south africa bunker & trading
feature
knowledge, global Local
strength
Andre Baard managing director and founder of Cape Town-based South African Bunkering & Trading (SABT) talks to South Africa Magazine. By Ian Armitage
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South African Bunkering & Trading FOCUS energy
W
hen Andre Baard graduated with an economics and philosophy degree from Stellenbosch University, the majority of his classmates left South Africa, seeking lucrative jobs overseas. He didn’t want to leave. And set about starting a career. His dad had a shipping background. Shipping was a big part of his life. So it seemed natural progression – a career in international shipping or related industry it was. A few jobs followed before he started bunker trading, notably for GAC Bunker Fuels in Cape Town. It was in 2006 that Baard had his eureka moment; he wanted to start his own business. South African Bunkering & Trading (SABT) was born. He didn’t start SABT with dreams of great wealth, but the company enjoyed a turnover of R1 billion in its first year. “I contacted one of my clients in the summer of 2006 and said I think I can do something in Africa with your financial backing and that is pretty much how SABT began,” Baard says. “In June we had the first conversation and by October I had resigned and began the process of registering bank accounts and starting the company. We had the fortunate privilege of turning over R1 billion in the first year. It has been wildly successful from a financial level.”
We had the fortunate privilege of turning over R1 billion in the first year. It has been wildly successful from a financial level
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South African Bunkering & Trading FOCUS energy
Bunkering is the refuelling or refilling of a ship’s fuel tanks. Baard saw a niche – Africa. Africa as whole is a vast market and a huge source of raw materials and energy. And he saw the potential early. The oil market in Africa is heading for rapid expansion as business grows, he says. “We’ve positioned and resourced the company as an African bunker specialist. We’ve built up an in-depth knowledge of the African bunker markets, which is always improving, and have grown our market share, building on the strategic partnerships we already enjoy with suppliers around the continent. We’re keen to grow further. Africa’s massive natural resources are a huge opportunity. We’re very excited about it.” According to Baard, SABT is a “professional bridge to the African bunker market”, formed to offer “expertise in providing product in niche African ports”. It operates in over 50 ports throughout Africa. “We have a long-term vision in the African bunker markets. We’ve done a lot of work on changing the ‘take now and run’ approach in some African bunker markets. It is a difficult task but SABT, in its own small way, is committed to helping to improve the reputation of some of these bunker markets by taking positive actions. We hope to act as a catalyst for change, even if it is only scratching the surface. We do this by site visits 4
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and sharing our knowledge of the best bunker practices and try to adapt them to a uniquely African reality. “Customers can be assured that when they entrust their bunker demand with us we will deliver.” What’s his secret? “They say if you can build a team you can build anything. We have built a team,” says Baard. “A lot of our growth comes from Africa, which is growing at between five and seven percent. I wanted to build a company that’s specialised not in the whole planet but in Africa, which is big enough. It is a huge opportunity – just two percent of the global market demand is traded here – yet, it’s all about margins and growth. I knew if I could be the first one in terms of being a pan-African trader, I’d have the rights of first arrival and you’d benefit off the margin and in terms of credibility and experience. The timing and the boom here really worked out well. The vision to be a
South African Bunkering & Trading FOCUS energy
bona fide specialist African trader also helped us differentiate ourselves because nobody else was doing it. We wanted to become a local specialist with a global connection. I think the saying that you have to be corrupt to do business in Africa is not true. No one wants to talk about the white elephant but part of my vision was to create a straight business model where we simply have no tolerance for bribery or collusion or price fixing, which is unfortunately quite rampant in our industry and I think that has helped us get our snowball effect of accumulated impact. I think when you have a large volume you are able to dictate. You’re able to say that this is how we like to do business and we don’t enjoy corrupting our traders or trying to bribe and solicit business in an unsustainable way.” While successful almost immediately, starting his business wasn’t easy. That 6
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said, he’d recommend giving your own business a ‘go’. “To be honest I’m amazed still,” Baard says. “People should have said how much fun it is starting a new business. I think 2006 was in the heady days of the boom so to get a ‘yes’ was a lot easier. When you get vision, meets opportunity, meets capital, you get explosion and we have benefitted from an explosion that is still going. Africa is really booming. It’s just the way you look at problems. Some people look at problems whereas others would see opportunity. We see opportunity. Africa is where it’s happening. Why look to Europe and the developed markets? They’re saturated. Africa holds so much promise and you don’t have to bribe your way through to tenders to take market share. We are living proof that you don’t have to do that. We could’ve made much, much more money doing so, but I have a long-term vision and we want to grow
Proud to be SABT’s local knowledge. Kukhanya Marketing is a licensed petroleum wholesaler, who is also allowed to import and export petroleum products. We are trading locally with transport companies, secondary distributors, independent depots, other wholesalers and exports to Botswana and Zimbabwe. We started trading with SABT in December 2011, purely as an
eting a Mark ukhany K , D a, M Timan Mandla
export partner.The partnership has since evolved into a formal partnership whereby a new companyUkhanyiso Petroleumhas been formed. We are here to enhance SABT’s motto of “Local Knowledge. Global Strength” and we are part of the local knowledge. Through this association, Kukhanya Marketing has made significant strides in other spheres of the petroleum business. We are now trading in JET fuel, Avgaz and HFO, a field that was almost impossible to penetrate. We are taking our products to both the SADEC region and East Africa.
PO Box 13544, Norkem Park, 1631 1277 Mike Crawford Avenue Centurion, 0157 Tel 012 683 8700 Fax: 086 6580016 Cell: 079 668 6173 E-Mail mandla@khanyapetro.com E-Mail: www.kmpetroleum.co.za
South African Bunkering & Trading FOCUS energy
When you get vision, meets opportunity, meets capital, you get explosion and we have benefitted from an explosion that is still going. Africa is really booming
our industry within Africa. It’s being on the right side of the curve but also the culture has to be on the right side of the curve. Just making a profit, going ‘in and out’, wasn’t an option. We’ve a long-term view and that changes the way you do business – it’s slower, but surer. Our profitability grew very fast but I think the market needed what we were offering. I think the accumulation of knowing that your trustworthy is key.” What’s next? A second office. “We’re looking at West Africa – somewhere between Ivory Coast and Senegal, maybe,” Baard says. “We’re hoping to open that second office soon. We have gotten to know a lot of the national oil companies there and we’ve got a good enough foundation to grow into our second operation. Our tagline is ‘local knowledge, global strength’ and we really believe that you’ve got to be local to really understand how the wind blows and how the currents flow. You need to know the local microclimate. “Even though we’re only 10 people, we move an awful lot of oil based in Cape Town and we’re trading large volumes in America and Hong Kong and all over the planet, doing really good business out of South Africa. We compete with the best in the world.” END To learn more visit www.sabunker.com.
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BUNKER SERVICES IN SOUTH AFRICA For fast, efficient, safe and environmentally friendly bunker fuel deliveries in the ports of Durban and Richards Bay, contact the team at SMIT Amandla Marine.
Partnering for tomorrow, today
Barge Scheduler: +27 71 606 3895 SMIT Amandla Marine: Durban Office, 18 Kobe Road, Bayhead Tel: +27 31 274 1100 www.careersatsea.co.za www.facebook.com/SmitAmandlaMarine
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