SPECIAL FEATURES: Lubrik Construction & Egyptian Steel
July 2015
www.africanbusinessreview.co.za
Africa’s
TOP 10
Wealthiest Business People
Larimar Group Invests $45m In Its Transport Portfolio TECHNOLOGY
Agile Enterprise Key To The Workplace Of The Future
LEADERSHIP
AIF: Catalysing Africa’s Innovation Market
EDITOR’S COMMENT
Tracking Africa’s Innovators H E L L O A N D A V E R Y warm welcome to the
July Issue of African Business Review. Our cover story this month focuses on the expansion of one of South Africa’s largest bus and automotive companies: Larimar Transport. The company is seeking to expand and diversify its business while maintaining focus on its core operations and strong CSR initiatives. Our other company reports look at Lubrik Construction and Egyptian Steel. Kicking off our features this month is a contributed piece by Thuthuka Mhlongo, Portfolio Manager of End User Computing at T-Systems in South Africa, sharing his insights on how businesses can prepare for the workplace of the future today. We also look at how African Innovation Foundation is using market models to bring about much needed innovation while addressing socioeconomic issues. Our Top 10 this month examines the wealthiest African business people.
Enjoy the issue!
Nye Longman, Editor Nye.Longman@wdmgroup.com 3
CONTENTS
Features
TOP10
LEADERSHIP
AIF: Catalysing Africa’s Innovation Market TECHNOLOGY
AGILE ENTERPRISE: Key To The Workplace Of The Future
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July 2015
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20
AFRICA’S Wealthiest Business People
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Larimar Group Lubrik Construction
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Lake Turkana Wind Power
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102 Farm and City
Company Profiles
Servcor
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SUPPLY CHAIN 30 Larimar Group
RETAIL 40 Servcor
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52 Farm and City
CONSTRUCTION
Gulf Power
64 Doron Construction 74 Egyptian Steel 84 Lubrik Construction
ENERGY 92 Gulf Power 102 Lake Turkana Wind Power
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Doron Construction
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Egyptian Steel 5
LEADERSHIP
Catalysing Africa’s Innovation Market 6 July 2015
The African Innovation Foundation is attacking the challenge of grassroots development using socially sustainable market approaches W r i t t e n b y : N Y E LO N G M A N 7
LEADERSHIP THE REMIT OF the African Innovation Foundation is encouraging enough for its simple ambition to: “increase the prosperity of Africans, catalysing [their] innovative spirit, we want to see needs-based innovation and change.” Unpacking this statement reveals that the supply/ demand duality of modern markets has found an application in the sphere of fiscally and socially responsible growth. The Foundation, based in Zurich, Switzerland and with a regional office in Luanda, Angola has a
three-pronged approach to achieving its goals including: a thematic focus (based on innovative technologies), governance and compliance, as well as social impact development. The foundation’s key goal is to: “Work with multi-sectoral audiences and focus on diverse industries and disciplines where innovation is needed in Africa.” This issue we will explore the hurdles to any individual or organisation looking to deliver innovation across the continent, as well as the work of the AIF in more detail.
The foundation’s key goal is to: “Work with multi-sectoral audiences and focus on diverse industries and disciplines where innovation is needed in Africa.”
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‘The remit of the African Innovation Foundation is encouraging enough for its simple ambition to: “increase the prosperity of Africans, catalysing [their] innovative spirit, we want to see needsbased innovation and change’ Angolan Impact Program Through its office in Luanda, the AIF operates its Social Impact Program for Angola (SIPA) which seeks to: “Solve pressing social problems via socially responsible sourcing of solutions, through collaboration, products or services.” Specifically, SIPA seeks to provide solutions to those areas typically lacking in undeveloped areas of the world which include: health, water, sanitation, energy, education and rural development.
What sets the foundation apart from others attempting the same goals are the methods it uses to achieve change. SIPA seeks to combine “demand-driven services and market approaches” in order to create lasting employment for locals while addressing the basic needs of the community through partnering with both the public and private sector. Demand for change in Angola is particularly pressing, since over a third of its population relies on subsistence agriculture. 9
LEADERSHIP The Innovation Prize for Africa Recognising that incentives are more often than not a strong catalyst for innovation, the AIF has since 2011 been providing innovators with the opportunity to achieve notoriety across the continent and beyond, alongside healthy cash prizes. Specifically, the award: “honours and encourages innovative achievements that contribute toward developing new products, increasing efficiency or saving cost in Africa.” Alongside first and second place, a separate award is designated for the innovator whose work has produced the greatest social impact. This year’s awards were hosted in Morocco, in partnership with the country’s Ministry of Industry, Trade, Investment and Digital Economy. Adnane Remmal received the top accolade of $100,000 for his research into providing a solution to improve livestock production while taking into account consumer health needs. His research developed an antimicrobial formula that reduces health hazards in livestock, preventing the transmission of germs and carcinogens to human beings through consumption of animal products. 10 July 2015
African Law Library (ALL) AIF has also created the African Law Library (ALL) as a “one stop shop” for professionals who can exchange ideas and information relating to business, government and civil society. The free online library features articles dedicated to African law and governance, legal texts, court decisions, and secondary legal literature collected in a multi-lingual and easily searchable database. Aside from being free to use, this tool offers a unique opportunity for professional networking, alongside the chance to participate in online work groups.
‘Through its three main initiatives, the foundation has provided the opportunity to learn and network and a solid approach to ethical economy building’
A I F : C ATA LY S I N G A F R I C A ’ S I N N O V AT I O N M A R K E T
Front row (Left to right): Sandra, Sophie (ALL), Pelthia, Pauline (IPA), Aulora, Laura (ALL), Sarah, Elodie. Back row (Left to right): Robinson (IPA), Carlos (SIPA), Mr Fust, John (ALL), Patrick (ALL). Why the holdup? Innovative ideas seldom leave the drawing board without sufficient financial means; enterprising Africans wishing to share their new ideas with the world feel this strain more than most. Perhaps the most telling statistic comes from the World Bank, which records that, on average Africa spends just 0.76 percent of its GDP on Research and Development (R&D) compared to an average of 2 percent for Europe (which has a target to hit 3 percent by
2020) and 2.74 percent for the US. It is against this background that innovators across Africa struggle with; it is why the work of groups such as the AIF is so vital. Through its three main initiatives, the foundation has provided the opportunity to learn and network and a solid approach to ethical economy building. By supporting home-grown efforts in this way, the AIF has the potential to kick start a culture of self-sufficiency, not to mention creating a culture of reduced dependence on foreign aid. 11
TECHNOLOGY
AGILE ENTERPRISE Key To The Workplace Of The Future Thuthuka Mhlongo is Portfolio Manager of End User Computing at T-Systems in South Africa Written by: Thuthuka Mhlongo Edited by: Nye Longman
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TECHNOLOGY THE WORKPLACE OF tomorrow will look very different from the average set up in most South African businesses today. As the notion of “work-life balance” ascends into the everyday business lexicon, virtualisation and mobility solutions hold the key to a more complete realisation of this concept. In fact, the key opens the door to one’s office from anywhere, at any time. No longer are employees bound by physical infrastructure such as desks, workstations and fixed line connectivity. “The office” and all the enterprise services needed, are available from anywhere. Enterprise mobility solutions extend corporate applications and services down to laptops, tablets and smartphones, creating a secure office environment for employees who are working from home, at client sites, or while travelling. They allow for more flexible working arrangements that fit with individuals’ lives. But the workplace of tomorrow isn’t just about moving from fixed, physical, “9 to 5” locations, to a state of anytime, anywhere productivity. New mobility solutions enhance collaboration between colleagues, 14
July 2015
‘Enterprise mobility solutions extend corporate applications and services down to laptops, tablets and smartphones, creating a secure office environment for employees who are working from home, at client sites, or whilst travelling’ allowing teams to form quickly and documents to be instantly shared wherever the team members may be. By implementing smart policies such as choose your own device (as opposed to bring your own device), the organisation is able to restrict the number of different handsets and mobile operating systems that need to be catered for. This helps ensure a standardised quality of service for all employees, and reduces the cost of having to support a myriad of different devices.
THE WORKPLACE OF THE FUTURE
As users look to technology to foster closer working connections, enterprise services are increasingly taking on the characteristics of social media tools which have exploded onto the scene over the past decade. Yammer, for example, includes many of the tagging, sharing, multimedia and news stream features popularised by Facebook. Microsoft Lync is now available in a mobile environment and resembles the corporate equivalent of giants such as Whatsapp and WeChat. Increased ease of mobility breeds
a stronger innovation culture within an organisation. Managers and executives can use these ‘always on’ collaboration platforms to crowdsource new ideas, create incentives and competitions, allow people to rank each other’s’ ideas, and then find ways for inventors to share in the profits of implemented ideas. Virtualised and mobilised workplace environments also create the platform from which new technologies can be swiftly integrated into the organisation. As concepts 15
TECHNOLOGY
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THE WORKPLACE OF THE FUTURE
like wearable technology show the promise of adding real business value (albeit in specific niche areas) those organisations already embracing mobility are far better positioned to rapidly adopt new technology. Enterprise mobility means the organisation can easily interface and integrate with partner companies, suppliers, distributors and any other parties in its ecosystem. The IT department is empowered with accurate statistics around things like bandwidth use, server capacity use, and service and application usage. So they can start designing accurate billing models for consultants, contractors, freelancers or partners that are benefitting from the organisation’s resources. In this way, the IT department gets closer to the ultimate goal of becoming a profit-centre rather than a costcentre. However, as the organisation embraces the concept of mobility, two major concerns often come to the fore. Each one needs to be approached in the right way, in order to mitigate risks and contain costs. These concerns arise from escalating development across multiple platforms and from security and privacy concerns.
The reality is that most SA corporates are emerging from a Blackberry-dominated era where basic services like email and instant message were made available on the user’s device. The demands are rapidly shifting, as users’ trend towards platforms like Android, iOS and Windows Phone – and develop appetites for richer corporate services. Organisations do not necessarily have to develop fully-native applications for each of the three or Thuthuka Mhlongo
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TECHNOLOGY four predominant mobile operating systems. Hybrid approaches wrap a web app within a native skin, and responsive “pure-web” solutions mean that all development only needs to be done once. The right approach generally depends on the extent to which an enterprise mobility application needs to call on native device capabilities like accelerometers, GPS etc. With mobility policies such as choose-your-own-device or bringyour-own-device, there is often a tension between how the device is
‘With the effective use of EMM (Enterprise Mobility Management) capabilities, the IT department can create a healthy separation between the two environments. Employees can easily switch between corporate and personal use, and the integrity of sensitive data is preserved’
The organisation requires high levels of security to be associated when she is using the device for work tasks, but the employee needs privacy and control when it comes to personal use
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THE WORKPLACE OF THE FUTURE
controlled and used, for work and for play. The organisation requires high levels of security to be associated when she is using the device for work tasks, but the employee needs privacy and control when it comes to personal use. With the effective use of EMM (Enterprise Mobility Management) capabilities, the IT department can create a healthy separation between the two environments. Employees can easily switch between corporate and personal use, and the integrity of sensitive data is preserved. Enterprise mobility gives the
organisation an inventory view of all devices within the organisation. Realtime analytics reflects on employee’s service utilisation patterns, such as the adoption of an in-house mobile application while end user analytics allows organisation to carefully prioritise such productivity apps for a more efficient ways of working. The benefits, therefore, extend to the enterprise and the employee. In short, true enterprise mobility means a more personalised, more collaborative and more productive workplace for all. 19
TOP 10
AFRICA’S Wealthiest Business People The number of billionaires in Africa has multiplied at an astonishing rate in recent years; in 2003 Forbes Magazine counted only two but in 2015 the number has soared to 27. The combined wealth of the top ten richest business people in Africa comes to an estimated $65.8 billion which means they represent roughly 2.5 percent of Africa’s total $2.7 trillion wealth, as estimated in 2013 by Credit Suisse.
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NAGUIB SAWIRIS
Nationality: EGYPT Age: 60 Naguib Sawiris, brother to Nassef Sawiris (4 on the list) is the Executive Chairman of Orascom Telecom Media and Technology Holding SAE; a top competitor for the position of Egypt’s largest private sector employer. Aside from telecoms and technology, the company operates through subsidiaries in the construction and hotel industries. Sawiris is estimated to be worth around $3.1 billion.
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ISSAD REBRAB
Nationality: ALGERIA Age: 71 The son of Algerian militants, Issad Rebrab founded his company CEVITAL in 1998; since then it has grown to become Algeria’s largest food manufacturer and is one of the largest companies in the country. Rebrab is looking to invest in diversifying the Algerian economy, acquiring international expertise to achieve this goal. He is worth an estimated $3.2 billion.
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ISABEL DOS SANTOS
Nationality: ANGOLA Age: 41 Isabel Dos Santos is unique in being the first female African billionaire, and also the first Angolan billionaire to boot. She started her first company when she was 24 and since then has developed a very broad portfolio of business interests including telecoms, media and finance, with interests in her home country of Angola as well as in Portugal. She has been widely described as her country’s greatest entrepreneur and has also been made the President of the Angolan Red Cross. She is worth an estimated $3.7 billion. 23
TOP 10
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MOHAMED MANSOUR
Nationality:Â EGYPT Age:Â 67 Seeing an opportunity to bring much coveted luxury goods into Egypt from the US, Mohamed Mansour became the sole Egyptian distributor of Chevrolet cars and Marlborough cigarettes. Founded in 1950, the Mansour Group is one of the largest private sector employers in the country. It has a presence in over 120 countries, with interests in media, telecoms, gas, and transport. Mansour is worth an estimated $4 billion.
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MIKE ADENUNGA
Nationality: NIGERIA Age: 61 Mike Adenunga controls companies which have all seen major growth in Africa in recent years: oil, telecoms, and banking. His company Consolidated Oil (now Conoil) was the first Nigerian operation to produce significant amounts of commercial oil. In addition, he founded a telecoms company to rival the dominance of Nigeria’s MTN Group which is perhaps why friends and rivals alike refer to him as ‘the bull.’ He is worth $4.1 billion dollars.
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CRISTOFFEL WIESE
Nationality: SOUTH AFRICA Age: 73 Cristoffel Wiese grew his holdings from a handful of stores into a retail empire spanning 2000 outlets in 15 African territories after multiple expansionary acquisitions. He also holds stocks in discount clothing, technology, industrial products, and private equity. His net worth is valued at $5.4 billion.
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TOP 10
3
4
NASSEF SAWIRIS
Nationality: EGYPT Age: 54 Nassef Sawiris is brother to Naguib (10 on the list); their father Onsi Sawiris is the patriarchal founder of Orascom. After successfully graduating in economics at the University of Chicago, Nassef oversaw the operations of the globally effective construction wing of their family company. In addition to sitting on the board of several multinational companies, Sawiris is also a sitting member of the Dubai NASDAQ. Estimates put his total wealth at $6.1 billion. 26
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NICKY OPPENHEIMER
Nationality: SOUTH AFRICA Age: 69 Nicky Oppenheimer recently sold his substantial stake in De Beers: a diamond company with over a century of experience in the African continent, particularly in South Africa. Since then, he has maintained an interest in the family trade but has turned his attention to his two investment companies: tockdale Street Capital and Tana Africa Capital. He is reportedly worth $6.8 billion.
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JOHANN RUPERT
Nationality: SOUTH AFRICA Age: 64 Johann Rupert is the CEO of the Swiss company Richemont which designs, manufactures, and markets a wide range of luxury items including perfume, watches, and quality leather goods. In 2008 he was elected as Africa’s Business Leader of the Year for the third time in recognition of his wide-ranging business successes. Aside from his traditional business ventures, Rupert is also a part owner of the Saracens, a top English rugby team. He is worth an estimated $7.3 billion. 27
TOP 10
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ALIKO DANGOTE
Nationality: NIGERIA Age: 57 Aliko Dangote achieved his position through the successful operations of his company, the Dangote Group. His business has shared prosperity with Nigeria, whose economic weight on the continent has greatly increased in recent years. The slump in Nigeria’s naira in line with the fall of global oil prices has wiped an estimated $5.9 billion off Mr. Dangote’s fortune which goes to show that sky-high success does not make anyone immune from the ebb and flow of the markets. Aliko Dangote has interests in both politics and philanthropy, having donated funds to battle the latest Ebola outbreak, as well as a considerable sum in support of re-electing the People’s Democratic Party in 2003, amid some controversy. At the start of this year, his personal wealth stood at $21.6 billion but has dropped to $15.7 billion as the naira fell in value, but the Nigerian is still the richest businessperson in Africa. 29
Larimar GROUP:
Investing In The Future Written by: Nye Longman Produced by: Daniel Pritchard
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LARIMAR GROUP
Through its strategic diversification and consolidation plan, Larimar is undergoing a ‘quantum leap’ in order to retain its position as one of South Africa’s transport groups
L
arimar has been a part of South Africa’s transport history for the past 65 years and is set to play a strong part in its future. Indeed, the family-run business could once boast the largest operations in the Southern Hemisphere with a fleet of close to 4,000 buses; while this number has waned somewhat, the company’s willingness to simultaneously embrace and deliver lasting, meaningful change has only strengthened. In order to maintain its much envied position in South Africa (the group boasts some very lucrative partnership and government contracts) it is simultaneously diversifying its revenue base and working towards making the business comply with global environmental standards. Operations Larimar’s group structure enables it to provide a diverse range of solutions to its clients and it is perhaps for this reason that the group is looking to diversify further. It is comprised of six companies which provide transportation (Putco), freight and logistics (Bell Trucking), engineering and manufacturing (Dubigeon Body and Coach, and VOMS Industrial) motor retail (KZN Iveco) and insurance (Larimar Financing and Leasing Services). Across these divisions, the group employs in excess of 5,000 people, all of whom have access to the company’s dedicated talent development initiatives. Perhaps the most notable of Larimar’s
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associations is its contract with the South African government; a deal that saw over 900 brand new buses rolled out between 2005 and 2009; one that will see a further 800 buses deployed in coming years. The successful implementation of “one of the largest fleet expansions in South Africa and the world” according to Group Managing Director Franco Pisapia, that has won the group international renown; it has been very recently awarded a contract by the Kampala Transport Authority to deploy and manage 100 of its buses, a number that will grow eventually grow by a further 600.
Key Personnel
Franco Pisapia Group Managing Director Franco Pisapia is part of the Larimar family, and was brought in for his unique technical experience which has proven instrumental to the group’s diversification efforts. He has successfully managed his own business ventures and holds diplomas in mechanical engineering and business administration, amongst many other technical and managerial courses.
Larimar will deploy 800 extra buses
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LARIMAR GROUP
The firm has many strategc partnerships
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Tactical Expansion Pisapia noted that the company needed to remain dynamic in order to retain its dominant position, he said: “To remain the top transport operator and remain competitive we will have to adjust to the new dispensation of transport in South Africa: diversification will give us the flexibility and will give us the technology and efficiency to stay ahead.” Explaining how it would be done practically, he said: “Across group we are trying to diversify our revenue base; to convert into an industrial group instead of just focusing on the transport side of things.” The main focus of this diversification project
S U P P LY C H A I N
is Putco’s partnership with the global chassis manufacturer Iveco; they share stakes of 40 and 60 percent in an extensive automotive facility respectively. Pisapia noted: “Although set up barely 18 months ago, our facility can produce up to 5,000 trucks and 1,000 buses annually; this makes us by far the biggest producer of buses and trucks in South Africa.” He also highlighted that Putco would be consolidating its stake in the facility with a hefty follow up investment of over 1 billion Rand; the factory alone provides jobs for upwards of 1,000 people. The larger picture has obviously attracted increased focus and capital: Pisapia tentatively noted that the group was considering expanding its capacity even further by offering freight tankers in the next few years. Larimar is making sure its expansion and consolidation efforts are properly supported with the correct software infrastructure. Aside
“Although set up barely 18 months ago, our facility can produce up to 5,000 trucks and 1,000 buses annually; this makes us by far the biggest producer of buses and trucks in South Africa.” – Franco Pisapia, Group Managing Director
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LARIMAR GROUP
TOGETHER WE KEEP SOUTH AFRICA MOVING Sasol and Putco continue to work together to create a better South Africa
The perfect choice FOR SCANDINAVIA
As a proud partner
we wish PUTCO continued success
for their future plans BASILDON - +44 (0) 1268 285620 BRISTOL - +44 (0) 117 982 8080 IMMINGHAM - +44 (0) 1469 571440
WWW.NTEX.CO.UK
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Continuous quality from start to finish
Tel & Fax +271 1783 5655
LARIMAR GROUP
S U P P LY C H A I N
from building strong links with Microsoft, the group has also rolled out the latest CAT6 Local Area Networking (LAN) systems and has also implemented a dedicated hot disaster recovery site. Responsible Business Larimar’s competitive strategy also seeks to ensure that the company extends the efficient practices it has demonstrated though its ISO 9001 accreditation towards becoming environmentally sustainable in compliance with the globally recognised ISO 14001 certification. No small part of this strategy focuses on fighting the case for buses as a sustainable mode of transport. Pisapia noted that Larimar was already taking a major step towards this goal, he said: “We are looking into using low sulphur diesel, switching to 50 parts per million down from 500, which will give our buses lower emissions.” The group is supplementing this initiative by upgrading to Euro 4 and 5 buses. Pisapia was proud of his company’s track record when it came to supporting its staff, he said: “I strongly believe that we look after our
Larimar has rolled out LAN systems
It is also making strides in sustainability
“Perhaps the most notable of Larimar’s associations is its contract with the South African government; a deal that saw over 900 brand new buses rolled out between 2005 and 2009” – Franco Pisapia w w w. l a r i m a r. c o . z a
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LARIMAR GROUP
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employees very well, so much so that some have been with us for over 40 years.” Loyalty of this magnitude is not bought but nurtured through encouraging workers to take genuine and conscientious ownership of their and the company’s success. Pisapia explained: “We delisted Putco in 2005, buying out any minority shareholders; we then allocated shares to our own staff. We structured this scheme to comply with South Africa’s Broad-Based Black Economic Empowerment legislation, which has gained us level 3 status.” A share of roughly 23 percent of the company has been divided up between employees in this way. Furthermore, employees have a clear idea of how they can progress within the company and have access to the group’s dedicated training academy which provides learners with everything from technical instruction and driving refresher courses, to dedicated management training. Aside from excelling at the delivery of government legislation, Larimar provides a wide variety of programmes to economically disadvantaged people. Each year the Putco foundation invests over 10 million Rand, sponsoring housing projects, mentoring schemes and even paying for the lengthy education of medical students. Based on its past achievements alone, it would almost be enough to predict that the Larimar Group will retain its dominant position in South Africa; looking at its current strategies, this is looking more like a certainty.
Company Information INDUSTRY
Automotive; Buses HEADQUARTERS
Gauteng FOUNDED
1945 PRODUCTS/ SERVICES
The Larimar Group is South Africa’s largest bus company, with a range of divisions involved in everything from manufacture and management, to finance and retail.
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Company logo goes here
Servcor set for expansion Written by: Abigail Phillips Produced by: Kiron Chavda
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SERVCOR
The Zimbabweanbased premier food and management services company has over three decades of experience in its industries, and is now set to branch out to more African markets
Staff in training
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ervcor, famous for its professionalism and high service quality in Zimbabwe, is set to expand its premier food and management services business to Mozambique and Botswana and intends to grow turnover by $5 million year on year as from 2015. To ensure quality throughout the business, Servcor suppliers are vetted using laid-down evaluation procedures while supplier premises are subject to audits before contracting. As the largest provider of catering services in the industry, Servcor has also adopted and implemented a quality management system that manages the quality of their processes and produces business benefits thereby creating a competitive advantage over its competitors. Christine Robinson, Sales and Marketing Director at Servcor, said: “Servcor (Pvt) Limited
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Kitchen fitted by Servcor
underwent an extensive restructuring exercise in 2001, resulting in the creation of five customerfocused Trading Divisions, all operating under the holding company of Servcor Limited. Each of the Trading Divisions now focuses individually on what has been our core business for 38 years, which constitutes the Professional Catering Solutions we have always proudly provided.” “We believe the creation of greater individual management of the divisions under Servcor, offers not only a major stride forward in our endeavours to identify and meet the ever changing needs and wants of today’s discerning customer, but also provides a cornucopia of professional, cost-effective catering solutions never before experienced in Zimbabwe. We take great pride in what we do – which enables us
1,000+
the number of employees working for Servcor
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to do it more effectively for our customers.” Trading Divisions are Servcor Catering Services, Happy Eater Catering, The Executive Chef, Servcor Manufacturing and Servcor Distribution. The company offers a diverse range of services including schools and institutionalised catering, traditional weddings and even water dispensers and coffee machines. Servcor has over the years developed a strong partnership with Nestle under their Nestle Professional brand to provide customers with a beverage solution through the Alegria coffee machines as well as access to the whole Nestle product range. The Alegria coffee machines have been placed mainly in offices and in hospitality institutions such as hotels and restaurants. Operations Management have ensured customer focus has been taken to higher levels than its competitors. In line with the company’s “extra mile” promise to be totally customer focused, this has been achieved through understanding and striving to exceed customer expectations. It has stepped up its efforts to ensure high levels of customer satisfaction by improving on quality of products and services. The move will therefore result in lessened shrinkage in product quality whilst wastage, returns and reworks are minimised. The Company anticipates an increase in market share obtained through flexible and fast responses to market opportunities
Misheck Manyumwa Managing Director
Angela Mandivenga Finance Director
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SERVCOR
“We believe the creation of greater individual management of the divisions under Servcor, offers not only a major stride forward in our endeavours… but also provides a cornucopia of professional, costeffective catering solutions never before experienced in Zimbabwe” – Christine Robinson, Sales & Marketing Dir. 46
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as well as increased effectiveness in the use of the organisations resources to enhance customer satisfaction. To ensure standards are maintained, Servcor has in place trained Quality Management System auditors, who regularly carry out audits to check, monitor and assess compliance. Where a noncompliance is picked up, awareness training is carried out onsite to ensure that conformity and quality standards are maintained. It is mandatory for the Corporate Training and Quality Assurance Department to maintain, implement and coordinate the Company’s Quality Management System for continual improvement of the system whilst it is the mandate of each Process, to train, impart knowledge and develop employee skills to provide quality products and service to their customers. This department also creates a safe and Product in the Warehouse
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Stocks in the Warehouse
hygienic environment, to enable delivery of safe products and services to their customers. Servcor has a very sound and efficient distribution system with its own fleet of vehicles that are serviced every 5000 kilometres and is constantly being upgraded. This fleet consists of 15 delivery trucks with five of them seven tonne refrigerated and two of them 10 tonne capacity refrigerated. The head office comprises of a warehouse size of 8000 square metres and butchery which holds stock and processes various cuts of meat which can be frozen. At least one months’ stock is kept in the warehouse to cover all units. This customer confidence has made Servcor first choice in outside catering and functions, hosting the most prominent political, business and social gatherings throughout w w w. s e r v c o r. c o . z w
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JERICHO 026017
SERVCOR
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SERVCOR
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the country. Through continual pursuance of a shared vision of quality and excellence, they have therefore been able to create a strong and irrefutable brand name in the industry. Servcor’s quality efforts have helped them be the first choice in partnerships and dealerships with preferential brands. The company is the sole dealer in Zimbabwe for Vulcan Catering Equipment, South Africa’s most preferred manufacturer, exporter and distributor of industrial and commercial food service equipment. Our main customers include the Cresta Group of Hotels, Meikles Hotel, African Sun Group, Econet Telecommunications, Old Mutual Group and National Foods, Zimbabwe Platinum Mine (Zimplats), Unki Mine, Todal Mine, Girls’ College and Eaglesvale School.
SUPPLIER PROFILE
“ Servcor has become far more proactive rather than reactive and can see a problem before it occurs and is therefore able to rectify a problem without the customer being aware of it.” – Christine Robinson, Sales & Marketing Director
OLD MUTUAL ZIMBABWE
Old Mutual Zimbabwe offers integrated financial services that are customised to meet the needs of Zimbabweans. These include Life Assurance, Asset Management, Unit Trusts, Property Development and Management, Short-term Insurance and Banking Services. Old Mutual has wide portfolio of clients that reflects the diversity of Zimbabwe’s financial needs. Among the clients are local institutions, major multinationals and individuals. The name Old Mutual has become synonymous with savings, investment, life and insurance products in Zimbabwe. Old Mutual plays an integral role in promoting holistic and sustainable development by supporting the economic recovery of Zimbabwe and the communities in which we operate.
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SERVCOR
“To achieve a competitive advantage, Servcor would require a staff base that is skilled and committed to their work. To that, we believe that employees are the key resource for the attainment of organisational objectives” – Christine Robinson
The firm also entered into dealerships with BCE, the leading supplier of kitchen utensils, industrial cookware and commercial kitchen appliances as well as with Lead Laundry, the foremost supplier of laundry equipment in Southern Africa. Progression The company’s state of the art training kitchen and strict adherence to quality has won the company recognition from the Industrial Training and Trade Testing department in the Higher and Tertiary Education ministry as the facility of choice for trade testing. Employees who are enrolled in training programs are trained in the following areas: Food Preparation and Presentation, Food and
Servcor’s own milling operation
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Beverage Service, Soups and Sauces, Larder Work and Pastry Work to name but a few. Robinson said: “Servcor has become far more proactive rather than reactive and can see a problem before it occurs and is therefore able to rectify a problem without the customer being aware of it.” “Quality is all about the customer, hence the company has become far more customer driven and use feedback from clients to serve the customer better. They have in place, customer service campaigns which run throughout the year, to ensure commitment of service to the customer, as well as communicate their commitment and service. Improvements in our operations will see better profitability being realised and we are able to provide a quality product at an affordable cost to the customer.” She concluded: “To achieve a competitive advantage, Servcor would require a staff base that is skilled and committed to their work. To that, we believe that employees are the key resource for the attainment of organisational objectives. “ “So we always recognise shining stars and we say thank you for doing a great job, give merit awards for outstanding performers. We provide work that allows employees to use their minds, acquire new skills, and face situations that invite them to grow.” With the committed workforce onside, Servcor’s vision to grow turnover by $5 million per year over the next five years could well be within reach.
Company Information INDUSTRY
Food services HEADQUARTERS
Harare, Zimbabwe FOUNDED
1977 EMPLOYEES
1000 REVENUE
US$22 million PRODUCTS/ SERVICES
Providing locally manufactured hot drink dispensers into the Zimbabwean market, with a recent expansion into the cold beverages and foodstuffs market
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Farm & City Centre
Nourishing Zimbabwean Agriculture Written by: John O’Hanlon Produced by: Kiron Chavda
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FA R M & C I T Y C E N T R E
Farm & City Centre is the goto business for advice, training and professional support for Zimbabwe’s farmers, both arable and livestock, as well as providing them with the products they need to stay productive A comprehensive range
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A
griculture is the backbone of the Zimbabwean economy. According to the Ministry of Agriculture “it provides livelihoods to 80 percent of the population and accounts for 23 percent of formal employment. The sector contributes 14 to 18.5 percent to the Gross Domestic Product (GDP)�. Far more than simply a retail and wholesale outlet, though it fulfils these functions through its network of 38 stores, centred on the 3,300 square metre flagship store at 4th Street Harare, Farm & City is a strategic player with its roots in a co-operative business founded in 1908. It sells everything a farmer needs, including implements, seed, chemicals, fertilizers, tools, day old chicks, veterinary products, animal feeds, protective clothing, fencing and building materials. Peggy Rambanapasi, the Managing Director,
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says ‘there is an urgent need to instil professional attitudes throughout the sector and educate farmers to be entrepreneurs and strategic thinkers. “Farming is a business, not a hobby or something to do in one’s retirement,” insists Peggy. She should know – she holds an MBA from Nottingham Trent University in the UK, and runs two businesses (Farm & City has a subsidiary Vetco supplying veterinary products to livestock farmers) that, while they might be challenges for the business to expand in the current climate, Farm & City is geared up for growth. The greatest challenge at the moment is to ensure that farmers achieve or maximise the yield potential of the seed they are using. “Our business is to ensure that people get what they paid for – which is a quality product and the right yields. Therefore a key role to achieve this is education. Retailers in this country sell what they can. As a result there are small hardware stores, food outlets, general stores getting into the business of selling seed and other agro inputs to farmers. With the best will in the world they can’t do more than sell the seed though. Nobody checks where that seed is going to be grown, what sort of soil is there, what climatic conditions exist, what diseases are endemic locally, let alone the quality of the seed itself.” Farm & City, she insists, must take a cradleto-grave approach to its customers. “We deal with all the people in the value chain from the seed suppliers and fertiliser and crop chemicals
Key Personnel
Peggy Rambanapasi Managing Director Peggy Rambanapasi commenced her career with CFI Holdings Ltd as the Managing Director of the Town and Country supermarket chain in October 2008, before being promoted to the position of Divisional Managing Director for CFI Retail in June 2009. She holds an MBA from Nottingham Trent University in the UK
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FA R M & C I T Y C E N T R E
“We deal with all the people in the value chain from supplier and manufacturer to the end user” – Peggy Rambanapasi, Managing Director
Warehouse stock
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manufacturers to the end user, and we can put these people together.” To pinch a slogan from Seed Co, it is not simply about creating a better product for the farmer but equally about trying to create a better farmer for the product! Major suppliers like Seed Co, the largest seed producer in Africa, founded in Zimbabwe 75 years ago, and the first company in the world to hybridise maize seed commercially, form an important part of the food supply chain. Together with such suppliers, the Ministry itself and its agencies such as Agritex, Farm & City needs to work to provide technical and advisory services. It is a role Farm & City has embarked on, though there is much work to do at grass roots level. “We are the interface with the farmers after all, and lately we have been trying to promote the idea of partnership between the stakeholders, public and private. Seed companies do a great job on seed testing and quality control, and bring technical advice to the ‘last mile’ of the supply chain, there is more that could be done. Farm & City’s co-operative ethic is impartial and has offered space to Agritex extension services and Zimbabwe Farmers’ Union in their stores to provide advice to the end users without pushing any particular product or brand. “The important thing is to increase the amount of training and advice available to farmers in upcountry areas. For me, ours is a strictly B2B model. Farmers are business owners and entrepreneurs, not simply consumers, and specialists too because farming is a scientific process. If our customers do not do well
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A corner of the tools department
we will not either!� A more effective strategy would be to put all the effort into a smaller acreage, using the best seed, fertiliser, weed and pest control to realise its full potential. Counter intuitive maybe, but sound business. Basically farmers must work smart and then increase their hectarage over time as resources permit. The focus from the country’s agricultural authorities on mechanisation and irrigation actually will support this strategy w w w. f a r m a n d c i t y. c o . z w
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in terms of both working smart and trying to alleviate climatic challenges. The same principles apply to livestock farming. There is an equal need to upskill the cattle farmers and make them more productive but to do that they need access to advice, support, and appropriate veterinary products, feeds and supplements. Accordingly Vetco is expanding its range of products and bringing in expertise and affordable products from such companies as Dopharma of the Netherlands, Ashish Life Sciences of India and Surgipharma Laboratories of Pakistan. “I tend to think that on the veterinary side people are more open to information. The vets are doing a good job in forming relationships with the farmers and getting the information to them.” But there’s still a need to
SUPPLIER PROFILE
Farmers’ essentials
ASHISH LIFE SCIENCE PVT LIMITED
Ashish Life Science was established to cater ever rising need of Veterinary medicines. We believe animals have been catering to service of mankind and it is our duty to reciprocate back. We have therefore developed a strong focus on Animal Healthcare & established its name in International market by providing a very high level of customer satisfaction. The world class manufacturing facility has been set up as per cGMP-WHO guideline. The company is in the business of veterinary drugs in the form of boluses, powders, pastes, suspensions, injectable, sprays & ointments. Currently we are exporting to more than 50 countries.
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FA R M & C I T Y C E N T R E Importer, Manufacturer and Distributor of Fertilizer
EAST WEST SEEDS
sales@fsg.co.zw
at affordable prices We distribute our Fertilizers nationwide through Farm and City Centre Depots
BRED, PRODUCED & SOLD IN ZIMBABWE, FOR ZIMBABWE 52 Alpes Road, Vainona, Harare, Zimbabwe Tel: +263 4 2916681 / 2930941 or +263 77 257 2634 email: mail@ewszim.co.zw
Graniteside Chemicals (Pvt) Ltd
Esb3 For treatment of coccidiosis in poultry
YOUR WORKER’S PROTECTION IS OUR BUSINESS Industrial Protective Clothing, Footwear, Rainwear & Accessories. Garments made in Poly Cotton and Cotton Drill fabrics.
Terranox
Broad spectrum antibiotic for bacterial infection in poultry
sales@granchem.com
+ 263 477 0814/6
All garments are made in Zimbabwe. T 00263 4 750753 E sales@tselentisgroup.co.zw enquiries@tselentisgroup.co.zw www.tselentisgroup.com N.Tselentis (PVT) LTD • 46 Kaguvi Street • Harare • Zimbabwe
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26 Cripps Road • Graniteside • Harare • Zimbabwe
July 2015
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focus on husbandry and pasturage, she says. “You need to be able to plan, and see that livestock is well fed through seasonal drought and protected from disease in the wet periods.” While in the past you could set your watch by the rains in Zimbabwe and the greater region, both crops and livestock are now affected by a much more erratic weather patterns, she adds. In line with the scientific approach Farm & City is advocating for its customers, the company is moving to become a knowledgebased company. “Our company’s ICT has not progressed as much as we would like, so we now need to leapfrog!” Peggy Rambanapasi proclaims. Farm & City brought in an Indian specialist company, ITree Dynamics, to implement new business intelligence platforms that will equip them for the future. “If we can capture transaction data, then dice and slice that data in more ways, we can determine the buying patterns of the customers and look into their baskets so we can meet whatever challenges they have and offer the right product at the right time.” The investment will be good for Farm & City’s stock control and capital
Cliff Mukumba Operations Manager
“Farmers are business owners and entrepreneurs, not simply consumers – and specialists too because farming is a scientific process” - Peggy Rambanapasi w w w. f a r m a n d c i t y. c o . z w
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Barbecues
Top names
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Company Information INDUSTRY
Retail HEADQUARTERS
Zimbabwe FOUNDED
1908 EMPLOYEES
367 REVENUE
management too, as it will enable inventory levels to be cut, and a more flexible approach to ordering and fulfilment. And it is an essential preparation for another strategy, a move towards online trading. “We need to get our farmers to be more efficient, to understand the elements that will allow them to be productive, and to get a business head on them. Where and when farming is a productive business it contributes to taxes, employment, and allows for the growth of downstream processing industry. That is a passion for our company – value addition, training and partnership!”
Not disclosed PRODUCTS/ SERVICES
Agricultural supplies
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Written by: Sam Jermy Produced by: Richard Deane
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DORON CONSTRUCTION
Despite being less than a decade old, the firm has grown steadily to the point where it is now looking to be the South African contractor of choice for clients in multiple sectors
D
oron Construction is a Construction Company specialising in Civil Construction and General Building for clients in the Mining, Governmental, Commercial and Residential Sectors. The strong growth of Doron Construction has been built on a foundation of consistently delivering construction projects to the highest standards. Since beginning as a small civil construction contractor in 2007, Doron Construction has demonstrated an unbeaten track record for delivering high quality civil projects to our world class clients. Doron Construction is looking forward to enhancing the good reputation it has built up after just eight years in the industry, with a number of large projects on the horizon and in process. These projects include being appointed the
Doron has steadily grown since 2007
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managing contractor for the construction of an extension of a tailings processing plant with Dikgosi Tailings Processing, the construction of two eight mega litre reservoirs, pump station and the associated infrastructure, as well as plenty of mining-related activities. Christo Smit, Managing Director at Doron Construction, said: “We started the company in 2007 with the vision to distinguish ourselves in the construction industry through quality and integrity. We set our vision from the beginning to become one of the larger construction firms and we never allowed the difficult times to distract us from our vision. “We have worked hard to grow to a company where clients invite us to participate in projects or to tender for projects. We have built a business profile of successful projects and we retained the human capital that was developed through this period. “Looking forward, we are aiming to increase our involvement in the mining sector by increasing our client base and by becoming involved in contracts that has a longer duration than the normal construction contracts.” Dikgosi Tailings Processing recently acquired 51 percent of the shares of the company, and it subsequently appointed three new directors. Smit believes their experience will make the management team even stronger in order to support the additional growth that is expected through their marketing
Key Personnel Kgosi Tshikare Non-Executive Director A custodian of the governance process, monitor the executive activity and contribute to the development of strategy
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DORON CONSTRUCTION
The company has staff from over 15 nations
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and projects that will spawned through the group of companies they are involved with. Continuous Improvement Focusing on the various stakeholders of the firm is one of the most important principles for Doron now and going forward. Frequent feedback sessions are scheduled with shareholders in order to set goals and reestablish the vision and medium-term goals. Good client relations are obviously crucial too, and the company has learned to effectively serve its client whilst simultaneously protecting its own business interests. Smit said: “We see our employees as assets and they are the people who are turning the wheel. Enhanced performance assists the growth and profitability eventually. Therefore it is the responsibility of the directors to ensure that our employees are positive and that they undergo continuous improvement. “We are viewing our suppliers as our partners
“Looking forward, we are aiming to increase our involvement in the mining sector by increasing our client base and by becoming involved in contracts that has a longer duration than the normal construction contracts.” – Christo Smit, Managing Director w w w. d o r o n . c o . z a
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Waste Water Treatment Works
and it is important for us to continuously improve our supplier base, as well as becoming increasingly better clients to our suppliers. “Two years ago we invested in the use of an Integrated Cost Management Software including estimating, planning, project control, cost management and enterprise accounting, enabling us to control and record all aspects of the company from inception to completion on an integrated system. We are continuously implementing and improving the use of the software throughout the company through internal workshops, training and increasing the number of users on the system. “To that end, our approach to project
Get to Builders. Get it Done! Building Material Supplied by Builders
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July 2015
0860 284 533 www.builders.co.za
CONSTRUCTION
An example of general civil construction work
management and project execution is becoming leaner and we are continuously improving as we learn through each project. We have developed internal manuals with regards to all processes of construction from plant/fleet management to casting of concrete. We are now ready to take it further and to engage in Lean Six Sigma.� Projects Doron’s biggest income stream at the moment involves the civil construction projects at various mines across South Africa. The company has worked with major clients such as Platinum Group Metals at Maseve Mine, Rustenburg where the company were contracted to build the front end concrete structures, the plant buildings, high security fencing and all the plant
Key Personnel Christo Smit Managing Director Gained an engineering degree through the University of Stellenbosch. Involved with the company since inception.
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DORON CONSTRUCTION
Doron has gained specific experience in water and concrete projects
60% The percentage of local labour that Doron Construction use in their projects 72
July 2015
infrastructure pipelines including three one mega litre reservoirs. This is well as working with Anglo Gold Ashanti, Northam Platinum and DRA South Africa. Despite this success, Doron likes to supplement these larger, more sporadic works with more frequent concrete and water projects. “We have gained a lot of experience in water and concrete structures, reservoirs, sewage treatment on top of our pleasing mine activities and we are even moving focus to solar plants.” said Smit. “In terms of our work with local authorities in erecting water retaining structures, we adapted to the narrow tolerances whilst keeping to the program through planning, organising, leading
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and control of the construction projects.” “Our construction at a platinum mine involve concrete structures of the plant, structural steel, plant buildings, high security fences, potable and fire water pipelines, reservoirs, sewage water pipelines and the communication sleeves. We also have a diverse plant and equipment hire range which is prospering and provides us with another revenue stream.” Investments and development There is a yearly budget for training which results to approximately 3 percent of Doron’s overall payroll, meaning there is tangible ongoing investment on employee skills. It has monthly internal training sessions and external training is focused on estimating, costs control, project management, procurement, fleet management, store control and technical knowledge. Doron also utilise a minimum of 60 percent of local labour on all construction projects. The local labour undergoes daily inductions and are supervised with a team leader and skilled labour who give them on the job training. Smit concluded: “Overall we are happy with the way our business is going. We have recently moved to new premises where the different departments will have space to establish themselves. The offices will have sufficient space for training and a conference facility. Not only that, but we will continue to invest in gaining and maintaining a skilled workforce and intend to continuously improve our plant and vehicles.”
Company Information INDUSTRY
Construction HEADQUARTERS
Potchefstroom, SA FOUNDED
2007 EMPLOYEES
350 REVENUE
R89 million PRODUCTS/ SERVICES
Construction & Mining
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AGAINST THE ODDS: EGYPTIAN STEEL’S MEGAPROJECTS
The award-winning steel manufacturer is pioneering competitiveness, sustainability and social improvements on a truly impressive scale Written by: Nye Longman Produced by: Richard Deane 75
EGYPTIAN STEEL
CEO Ahmed Abou Hashima
E
gyptian Steel has carved a trailblazing path through Egypt’s steel industry since its foundation 2010. The company has invested over $1 billion over the past 2 years, chiefly on constructing two massive state of the art steel megaprojects, but also on developing exemplary business operations, environmentally friendly practices and CSR standards. The company is confident that its actions will contribute to a successful Initial Public Offering (IPO) in the next five years.
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Operations Egyptian Steel’s operations are divided between its subsidiaries, which comprise National Port Said Steel (NPSS), IIC for Steel Plants Management, and Egyptian Steel for Building
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Key Personnel
Ahmed Abou Hashima CEO
“Egyptian Steel has carved a trailblazing path“
Materials. Alongside a portfolio of capabilities catering for the steel industry, the company also has the capacity to produce a variety of building materials, particularly cement (an avenue which the company is actively exploring.) The business was founded at one of the most turbulent times in Egypt’s history: the January Revolution of 2011. However, CEO Ahmed Abou Hashima’s faith in his abilities and the resilience of the country paid off, he said: “It was a calculated risk, but my faith in Egypt, its people, and that we always come up stronger than before made me sure that this was a temporary phase and that eventually taking this risk would pay off. Fortunately, I was right.” The company is seeking to expand its share of the Egyptian Steel market and has
Ahmed Abou Hashima is CEO of the Cairobased Egyptian Steel, which he co-founded in 2010. A self-made global entrepreneur, Mr. Abou Hashima has worked in the steel industry since 1996. Named one of the World’s 100 Most Powerful Arabs by Arabian Business, Mr. Abou Hashima has been the recipient of CEO Middle East’s Young CEO Award and Arabian Business’ Best Visionary awards. He was the first Egyptian to receive CEO Middle East’s Young CEO of the Year Award. He’s also the recipient of Executive of the Year Award –Manufacturing Industry at Stevie’s International Business Awards in Paris, October 2014, in addition to an honorary Golden Award in the same ceremony as “Rising Businessman of the Year”.
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EGYPTIAN STEEL
“Each team is always updated about developments in its field and submits reports on what improvements are needed; teams act as a part of a whole, which in the end is developed for competition on an international level.” – Ahmed Abou Hashima, CEO
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invested heavily in doing so, Hashima said: “The company forecasts total production to soon represent 20 percent of Egypt’s market share.” No small feat for a company with less than a decade of experience under its belt. Its two megaprojects, which are set to become fully operational in 2017, not only indicate a business willing to invest in the long term but also one that is not afraid of making a large scale commitment to the prosperity of the company, its employees, and Egypt. The two facilities will each produce 830,000 tonnes of steel annually which will put the company well on its way to achieving its target market share. Hashima noted that constructions of this size required significant capital investment to get off the ground, he said: “We paid approximately 60 million dollars just to secure
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“The company forecasts total production to soon represent 20 percent of Egypt’s market share.” energy flow to the plants.” The expansion is set to make the number of employees reach 6,000 in Egyptian Steel’s books, which illustrates that the company is confident in its abilities to effectively train, manage and deploy its varied workforce in a timely and cost-effective manner. At the heart of its operations lies the principle of continuous improvement, which Abou Hashima summed up by saying: “Each team is always updated about developments in its field and submits reports on what improvements are needed; teams act as a part of a whole, which in the end is developed for competition on an international level.” Its remarkable progress was recently recognised, when it was awarded “Rising Star”
830,000
Tonnes of steel produced annually by each of the two facilities
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SESCOTRANS 50 FOR DEVELOPED LOGISTICS S.A.E
-SESCOTRANS Integrated logistics solutions for your business 24/7 at your service -SESCOTRANS is serving 4 main ports in Egypt, Three on Mediterranean Sea (Damietta port, Alex port and Abu Qir port) and one on Red Sea ( Adabyia port ) • Annual volume exceeds 13 Million Metric Tons. • Storage capacity exceeds 300,000 square meters either covered or open yards which accomodates 2 Million Metric Tons as a volume per a single session. • More than 250 trucks with various specifications with GPS feature for handling all types of goods and products. • 700 Different kinds of equipment serving your operational processes : Ship-unloaders, Harbor Cranes, Conveyor belts and extra equipment. • 1700 High qualified and well trained employees with a great experience of management and operation. -MAIN ACTIVITIES • Steel Station ( Steel Scrap – HBI – DRI- Steel Billets/Bars) • Energy Station (Pet Coke-Coal) • Grains Station • Fertilizers Station • Cement & Clinker Station • Mining Station -SESCOTRANS is providing Logistics support for EGYPT MEGA projects • NEW SUEZ CANAL • NEW PETROLEUM REFINERIES LABS • NEW POWER PLANTS • STEEL PLANTS 80 July 2015 www.sescotrans.net
EGYPTIAN STEEL
CONSTRUCTION
status at the Platt’s Global Metal Awards. Talent Management Since its inception, Egyptian Steel’s workforce has grown exponentially yet Abou Hashima and his management team still have the time, resources and willpower to ensure that each employee is not simply loyal to the company and its vision, but also a fully-rounded professional. He said: “We choose the best calibre people and work on developing them, implementing the relevant corporate governance so that each person has a solid idea of their career path and what is expected of them to achieve this; we all work together as one big family.” Backing up its close-knit, skill-centred approach to employee development is the company’s strong HR team, backed up by a philosophy committed to what can be achieved in the future; this is exemplified by the large number of varied graduate internships offered by Egyptian Steel. Sustainability Developing sustainable practices will always remain a challenge in the steel and building materials industries, but this has not hindered the company and has, in fact, become a profitable pursuit. Abou Hashima said: “The technologies we use depend on constant charging of scrap in electric arc furnaces without hatch opening, which secures shortened melting time, saving energy while controlling harmful emissions, and
Receiving the Platts Global Metals Awards
‘Its remarkable progress was recently recognised, when it was awarded with ‘Rising Star’ status at the Platt’s Global Metal Awards’
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EGYPTIAN STEEL
“The production process does not consume as much energy as our competitors” limiting strain on the national power grid.” The competitive edge that companies are gaining from the adaptation of efficient technologies is becoming harder to ignore, Abou Hashima agreed: “This resulted in having a price competitive edge for our products, since the production process does not consume as much energy as our competitors; our plants do not negatively affect the communities they operate in.” At the heart of its operations lies the principle of continuous improvement
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Social Responsibility Abou Hashima summed up his business’s attitude to social responsibility: “I believe that the private sector has a major role in developing and
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enhancing the living conditions of the people. The government will not be able to address all problems on its own. At Egyptian Steel our CSR program is one of our top priorities.” This commitment has already been put into practice at the most trying of times in the country’s recent history; during one of the coldest winters on record, the company was responsible for the distribution of 20,000 blankets. Egyptian Steel’s commitment to helping the less fortunate has even taken priority over other aspects of the business, Abou Hashima said: “In 2014, we cancelled both our advertising and marketing campaigns and directed all the funds toward revamping Egypt’s 20 poorest villages. The living conditions in these villages were inhumane; they had no clean water or electricity. We wanted to ensure that these people lived in a human environment.” Its CSR activities have not gone unrecognised and have received many awards, notably the silver ‘CSR Program of the Year’ award from the 2014 Stevie Awards in Paris. This accolade is much coveted and is from an awarding body that seeks to “honour and generate public recognition of the achievements and positive contributions of organisations and working professionals worldwide.” The next half of Egyptian Steel’s first decade is set to be just as exciting as the first half: in that time its megaprojects will operate at full capacity; its first cement plant could also see the first bags roll off the production line, and the company could very well be floated on the Egyptian Stock Exchange.
Company Information INDUSTRY
Building Materials HEADQUARTERS
Cairo, Egypt FOUNDED
2010 EMPLOYEES
Expected to reach 6,000 REVENUE
Not disclosed PRODUCTS/ SERVICES
Steel Production
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Lubrik Construction
Spearheading African Mega Projects Written By: Sam Jermy Produced By: Richard Deane
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LUBRIK CONSTRUCTION
The firm which has only been in existence since 2007, has now grown to the point where it is now the construction firm of choice for substantial works in Nigeria
L
ubrik Construction recently won a $122 million contract to spearhead the development of Onne Port Complex in Rivers State, Nigeria, underlining how much the firm has thrived in just eight years. With headquarters based in nearby Port Harcourt and procurement offices in Lebanon and London as well as offices in the Nigerian cities of Abuja and Lagos, Lubrik has subsequently grown into a truly international operation and is taking on bigger projects each year. Now the Business Development Manager, Mark Robertson, is looking forward to continuing the progression already made. He said: “Our $122 million project for Indorama Petrochemicals in the Onne Port complex is far more than just a normal engineering, procurement and construction contract. We
The $122 million Onne Port Complex project under construction
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are also responsible for the training of client’s staff, commissioning of equipment as well as the start-up of export operations, as we have to hand over a fully operational and commissioned jetty with associated buildings and urea powder handling system at the end of the project. “Physically it consists of the jetty structure, container stacking area, a large general warehouse, and an array of facilities for export of urea fertilizer such as a truck unloading station, conveyors, bucket elevators and bulk reclaimers that handle the urea powder to its special warehouse and from there to the ship loading structures, all of which are protected from the elements due to the sensitive nature of the material.” With adjacent facilities such as workshops, administration buildings and so on there are 18 buildings of various sizes in total. This includes full equipping in terms of MEP (mechanical, electrical, plumbing), security and shipping services. The sheer size of content versus the size of the plot of only 6.8ha is a challenge in itself, while Lubrik also had to overcome challenges such as the bad quality of the soil in the port’s swampy area, and very strict timeframe for completion. Building a road anywhere is challenging enough, but when it goes through an area which is made up of dense vegetation, swamps, rocky outcrops and a river; it makes it even more challenging. With the help of a very cooperative local community and a proactive client, these
“Our $122 million project for Indorama Petrochemicals in the Onne Port complex is far more than just a normal engineering, procurement and construction contract. We are also responsible for the training of staff, commissioning of equipment as well as the start-up of export operations” – Mark Robertson, Business Development Manager
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LUBRIK CONSTRUCTION challenges were overcome by Lubrik when building the access roads for the Unicem cement plant; another standout project in its portfolio. This particular road will be one of the first roads in Nigeria constructed using a Slipform machine, which enables the road to be constructed faster, while being made of concrete it will be more durable and reduce maintenance costs for both the road and the vehicles using it. Expansion and diversification Current expansion plans include growing Lubrik’s core construction business in Rivers State. Management hope to achieve this by
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focusing on specific areas of construction, jetties, roads and high rise buildings. Currently, state government are a big source of construction work with multi-million dollar projects on offer. But the firm hopes to diversify by adding more revenue streams; thus keeping the organisation agile. Robertson said: “We already have our own quarry that supplies all of our aggregates and are now looking to open our ready-mix concrete plants and asphalt plants for the commercial market so this will provide another income stream. Our plans also include the execution of projects in Abuja and Lagos. “We believe that with our experience and reputation as a contractor that gets it right the first time we will offer a first class alternative to the current contractors in these markets. Our ability to react to market trends set us out from our competitors. We also like to ensure full dialogue with the community we are working with, making sure we deliver on their expectations as well as the client’s. “The biggest challenge in setting up a new business is obtaining work, in order to do this we had to invest money and time into the marketing of the company, starting with smaller projects and working our way up to where we are today. It takes years to build a solid reputation but only days to ruin it with poor management and poor workmanship, so employee retention and training is a very important function in this aspect”
Casting of concrete pavement structure
Casting of concrete pavement structure
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“In five years’ time we would like to be considered in the top five contractors in Nigeria. With our determination and loyal staff along with the leadership and drive of our Managing Director Gilbert Sassine, we are confident we will reach our goals” – Mark Robertson, Business Development Manager 90
July 2015
Materials where possible are purchased from the local area during a project, in order to put something back. Being ahead of competitors is one of the things that differentiate us from other contractors. Progressive ethos The name Lubrik is well known within the Port Harcourt area for the quality of work the company executes, and Robertson believes this has attracted several prospective employees its way. He said: “Our company views the development of its employees as one of the prerequisites
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to succeeding in the Construction Industry. We therefore encourage our employees to develop themselves and assist them in any way we can. We conduct some in-house trainings where consultants are contracted to train our staff in different areas. We also conduct on the job training for employees interested in learning from other departments. “Our staff who have indicated their interest in furthering their education are given time off work for this purpose and some financial assistance where applicable. We offer apprenticeships in some departments too, and they are available to both members of the local community where we have a construction site and other Nigerians interested in developing themselves.” Lubrik continues to invest in new machinery in order to maintain its level of service following on from the company’s major capital investments in the last few years. Investments include a PLC system for concrete batching plants, Gomaco slipform machine, cranes lifting from 60 to 160 tonnes, a new concrete plant and fleet of 15 new tipper tricks, two fully mobile workshop for maintenance and a modern new crusher for quarry work. “In five years’ time we would like to be considered in the top five contractors in Nigeria. With our determination and loyal staff along with the leadership and drive of our Managing Director Gilbert Sassine, we are confident that we will reach our goals.” concluded Robertson.
Company Information INDUSTRY
Construction HEADQUARTERS
Nigeria FOUNDED
2007 PRODUCTS/ SERVICES
A Nigerian company that specialises in design, building and development of infrastructure, marine structures and other civil works.
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GULF POWER Energising Kenya’s growth Written by: Nye Longman Produced by: Anthony Munatswa
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Gulf Power entered Kenya’s energy market in December 2014
Using its recent HFO power plant as a model, Gulf Power has developed a socially, economically and environmentally sustainable model for sustained growth
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ulf Power is a special purpose vehicle for the construction and operations of an 80 MW medium speed diesel power plant in Kenya. Gulf Power entered Kenya’s energy market with its $112 million, 80MW, Medium Speed heavy Fuel Oil (HFO) power plant which became operational in December 2014. This commissioning was in the wake of many challenges and opportunities: in what is quickly becoming a crowded sector, Norman Wanyiri and his team have optimised the business for consistent performance well into the future. Operations Gulf Power received high profile funding to construct its plant from both the International
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Finance Corporation (IFC) as well as the OPEC Fund for International Development (OFID) which together contributed about $75 million. This is a solid indication that the plant is part of the country’s short and long term Least Cost Power Development Plan and is thus worthy of international funding on this scale. Wanyiri noted that financial endorsement from the IFC and OFID also brought with it the requirement to adhere to the highest global standards in management practices, as well as environmental and social initiatives which in turn ensured that the plant was built in line with global technological and engineering standards. The HFO power plant at Athi River near the capital Nairobi is a state of the art project and is
112m Amount in USD that Gulf Power’s power plant cost
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info@vivaafricallp.com www.vivaafricallp.com
Specialist legal and financial tax consultants
Viva Africa Consulting LLP (VACL) is a specialised legal and financial tax advisory firm providing tax advice in personal, business and investment matters. VACL comprises of some of the leading experts in East African taxation, all of whom have gained their experience from many years of practice with a ‘big four’ a professional firm.
3rd floor, Kiganjo House Rose Avenue, Off Denis Pritt Road. P. O. Box 50719-00200 Nairobi.
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Tel:
+254 +254 Mob: +254 +254
20 2465567 20 2699936 725389 381 733248 055
GULF POWER
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the first of its kind, Wanyiri said: “Up until now, Independent Power Producers (IPPs) in Kenya have been dominated by foreign investors. Gulf Power is the first IPP to be fully owned by indigenous local Investors.” Aside from infrastructure challenges, it is interesting to note that the HFO plant faces competition from other players at this stage. For instance, Wanyiri noted that there had already been several major renewable energy commitments across the country, including the construction and commissioning of 280MW geothermal power plants in the fourth quarter of 2014. Gulf is however confident of higher dispatch factor in the future, since two thirds of Kenya’s population is still without electricity, he said: “We have the potential to grow if required; just by using our current installed infrastructure, we can Two thirds of Kenya is still without electricity
Key Personnel
Abubakar Ali Chief Finance Officer Abubakar is a fully qualified Finance Expert and Leader with vast experience of leading financial strategies to facilitate companies’ ambitious growth agenda. He possesses proven ability to constantly challenge and improve existing processes and systems for optimal efficiency in achievement of business projects. His professional demeanor is excellent and his negotiation capabilities are valuable to any business.
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GULF POWER expand the current capacity by another 40MW by adding additional generating units.”
Norman Wanyiri, General Manager
Talent Management. The HFO plant directly employs 10 professionals, as well as an additional 40 people indirectly through operational and maintenance contract with Wärtsilä Eastern Africa, Since the plant has only been operational since December last year, training requirements have focused mainly around ensuring that the plant and its staff meet both Kenyan statutory requirements, as well as extra safeguards outlined by the World Bank, Wanyiri said: “At the moment we
Challenging the status quo in Energy in Africa
POWERING TOMORROW’S PROGRESS TODAY.
We’re proud to be there to help Gulf Power and the larger Gulf Energy group bring clean energy solutions to life.
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Some strive to give energy to solutions that spark commerce and growth, and what they need today is an ally to help them deliver a more ecological, sustainable tomorrow. What if a bank made that its job? We think a bank should.
Dentons has been engaged in Africa’s dynamic and exciting energy markets for decades. Our long track record on the continent means we have a thorough understanding of the political, economic, regulatory and legal issues that surround doing business in East Africa. Our world class team of energy lawyers are proud to have advised Gulf Power on the Athi River 80 MW heavy fuel oil power project. We wish Gulf Power every success in their venture.
dentons.com © 2015 Dentons.Dentons is a global legal practice providing services worldwide through its member firms and affiliates. Please see dentons. com for Legal Notices.
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are conducting statutory training; our employees have been trained on occupational health and safety, first aid and emergency preparedness. We also plan to empower some of our engineers in specialised electrical and mechanical engineering courses in power plants.” Social Responsibility Although the facility only requires a lean team, Gulf Power recognised early on the opportunity to integrate corporate social responsibility into its daily operations. Wanyiri noted that not only did the business have several dedicated social and environmental programmes in place, this was also implemented by a specialist community liaisons officer. He said that the community liaisons officer immediately had his work cut out; he said: “Before and during the construction phase, the local community wanted to know exactly what would happen to their neighborhood and if there would be any adverse effects to the community.” He added: “Through this liaisons channel that we had established between the business and
Inside the power plant
“Currently, only 30 percent of Kenyans have access to electricity and, with the government aiming to double this figure in coming years, Gulf Power’s expansion in the country could not be timelier” – Norman Wanyiri, General Manager w w w. g u l f p o w e r. c o . k e
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the community, we were able to assure them that there would be no environmental and social adverse effects.” Echoing its future-oriented business plan is Gulf Power’s focus on investing in the country’s future leaders and workforce. Wanyiri said: “We plan to provide 2 prefabricated classrooms to one of the schools in the area this year and we may provide more in the future so we can further ease congestion and give the children a better learning environment.” The company also plans to supply educational materials, as well as mentoring future
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potential leaders. Combining its management team’s experience with solid financial backing, the company is aiming to provide mentoring and scholarships to disadvantaged students. Wanyiri added: “Some Bright children often may not make it to join the best schools because they cannot afford to pay the required fees, so we are planning to fund several of them through high school and university, while giving them support they need to remain focused through mentoring.” For Gulf Power, social responsibility is not limited to signing a cheque; it understands that its contributions strengthen the communities and the individuals within them, providing many with the opportunity to traverse the limitations of their circumstances. Furthermore, in order to mitigate its environmental impact, Gulf Power is exploring the option of using solar panels to meet some of the plant’s energy needs; it has also undertaken an extensive tree planting programme around its facility which will lock in carbon for generations to come. Currently, only about 30 percent of Kenyans have access to electricity and, with the government aiming to double this figure in coming years, Gulf Power’s expansion in the country could not be timelier. Positioning itself in the Kenyan market as a socially and economically responsible energy provider will not only give the provide the company with the diverse revenue base it needs, but also sets it up to grow in capacity as the Kenyan economy develops.
Company Information INDUSTRY
Energy HEADQUARTERS
Athi River FOUNDED
2007 EMPLOYEES
50 direct and indirect REVENUE
$48 million PRODUCTS/ SERVICES
Energy provider
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A fair wind over Lake Turkana Lake Turkana Wind Power (LTWP), after nine long years of negotiation and preparation, is now an active project that will be delivering 300 megawatts of power to the Kenyan grid by the end of 2016 Written by: John O’Hanlon Produced by: Kiron Chavda
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he Lake Turkana Wind Power Project (LTWP) aims to provide 300MW of reliable, low cost wind power to the Kenya national grid, equivalent to approximately 20 percent of the current installed electricity generating capacity. The Project is of significant strategic benefit to Kenya, and at Ksh 70 billion (€600 million) will be the largest single private investment in Kenya’s history. A barren moonscape, pitted with volcanic craters, arid and inhospitable, and populated by warring tribespeople. That is one view of northern Kenya, and in a sense it is true: but a dualistic world view that only sees ‘challenges’ misses the point entirely. The counties of Turkana and Marsabit have extraordinary qualities. Among these is their wildlife, for example it was the prospect of catching six-foot Nile perch weighing nearly 390 stone that attracted entrepreneur Willem Dolleman to the shores of Lake Turkana in the late 1980s. His main problem was the relentless wind that would take control of his boat – no tent that he could obtain could withstand the force of those winds, and he often had to give in and sleep in his car.
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The potential of harnessing those forces for electricity generation was not lost on Dolleman and his friend Carlo van Wageningen, but at that time wind power was still an embryonic technology, and the low cost of oil put it out of contention. Wind power development required subsidies, and none would be forthcoming in Africa. It was not until 2005, when oil prices rose above £50 per barrel for the first time, that they, together with Chris Staubo decided it was time to take another look. The ‘founding fathers’ of LTWP called up Harry Wassenaar and Kasper Paardekooper of KP & P, a company with a history of developing and operating wind power projects, to bring some specialist expertise to the project. They were highly sceptical. Wassenaar, an old school friend of Dolleman, was however persuaded to come for a holiday. “He fell in love with the place as soon as he saw it,” says van Wageningen. “The wind itself convinced him!” With the help of Henk Hutting another veteran of wind power, if that is the right word in such a new industry, who confirmed the reliability of the wind flow in the area, LTWP was set up in Kenya under the ownership of KP & P BV, and the real work began. Early this year LTWP chairman Mugo Kibati accepted the Project Finance International
Key Personnel
Carlo van Wageningen Director Carlo was born in Rome (Italy) on 7th January 1957. He lived in North and West Africa with his parents from 1958 to 1969, in Nigeria, Libya, Ghana and Sierra Leone. He then went back to Rome to finish his higher education. From 1976 to 1988, Carlo worked for the Food and Agricultural Organization (FAO) of the United Nations and World Food Program. He was stationed in Rome (Italy), Niamey (Niger), Cotonou (Benin) and Harare (Zimbabwe) in various capacities. He ended his career in the United Nations as WFP Assistant Representative.
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LAKE TURKANA WIND POWER
What can a proven track record do for you? With 35 years of experience in building wind power plants, +67 GW (54,000 wind turbines) of installed wind power across 73 countries, 52 per cent more installed capacity than the closest competitor* and more than 26,000 wind turbines globally under 24/7 surveillance, our track record speaks for itself. Based on this vast experience and accumulated knowledge, we continuously support customers and policy makers throughout the world. As your trusted advisor, Vestas can help you make the most of your wind power potential.
* as of December 2013
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(PFI) African Renewable Deal Award 2014 in recognition of the way the project finance was put together up to final financial close in December 2014 – it was considered the best project finance structure achieved in the region over the last couple of decades. “The MoU between Willem Dolleman, Carlo van Wageningen and Chris Staubo was signed in 2005 so it took nine years for us to complete the development phase,” says van Wageningen. That was three years longer than the founding fathers had hoped for, but explicable considering the complexity of the project and the painstaking way in which project and political risks perceived by lenders had to be mitigated, No collateral other than its own potential
The Lake Turkana Wind Power Project is the largest single private investment in Kenya’s history LTWP water storage and accommodation
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Engineering Africa... Civicon Group is proud to be associated with the Lake Turkana Wind Power Project Over the last 40 years, Civicon Group Engineering has established itself as the regions leading Mechanical Engineering, Civil Engineering and Contracting firm in East and Central Africa. The company has a dynamic management team with over 30 engineers and technicians, a staff base of 2000, a large asset base of 5 fully equipped workshops across Eastern Africa and over 350 pieces of heavy equipment. The group also provides out-of gauge Logistics, Cranage and Erection services.
Select Projects
Mechanical Engineering: Greenfield Titanium mine in Kenya. The scope included: Structural, Mechanical, Plate work and Piping (SMPP). Civil Engineering: Road construction, maintenance of 113 KM, Yei Juba Road, South Sudan. Logistics: Transport of brewery vessels, Uganda. Cranage & Erection: Development of Heavy Fuel Oil Power Plants across East Africa. Mining: Turnkey projects to develop Greenfield Titanium Mine (Kenya) and Greenfield Gold Mines (DRC). Oil and Gas: Building of well pads and associated infrastructure for leading Oil & Gas E&P companies. Demand for Engineering continues to grow, driven by: • Development of Power generation and transmission facilities in the region. • Investment by regional governments to develop new roads and maintain Existing ones. • Private sector’s Investment in oil storage facilities across the region and Exploration for oil and gas. Development of mining in the DRC and Tanzania
• MECHANICAL ENGINEERING • CIVIL ENGINEERING • SPECIALISED TRANSPORT • CRANEAGE & ERECTION
• TANZANIA • SOUTH SUDAN • RWANDA • DRC • MOZAMBIQUE 1 0 8 KENYA J u l y •2UGANDA 015
LAKE TURKANA WIND POWER was offered so the wind farm had to secure sound backing. Of course it had the support of the government of Kenya from day one, but given that there was only one customer for its product, the government owned Kenya Power and Lighting Company (KPLC), political risk was a considerable factor. Initially the World Bank had offered to cover this but withdrew after a lengthy due diligence process. This meant that a different structure had to be put in place, and that was not so easy. “Where you have a single client, lenders normally request that the offtaker issue a letter of credit in favour of the lenders equivalent to six months’ forecast invoicing,” says van Wageningen. “At 300 MW the monthly bill to KPLC would be around €9 million, but €54 million is a lot more than they had ever had to find at one time and it would have been difficult for them to obtain that kind of security. We had to be inventive and come up with a different structure that would satisfy the lenders.” This was eventually achieved through a temporary levy on the tariffs, paid into an escrow account held by the government but in favour of the lenders. Negotiations were held right up to cabinet level, however this is a project of strategic national importance and all parties wanted it to go ahead. Nevertheless it was with some relief that the partial risk guarantee (PRG) was signed by Mr Kibati and the leaders of the Standard Bank, the National Treasury and the Kenya Electricity Transmission
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Company (Ketraco) in December last year. Ketraco is a key partner since it is tasked with building a 428 kilometre transmission line to evacuate the power output from the 300MW wind farm. This EPC contract is worth €142 million, and is being carried out by the Spanish company Isolux Corsán. The line will link Loiyangalani, close to the Lake, to the town of Suswa, on the outskirts of the capital, Nairobi. An additional benefit is that various geothermal plants that will be located along its route will be able to upload their output in the future. Though this contract is not directly overseen by LTWP it is classed as an ‘associated’ contract. “We have to make sure we complete the two projects in a harmonised manner, to be ready when we are ready to deliver power from our plant. They have been working since August 2014, and
Villiage Construction
SUPPLIER PROFILE
SECO
Southern Engineering Company Ltd (SECO), established in 1957, is an ISO 9001:2008 quality certified company operating in East Africa in Kenya, Uganda, Tanzania and Mozambique. SECO has four main operational divisions namely Marine Engineering, Energy, Camps as well as Civil – Mechanical Engineering. SECO’s private quayside facility is fully equipped with state-of-theart equipment in its fabrication, carpentry, electrical, hydraulics, and machine shops and offers 250, 100, 90, 70 and 50 tonne cranes. SECO prides itself in its strong team of qualified engineering and design professionals as well as in its project management teams to address an array of client needs.
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Ketraco is a key partner in the Lake Turkana project. Building a 428 kilometre transmission line to power the 300MW wind farm
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should complete by July 2016 ready for us to come on line with the first 90 MW in October,” says van Wageningen. The transmission line is one of seven EPC contracts, the remaining ones all directly owned by LTWP. Following financial close work started on all fronts in January and the site became a hive of activity. Perhaps the most important is the construction, or rather the upgrade of a 210 kilometre stretch of road from the A2 highway at Laisamis. This is being surfaced to take the site traffic, and is currently proceeding to schedule. The same is true of the work on the site itself, where 150 housing units are being built for the staff as well as admin offices and a fully equipped maintenance workshop. “As the turbines will be at full production all of the time they will need servicing twice as often as similar units sited in Europe for example,” he explains. “The workshops are designed to accommodate full maintenance of the turbines including refurbishment of gearboxes if that is necessary.” The usual resource of sending the
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nacelles to a Vestas depot is just not available. Groundworks have also started for the substation that will collect the power from the 365 turbines and feed it to Ketraco’s new transmission line, and the foundations of the turbines themselves. As a preliminary, soil survey drilling is being conducted at each microsite to make sure it can take the 43 metre masts supporting the Vestas V52-850 kW turbines. “We planned it so that when the turbines start coming into Mombasa they are loaded on trucks and driven straight to the site, avoiding double handling at a warehouse.” Delivery will be on a rolling programme, with around 30 turbines arriving each month. Additionally, 110 kilometres of internal roads are being built to reach the turbines on the 40,000 acres estate, held on a 99 year lease from the government.
Video - Lake Turkana wind power project named African renewables deal of the year 2014 in London
““We have to make sure we complete the two projects in a harmonised manner, to be ready when we are ready to deliver power from our plant.” – Carlo van Wageningen, Director
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Being a construction company, Entreprise Générale Malta Forrest recognizes the benefits that sustainable energy provides to the environment and economy. With vast expertise in offering turnkey project solutions in telecommunications, electro-mechanics as well as wind power, we continue to invest in modern equipment and
technology with the aim of fulfilling Africa’s development goals. We strive to build strong relationships that are beneficial to communities where we work, and value a great deal the partnerships we have forged with our clients. For this reason, we are very proud to be partners of Lake Turkana Wind Power Project.
EGMF is a member of Groupe Forrest International.
www.egmfkenya.co.ke www.forrestgroup.com Karen Office Park Nairobi: +254 20 354 7741
ENTREPRISE GÉNÉRALE MALTA FORREST s.p.r.l GENERAL & CIVIL CONTRACTORS
P.O Box 1322 -00217, Tigoni, Limuru, Kenya
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A word about the siting concept would be appropriate here. Henk Hutting quickly corrected his new colleagues, who had thought the wind a local thermal effect, once they called him in. He explained how two opposing, low level seasonal winds affecting East Africa, the Kaskazi and the Kuzi, run for six months from north east to south west and for six months in a south east to north west direction. Split in one case by the great mountains of Kilimanjaro and Kenya and in the other by the Ethiopian plateau, in each case a portion is directed northward up the Turkana corridor by the constant low pressure of the Sahara. Accelerated by the venturi effect of the hills to the north of Meru, the wind to the south east of the lake averages 12 metres per second or around 27 miles per hour. For the wind turbine designers, the problem was if anything that the site had too much wind! Now that it is under construction the wind farm seems certain to be delivering low-cost electricity to the Kenyan national grid by the end of next year. At full production its contribution will be equivalent to nearly 20 percent of the currently installed generating capacity of Kenya. “We don’t claim that wind power can be considered baseload (always available), but in fact we achieve good enough load factor, based on eight years of wind measurement on site. And because the transmission line brings power to this region for the first time, it will transform the lives of the local people. What the
“As the turbines will be at full production all of the time they will need servicing twice as often as similar units sited in Europe” – Carlo van Wageningen
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kilometres of internal roads are being built to reach the turbines on the estate
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The African continent contains many of the fastest growing emerging markets in the world today. In order to fuel this growth, the public private partnership model is being exploited throughout Africa to build the infrastructure needed to meet growing commercial demand. The Lake Turkana Wind Power Project is emblematic of the large and complex infrastructure projects that are now being pursued in SubSaharan Africa. In fact, in Kenya, this project is just the tip of the iceberg. Increasing modernisation efforts in the public and private sectors are making the difference. Bankable projects are easier to achieve in the face of better governance practices, lower political
risk, trade liberalisation and improved legal enforcement and regulatory regimes. With the availability of political risk insurance products, the implicit cover provided for by development financial institutions and guarantees offered by local governments, political risk in Africa can be managed effectively. In the legal arena, agreements are negotiated with detailed provisions providing for changes in the law or taxation schemes and the overall scrutiny of documents is significantly higher. As a result, opportunities are able to be valued more realistically which enhances the availability of creative financing options. In addition, the risk appetite of large multinational companies has increased as
evidenced by the growing number that have set up operations in Sub-Saharan Africa recently. Increased competition in turn is providing a more even playing field for newcomers to enter the market. As the Lake Turkana Wind Power Project shows, creative African solutions to African problems are paving the way for transformative infrastructure development. The opportunities in Sub-Saharan Africa are well-known to many. Those who understand the commercial challenges will reap the rewards of the PPP projects that will change the face of business in Africa.
Amyn Mussa, Editor Amyn Mussa is a partner at Anjarwalla & Khanna and head of the firm’s Energy & Infrastructure Group. Amyn is also Co-Head of the Energy & Infrastructure Sector Group of ALN, an association of top-tier independent law firms across Africa.
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effect of development will be upon local conflict, which is rife, remains to be seen, but the more enterprising are already seeing this as a chance to establish trading businesses, commercial fishing, tanneries and other sources of employment and revenue. “As soon as the substation goes live we will be electrifying the largest towns in the area,” promises van Wageningen. The communities of Loiyangalani, Kargi, South Horr and Laisamis, will have access to light, refrigeration and other enabling technologies. Since the transmission line will carry high speed optic fibre as well, they will get better connectivity than many people in rural Europe, he points out. The money that will come in to this neglected part of Kenya will surely make a difference. Because this is green energy the United Nations registered LTWP under a mechanism that will
“As soon as the substation goes live we will be electrifying the largest towns in the area” – Carlo van Wageningen
Progress on the village construction for staff lodgings
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allow the project to generate carbon credits which will generate some $4million to develop communities around the wind farm. Additionally the company has set up a CSR programme, implemented by the Winds of Change Foundation (a wholly owned subsidiary of LTWP) that funds health programmes and water, sanitation and educational initiatives. Seeded with â‚Ź500,000 a year, the foundation will be raising further funds to support business development. “Following extensive consultation with the communities
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to identify their needs we have created a 20 year development plan for the foundation.� The communities have been asked to participate and identify their needs.� The 20 year plan will be delivered in five year segments, he says. To have secured the largest ever private-sector financing in Kenya with no fewer than ten European and African development finance institutions providing debt and equity is a great achievement. The project will change the lives of millions of Kenyans, and boost the national economy.
Site Works - progress as at March 12 2015
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