Africa
www.essentialbusinessmag.com|Issue 13
Capacity for The future for O.R. Tambo International Airport and the aerotropolis of Ekurhuleni
Also in this issue: p34 Transnet Port Terminal p42 Monitoring and Control Laboratories p48 Metrofibre p54 Netcare
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his issue of reflects a challenging but fascinating time for business in Africa.
In our lead feature we look at Africa’s largest airport, O.R.Tambo, which plans to transform Ekurhuleni into an aerotropolis.
Lucrecia Salie
With a similar focus on investment and growth is an investigation into Transnet Port Terminal’s role in Operation Phakisa.
S A L E S
In a piece exploring some interesting themes we’ve profiled Netcare, the largest provider of private healthcare in South Africa.
Project Manager lsalie@essentialbusinessmag.com
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
Elsewhere we’ve looked at laboratory equipment providers MCL, fibre broadband providers Metrofibre, and discussed ways to weather the storm of low commodity prices. Issue 13 has been an especially exciting one to work on, and we hope you enjoy reading about this very interesting time for the business world in Africa.
D I R E C T O R S
Adil Nazer | Rahim Ali | Daniel Goha Essential Business Publishing 145-157 St John Street, London, EC1V 4PW, England www.essentialbusinessmag.com © Essential Business Publishing 2016
Sam Wright, Editor in Chief
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Contents Taking a diverse path
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A look into ways of alleviating problems caused by the recent slump in commodity prices.
Africa’s energy potential
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Jacques Nel, senior economist with NKC African Economics, discusses investment in Africa’s energy industry.
MCL
News roundup
We spoke to managing director Richard Hattersley about how MCL continue to grow by making sure it adds value to its services.
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In our sector-by-sector round-up of Africa’s business news, we look at developments in the oil industry and the opening of the continent’s largest ever retail centre.
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Metrofibre
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Metrofibre has recently announced a co-build with Link Africa. In our profile we discuss capital investment and exciting new partnerships.
O.R. Tambo International Airport
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In our lead feature we look at O.R. Tambo, Africa’s biggest airport, and speak to general manager Bongewi Pityi about its development of Ekurhuleni into an aerotropolis.
Netcare
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In our profile of South Africa’s largest private health care provider we look at its role in the community and its attitude to corporate social responsibility.
Transnet Port Terminals
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In our profile of Transnet Port Terminals we speak to Karl Socikwa about its pivotal role in the exciting Operation Phakisa.
SAP East Africa
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Managing director Andrew Waititu speaks to us about addressing Africa’s skills gap, the job market in Kenya and some of the company’s future opportunities.
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Low commodity prices present a problem for many businesses and industries across Africa. look at how the continent will find ways to weather the storm.
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ince the collapse in global commodities, serious questions have been asked about Africa’s economic future. Yet while low prices for oil, gas, copper and other resources will no doubt continue to have a considerable effect in the short
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nations standing at 7-8% per year, buoyed by purchases of hydrocarbons and minerals from China and other resource-hungry nations, future progress looked assured. term, a combination of a youthful population, stability and diversification means that further ahead the path looks considerably brighter.
Shifting balance
Prior to the commodities crash that dominated much of 2015, Africa’s economic story over the previous decade was largely one of enormous potential. With growth in the continent’s sub-Saharan
The reasons behind this unravelling are complicated, but largely stem from oversupply and Beijing’s own decision to repurpose its economy towards internal rather than external consumption. The resulting crash has led the World Bank to slash its growth forecast to 3% for 2016. With the population of subSaharan Africa set to grow by 2% during this period, this is as good as standing still. Yet, as Mitsuhiro Furusawa, deputy manager of the International Monetary Fund (IMF) said recently, “the narrative of Africa rising is not over.” Instead, he said the Fund is “sure that the region’s future is still bright.”
Prior to the commodities crash that dominated much of 2015, Africa’s economic story over the previous decade was largely one of enormous potential.
Youth on the rise
Overall, he added, there are eight countries “in the region that exceeded 5% growth” last year, before going on to say that “the
drivers of an improved business environment combined with favourable demographics are still intact.” A previous report by the UN Conference on Trade and Development (UNCTAD) showed that growth in services in Africa stood at 4.6% per year, more than twice the global average. Kenya is now a recognised IT hub, while venture capital funding from Silicon Valley backers is finding its way into countries such as South Africa and Nigeria. South Africa is forecast to invest US$26.6 billion in IT during 2016, a 5% increase on the year before. In 2015, a World Bank report praised a number of reforms across countries such as Uganda, Kenya, Mauritania, Senegal and Benin that increased the ease of doing business. Foreign direct investment has also soared, while last week, the African Development Bank (AfDB) has approved a US$76.2 million loan to Botswana to allow the country to diversify across key sectors such as agri-business, clean energy, services, infrastructure and manufacturing. These are clear signs of maturing economies, less exposed to the boom and bust cycle inherent to the commodities markets. And, as Furusawa says, Africa’s demographics are also working in its favour.
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too, while the 4G boom has granted millions access to the internet without the need for costly infrastructure.
Trading up
Previously, the UN has estimated that a quarter of the world’s population will live in Africa by 2050 – a total of roughly 2.5 billion people. In fifteen countries, half the population is under eighteen years old. While this represents something of a challenge, the potential of this young workforce is enormous. They are better educated than previous generations, with literacy rates above 70% in most nations. Healthcare is vastly improved
No doubt, too many African economies are over-reliant on revenue from commodities. Eight countries, including Angola and Nigeria, receive more than 90% of their export revenues from oil. Meanwhile, taxes account for just 10-15% of gross domestic product in many nations across the continent. In Nigeria, one of Africa’s largest economies and one of its biggest sufferers from corruption, this fi gure is as low as 6%. However, progress is being made. As well as the growth in IT and services, reforms being implemented by Nigeria’s newly elected President Muhammadu Buhari are beginning to take hold. A bloated public service is being trimmed, and many officials siphoning off public funds are having their wings clipped.
While conflicts are troubling nations such as Somalia, South Sudan and the Central African Republic, stable democracies are in place across the majority of the continent, and although efficiencies vary wildly, investors are becoming increasingly reassured
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Other countries are seeing increased political stability too. While conflicts are troubling nations such as Somalia, South Sudan and the Central African Republic, stable democracies are in place across the majority of the continent, and although efficiencies vary wildly, investors are becoming increasingly reassured. At the same time low prices have allowed petrol and diesel subsidies to be slashed, while oil importers such as Ethiopia, Kenya, and Côte d’Ivoire have benefited from vastly reduced bills. There is promise in other areas too. On June 10, the leaders of 26 African nations signed an initial deal to create a free trade zone (FTZ) stretching from Cape Town to Cairo. Having stalled for years, the progress that this agreement could bring may be vast. As it stands, intra-African transactions make up roughly 11% of overall trade. Following the implementation of the FTZ, this is predicted by some to rise to 30% – a potential value of US$3 trillion per year against current levels of US$1.3 trillion. While still well short of the 70% figure seen in Europe, achieving this target would transform many economies in a flash. For a continent that has been reliant on selling its wares to others for so long, this increased self-reliance will be a satisfying step.
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Expert
Can we start with some background on NKC African Economics?
NKC scans the political and macroeconomic conditions of 30 African countries, measuring sovereign risk in detail and providing original research on a diverse range of topics. Our team has developed an expert understanding of the continent’s opportunities and pitfalls due to our ability to weigh political and macroeconomic risk. We have developed our own sovereign risk ratings model, and are able to assess countries not rated by global ratings agencies. NKC African Economics is majority owned by Oxford Economics, the world’s foremost independent global advisory
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firm. This snapshot of the speak to partnership current African Jacques Nel, senior has brought power economist with NKC together market, NKC’s where we African Economics, about in-depth looked researching Africa’s knowledge at the energy sector and some of of the generation African capacity the challenges it faces in continent as well as terms of investment. and Oxford the quality of Economics’ electricity supply powerful global in 25 of the largest models and African economies. analytical framework. By using the latest power sector data, we compared countries from various regions What kind of including oil-dependent West work do you Africa, fast-growing East Africa, do in the comparatively developed energy sector? We provide our clients with North Africa, as well as most independent research on the countries in Southern Africa to African energy market. One show differences in the various of our recent projects was a power sectors. In addition
ExpertInterview
we discussed topics such as electricity surpluses vs. deficits, and distributional losses, showing the performances of different countries in this regard. Furthermore, we have also identified drivers behind the development of the African power sector more generally, covering developments in renewable energy, offgrid initiatives, as well as private provision.
What in your view are the main challenges to the African energy sector?
In addition to the muchdiscussed challenges such as infrastructure constraints and issues surrounding property rights and land security, I think a key hurdle faced by energy investors is the actual monetisation of investment projects. Whether the primary source of revenue is the domestic government or private customers, I think many investors are deterred by the uncertainty of how and to what extent they will be able to secure a return on their investment. Investment in some ‘frontier’ countries such as some of those in Africa requires a very high return given the risk being taken, but the viability of a project is sometimes marred by uncertainty related to where the revenue will come from, as well as the timeliness and consistency of revenue inflows. It should be noted that this is only a hurdle and not a wall, and innovative
solutions have been found to solve this problem. That will continue to be the case. In addition, an often overlooked issue is that of the maintenance of energy projects. It does not only take considerable investment to generate energy, but maintaining capacity also gets really expensive. Some countries face the risk of over-extending themselves in generation capacity, and then are unable to undertake the necessary maintenance. This results in generation losses and project failures. The sector thus requires a realistic, long-term approach supported by publicprivate partnerships.
What surprises you about this sector?
The willingness and enthusiasm with which some countries adopt unfamiliar technologies. Sometimes it seems like developed economies can get stuck in their old ways, and it is refreshing and encouraging to see that Africa could be at the forefront of the adoption of some technologies, with the continent leapfrogging its more developed peers.
Anything you would like to add?
Many companies have entered frontier African markets gung-ho with the aim of benefiting from first-mover advantage. However,
many of these companies were forced to withdraw from these ventures only a few years later, with some tender wounds in the form of large financial losses. Identifying the correct
Our team has developed an expert understanding of the continent’s opportunities and pitfalls due to our ability to weigh political and macroeconomic risk. gateway into Africa is critical for success – direct market entry is not always the best strategy. Some countries could provide access to certain regions more generally, with factors such as institutional strength and economic policies favouring business development relative to other regional peers. From an energy sector perspective, this implies that cross-border projects should be considered to take advantage of the macroeconomic and regulatory environments in some countries, while addressing the needs and demand in others.
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News F I N A N C E
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t has been reported that Atlas Mara, a London-listen investment consortium cofounded by Bob Diamond, has taken further steps towards a bid for Barclay’s African operations. Diamond has confirmed that the consortium is in talks over a potential deal, which has seen Atlas Merchant Capital and private equity group Carlyle teaming up in order to examine a bid.
Barclays said last month that an increase of regulatory pressures led it to sell its 62% stake in its African business, which is listed in Johannesburg with a market capitalisation of R22 billion. Barclay’s presence has been felt in Africa for almost a century, but the group is now planning to cut operations there and focus on its UK and US markets. In news relating to Africa Finance Corporation, despite the difficult financial environment of 2015 the institution has seen
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n exciting retail news shoppers have been queuing for the opening of Africa’s biggest mall. Mall of Africa, located in Midrand, South Africa, saw shoppers outside its walls as early as 6am on opening day, which reportedly led to a significant rise in rush hour traffic on the morning of Thursday 28th April. The retail centre will accommodate over 300 stores, 30 dining options and has no fewer than 24 entrances.
positive results for the 2015 fiscal year, including a total asset growth of 25%. 2015 saw many struggle due to price drops in oil, minerals and other commodities, but the AFC, a crucial investor infrastructure across the continent, has weathered this difficult period and continues its mission to address Africa’s pressing development needs while seeking a competitive return on investment for its shareholders. Finally, after the leak of the Panama Papers earlier this month former South African President Thabo Mbeki has joined calls for any African citizens implicated in the leak to be held accountable for any illegal activity, including profit shifting and tax avoidance. Mbeki is reported as saying that a new estimate of the amount of money stolen from the continent every year is US$80 billion, and that the leak has provided a concrete example of how tax evasion is conducted around the world.
a partnership with Lagos-based AG Leventis & Co. The expansion plans come after a good year for the company, which saw a 26% rise in full-year earnings. Pick n Pay has also featured in news surrounding environmental organisation Greenpeace’s calls for retailers in South Africa to increase their commitments towards renewable energy. Greenpeace Africa are calling on South Africa’s largest retail chains to champion the country’s transition to 100% renewable Also in South Africa the retail giant Pick n Pay Stores energy, emphasising their pivotal role in shaping Ltd. have announced plans to enter Nigeria through sustainable growth in the energy sector.
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est-Africa focussed Tullow Oil has seen an 8% increase in its share price, bringing some positive news to an industry in Africa under pressure since the drop in oil prices. Lenders to the multinational company have agreed to extend their loans to the heavily indebted group, which plans to restart production at its Jubilee oil field in Ghana next month.
Maria Botelho de Vasconcelos is reported to have said that Sonangol will continue focussing on production and exploration while two entities, the Agency and Superior Council, will be responsible for administration and regulation. Meanwhile, in South Africa independent gas and oil company SacOil has signed a memorandum of understanding (MoU) to explore opportunities in Nigeria. The CEO of SacOil, Thabo Tullow also has plans to venture into East Africa, and Kgogo, is reported to have said “This announcement is is reported to have said its appraisal program in Kenya has aligned with our previously shown fields there might hold as communicated strategy to focus on cash-generative, much as one billion barrels. In other oil news Angola, income producing activities in both upstream, refining and Africa’s second largest downsream… We are pleased oil exporter, is planning to restructure its state firm Sonangol, to have secured this crude with the oil ministry announcing allocation for trading as it its aims towards increasing provides us with a structured efficiency and profitability. and measured exposure to this Petroleum minister Jose attractive market.”
ndia’s energy minister Piyush Goyal has questioned recent efforts towards bringing off-grid power to remote communities in Africa, it has been reported. Nigeria, Sierra Leone, Somalia, Rwanda and Malawi have all signed up to the Energy Africa scheme, a project run from the UK, and more than 20 African countries have signed up for the US-led Power Africa.
The schemes aim to E N E R G Y provide green sources of lighting to villages without access to grid electricity. Goyal disparaged the scope of the project, reportedly saying that “Some of the western world… they give one solar lamp with a battery and then gloat about it as if they have done wonderful work. To my mind one bulb is really not any transformational achievement.” It has been suggested elsewhere that the energy needs of the continent will be met via a different source. The UN nuclear agency said recently that African countries are expressing greater interest in developing nuclear power, with over 30 states considering introducing it in the medium to long term. South Africa is the only African country that uses nuclear power plants to generate electricity, while Egypt has signed an agreement with Russia towards future development.
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O.R. Tambo International Airport
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O.R. Tambo International Airport, Africa’s biggest and busiest, is part of Airports Company South Africa (ASCA) and a hugely successful example of one of South Africa’s State-Owned Enterprises. In speak to our lead feature general manager Bongewi Pityi about venturing into new markets and the city of Ekurhuleni’s fascinating future as a bustling aerotropolis.
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.R. Tambo is the largest airport in Africa, handling 20 million passengers and 220,000 aircraft per year. The airport has won numerous international awards – something the company attributes to the hard work and dedication of its employees, who, under the directive of an operating model implemented in 2015 are focussed on providing constant improvements to service quality. O.R. Tambo has invested billions of rand to develop infrastructure that facilitates the seamless movement of passengers and aircraft as well as an enhanced customer experience, and the organisation continues to expand, with some exciting plans for future development. This level of complexity understandably brings its own challenges. Millions of O.R. Tambo’s passengers use the airport to connect from flight to flight or from flight to land transport, resulting in a wide range of customers with different needs and objectives.
These include passengers that require assistance due to physical limitation, first time travellers, and families with small children, all of whom require different kinds of interaction with staff at all levels.
“Previously a rather fragmented, parastatal organisation, ACSA has worked since to become a customer driven and focussed commercially successful business, whose airports have since become a jewel in South Africa’s crown
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As well as taking care of airport users O.R. Tambo also has been ensuring that all facilities and stakeholders are prepared for the demand, ensuring that all touch points deliver an experience in accordance to its own high standards. The passenger journey touches upon many different roles within the organisation, which means O.R. Tambo works closely with ACSA in order to ensure that collaboration results in the delivery of an excellent operational experience.
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ACSA
O.R. Tambo is one of ten airports managed by ACSA. ACSA’s executive committee, under the leadership of the CEO, is responsible for the day-to-day management of O.R. Tambo, and they share a mission to develop and manage worldclass airport businesses for the benefit of all stakeholders. ACSA itself was formed in 1933 as a public company under the Airports Act. It operates under commercial law and is legally and financially autonomous, while being majority owned by the South African government. Previously a rather fragmented, parastatal organisation, ACSA
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“An aerotropolis will see a city being developed around the airport, and it’s something that I think is going to very positively make an impact in the region, as well making O.R.Tambo attractive to future investors
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has worked since to become a customer driven and focussed commercially successful business, whose airports have since become a jewel in South Africa’s crown. ACSA currently manages nine airports, including the three predominant international hubs of O.R. Tambo, Cape Town and King Shaka International. Its nine airports facilitate nearly 39.5 million passengers. ACSA has identified its two main revenue streams as aeronautical and non-aeronautical income. Aeronautical is derived from regulated charges or tariffs, consisting of aircraft landing and parking charges as well as service charges from passengers.
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Non-aeronautical income is generated via commercial activities such as retail, car parking, advertising, hotels, car rental and property leases. Another source of revenue for ACSA, one that ties into some of O.R. Tambo’s own aspirations, comes from international operations. These have included ACSA’s part in a consortium that took over the management and expansion of Chhatrapati Shivaji International Airport in Mumbai, the success of which has encouraged ACSA, and
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“Security threats to O.R. Tambo are monitored daily through their own security department, as well as in collaboration with various government agencies
O.R. Tambo, to look for similar opportunities elsewhere. ACSA has said that “such undertakings allow the leveraging of the pool of skills and experience that the Company has amassed over the years to grow the business and increase shareholder value.” A massive expansion and upgrade in infrastructure, completed in 2010, has led to ACSA maintaining a network of airports that are quickly becoming the envy of the international airports community. Continued focus has been aimed
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at service quality, which can be seen in the success of O.R. Tambo’s operations and the influence they have, not only on the skies above South Africa but in the community surrounding it, benefiting from the creation of jobs and business opportunities.
O.R. Tambo operations
Bongewi Pityi tells that after the company began in 1993 operations didn’t differ a great deal from the original designs for some time – although in 2013 things started to change. “In 2013 our board took the decision that one of the key things to consider was to rearrange our operating model. That project kicked off late in 2014 when we met with consultants, and the design of the new operating model was commenced in February last year. The work was eventually approved late last year, and we now have the hard task of ensuring that the changes are properly implemented.”
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“An important role for O.R. Tambo’s business development department is to emphasise its capabilities to other airport companies around the world and to extol the potential benefits of partnership
Partner with Telkom and Business Connexion for a digital solution to increase workplace productivity. Your future customer The future customer for every business is “a digital savvy customer”. They have grown up in this digital world and the next economy will be driven and consumed by them. Are you ready to meet the demands of these new customers? Have you thought about who they are and how you will serve, engage and retain your future customer? Partner with Telkom and Business Connexion for a digitalisation solution that will serve your future customer needs. Meet your future ICT partner Telkom and Business Connexion have come together to create Africa’s premier ICT end-to-end digital solutions provider. We have been servicing South African and African enterprises for over 100 years and are participants in this technology pervasive world, because we understand the challenges facing executives today. We also have use cases on new digital solutions that will serve the needs of your future workforce and customers. Together, we are best positioned to enable you to focus on your core business, while we take care of your Information Communication Technology needs. For more information, go to www.telkom.co.za/bigbusiness or call 10214.
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From an operations point of view O.R. Tambo now has technical solutions which look at project management and advice and feedback from other airports worldwide. Cooperation with other industries has also become essential, for example in the development of infrastructure in partnership with construction companies. Pityi also tells us that “We now have a new division called ‘infrastructure and asset management’, which collapses a number of departments we previously had.
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It’s housed in what we used to refer to as maintenance and engineering – while we continue to maintain our facilities we also need to have a future outlook in terms of new engineering and new approaches, so those departments are now housed in that extra portfolio.”
“A massive expansion and upgrade in infrastructure, completed in 2010, has led to ACSA maintaining a network of airports that are quickly becoming the envy of the international airports community
Another new department key to O.R. Tambo’s future, both in Africa and worldwide, is business development, where strategic investments will be planned and implemented. This is a key
change for O.R. Tambo at a strategic level, and it happens to be the company in the ACSA group for which the change is most important.
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Malaysian Switchgear Distributors (Pty) Ltd, successfully completed a Protection Relay upgrade of the entire Medium Voltage Switchgear Network (153 x 11kV panels), supplying power at O.R. Tambo International Airport. ACSA’s M&E Project Manager, Mr Yanga Sapepa, oversaw the project with Tesla Engineering (Pty) Ltd on board as the Electrical Consultants. All works were completed after hours, preventing major disturbances to daily operations.
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Malaysian Switchgear Distributors is a well established MV switchgear supplier in the South African market, representing the TAMCO range of products from Larsen & Toubro to the latest IEC speciďŹ cations, from 11 to 33kV. Over 45 TAMCO MV panels are in operation at OR Tambo. Installation and 24/365 maintenance is also our specialty as well. MSD (TAMCO) 25/27 Caithness Street, Ophirton, Johannesburg Tel: +27 (0)11 298 1800 | Fax: +27 (0)11 298 1801 reception@malaysianswitchgear.co.za
www.msdsouthafrica.co.za
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Venturing into new markets
An important role for O.R. Tambo’s business development department is to emphasise its capabilities to other airport companies around the world and to extol the potential benefits of partnership. This allows the company to focus on the possibility of growth and the creation of new airports. Pityi describes two recent consultations that have been highly successful to date. “In 2006 we were awarded the deed to operate in Mumbai, India, and
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then in 2012 the deed to be an equity partner to a company based in Brazil, to manage an airport. Emanating from that experience the company is now taking the strong decision to pursue strategic investment.” The business opportunity that Pityi mentions, based in Brazil,
“The key focus of Ekurhuleni’s aerotropolis plans, as stated on the city’s official website, will be to utilise inter-modal connectivity as a basis for generating economic development
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involved a partnership with the Brazilian company Invepar and the successful bid to manage the development, maintenance and operations of Guarulhos International Airport in São Paulo, the busiest airport in Latin America. O.R. Tambo’s business development team is based at the company’s head office, and there has been the recent appointment of a new executive with an excellent track record of leading previous managers, as well as the progressive thinking that such ambitious plans require.
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O . R .
Terminal A refurbishment
O.R. Tambo’s Terminal A is currently undergoing refurbishment – a significant project that, while exciting, has brought the company certain challenges. Construction taking place in an area that must still be operational is a process that must be done efficiently in order that the company’s operations continue smoothly. O.R. Tambo has said themselves that the most important parts of this process are collaboration among all stakeholders and effective communication with passengers. Recognizing the importance and support of its stakeholders has led to most decision making during the construction being collaborative, with the focus being reducing impact to customers. Stakeholders are an important part of the value chain in O.R. Tambo’s decision making and are instrumental in the service their customers receive. In an example of this process, while the Central Terminal Building (CTB) processing point was at saturation during peak travel times, O.R. Tambo ensured that it had additional staff on standby to assist, and the construction program in Terminal A was shortened with 24 hour work activities for the full closure. O.R. Tambo has committed to its stakeholders and customers that Terminal A will be fully operational before the Easter break, and processes have been put in place to guarantee this timeline.
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T a m b o
The question of security
Understandably, security measures are one of the first questions asked of airports, and one of their most important concerns. Security threats to O.R. Tambo are monitored daily through its own security department, as well as in collaboration with various government agencies. Current measures include the deployment of sniffer dogs, which is a proactive method of detecting drugs, explosives and other contraband. The airport has also increased its undercover operations with the South
I n t e r n a t i o n a l
A i r p o r t
African Police Service (SAPS) and State Security, in order to obtain information and monitor the entire airport precinct. It has also appointmed an IT Security Information manager for the company, focussing directly on the integrity of its network and security against cyber-attacks.
“O.R. Tambo has invested billions of rand to develop infrastructure that facilitates the seamless movement of passengers and aircraft as well as an enhanced customer experience
Aviation
Other vigilant and proactive approaches are implemented when important information is received from other countries. If a threat is detected with South Africa as its target, then meetings are coordinated to ensure information is disseminated correctly and contingency plans, approved by regulators, are put into operation.
Gauteng’s new aerotropolis
The city of Ekurhuleni, which in Tsonga means ‘place of peace’, benefits from being inside Gauteng province, which accounts for 35% of South Africa’s GDP and is regarded as the engine of the economy. O.R. Tambo have partnered with Ekurhuleni
in order to develop an aerotropolis there – an area of concentrated infrastructure and development centred on its airport. The aerotropolis master plan for the city has already been approved, following on from other airports that have successfully implemented similar schemes. From the city’s perspective the creation of an aerotropolis will build on the economic strength of the entire province of Gauteng. In addition, O.R. Tambo will be able to leverage great additional income and offer enormous scope for future job creation, and ultimately support rapid growth and the redevelopment of its communities.
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O . R .
T a m b o
I n t e r n a t i o n a l
A i r p o r t
Big 5 Duty Free The aims of the project intersect with the government’s national diploma plan, which is seeking to ensure that the government, working with private businesses, improves the health of the job market. This plan aims to tackle South Africa’s high unemployment rate, which in 2014 was sitting at around 25%. Pityi sees the project as an important one in tackling the problem: “Job creation in South Africa is something that is key. An aerotropolis will see a city being developed around the airport, and it’s something that I think is going to very positively make an impact in the region, as well as making O.R.Tambo attractive to future investors.”
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The key focus of Ekurhuleni’s aerotropolis plans, as stated on the city’s official website, will be to utilise inter-modal connectivity as a basis for generating economic development. This will be particularly aimed at time-sensitive businesses such as bio-life sciences, aerospace, ICT, research and development, and innovation, among others. The project envisages an innovative use of land, investment capital, human resources and logistics in order to form connections with new markets and sources of revenue. In order to meet this challenge, the Ekurhuleni aerotropolis
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Aviation
master plan has proposed five overarching principles. The first is ‘community’ – the desire to form strong neighbourhoods that allow citizens to fulfil their potential. The principle of ‘collaboration’ aims to harness streamlined, effective governance that matches up to global standards. ‘Concentration’ refers to dense transit-orientated developments that add to existing communities. ‘Connection’ – effective logistics efficiently transporting passengers, services and cargo. Finally there is ‘competition’, which will involve identifying the value chains that South Africa can aim to dominate globally.
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Considerations for expansion
As the aerotropolis of Ekurhuleni expands, as will the volume of passengers and aircraft passing through it. This means making sure that the increased capacity can be handled: “One thing we need to focus on is having the capacity required both from a passenger and a cargo handling point of view. From a passenger point of view we have the master plan which ensures that we continue to provide the capacity required and that the current level is adequate.” Pityi goes on to explain one of the capacity issues currently faced by O.R. Tambo – that of the parking of light-bodied aircraft: “We have consulted broadly with the industry on this issue… Jointly produced plans from the industry and other airlines support our future outlook, because for the tariff they are the ones financing the infrastructure of the park. As part of that process one of the key projects is that of having additional aircraft parking space, and as soon as that part of the project is approved by our
regulator it will alleviate some of the pressures.” Pityi identifies the one other area that needs to improve as that of cargo handling facilities. Pityi says that “We partnered with government respected companies and asked them to complete studies for us, which seek to explore what the constraints are from a cargo handling point of view and what it is that we need to do in the short term. Through consulting with them and our cargo handlers we realised that in the
“In 2013 our board took the decision that one of the key things to consider was to rearrange our operating model. That project kicked off late in 2014 when we met with consultants, and the design of the new operating model was commenced in February last year
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next three to five years we will need access to new facilities and so have created plans, including initiating economic improvements, with the intention of construction work to increase capacity in that area.” This expansion project will complement the city’s development toward becoming a full-blown aerotropolis. Ekurhuleni authorities have approached all of their secondary partners to establish the initiatives best suited to act as catalysts for the creation of infrastructure, and this has included O.R. Tambo and its plans to increase cargo capacity. Pityi notes that these projects will keep the company, and Ekurhuleni, busy for the next 25-30 years – an exciting time for South Africa’s job market, development, and Africa’s aviation industry as a whole.
Aerospace
email: production@essentialbusinessmag.com
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TPT Terminal
South Africa’s state-owned Transnet Port Terminals (TPT) will be at the forefront of the expansion of Africa’s ports, a huge project with implications far beyond the improvement of spoke to chief the continent’s logistics. executive, Karl Socikwa, about Operation Phakisa and the company’s interesting strategies for tackling unemployment. Operation Phakisa
The potential of Africa’s ports for expansion and development has received significant attention recently. This is no surprise – Africa’s ports handle more than 90% of its external trade but only 6% of total global traffic. With 26,000 kilometres of coastline it’s clear that huge gains in this area are there for the taking.
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T r a n s n e t
Importantly, these would not just improve Africa’s logistics systems and make international trade smoother. There are potentially enormous social implications that come with the expansion of any large industry, and this one is no exception. South Africa’s Operation Phakisa is a government-led attempt to utilise the seas surrounding South Africa, harnessing their economic power in a way designed to alleviate the country’s economic problems, and, as a corollary, their social problems too. Karl Socikwa describes some of these problems
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“Africa’s ports handle more than 90% of its external trade but only 6% of total global traffic. With 26,000km of coastline it’s clear that huge gains in this area are there for the taking
P o r t
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in colourful terms: “In South Africa we like to say here at the moment we are under attack from the 3 headed monster: unemployment, poverty and inequality.” TPT has been given a central role in Operation Phakisa. As the “custodian of the country’s ports and harbours” TPT has already started substantial work on the project, which was implemented by President Jacob Zuma in 2014. Socikwa describes what’s been happening: “We have already started to identify berth capacity in places like the Port of Saldanha, Port Elizabeth and other ports
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T r a n s n e t
too. Some are going to be built up as dedicated berths for activities such as rig repair, and we are also identifying areas along the shoreline which are in custody of transit national port authorities for development of agricultural industries.� Operation Phakisa is a collaborative project involving international, national, public and private partners. Such collaboration is necessary for such a large project that will inevitably see its fair share of challenges. One such challenge is that the basic size of vessels coming into port seems to be increasing, creating potential problems in terms of infrastructure.
“Operation Phakisa is a longterm project that will have to crest the waves of commodity price cycles for many years to come
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Karl Socikwa, chief executive, Transnet Port Terminals (TPT)
P o r t
T e r m i n a l s
While often this is a problem faced by shipping companies themselves, as they organise and attempt to cooperate when it comes to vessel sharing agreements, the ports into which the vessels must dock must also adapt to the changing environment. This is something being addressed by Operation Phakisa, as Socikwa explains: “It is a challenge that we are managing under the quad terminals division in terms of making sure we have the right type of infrastructure of cranes and that our terminals are deepened to a depth able to receive these vessels and work with them, and that our
Logistics
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systems, tools and personnel are fully capable of handling the complexity.”
Commodity prices and TPT
Understandably commodity prices could be seen as something presenting a problem to TPT and Phakisa. Even though the current low fuel prices are a welcome offset to more problematic commodities such as coal and iron, there are still challenges that will need to be faced. With mines exporting lower volumes than usual and ports and terminals handling less cargo, low commodity prices may be an inhibiter to expansion, but there are ways to alleviate this problem. Socikwa identifies a way of cushioning the effects of these
“Everyone benefits from growth and we all have to pull together and work much closer than we have done before to make sure that we are able to achieve those inspirational goals cycles as maintaining an intelligent capital investment programme, and the creation of strategies that allow for a certain margin of error to allow for headroom when things do take a turn for the worse. Operation Phakisa is a long-term project that will have to crest the waves of commodity price cycles for many years to come.
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T r a n s n e t
P o r t
T e r m i n a l s
“There is a big focus on trying to create job opportunities as much as we can for the people of the country, and there is a huge backlog in terms of education and skills level in the country that we still have to deal with
South Africa’s ports and unemployment
Bucking the trends we see in more developed countries might not seem to be a good idea when it comes to a desire for expansion, but interestingly TPT is looking at things differently. Globally, there is a trend for ports to become increasingly automated. While South Africa must ensure its ports remain competitive it’s interesting to discover that TPT is not taking this approach. According to Socikwa, in South Africa “there is a big focus on trying to create job opportunities as much as we can for the people of the country, and there is a huge backlog in terms of education and skills level in the country that we still have to deal with.” For Socikwa and TPT, automation is not the right way to address this problem. As Socikwa admits, “there is attention on education and up-skilling the people but we are not quite at the point where we can begin to embrace trends such as automation in the same way as first world countries have.”
In order to mitigate some of the negative aspects of not going down the automation route, TPT is instead going to “embrace the fourth industrial revolution which is digital revolution, and really look at things such as the internet in terms of thinking about things in a smarter way and how we can better leverage the internet and skills of our people to form partnerships under a new and improved approach.” As a state-owned organisation TPT is expected to some degree to align their aims with the government’s, and avoiding automation in order to create more jobs is one of the ways they will achieve this under Operation Phakisa. An example of how TPT will balance a lack of automation with investment in digital systems comes in the form of a mechanism by which TPT will be able to predict future problems or necessary updates to equipment, meaning that technology will be working in support of a newly utilised manual workforce – so
Logistics
while automation may not be the focus, TPT and Operation Phakisa will still be embracing our digital future.
Private sector collaboration
Interestingly TPT is collaborating with private investors in order to help advance projects within Phakisa. While relations are still tentative, Socikwa tells us that “we certainly have started to look at some private sector participation projects in our various terminals, and have in fact started to speak – at a light touch level – with private entities in terms of testing their appetite levels in involving them in some of our operations.” Working with the private sector might be the way forward for TPT and Phakisa. As Socikwa points out: “The game in South Africa at the moment is really about growth. Everyone benefits from growth and we all have to pull together and work much closer than we have done before to make sure that we are able to achieve those inspirational goals.”
Company MCL name
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peressintia sae exerumquam, sum est mi, con cuptate ndiatur, ulpariandi corum, ullautem il est expelenimus dipsapis et rectotate sitaepro es net ducia quunt od el mod que perit, ipic te sedicienis cum il ipsa nihillamus aut qui tentur, coris preium aut modipicient exerum quisciur magnimossi unt est, es evellibus asit que non prendio voluptam quis et venem et re, quae. Voluptae doloressimo odi veriate mpossime quassed minum il molesci atibus eic torrum earchit quam ullantiorro et officidisqui utem fuga. Bus. Ehenim re adiore pro molum adit, quistrum nim everi rerio dolupta numqui as andis non numqui delecus sitios eosae voluptatur reptatem si rem quiande sequatio. Nequis earum ra veniat
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Monitoring and Control Laboratories et harumqu aescidi none (MCL)iderupt supplies a wide pror sitatiirange squatur? of laboratory to earum customers Sediequipment con electatus int fromcores many different aut qui dita unte voluptat aut quatias isque eumHaving asperferis industries. acienihilia conemolo id enjoyed quatiaecum ipsamimpressive facepe laut growth in recent years essi aceptatempe listis volupici oditibus. spoke to managingquiant director Sed qui aspistiorum et ipid Richard Hattersley ma consect emporro quos id quamabout volentadding is as doluptatur ad value to qui doluptas mostis site cullatur its services and about adiatumet ario maximol oritet esti theaut benefits of working ipid qui odignam hariae reri voluptas et dolestem in Southexceatur? Africa. Is etur sinus dolecep uditiissum ium vel intet que pe dem reperum renimoles quatquam ipsam, quam harum facerfero doluptam hitae culloria de
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tarting a business involves taking opportunities when they arise. Having worked for a wellestablished company Richard Hattersley decided to start his own, continuing with the product lines he had come to know. MCL now nullupt atusam qui voluptum sinulpa as dolorerovita offers a wider range than dolum ever, and Hattersley fuga. Et volupta turem. Ut extoet, conthe repre, odgoing ut quideles has been “adding them over years, to illestiis adexhibitions ut optatem etur? beritbeen quia volorum and picking them arionsequi up as we have repraectin pro omnis dolupta going along.” Ximus et que esequodis enimi, spitium qui tem ipsuntis et velitam quatemperunt estiam, start with volupta temqui qui omnimpe Often new companies the aim of filling a eum eossi tet latio con cor voluptate magnis eat –ad quam, specifi c market gap. The nature of MCL’s products molentemque vera equipment dolorum autincluding coreglassware, ea cument fuga. Vite laboratory chemicals ut alignimus et volectatur? labo.inNamendi tatur, ipitatium as well as complex devices used more industrial quide odia inullaccum que settings – means that they are in demand from sectors as Hiciliaturia cum inum int. verum ipsaectum molo offic diverse as petrochemical and education, so its imil expertise tet quatem ere elarray molore, is wide-ranging. Hattersley explains MCL’snus diverse Cero voluptatibus eum“We verum con aces in of customers: arequi involved inreped almostmagnis every type aut dolore rempossuntur sitis dus, si of nonsequ industry inaspernatis the scientific sector, so we work in quatis the eriorest, unt. corem nobit quam academic and research industry, asque welllabore as the industrial quis delligendia sitist et maior aut and clinical. Our products also cover food, beverages Idelliq uiaspel et late omnis mining and fugiatio. conectem reptatu and other materials, prep,Hendi chemicals, experumpharmaceutical nobis aut eos moand mincosmetics stenda queascon nos volutat as well environmental.” cone apisqui buscitiis digniatis emquos et et ut aliquis doluptiis ipiendunt. et erae. Nequas a velectiae aut imus. Optium is ea nobis pereium nobita et aut ipsanda epudiae del incta voluptia conseque sim
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M o n i t o r i n g
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L a b o r a t o r i e s
ELE International
Doing things properly
As it stands, MCL’s focus is on expanding across the continent and taking advantage of markets that are increasingly mature, especially as economies like Nigeria, Kenya, Tanzania and Ghana continue to grow. Hattersley explains that “I think we are going to stick to South Africa and sub Saharan Africa and do it properly, as opposed to spreading our wings too much and taking too much on, and risking watering down our efforts and support.”
“Our turnover grew by 35% last year, and I think despite being around 25 years old we are still growing
So rather than trying to expand its products into other industries or trying to find new customer bases abroad, MCL’s strategy is to focus on doing what it does as well as possible. This means adding value to its services and making sure customers are getting the best out of the products they receive. With equipment that requires specialist knowledge to implement, control and maintain this comes in the form of a significant focus on customer support, and cultivating a group of technicians who can deal with problems quickly and efficiently. MCL’s support is based in Johannesburg, with three technicians already employed by the company and a fourth set to join soon. Another technician works from the Durban office and helps deal with customers further away from South Africa. This focus on customer support is something that sets MCL apart from competitors and keeps customers returning. Hattersley says that being there with advice and expertise “adds value to what we can offer – not only do we supply the equipment, we can train people on it and we can install it, commission it and back it up at any time.” Properly maintaining this support network means staff training is important to MCL. Hattersley says that the company sends “both our technicians and product managers overseas for training”. MCL has a relationship with
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ELE International specialises in the design, manufacture and supply of high quality construction materials testing equipment and environmental instrumentation. Our products are backed by global customer service, with comprehensive technical and applications support. ELE International was founded in 1961 to supply testing equipment to the Construction Materials Industry. The Environmental Division, specialising in international projects, was created in 1983. Product sales, service and advice is available from strategically located offices in the UK and USA, supported by regional offices with ELE associates located in People’s Republic of China, the Middle East and Singapore. As part of the multi-national Danaher Corporation, we have the resources, skills and knowledge to support your business, providing the expertise you need for accurate, reliable and consistent sample testing. In August 2014, ELE appointed MCL (Monitoring and Control Laboratories) as its sole distributor for the South African market. MCL prides itself on its highly professional team, strong product knowledge and reliability. With outstanding after-sales service, MCL technicians can cover South Africa and the Southern African region from their head office in Johannesburg and branches in KwaZulu Natal and Cape Town. We share a common focus to maintain our market profile as a “value for money” supplier of high quality goods and services to our customers. ELE International Tel: +44 (0)1525 249200 Tim.gardiner@eleint.co.uk www.ele.com
Global expertise in the design, manufacture and supply of civil engineering materials testing equipment We supply high quality construction materials testing equipment and environmental instrumentation to cover the following areas: ± ± ± ± ± ± ±
Soil & geotechnical Concrete Cement Aggregates Asphalt Rock And more
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ELE International, Chartmoor Road, Chartwell Business Park,
• t: +44 (0)1525 249 200
Leighton Buzzard, Bedfordshire, LU7 4WG,
• f: +44 (0)1525 249 249
England, United Kingdom
• e: ele@eleint.co.uk
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Brookfield AMETEK, a company based in the USA and the world’s leading manufacturer of viscometers and rheometers. “We send our staff to Brookfield every year, so they get a lot of good experience. On the financial side our staff do other types of training too, whether that be accounting package software programmes, computers, etc, so staff training is a very important aspect of our business.”
Growth
MCL’s growth continues to be impressive. “Our turnover grew by 35% last year, and I think despite being around 25 years old we are still growing – and that was in the recession. We try hard to do everything to make our customers happy, and we are always looking for new markets within the sectors that we already do business.” One of the reasons this level of growth has been maintained has been the strengthening of MCL’s external sales team. Making the most of employees who know the entire product range and can source new business opportunities means that external and internal sales teams can be relied upon to work together to quickly get customers on board and provide quotes shortly after initial meetings. Hattersley is also confident that MCL’s growth won’t be inhibited by working in South Africa. In fact, working in South
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“MCL’s focus will be expanding on the continent and taking advantage of markets that are increasingly mature
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Africa seems to be a huge positive for the company. “I think from an infrastructure point of view, South Africa is well developed with a mature market to look at – you have got an infrastructure that works.” Hattersley goes on to say that “You do have problems like electricity and politics – it’s not political instability it’s politicians making stupid decisions and things like that, but on the whole things work and you do have a lot of well-educated people in our market sectors, so availability of staff is definitely easier, and logistics is easy here as well.” MCL’s positive approach and attitude to customer relations looks set to make sure growth continues at an impressive rate.
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Metrofibre w w w . m e t r o f i b r e . c o . z a
E x p a n d at the speed of light
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Communications
Metrofibre, a South African open access fibre network and broadband fibre provider, has seen impressive expansion recently and continues to extend its operations. spoke to head of Fibre to the Home (FTTH) business development Jacque de Villiers about recent capital investment and an exciting new partnership with Link Africa.
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etrofibre, based in Johannesburg, started in 2010 as a Layer 2 provider, concentrating on installing networks into business parks. In 2014 it established its FTTH division, which has since become a new source of focus for the company. Metrofibre has a goal of reaching 14,000 in-points by 2018 (in-points are not necessarily live customers but in-points into a property), with a penetration rate of 60%, resulting in around 25,000 active network users.
Raising and investing capital
Metrofibre has an ambitious expansion plan, which has resulted in a need to raise capital to invest in the business at the ground level. In March this year Metrofibre sold an 18.14% stake to African Rainbow Capital, a fairly young company and a subsidiary of Ubuntu-Botho Investments. De Villiers says that investment from a company not in Metrofibre’s industry is suited to its current needs: “African Rainbow Capital is not in the telecoms industry at all, and from our point of view this suited us very well, because at
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“Metrofibre has an ambitious expansion plan, which has resulted in a need to raise capital to invest in the business at the ground level
this point we don’t necessarily want to deal with other telecoms companies as shareholders.” Metrofi bre has earmarked this investment entirely for expansion, and especially into the world of FTTH. Metrofi bre’s FTTH strategy is to identify specific residential areas and undertake extensive engagement with the community and relevant associations. Having an available network already in place and being able to quickly give a start date results in high levels of success. In fact the largest obstacle faced by Metrofi bre in its FTTH operations seems to be fi nding the right external workforce to implement its services. De Villiers tells us that “the biggest challenge at the moment is to fi nd enough competent contractors to do the actual work. We prefer to give responsibility to one contractor to deliver solutions to us, from the civil work right through to activating the customer.”
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Finding the right people is, according to de Villiers, a problem for many in the industry at the moment, although not so much that it will inhibit Metrofi bre’s expansion strategy.
The domestic fibre market
Metrofibre’s ability to delivery quickly after initial interest is demonstrated means that appetite for its services is high. While with lower income customers living in smaller units the numbers are lower, in more affluent areas uptake reaches 50% and beyond within six months. De Villiers says that, “On our business cases we go on an assumption that we will reach a ceiling of 60% uptake in 24 months, after the project is finalised. This is an international benchmark that seems to be the right number for us.” De Villiers is confident that, as demand for internet connectivity rises, this benchmark could reach 90% – something that will require further investment. As de Villier says, “the rise in demand will
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ProLabs require deep pockets, which is why the capital raise was made to put capital into the ground. The business is self-sufficient as we sit here, if we did nothing today we’d make money going forward, but obviously we want to expand aggressively.”
Fibre connectivity in South Africa
Even since Metrofibre started its FTTH services in 2014 the fibre connectivity market in South Africa has changed. De Villiers says that the industry is waking up to the fact that “the cost of what was charged for 24 month contracts was excessive. Consumers want
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month-to-month contracts and are increasingly looking at uncapped products.” The desire for more flexible contract terms and uncapped bandwidth reflect a market in which an increasing number of households have a demand for things like streaming services, which require high speed and data allowances to work. Flexible contracts mean that lowerincome households will feel less financial strain from such services and will be able to enjoy them without the concerns that longerterm contracts might bring, and the fact that Metrofibre is listening to these consumer
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demands means that its uptake levels are likely to increase. Something that differentiates Metrofibre from competitors is the control that it has over its own network capabilities. “What we pride ourselves on is that we own our own network. The end customer is on a Metrofibre network from the main data centre right through to us, there’s no one else involved, and that will continue to be our strategy.”
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“The business is self-sufficient as we sit here, if we did nothing today we’d make money going forward, but obviously we want to expand aggressively
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Co-build with Link Africa
In April this year Metrofibre announced an exciting new partnership with Link Africa. All of Metrofibre’s previously leased fibre infrastructures are set to be replaced, with two major routes being completed by the end of the year. The partnership will allow Metrofibre to fast track the rollout of its fibre infrastructure, expanding its footprint and solidifying its already ambitious expansion plans. Having raised almost all of the capital that it intended to, Metrofibre is looking at the possibility of developing overseas partnerships. “We’ve basically achieved the amount we set out to raise,” says de Villier, “but we’re also not averse to looking at international investment.”
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Netcare
w w w . n e t c a r e . c o . z a
for the community
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etcare is not only the largest provider of private healthcare in South Africa, but also play a dominant role in private healthcare in the UK. Its holding company, Necare Limited, has had ordinary shares listed on the JSE Limited, since December 1996 and the company expanded into the UK in 2001, where they started to provide specialist healthcare services on contract to the National Health Service (NHS).
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Netcare’s presence in South Africa is extensive. Its private hospital and trauma services encompass 55 hospitals, including both private facilities
Healthcare
As the largest provider of private healthcare in South Africa, Netcare has taken on a pivotal role in servicing communities and providing essential care to those that need it most. In this profile look at the company’s history, values and altruistic ethos.
and those under the Public Private Partnership (PPP) scheme. Its medical centres are home to 9,052 registered beds and 338 operating theatres, and it manages 87 retail and hospital pharmacies. A whollyowned subsidiary of Netcare, Netcare 911, operates the largest private emergency medical service in the country, offering a service to 6.9 million insured individuals with a fleet of
180 ambulances and response vehicles, three helicopters and two fixed-wing air ambulances. Netcare’s Primary Care Division operate medical and dental services through another healthcare provider, Medicross, and manage an organisation focussing on the low income market, extending their service to uninsured individuals through their groundbreaking Prime Cure clinics. This cluster of services and partners involves 88 Medicross and Prime Cure medical centres, 12 day theatres
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and 41 retail pharmacies. The network of services managed by the Primary Care Division also include Netcare Travel Clinics, an aspect of Netcare dealing specifically with travel healthcare requirements including vaccinations and dispensing tailor-made malaria medication. Netcare is also the largest private provider of dialysis services in South Africa. The National Renal Care (NRC) is a 50% joint venture between Netcare and Adcock Ingrams Critical Care and offers haemodialysis at 56 facilities and peritonea dialysis (PD) at 8 specialised PD units.
“As a company that provides an essential service bound in an ancient code of ethics it’s no surprise that CSR is so important to Netcare’s company ethos and business model
Netcare and CSR
As a company that provides an essential service bound in an ancient code of ethics it’s no surprise that CSR is so important to Netcare’s company ethos and business model. The company’s dedication comes in the form of their Corporate Social Investment (CSI) policy, for which the indicative expenditure target is 2.5% before tax. Understandably the bulk of its CSI activity is into healthcare services, with a preference given to schemes providing care to indigent members of society. Money is also invested into health science education at all levels. To ensure their investments carry the maximum social impact the company makes sure that each hospital, facility and operation division cultivates its own sense of responsibility according to the specifics needs of the communities they serve. As part of Netcare’s CSR strategy they have also teamed up with NGO Habitat for Humanity. Through initiatives that offer housing to disadvantaged communities Habitat for Humanity and Netcare’s community aims intersect. An essential company ideal of Netcare, as identified in its official company profile, is that of dignity – “an acknowledgement of the uniqueness of individuals. A commitment to care with the qualities of respect and understanding.” Those who
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receive housing under the Habitat for Humanity initiative are asked to complete a programme that teaches the values of home ownership – including the fact that home ownership is, of course, associated with improved health and wellbeing, a fact that means the two organisations’ own interests dovetail in a way that is beneficial to all.
“The healthcare services that Netcare provides in Africa are extremely extensive Netcare value a hands-on approach when it comes to community projects, a fact which saw them build five houses in Katlehong, a township on the East Rand. The company financed the materials and supplied the labour from their own staff.
Values
Netcare’s actions wouldn’t be possible without strong and well-defined company values influencing everything they do. From the way their staff are asked to greet patients to their investment strategy, a core set of values and instructions running from management through all employees can be detected. Throughout the company’s literature one word in particular is repeated again and again:
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Healthcare
care. Considering the nature of Netcare’s services this isn’t a surprising word to hear from the company, but it’s the way they discuss the concept which lends interest to what they do. Just how important CSR is to all sides of Netcare’s business was hinted at by group company secretary and general counsel Lynelle Bagwandeen. In an interview with The Legal 500’s General Counsel magazine Bagwandeen says that “The values that Netcare espouses are about care, dignity and helping your fellow human beings. In fact, that is the strategy of the company – to provide care for all humankind. So that is a value and a strategy that resonates with everybody here and through everything we do – whether you’re a junior nurse, reception staff, all the way up to the CEO – is geared to one thing, and that is the optimum care of the patient.”
“Throughout the company’s literature one word in particular is repeated again and again: care Bagwandeen’s role in the company is in the legal side of the business, which just goes to show how deeply the company values are ingrained. While operations in the UK have seen a slight downturn recently this has been more than offset by successes in South Africa, and Netcare’s position as both healthcare and social providers looks set to continue to grow.
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SAP Africa w w w . s a p . c o m
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a
Technology
for the next generation SAP East Africa covers operations for the enterprise application software company in Kenya, Tanzania, Uganda, Rwanda and Ethiopia. We spoke to managing director Andrew Waititu about their recent recruitment and training initiatives and possible opportunities for the future.
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raining schemes designed to benefit the wider population are increasingly an important part of how companies operate in Africa. With enormous development projects such as Kenya Vision 2030 promising the creation of millions of new jobs, gaps in education and training will have to be filled. Companies like SAP are taking it upon themselves to fill them with generous schemes designed to
“We’ve got more and more graduates out of university with very, very good skills unable to get jobs, and this is one of the reasons we came up with the SAP Skills for Africa program give graduates valuable skills for the job market. They’re also working at the grassroots level – for example during upcoming Africa Code Week, in which excitement will be created for young students around coding and creating things via IT platforms, helping recruitment possibilities in the long term. These schemes are not just designed to help SAP. SAP Skills for Africa, a skills development and job creation program conceived
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quite literally on the back of a napkin by Andrew Waititu and a colleague from Kenya’s ICT Board, isn’t there to drive the cream of Africa’s graduates towards careers with the company. Instead it’s part of a wider solution to the reported 54% mismatch between the skills of jobseekers and the requirements of potential employers. SAP Skills for Africa started in Kenya with just six students on its pilot scheme, four of whom went on to work for SAP, with the others quickly finding employment. Waititu describes what the residential scheme involves: “We’d train up these guys, give them full certification and see we if can link them up with our partners or existing customers, so that they get hands on experience for a three month internship, which in turn would give that partner first choice to either employ that person, or release them back into the ecosystem, now with some experience”. The programme has now become a successful initiative across the continent in key locations in which SAP does business.
Kenya’s graduates
Waititu describes the graduate employment market in Kenya as “tough, very tough”, and schemes like this are designed to alleviate the problem. A suggestion of the scale of the issue comes from the fact that the first SAP Skills for Africa
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program, despite specifying stringent requirements such as a first class honours degree and a rigorous interview process, attracted three thousand applicants. Waititu goes on to discuss the root cause: “Kenyans have grown up knowing that if you study hard you’ll get a job, so what has happened is that we’ve got more and more graduates out of university with very, very good skills unable to get jobs, and this is one of the reasons we came up with the SAP Skills for Africa program.” Employment problems faced by graduates seems to be an issue felt around the world, as more and more people go to university without necessarily gaining ways to stand out to employers. This problem is being widely discussed in the UK and the United States and seems to be a problem faced by graduates and employers both in developed and developing countries. The issue affects SAP directly, but importantly it also affects the companies they have to work with. Waititu say that “there’s always that issue where you want a consultant, but you want x number of years of experience, and that’s the importance of having these internships”. Closing the skills deficit across the board will help all employers and collectively forward Africa’s development.
Supplementing education
SAP has also formed a relationship with Nairobi’s Strathmore University in another initiative to help close Africa’s graduate skills gap. Combining SAP Skills for Africa with another of SAP’s programmes, SAP Africa University Alliances, the project is designed to supplement a normal university education and help graduates find employment soon after completing their studies. Waititu explains: “What we do is provide students at the end of a six
“What we do is provide students at the end of a six month period, as part of their normal course of education, with SAP certification
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month period, as part of their normal course of education, with SAP certifi cation”. The different market settings across Africa effects recruitment differently across the continent and of course brings other issues too. Thinking about East Africa in terms of being almost a subcontinent in itself, Waititu says that “once you leave the borders of Kenya you find the maturity of the market and the needs of customers are slightly different. So, initially you’d find that you’d be going into some markets and having to explain from scratch who SAP is and what they do. However, over the years we’ve got it to the point where customers no longer question what ERP (enterprise resource planning) is and how it will help them.” However it’s also true that changes around the continent will bring opportunities for the company. Oil and gas discoveries in countries such as Tanzania and Mozambique promise the possibility of growth. Waititu explains that what SAP are looking forward to “is the downstream impact of those oil finds. If you look at Tanzania, which is already seeing the benefit of the gas they have, there will be downstream retail and marketing companies that will come about and those are the ones we look at as opportunities.”
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