nigeria, Angola, Kenya and Tanzania, among others, looking for developing and untapped markets.

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Milkor

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Trajectory Milkor is one of South Africa’s most well-known arms companies, with a specialist product known by armed forces all over the world. As South Africa’s defence needs change, so too have Milkor’s range of products, with more specialist items gaining new attention.

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Defence

ilkor (Pty) Ltd is one of the South African arms industryâ&#x20AC;&#x2122;s better-known independent success stories. Debuting in 1981 with the MGL revolver grenade launcher, Milkor has gone on to sell nearly 60,000 weapons and vehicles in 62 countries worldwide, with new models going to clients including the SADF, the Bangladeshi, Brazilian, Colombian, Danish, Indonesian, Indian, Malaysian, Pakistani, South Korean, Swedish and Thai armed forces, as well as a number of private users and police forces. The launchers are also manufactured by Milkor USA, which supplies the US Marine Corps, Arsenal AD in Bulgaria and Metallic d.o.o in Croatia, as well as various licensed copies made by several other countries.

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Throughout its 35 years of operations Milkor has established a reputation for reliability and toughness thanks to its flagship product’s extremely simple design (the MGL is essentially an overgrown revolver firing bigger, slower projectiles), its use of highquality materials and precise, stringently quality-controlled manufacturing processes. Milkor makes a point of using militaryspec materials and components to ensure that its grenade launchers remain functional no matter the conditions they’re used in.

Marius Roos, CEO Milkor

“Throughout its 35 years of operations Milkor has established a reputation for reliability and toughness thanks to its flagship product’s extremely simple design (the MGL is essentially an overgrown revolver firing bigger, slower projectiles)

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Origins

“Milkor has seen a niche in the market and begun building APCs, patrol vehicles, anti-riot water cannon trucks and even armoured cash delivery vans, many of which feature heavy off-road suspension to help deliver cash to remote areas

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Founded in 1981, Milkor developed around a launcher prototype designed in the private workshop of one Andries C. Piek. The original design held 12 shells, but the SADF eventually adopted a six-shot version as the MGL, code-naming it the Y2. Since then the weapon has undergone numerous revisions and modifications, gaining the ability to fire non-lethal and less lethal shells with a wide variety of payloads. The company worked closely with Armscor, the procurement wing of the SADF, being nominated for an Armscor award in 1984 and supplying the SADF extensively.

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M i l k o r

â&#x20AC;&#x153;As such, a long-term focus on sophisticated niche products (for example, guided missiles, MRAP vehicles and less-lethal weapons) is likely to be more profitable for South Africa as a whole While originally designed to significantly increase the firepower of individual infantry and intended primarily for military purposes, law enforcement and police forces worldwide have also adopted the MGL and other Milkor grenade launchers for their own use. Products like the Milkor 37/38mm Multiple AntiRiot have been developed to fire the 37/38mm less lethal riot

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control rounds in use worldwide, with payloads including tear gas, smoke, stun grenades and irritants. In addition to its famous grenade launchers, Milkor also manufactures armoured vehicles of various kinds, mostly armoured carriers and patrol vehicles, a more recent development following the trend of mineresistant and armoured patrol

Defence

vehicles for militaries worldwide following the 21st-century shift to insurgency conflicts. Many of these designs are evolutions of existing models such as the Casspir, taking advantage of the renewed demand for explosion-resistant vehicles in conflicts worldwide. With improvised explosive devices and suicide attackers becoming increasingly common, several manufacturers including Milkor has seen a niche in the market and begun building APCs, patrol vehicles, anti-riot water cannon trucks and even armoured cash delivery vans, many of which feature heavy off-road suspension to help deliver cash to remote areas. These vehicles are also being marketed and sold all over the world, to both national governments and nongovernmental organisations.

Made in South Africa

retaining its focus on high-tech systems and manufacturing while looking outwards to supply both South Africa’s reduced military and international clients. A focus on counter-insurgency operations and peacekeeping informed much of the industry’s more recent developments (this focus can be seen both in Milkor’s shift to less-lethal grenade launchers and its move into armoured car production, and peacetime military technologies).

The South African arms industry is unique on the continent. From its origins as procurement for the South African military during the embargoes of the 1980s, the home-grown arms manufacturing industry (echoing South Africa’s defence forces) re-invented itself when South Africa became truly democratic,

Changes in defence

A true South African manufacturer, Milkor’s two production plants cover a total of 19,000 square metres and employ 200 skilled personnel as well as up to 60 contractors, all ISO 9001 certified. The company also ensures it complies with the South African and international codes of conduct for the distribution of its weapon systems, and even has a BEE Level 3 Contribution Certificate for equal employment in South Africa.

While the controversial Strategic Defense Package in the 1990s made the defence aerospace sector profitable again, the Denel corporation’s Rooivalk helicopter gunship and deal with Airbus being notable investments, the SADF has been procuring limited quantities of equipment. After all, they aren’t fighting any major wars at present and despite political unrest elsewhere there’s no prospect of a major war on the horizon. Strict export regulations mean that South African defence contractors sometimes lose international business. As such, a long-term focus on sophisticated niche products (for example, guided missiles, MRAP vehicles and less-lethal weapons) is likely to be more profitable for South Africa as a whole. The industry has changed and continues to change, and Milkor continues to change with it.

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Inyoni Africa

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Agriculture

Inyoni Africa provide irrigation solutions to sub-Saharan and Western Africa. spoke to Gordon Vermaak, the company’s director, to find more about its path to success.

nyoni started out by selling mining equipment in 1949, before diversifying into irrigation and providing machinery to the farming sector. By the 1990s the company had expanded operations internationally to Swaziland, Zimbabwe and Zambia, and now it provide its services to large areas of the continent, and continues to see growth.

Providing complete systems

Given the climate and the vagaries of the water supply, irrigation is vital for any farming or landscaping project anywhere in Africa. While in some areas basic gravity-feed systems are sufficient it’s often much more of a challenge to get water to where it needs to be, especially when factoring in variables like power consumption and seasonal changes in availability. Inyoni Africa has been supplying purpose-built irrigation systems to

farmers for nearly 40 years, and has honed the process down to an art. “Inyoni Africa is a turn-key irrigation developer,” Vermaak says. “That means we focus on the complete development cycle for each irrigation system we install, whether it’s for a farm, an estate or an irrigation system. The process goes as follows: We conduct feasibility studies, design and plan the system to account for local factors, source the correct kit and materials and manage the delivery, which includes handling export of kit as well as acquiring components locally. Once that’s done, we also oversee construction, installation and testing, and then provide maintenance going forward as well as training of operators and managers to make sure the system runs properly.” The company’s years of experience are vital in creating complex modern irrigation systems. Designers have to factor in the needs of the client, local soil and climate features, the planned crops and a myriad of other factors to determine which solution to use. Inyoni focuses

on providing a quality system that balances initial outlay with long-term maintenance and operational costs.

Water from a stone

Given a changing climate and the diverse terrain of the African continent, drought is a major concern. Farmers can lose entire harvests or see significant drops in yields, particularly with more waterfragile but valuable crops like sugar cane. (Sugar cane companies are some of Inyoni’s most frequent customers.) The ever-present possibility of drought is a major factor influencing the company’s operations. “Africa is a water scarce continent, and we see this a lot in our line of work. The recent drought has had a huge impact on the mindset of farmers. There’s a definite move towards more efficient systems, not just in water application efficiency but also in terms of power usage, labour requirements, longterm maintenance and management considerations. In line with this we see a move

“There’s a definite move to irrigation systems that are more efficient in terms of water application while requiring less power and labour

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I n y o n i

away from the old labourintensive, inefficient systems like flooding and moveable overhead sprinkler systems towards drip, micro and centrepivot systems.” The African farming industry faces many problems. Ample land space is useless without enough water, and advanced irrigation systems are often useless without sufficient power. This has led to the development of variable speed drive systems and systems planned around non-peak power tariff times. In addition, many farms will struggle with theft, and as a result components that can be easily stolen like copper valves or cables are being replaced with less-valuable plastic and aluminium components. Compounding the problem, sub-standard components are also often used, which can lead to irrigation systems failing and wasting valuable power and water. Inyoni is a Corporate and Design member of the South African Irrigation Institute (SABI), an organisation that prescribes

“Increasingly, farms willing to take the capital risk of purchasing a well-designed system, managing it properly and ensure it’s sustainable are doing well minimum design norms and sets guidelines for quality equipment.

State of the industry

Things have been difficult in the South African agricultural sector of late, with seven consecutive quarters of decline, according to Stats SA. For many of Inyoni’s clients the mood is somewhat negative. Inyoni, however, has seen an increase in business, and found a positive side to this difficult environment. The companies which are flourishing are those which employ quality irrigation systems. Increasingly, farms willing to take the capital risk of purchasing a welldesigned system, managing it properly and ensure it’s sustainable are doing well. As a result, companies like Inyoni that provide this expertise are thriving as well. “There’s a definite move to irrigation systems that are

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A f r i c a

more efficient in terms of water application while requiring less power and labour. We’re working closely with the R&D departments of our major suppliers, giving them plenty of feedback, to make sure we provide equipment suitable for the current situation.”

Going forward

“Our biggest success in recent times hinged on the strategic partnerships we have formed with key suppliers like Valley Irrigation and Netafim,” continues Vermaak. “With exclusive supply agreements, access to training and additional services like the aforementioned R&D feedback we’ve been able to secure a competitive advantage through these partnerships.” He also admits that there’s still room to improve, citing optimisation of internal processes, better control of costs on construction to avoid the dreaded cost overruns that plague industries all over the world and increased staff training, particularly for field technicians. Nonetheless, Vermaak is confident in the company’s prospects.

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51 President Street, Barberton, South Africa – PO Box 125, Barberton, 1300, South Africa Phone: +27 (0)13 712 2175 – Fax: +27 (0)13 712 4198 – Email: info@inyoniafrica.co.za – Website: www.inyoniafrica.co.za 51 President Street, Barberton, South Africa – PO Box 125, Barberton, 1300, South Africa Phone: +27 (0)13 712 2175 – Fax: +27 (0)13 712 4198of– Southern Email: info@inyoniafrica.co.za – Website: www.inyoniafrica.co.za Valley Irrigation Africa (Pty) Ltd.

Contact: 010 350 0050 | Email: infosa@valmont.com | www.valleyirrigation.com/za

CC Crane Hire w w w . c c c r a n e h i r e . c o . z a

Tow ??????

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Logistics

wering Achievements

C Crane Hire’s Facebook page is an exercise in unbelievable scale. While some of its albums show relatively small transformers and trailers on the back of flatbed trucks, scrolling down shows recent projects at Gibson Bay Wind Farm in South Africa’s Eastern Cape and bucketwheel replacement on a mining reclaimer at the Kendal coal mine in Witbank.

The wind farm construction is a complex ballet of multiple crane arms that seem impossibly unbalanced as they lift turbine blades into the air. The reclaimer wheel is vast, dwarfing the crew standing in front of it, and dozens of pictures detail the complicated process and vast quantities of machinery required to position it to be replaced. It’s a real insight into the scale of the logistics and mechanical precision required by a modern heavy lift company.

“CC has also taken advantage of new technology to boost its operations, with software monitoring solutions that allow clients to accurately track all cargo movement, as well as supervising and managing on-site operations

Construction hire companies are a key element of the international heavy industry economy. CC Crane Hire is one of South Africa’s biggest and most wellknown, with a long list of projects under its belt.

Fielding a fleet

CC Crane Hire is one of subSaharan Africa’s most well-known heavy lifting equipment providers, serving the DRC, Mozambique, Namibia, South Africa, Zambia and Tanzania. The company has a large fleet of vehicles designed for all kinds of tasks, including 43 cranes, 19 crane trucks (between 18.5 tonnes and 68 tonnes with up to 12 metres of deck space) nine truck tractors and two load bed carriers capable of carrying up to 100 tonnes (seen in a spectacular drone video on the company’s Facebook carrying house-sized sections of pipe). In addition, the company can also call upon lighter assets including 75, 65 and 50 tonne load-carrying low beds, a 45 tonne step deck, extendable trailers including two fifty metre models, a multi-axle trailer and a

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C C

variety of buses, concrete mixers, diggers and construction vehicles, trailers and escort cars. Keeping all this equipment on the road is a major task, and the company also employs a network of backups and engineers to make sure all jobs are completed smoothly. Other more static projects involve the installation of lifting machinery, most recently various lifters and rigging equipment at the Port Elizabeth ore terminal, another niche in the industry. CC has also taken advantage of new technology to boost its operations, with software monitoring solutions that allow clients to accurately track all cargo movement, as well as supervising and managing on-site operations. This ties into CC’s business model, which emphasises turnkey solutions that allow clients to get straight to work using the company’s equipment, with minimal oversight required from CC itself. The company operates as part of a group operation alongside Tsoma Trading and CR Freight, operating throughout southern Africa, a setup which allows it to provide a much wider range of services ranging from structural engineering to training, milling and plant design. In the past the company has worked in shipbuilding and electrical engineering for Vodacom and MTN Nigeria, and its management has a solid working knowledge of customs, police

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liason, cargo assessment, pricing, and arrangement of escorts and route surveying to support the transit of large, abnormal or very heavy loads. CC also conducts extensive training both for its own crews and for its customers, to ensure that equipment is used efficiently, adding to the turnkey nature of its operations.

State of the industry

The crane industry in South Africa has undergone a turbulent couple of years as its operations are intimately linked to the flagging construction sector. The construction industry, both the small-scale home building segment and the much larger scale mega-project segment, has consistently failed to reach the highs reached during construction around the 2010 World Cup. Government and civil projects since then have been marred by labour unrest, project delays and other side effects of a subdued economy, with profits and new projects declining throughout 2014 and 2015. There are many reasons for this – currency depreciation, labour inflation and the persistent bugbear that is falling commodity

C r a n e

H i r e

prices have all resulted in less funding and ambition in the infrastructure, energy and mining sectors, all of which are the kind of projects that require highcapacity construction cranes and heavy abnormal load transport. Like many other contractors in the industry, CC expanded its operations internationally across sub-Saharan Africa. As many sub-Saharan economies are expanding and diversifying into new sectors, both their demands for power and their ability to fund large-scale infrastructure projects is increasing. While the commodity price falls have undercut the heavy lift and construction vehicle sub-industries by reducing the amount of investment in mining and heavy transport, large renewable energy projects like dams and wind farms are blossoming in many areas, as is railway construction. Chinese investment, one of the major drivers of development in the African markets, is behind many of the large-scale projects throughout the region, including the new light rail system in Addis Ababa. With China facing a new trade war with a protectionist and unpredictable United States, and Chinese investment in Africa shaking off its image problem, this sort of large-scale investment looks set to become more common. As such, it’s possible that better times are coming for the industry.

Attacq w w w . a t t a c q . c o . z a

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Property

Attacq is a leading capital growth company in the real estate sector, headquartered in South Africa with a diverse investment and development portfolio in its home market and further afield. sat down with MornĂŠ Wilken, the companyâ&#x20AC;&#x2122;s CEO, to talk international strategy and investment opportunities.

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ince Attacq was founded in 2005 in South Africa the company has consistently delivered capital growth to its investors through its geographically diverse portfolio of properties and investments. It has grown a diverse investment portfolio that includes landmark commercial and retail property investments and developments, in South Africa, sub-Saharan Africa and Europe. Attacq’s blended

investments in established and developing markets minimises risk, especially in pressured times. The company listed on the Johannesburg Stock Exchange (JSE) in 2013. “Attacq’s strategy is based on long-term sustainable capital growth, taking a long-term view, similar to the asset class we invest in,” says Wilken. “Attacq will continue to invest, develop and grow wisely as a sound listed real estate company with a strong

Graeme Page Consulting Engineers CC (GPCE) ...is a Johannesburg based firm of specialist heating, ventilation and air-conditioning (HVAC) Consulting Design Engineers. The heart of their expertise lies in the successful delivery of large commercial developments. Understanding the ever changing demands of commercial driven space is crucial. Their entire design process takes cognisance of this at each step, to provide the most flexible solution for the client. Full Scope Air Conditioning Design Inception Concept and Budgeting? Tender and Cast Suspension Construction Quality Control Close Out Fields of Expertise 2 and 4 Pipe Chilled Water Systems Rooftop Package Units DX Split Unit Solutions Close Control Installations (Data Centres) Mechanical Ventilation Solutions Smoke Extraction Solutions Kitchen Canopy Extraction Design The firms’ members, Graeme Page, Steven Barrett and George Arnold, and its key alliances have some 50 years’ experience in the industry, and have been involved with leading developers and professional team members on a number of prestigious projects, in all sectors. The firm’s project experience includes but is not limited to:

Retail Shopping Centres Corporate Offices Hotel and Leisure Industries High/Low Rise Luxury Accommodation Educational Facilities Health Care Industrial Developments

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CMY

Graeme Page Consulting Engineers (gpce) is a Johannesburg based firm of specialist heating, ventilation and air-conditioning (HVAC) Consulting Design Engineers servicing the built environment. The firm founded in 2002 specializes in retail, commercial, hotel, leisure, entertainment and residential projects with a special emphasize on personal client focused delivery. The business makes use of the latest design, CAD, and thermal modeling software to ensure each project is delivered a solution of the very highest quality with leading technical innovation. GPCE staff has more than 10 yearsâ&#x20AC;&#x2122; experience in the design and supervision of mechanical services for buildings in the private and public sectors. Projects range from the most complex corporate office environments and retail centres to hospitals, sports and leisure facilities and refurbishment projects.

We are proud to have been involved in The Mall of Africa project. Tel: +27 11 794 1907 Fax: +27 11 794 1201

Email: info@gpce.co.za Website: www.gpce.co.za 69

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investment and development pipeline. We pursue good business opportunities in South Africa, in developing as well as established markets.” Attacq acquired the development rights to Waterfall in 2008. This provides Attacq with a pipeline to develop South Africa’s new lifestyle city over the next 10-15 years in Gauteng

– the economic powerhouse of southern Africa. The decision to invest outside of South Africa was taken to diversify Attacq’s portfolio, to create a currency hedge and take advantage of the growth opportunities in foreign markets while capitalising on the stability of developed markets. Wilken is proud of Attacq’s international

“Since Attacq was founded in 2005 in South Africa the company has consistently delivered capital growth to its investors through its geographically diverse portfolio of properties and investments.

Adams & Adams ...is an internationally recognised and leading African law firm that specialises in providing intellectual property and commercial services. With primary office locations in South Africa and branches and associate offices in a number of African countries, our firm’s leadership position is reflected in the groundbreaking work we do, the valuable client relationships we have and the quality of our professionals. Our more than 200 professionals specialise in various legal and technical disciplines in intellectual property law, commercial and property law, and litigation. We proudly represent many of the world’s largest corporations and organisations, as well as small to medium-sized companies and our 70 partners are established pathfinders and thought leaders in their respective practice areas. Our Intellectual Property law practices work with clients around the globe and across many industries to protect, enforce and commercialise their intellectual property including trademarks, patents, copyright and designs. Likewise, our general commercial legal services practices boast competent and powerful teams that are purposed to represent clients in expertise areas such as commercial litigation, property services, public procurement, banking and finance, mergers and acquisitions, tax, franchising, personal injury, arbitration and dispute resolution, and technology, among others.

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ATTORNEYS

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expansion progress: “We have invested in Europe with a strategic investment of around 40% in MAS plc (a company listed on both the JSE and Luxembourg Stock Exchange),

two retail centres in Cyprus and a portfolio of retail properties in Serbia. Attacq has also invested in Africa, predominately through joint ventures and in retail centres located in Ghana, Zambia and Nigeria. The investments are paying off, and these investments are around 24% of our gross assets and almost 40% of our net equity.” Wilken was in charge during the company’s listing on the JSE, and he admits that it wasn’t an entirely painless process. “There were two main challenges when we went to market. Firstly, from inception the company grew quite quickly and in the first few years of operating we had to restructure the organisation, to support our business focus. Secondly by operating as a capital growth company, we

Brian Heineberg and Associates ...was formed in February 1997 by Brian Heineberg, having worked as a professional quantity surveyor in private practice since 1979. Some eighteen years after the establishment of Brian Heineberg & Associates, the practice has grown from a single employee to a staff complement of twenty-five. WHY US Our practice has handled amongst the largest, fastest and most difficult projects in the country. In order to do this we need to have a constant, tight control of the budget, at all times. We need to balance the scales of the budget with that of the practical and aesthetic needs of the Client and designer. To do this two fundamentals are essential: A close and co-operative working relationship with all other members of the professional team and the Client body. A hardworking team. Our office will work relentlessly, 24 hours a day, 7 days a week to ensure that we are at all times up to date with our commitments. We have ample back-up resources within the office to supplement where necessary. COMPLIANCE Our practice is a fully paid up member of the Association of South African Quantity Surveyors, South African Property Owners Association and Green Building Council of South Africa. The majority of our quantity surveying staff are Greenstar SA accredited professionals.

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www.bhberg.co.za Tel: +27 (0)11 784 0870 | bhberg@bhberg.co.za 4th Floor, 4 Stan Road, Sandown, Sandton

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have been pioneers in the industry, as most of our peers are income-producing real estate companies, also known as ‘REITS’. Attacq is driven by a creative approach to local and international real estate developments and investments which create sustainable growth for all Attacq stakeholders. This consistent focus on long-term capital growth differentiates Attacq from other JSE-listed property entities that focus on the generation and regular distribution of income to shareholders,” explains Wilken. Attacq’s real estate assets are therefore not designed for short-term profits but to

“The decision to invest outside of South Africa was taken to diversify Attacq’s portfolio, to create a currency hedge and take advantage of the growth opportunities in foreign markets while capitalising on the stability of developed markets.

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generate quality rental income and sustainable capital growth well into the future – a fact seen clearly in the scale and nature of the projects they choose to undertake. Like many companies, Attacq has gone through some tough financial times in recent years. Wilken joined the company in 2008, as the global financial crisis struck and businesses all over the world saw losses and slowdowns. While the business environment was very challenging, the unique climate also held its own opportunities: “It actually played to our advantage. We had to get a number of approvals for many of our development rights and there wasn’t a lot of objection to getting our rights through.” When asked about how the industry is changing, Wilken suggested that another slowdown might be imminent, despite the recent signs of possible improvements in the economy. “In challenging macroeconomic circumstances, we have produced a good set of results,” states Wilken. Attacq reported R27.6 billion in total assets at its annual results on the 30th June 2016, with nearly R19.5 billion of completed property in South Africa alone. Of these around 58% are retail properties, including the recently completed Mall of Africa in Waterfall City, and 33% are office space, with the remaining 9%

WSP | Parsons Brinckerhoff ...one of the world’s leading engineering professional services consulting firms. We bring together our 36,500 staff, based in more than 500 offices, across 40 countries to provide engineering and multidisciplinary services in a vast array of industry sectors, with a focus on technical excellence and client service. Our expertise covers land remediation to urban planning, engineering iconic buildings to designing sustainable transport networks, and developing the energy sources of the future to enabling new ways of extracting essential minerals. Operating from South Africa, our specialist skills backed by a global reach make us the provider of choice – whatever the challenge might be. Africa’s entrepreneurial success means we can offer clients all the benefits of a world-wide organisation. These include our global reach, shared knowledge and close local relationships. We employ more than 1,000 people in Africa, all of whom are: Passionate about problem solving Transforming the built environment Restoring the natural environment Service focused Through continuous improvement of customer services, we strive to be the outstanding supplier of integrated services. We are Africa’s leading provider of sustainability and a Gold Founding Member of the Green Building Council of SA.

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Boogertman + Partners Architects

split between light industrial and hotel properties.

Balanced portfolio

The company has always gained a competitive edge through its diversification strategy, which mitigates local market fluctuations. As Wilken explains it: “We invest in various markets to mitigate the downside risk of economic slowdown. When there’s a slowdown in one economy you might get an advantage in another.”

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Investing internationally presents its own challenges. Each market has inherent risks, which need to be considered and well managed to avoid losses. Attacq responded by developing systems that take local conditions into account. “If I can use South Africa as an example, what works in Johannesburg is not necessarily going to work in Cape Town or Durban. By being on the ground and, I mean, really living in a place, you gain valuable

...was established in 1982 with offices in Johannesburg, Pretoria, Cape Town, Durban and Kenya. The practice engages in projects throughout Africa by continually embracing social, economic and functional challenges through “Excellence by Design”. Having gained national and international acclaim, Boogertman + Partners has successfully completed projects in Egypt and Sudan, has ongoing projects in Botswana, Kenya, South Africa and Zambia, as well as numerous design proposals in the Ivory Coast, Ghana, Mauritius, Mozambique, Namibia, Rwanda, Uganda and Zimbabwe. Boogertman + Partners are driven by a dynamic team of directors who share a vision for contextually responsible and innovative design, with a dedicated approach to the building process, from project inception to execution. The team is complemented by talented professionals – urban designers, interior designers, architects and technicians, as well as an in-house graphic design and marketing team and the support of administrative staff. Armed with this intrinsic nexus of skills, Boogertman + Partners encourages a collaborative process in which the client brief and dialogue are realised by a creative vision, shaped by geographic location and environmental characteristics, moulded by economic and social conditions and refined through technical and sustainable advances – resulting in a holistic project solution. As gold founder members of the Green Building Council of South Africa, Boogertman + Partners fully support the environmentally sustainable transformation of the built environment. With increasing concerns over global warming and the pressures of sprawling urbanism, Boogertman + Partners, through our integrated design approach, is committed to creating and developing sustainable environments that are low energy consuming, efficient and flexible and encourage an optimally healthy lifestyle.

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A t t a c q

“Attacq’s real estate assets are therefore not designed for shortterm profits but to generate quality rental income and sustainable capital growth well into the future – a fact seen clearly in the scale and nature of the projects they choose to undertake.

experience over a period of time. It is for that reason that Attacq prefers to choose partners with proven local operating track records rather than trying to do it all ourselves.”

New city, new opportunity

In recent years, Attacq’s largest project has been the development of Gauteng’s new lifestyle city, Waterfall City, with the Mall of Africa as the retail jewel in the new destination node’s crown. The 131,000 square metre Mall is the largest single phase shopping mall built anywhere in Africa, and Wilken says that it’s had a strong opening with more than 123,000

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visitors on opening day and a strong visitor flow since then, exceeding expectations. “Over 1.1 million people visit the mall every month. Of course, there’s been some small operational teething issues, but nothing that we haven’t been able to sort out.” The scale of the Mall of Africa brings significant shoppers’ choice acting as a draw card, which in turn makes it attractive for leading local and international retail brands to secure space in the mall. The size caters for significant footfall, making it attractive for tenants. The development of the Mall

of Africa was done based on sound prior demographic studies, investigations and forecasts of an acceptable yield. The Mall of Africa has created more than 4,500 permanent jobs, employed over 7,500 people during its construction and has over 300 retailers. In addition to the 133,000 square metres of retail space a further 25,000 square metres is planned for the first expansion. Attacq has secured a total of 1.8 million square metres of development space across the entire site, of which 409,000 square metres is already completed as of 30th June 2016.

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PLANTECH

Building and operating shopping centres has been good business in South Africa for a number of years, with something of a boom taking place. The country now has a greater square footage of retail space than any country in continental Europe and the 7th largest total retail area in the world, with more than 23 million square metres of shopping centre. Despite this, many parts of the country still don’t have access to adequate shopping facilities. The super-regional Mall of Africa is intended to address this problem for Gauteng and the surrounding area, where more than 100,000 households are still short of retail access. While there are concerns in some economic circles that the South African retail industry is over-supplied given the current economic climate, many dismiss this as an underestimation of South Africa’s mall culture. Given the security concerns that surround the country’s urban areas, many choose to visit malls like the Mall of Africa to relax and enjoy themselves as well as to shop. Although it may seem that South Africa’s industry has grown too fast and become too big to survive in the current economic climate, this is only a short-term view. Given the multi-year timeframe involved in constructing a major shopping mall, many developers will begin projects at the top of the business

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cycle, even if they finally open them during a downturn, as the mall will then be established and fully operational by the time the economy picks up again. In addition, extensive research done prior to 2008 showed that Pretoria and Midrand were developing to the south and Johannesburg was extending its footprint to the north, with Waterfall right in the centre and a prime location for an infill development. Being conveniently located and easily accessible made it the perfect location for Attacq to invest in a number of larger development projects, including the Mall of Africa shopping centre, Waterfall City and Waterfall.

Live, work and play

Waterfall is being developed as Gauteng’s newest lifestyle city with Waterfall City as its central business district (CBD). The interest and uptake is already very promising. “We have had a number of international corporate brands like PwC, Novartis, and Premier Foods that have consolidated in Waterfall City. The new Waterfall City CBD is developed as a lifestyle urban space where people can enjoy a balanced lifestyle in a pleasant urban development setting that takes both people’s needs and that of the environment into account. Waterfall is a superior mixed use city that includes retail, commercial, light industrial and

...expertise covers the full spectrum of electrical, mechanical and electronic engineering services. The Electrical department specialises in distribution substation, power line, cable feeders and township electrical reticulation systems for both regional and municipal networks. Plantech Associates have extensive experience in all building services for commercial and specialised buildings. Building services including air conditioning, ventilation, transportation, steam, gas, fire detection and control, security and other installations for offices, shopping centres, airports, laboratories, factories, universities and many more. Electrical Consulting Engineering Mechanical Consulting Engineering Electronic Consulting Engineering By being personally involved and totally committed, the best service is rendered to clients at all times www.plantech.co.za

“Attacq reported R27.6 billion in total assets at its annual results on the 30th June 2016, with nearly R19.5 billion of completed property in South Africa alone. residential properties and is conveniently located on the N1 highway between Pretoria and Johannesburg. “We believe in being a good corporate citizen and investing

Property

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Plantech Associates is a specialist Electrical and Mechanical Engineering Services company with extensive experience in the following ﬁelds:

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www.plantech.co.za beyond our bottom-line” states Wilken. In recent years, Attacq has teamed up with Growth Point to invest in Property Point, a programme supporting enterprise and supplier development (“ESD”). “We believe that supporting ESD is a key way in which we can create meaningful change in South Africa. Through this programme, we have already sponsored 17 SMEs”. The objective is to collaborate to maximise meaningful transformation in the property sector, by nurturing and growing small businesses. The first intake ran over two years which culminated with a graduation ceremony on the 23rd November 2016. The programme aims to develop the SMEs to be supplier ready, and includes a variety of trades, ranging from painting to

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air conditioning and landscaping contractors. Attacq has also formed a partnership with LaunchLab, an incubator entrepreneur-training company, to promote business investment and innovation in the retail sector. Wilken explains: “We want to look at potential initiatives in the retail space. We give participating entrepreneurs seed money to look at opportunities, and when one is feasible and we want to roll it out, we as Attacq can participate. It’s an opportunity for people to put their entrepreneurial ideas into practice and it gives us a potential business opportunity in the future.” Wilken is confident that his company is maintaining its

momentum. “Our big focus is on the Waterfall rollout. Operationally we want to make sure everything is sound and working optimally.” Wilken also mentions that on the international front he is quite excited about MAS’s revised strategy for expansion into eastern and central Europe. “This is mainly driven by the new joint venture with the ex-CEO of New European Property Investments, Martin Slabbert, and his team,” explains Wilken.

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