Africa Outlook Issue 8 by Outlook Publishing

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AFRICA Enticing the next generation of African leaders

Investment profile 14

Zimbabwe

Growth on the menu

Unilever Food Solutions helps chefs all over the world “serve tasty, wholesome meals that keep guests coming back for more”

Aveng Manufacturing

Aveng has regrouped its manufacturing business units into a more relevant and aligned operating division

The brand of brands

A restaurant group dedicated to bringing the best F&B brands and concepts to Africa, Eat’N’Go feeds your needs

AFRICA OUTOOK ISSUE 08 A LSO TH I S I SSUE : G u l f P o w e r | Sa f a r i c o m | BEE | G r e e n f u t u r e s | POUCH D Y N A M I CS

WE Import & Distribute the finest quality Italian products into Africa

Mangiare Bene, Vivere Bene

- eat well, live well

Contact Clifford Barratt, Managing Director Email: Clifford@fratellifoods.co.za Website: www.fratellifoods.co.za

W E L C O M E Africa continues to grow

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Economic growth in SubSaharan Africa remains strong with growth forecast to be 4.9 percent in 2013, according to the World Bank. I can’t say I’m surprised and if you’ve been reading this magazine at all in recent months you shouldn’t be either. Every issue we bring you growth stories and whether it is natural resources, infrastructure, energy or tapping into the growing consumer class, there is plenty to get excited about. This issue is no different and our pages are full of stories of companies with African ambition. One of those is Johannesburg-based Dale Spiral Systems and Bakery Automation, the brainchild of Christopher Dale. Its first order for equipment was for two double drum spiral coolers for Albany bakery in Germiston and first freezer order was for IQF chicken portions and was awarded by Tswana Pride, a Botswana-based company. From these humble beginnings, it has achieved some incredible things and you can read more on page 68. Kansai Plascon is another company with expansion on its mind. Already the premier paint company in South Africa, Plascon was purchased by Japanese company Kansai in 2012, and with a fresh injection of money from Japan, it purchased a 63.25 percent interest in Zimbabwean Astra Industries Limited this July. We take a closer look at this household name with huge ambitions on page 54. These though are just two examples. There are many, many more inside – ranging from Aveng Manufacturing’s high hopes in Mozambique to the growth prospects at Pouch Dynamics and Unilever Food Solutions (the latter is a particular favourite and can be found on page 20). Ian Armitage

AFRICA

Enticing the next generation of African leaders

INVESTMENT PROFILE 14

Zimbabwe

GROWTH ON THE MENU

Unilever Food Solutions helps chefs all over the world “serve tasty, wholesome meals that keep guests coming back for more”

AVENG MANUFACTURING

Aveng has regrouped its manufacturing business units into a more relevant and aligned operating division

THE BRAND OF BRANDS

A restaurant group dedicated to bringing the best F&B brands and concepts to Africa, Eat’N’Go feeds your needs

AFRICA OUTOOK ISSUE 08 A L S O T H I S I S S U E : G U L F P O W E R | S A F A R I C O M | B E E | G R E E N F U T U R E S | P O U C H D Y N A M I C S

Editor, Outlook Publishing

Editorial Editor: Ian Armitage ian.armitage@outlookpublishing.com Writers: Chris Farnell Hannah Eiseman-Reynard

production Production Manager: Clare Durrant clare.durrant@outlookpublishing.com

Business Sales Director: Nick Norris nick.norris@outlookpublishing.com Sales: Eddie Clinton eddie.clinton@outlookpublishing.com Sales: Donovan Smith donovan.smith@outlookpublishing.com Projects Director: James Mitchell james.mitchell@outlookpublishing.com Project Managers: Sheridan Halls sheridan.halls@outlookpublishing.com Stuart Shirra stuart.shirra@outlookpublishing.com Tom Cullum tom.cullum@outlookpublishing.com Ben Wigger ben.wigger@outlookpublishing.com Arron Rampling aaron.rampling@outlookpublishing.com Hal Hutchison hal.hutchison@outlookpublishing.com

Accounts Financial Administrator: Abby Nightingale Suzanne Welsh accounts@outlookpublishing.com Office Administrator: Daniel George daniel.george@outlookpublishing.com Magazine Design: Optic Juice Ltd Images: Getty Digital & IT: Hamit Saka Helpdesk: James LeMay

Outlook Publishing Managing Director: Ben Weaver ben.weaver@outlookpublishing.com Chairman: Mark Weaver Contact Africa Outlook / UK 22 Wensum Street, Norwich, UK, NR3 1HY Sales: +44 (0) 1603 559 551 Editorial: +44 (0) 1603 559 144 Fax: +44 (0) 1603 559 553 Africa Outlook / SA The Colosseum, First Floor, Century Way, Century City, Cape Town, 7441 Tel: +27 (0) 21 527 0053 Subscriptions Tel: +44 (0)1603 559 144 ian.armitage@outlookpublishing.com

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Enjoy the magazine.

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In this issue of Africa Outlook...

E 06

NEWS All the latest news from across Africa

BUSINESS

Africa rising Enticing the next generation of African leaders BUSINESS

Is BEE still important? A decade on from the introduction of B-BBEE, Jacob Zuma spoke at the first ever B-BBEE Summit INVESTMENT PROFILE

14 78 94

52 108

Zimbabwe Africa Outlook takes a closer look at Zimbabwe’s business and investment potential BUSINESS

Green futures The answer to South Africa’s problems? PROFITING FROM ONLINE

Now is the time for forward-thinkers to focus on the virtual world

Fo od & Drink FOCUS

G rowt h on t h e menu Unilever Food Solutions helps chefs all over the world “serve tasty, wholesome meals that keep guests coming back for more”

T h e bran d of bran d s A restaurant group dedicated to bringing the best F&B brands and concepts to Africa, Eat’N’Go feeds your needs

20 4

128

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T h e spi c e of life Season To Season is a leading manufacturer of dry savoury, sweet blends and wet sauces

O pen wi d e ! Open Food provides catering to the aviation industries and a broad range of clients, big and small, across South Africa

Manufacturing FOCUS M anufa c turing in S out h A fri c a Foreword by Coenraad Bezuidenhout, executive director, Manufacturing Circle

A fri c a n ambition Kansai Plascon is a company with expansion on its mind. Already the premier paint company in South Africa, Plascon was purchased by Japanese company Kansai in 2012

T h e f abri c of a c ommunit y For South Africa’s Pep Clothing there is more to life than loss or profit

Oil & Gas FOCUS Q & A W eat h erfor d Oilfield services company Weatherford operates in more than 100 countries and employs more than 50,000 people worldwide

Telecoms FOCUS Q & A S afari c om Safaricom is one of the leading integrated communications companies in Africa with over 17 million subscribers

104 108

Property FOCUS

64 68

O n t h e rise Dale Spiral Systems and Bakery Automation are specialists in plant bakery and freezing systems

A veng M anufa c turing Aveng has regrouped its manufacturing business units into a more relevant and aligned operating division

D riven b y innovation Packing entrepreneur Heinz Pospech, the founder of much-respected Pouch Dynamics, on the secrets behind his success

Energy FOCUS K en y a given energ y boost Gulf Energy Ltd. is part of a consortium building Gulf Power, an 80 megawatt power plant southeast of Nairobi

C onne c ting S ierra L eone Africa Outlook talks to Airtel Sierra Leone’s boss RVS Bhullar

116

A h ea d of t h e c urve VDMV Property Group currently has properties with a market value of R1 billion

Healthcare FOCUS T h e future of h ealt h c are Lenmed Health Bokamoso Private Hospital near Gaborone is one of only two private hospitals in Botswana

120

Z imbabwe ’ s largest h ealt h c are giver PSMI is Zimbabwe’s premier healthcare service provider

124

Supply chain FOCUS W inning partners h ips Total Facilities Management Company (TFMC) is the largest facilities management company in South Africa

128

events

134

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N E W S B u s i ness

Strikes cost BMW SA

BUSINESS

Vodacom considering R5bn Neotel takeover Vodacom, which is 65 percent owned by Vodafone Group and is South Africa’s largest wireless operator, is considering a reported takeover of Indianowned Neotel. Neotel, of which Tata Communications owns 68.5 percent, could give JSE-listed Vodacom a foothold in the lucrative fixed-line data and telecommunications market. The other stakeholders include Nexus Connexion which owns 19 percent and Communitel which holds 12.5 percent stake. Neotel, previously SNO Telecommunications, is the second national operator for fixed line telecommunication services in South Africa. The deal, reported by Bloomberg, would see Vodacom pay R5 billion for the firm. “Vodacom is increasingly focused on small- to mediumsized business customers and expanding data services to offset declining revenue from its domestic voice division. Neotel said in May that its corporate

BMW South Africa says it has lost the opportunity to bid for the production of a new car model for the global market and will scale back “future plans” following strike action. BMW SA had been working hard to get a second model to produce at its Rosslyn plant but had “been taken off the bidding table,” said Guy Kilfoil, a company spokesman. Plans to increase capacity at the plant have been called to a halt as a result. Talking to the BBC, Bodo Donauer, managing director at BMW South Africa, said the company had been unable to produce 11,000 cars while its workers were striking. “But more important than these 11,000 cars is the sustainable damage which this [the strike] has made,” Mr Donauer said. “On a very serious note we have stopped all of our future plans to increase capacity in our plant in Rosslyn,” he added. B u s i ness

South Africa’s PMI declines as manufacturing recovery suffers setback

customer base rose 29 percent for the full year, driven by growth in managed and network services,” Bloomberg reported. “Mobile operators are turning increasingly to fixed-line assets that allow them to sell a wider range of services and carry data traffic more efficiently,” it added. For the year ended March 31, Neotel recorded a net loss of $45.9 million.

The seasonally adjusted Kagiso purchasing managers index (PMI) declined to an eight month low in September as a strike in the auto sector hurt new sales orders, its sponsor Kagiso Tiso Holdings has revealed. The PMI, a measure of activity in the manufacturing sector, fell to a worse than expected 49.1 from 56.5 in August. “The New Sales Orders Index lost 9.4 points in September, reflecting the knock-on effects to the wider manufacturing sector from the prolonged strike activity in the vehicle manufacturing sector,” said Abdul Davids, head of research at Kagiso Asset Management. “Intermittent mining sector disruptions and fears about future industrial action may also be weighing on manufacturers”. Kagiso said the PMI was now lower than the PMI readings of China and the eurozone, two of South Africa’s main trading partners.

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TRA V E L

Fastjet reports first half loss

Finance

IMF issues South Africa warning The International Monetary Fund (IMF) has warned that South Africa is trailing other emerging markets and must quickly implement reforms if it wants to avoid a crisis. The IMF predicts growth this year to slow to two percent and to recover only slightly to three to 3.5 percent in the next few years, adding that the rand has been one of the worst performing emerging market currencies in 2013. “South Africa’s growth has underperformed and vulnerabilities have increased considerably,” the IMF explained. “Absent structural reforms, growth will be insufficient to reduce unacceptably high unemployment.” South African Finance Minister Pravin Gordhan and President Jacob Zuma have frequently blamed the country’s poor growth on global conditions and weakness in its main trading partners. The IMF however emphasised the role of domestic problems and urged authorities to push through structural reforms. “Quicker implementation of muchneeded structural reforms could result in higher growth and job creation,” the IMF said before warning, “Risks are tilted firmly to the downside.”

African low-cost airline fastjet has posted a first half EBIT loss of $24.9 million, with $13.3 million trading losses in its Tanzanian operation. CEO and Interim Chairman Ed Winter said that despite the loss, the firm was pleased with its operational performance. “We are extremely pleased with our operational performance in Tanzania and the endorsement of the fastjet brand by Tanzanian consumers,” he said. “In response to our consistently high levels of operational reliability, passengers are rapidly adopting fastjet’s low-cost model and booking early in order to pay the lowest prices and allowing us to yield manage to high load factors. We are significantly changing the view of air travel and taking the lead in developing the aviation industry in Tanzania. “Building on our existing operation and the strong consumer faith in our brand, we are moving ahead with our growth plans and plan very soon to launch our first international route from Dar es Salaam to Johannesburg. We expect to add further international routes over the next few months, including to destinations in Zambia and Malawi. In addition to this, we will be adding a fifth city, Mbeya, to our Tanzanian domestic network from 1st November following completion of the redevelopment of Songwe airport to accommodate modern jet aircraft.” Winter said he expected further improvements in the second half. “Our performance is expected to considerably improve in the

second half of 2013 with yields having grown from $42 to $81 between January and June. As our planned network expansion progresses and scale covers fixed operating costs, we fully expect fastjet Tanzania to become profitable. Once Tanzania is fully established and profitable we will turn our attention again to the South African market. Regional routes from South Africa to Sub-Saharan destinations lack effective competition and are both underserved and overpriced and ready for an alternative to the cosy relationship between South African Airways and the respective national carrier of each country. It can cost the same amount to fly direct between two Southern African cities on a flight of 3-6 hours as it does to fly to Europe on a ten to 12 hour flight. “Based on our success in Tanzania to date, fastjet is confident in the potential of its long-term strategy to become the pan-African low cost airline of choice.” He attributed most of the losses fastjet suffered to the inherited Fly540 operation which he said had “not performed as expected”.

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N E W S B u s i ness

T r a ve l

Cell C accuses rivals of anticompetitive conduct

PRASA signs R51bn train renewal contract Alstom SA joint-venture Gibela and the Passenger Rail Agency of South Africa (PRASA) have signed a R51 billion contract for the supply of 600 passenger trains, made up of 3,600 coaches, to be delivered between 2015 and 2025. The contract, which was signed by PRASA group CEO Lucky Montana, Alstom chairperson and CEO Patrick Kron and Alstom Transport president Henri Poupart-Lafarge also included the construction of a manufacturing facility in Ekurhuleni and would house an engineering centre and a training facility. Construction on the manufacturing facility was expected to start in 2014, with the factory to come on line in 2015. “The PRASA fleet renewal programme is the catalyst for the transformation of Metrorail services and public transport in South Africa as a whole,” PRASA’s CEO said in a statement. “It is the beginning of the roll-out of government’s comprehensive rail programme. While the urgent challenge to improve passenger services remains primary, the rolling stock programme has been designed to achieve government’s objectives of developing skills, creating jobs and delivering quality services to citizens.” Gibela, 61 percent owned by the Alstom, will provide technical support and spare parts for 18 years in addition to the contract. “Alstom is proud to have been selected by PRASA for a project

of this magnitude. We are fully committed to mobilising the best of our technology and expertise through our South African joint venture Gibela and we believe our trains will set a high standard in serving the interests of commuters,” Henri PoupartLafarge said. The contract is part of PRASA’s aim to revitalise South Africa’s rail industry, create jobs and provide efficient,reliable and safe public transport and was launched in 2010. It will replace the aging suburban trains in service in Pretoria, Johannesburg, Cape Town and Durban, with 1,200 electric trains over a period of 20 years. It will create more than 1,500 direct jobs in the local factory and more than 33,000 indirect jobs over the first ten years, achieving a local-content level of more than 65 percent. PRASA will be supplied with X’Trapolis Mega, the new X’Trapolis train developed by Alstom to fit the 1.067 metre gauge in South Africa. The first 20 trains would be manufactured at Alstom’s facility in Brazil, while the South African manufacturing facility is being completed.

South Africa’s third-largest mobile operator Cell C has lodged an antitrust complaint against MTN Group and Vodacom, charging its bigger rivals with what it called “discriminatory pricing”. Cell C said in a statement it had lodged the complaint with the Competition Commission over the rates MTN and Vodacom charge their own customers for calling users of other networks. It said MTN and Vodacom offer discounts when customers call subscribers on the same network, but charge a premium for calls to other networks. “The two dominant incumbents discount their effective on-net prices substantially while charging a premium for their customers to call off-net. This amounts to discriminatory pricing and is without doubt anti-competitive when adopted by dominant operators,” said Cell C CEO Alan KnottCraig. “Customers that call off-net are being penalised often without them realising it. With number portability, customers don’t always know if they are calling on- or off-net anymore, so they don’t actually know what rate they are paying,” he added. In 2013, the Nigerian regulator called on MTN Nigeria to introduce flat rates (where on-net tariffs are the same as offnet tariffs) as 85 percent of MTN’s traffic is on-net in that country.

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T r a ve l

Boeing, SAA plan Africa’s first biofuel supply chain for commercial aviation Boeing and South African Airways are planning Africa’s first biofuel supply chain for commercial aviation. The two companies signed a Memorandum of Understanding at The Corporate Council on Africa’s ninth Biennial U.S.-Africa Business summit, agreeing to collaborate on programmes to ensure the availability of renewable fuel that will help reduce the industry’s emissions. “South African Airways is taking the lead in Africa on sustainable aviation fuels and, by setting a best practice example, can positively shape aviation biofuel efforts in the

region,” said Ian Cruickshank, SAA Head of Group Environmental Affairs. “By working with Boeing’s sustainable aviation biofuel team, which has a history of successful partnerships to move lower-carbon biofuels closer to commercialization, we will apply the best global technology to meet the unique conditions of Southern Africa, diversify our energy sources

and create new opportunities for the people of South Africa.” Boeing has collaborated with airlines, research institutions, governments and other stakeholders to develop road maps for biofuel supply chains in several countries and regions, including the U.S., China, Australia and Brazil. “Sustainable aviation biofuel will play a central role in reducing commercial aviation’s carbon emissions over the long term, and we see tremendous potential for these fuels in Africa,” said Julie Felgar, managing director of Environmental Strategy and Integration, Boeing Commercial Airplanes. “Boeing and South African Airways are committed to investigating feedstocks and pathways that comply with strict sustainability guidelines and can have a positive impact on South Africa’s development.” Biofuels emit less carbon dioxide than conventional fuels.

B u s i ness

Nampak appoints new CEO Sasol senior group executive for global chemicals and North American operations André de Ruyter has resigned to take up the top job at JSE-listed South African packaging company Nampak. He will take up the position of CEO designate from January 2014 and the CEO’s chair from April, following the exit of current Nampak CEO Andrew Marshall, who will step down on March 31. “On behalf of the Sasol board and the group executive committee, I would like to wish André every success as he commences an exciting chapter in his career at one of our longstanding customers – I am certainly looking forward to working with him in his new role,” Sasol CEO David Constable said in a statement. Fleetwood Grobler, currently managing director of the Sasol Olefins and Surfactants business, has been appointed Group Executive to succeed De Ruyter with effect from 1 December 2013.

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A f r i ca

r i s i n g

AFRICA

Enticing the next generation of African leaders. Writer Ian Armitage

believe the children are our future... Teach them well and let them lead the way. Those are famous lyrics from the late Whitney Houston. They will ring true by the time you reach the end of this piece. Africa is home to 350 million young people and the numbers are growing rapidly. It could be the continent’s big weakness. Or it could be its biggest asset. How can Africa make the most of it? Enter people like Fred Swaniker, Founder and CEO, African Leadership Academy. Mr Swaniker is a revolutionary, an inspiration, and, at a recent conference, he talked about leadership in Africa and

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asked the question: what does the new generation of African leaders look like? Who are they? Where are they? And who is harvesting their talent? It made everybody stop, pause and think. Swaniker’s African Leadership Academy (ALA) is a prestigious school in Honeydew, Johannesburg, which aims to create the continent’s leaders of tomorrow and admitted its first students in 2008. He is a Ghanaian-born entrepreneur who hopes to instil a new generation with the skills to navigate Africa towards prosperity in future years. “We get young people from all across the continent, bring them here initially for two years [and] give them this hands-on leadership practice,” Swaniker told CNN’s African Voices in

an interview in 2011. “I believe that you don’t learn leadership through theory, you learn leadership by leading and so that’s what we’re trying to replicate here at the academy.” ALA tasks students with starting their own businesses and working closely with the local communities situated around the school. They are also taught about the roles of CEOs and CFOs as well as other senior positions within business, politics and industry. ALA has about 550 young leaders in its network and its scholars have won bursaries/scholarships to study at leading global universities such as London School of Economics in the UK, Harvard, Stanford and Duke in the U.S. and the University of Toronto in Canada. Its aim is to create 6,000 new leaders for Africa. “To create lasting change in Africa, it is necessary to make investments that treat the cause, and not just the symptoms, of under-development in Africa,” ALA’s website says. “We believe an undersupply of leadership across all sectors is the root cause of many of Africa’s problems. Africa needs strong leaders throughout society, in the spheres of politics, business, healthcare, education, the environment, and beyond, to create positive change and generate growth and prosperity. “Africa needs entrepreneurial leaders across all sectors who will throw off the constraints of existing institutions to change the paradigm and create value on the continent,” it adds. “Most entrepreneurs in Africa today are “subsistence” entrepreneurs, with small businesses and meagre incomes that allow them to support only their families. To break the cycle of poverty and generate significant growth, however, Africa needs large-scale entrepreneurs.”

According to recent reports, GE Africa, in partnership with ALA, has announced a $5 million partnership aimed at identifying, developing and connecting the next generation of African leaders. GE said it was part of its multi-sector local content development initiative for Africa. “This is an investment in a future generation of African leaders and in skills development for this continent,” Jay Ireland, president/CEO for GE Africa, said, in a reported press release. “These are bright young people who will have the opportunity to acquire the skills and academic qualifications to pursue long-term careers at General Electric.” Frank Aswani, ALA vice president and director of strategic relations, welcomed the partnership, adding: “We thank GE for their commitment to Africa’s prosperity and for investing in Africa’s biggest asset; its youth. This will enable us to expand our operations, select and admit additional students, and support their lifelong growth and development. In so doing, we shall be fulfilling our mission of transforming Africa by identifying, developing and connecting the next generation of African leaders.” In September ALA officially welcomed a new batch of 98 young leaders into the class of 2013.

The class is composed of 52 female and 46 male young leaders, drawn from 27 African countries, including ALA’s first ever students from Gabon and Swaziland. Members of the Class of 2013 also include three Gap Year and Term Abroad students from the U.S. “The Class of 2013 arrives at African Leadership Academy with a great track-record of leadership, enterprise development and community service,” the ALA said in a statement. Africa’s future, it seems, is in good hands. In June, while speaking at the Young African Leaders Initiative Town Hall in Johannesburg, U.S. President Barack Obama acknowledged the need for entrepreneurs like Swaniker to be empowered to do more (if that isn’t a seal of approval I don’t know what is). “We want to empower entrepreneurs like Fred Swaniker,” Obama said. “Where’s Fred? He’s from Ghana. (Applause.) Where is he? There he is. … Fred helped to start a biotech company, and now uses his expertise to help other young Africans develop their leadership skills so that they can come back and put those skills to use serving their communities, starting businesses, creating jobs. So thank you, Fred, for the great work you’re doing.” To learn more visit www.africanleadershipacademy.org.

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B - B B E E

BEE still important: Zuma

A decade on from the introduction of B-BBEE, Jacob Zuma spoke at the first ever B-BBEE Summit, hosted by the Department of Trade and Industry (dti) in collaboration with the Presidential B-BBEE Advisory Council, which he chairs. He spoke about the successes and failures of B-BBEE and outlined future ambitions. Writer Ian Armitage

his year marks 10 years since South Africa introduced Broadbased Black Economic Empowerment (B-BBEE) and it remains an integral part of South Africa’s economic policies and transformation, according to President Jacob Zuma. “B-BBEE is part of a broader objective of promoting inclusive growth and economic development,” he said at the first ever B-BBEE Summit, hosted by the Department of Trade and Industry (dti) in collaboration with the Presidential B-BBEE Advisory Council, which he chairs, adding that the state will continue to intervene and promote transformation. Mr Zuma stressed that economic transformation was not just about big

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business deals for a few individuals in society and that BEE policy should be consistently implemented across all parts of the economy to ensure maximum impact on as many South Africans as possible. He said that throughout the decade, there have been successes and challenges in the implementation of the legislation, and that the summit was intended to reflect on what has worked and what has not worked, so as to build a truly inclusive economy. “There have been successes and there have also been challenges,” he told delegates, adding, “A lot of progress has been made over the years to open up opportunities and to grow the economy. In this regard, the South African economy has expanded by 83 percent over the past 19 years.”

bus

Zuma also noted that there had been growth in the black middle class and said although progress had been achieved with BEE, the country still faced unacceptable levels of poverty, inequality and unemployment. “Let me hasten to add however, that while we have made strides with regards to black economic empowerment and the growth of the black middle class, we are still faced by unacceptable levels of poverty, inequality and unemployment,” he said. “The average annual African household income is R60,613 and of the white household stands at R365,164, indicating the enormous work we must still do to bridge the gap at the levels of the poor and the working class. “With regards to progress in terms of BEE transactions, according to our National Treasury, over R600 billion in BEE transactions have been recorded since 1995.” Zuma encouraged the growth of SMMEs that are owned by black people, women, youth and people with disabilities. “We encourage the growth of more SMMEs owned by black people, women, youth and persons with disability in our six New Growth Path job drivers – mining, agriculture, the green economy, tourism, manufacturing and infrastructure development. The backbone of any growing economy will depend on its SMMEs sector, and will have huge impact on creation of jobs and skills development in our economy,” he said. “The National Empowerment Fund (NEF), which is mandated to grow black economic participation, has approved over 500 transactions worth over R5 billion to black empowered businesses across the country.” Zuma said that, going forward, active B-BBEE will continue to be an important policy of the ANC government, “driving real and meaningful economic transformation and growth”.

ness

“The State will continue to intervene and promote transformation,” he explained. “Where the state intervenes strongly and consistently, it can turn around key industries that face external or internal threats as has happened in our manufacturing sector. Intervention by way of targeted financial support and localised State procurement has seen the revitalisation of industries such as train and bus building as well as clothing, textiles and footwear manufacturing. This has helped to protect existing jobs and to create new ones. We are moving a step ahead to promote transformation, and the passing of the BBBEE Amendment Bill by the National Assembly on 20 June 2013 represented a huge step forward. We have reviewed BBBEE in order to align it with other key pieces of legislations, including, but not limited to Industrial Policy, National Development Plan, New Growth Path, and National Skills Development Strategy 3, which are all geared to support job creations, localisations, skills development and growth.” Mr Zuma also condemned the act of so-called fronting, calling it unforgivable. “It distorts our empowerment picture, giving an impression of progress where there is none,” he said. The President continued that business training was “crucial” so that emerging entrepreneurs can gain confidence and expand beyond ownership to become industrialists. He said the State would continue to support empowerment. “The State will continue to intervene and promote transformation,” Zuma explained. Economic Development Minster Ebrahim Patel and Trade and Industry Minister Dr Rob Davies were among those who attended the first day of the summit and Mr Davies acknowledged that while B-BBEE was initially not effective nationally, it has been a success.

A lot of progress has been made over the years to open opportunities”

“Achieving broad-based black empowerment was a political imperative ... and a matter of equity,” said Davies. “It has also been an economic imperative.” Davies was speaking at the New Age’s business breakfast in Midrand. He said efforts were in place to improve the system and acknowledged that the plan still faced several problems. Local commentators have been calling for more clarity and improved transparency as the government assesses its options to increase the pace of transforming black people’s lives.

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In v estment

p r o f i le

I nvestment profile 14

Africa Outlook takes a closer look at Zimbabweâ&#x20AC;&#x2122;s business and investment potential. Writer Ian Armitage

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imbabwe is a country rarely far from the headlines thanks in part to controversial president Robert Mugabe and some of his often bizarre policies which, investors complain, stifle investment. And they might have a point. Zimbabwe’s economy was once the envy of Africa, booming after independence in 1980, but then, in 2000, came the seizure of whiteowned farms. It led to chaos in the agriculture sector and the economy shrank by half. In 2008 hyperinflation of 231 million percent broke the national currency and left millions of people hungry. Investors fled. Then though came dollarization and it has brought a measure of stability to the economy and created a much better environment for business. FDI flows into the country rose to $400 million last year - and that says it all. “Zimbabwe has not collapsed under the heavy weight of sanctions,” 89-year-old Mugabe proudly boasted after winning recent (and heavilydisputed) elections. Indeed, signs of recovery are everywhere and according to the Zimbabwe Investment Handbook, the southern African country was among the ten fastest growing economies in Africa from 2009 to 2012. “Zimbabwe’s economy recorded average growth of 8.5 percent in the period 2009-2011, but slowed down in 2012 with estimated growth of 4.4 percent,” it reads. Investors, it would suggest, are again interested. The CEO of Augur Investments, which is part of a team spearheading the construction of a $100 million development that will be known as the Mall of

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Zimbabwe, certainly agrees. He recently described the last decade as a “lost opportunity” for many offshore investors who adopted a wait-and-see attitude. Augur Investments is one of the country’s biggest foreign direct investors in recent years. “Many people have adopted a wait-and-see attitude for the last decade,” Ken Sharpe told journalists during a tour of the Harare Airport Expressway – an $80 million road project the firm is involved in – in August. “The lost decade has been a lost opportunity because if you wait and see, you don’t do anything.” Mr Sharpe said investing in Zimbabwe was not an easy decision to make considering challenges the country has been going through at the time they decided to invest. “We decided that although the journey was a thousand miles, for us, we took the first step in 2008,” he said. “Yes, the conditions were difficult. The risks were very high (but) we took a long-term view on Zimbabwe. We took a decision that we are not involved in politics but in business. So we went ahead and made that investment.” Zimbabwe has realised substantial investments particularly in the mining sector over the past four years too.

However, there is a twist in this tale. In its September Economic Briefing, the World Bank said the 2014 outlook for Zimbabwe was uncertain. It said growth in the country was rapidly fading, and after 4. 4 percent recorded in 2012, the growth projections for 2013 have been revised downwards to three percent, with little prospects for a recovery in 2014. “The economy faces uncertainty both from expected volatility in the global economy, and on the domestic front after July elections, amidst worsening macroeconomic indicators and increased vulnerability of the banking sector,” the bank said. “Growth performance has been stymied by continued slowdown of the key sectors of the economy, amidst easing of international commodity prices, low investment, tight credit conditions, and policy uncertainty after the July elections.” The briefing also noted that concerns over the new government economic policies, including extensive implementation of indigenisation legislation. Zimbabwe certainly isn’t for the fainthearted. There is undoubted potential... and after all, fortune favours the brave. To learn more visit www.investzim.com.

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Green futures Green and sustainability: The answer to South Africa’s problems? Writer Ian Armitage

he International Monetary Fund (IMF) has warned that South Africa is trailing other emerging markets and must quickly implement reforms if it wants to avoid a crisis. In its annual country report on Africa’s largest economy, the IMF predicts growth this year to slow to two percent and to recover only slightly to three to 3.5 percent in the next few years. “South Africa’s growth has underperformed and vulnerabilities have increased considerably,” it

explained, adding, “Absent structural reforms, growth will be insufficient to reduce unacceptably high unemployment,” pointing an economy “increasingly vulnerable to shocks.” It is a sorry state of affairs. But could this represent an opportunity so far as sustainability and green are concerned? South Africa’s Minister of Water and Environmental Affairs Edna Molewa certainly thinks so. “South Africa is committed to pursuing and exploring opportunities in its transition to an inclusive, lowcarbon, resource-efficient green economy,” she says.

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Molewa has thrown her weight behind a new study, South African Green Economy Modelling, which shows that investing in a low-carbon, resource efficient green economy is fundamental for South Africa’s sustained economic growth and well-being. “This study demonstrates that a green economy approach, which takes into account the country’s economic, social and environmental aspirations, can deliver as much growth as a business-as-usual model but in a more sustainable manner,” she says.

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Earlier this year, Molewa launched the Nissan LEAF green car, a groundbreaking pilot initiative, and a first of its kind in South Africa. Through this initiative, which is an exciting development for the motor industry, SA is setting an example. It will also create jobs. The auto industry isn’t the only one embracing green. Indeed, nowhere is it taken more seriously than in the building industry and activity in the green building sector has surged as the government, businesses and developers in the country increasingly embrace sustainable building practices. More and more property developers, it seems, are opting for sustainability, not only as an alternative building initiative but as a unique selling point. “We will increasingly see green building practices becoming the norm,” Brain Wilkinson, CEO of the Green Building Council of South Africa, said in a recent press release. “There are clear environmental benefits for building green as well as compelling business case.” Going green is not just about the environment. The bottom-line benefits of building and operating green buildings are important too, considering things like South Africa’s rising energy costs and water crisis. Developers are obviously aware and the country is now home to a number of Green Star-rated buildings, including the Environmental Affairs Department’s head office in Pretoria, Hyundai’s new head office in Bedfordview and Nedbank’s Menlyn Maine Falcon Building in Pretoria. “The industry is embracing this absolutely necessary shift towards sustainable practices and it is exciting to be part of this change,” Wilkinson said. This is a great point at which to introduce Dr Sujit Ghosh, the CEO of Holcim Singapore, a man I had the recent pleasure of meeting. Holcim’s

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vision is to provide “foundations for society’s future and commitment to sustainable development”, continuously seeking “ways to promote sustainable construction through innovation”. It’s a hell of a vision. And for Dr Ghosh it is much more than mere window-dressing. He believes that by adopting sustainable practices, companies

South Africa is committed to pursuing and exploring opportunities in its transition to an inclusive, low-carbon, resourceefficient green economy”

“can gain competitive edge, increase their market share, and boost shareholder value”. What’s more, the “growing demand for ‘green’ products has created major new markets,” he says. “Our sustainability efforts are central to our core strategy. Apart from focusing on business growth, we also put a strong commitment to sustainability development. Typically, companies have lofty visions and Holcim also has its own lofty vision – to be not only a profitable company but also take the interests of stakeholders at large into account. We’ve been talking

the talk and walking the walk, being named the leader in the Dow Jones sustainability Index because of our commitments on sustainability and with CO2 emissions control.” Last year Dr Ghosh attended an event run by Harvard Business School called “Innovating for Sustainability” in Hampshire, England. Something like 40 executives from 24 countries and many industries attended and discussed items like how to avoid trade-offs between short term financial and nonfinancial performance improvements. One of the many outcomes was the conclusion that investors of today are highly sophisticated, well informed, and highly demanding. Not only do they care about immediate financial performance, but they are looking for business sustainability. This of course was not news for Holcim. “We’ve long been aware of the need to create value for shareholders in a way that creates value for other stakeholders as well,” Dr Ghosh explains. “But we are about more than simply saying sustainability is good business because it reduces waste or something like that or creating products that are green. It is much far-reaching and takes a long time for companies to develop and implement, and requires creativity. “We look for win-win solutions that offer immediate value and provide a commercial advantage.” The Building and Construction Authority (BCA), which regulates Singapore’s construction industry, has embraced Holcim’s approach and has even gone as far as far to amend building codes, while encouraging the use of materials that reduce the carbon footprint of buildings. South African government, policy makers, decision-makers and businesses can learn much from green pioneers like Holcim.

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A safe bet South Africa:

for profiting from online an d mobile wagering

Physical assets have long made South Africa a land of opportunity. Now is the time for forward-thinking companies and investors to focus on the virtual world. Writer Mark Bosman, BetTech’s international CEO

he internet changed the world but it took the mobile phone to make it a truly global phenomenon. Like in many other developing countries, the majority of people in Africa access the World Wide Web via a cellular handset, rather than a PC or laptop, and the growing ability to get online is changing consumer habits on the continent. In South Africa, where access and penetration is at its greatest, we are seeing similar ecommerce patterns emerge to that of Europe and North America. As well as emailing and browsing the web, communicating with friends and business associates on social networks, planning journeys, taking high-quality photos and videos,

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people are increasingly shopping – and even banking. Another major trend is also emerging: online and mobile betting on sports and horse racing. Look at the global figures – analysts H2 Gambling Capital calculate the interactive market to be worth more than $35 billion in gross wins – and it is clear that this a huge business. One that is burgeoning in South Africa too. According to accountants PricewaterhouseCoopers, overall sports betting turnover grew from R10 billion in 2007 to R17 billion last year. They estimate it will have reached R24.6 billion in 2016. These figures include offline revenues but there is no doubt that the development is being driven online.

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At present, fixed odds and in-play wagering on sports and horse racing is legal in South Africa. From licensed casino groups and sports marketing agencies, which have large databases of existing clients or mass marketing channels, to start-ups with budget but limited knowledge about how to create and operate an online sports book, a multitude of organisations are turning to this innovative revenue stream to attract and engage with new and existing customers. Brands like Bet.co.za are beginning to invest in above and below the line marketing campaigns. Sports enthusiasts are ever more alive to the fact that you can bet on a live fixture on your mobile phone. But the market is not for the faint-hearted. Several international operators have launched and then exited soon after, proving that local knowledge and an on-theground presence are the important requirements. One of our key commitments is empowering local bookmakers to offer a platform that is competitive against more established, international betting companies. Operators no longer have limited software options to exploit the

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demand for interactive betting services in a traditionally offline industry, although not everyone understands the market. We tend to stay away from apps due to the heavy technical work which goes into maintaining these on an ongoing basis. Furthermore, in Africa, it is thought that 90 percent of mobile traffic takes place in browser, with only ten percent in apps. The South African mobile market is fragmented. The Samsung E250 and Nokia C1 are the most prevalent feature phones. When you take into account all the makes and models there are literally thousands of different types of mobiles in use. Our approach to mobile is inclusive – we focus on web-based applications which have the capability of reaching every handset in the market, from a low-end feature phone to a high-end smart phone. There are case studies from many of the more mature jurisdictions, particularly in Northern Europe, to show that as regulation allows, the introduction of further gambling products, such as slots, casino and table games – some of which are already playable elsewhere in Africa – will see the market grow exponentially. The more switched on among us are already tapping into it.

About Mark Bosman and BetTech Gaming

Mark co-founded BetTech Gaming, the global provider of premium technology solutions to gaming companies, with Chief Executive Officer Jesse Hemson-Struthers in August 2009. His role as International CEO sees him focus on business development and identifying new market and client opportunities for BetTech Sports, the company’s flagship, Gaming Laboratories Internationalcertified product. The BetTech solution covers all channels from web, mobile through to retail and self-service, taking full advantage of best-of-breed third party products to provide automated prematch sports book and live data feeds as well as online casino and virtual games direct to clients. Bosman, a graduate of the University of South Africa, is an entrepreneur with a background in the fast-moving consumer goods industry. He has previously held roles at Red Bull and L’Oreal and was the Business Development Director of a Swiss hedge fund.

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Growth is on t h e menu

Unilever Food Solutions helps chefs all over the world â&#x20AC;&#x153;serve tasty, wholesome meals that keep guests coming back for moreâ&#x20AC;?. Writer Chris Farnell Project manager Jason Gilkes

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nilever is one of the most recognised names in the food industry around the world. If you go to your fridge right now there’s a pretty good chance you’ll find something with the word Unilever somewhere on the label. Among the many facets of the business is Unilever Food Solutions, the professional culinary division which is dedicated to offering products and services to the food service market all over the world. As managing director Michel Mellis explains, “We work with powerful global brands such as Knorr, Hellmann’s, Robertsons and Carte d’Or in combination with local names such Marvello, Meadowland and Fine Foods in order to offer culinary solutions to all kinds of operators, ranging from hotels, restaurants, contract caterers to quick service restaurants.”

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Of course, while Unilever is a globally recognised brand, Unilever Food Solutions can’t rely on brand recognition alone to bring in business. It’s unique selling point, Mellis says, is the “incomparable end results our customers can achieve on meal preparation through our brands and services”. “We don’t just sell top quality products and brands, but we also offer services in the areas of menu organisation, kitchen preparation and guest satisfaction,” he says.

Nashua Limited

We work with powerful global brands”

s a company, Nashua is aware that the future sustainability of business in South Africa and the world depends on companies adopting eco-friendly policies that minimise wastage and environmental impact. With this in mind, Nashua developed a number of eco-friendly hardware and software solutions as part of its product offering. This lead to a partnership between Nashua and Unilever, as both companies have a vested interest in energy-saving, recycling and combining ecology with sound business practice. Nashua is working with Unilever to adopt eco-friendly solutions at their Durban head office that include: All the consumable materials that Unilever’s printing devices use will be made of Biomass Plastics which are recyclable and contribute less to global warming than their petroleum-based counterparts “Quick Start Up Technology” means a lot less energy is required to reach fusing temperature, therefore reducing Unilever’s energy consumption and carbon foot print Nashua will work hand in hand with Unilever in assisting and disposing of the toner bottles in the correct eco-friendly way

Nashua believes whole-heartedly in maintaining the balance between people, the planet and profit in a way that is ethical, responsible and above all, sustainable. The solutions that Nashua is implementing at Unilever are a perfect example of this principle and will hopefully open many other doors for large-scale companies looking to improve their eco-friendly initiatives. Tel 031 940 9129 Email info@nashuadbn.co.za www.nashua.co.za

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A new branch on the family tree. Unilever’s on-going quest for a greener future, and Nashua’s firm commitment to reducing their clients’ carbon footprints has led to a natural business solutions partnership. Nashua proposed a solution that is custom-built to Unilever’s needs, lowering the amount of paper printed while still maintaining a high level of efficiency. The energy-saving functionality built into all Nashua’s devices reduces electricity consumption when not in use, another planet saving feature.

With our like-minded approaches to business, we look forward to this partnership blossoming. Tel: +27 31 940 9120 email: info@nashuadbn.co.za www.nashua.co.za

DURBAN

/NashuaLTD

@nashuasolutions

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We don’t just sell top quality products and brands, but we also offer services in the areas of menu organisation, kitchen preparation and guest satisfaction”

This combination of high quality products and excellent service has been key in consolidating Unilever Food Solutions’ position as a market leader, but the company is still setting its sights higher even in the face of a difficult financial climate. “This year we are growing at twice the GDP index in like-for-like business, which is a relatively good performance,” Mellis says. “However we feel there are plenty of opportunities to accelerate. The main issue affecting Unilever Food Solutions and the whole industry is a combination of inflation and lower consumer income, which pressures costs on one side and takes value off the market on the other.”

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However, while the economic climate is one thing, Mellis believes the biggest challenge facing the industry right now is something far more prosaic. “Our biggest challenge has been communication,” he admits. “Because the market is so pulverised and operators don’t follow any specific communication channel exclusively, it is a real challenge to talk to our target food service market. That’s why we must develop multiple forms of communication in search of our customers. Then of course there is also the challenge of operating in an emerging market environment, where the economy is not particularly strong, there is a high unemployment rate, volatile currency and social inequality.”

The main issue affecting Unilever Food Solutions and the whole industry is a combination of inflation and lower consumer income, which pressures costs on one side and takes value off the market on the other”

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eatu

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Advising you in changing times To find out more on how we can assist you, please contact our Durban ofﬁce in South Africa on +27 (0) 31 271 2000.

Sometimes bigger is better. Tap into a world of possibilities with PwC. There’s much to be said for world-class solutions and a global network of expertise. We establish relationships to bring real value to our clients, our people and the communities in which we operate. Contact us for tax, advisory and assurance services tailored to your specific needs.

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In the face of these diverse challenges, the most important thing is for Unilever Food Solutions to have a team with the skills and experience to deliver the very best. For Mellis, ensuring the business has the best talent is an absolute priority. â&#x20AC;&#x153;We make sure we have the best people by attracting the best talents, developing them and making sure they stay with us. The care we take in creating a great work environment has been recognised. This year Unilever was elected best employer to work for, which obviously helps tremendously in finding people who are willing to work for us. We also have probably one of the best development programmes in the market, which includes real global exposure and local training that ranges from market insights to leadership behaviour, as well as on the job coaching/mentoring.

Natpro Spicenet Natpro Spicenet has been in the herb and spice manufacturing business for the past 23 years

We make sure we have the best people by attracting the best talents, developing them and making sure they stay with usâ&#x20AC;?

Natpro Spicenet has FSSC 22000, Kosher, and Halaal certification. We are currently busy with a sustainable farming programme We have become Sedex members as this offers an effective way of managing ethical and responsible practices in our supply chain Through our quality and dedication to our customers we have grown substantially over the last few years We have manufacturing capabilities to mill, blend, roast, dry, sift and pack most herbs, spices and food chemicals. Tel +27317054118 Email rory@paprika-sa.com

www.paprika-sa.com

Bidvest Magnum Bidvest Magnum has built a Platinum Partnership with the prestigious Unilever Group extending over three decades; a relationship built on honesty, integrity, ethical leadership and commitment to service excellence. Our holistic approach to providing every client with the best turnkey security solution makes Bidvest Magnum the service provider of choice. A combination of manpower and state of the art technology enables us to provide a tailor made solution to each and every client by being involved from the conceptualisation stage, the conducting of a comprehensive risk assessment, installation, commissioning and maintenance of our services. A broad spectrum of Bidvest Magnumâ&#x20AC;&#x2122;s security solutions has been implemented at the various Unilever sites to secure the service excellence we strive for. Tel 0861 243 770

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Spice & Herb Specialists Milling/Blending/Roasting/Packing/Drying

www.paprika-sa.com 16 Southway Road, Carlon Falco Office Park, Block A â&#x20AC;&#x201C; B Support Services: 0861 243 770 Fax: (011) 555 4950

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KPMG in Africa

PMG has a clear commitment to serving our clients across Africa. As a leading provider of audit, tax and advisory services, we have identified three mega-trends that will collectively drive Africa’s future growth. These are abundant natural resources, a one-billion-plus population and the urgent need for enhanced infrastructure. As a result, we have made focused investments in the following high-growth areas: Fi nancial services Infrastructure Telecommunications Consumer Markets Energy and Natural Resource Healthcare Anthony Thunström Chief Operations Officer Africa T: +27 83 700 8862 E: anthony.thunstrom@kpmg.co.za Katherine Miles Africa High Growth Markets T: +27 82 710 7408 E: katherine.miles@kpmg.co.za Shelley Alberts Africa High Growth Markets T: +27 82 710 9807 E: shelley.alberts@kpmg.co.za

We will keep developing our South Africa power house and make a more structured move into Sub-Saharan African markets”

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However, investing so heavily in the company’s staff can be a double-edged sword. When your company has the best talent, it makes them a rich target for headhunters. “The real challenge becomes preventing other companies tempting our talent away after we’ve worked with them for so long,” Mellis admits. “We strive to avoid this by offering great career possibilities combined with the pride of working for a company with such high ethical principles. If you are interested in developing your career and are a good performer, a major global company like us will always have a place for your next step.”

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KPMG Africa Digital We have the digital tools for you. • The KPMG Africa Business Guide contains information on how to do business in Africa • KPMG Africa Live is a news based app that gives you country-specific information at your fingertips • The KPMG Africa blog offers in-depth knowledge from industry experts www.blog.kpmgafrica.com • KPMG Africa Lunch with our Leaders on LinkedIn. Your business questions answered by a KPMG Africa leader on LinkedIn. Bi-weekly on Thursdays at lunchtime Join the conversation now

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© 2013 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. MC10922

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With top of the range talent and brands that are known and loved the world over, Unilever Food Solutions is in a great position right now, and the business intends to make the very most of that. “The future is there for us to make the most of it,” Mellis says. “Specifically for Unilever Food Solution in Africa, we will keep developing our South Africa power house and make a more structured move into SubSaharan African markets.” As the company builds on its growth in existing markets, and approaches new ones, he is confident in Unilever’s unique value proposition. “We have such well known and loved brands, that in combination to our unique market approach, we must leverage into new markets like Angola, Nigeria and Ethiopia, just to name a few. The food service market is very promising in this part of the world and we plan to outpace market growth at least at double rate.”

FRONTLINE

We have such well known and loved brands... we must leverage into new markets”

FRONTLINE is a leading, full service Market Research Agency, recognised for our ability to inform on emerging markets and rural areas. Highest levels of transparency down to outlet level data Serious flexibility, for your requirements. This means your definitions, your trade channels, your regions, and outputs relevant to you 100% direct field and data quality control through our QC division State of the art mobile survey technology Budget friendly survey options that deliver what you need, at the level of detail you require Value adding “piggyback” audits, that enhance your understanding of the trade Turnkey research solutions, from concept and design to analysis and interpretation. If your challenge is a credible read of retail in emerging markets, then talk to us. Tel + +27 41 586 2257 Email info@frontlineafrica.com

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SPEC TOOL AND DIE Two decades of mould-making excellence Working with leading brand owners and the country’s top plastics packaging converters, Spec Tool & Die has grown in the last 21 years to be one of the largest independent toolrooms in southern Africa. The company specialises in the development, design and manufacture of moulds for plastics packaging. With one of the largest toolrooms in southern Africa, Spec Tool and Die offer in-house design facilities, and the supply of prototype moulds. Advanced technology, coupled with skilled staff, ensure quality is built into every aspect of the process, providing customers with moulds that allow them to compete on both international and local markets. Tel +27 (0)31 461 1836 Email davem@spectool.co.za

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Moulding good ideas into great packaging! Spec Tool & Die specializes in the development, design and manufacture of quality injection moulds, injection blow moulds, pilot working models and blow moulds. This is accompanied by sound technical expertise, from concept to final production. Spec Tool & Die is one of the largest independent tool rooms in Southern Africa. Tel: +27 (0)31 461-1836 • Fax: +27 (0)31) 461-1758 Email:davem@spectool.co.za • www.spectool.co.za

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THE AD SHOP 2649

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THE AD SHOP 2648

Cordon Bleu packaging!

Charting a new course www.astrapak.co.za • Robin Olbrich • robino@astrapak.com

The most important aspect of everything that we do is the consumer” There are clearly exciting prospects ahead for Unilever Food Solutions, but more than the wide recognition of their brands, the quality of their products and service, or even the talents of their people, there is one thing that Mellis believes the company keeps in mind above all else. “The most important aspect of everything that we do is the consumer,” Mellis says. “And consumers in our market are very local, despite globalisation in many sectors. We at Unilever Food Solutions spend many, many hours talking to consumers, investigating market trends and learning from observing them. We do all of this in order to pass all this knowledge onto our customers, so that they will always be empowered to develop the very best solutions for making their guests, and our consumers, happy.” To learn more visit www.ufs.com.

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Partner with Aon. It’s the way successful businesses protect their interests against the impact of future risks. Robin Moss, Manager Corporate: Aon Durban, explains: “While it is difficult to predict which risk will emerge next and demand attention, we can be certain that successful companies will not adopt a ‘wait and see’ approach. “Instead they will prepare themselves thoroughly to anticipate future needs and undertake the difficult process of finding solutions to address them. “One way of doing this is by reviewing and strengthening their specialist insurance cover under the guidance and advice of a professional insurance broker and risk adviser.” Contact Aon today to reinforce your risk management insurance strategy – and your business success.

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2013/10/23 11:36 AM

E A T ’ N ’ G O

The of

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A restaurant group dedicated to bringing the best F&B brands and concepts to Africa, Eat’N’Go feeds your needs. Writer Chris Farnell Project manager Jason Gilkes

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E at ’ N ’ Go

ood is big business and in a crowded marketplace few things are more valuable than a recognisable brand. Having a strong brand means customers know exactly what to expect when they buy your products, as well attaching a certain amount of cultural cachet to the food you sell. This is why Eat’N’Go is in such an excellent market position. They have built the brand that other brands choose to market their franchises to Nigeria, as well as elsewhere in Africa. Jean-Claude Meyer is the CEO of Eat’N’Go. “We are a company set to deliver our brands to Nigeria and the West Coast of Africa,” he tells us. “We currently have ten outlets open, and we hope to build another six or seven next year.” He sees the company’s potential lying in its ability to bring widely known international brands into its own markets.

“We are bringing international brands to the African continent,” Meyer says. “The African consumer is attracted to these brands because we’re constantly seeing them in our imported media. You see these brands on TV all the time but they are rarely available, so we bring these brands here.” Having access to these brands is important to Eat’N’Go, which describes its mission as being “to become the premier food operator in Africa”. The company entered the Nigerian market in September last year, with promises that they would bring with them the very best in food and beverages. Today it has delivered on this promise by successfully rolling out the globally recognised brands Cold Stone Creamery and Domino’s Pizza. Eat’N’Go celebrated this announcement on the mark of their one year anniversary with a grand opening for their mainland flagship store at Toyin Street, Ikeja. It was an all star event, featuring

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Nigerian celebrity Taymilistic Taymi as the master of ceremonies and guests taking part in sing-a-longs of brand jingles and chants. The event was attended by representatives from Domino’s Pizza International, including the brand’s vice president, Eric Anderson, and his peer, Brian Richard, vice president of Cold Stone Creamery International, members of the Eat’N’Go Africa board, the Eat’N’Go Africa team as well as a host of journalists, advertisers and other distinguished personalities. Most of all, the celebration featured lots and lots of ice cream and pizza. And by ice cream and pizza, we mean ice cream and pizza that is known and loved across the world. Domino’s Pizza can trace its history back to a small pizza store in Ypsilanti, Michigan, in 1960. By 1989 there were over 5,000 stores

across the U.S. Today that number has doubled to over 10,000 Domino’s Pizza stores in countries around the globe, of which Nigeria is the latest. When Domino’s decided to enter the Nigerian market, they were pleased to find a company like Eat’N’Go to represent them. At the launch event Ritch Allison, Domino’s Pizza International’s executive vice president said, “Establishing ourselves in this emerging West African country presents a great opportunity for our business, and continues our global momentum as a brand. We have a great operator in Eat’N’Go – their knowledge of the business landscape will be instrumental in making Domino’s Pizza the leading pizza brand in Nigeria.” Meanwhile Eat’N’Go is also introducing the Cold Stone Creamery to Nigeria. This company was

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The African consumer is attracted to these brands because we’re constantly seeing them in our imported media. You see these brands on TV all the time but they are rarely available, so we bring these brands here”

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founded by married couple Don and Susan Sutherland in 1988 with one store in Tempe, Arizona. The Cold Stone Creamery brand aims to go beyond merely selling ice cream. Their mission statement includes the ambitious goal “We will make people happy.” The brand now has over 1,400 stores in countries all over the planet, now including Nigeria as well, thanks to Eat’N’Go. But why do these internationally recognised brands come to Eat’N’Go rather than entering the market themselves? A big part of the reason is that Eat’N’Go has the knowledge to deal with some of the very specific challenges of doing business in Nigeria. “The biggest challenge in Africa is the supply chain, and in Nigeria there is a lack of infrastructure, which is a real challenge when it comes to meeting our needs for electricity

and water,” Meyer explains. “When it comes to our supply chain we’ve learned the hard way and we need to think about six months ahead in all our dealings. Meanwhile, when we encounter infrastructure problems we do what everyone in Nigeria does, provide our own electricity and water to make up for the shortfall.” That local knowledge is combined with an intimate knowledge of the food service industry. They are already bringing Nigeria the best in food service from quick service and fast casual restaurants. Their outlets sell pizza, ice cream, coffee and more. They do this while still keeping their food affordable, providing dining options for consumers of all types and every sector of the market with a diverse range of dining concepts. What’s more, Eat’N’Go manages this while maintaining a keen sense of social responsibility,

creating jobs for their local community and empowering people to enhance their quality of life. However, applying for a job with Eat’N’Go isn’t quite like applying for any other job in the food service industry. They don’t just want the right skills – they want the right personality as well. “Our recruitment process is a bit different” Meyer admits. “We have auditions, not interviews. Also retention is not a problem, once people are onboard we give them plenty of opportunities to develop their careers. We have a well structured training programme adopted from our brands.” Of course, for Eat’N’Go, this is just the beginning. “We’re looking to expand our reach within Nigeria” Meyer says. “In 2014, we’re also looking at entering new markets with our brands.”

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S eason

spicelife The

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Season To Season is a leading manufacturer of dry savoury, sweet blends and wet sauces. We talk to founder Ronel Venter. By Chris Farnell Project manager Jason Gilkes

t some point everyone dreams of packing in their day job and going into business for themselves. But very few people have it in them to actually go ahead and realise that dream. One of those precious few is Ronel Venter. Season To Season is, as the name suggests, a seasoning company. They make seasoning for the food industry, specialising in savoury flavours and supplying the snack food industry as well as for fast foods, recipe dishes, stocks and spices and more. However, while the company is currently undergoing a meteoric rise, it started as nothing more than a pipe dream. “I was a sales director at McCormick,” the charismatic Venter says. “Then the company got new management and I realised that what I wanted was a smaller more intimate vibe. So I left the company and after about a year and a half I started my own company.” That is how Season To Season came to be. So then comes the instant success story, right? Not quite. “It wasn’t like Edison and his lightbulb, there was a long process of trial and error and experimentation,” Venter explains. “I found a company close to me that let me have access to their factory after hours. After a year I outgrew them and started my own factory. And after two years I moved to a bigger factory until eventually we moved here.” The moral of the story is clear as far as she is concerned, “It takes 1,000 days to make something work.” But throughout those first 1,000 days Venter always knew exactly what she wanted out of Season To Season. “I’ve always valued my independence,” she says. “I wanted to be an independent supplier to the food industry. I knew to do that successfully I would need to have the right business partner. I found Anneke Potgieter who was very good at the development side of things. They were invaluable

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S eason

in helping me get the right tastes and flavours out there.” Every new business has to make a choice about how they’re going to target their products. There are two routes - the cheap product or the quality product. It didn’t take Venter long to decide which way she wanted Season To Season to point. “When we wanted to decide which direction the business should go in, we decided the right route was to go with the best flavours, to target those customers who could appreciate quality products, and were able to buy in reasonably large volumes. From the start we wanted to create premium level brand. We wanted to be something that was affordable, but didn’t cut corners on quality just to be cheaper than our competitors.” However, she admits, for her it was never really a choice. “We just don’t know how to make a bad flavour!”

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First and foremost, what we are about is getting really good flavours and flavour combinations that consumers really enjoy. Our quality is consistent and our level of service is exemplary”

These flavours are what Season To Season has built its reputation on. “First and foremost, what we are about is getting really good flavours and flavour combinations that consumers really enjoy. Our quality is consistent and our level of service is exemplary. The brand is built on a three pronged stool of great taste, high quality service and a responsible, knowledgeable team of staff,” Venter explains. “When our larger customers give us an order, our turnaround time is extremely fast. We can produce most volumes and flavours; and in only a few days we can produce, depending on the level of input our customers want.” The company has been seeing healthy levels of growth, with their latest numbers showing them to be 12 percent up on their previous year. Season To Season has also started selling more into the wider African continent, providing a tremendous boost to their sales volumes. But of course, it hasn’t always

been plain sailing. Like many businesses, Season To Season has felt the pinch of the recent economic climate. “We’ve seen fantastic growth but with the economic climate the way it is we’re always looking for new clients,” Venter says. “We get a lot of new business through word of mouth, businesses contacting us after they’ve heard of our reputation. We’re also making use of broader channels of communication. Our website is a big draw for new customers, as are our more active methods of attracting business through telesales and providing presentations at conventions and food shows where people can taste our products for themselves.” Season To Season’s journey has not just been Venter’s journey however. It’s also been a journey for all the people who have worked with her over the years to build the company. “Most of our staff has been with us forever,” Venter says. “The company is

ten years old and a lot of our staff were here from the start. These days we tend to acquire new staff through recruitment agencies, but I also have excellent relationships with a number of professors at universities. They’re great for pointing their best students in my direction.” But this is only the start of plans for Season To Season. Venter has big plans for her business. “We would like to grow into Africa,” Venter says. “We already export to the UK and Australia, and we’re careful to make sure we maintain the balance of food and snacks going over the borders. We put a lot of effort into finding customers that we can build a long term relationship with. Many companies make the mistake of chasing business purely for the sake of chasing, but we see every new customer has an investment, so it’s important to find the right ones.” Their latest development is the addition of the company’s new “Spice Girls” retail brand, which I can tell Venter

is particularly excited about. “We are actually going to go into retail, targeting the more informal trade markets. Our new ranges will include spice blends, spicy chicken, barbecue, curried blends and more. We’re really excited about the possibilities this offers us.” I ask Venter what the one thing that she wants readers to take away from this article, and I expect her to reiterate some of the qualities of Season To Season she most wants the brand to be associated with, or to plug one of the many new products that the company is going to be releasing in the future. But she surprises me when she says that what readers should take away from her story is “Persist in what you’re doing and believe in it and work hard and you will succeed.” It’s a good message to remember. Contact Ronel Venter on +27 11 7965275 or ronel@seasontoseason.co.za or visit www.seasontoseason.co.za.

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O p en

Foo d

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Foo

Open Food provides catering to the aviation industries and a broad range of clients, big and small, across South Africa. We caught up with managing director Tamar Klonarides to find out what makes the company tick. Writer Hannah Eiseman-Reynard Project manager Jason Gilkes

pen Food is a catering company which runs 360 days a year at nine different facilities, and has recently added a night shift. It has been specialising in the aviation, hospitality and corporate catering fields; yet can cater for both big and small events. “We believe that the days of the canteen are over, and dull, stodgy mass produced canteen food are a thing of the past. There is no reason why food for corporates needs to be mass produced and of inferior quality. You can create wonderful, fresh and healthy food at good prices,” says managing director Tamar Klonarides. The company has been making waves serving a wide range of high-quality, good-value food to a wide range of clients. “Our greatest strength is our diversity of skills,” she says. “Not only are we able to cater for events ranging from ten to 3,000 people, but we have a manufacturing division servicing the food wholesale and retail industry, and we have a Corporate Management team who specialise in managing Food and Beverage requirements for several corporate facilities.” That sounds like quite a lot of different scales to work along. How does Open Food adjust? “We are still a very customer driven company, where personal service is our key selling point.” And the approach certainly seems to be working. With clients including Bentley, Henley Business School and movie launches at Nu Metro Facilities, Open Food is clearly able to adjust and make a menu to fit for any event. “We have been very fortunate to have worked with inventive and dynamic clients who are constantly encouraging our company to find new and inventive ways to produce and serve food,” says Klonarides. This includes FNB’s sponsored events. “We recently catered for FNB in the middle

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FRATELLI FOODS We import and distribute the finest quality Italian products into Africa Quality, reliability and consistency are our core principles Our premium brands include Bastianich wines, Baladin Craft Beer, La Dolce Vita Caffé Coffee, Pantaleo olive oil, Quaranta nougat and dolce, La Fonte and Solonia whole peeled tomatoes and many more 3rd generation Italian owned, we pride ourselves on our reputation for housing a portfolio of superior products which are the best in their category internationally Contact Clifford Barratt, Managing Director, for more product and distribution information. Tel +27(0)31 566 3414 Email clifford@fratellifoods.co.za

www.fratellifoods.co.za of a field at Aardklop music festival for five days in the sweltering heat and this was an unparalleled success. We will also be doing some very exciting work with FNB at Whiskey Live next month.” Meanwhile, on the non-events front, Open Food has big contracts in aviation. “Open Food has been associated with Menzies Aviation Hospitality Lounges since the onset. We were commissioned to create their catering spec and supply on an ongoing basis.” In addition Open Food has been associated with Comair Slow Lounges “creating and managing their entire food and beverage image. Here our role was to create their catering image, supply staff, and manage, produce and constantly update their food and beverage consideration.” So what’s Open Food’s secret to winning all these contracts? Good old-fashioned customer service, paired with an extremely modern and

diverse range of catering options. “We have a dynamic team who are personally involved with every client and every aspect of each job undertaken,” says Klonarides. “Personal commitment and care make the difference. “By diversifying our company and valuing all business; big and small, we have managed to meet the needs of most of our clients.” The global economy has affected almost every industry: what are challenges has it created for Open Food? “The industry has taken some knocks over the past few years given that fewer companies have big budgets for functions and events. Part of our process to manage our client needs have been to be very cost conscious and wherever possible offer unparalleled value.” Clearly something is working since the private company is still growing – it has scaled-up from having three

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INDEZI RIVER CREAMERY A family’s passion - pioneers of artisan cheesemaking in South Africa – now market leaders in exotic cows’ and goats’ milk cheeses Cheeses are hand-crafted in small batches, enabling us to partner with chefs, ensuring that their specific requirements are met Cheese types range from fresh cream cheeses to hard pecorino-styles, and everything in between Cheeses are named by the dedicated Zulu and Xhosa staff who craft them, and so include names such as Kwaito, Maskandi and Umcimbi The facility is Halaal certified and audited annually by an independent Food Safety certification body. Tel +27 33 234 4889 Email info@indezi.co.za

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members of staff to 300 and now runs a fleet of eight refrigerated vehicles. How has Open Food adjusted? “Growth for any business brings its own set of challenges,” admits Klonarides. “Not only have our faculties had to change to meet our production needs, but as the company grows, one needs to instill a more corporate dynamic without compromising your core principles: such as being a personal business that cares about each client and their needs. “The other challenge is complacency. This is an everchanging business. We believe in traveling and exposing ourselves to as much as possible within the food industry, constantly looking for new and exciting ideas for our clients.” With their sights set so high, having the right team for the job must be important. How does Open Food recruit and retain skilled people? “Finding the right staff is always challenging, but there are some wonderful and passionate people out there,” says Klonarides. “When we find the right staff, we believe in investing in them. We try and offer further training, not only through courses, but also through personal investment from the management team into each

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individual.” She has personally mentored a couple of members of staff, and the company – despite its recent growth – maintains an open-door policy and avoids titles. “As a company we do not really believe in titles – everyone is on a first name basis, as this encourages and perpetuates the personal dynamic. We have often had staff leave us to further themselves and gain alternative experience in the industry, and then rejoin us at a later stage. We believe this is because we try and encourage everyone to gain pleasure from their work and their working environment.” Open Food has recently identified a gap in the market which is the focus of its next stage of expansion. Is Africa Outlook allowed a sneak peek? “Corporate space comes at a huge premium today and often companies cannot accommodate dining facilities and smaller conference and meeting areas. We believe that this need has been seriously overlooked. We are currently working on a very exciting project in Sandton which basically offers prestigious but relaxed and private dining spaces within corporate buildings.” With rollout due in March next year, we’ll keep our eyes peeled.

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F O R E W O RD

Manufacturing in S out h A f ri c a

Writer Coenraad Bezuidenhou executive director, Manufacturing Circle t has become clear to all that if Africa wants to leverage its population dynamics adequately for sustainable growth over the next decade, the continent needs to rapidly expand and build out its manufacturing base. South Africa may by far be the most industrialised of all African economies, but its relative position has been slipping and much work needs to be done for manufacturing to regain the strong foothold it once had here on the continentâ&#x20AC;&#x2122;s southern tip. The Manufacturing Circle has made it its mission to converse with our

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There are numerous opportunities for the situation to improve for manufacturers in South Africa over the next couple of yearsâ&#x20AC;?

government on issues that challenged the survival and growth of many of our stalwart manufacturing companies. Many improvements have resulted since we have started to have these conversations with government, many of which have contributed to an environment where manufacturing has been recovering, albeit at rates we would have liked to exceed. So the South African purchasing management index have been in expansionary territory for five months of this year, which at least compares well with many of our competitors. But even so, volumes are now still at pre-October 2008 levels, which means there is still a long way to go.

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South Africa has a reputation for manufacturing quality at a good price. We have long established trade relationships with the Eurozone and the U.S., which have allowed us to explore complementarities. So, for instance, we know that we are competitive with goods such as metal parts and components, rubber and plastics, pipes and process equipment and aftermarket automotive components. Our established manufacturing concerns are keen to find investment partners from strong competitor economies and to have their existing distribution networks leveraged to export products into Africa that are complimentary to their existing manufactured exports. Though our conversations with government, we have promoted monetary and fiscal policy implementation that is circumspect of the needs of manufacturing. The South African Revenue Service has responded by improving customs operations and its interactions with key industries. The latest installment of South Africaâ&#x20AC;&#x2122;s industrial policy action plan envisages numerous transversal interventions and is less focused on picking winners, and more so on helping to enhance the competitiveness of our manufacturing sector. There are numerous opportunities for the situation to improve for manufacturers in South Africa over the next couple of years. In the first instance, we are slowly but surely seeing the political space in the country becoming more competitive. This will have the effect that, especially at local and provincial government level, service delivery could improve over time. This would particularly benefit our many injection moulding and FMCG manufacturers who suffer worst during water and electricity supply interruptions. In the second instance, the traction

being gained by industrial policy measures has every chance to improve. Governmentâ&#x20AC;&#x2122;s local procurement strategy is succeeding where locally manufactured goods of the right quality can be supplied at prices that do not exceed justifiable premiums. In addition to this, industry also eagerly awaits the results of the Presidential Infrastructure Coordinating Commission, whose task it is to ensure a prioritised pipeline of infrastructure projects is being rolled out evenly, thus ensuring better project sightlines and facilitating better investment decisions. The third opportunity lies in growing the market lies outside of South Africaâ&#x20AC;&#x2122;s borders. Here we concentrate on three areas. In the first instance, there are still numerous opportunities to deepen our relationships with our traditional export markets (Europe and the U.S.), who may not be growing as fast as our emerging competitors, but who are still affluent and has demand for products we could still potentially manufacture. Secondly, with the introduction of the BRICS Business Council, we now

have the opportunity to explore complementarities with Brazil, Russia, India and China, with the hope of securing improved reciprocity on trade in manufactured goods. The third area is Africa, where massive urbanisation will provide excellent opportunities for South African-based manufacturers. Finally, there is a massive opportunity for better alignment between the manufacturing industry and organised labour in South Africa. Whereas public sector unions have consolidated over the last decade, labour in the private sector has disaggregated. This opens the opportunity for labour and business to better rally around a strong industrial development agenda, to which government can then respond. This would not only bolster the labour market, but would massively strengthen industrial peace and productivity, which is a hallmark of any strong manufacturing economy. To learn more visit www.manufacturingcircle.co.za.

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Kansa i

Pl ascon

A fri c an

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Kansai Plascon is a company with expansion on its mind. Already the premier paint company in South Africa, Plascon was purchased by Japanese company Kansai in 2012. With a fresh injection of money from Japan, it purchased a 63.25 percent interest in Zimbabwean Astra Industries Limited this July. Africa Outlook takes a closer look at this household name with huge ambitions. Writer Hannah Eiseman-Reynard Project manager Tom Cullum

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outh African paint and coatings company Kansai Plascon’s history stretches back to 1889 when a carriage varnish seller expanded into ready-mixed paint – the first to do so in the country. In the years that followed Plascon, as it was known until Japanese company Kansai purchased it in 2012, became South Africa’s largest manufacturer of paints, coatings and chemicals, serving both the retail and manufacturing industries. Now it has investment from Japan to go even further. “Kansai had a clear mandate that once we came into Africa we would use Kansai Plascon in South Africa for our platform for further growth into the rest of the continent,” CEO Nauman Malik told CNBC Africa’s Power Lunch in an interview earlier this year.

The expansion has been rapid with a $5.5 million investment in a 63.25 percent share in Zimbabwean company Astra Industries – the leading paint company in Zimbabwe – just this July. “We are very happy to say that we have made the first step in that expansion plan a reality,” Malik said. Astra Industries focuses on the coatings industry and the industrial sector – much like Kansai Paint does in South Africa, creating a formidable and joined-up approach to the entire paints and coatings market. “As in any market you know finding the right partner is critical,” Malik continued. And this is just the first step. The rest of the continent – East and West Africa – is on the radar and “we will be embarking upon acquisitions, greenfields projects, joint ventures in those territories as well,” Malik said.

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Konica Minolta Sensing Europe B.V. Konica Minolta Sensing Europe is a globally leading supplier of solutions for colour and light measurement for many applications In the EMEA region, Konica Minolta operates with branches in eight countries and exclusive distributors in more than 30 countries Konica Minolta products are renowned for their accuracy and total reliability for Quality Assurance in the Lab or in production We emphasize on competent presales consultancy as much as reliable and timely after sales support As a truly global player, Konica Minolta has proven experience to account major global accompanies in their pursuit of global quality standards in colour and light. Email info.sensing@konicaminolta.eu

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eVONIK DEGUSSA (PTY) LTD

vonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Profitable growth and a sustained increase in the value of the company form the heart of Evonik’s corporate strategy. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik has for many years used the Smart Formulating concept, which represents the promise that it will work closely with its customers in arriving at innovative, effective, and individual solutions for the formulation of advanced paint and coating systems. Since 2005, the presentation of the system solutions offered has developed into a customer-oriented categorization of coatings components. Tel +49 201 177-01

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Kansai Plascon already has a presence in Malawi, Zambia, Botswana and Namibia. Now it’s looking at possible expansion into Kenya, Tanzania and Uganda in the East, and Nigeria and Ghana in West Africa. “Those are big markets,” Malik continued. “They’re not only big markets in terms of consumer goods but of course with a lot of infrastructure development happening, the demand for coatings would substantially increase going into the future. We are looking into finding the right partners in both territories. Finding the right partner is key going forward. Integration is key. Buying the company is the easy bit, but integrating it and then setting it up for success for further expansion is the key objective for us going into the future.” Kansai Plascon’s relationship with Astra goes back to the mid 70s and in many ways, buying a large stake in the firm, was a “logical conclusion”.

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We will be embarking upon acquisitions, greenfields projects, joint ventures in those territories as well”

“Astra Industries is a very longestablished company, very strong management, some very good brands and have been manufacturing some of the Plascon brands for several years,” says Ebrahim Mohamed, executive director for African operations. Of course working in Zimbabwe is seen by some as a risky venture, but the acquisition seemed perfectly timed for Kansai Plascon. The Investment Branch of the Bank of Zimbabwe was selling its stocks and Kansai Plascon stepped up to the challenge. Though there were other interested parties Kansai Plascon was able to demonstrate why it should be the preferred bidder – from the historical relationship to the existing licence and technical agreements between the two companies already. Importantly, it was also able to demonstrate a very clear and credible indigenisation programme which

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Iron Oxide Pigments for Paints and Coatings. Made by CATHAY. As one of the world’s leading manufacturers of iron oxides CATHAY INDUSTRIES pursues an ambitious goal: to offer pigments of the highest quality for the production of exceptional paints and coatings systems. As with CATHAYCOAT™ Red RA11A. This super micronized and easily dispersible pigment provides a particularly high chroma in comparison to standard iron oxides. Your advantage: extraordinary brilliance and high colour saturation of your paints. For more “brilliant” information on iron oxide pigments from CATHAY INDUSTRIES visit: www.cathayindustries.com / www.cathayindustries.co.za Or email us at: info@cathayindustries.co.za Cathay Industries (Africa) (Pty) Ltd has been proudly associated with Kansai Plascon in South Africa for the past 8 years.

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Protea Chemicals Creating customer wealth by leveraging knowledge through process innovation Providing exceptional and innovative service- based solutions by utilising assets to differentiate market offering A well established distributor and manufacturer of polymers, speciality, functional chemicals and effect chemicals Operating through out Africa supplying over 7000 customers with 700 generic products According to ICIS Protea Chemicals is the thirteenth largest chemical distributor in the world and the largest in Africa and Middle East Protea manages the entire customer supply chain and builds partnerships by providing chemical solutions that solve, not create, environmental issues.

www.proteachemicals.co.za would enable management and staff to benefit from the acquisition. “I think it’s on these fronts that we were able to clinch the deal,” says Mohamed. So, with such an ambitious (and proudly stated) expansion goal – what tips might Kansai Plascon offer other companies planning similar expansion? “I think homework is essential,” says Mohamed. “Certainly understanding and having a good grasp of the regulatory environment, understanding that one cannot find shortcuts at all. We also have a very strong Plascon brand and it will certainly serve us well going forward.” Starting from South Africa, with Japanese funding, the Kansai Plascon brand is extremely well placed to realise those ambitions. “In South Africa you really have a little bit of the whole African continent right here in our country,” says Mohamed. “We

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Buying the company is the easy bit, but integrating it and then setting it up for success for further expansion is the key objective for us going into the futureâ&#x20AC;?

use that expertise for the various segments of our markets to understand the markets much better, to enter those markets with humility rather than an arrogance that we know we are the market leader, and our targets are very, very clearly identified.â&#x20AC;? Kansai Plascon is the first of a new wave of international business. Africa is at the forefront of Japanese investment and we expect to see a lot more of this fast growing company.

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p e p

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fabric community

The

For South Africaâ&#x20AC;&#x2122;s Pep Clothing there is more to life than loss or profit. Writer Chris Farnell Project manager Tom Cullum

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or more than 40 years, Pep Clothing, the manufacturing division of Pepkor, has been clothing South Africa. The company has been dedicated to providing every variety of high quality apparel. “We’re more than 40 years old,” boasts Marthie Raphael, Pep Clothing’s general manager. “The first factory operated in KwaZuluNatal, and we soon founded another division in Cape Town. 25 years ago we moved both of those divisions into one building. Over the years we’ve done many different clothing items. We’ve been a school uniform factory, we’ve had limited fashion exposure, we’ve provided socks, blankets, underwear and stockings. However, over time many of those divisions have been relocated and sold, leaving us specialising in school uniforms.” Raphael knows what she’s talking about, she’s been with the company for a while, and has worked her way up through the business, seeing it from every perspective. “My very first job was with the factory in 1993,” Raphael tells us. “I

worked as a quality engineer, then moved to Malawi, first for the group, then left to work for a local company for four years before returning to Pep Stores and from there moved back into the manufacturing side of the business again, where I moved up through the ranks. I’ve now held this position for six years.” Throughout its 40 years Pep Clothing has built its reputation on one foundation – consistent quality. “The consistent quality of our clothing, trouser after trouser and shirt after shirt, has always been our unique selling point,” Raphael insists. “We provide school clothing of a high standard, we supply two leading brands, and with school uniforms quality is paramount because it will be passed down for years.” That quality is all the more essential because Pep Clothing is competing in a market awash with cheap, low quality products. “What happens with many of the imported products on the market is that year after year you will not get consistent quality and colour continuity,” Raphael explains. “We can achieve that quality because we

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have an in house laboratory that tests all our products to destruction before they reach the shops, as well as a long established quality system which monitors quality from the source of our raw material supplies, to the delivery to our customers.” Competing on quality alone is always a challenging proposal, especially when on all sides you are being undercut on price. “There are certainly areas in the industry that show growth, especially if you can offer superior quality to the cheaper imports, but the main challenge remains the cost of the raw materials we need. We’ve seen some job losses in the industry as a result of that,” Raphael says. But in the long run it’s a strategy that has always worked for Pep Clothing, and continues to do so today. “Over the last year we’ve outperformed our operational and financial budgets,” Raphael says. “We operate on a break even model where profits go right back to the customer. We’ve been performing higher than our targets, we’ve brought staff turnover down, absenteeism is low and our financial targets are being met. That being said, we have to continuously improve our offering to our customers in terms of value, as superior quality alone will not keep any business afloat.” Even now, the business is working on making their facilities bigger and better, providing higher volumes than before. “We’re in the process of renovating the whole factory and building,” Raphael tells us. “The entire site is being renovated. We have redesigned the factory layout to improve process flow. We are moving each of our four factories to a temporary area while we relay the factory according to our new line layouts. The first phase is already half way down the line and we expect to finish the project in 12 to

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Here’s to Pep Clothing for clothing South Africa for over 40 years. From De Aar to Durban, Cape Town to Kakemas, Nedbank is dedicated to the growth of our country, our businesses and communities. That’s why we’d like to wish Pep Clothing all the best with their expansion drive for 2014/2015. By providing seamless Corporate Banking Solutions, we are committed to building a better South Africa. For more information on our Corporate Banking Solutions call Alistair Pearce on +27 (0)21 416 6825 or visit nedbank.co.za.

nedbank.co.za

13 months, improving our efficiencies and health and safety standards, as well as replacing our light fittings with more environmentally friendly alternatives. Once the refurbishing is done, we’ll reintroduce shifts and expand our capacity.” Constructing new facilities is only part of Pep Clothing’s ongoing projects for improvement however. Another crucial facet they are working on is improving efficiencies and effectiveness throughout the entire operation. “Last year we improved our productivity by one percentage point, lowered absenteeism by three percent, with the lowest labour turnover we’ve seen in seven years,” Raphael says. “This is thanks to a combination of the way we treat our employees, an organisational change to create a safe environment to work in, as well as providing extra support

Underwritten by Nedbank. Nedbank Limited Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16)

that’s necessary because many of our employees come from difficult backgrounds. By providing a safe, supportive environment, we’re able to ensure that our employees don’t leave us as they appreciate our wide array of wellness and leadership programmes.” This is only the beginning as far as Raphael is concerned. She strongly believes in the ongoing improvement of the business. “We still need to improve absenteeism and productivity,” she admits. “It remains a challenge during the winter months due to excessive rain and flooding. The biggest measure we’re introducing will be having assistance programmes for employees to put them in touch with government departments that can assist them, as well as introducing an attendance bonus, and more initiatives to bring services in house. For instance we have a full Employee Assistance programme

offering training, education and several other services to our employees.” This is about more than having a series of schemes that pay lip service to staff support however, Raphael emphases that all of these efforts are just symptomatic of a corporate culture that really cares about its people. “I think what’s very important to me is our organisational culture, treating everyone with dignity and respect,” she says. “The initiatives we run are quite unique for a large South African clothing manufacturer. These initiatives include full occupational and primary healthcare, as well as social workers on site. We run debt counselling sessions, a large number of training programmes for our employees and the ultimate cherry on the cake for us is knowing we can help our employees’ families and communities.”

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On the rise

Dale Spiral Systems and Bakery Automation are specialists in plant bakery and freezing systems. Writer Ian Armitage Project manager Tom Cullum

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ale Spiral Systems and Bakery Automation is the brainchild of Christopher Dale. Founded in 1999, the Johannesburg-based company’s success has been remarkable. Its first order for equipment was for two double drum spiral coolers for Albany bakery in Germiston and first freezer order was for IQF chicken portions and was awarded by Tswana Pride, a Botswana-based company. From these humble beginnings it has achieved some incredible things. “I was working in the petrochemical industry in Australia and I returned back to the UK,” says British-born Mr Dale. “On my arrival a new company had started up called Triphase of which I was one of the first employees. Slowly, over 13 or 14 years, we built that company up to be quite a successful British company of which I became the works director. They then secured three large contracts in South Africa and at this point my wife, who is British but lived in South Africa, and I jumped at the opportunity and we ended up in the country with Triphase. But promises, promises, it didn’t work out and I eventually started my own company.” When forming Dale Spiral Systems and Bakery Automation, his goal was not just to branch out alone. He had a bigger, grander picture. “It wasn’t just a case of going it alone,” he says. “I had done all the hard work on the sales front for 20 months travelling up and down South Africa meeting the people I needed to but there were no forthcoming orders; this technology was a new concept to them. We installed the three bread conditioning systems but no new orders were coming. I left Triphase and soon after the orders started coming through. It went from there really.” The business hasn’t looked back. “We’re pretty much a one-stop solution provider,” Mr Dale agrees.

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Impressively, in spiral bread conditioning equipment, Dale’s equipment is responsible for cooling and conditioning over 360,000 loaves of bread every hour of every day – or over 8.5 million loaves a day. It has also installed the largest single turn drum spiral freezer in the southern hemisphere with a throughput of eight tons an hour for Grainfields Farms and, in fact, has installed over 110 spiral systems in South Africa, Botswana, Swaziland, the UK and Australia, becoming a world leader in both the poultry and baking industries. “Both businesses - Dale Spiral Systems and Automation – are under the Dale umbrella,” Mr Dale says. “The last two years, the baking side

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has been very rewarding for us and we have been extremely successful in that market. The chicken side at the moment is down in South Africa because of the Brazilian import of meat which has driven prices down and producers are struggling and therefore not expanding their operation. But some years we find the chicken is up in sales and the bread down. It’s a bit of a seesaw.” Currently, the demand and market for bread is growing very fast; there is huge demand for bread products of all types, the bread industry being driven by consumer demand for quality products and for products which were once seen as only within the reach of the better-off white population.

Instruweld cc Welding Centre is a supplier of high quality welding consumables to the manufacturing, fabrication and associated industries in Gauteng. Established in 1997, Welding Centre has grown to become one of Gauteng’s top suppliers of welding equipment and machinery, thanks to superior service, fast turnaround times and commitment to customer satisfaction Welding Centre is proud to have grow with Dale Spiral Systems over the past 15 years Tel 011-794-1927 Email info@instruweld.co.za

www.instruweld.co.za

Monarch Innovation Established in India in 2009 as an Engineering and Design Consultancy Service Company, Monarch Innovation has gained its standing for its Engineering & design services through strategic partnerships and continuous research and development The Company is driven by passionate and talented engineers mentored by seasoned technocrats with many years of international experience When we talk about leveraging globalized development approach Monarch Innovation is the name to reckon with. We entrust and deliver high quality out of box innovative solutions tied with cost-effectiveness and efficiency Tel +91 79 4019 3206 Email info@monovative.com

www.monovative.com

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Instruweld are suppliers of - Industrial Welding Gases - Welding Machines - Plasma Cutters - Abrasives - Laser Cutters - PPE & Saftey Equipment - Power Tools - Robots - Welding Consumables

38 Ridge Road, Laser Park, Honeydew Tel: 011 794 1927 / 5022 Fax: 011 794 4569

www.instruweld.co.za

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“Both chicken and bread are the staple diet for the African consumer and they are demanding better quality in their bread,” says Mr Dale. “Bread manufacturers were making a South African loaf, a skinner, taller loaf, and they changed to the English loaf, a Warburton’s-type square loaf. But it has a bigger footprint. They used to get five loafs per pan per strap into the oven and now they can only achieve four loafs in the same pan area so their throughput is down 20 percent and they have to gain that back. The only way to do it is to put in new plant for more capacity, which is good for us. “Also, in South Africa, a lot of the bigger group bakers had about 30-40 bakeries per group and we’re down to about 15-20 now. The reason for this is that they’ve consolidated and increased automation, again good for our business. Whereas they once would have had a small bakery in a reasonable town, they’ve closed two 4,000 an hour

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REFRIGERATION DESIGN SOLUTIONS RDS is an owner managed company with refrigeration experience spanning over 30 years. RDS prides itself on offering a personal service to its clients.

The only way to do it is to put in new plant for more capacity, which is good for us”

RDS is set up as an engineering/consulting company providing industrial refrigeration design and project management services throughout the food processing industry. RDS is currently active in Namibia, Mozambique, Tanzania and Ethiopia. RDS operates in the following industries: Specialised high humidity cooling in the bakery industry Fishing industry-land based plants for ice facilities, blast freezing, plate freezing Fruit industry o Apples & pears-Controlled and Regular Atmosphere storage o Citrus-Steri protocols, forced cooling Beverage production, fruit juice concentrate Refrigerated warehousing Food Processing Factories Tel +27 73 308 9150 Email christo@refrigsoloutions.co.za

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Design, supply, installation, commissioning and servicing of industrial refrigeration plants Marine & Refrigeration Engineering (Pty) Ltd CAPE TOWN: Tel: 021 551-0575 â&#x20AC;˘ JOHANNESBURG: 011 894-1932 KWA-ZULU NATAL: Tel: 031 705-1738 web page: www.mre.co.za

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plants down and put in one automated 8,000 an hour plant. By installing larger automated plant, groups have been able to reduce their operational costs dramatically and operate from one site only. When the customer purchases and installs our spiral conditioned cooling units there are even more savings to be had. Typically a loaf of bread used to evaporate approximately 40 grams of its weight per loaf and on average with a cooler they’re only evaporating around 12.5 grams and by scaling the ingredients back the results can be a saving of between 24 and 28 grams per loaf.” The result is that sales increased to such an extent that Dale had to expand its facility and moved to Cosmo City Business Park in 2011. “Cosmo City was our fourth move we’ve had throughout our growth. Luckily, we purchased the land next door and two years after moving in we’re able to expand again,” says Mr

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OPC Systems & Controls System Cleaners A/S of Denmark, and their SA Distributors M/S OPC Systems & Controls are pleased to be suppliers of modern automated cleaning and sanitizing equipment to M/S Dale Automation

Both chicken and bread are the staple diet for the African consumer and they are demanding better quality in their bread”

Food processing cleaning equipment includes fully automated computerized CIP systems for cleaning of spiral freezers, coolers, filling machines and conveyors Fully engineered centrally installed low to medium pressure cleaning and sanitizing systems comprising satellite stations with booster pumps that facilitate rinsing, foaming and sanitizing functions for total food plant hygiene, are supplied to client specifications. Mobile cleaning stations and foamers also supplied. Tel Denmark: +45 9634 0404 / RSA: +27 21 7123497 Email john@opcsystemssa.co.za

john@opcsystemssa.co.za

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Engineering Solutions since 1982

P O Box 16132, Pretoria North, 0116 Phone: +27 (0)87 941-2395 FAX: 086 543 0722 Email: info@ipsprojects.co.za

Cold Room Manufacturer Concept Design Fabrication Installation

Spraybooth | Pre-treatment plants | Ovens | Conveyors We offer the full spectrum of equipment including feasibility studies, design and manufacturing of cost effective systems, relocation of plants and equipment, technical back up and after sales service. 51 Shamrock Road, Primrose, P.O. Box. 2162, Primrose, 1416 Tel: 011 873 0094 / 011 027 5570 / 83 Fax: 086 655 4591 Email: hein@bendet.com / bruce@bendet.com

www.bendet.com

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Dale. “We’re putting another 1,600sqm onto the current 5,200sqm factory with the possibility of another future expansion of 2,200sqm if we wish.” Improvements too have been made on the manufacturing front and Dale recently invested in new laser cutting and press brake technology which has reduced production time. “We used to outsource our laser cutting and folding work which created delays so this has really helped to speed production up.” The company is now positioning itself for growth and African expansion is on the cards. “We are certainly expanding into Africa,” Mr Dale adds. “We have done Sub-Saharan Africa - Zimbabwe, Swaziland, Namibia, Botswana and places around there – and we want to start moving further north and we’ve got a strategy to go forward into Africa. We have yet to find the right players/agent to assist with our growth plans us up there. “We hope to position ourselves as the leader in Africa. We also hope to carry on penetrating other parts of the world with our range of equipment. Our oversea’s competitors are starting to worry about our capability now and especially with the rand sitting where it is, making us very competitive. We have just secured a £1.5 million job in the UK. Next year we could probably double or even triple that. It has been very quiet in the UK; we have an office there which employs a technical sales engineer that sources parts for both our equipment here and for the UK whilst looking for sales over there. The UK market has been quiet for some time because of the recession. No one has been spending money on capital equipment at all until now. Some of our competitors in the market in the UK haven’t been able to keep going and have either shrunk or folded. It’s kept us in quite a strong position.” He is excited about opportunities for the Plastic Modular Blue Belt business too. “It is an important part of the group which helps us keep our main equipment very competitively priced. There has been a huge investment in the Belting business lately making Blue Belt the largest South African Plastic modular belt supplier into Africa,” Mr Dale concludes. “Blue Belt also sells its comprehensive belting range to the industry and is purchased by various end users and customers.”

Proudly associated with Dale Automation, two of our UV lamps are positioned in front of the cooling coil. This has two benefits: Sterilizing of the air going into the cooler to prevent mould build up and direct irradiation of the coil. Due to the continuous flow of sterile air, the UV prevents mould growth on bread, extending the shelf life.

To learn more visit www.daleautomation.co.za.

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MANUFACTURING

SKILLS 78

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JSE-listed diversified infrastructure company Aveng has regrouped its manufacturing business units into a more relevant and aligned operating division. Africa Outlook learns more. Writer Ian Armitage Project manager Tom Cullum

veng is one of South Africa’s top diversified engineering and construction groups and like other building firms in Africa’s top economy it has grappled with sluggish demand. But it has responded and has regrouped certain business units into more relevant and aligned operating groups. Aveng Manufacturing used to have four business units and now consists of six- namely Aveng Manufacturing Automation and Control Systems (ACS), a leader in South Africa in the field of process control instrumentation, process systems solutions, machinery health monitoring equipment and services and engineered fire and gas detection systems and solutions; Aveng Manufacturing Infraset, which manufactures concrete products for the infrastructural market – from rail to landscaping; Aveng Manufacturing Duraset, which manufactures steel and concrete products for the mining industry; Aveng Manufacturing DFC, a manufacturer of valves for the water, effluent and the mineral processing industry; Aveng Manufacturing Lennings Rail Services, which builds a sophisticated range of rail machines and constructs and maintains railway lines for its rail customers; and Aveng Manufacturing Facades, a specialist division that offers the design, manufacture, supply and installation of curtain walling over cladding systems and specialist shop front glazing solutions. Facades and ACS are new kids on the block, so to speak, added to an operating group which aims to become the “leading supplier of products, services and solutions to the mining, construction, water, power, oil, gas and rail sectors across the value chain

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Active Foundry Active Foundry is a South African based company which produces ferrous metal castings. African conditions are extremely punishing on any equipment so we are compelled to produce world class quality castings and services that offer our customers more than they expect to receive. Our main focus is the production of standard and low alloy steels, spheroidal graphite iron in a variety of castings which include Ground Engaging Tools, Valves, Track Pads, Crusher Hammers, Pumps and many more. Our services also include: Computer aided casting designs. Casting simulations. Heat Treatment of castings. Technical and administrative support. Tel +27(0) 11 828 - 9900 / 1 / 2 / 3

www.activefoundry.co.za

locally and Internationally,” according to its website. The changes also saw Aveng Manufacturing Steeledale (Steeledale) combined with the newly formed Aveng Steel operating group, one of the Aveng Group’s six sectorspecific operations, those being Aveng Mining, Aveng Steel, Aveng Engineering, Aveng Construction Africa, Aveng Manufacturing and McConnell Dowell. “Aveng Manufacturing is an operating group of The Aveng Group, a leading infrastructure development group and provides a diverse range of services, products and solutions in engineering, construction, mining, steel and manufacturing,” the company website continues. “Aveng Manufacturing supplies materials to the mining, construction and building sectors and also undertakes construction and maintenance projects in the rail

sector. Products are manufactured at plants throughout South Africa and neighbouring countries and exported to a number of countries in Africa and Europe as well as other destinations including Canada, U.S., Indian Ocean Islands and Australasia.” The re-organisation of Aveng Manufacturing is designed to improve customer focus and streamline operations and they are well timed. “Financial year 2014 will be a year of consolidation and repositioning as our operation strengthens its focus and optimises its performance,” says Solly Letsoalo, Aveng Manufacturing MD. Aveng Manufacturing has had a number project awards in Mozambique, where it is looking at leveraging further opportunities in the country and wider region. It opened an office in Maputo as part of its expansion in the country earlier this year, responding to rapid

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Aveng Manufacturing supplies materials to the mining, construction and building sectors and also undertakes construction and maintenance projects in the rail sector”

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TOOLING & ENGINEERING GENERAL ENGINEERING SUPPLIES

Specialising in Industrial, Engineering and Mining Supplies

P.O Box 1316 24 Howard Benoni Avenue 1500 Benoni

Tel: (011) 420 - 1000 Fax: (011) 420 - 1027 Accounts Fax: (011) 420 - 1024

Email: spannertools@telkomsa.net

Industrial Supplies & CNC Machining Services

All Black Road, Unit 3 Chandre Park, Anderbolt, Boksburg Tel/Fax: 011 892-5241, 011 892-1530, 011 849-1489, 011-425-4647 Cell: Gavin 0824906306

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economic growth by constructing a $17 million factory in Tete province to produce materials for the country’s huge infrastructure projects. The Mozambique government has identified a number of growth corridors where substantial investment is taking place. Aveng Manufacturing Lennings Rail Services was awarded a contract for section two of the Nacala Corridor Project and is constructing a 62.5km rail line. “Aveng Manufacturing has factories in Swaziland and Zambia and, in partnership with Aveng Steel, has established two new manufacturing and processing plants in Tete to serve coal mining and related infrastructure development in the province. The steel factory commenced production in April 2013. The concrete products factory is expected to commence operation in January 2014 and is well positioned to supply pipes, culverts and railway sleepers to the mining and rail sectors in Mozambique,” Aveng says in its 2013 integrated annual report. “The operating group continued to experience growth in the export of its concrete and steel products to Mozambique and Zambia and is exploring opportunities to build factories in other growth markets in west and east Africa where it does not currently have a presence.” These are encouraging times for a business which had “mixed results” in the last financial year. Strong performances by Aveng Manufacturing’s operations serving the rail sector were not sufficiently to offset what the company described as “the severe impact of market conditions and cost inefficiencies on the operations serving the steel and mining industries”. The integrated annual report makes for interesting reading. It shows the revenue of Aveng Manufacturing was impacted

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Specializing in roof trusses for all types of buildings Deliveries throughout southern Africa

Truss Master

Financial year 2014 will be a year of consolidation and repositioning as our operation strengthens its focus and optimises its performanceâ&#x20AC;?

6 Disa Street, Nelspruit, 1201 Tel: 013 752 3327 Fax: 086 515 5204 Email: trussmaster@telkomsa.net

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Lennings was awarded the Nacala Section 2 Rail Project in Mozambique and is awaiting the outcome of the award of the railway line project to serve the Majuba Power Stationâ&#x20AC;?

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The operating group continued to experience growth in the export of its concrete and steel products to Mozambique and Zambia and is exploring opportunities to build factories in other growth markets in West and East Africaâ&#x20AC;?

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Establishing the right partnership between job seekers and job providers

PO.Box 16223 | Leondale | 1424 | Tel: 011 425 5974 | Fax: 011 425 5876 | Email: babanango@telkomsa.net by “the supply of lower volumes to the mining and construction sectors” while revenue grew to R3.7 billion, an increase of 3.9 percent on 2012. It was largely attributable to increases in rail construction work in Australia. Operating profits declined significantly to R14 million though, down from R206 million in 2012 as “volatile conditions in the steel industry and labour disruptions in mining took a heavy toll on Aveng Manufacturing”. The operating group contributed 7.2 percent to the Group’s revenue and 2.1 percent to its net operating earnings. One good performer was Aveng Manufacturing Infraset, which achieved solid growth in revenue and operating profits – the good performance attributed to cost reduction and efficiency gains from “the operational improvement programme implemented in 2012” and growth in the supply of precast concrete products to South Africa and Mozambique. Infraset was awarded a contract to supply the Nacala Rail Project with 80,000 railway sleepers. Aveng Manufacturing DFC and Aveng Manufacturing Duraset both have high levels of exposure to the mining industry and were heavily impacted by lower demand and industrial actions, particularly at the platinum and gold mines they supply.

COMMERCIAL VEHICLE BODY BUILDERS Tel: +2711 868 1149/0 Fax: +2711 868 2990 Email: gerhard@mpbodies.co.za / george@mpbodies.co.za www.mpbodies.co.za M&Pbodies

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Aveng Manufacturing Lennings Rail Services, in contrast, achieved “significant growth in revenue and profits” as work proceeded on track maintenance in South Africa and the rail construction project for Australia Fortescue Metals Group. The rail project, which entailed the construction of a 300km railway line from iron ore mines to port, was undertaken with JV partner McConnell Dowell. “The project was delivered ahead of time in August 2013,” Aveng says. “Lennings was awarded the Nacala Section 2 Rail Project in Mozambique and is awaiting the outcome of the award of the railway line project to serve the Majuba Power Station.” Aveng Manufacturing enters the new financial year with a business that is more focused on its growth markets in rail, mining and construction. It is busy in Australia and Africa and is awaiting the award of the Majuba rail project in South Africa. It is also gearing up for anticipated growth in demand for its precast concrete products in South Africa and the SADC region. “The two-year order book of Aveng Manufacturing is promising,” Aveng says. “The leadership team will focus on much of its attention on driving the growth of the rail business and integrating the new ACS and Facades businesses into the group. ACS, which supplies automation control solutions and operates under licence from Emerson, will pursue opportunities in the oil and gas and mining markets. Facades fabricates and installs aluminium and glass facades for buildings in the construction market.”

The two-year order book of Aveng Manufacturing is promising”

To learn more visit www.aveng.co.za.

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innovation Driven b y

Africa Outlook talks to packing entrepreneur Heinz Pospech, the founder of much-respected Pouch Dynamics. Writer Ian Armitage Project manager Tom Cullum

einz Pospech is the man behind Pouch Dynamics, a South African company that has become a well-established manufacturer of top-quality bags and pouches for either large or small runs and which differentiates itself as a supplier of “innovative” pouches. His story began well over a decade ago when he quit the corporate packaging world at 34 and set about establishing his own company and fortune.

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“I had a background in the flexibles arena and started with pouches I thought would be profitable,” Pospech explains. The journey started with an Iverslee pouch-making machine and in January 2000 the first three-sided pouch came off the line. Today it’s one of several lines at Pouch Dynamic’s current home, a purpose-built cutting-edge facility in Capricorn Park, Muizenberg. “It was touch and go in the early

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years but soon we secured business with some national companies and we started to grow, especially in the biltong, window putty and fresh produce markets. “Over the years we’ve turned out over 100 million bags,” he says. A focus on customer requirements and a flexible approach has stood the company in good stead and reflects a large list of both local and export customers. Owner-managed Pouch Dynamics is

a company continually pushing the envelope and current capacity is ten million pouches per month. “I think it was in 2003 that we bought a Nishibee pouch-maker which opened the door to bigger bags, especially black/gold/silver backed bags with clear fronts for the processed meat industry,” says Pospech. “But as we grew and evolved, it soon became clear that life in commodity pouch-making was getting tougher and tougher

because of the local competition and imports and so we thought a little differently.” This realisation saw Pouch Dynamics become the first converter in the country to make quad-sealed bags. It was a game-changing moment. “Compared to traditional sidegusseted bags, the quad-bag offers a number of advantages – and they are also very flexible,” Pospech says. “They’re used for ground coffee, dried fruit and pet food.”

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Soon after, Pouch Dynamics moved to the new factory in Capricorn Park. The year was 2006. “It wasn’t long before we entered the stand-up bag market,” says Pospech. “This machine allowed the production of standing bags with many outstanding features and advantages.” And it was around this time that Cliff Augustyn, a man highlyexperienced in packaging production and design, came into the business. It was another milestone. “I realised I needed someone like Cliff and he has helped to transform our business,” says Pospech. The theme of the discussion was clear – evolution. And how the company has evolved. “As much as we have evolved, we haven’t lost our focus on the smaller guys and we are happy to deal with large and small runs and to cope with short lead times,” stresses Pospech. “We’re agile, we’re quick, we’re creative – and we like to get things done. We jump through hoops and barriers aren’t an obstacle.” Pouch Dynamics doesn’t compete head-on with traditional flexible packaging printers and sticks to its core business of bag and pouch making. This too has been a historical strength. It doesn’t extrude, laminate or print material and is able to pass on the benefits of that approach to its clients in terms of service, technology and price. And it never stops improving. Pouch Dynamics continually expands it repertoire, in recent times launching shaped pouches and Africa’s first bottle bag. There’s more to come. “Velcro zipper pouches for powders and a polypropene vegetable standing bag,” Pospech reveals. “Those are the latest innovations. We are always looking at being the first to bring something new, to innovate and to grow. That is what we are about and it is our big differentiation. When

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We are always looking at being the first to bring something new, to innovate and to grow. That is what we are about and it is our big differentiation”

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Top Quality Flexographic Printing Highly specialised laminated materials and are slitting specialists. Materials with specific barrier properties for different conditions and applications. Flexible materials from 12 to 650 microns.

Unit 10A Central Park | Epping Ave | Elsies River Tel: 021 931 1665 | Fax: 021 931 7633

www.allflex.co.za

customers come with new idea or different forms of packing, we engage with them. We never say no because we don’t currently do it. We engage with our customers and 85 percent of the time we get it right and come up with solutions. We’re driven by innovation.” The approach has paid off. “Pouch Dynamics is currently the largest producer of laminated pouches in Africa,” says Pospech. “I’m not saying of pouches, I’m saying of laminated pouches. “And we not only the biggest producer of laminated pouches but the company that has the widest spectrum of types of bags under one roof.” Next on the radar? Africa. “South Africa is one-size and extremely competitive so the real growth is looking across the borders and looking at companies that are exporting the final product – remember we don’t fill the packs. We have got to engage with the guys that are actually exporting. But yes, we have to go more into Africa. Where do we want to be? We want to grow to become an international player, regionally and then probably for the southern region and then who knows? Could probably be a global player!” ©PouchDyanamics/Youtube

To learn more about this entrepreneurial story visit www.pouchdynamics.net.

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boost ENERGY

Gulf Energy Ltd., a market leader in the supply of crude oil and refined products in the East Africa region, is part of a consortium building Gulf Power, an 80 megawatt power plant southeast of Nairobi. Writer Ian Armitage Project manager Sheridan Halls

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enya has a booming economy and a growing appetite for energy but has often been held back by a crippled energy supply line that is forever at the mercy of the elements and frequent power cuts. Thankfully, Kenya’s electricity generating capacity received an 80 megawatt boost when a new private power project sponsored by local investors, namely Gulf Energy Ltd (GEL) and Noora Power Ltd, broke ground earlier this year. It is due to be completed in the next 12 months and Gulf Power (GPL), an independent power producer, will produce power from a thermal power plant in Athi River. Gulf has signed a power purchase agreement with Kenya Power Company for purchase and distribution of the electricity it will generate and the plant is being built in such a way that it can also use natural gas – important as there are some prospects of natural gas production in Kenya. The project is one of three Independent Power Projects for which the Kenya Power and Lighting Company, the national transmission and distribution company, had sought Expressions of Interests in June 2009. The added electricity capacity will go a long way to boost power stability on the grid especially in areas around Nairobi. “The country’s installed capacity is hugely disproportionate to the country’s potential and rate of economic growth,” says Gulf Power General Manager Norman Wanyiri. “A thermal power plant offers a great solution as high capacity plants can be set up in far less time than other power generation plants. “In 2009, the Kenya Power and Lighting Company issued a Request for Proposals for three thermal power

plants. GEL saw the opportunity and incorporated a company to tender for one of the projects, GPL. GEL is the lead sponsor for the project, meaning it carries out all the groundwork including organising the financing for the project.” Agreements for the Gulf Power project were signed in March between the Government of Kenya, the Kenya Power and Lighting Company, the World Bank, JP Morgan Chase Bank N.A. of London and Gulf Power Ltd for two Partial Risk Guarantees (PRGs) for $35 million and €7 million.

At less than 2,000 megawatts installed capacity... the energy sector has a long way to go”

In a statement, the World Bank said the PRGs are “in support of two Letters of Credit provided by the Kenya Power and Lighting Company to Gulf Power Ltd, and to be issued by JP Morgan Chase Bank for a term of more than 15 years.” “The World Bank has now signed partial risk guarantees for a third private power producer to increase the availability of electricity in Kenya,” says the bank’s country director Johannes Zutt. “Diversifying Kenya’s power sources and increasing the stability of supply are key to helping businesses to grow and create jobs for the Kenyan people.” The power project was approved in February 2012 and the total cost of the project is $108 million, which includes $32 million of equity

investments and $76 million in longterm debt financing. The debt portion consists of IFC A Loan, and commercial lending through IFC B Loan and OPEC Fund for International Development (OFID). “The Kenyan Government has developed a Least Cost Power Development Plan (LCPDP) to increase the installed energy capacity from 1,515 megawatts to 10,621 megawatts by 2031,” adds Mr Wanyiri. “The LCPDP is a great initiative because previously there was no centrally developed roadmap for energy development in the country. In addition it is regularly being updated to cater for developments on the ground. Before, the sector grew amorphously trying to catch up to the growing energy needs of a growing economy. With The LCPDP, the growth strategy is clearly defined. Plans and projections are clearly set out and available in detail to all stakeholders allowing privateers to plan on their investments in the sector. “The LCPDP sets out capacity projections per generating method, e.g. thermal, solar, hydro etc. As an investor, the capacity deficits can be calculated and one can determine the scale of possible investments and which sectors are being developed in particular. The LCPDP is a map for investment opportunities.” Kenya’s current power generation capacity is approximately 1,800 megawatts; the new plants, further private sector participation and utilisation of low carbon resources such as wind and geothermal will increase electricity generation capacity by an additional 2,000 megawatts. “The energy sector is constantly growing,” Wanyiri says. “At less than 2,000 megawatts installed capacity countrywide, the energy sector has a huge way to go. GPL has experience in project development for a thermal power plant and so if there is possibility to grow in that

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Powe r

Crosby Capital Pakistan Crosby Capital is a leading consulting and financial advisory firm based in Pakistan and specializes in the area of Corporate Finance, M&A, Strategic Consulting and IPPs/Power Sector Advisory. The Company has successfully managed and executed a number of high profile transactions including financial/development advisory services for green-field IPPs and power projects in Pakistan and Africa. Clients represent a diverse mix of industries and regions; with the Company having served reputed business groups and institutions from South Asia, Europe, East Africa and the Middle East. The team has a strong domain knowledge and varied experience in the finance, banking, logistics, aviation, telecom, information technology, real estate, food, power, energy, and cement sectors. Crosby’s hybrid Investment Banking-Consulting model helps it tailor mandates to fit the client’s requirements, and focus on delivering the best value from a financial and strategic standpoint. Service offerings are as follows:

segment, then GPL will certainly explore the opportunity and leverage on its experience. However, GPL also recognises the potential in renewables and thermal power plants utilising other fuels and if the opportunity presents itself and circumstances allow, GPL will be there. GPL aims to be regional force in energy production. Our goal is to be an all-round energy producer.” Almost exactly 12 months ago, all the engines were tested ready for shipping, and GPL has secured all the necessary licences and appropriate approvals from Kenya’s Energy Regulation Commission (ERC). “Breaking ground this year was a major high,” says Wanyiri. “It was all a concept on paper until the day the excavators started churning the soil. Biggest low has been waiting to finally

secure financing. But we are very close. We have grown in our efficiency in handling the myriad of administrative issues required to undertake such a project. We have been successful in developing ourselves from first timers to an experienced group of energy sector players. If the government follows through on its ideas, visions and ambitions for the energy industry, then this is by far the most exciting sector at the moment. “The availability of cheap reliable power yields growth,” he concludes. “So in this case, I would say it is more a matter of the availability of energy that drives growth. There will always be a market for power. Any excess will yield a new consumer to take it up.” To learn more visit www.gulfenergy.co.ke.

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Transaction Advisory • Mergers & Acquisitions • Sell Side Advisory • Privatizations Capital Raising • Debt Syndication • Private Placements • Public Offerings Independent Power • Project Development • Project Financing • Project Agreements Financial Advisory • Feasibility Studies • Financial Modeling • Financial Restructuring Business Consulting • Business Plan Review • Turnaround Strategies • Business Processes Overhauling Tel (92-42) 35871251-3 Email mumtaz.syed@crosbycapital.com.pk

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W eat h e r f o r d

Q&A: Oilfield services company Weatherford operates in more than 100 countries and employs more than 50,000 people worldwide. With a product and service portfolio that spans the life cycle of a well, it is positioned to meet the ever-evolving needs of the oil and gas industry. Writer Ian Armitage Project manager Debbie Clark

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eatherford is an oilfield services giant that needs little introduction and its international businesses are likely to be key growth drivers in the future, with expansion in Sub-Sahara Africa in particular. Africa Outlook recently talked with Weatherford’s Business Development Manager: Wireline Minerals, Blake Smith. It is his job to regularly review the African market place and we asked him a series of questions centred on business performance, market trends and growth potential… Thanks for taking the time to talk with us. Could you start by giving me a brief introduction to the company in your own words? At its root, slimline logging entails the acquisition and interpretation of data from small-diameter boreholes to evaluate asset potential and inform critical operational decisions—whether the target resource is coal, minerals, or unconventional hydrocarbons. The company’s slimline logging capabilities range from standard log acquisition and interpretation to specialised services such as borehole cross-correlation, geotechnical mine planning, ore mapping and stratigraphic well logging. Weatherford, a Swiss-based, multinational oilfield service company, is a premier provider of slimline logging services to the mining sector around the globe with a major focus throughout Sub-Saharan Africa. The regional entity of this global service company is Weatherford UK Ltd (SA Branch), with branches in various other countries across our region SubSaharan Africa.

What would you say is your USP? Weatherford’s Slimline services draws on more than 40 years of dedicated minerals logging

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W eat h e r f o r d

Spectral Geophysics Spectral Geophysics provides geophysical contracting and consulting services, worldwide, based from southern Africa. Services range from survey planning, data acquisition and QC/QA, processing, analysis, 2D and 3D inversion, visualization, interpretation, to integration with data from related disciplines.

development and experience – as part of an oil and gas wireline service provider we are able to advance our minerals equipment development based on the significant advancements available through the very technically demanding oil and gas regime. We are the only minerals logging company able to draw on the extensive experience and resources of a major international wireline service provider. This allows us to meet and cater for all of our client’s needs with a measurable and sustainable level of quality. Tell me more about your current position and your remit? What are your aims and objectives? My job title is business development manager, but in the local Slimline business my remit is wider ranging than that job title might suggest. It is my job to regularly review the African market place and to adjust local strategy to best suit the changing needs of that market. It is

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also important for me to contribute at a global level to the development of our global Slimline strategy. At a micro level I must ensure that we are in regular contact with our established clients to ensure service delivery satisfaction, and that I identify new opportunities for adding value in the mining and the civil engineering industries. My aim is to ensure that our business is providing the quality service that our clients need. I see myself as the feedback enabler between clients and operations, allowing us to continually improve our performance. Are you excited by the challenge? This is one of the most exciting and challenging roles I have ever had. The face of mining in Africa is changing every day. It offers a huge variety of client challenges which require tailored responses. There is diversity in geographical market segment as well as technical market requirements.

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Spectral Geophysics utilizes the latest geophysical equipment technologies eg. EMIT, GDD, Iris and Zonge, to acquire quality surface and downhole measurements with highly sensitive Fluxgate and ultra-sensitive HT SQUID sensors. The use of these sensors coupled with best-of-class, powerful EM and IP transmitters, ensure the maximum possible depth penetration. In addition to conventional EM and 2D/3D Electrical IP, specialized techniques eg. Magnetic IP and Magnetometric Resistivity, can be conducted using the before-mentioned sensitive sensors. High resolution, near-surface geophysics, also applicable to engineering and environmental studies, consist of central loop EM soundings using appropriate high frequency receiver coils and fast switching transmitters and Electrical Resistivity Tomography using intelligent ‘active’ electrode arrays, respectively. Advanced processing and interpretation are achieved with the latest available mapping, modeling and 2D/3D inversion software. The same software is also applied to process and interpret airborne magnetic, radiometric and electromagnetic data. Currently Spectral Geophysics is co-operating with WEATHERFORD, providing valuable and critical advice related to the application of surface geophysical techniques prior to drilling and subsequent in-situ downhole logging. Tel +267 71315017 / +267 71724725 Email cas@spectralgeophysics.com / paul@spectralgeophysics.com www.spectralgeophysics.com

fo eatu i l r & e

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The people I work with (internally and externally) are also one of the best aspects of being in this position. Iâ&#x20AC;&#x2122;m not just saying that because it is politically the right thing to say, but because it is absolutely true. The opportunity to spend time with people who originate from such diverse backgrounds and outlooks is a fantastic privilege.

Our main challenge has been to continue to provide safe operations and to maintain our desired service qualityâ&#x20AC;?

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So, looking back on 2012... Whatâ&#x20AC;&#x2122;s happened? The expansion of the mining industry leading up to 2012 provided challenges to our business at a global level to meet the rapidly increasing demands of our clients. More recently, as the near-term outlook for mining has changed, our main challenge has been to continue to provide safe operations and to maintain our desired service quality, while keeping tight control on our costs. We have always had very good cost control, and this has allowed us to ensure we are providing value to our clients in a very cost conscious market place. In Mozambique we have been able to work closely with the clients there to develop the extensive coal resources through very intense exploration programmes in recent years. These have been large scale programmes. On a smaller scale, but equally importantly, we have been able to assist a client in the Republic of Congo by helping them define their ore-body and geotechnical parameters of their prospect beyond their expectations. Sometimes the relatively small jobs can be as satisfying to us as the large programmes, especially when what we provide is highly valued by the client. The equation for success in our business is relatively simple. We focus on safety and we focus on quality. To this end we are always engaged in training our workforce to ensure that they are always engaged in and focused on improving our safety culture and that they continue

to provide the highest level of service possible. We develop our equipment and our systems, but the development of our people is what is most important. We can always improve, and we strive to do so to become more efficient and ultimately more responsive to our clients’ needs.

industrialise and populations improve their standards of living, mining is taking a more central role on the world stage. Today mining is front page news, more often than not, across the globe. This greater visibility implies greater responsibility from the mining companies.

How would you sum up the current state of the industry then? The global market is going through some challenging times. Growth in demand for mined products is driven by economic growth, and exploration and development are driven by demand for the underlying commodities. Our clients are very cost conscious at present, but they are also aware that the exploration work must continue today so they can be prepared for their future production needs. In many developing nations mining represents a significant opportunity to improve the fortunes of the people. Raw commodities are a requirement for economic growth in the modern world, and as such demand may slow, but it will always be there. International mining companies are targeting their development expenditure more thoughtfully – they are moving funds for exploration from the countries where it has become too expensive to operate, and are targeting those countries where they can see political stability as well as the opportunity to maintain control of costs. For example many African countries are likely to benefit from the shift of development funds away from Australia, where operations have become unsustainably expensive to develop and to maintain. The key is a stable political attitude to the mining sector – incredibly the Australian government has not done this, and this has contributed to the departure of investment in mining there. Their loss can be Africa’s gain. As nations

What’s the aim for 2013/14 and beyond? 2013 is a year of consolidation for us – the slow down in activity from our clients this year has provided us with a rare opportunity to increase the time dedicated to operational excellence and to improve our safety culture to a new level. We are striving to improve our systems and service quality by development of our people – this is time consuming and requires the extra capacity in the system that we have this year. That will position us to be best prepared when in the coming years the demand for services increases to previous levels. Our oilfield arm has had some very exciting developments in recent years and applying these new technologies to a minerals environment in a cost effective way will be one of our areas of focus. We have the global capacity to expand our business to meet the often rapid changes of our market. We recognise that our people are the key to our future growth, and our strategy is to maintain and develop our key staff to be the future mentors and trainers within an expanding business. Our diversity in geography and mineral segment means that we are able to maintain the levels of profit which our shareholders expect. Weatherford’s global revenue and profit margins are a matter of public record, and importantly for our shareholders, the share price has been steadily increasing over the year and I think that is reflection of our sustainable business practices.

Turning our attentions onto Africa again, many countries on the continent are enjoying growth at a time when the rest of the world is in recession. Are you benefiting from that? We have benefitted over this “recession” time and have managed to grow our business in a very volatile and competitive market place. I think it is important to understand that African and Asian countries are industrialising quite fast, and this has affected the supply and demand economics in a very positive way in Africa where demand has been and probably will continue to grow at a much quicker rate than supply. The relatively low underlying development and production costs for our clients in Africa will continue to encourage the international investment in this region. Since we are willing and able to invest in our own business to take advantage of these demand spikes we naturally grow relative to these economic factors. I certainly believe that we are well placed to take advantage of the opportunities in Africa, especially when we look at the investment we have made in this region in our people and equipment. Our global support network and ability to respond rapidly to a changing market also puts us in a position to make the most of all opportunities in Africa. What is the secret to the company’s success? We strive to be flexible in the way we approach the problems faced by our clients. We work with them to find the answers that they need and to get the most from their investment in exploration and development. I think Ernest Hemingway said it best -“I never knew of a morning in Africa when I woke up that I was not happy.” To learn more about Weatherford visit www.weatherford.com.

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S a f a r i com

Q&A: afaricom is one of the leading integrated communications S companies in Africa with over 17 million subscribers, as well as sponsoring concerts, sporting events and not to mention the Safaricom Foundation which is ten years old this year. It is also expanding into financial services to aid financial inclusion and when youâ&#x20AC;&#x2122;re already the biggest mobile network operator in Kenya, thereâ&#x20AC;&#x2122;s only one way to grow: outwards. Safaricom CEO Bob Collymore tells us more. Writer Ian Armitage Project manager Donovan Smith

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Give me a brief introduction to Safaricom? Safaricom started off as a department of Kenya Posts & Telecommunications Corporation, the former monopoly operator, which was a government parastatal. Safaricom Limited was officially launched in October 2000 and was converted into a public company with limited liability. Vodafone plc held 40 percent of the company’s share. By virtue of the 60 percent shareholding held by the Government of Kenya (GoK), Safaricom was a state corporation. Until 20 December 2007, the GoK shares were held by Telkom Kenya Limited (“TKL”), which was a state corporation. Following the offer and sale of 25 percent of the issued shares in Safaricom held by the GoK to the public in March 2008, the GoK ceased to have a controlling interest in Safaricom. How is that ownership structure advantageous? Through the partnership with Vodafone we have access to best in class processes, practices and technology. We also benefit from economies of scale enjoyed by Vodafone group of companies. Your position in the market is a strong one – 66 percent market share. Can you tell us how you got to that incredible position? There are several reasons: extensive network coverage, low denomination vouchers targeting the mass market, per second billing, robust and extensive distribution network, affordable prices and innovation. What would you say is Safaricom’s unique selling point? We focus on transforming lives and offering products and services that make a difference to the lives of our customers, these products and services have in turn made us very successful.

What are the biggest challenges Safaricom has faced? Keeping up with the regulatory changes which treat us like a monopoly due to our high share of market and disruptive pricing wars from our competitors which has eroded the value especially for voice calls. Getting the right people is vital in any business so how do you make sure you employ the best staff? We provide a great place to work and grow, where both individual accomplishments and team effort are rewarded. We provide opportunities for personal empowerment and career growth in an atmosphere of trust, honesty and openness. Can you tell us more about the Safaricom Foundation? It’s the charitable arm of Safaricom limited founded in 2003. It’s celebrating ten years since inception and has strategic partnerships with more than 500 institutions, community organisations and NGOs, and has implemented more than 700 community projects countrywide. The foundation has a broad mandate and participates in community development projects in the areas of health, education, economic empowerment, environmental conservation, and water and disaster relief. Its emphasis is not on the amounts disbursed, and has invested Kshs 1.8 billion through these projects and partnerships. Safaricom is investing a massive $280 million in the network – can you tell us more about that? It’s all about network quality and delivering the best network by maintaining and enhancing network quality. The modernisation of our legacy radio network equipment is necessary to improve voice call quality, decrease the number of dropped

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calls, reduce congestion and enhance data performance. All services offered by Safaricom are provided through different network infrastructures and network quality is an essential aspect of our business and fundamental to our ability to deliver a satisfactory service to our customers. Improving on our network reliability, availability and capacity will also include increasing the population coverage of our 2G and 3G networks, completing network modernisation in six key cities and the roll-out of fibre to at least 40 percent of sites in Nairobi with particular focus on the Central Business District area in the next year. What else has your company got planned for the future? Innovation is central to achieving our strategic objectives, retaining our competitive edge and ensuring that we continue to grow. While innovation encompasses our processes and procedures, our focus is on developing transformational products and services. Our innovations are social (directly

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improving the lives of Kenyans), financial (providing formal financial services to the unbanked) and/or revenue. With the â&#x20AC;&#x153;Best Network in Kenyaâ&#x20AC;? initiative we will continue to democratise data through faster speeds, value based pricing of data, lower priced 3G smartphones, improved customer experience and providing an enabling environment for developers to provide relevant local content. M-PESA will be the driver for deepening financial inclusion through expanding our distribution network and with it accessibility; reducing system downtimes substantially and growing retail and e-commerce payments. We also aim at ensuring geographical system redundancy for M-PESA, and have begun the 18-month programme to locate a new M-PESA system in Kenya. We are helping to deepen financial inclusion not only through developing transformative financial inclusion solutions. To learn more about Safaricom visit www.safaricom.co.ke.

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We focus on transforming lives and offering products and services that make a difference to the lives of our customersâ&#x20AC;?

fT eatu elecoms r e

Big cities â&#x20AC;&#x201C; big opportunities The decisions we make today will shape the world we live in tomorrow. The uptake in data usage fueled by the enthusiastic smartphone adoption requires improved network capacity that provides users with a seamless experience. Ericsson is proud to be working together with Safaricom to help to grow their fixed and mobile data business and contribute to Safaricom Best Network in Kenya. We are focused on delivering high performing networks that enrich the user interface. Together with our partners, we are pleased to embark on this journey that will change the telecoms landscape in Kenya. ericsson.com

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A I R T E L

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L E O N E

Connecting SIERRA

Africa Outlook talks to Airtel Sierra Leoneâ&#x20AC;&#x2122;s boss RVS Bhullar who tells us more about how the telecoms giant is meeting growing demand for data services and why it is deploying high-speed Internet capacity across its network. Writer Ian Armitage Project manager Donovan Smith

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hen Bharti Airtel entered Africa acquiring the Zain portfolio in March 2010 there was a heck of a lot of fanfare, experts eager to see what the new kid on the block would do, anticipating a major shake-up in the telecoms sector across the continent. In Sierra Leone, Airtel oﬀers “2G, 3G wireless services and mobile commerce,” says Airtel SL managing direct RVS Bhullar. “We have the widest coverage, the largest geographic footprints in the country and are number one for bringing innovative products to the people of Sierra Leone,” he says. Airtel SL has grown rapidly in innovation, quality services and other advanced technologies. To match this growth, the ﬁrm recently moved its headquarters to a sophisticated new building at Hill Station in Freetown. Bhullar explains that the company “needed a building that could match the current trend of innovation” and it is another signal of Airtel’s commitment to Sierra Leone, whose government has done much to create a conducive business environment, while the company has aligned itself with the country’s Agenda for Prosperity. “Airtel is leading contributor to the economy. Over and above that, our CSR contributions continue to impact the daily lives of Sierra Leoneans through school adoptions and also Airtel Rising Stars. We’ve also increased employment by creating self-employed jobs through retail schemes,” Bhullar says. Of course Sierra Leone represents a challenging environment. Torrential rains earlier this year brought down Airtel’s communication towers in Port Loko districts north of the country, resulting in the loss of telephony coverage within and to the area. The rains accompanied by lightning grounded a total of 14 network

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sites causing severe difficulties for subscribers to make and receive calls and send text messages. The weather isn’t the only challenge. “There have been a lot of issues mainly the exchange rate fluctuation, the cost of fuel, as bulk buyers pay more than retail, considering more than 70 percent of our site is not on grid, and the company makes GST Payments on behalf of the customer,” explains Bhullar. “Energy is the big problem; the unavailability of the national grid and accessibility to sites.” Despite all this, Airtel SL has achieved much in the last year,

We have over the previous year invested a lot in our network to ensure that we provide a seamless experience for customers”

successfully increasing the capacity of most of its sites which has “improved the quality of service for both voice and data,” says Bhullar. “We have over the previous year invested a lot in our network to ensure that we provide a seamless experience for customers. We have continued to bridge the communications divide by introducing non-banking solutions via Airtel Money, by launching 3.75 G network and reintroduced One Airtel (previously One Network). We also, of course, invested in and have successfully moved into our newly commissioned world class office premises. And we have successfully connected to fibre which has improved on the data experience.”

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fT e ea t l u re e c

Everything For Your Office

At Office World in Sierra Leone we cater to every office need including, hardware, software, stationery, general office supplies and office furniture. With thousands of products and 5 shopping outlets, we cater to clients nationwide. With over 15,000 products available, rest assured that we can cater to your every office need.

• Office Equipment • Office Software • Office Stationery • Office Furniture • General Supplies • Ink Cartridges • Toners & Drums

www.officeworldsl.com Sierra Leone Office 18 Bathurst street, Freetown, Sierra Leone Tel: 00232-76-633421/ 00232-79-454172/ 00232-33-420875/ 00232-33-458645 Email: isesay@officeworldsl.com

Liberia Office UN Drive, Monrovia, Liberia Tel:00231-88-0656159 Email: officeworldlib@yahoo.com www.aFRICAoutlookmag.com

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Telecoms in Sierra Leone is still growing and connecting to the Sierra Leone Cable (SALCAB) ACE fibre was a major milestone. The result has been better service due to increased bandwidth, a variety of new services that are anchored on the platform of faster internet and, eventually, it will bring down the price per MB. Importantly, data access has much improved and is more convenient than ever with services like WIFI or public hotspots in key locations like airports, universities and colleges, and business districts. It is driving a technological revolution in Sierra Leone. “The industry is still growing. There is much to be done on the infrastructure of the country however,” says Bhullar. “But there are still opportunities like new coverage potential as we continue to improve on our footprints and data experience.”

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We have continued to bridge the communications divide”

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elecoms

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S E T S

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Reliable product, supported in the field. Integrated Power & Control Solutions (IPCS) provide power to the telecommunications business with high quality products you can trust, support and rely on.

Expert aftermarket support

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There is much to be done on the infrastructure of the country... but there are still opportunitiesâ&#x20AC;?

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elecoms

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P.T.N Services oﬀer the following services: • Cleaning and Fumigation

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There is no secret to our success here; it’s just sheer hard work and dedication” Airtel’s plans include an additional $82 million CAPEX investment over the next three years designed to “increase population coverage to 98 percent” and build a “world class” data centre. “If I met a Genie who offered to have all of Airtel Sierra Leone’s dreams come true, what would I ask for? To get the power grid sorted so that all towers are connected to it and generators will be a thing of the past and of course improve on the road network system to enable access to sites,” concludes Bhullar. “There is no secret to our success here; it’s just sheer hard work and dedication by a lot of committed people.” To learn more visit www.africa.airtel.com.

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P r o p e r t y

G r ou p

VDMV Property Group currently has properties with a market value of R1 billion. Writer Ian Armitage Project manager Stuart Shirra

ndustrial property is often-overlooked, traditionally considered ‘dirty’. According to Fanie Botha, however, it is “the best inflation linked passive income generator to create long term wealth”. Mr Botha is part of the team at VDMV Property Group, a South African property company with a focus on the industrial market mainly in Cape Town and Johannesburg. The group is gaining momentum and was formed by Izak van der Merwe in 2003. It has, over the years, expanded into property management, leasing, sales,

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joint venture partnerships, turnkey contracts and project facilitation. In 2008, VDMV entered into a joint venture with Standard Bank Properties to procure 35 hectares of vacant land for development. The profits from this venture are being reinvested into a new R500 million development of 96 hectares – Brackengate Business Park. There is another R100 million portfolio in Johannesburg. “It has been an interesting few years,” says Botha, who came in to help take VDMV to the “next level”. “Over the past five years, our strategy has been to structure and consolidate the business to an extent and we

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bought the parcel of land in 2008 to plan, service and develop it. We’ve just gotten out of the red with that. Now it is about what lies ahead.” Botha explains that the structure of industrial and commercial leases in South Africa is fairly unconventional compared with Europe and the U.S. In South Africa, most lease agreements include annual rental escalation clauses. Although rentals are relatively low by comparison, by raising rentals on an annual basis, you are able to compensate and increase the value of property assets due to the continually expanding income streams. VDMV has used this to great effect, he says.

Although the next peak in the South African property market might be a few years away, investors are seeing improvement in market conditions and VDMV is positive about the future. “The timing and shape of the next upward cycle will be dictated by the performance of the macro economy, interest rate movements, commercial bank’s ability to provide funding (Basel III) and the sector’s ability to maintain a balance between the demand for and the supply of new developments,” says Botha. “We have access to funds and have confidence in our capabilities and expect to achieve the best from the market.

“The business strategy is to retain our focus on industrials and to grow the portfolio.” But the opportunities are tight. In the upper end of the market, over R50 million, the listed property funds dominate. In the lower end, under R10 million, you have a lot of owner-operators willing to pay a premium for the right location for their businesses. The mid-level is where VDMV sees opportunity. “Because we have the capability to stay near to our tenants, that’s the market space we prefer to play in and where our returns are better,” says Botha. “Our focus is on the

middle market where the funds don’t play and where the owneroperators don’t play. It is a high yield area. “The big growth funds have been major buyers of South African properties and the competition for available properties is immense. They have pushed up pricing to high levels where, with a traditional view, you have difficulty in seeing value in individual properties. “We try to create our own pipeline of new properties. We’ve been developing our own stock. You can always be a follower but we try to be just ahead of the curve.”

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Linkqage Linkqage is an owner managed company based in Cape Town with branches in Johannesburg, Port Elizabeth and Durban. We supply product all over Africa. We have a number of speciality fields, not limited to the supply of: IT cabling infrastructure for both new and existing buildings TV, monitor and projector mounting brackets Video distribution Our strength is that our product is sourced directly from the manufacturer and we visit and inspect their factories annually. Tel +27 (0) 21 514 4800

www.linkqage.co.za

One of the secrets to the success of VDMV is its structure and focus. Decisions can be made quickly. “We make sure you get the decisions easy and you have to have good thought processes at the top,” Botha says. “Being opportunistic, moving quickly and making quick top level decisions are vital. Yes, there is a background growth strategy and focus on Cape Town and Johannesburg and maybe one or two other centres and to constantly remain opportunistic to react to opportunities that present themselves at any time. A historic land owner in Cape Town, Cecil Morgan, once said, ‘God makes more people but he doesn’t make more land’. For Cape Town and all the coastal areas this is very true. The availability of land is limited. The price of land therefore has been pushed and pushed and pushed. If you develop, all the profit lies in the land value. There is no profit in the

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building. You can only profit from the building if you hold it for a term of ten or 15 years. You will get your money over time. If you want quick returns it is only on the land portion. “As a business, we started small, buying up small parcels. Then, of course, we bought the 35 hectare parcel and developed Brackengate Business Park. Now we are looking forward and have just brought a new piece of land adjacent to Brackengate. There is not a lot of good located land available and we were very fortunate to acquire about 96 hectares of which a good 60 hectares can be developed. Our work stream for the next decade is laid out in terms of this piece of land. The important thing is that we try to build it up, making the community proud of having us there. We try to give it an identity. Give it a little twist. Make it a place to be. Give it an address. That is our strategy.”

We try to create our own pipeline of new properties. We’ve been developing our own stock. You can always be a follower but we try to be just ahead of the curve”

VDMV is creating a lot of attention. “Our focus has been to grow where we are strong and that is in Cape Town,” says Botha. “The new development will eventually be valued at about R600-700 million, maybe more – I’m being conservative – and then 80 percent of our portfolio will be Cape Townbased; that will be in about five years from now. Due to the cost of new developments, we know that the pressure is building up for a major upward change in property rentals and that will benefit our current portfolios. In South Africa we expect an interest hike within the next two years, but that is world over.” Important themes for the future will be green building and there will be greater demand for “cubic metre” versus “square metre” developments, he concludes. To learn more visit www.vdmv.co.za.

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Lenmed Health Bokamoso Private Hospital near Gaborone is one of only two private hospitals in Botswana and it has been operational since January 2010, bringing state-of-the-art technology to provide the best possible patient care. Writer Hannah Eiseman-Reynard Project manager Eddie Clinton

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okamoso Private Hospital is owned by Bpomas and run by Lenmed Health which also runs hospitals and other health facilities in South Africa and Mozambique, and the group is able to bring its industry-wide expertise of the world class facility, to offer patients the best of both worlds. Bokamoso Private Hospital caters to needs which had not previously been met in Botswana, a country which faces many challenges when it comes to health, burdened by HIV, Tuberculosis, and Malaria. The hospital is on the frontline and patients can expect the very best levels of treatment and will have the time and attention of medical specialists. With 200 beds, the facility boasts an incredible 60 specialists based permanently on site. “One of our unique selling points is the range of specialist services that we provide,” says marketing manager Mmabatho Amelia Mokabedi, who told us that the Bokamoso Private Hospital can offer patients “a fully joined-up service” with specialisms in neurology, cardiology, endocrinology, haemodialysis and peritoneal dialysis, sports medicine, pathology and gynaecology. The hospital sports a cardiac catheterisation lab, an oncology and nuclear medicine unit, a dialysis unit and, of course, radiology, while it also houses a rehabilitation unit, an orthopaedic unit, ophthalmology, and has 24-hour accident and emergency services. “Our five operating theatres can offer a range of procedures including orthopaedic surgery, plastic surgery and cardiac surgery and we are growing our specialisms all the time with the aim of providing the best medical services to the country,” Mokabedi says. “Our mission is to provide affordable and quality patient care through excellent customer

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service that meets the standards of our patients, staff, internal and external stakeholders.” Lenmed Health Bokamoso Private Hospital provides equipment and facilities which other hospitals cannot. “We are state-of-the-art and we have only two private hospitals in the country,” Mokabedi explains. “The hospital went into sequestration in 2010 and towards end of last year a group from South Africa called Lenmed Health took over. It was a pivotal moment and patents are reaping the benefits. We are different from other hospitals and are owned by Bpomas and Lenmed does the daily operations of the business. It is advantageous because this group has about seven hospitals in South Africa and one in Maputo hence they are well-equipped and knowledgeable in the medical field which has been a blessing for the healthcare industry in Botswana.” Bokamoso is continually looking to improve and pioneer healthcare services and delivery in Botswana and uses patient satisfaction questionnaires to identify areas in which it is excelling and those that require further attention. “We have some tools in place which we use to measure our standards - like the patient satisfaction questionnaires - which gives us an idea on areas which we are excelling and those that we need to amend,” Mokabedi says. Since the new management took over, the hospital has been doing very well and its future is looking bright. “The hospital is developing tremendously, the urology clinic is on its way and there are so many opportunities for the hospital to develop and meet the needs of Botswana, health wise. We believe in playing a pivotal role in the future of Botswana in the health industry and being a healthy nation is one of pillars of the country’s vision 2016. We are optimistic about the future and focused on patient care which is the core value of the business,” Mokabedi agrees. As the very best-resourced hospital in the country, Bokamoso has a huge role to play within the medical profession. Health professionals, senior and junior doctors all pull together to offer the very best patient care. In just three years this hospital has become possibly the best in the country. Bokamoso means ‘the future’ in Setswana and Africa Outlook wishes it all the best.

One of our unique selling points is the range of specialist services that we provide”

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Premier Service Medical Investments is Zimbabweâ&#x20AC;&#x2122;s premier healthcare service provider. Writer Ian Armitage Project manager Eddie Clinton

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imbabwe’s healthcare was once the envy of Africa. It was outstanding. But in the last two decades it has deteriorated, made worse as a result of the country’s economic crisis. Indeed, Zimbabwe’s economy boomed after independence in 1980, a time when healthcare standards were high, but from 2000 the seizure of white-owned farms led to chaos in the agriculture sector and the economy shrank by half. In 2008 hyperinflation of 231 million percent broke the national currency and left millions of people hungry and healthcare in crisis The adoption of the U.S. dollar and South African rand however have brought a measure of stability and the government’s national budget for this year stands at $3.8 billion, with the economy projected to grow five percent. And, on the healthcare front, the government is acting. It wants to have the highest possible level of health and quality of life for all its citizens – and that means ensuring every Zimbabwean has access to comprehensive and effective health services. Currently however, if you don’t have medical insurance in Zimbabwe, the method of payment is cash. There is no room for negotiation of terms. Levels of access are low. The result is a sorry state of affairs when it comes to affordable medical treatment. Key to improving this will be companies like Premier Service Medical Investments (PSMI), a subsidiary of Premier Service Medical Aid Society (PSMAS) “established in year 2003 with the objective of servicing PSMAS members at affordable costs as well as the generality of the public”. “The geographical spread as well as health services offered by

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PSMI makes it easier for corporates and individuals to access services anywhere in the country,” PSMI’s website says, with PSMAS’s website adding that it is “the largest and most experienced Medical Aid Society in Zimbabwe. But of paramount importance to the Society is how well members are served as reflected by the motto – We Value your Health. PSMAS offers several scheme products and has 10 branches around the country.” Zimbabwe-based PSMI provides a one-stop shop for health services from diagnostics and family health to hospitalisation and has grown from a small enterprise to become Zimbabwe’s largest medical service provider with several hospitals, clinics and pharmacies across the country, as well as other services like a fleet of ambulances. It also has operations in Botswana and South Africa, according to our research, and last year following the successful implanting of an implantable cardioverter defibrillator (ICD) device to a cardiac patient,

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PSMI group managing director Dr Farai Muchena said the operation had provided a platform to re-establish cardiac specialties in Zimbabwe. “The success of the implant and the life saving therapy that the patient continues to receive is testimony to the skills and temperament of medical professionals involved. We hope that this is the first of many such successful cardiac therapies for the people of Zimbabwe and that our cardiac skills development programme continues to improve patients with lifesaving therapy in years to come,” said Dr Muchena. He added that the initiative was a collaborative initiative between PSMI and a South African cardiology company – Amayeza Abantu Biomedical – to bring cardiac specialties, resources and skills back to Zimbabwe. “It is hoped that this will culminate in the roll-out of appropriate resources to re-establish cardiac specialties in Zimbabwe,” Dr Muchena concluded.

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www.marpleelectronics.com Dr Muchena has been credited as the man driving growth at PSMI. His aim is to continue investing in Zimbabwe and the region. “We are passionate about what we do,” PSMI Business Development Director Nhamo Marandu told our researcher in a recent call. PSMI’s website says that it “offers a Healthcare fund to corporate organisations as a means of availing healthcare services to employees of various companies.” It offers, “Healthcare services in various disciplines and in various geographical locations in a bid to be readily accessible in different areas”. “Where PSMI is not present, we enter into agreements with “Referral Partners” who can attend to PSMI patients, thus extending our services to areas where we may not be physically and professionally present,” it adds. “PSMI works closely with the Association of Healthcare Funders of Zimbabwe (AHFOZ) in providing continuous service within agreed parameters that satisfy members and member organisation.” PSMI is the largest healthcare giver in the country. PSMAS controls over 60 percent market share in medical insurance. To learn more visit www.psmi.co.zw.

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Total Facilities Management Company (TFMC) is the largest facilities management company in South Africa, providing integrated facilities management that minimises costs “through forward looking performance-based risk and maintenance strategies”. We talk to managing executive Cornelius Van Der Merwe. Writer Ian Armitage Project Manager Stuart Shirra

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acilities management is a critical, strategic business discipline with organisations the world over increasingly occupying complex buildings and using sophisticated technology for communications and control. Professional FM is needed to plan, maintain and manage such facilities. It is part of the drive to meet the higher demands of organisations and individuals - we all have high expectations and good facilities management can deliver flexibility, adaptability and sustainability. Nobody understands this better than Total Facilities Management Company (TFMC). In South Africa you don’t get bigger than them.

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“Facilities Management is so integrated in our lives that we don’t realise how many times a day we actually engage in and experience facilities management,” says managing executive Cornelius van der Merwe. “We are surrounded with our work environments for most of our days and almost everything we touch during a day is part of the facilities that support our core businesses. Think of the amount of times you touch doors, chairs, tables, flooring, ablution facilities and so many other not so obvious things like lighting and airconditioning not to mention the power we utilise at the various outlets where we require it.” Many companies have the perception that facilities management is merely the maintenance of their buildings which can be done through the use of individual contractors.

They normally assign these responsibilities to a willing employee who are good at organising. It is then expected of this individual to have a list of contractors for the different basic services like air-conditioning, electrical, general infrastructure maintenance and maybe for their access control system. According to van der Merwe, facilities management typically become “only a cost to the company and no additional value-add is received other than the direct services that is rendered through each order placed”. “Little or no management of these contractors takes place as the responsibility to assess the success of the individual work done is then bestowed on the receiver of the requested service only,” he says. “Companies end up reviewing these costs annually in an effort to see how they can reduce it due to it being experienced as a pure cost hitting the bottom line with no apparent return on investment. This is of course making the assumption that the company can identify these costs separately as the individual work requests are normally requested and funded through a general budget line under individual managers’ budgets grouped together with various other general expenditure items. This results in poor or understated facilities management cost visibility which are extremely difficult or at least requiring a lot of effort to collate a cost which represents the associated facilities management cost.” Van Der Merwe says when it comes to selecting a sub-contractor, it is normally done by employees who, “knows someone that either runs such a business or work for a company that deliver those types of maintenance or similar services”. He says that, at best, “the procurement division is tasked to source service providers who generically deliver these services

without conducting any or limited technical capability assessments on these service providers”. “It becomes a numbers game and contractors need to compete many a time on cost which then results in service quality of a mediocre standard,” he says. “Service requests relayed to contractors are normally done through a phone call and it is then expected from the contractor to generate what they believe the scope of work should be based on the provided information or after meeting the requestor on site to understand what they require. A proper scope of work which includes warrantees, standards, material specifications as well as health and safety requirements are not clearly noted. This puts many companies at risk of an increased cost due to inferior work or materials provided and rework that is then required within a short space of time, normally just outside the normal three month warrantee on workmanship which is provided as a standard. When a couple of quotations are requested it is many a time difficult to do a proper technical and cost comparison of these quotations due to the very nature they are acquired. Contractors present their quotations in the way they believe the best way is or how they normally do their pricing based on their pricing methodologies and or billing methods. It is then almost impossible to compare the different quotations properly hence the importance of understanding the required work upfront drafting a proper scope of works and expecting the various contractors then to provide quotations in line with the requirements. A proper technical and financial comparison can then be done resulting in a final order placement which is exactly aligned to the expectations and the requirements. This has a direct impact on cost as work is then done correctly the first time and if proper quality assurance is done will last the expected lifetime as well.”

These are problems you wouldn’t experience with TFMC and its strength lies in its national footprint from where it can provide end-to-end FM services across the country.

FM is needed to plan, maintain and manage such facilities. It is part of the drive to meet the higher demands of organisations and individuals - we all have high expectations and good facilities management can deliver flexibility, adaptability and sustainability”

“We have an integrated FM solution which is enabled and supported by a strong ERP system (SAP) and allows us to continuously deliver value to our clients in terms of cost reductions by optimising the use and operational parameters of facilities,” says Van Der Merwe. “We have built up Intellectual Property over many years in various technical fields which we fully utilise in the management of our clients’ facilities. Through this approach we do not only deliver tangible cost reductions but reduce risks facilities pose to our clients’ business significantly while looking after and optimising asset life cycles.”

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But why is that important? “Space utilised by companies are in most instances one of the biggest line items on any company’s expense sheet,” Van Der Merwe answers. “This is where FM companies add a lot of value. Understanding the company’s operational requirements, workflow for normal operations are mapped out and with many years of experience site layouts are re-designed in such a way not only to minimise work execution but optimise the space requirements. Types of furniture used can have a tremendous impact on space requirements and special care is taken to select and or propose furniture which is conducive for the environment and type of work that is require yet enable the floor space requirements to be minimised. This has a direct impact on the bottom line due to the significance of the cost of space. “Another significant component for most companies is their energy bill together with rates and taxes and water consumption,” he continues. “With our building management and control systems approach we measure the energy consumption on a small enough timing frequency to provide consumption data from where we determine the exact usage profile of the building or facility. Depending on the electrical reticulation layout of the building this is done to sub system level in order to influence energy demand and consumption at the point of use. This is not only then utilised to lower the energy consumption but is used to determine what the maximum demand of the site is. By having visibility of energy consumption the building manager and or client can influence demand and create immediate savings to the bottom line. In many areas where available power is limited and the company have urgent growth demands this approach in energy management creates growth opportunities without costly new

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or upgraded energy connections as energy capacity is created and immediately available to support the growth requirements.” Van Der Merwe says reporting is one element that “successful facilities management companies” like TFMC “spend a lot of energy on” as well as “direct many hours of thought to”.

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“When an FM company manages the facilities as a whole many key fields of data are collated daily, which is transformed into management information,” he says. “This information are then analysed from different perspectives to ensure the client’s key business drivers are supported. This is where a lot of value-add to any

organisation are delivered and literally creates many millions of rands savings and or value add to our clients. Systems need to be integrated in such a way that data fields are captured or automatically fed only once through the entire value chain of service delivery which is then efficiently utilised for the required reporting and business analysis. “Supporting functions are provided as part of the service delivery model which doesn’t only include the typical supporting functions behind the scenes like Human Capital, Finance, IT, Procurement Services but a 24-hour service centre support business critical requirements after hours. From this centre in our environment known as the Contact Centre all calls are received, captured and actioned. Workflow management is utilised to keep the client informed of his or her call request progress and status which is automatically generated as the service progress through its delivery steps until final completion where the client has an option to rate the service or even reject the service if it was not delivered to expectations. Due to the criticality of energy availability of many of our clients we have a full building control centre from where critical elements are monitored like power availability, temperature levels as well as lift and fire panel alarming. From the building control centre our field technicians which is located all over South Africa is despatched electronically through their handheld devices and or per telephone. Information captured on the handhelds are then relayed to our back-end system which provides timely status updates of the workflow. Due to the many power interruptions experienced and the significant impact these could have on our client sites we have a fairly large pool of diesel back-up generators (176) which is deployed to various sites. We then manage the refuelling of these generators through our own fleet and mechanical equipment like diesel

When an FM company manages the facilities as a whole many key fields of data are collated daily, which is transformed into management information”

bowsers. This is extremely value adding to our clients giving them peace of mind that they can focus on their core business while we as facility managers ensure availability of the facilities to conduct business efficiently. “What’s more, as part of an entire end to end lifecycle facility management approach we have an entire Design and Project Management division from where we manage all facility management and other specified assets for our clients. We do business requirement assessments and draft business cases for our clients which they then evaluate not only from a return of investment point of view but an entire risk management and strategic investment point of view as well. The Design services range from Architectural Services, Civil Engineering, Mechanical, Electrical and Electronic Engineering to Quantity Surveying

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which enables us to deliver services as a one stop shop. To manage capacity and required turn-around times we have strategic partnerships with key design houses which forms an integral part of our business service offering.” Van Der Merwe stresses FM will not be complete without “managing the clients’ property portfolio appropriately”. It is easy to see why TFMC is such a huge success and why it a “cornerstone” of Mvelaserve, the empowerment provider of outsourced business support services in southern Africa. “It is always good to have a “big brother” so to say in order to support a business in terms of diversity,” says Van Der Merwe. “The FM market is a tough market to be in due to the many perceptions in the market of what FM entails. Being part of the group which owns 100 percent of TFMC it provides the group in its totality the diversity we need to be a sustainable business. TFMC together with Protea Coin are indeed key to the Mvelaserve Group and play a vital role in the group’s success hence our focus of diversifying and growing our business.” And the business is performing steadily, experiencing some growth over the last 12 months, although not nearly what “we hoped to achieve”. “The FM industry is a tough business from a margin point of view to be in as well from a point of view of what value a FM company bring to the table other than the services it delivered,” Van Der Merwe says. “One of our key highlights through the year was that we successfully acquired FM services for a part of Standard Bank but unfortunately had to walk away from another fairly sized contract due to it just not being economically feasible. That is always heart-breaking as the value from FM only become apparent after some time in the contract. When the data collocation starts showing clear trends it is then when benefits start flowing back to our clients. The clients that

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understood this and allowed us into their business have experienced this wealth of value on a continuous basis.” Despite that blow, there have been other achievements. “Successes are mostly within our current contracts where one is able to deliver value-add to our clients over and above the direct services they pay you to fulfil,” Van Der Merwe continues “It is extremely difficult to sell FM to a company which has not experienced the true value add of a FM company.” The FM industry is under tremendous economic pressure and without exception TFMC’s clients demand more for less. The challenge is delivering more value at reduced costs on a continuous and not only on demand bases. Margins are under pressure which is not assisted by labour, fuel and energy costs which are on the rise. It has TFMC concerned. “A perfect storm is brewing in the FM industry and only the companies that

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We successfully acquired FM services for a part of Standard Bank but unfortunately had to walk away from another fairly sized contract”

Colley’s Control Services CCS services range from small standalone plants through to full scale Turn-Key Building Management Systems, CCS lead by the implementation of an aligned, “Intelligent Building Management System” strategy in support of our client’s core business, to optimise a wide range of value-for-money Remote Monitoring, Control and Reporting services from a Single Unified System (TRIDIUM) enabling the client to manage his facilities, “Anytime-Anywhere” CCS strives towards QUALITY and DATA INTEGRITY to further the advancement of our client’s core business. CCS is System House that can offer a wide variety of services and solutions, on various environments. Tridium – Siemens – Honeywell – Distech – EasyIO Tel 0027 82782 1873 Email admin@ccs-bms.co.za

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are truly innovative in design and structures to deliver services in the most efficient ways will survive,” Van Der Merwe says. “TFMC at this stage is performing well and continuously reinvents itself to adapt to the changing market conditions. Our first priority and aim is always to retain our current contracts and to grow both within these contracts as well as in new areas. Due to the tough market conditions currently we aim at growing our revenue marginally but sustainably. “We are excited about the investments Bidvest is currently making into Mvelaserve which could present us with new opportunities within the group and there are numerous opportunities in the market for us and are participating in various bids for new business. The challenge however remains for any FM company to price itself attractive enough in order to enable it to start delivering value add over and above the direct services.” Having many years of experience in the ICT arena, with a vast skill base, means it is one area Van Der Merwe would like to see TFMC grow as well as “banking markets or any business which requires strong technical background and support knowledge”. As FM is seen as a cost it is the first budget line, life will always be challenging but TFMC is more than up to the task.

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