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taag angola airlines: Angola’s take-off

andalusite resources:

AFRICAN EDITION Issue No.2

A market for quality

nashua mobile:

Cellular organisation

smoothing the

fresh produce supply chain

Paltrack provides solutions for the fresh produce supply chain, enabling real time collaboration through technology

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Seen www.bus-ex.com

Editor’s letter in touch EDITORIAL

Martin Ashcroft Editor In Chief mashcroft@bus-ex.com Will Daynes editor wdaynes@bus-ex.com

A comprehensive

portfolio

T

Infinity Business Media Ltd

he second issue of BE Africa brings you exclusive interviews with executives from a range of companies in different sectors and countries across the continent.

In mining we take a close look at the corporate social responsibility policy of Newmont Ghana Gold, the development of a new mine in Ethiopia

by Allana Potash and the production of refractory materials in South Africa by Andalusite Resources.

Mines need equipment and services, so here we have a selection of suppliers including bulk material handling specialists Martin Engineering and KPMC, engineering firms Howden Africa and SMT Scharfe, and IT support provider Gijima.

Africa is a large continent and moving goods around is big business, too. Paltrack provides a comprehensive portfolio of solutions for the fresh produce supply chain, while Forwarding African Transport Services (FATS) has grown from nothing to a R200 million organisation in the space of ten years.

With some of the biggest names in telecommunications describing the explosion in connectivity in Africa, we have a comprehensive portfolio ourselves.

Tel: +44 (0) 203 137 7100 Fax: +44 (0) 1603 666466

M.Ashcroft

DESIGN

Matt Johnson Art Director mjohnson@bus-ex.com Louise Culling Production Designer lculling@bus-ex.com

BUSINESS

Richard Turner Director of sales rturner@bus-ex.com Vince Kielty Director of Editorial Research vkielty@bus-ex.com Sharon Rooke Administration & Operations srooke@bus-ex.com Matt Day Head of technology mday@bus-ex.com Andy Turner Chief Executive aturner@bus-ex.com

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www.bus-ex.com Š Copyright 2012 Infinity Business Media Ltd

Martin Ashcroft Editor-in-chief mashcroft@bus-ex.com

BE AFRICA | 3

africa

10

Logistics 10 Paltrack

The catalyst within the fresh produce supply chain

22

A comprehensive and integrated portfolio of solutions for the fresh produce supply chain.

16 one network in africa

Think community not supply chain

Looking ahead, a network model is the way forward for authentic supply chain and logistics collaboration.

22 Port of Beira

Changing perceptions

32 4 | be africa

One of Mozambique’s most strategically important ports is delivering a cost-effective service for the region’s land-locked states.

contents

42

32 FATS

Achieving audacious goals

In the 20 years from 1992, the Harris sisters built their company from nothing to a R200 million organisation.

42 TAAG Angola Airlines Angola’s take-off

Having launched an improvement programme in 2008, Angola’s national airline is now planning to extend its international, regional and domestic footprint.

56

Mining operations 56 Newmont Ghana Gold A helping hand

Mining operations usually provide much needed employment in developing countries; but a longer point of view is what’s really called for.

64 Allana Potash

74

The best of all worlds

Richard Kelertas explains why the Dallol Project in Ethiopia is perfectly placed to satisfy the growing demand for potash.

74 Andalusite Resources A market for quality

The world’s iron and steel producers depend upon the properties of a refractory material produced by this South African mining company.

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africa

Mining services 86 SMT Scharf Africa

Speculating and accumulating

94

Convincing mines to spend more money up-front on the expectation of lower life-of-mine costs is what one South African supplier is working hard to do.

94 Trollope Mining Services A winning transformation

After being hurt by falling coal prices in 2008, Trollope Mining Services has grown dramatically by taking a more balanced approach.

102 Martin Engineering

102

Keeping the movers moving

One of South Africa’s leading bulk material handling specialists is helping to make material handling easier, safer and more productive.

112 SGS Ghana Testing times

In West Africa, demand is high for the services of the world’s leading inspection, verification, testing and certification company.

120 Howden Africa An engineering edge

112 6 | be africa

Showing impressive growth in meeting the needs of the burgeoning resources industry in Africa.

contents

128 KPMC

Moving mountains

Combining the practicalities of mining, the challenges of logistics and the volumes of bulk materials handling.

138 Gijima

The search for differentiation

One of South Africa’s largest IT support companies is looking at how it can remain at the top by developing different niche markets.

128

Telecoms 146 BT Sub-Saharan Africa Getting nations talking

Development in Africa needs to be underpinned by a reliable communications network that will unite the continent.

156 Windhoek Cable Accessories

146

Namibia in the glass age

164

Fibre optics are transforming communication in Africa, and this supplier is helping to upgrade the system in one of the sparsest countries imaginable.

164 Allied Group Connecting Africa

Taking advantage of the growth in Africa’s telecoms market requires experience, expertise, and an ability to customise according to client requirements.

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africa

176 Nashua Mobile

Cellular organisation

Provinding SMEs with effective communications without heavy investment and long-term commitment.

Energy and infrastructure 186 Cennergi

Winds of change

One of the most recent independent power providers to enter South Africa’s electricity market is setting itself ambitious targets.

176

198 Power Providers Company Limited Business and belief

Renewable energy is the answer for Tanzanians seeking a robust and reliable power supply.

198

208 Atmei Construction Single-minded

This company is continuing to grow by focusing on the original business sector it started with.

216 Sukuma Consulting Engineers (Pty) Ltd Water for life

216 8 | be africa

Getting clean and safe water to those who desperately need it is just one of the areas of operation for this infrastructure specialist.

contents

234 General services 224 Avis Ghana

Riding growth in Ghana

As Ghana’s economic and business landscape changes, this famous name in transportation is preparing itself for an explosion in demand.

224

244

234 Silver Star Auto Limited A star in the making

Having carved out an impressive market share for Mercedes-Benz in Ghana, this dealer is now set to expand its network even further.

Food 244 Astral Foods Ltd

Nature plus nurture makes nutrition Despite increasing competition, South Africa’s leading integrated poultry producer is going from strength to strength.

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The th

10 | BE africa

Paltrack

e catalyst within he fresh produce supply chain Paltrack provides a comprehensive and integrated portfolio of solutions for the fresh produce supply chain, enabling real time collaboration through technology research by: Gareth Hardy

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Conventional fruit shipping

Paltrack

P

altrack (Pty) Ltd is a South African owned company that provides supply chain solutions to the local and international produce industry. Its majority shareholder is the IMPERIAL Group.

The Paltrack business was formed when the IMPERIAL Group acquired Capespan’s Distributed Systems (CDS) department in 2000. A commercial solution was created, whereby strategic focus areas for supply chain visibility were defined. A suite of point solutions was developed to service the individual supply chain entities – from producer to port – providing an integrated network solution. Paltrack’s information collection and delivery services (ICDS) consolidate and distribute electronic data sourced from various activity points in the logistics chain.

Transaction data between supply chain partners is available just in time. This enables operational decision making during execution of the outbound supply chain; a critical enabler within a perishable export supply chain. ICDS handles millions of transactions per year on behalf of industry level and individual parties. Its central code registration (CCR) solution offers a mechanism to centrally register and

maintain master data used throughout the entire fruit production and export industry.

The emphasis is on registering codes once and automated distribution to all thereafter.

South African export channels have proliferated into hundreds. From individual producers exporting under their own brands, to co-operatives between multiple producers, to trading companies consolidating produce from multiple sources under their own brand names. This arrangement encourages competition with resulting quality and innovation benefits.

Paltrack’s solutions to the industry are continually evolving. It is currently a comprehensive and integrated portfolio of solutions, serving individual entities within the industry, and industry-level regulators tasked with food safety and certification of food supply processes.

Paltrack’s solutions allow its users to manage, track and trace their products throughout their business, and thereby meet the high standards required from their global customers.

The fruit focused solutions include: AGRIPORT - A logistical and financial management solution aimed at the export agent.

“The end-state should be a real time value network where all trading partners can easily connect and share relevant information” BE africa | 13

solutions to the ions and provide these lut so gy olo hn tec n tio es informa jority Paltrack (Pty) Ltd creat owned company with ma an ric Af uth So y oll wh se agreements. It is a fruit industry under licen l Group. shareholder, the Imperia uth African ated services to the So rel d an ms ste sy n tio pplier of informa mpliment the Paltrack is the leading su been established to co ve ha s ice rv se y lar cil number of an and setting of fruit export industry. A to information provision ed at rel y inl ma e ar s ese service software solutions. Th mation exchange. standards to ease infor

Exporting

Business Rules & Standards

Paltrack (Pty) Ltd. | Old Mutual Building, Cnr Oxford & Queen Streets, Durbanville, 7550 PO Box 3755, | Durbanville, 7551 | Tel: +27 21 970 2777 | Fax: +27 21 970 2888 Email: info@paltrack.co.za | www.paltrack.co.za

Paltrack

Fruit picking

PALPRINT - A label printing solution that produces pallet, carton, punnet and thrift bag labels.

PALFARM - A label printing and document generation solution for the farmer.

PALPACK (STD / PRO) – A pack-line management solution suited for the pack house environment.

PALSTORE (STD / PRO / EXP) - A warehouse and stock management offering.

PALPORT (STD / PRO / EXP) - An extension of PALSTORE that focuses on conventionaland container vessel loading.

PALINFO - ICDS; data warehouse and CCR services.

Paltrack (Pty) Ltd also offers a range of additional services that range from bespoke development to consultation and training.

Paltrack is constantly innovating and believes that the next focus areas should be greater collaboration between all the role players that make up the industry and reducing the need for masses of paper and human intervention still required in the export certification processes. Wet signature replacement, backed by an integrated DMS solution with all-hour automated export approval processes, has to be the next step towards sustained competitiveness. The endstate should be a real time value network where all trading partners can easily connect and share relevant information.

For more information about Paltrack visit: www.paltrack.co.za

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16 | BE africa

one network in africa

Think community not supply chain Looking ahead, a network model is the way forward for authentic supply chain and logistics collaboration research by: Gareth Hardy BE africa | 17

One Network in africa

O

ver the years, industry has seen various shifts within the concept of how to name and define how “products are moved”. The concept of the value chain begins with an emphasis on the supply chain. In recent time there has been an increased focus on the demand chain with ever increasing sophistication leading to companies driving to a demand driven value chain (DDVC). In a DDVC, suppliers and retailers let customers drive their actions.

Yet product and accompanying information, is not moving in a way that is very chainlike. Instead, we are viewing a complex web of cross-connections that either directly or indirectly link every participant. While the concept of a chain may have worked in a paperdriven, more vertically integrated business environment and the demand driven model ensured many benefits, the future holds an even further improved model.

UNEXPLORED BENEFITS THROUGH A NETWORK MODEL The network model is the future. It moves with the paradigm shift of “in the cloud’ technology. Today, far too much information is available and decisions required are far too granular for human planners to be effective. Software as a Service (SaaS) allows for real time decision making, utilising the vast amount of information in the cloud and improving the management thereof to create visibility throughout the network.

Currently members in the cloud use discrete enterprise systems with little or no ability to communicate with any other

systems (even those within the same company). This lack of upstream and downstream visibility typically means that retailers have little idea what conditions the manufacturing plants are facing at a particular time and vice versa.

THE MOVE TO THE REAL TIME VALUE NETWORK™ (RTVN™) Imagine a network-based environment that provides instantaneous and seamless communication among members, and even provides execution orders that will allow the most far-flung or tangential nodes of the value network to align operational objectives with minimal human interaction.

A community of companies oriented toward the end consumer. In other words, a RTVN. Only a platform-enabled RTVN is able to model the complex web of real-world relationships found in today’s value chains.

The RTVN is an extremely responsive cloud-based network where informational lead times are virtually eliminated and physical lead times are minimised.

The RTVN precisely models and connects you to your own unique supply chain.

Whether in whole where, for example every node from retailers to raw material suppliers - or in part such as for a logistics and transportation network. It provides value across multiple industries and business roles and initiatives.

WHY IS THE RTVN SO POWERFUL? The rapid growth of the RTVN will be fuelled by network effects. The network effect will begin to take over as the cost of not connecting

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The RTVNTM model

with the network becomes greater as each additional company joins. The success of an RTVN model hinges on finding the right balance between capturing the complexity of real-world relationships found in value networks without being too open. A networkbased platform is needed that will allow each member of the network to easily connect and share the right kind of information.

There are signs that the RTVN revolution is already moving. In February of 2012, Gartner reported that companies that implemented demand driven value networks grew revenue faster, achieved more than 15% higher perfect-order rates and reduced levels by as much as a one-third when compared to their peers with traditional, cost-focused value chains.

Gartner also recognised that many companies still lack timely, accurate networkbased data as well as the ability to execute

on that data. They predict that by 2016, half of their Top 25 will begin to exploit intraand enterprise network-based data through a combination of predictive analytics autogenerated actionable recommendations.

THE RTVN IN ACTION One Network is an enabler of responsive and agile supply chains, making value chains, smarter, leaner and far more demand driven.

One Network’s RTVN lets your supply chain become as real time as you want it to be. Retailers, suppliers, transportation companies, 3PLs, 4PLs and raw material producers— all have found value in One Network’s RTVN. For more information about One Network in Africa visit: www.e-Logics.co.za

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Changing perceptions The Port of Beira, Mozambique, is playing a major role in the nation’s economic growth by delivering a cost-effective service for the region’s land-locked states written by: Gay Sutton research by: Abi Abagun

22 | BE africa

Port of Beira

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Lifting freight

Port of Beira

O

ccupying over 1,300 miles of marketing manager Félix Machado. The the eastern coast of southern obligations were far-reaching and included Africa, Mozambique is a investing in equipment and infrastructure, strategically significant cutting costs, and improving efficiency transport corridor for land- and productivity. The port was required to locked Zimbabwe, Zambia, Malawi, DRC improve its safety and security, facilitate and of course, Mozambique itself. Over local and regional trade and growth, and the past 15 years, the Port of Beira, which protect the environment. “And we have has strong infrastructure links with these achieved all of those. Today, we are locally hinterland countries, has been undergoing and regionally competitive and make a significant expansion and investment and major contribution towards the growth attracting increasing volumes of trade. of the economy. We are efficient and cost Today, it is making a major contribution to effective and have captured a major share the economic growth of the region. of the import and export market.”

The period of investment The Port of Beira began in October 1998 operates within its original when Mozambique started 12-berth footprint. The with new reforms (oriented port comprises a container by the World Bank and the terminal and general cargo IMF) to place the ports (operated by CdM), fuel Proportion of port terminal, coal terminal, under private management throughput destined grain terminal and quay and stimulate growth; and for export number one reserved as the government handed a fishing harbour. The the management of the Port of Beira to Cornelder de Mozambique container terminal handles a variety (CdM). A joint venture 67 per cent owned of products including tobacco, soft

by Rotterdam-based Cornelder Holding timber, ferrochrome, logs and cotton, and 33 per cent owned by the government and the general cargo terminal handles entity Mozambique Ports and Railway fertiliser, wheat, clinker for cement, sugar, (CFM), CdM has steered the port maize and coal. Today, 60 per cent of through a period of infrastructure and throughput is in imports and 40 per cent commercial development and plans to is in goods for export. accelerate that growth to support trade The condition of the road network along the Beira Corridor is generally and industry in the region.

“We took over on 15 October 1998 with good to excellent; however, there are a 25-year concession and a further 15-year some sections which are in poor condition extension if we achieved our obligations or have severe speed restrictions, for within the first 15 years,” explains sales and various reasons. Beira is the central

40%

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Port of Beira hub of the Beira Railroad which reopened recently.

Company, the country’s The Machipanda Line, meanwhile, is to undergo longest established railway system. The Machipanda further improvements.

Line extends to Harare In spite of the obvious in Zimbabwe, creating a commercial benefits of this cost effective route to port accessible and cost effective for all the land-locked import and export route, central southern African Ships docked at the port attracting hinterland trade states. The Sena Line links to the port has not been easy.

“One of the big challenges we have had to the port to the lucrative and nationally important coal mining province of Tete, face is a long-standing negative perception providing a low cost export route for of safety and security at the port,” Machado companies such as Vale and Riversdale says. Security was one of the first issues to be Mining. A considerable amount of work tackled from the beginning by CdM as part has recently been done on the Sena Line, of its investment plan; however changing

nectar The Nectar Group has been providing innovative and cost effective cargo handling solutions since its inception in 1972, solving logistical problems often in challenging circumstances.

The Group is unique in that it offers a truly global reach, providing port-related bulk handling and bagging services, primarily for the discharge of bulk, dry and free flowing commodities, such as grain, cereals and fertilisers.

The Group activities now extend to consultancy, terminal design and development in addition to the management and maintenance of mobile harbour cranes, shipto-shore gantry cranes and the wider range of bulk handling and terminal equipment.

In 2011 the Group established Nectar Coal Handling Mozambique Ltda to provide operation, maintenance and management

support for a coal terminal. This company is now fully up to speed and employs over 180 people all trained to international standards in operations and maintenance, and is backed by an experienced management team.

The Group’s skills and expertise are based on decades of hands-on operational and technical experience. The transfer of technology and training of local personnel is part of the Nectar ethos and plays a fundamental role in all the company’s projects and partnerships.

Both Nectar Mozambique Ltda and the wider Nectar Group are very proud to be associated with CdM, CFM and the Port of Beira.

Nectar: Driven by innovation E. marketing@nectar.co.uk www.nectargroup.net

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Port of Beira

The port operates within its original 12-berth footprint

the negative perception and convincing the success of these policies. In 1998, Beira possible customers of the economic handled just 10 per cent of the trade; today, benefits of using Beira was an uphill task. it accounts for 60 to 70 per cent.

On the sea side, the port is accessed via “People were very resistant to change,” he continues. “To overcome this reluctance the Mancuti Channel, which was dredged we made a strategic decision to offer between 2010 and July 2011. The port can lower import rates, increase now receive deepwater vessels. As a result of the the free period of any positive market-oriented commodity coming from philosophy of CdM, the hinterland countries, container traffic in 2011 and generate availability has risen from 105,000 of empty trucks in all to 160,000 TEUs, an those countries to attract increase of 50 per cent. the exports.”

Gradually, habits have General cargo throughput been changing, and the has also grown by around General cargo Malawi tobacco industry 40 per cent, from throughput, 2011 is an excellent example of 1.2 million tonnes to

1.9

million tonnes

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1.9 million tonnes, in the same period.

The vision for the future of the port is ambitious. A number of critical expansion projects are currently underway and more are planned for the future. Construction work is in progress at the container terminal, and this will increase container storage capacity from 6,400 TEUs to 11,400 TEUs. At the general cargo terminal, the final touches are being made to a dedicated tobacco storage facility.

Both projects should become operational

by August this year. “We are also putting in a new dedicated container gate, to separate the access routes for container and general cargo traffic and to facilitate the flow of trucks,” Machado says.

In the medium term, plans are in hand to double the storage capacity at the grain terminal from 30,000 tonnes to 60,000 tonnes, and to construct a dedicated fertiliser terminal to improve the efficiency and capacity of the operation. The aim is to improve vessel turnaround time and triple or even quadruple offloading capacity from the current 2,000 tonnes a day to 8,000 tonnes. If all goes according to plan, construction will begin this year.

Looking to the future, the company is examining the viability of building

new dedicated terminals to improve the efficiency of mineral, sugar and car handling. Meanwhile, it’s also addressing longer term capacity planning. “The container terminal was originally designed for 100,000 TEUs, and with all the improvements we’re making it should have a capacity of 400,000 by 2015. We believe we can continue to operate the container side of the business for the next 15 to 20

“Our plan is to construct a further 300 to 600 metres of quays with a draft of 12 to 13.5 metres for general cargo” 30 | BE africa

Port of Beira

A number of critical expansion projects are currently underway at the port

years with the quays we 15 per cent of total traffic have. The general cargo through the port was terminal, however, is likely generated by Mozambique. to come under pressure,” Today, it accounts for 54 per Machado explains. “So our cent of the traffic, Malawi Proportion of the port’s plan is to construct a further for 22 per cent, Zimbabwe traffic generated by 300 to 600 metres of quays 15 per cent and Zambia Mozambique eight per cent. With the with a draft of 12 to 13.5 region’s economic growth metres for general cargo, set to continue, the Port and together with CFM (the landlord), we’re currently engaged in the of Beira is well placed to provide a cost feasibility studies for this project.” effective and efficient import and export Since achieving political stability in route for future trade. the mid 1990s when the current spate of economic reform began, Mozambique For more information about has enjoyed continuous growth, strongly Port of Beira visit: supported by the Port of Beira. And the www.cornelder.co.mz figures amply illustrate this. In 1998 just

54%

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FATS

Achieving audacious goals In the 20 years from 1992, the Harris sisters built their company from nothing to a R200 million organisation.

We spoke to CEO Caron Harris written by: ruari mccallion research by: Robert Hodgson

BE africa | 33

Entrance to the offices

FATS

T

he year 1992 was one of major change in South Africa. Amid all the excitement about the release of Nelson Mandela and the progress towards majority rule, it might have been easy to overlook the activities of two sisters who were in the process of setting up a freight forwarding and transport services company. Twenty years on, it is hard to overlook what they have achieved: a R200 million services company that has established itself in South Africa and sub-Saharan Africa.

The logo is eye-catching enough: it features a large lady carrying a container on her back, single-handedly, which reflects the name of the company, FATS (the initials stand for Forwarding African Transport Services). It could easily have been named CATS, as at the time of its establishment, businesses were required to submit alternative names; but FATS was the one that was selected. That is just fine

by CEO Caron Harris, for personal, family reasons and because FATS is certainly an eye-catching name. It was a name that attracted attention to itself quite quickly for other reasons, too, because FATS was one of the first companies to actively market itself into Central Africa.

“Twenty years ago, everyone was afraid of Central Africa,” she says. Corruption was just one of the factors that gave other people pause for thought but to the Harris sisters, it was a region that simply could not be ignored—and nor should it be. They decided not just to venture where others were frightened to tread: they determined to

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SHIPPY MARKETING P/L “Shipping without compromise”

Shippy Marketing’s main activities are: • International Road Transporters • Air Freight Forwarding • Customs Clearing • Consulting • Warehousing Shippy Marketing P/L | Unit 8, Cnr Diamond & Sande Cres | Graniteside, Harare | Zimbabwe Tel+263 4 762973-5 / 700816 | Cell: +263 72 424 268 / +263 733 346 994 Email:operations@shippy.co.zw

FATS do so in a way that would set Shippy Marketing an example to the industry.

Shippy Marketing is able to carry consignments of different “Most freight forwarders weight to various destinations, both local and regional. Our do different parts of the wide range of vehicles varies from bakkies to 30-tonne business separately. We trucks. Dedicated trucks for speedy delivery are available at decided to do them all,” competitive rates. We are highly experienced in movement she explains. “What this of the following commodities: cotton lint; machinery and spares; maize (bulk and packed); and containerized cargo. enables us to do is to discuss We are proud of our relationship with FATS and wish them problems before they continued success in the future. happen, because problems operations@shippy.co.zw do arise. We chose this approach because it was not easy: everyone else was doing what was easy; we came at it from the other end. Our objective is to look after the end user, from start to finish, as a one-stop operation.”

What the Harris sisters were trying to do was pretty ambitious, but they did have at least one advantage: the main port of entry to the landlocked countries of Central Africa is Durban. While there are other ports, nowhere else is as well-equipped or has the same level of port and transport infrastructure. “You can go through DarEs-Salaam, which is closer, but the port is very congested and there are major delays.

And Beira is tiny in comparison with Durban,” Harris says.

FATS was launched with a capital of R 24,000—R12,000 each—some experience, business discipline, vision and ambition. Caron’s background is in Reception area at FATS

“We have based our entire existence over the last 20 years on delivering high service levels” BE africa | 37

Chita One Logistics is a South African registered company which was formed in 2010.

We provide cross border transport services on northbound and southbound into countries like Malawi, Mozambique, Tanzania, Zambia and Zimbabwe. We intend to expand our services into other African borders in the near future.

The company proudly owns 36 freightliner trucks (century class, Columbia, Argosy) and 36 trailers (sided and flat decks) enabling us to carry and move all kinds of loads with ease either as break bulk cargo such as fertilizers, steel coils, polythene, paper, agricultural products or containerised cargo e.g. liquor, groceries and electronic goods.

PUTTING SMILES TO MILES 77 Smits Street, Germiston, South Africa Tel: +27 11 873 0945 or +, Fax: +27 11 873 0895 Emails: jedeni@chitaonelogistics.co.za - General francis@chitaonelogistics.co.za - Operations janton@chitaonelogistics.co.za - Accounts

BIG

on Projects into: Namibia, Botswana, Lesotho, Mozambique, Swaziland, Zambia

20 years experience in general haulage Containers • Breakbulk • Abnormal Loads • Full & Part Loads Durban: Tel: +27 31 460 0500 Fax: +27 31 465 7903 Email: mark@rfbtrans.co.za

Johannesburg: Tel: +27 11 396 9067/45 Fax: +27 86 615 1947 Email: sagie@rfbtrans.co.za

www.rfbtrans.co.za

Our trucks are fitted with satellite tracking devices which allows us to add security to our clients’ cargo at the same time also giving our clients up to date tracking reports of their cargo and the right turnaround of the trucks.

All staff come with a wealth of experience and their dedication to serve our clients effectively concurs with the long term vision of the company.

inspired Your weekly digest of business news and views

www.bus-ex.com

FATS accountancy; her sister, Elaine, had shipping Chita One Logistics became engaged with FATS in 2010 experience gained at Rholig after the demand for vehicles to Malawi rose. After a and other companies. Their few trips to Malawi FATS increased its confidence in our focus is the customer, their services and since then we have become an integral part of strategy is service.

FATS, with an honest relationship built through trust.

“The only thing we have We have extensively moved large volumes of steel coils and paper loads from South Africa to Malawi and in the to sell is communications,” process have attained the experience in handling these she explains. “We have commodities to FATS’s satisfaction. In brief we are proud based our entire existence to be associated with FATS and Chita One Logistics wishes over the last 20 years FATS well as it celebrates its 20th anniversary. on delivering high jedeni@chitaonelogistics.co.za service levels. We are not the cheapest, but our company is founded on the principles of communication and integrity: whether it is good news or bad news, we will give our customer the news.” They make sure the customer gets it as well: they do not place the onus on the customer to find out what is happening by tracking their delivery on a website: they actually email them personally. “This is a personal service. Customers should not have to find out for themselves; it is our responsibility to tell them.”

FATS, scoring Level 5 in Broad-Based Black Economic Empowerment, now employs around 50 people and owns a warehouse and shipping depot. It tends to train its recruits to the necessary skills level, FATS building in Durban, South Africa rather than importing expertise externally.

Chita One Logistics

“We are not the cheapest, but our company is founded on the principles of communication and integrity” BE africa | 39

“Our business is about looking for niches, for areas and opportunities where we can offer something special” “The reality is, this business is about people, and I am only one person,” Harris declares.

“Our success comes from the people who work in the company.”

FATS’s largest markets are steel and paper but the company is also involved in project work, which it defines as the handling of abnormal loads, ‘out of gauge’ cargo, large structures and similarly unusual challenges.

Paper is imported from Europe to Central Africa; steel is two-way traffic. Structural steel is exported to China, for example, with

40 | BE africa

specialist metals coming the other way.

FATS makes a virtue out of dealing with the unusual. “Over the past two years we have been moving more towards project work, in areas like construction, energy and strategic investment to Central Africa,” Harris says.

“Businesses in China are becoming our biggest partners. That sometimes means that margins are becoming smaller, so our business is about looking for niches, for areas and opportunities where we can offer something special.”

FATS

Transporting a bulldozer

FATS’s knowledge of the continent’s infrastructure, as well as the end-to-end service it offers, represents a premium product. For example, if you have 1,000 containers to move and the apparently nearest and most convenient port actually has the capacity to unload only 10 per day, then you are going to have problems.

“People don’t think of these things and that’s where we come in: we are about finding solutions,” Harris explains.

“Customers don’t want to hear about what can go wrong but part of our job is to educate our clients—it is important to be aware of the challenges.” FATS’s task is to ensure that things go as smoothly as possible, that documents are where they should be in plenty of time, so cargoes

are despatched and therefore have the opportunity to arrive on-schedule. That’s what the company is doing now and it has ambitious plans for the future.

“We have set ourselves the target of being a half-billion rand company,” Harris says. “Our BHAG [‘Big Hairy Audacious Goal’] is to get there in two years. Our BAG [‘Big Achievable Goal’] is to get there in three years.” And if it achieves the achievable, all its employees will share in FATS’s success, with a large bonus. They will have earned it.

For more information about FATS visit: www.fats.co.za

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the Boeing company ©

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Angola’s take-off

TAAG Angola Airlines

TAAG Angola Airlines has done much to earn the loyalty of its customers. Director Rui Carreira talks about plans to expand the airline’s international, regional and domestic footprint written by: Gay Sutton research by: James Boyle

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TAAG Angola Airlines

I

TAAG operates long-haul and domestic flights

n the 10 years since peace has been achieved in war-torn Angola, the transformation has been enormous. The economy has blossomed and grown; so much so that according to figures from The Economist, Angola has been ranked as the world’s fastest growing over the 10 years to 2010, outpacing even those of the much-vaunted BRIC countries. And for the state-owned Angolan national airline, TAAG Angola Airlines, the opportunities are enormous.

Increasing numbers of business people are attracted from around the globe to the capital Luanda and to the outlying regions, not only to exploit the nation’s rich diamond, oil, gold and copper resources but also to engage with commerce and smaller business. The increase in demand for air travel is not confined merely to the business sector, either. Tourism is growing rapidly, and the people of Angola generally prefer to make major journeys by air. “Our country is very large,” explains director Rui Carreira, “and some roads are not in good condition after nearly 30 years of war, so air travel is sometimes safer and cheaper.”

The airline currently has a fleet of 13 aircraft. Five Boeing 777s operate scheduled long-haul flights to Brazil, Cuba, Dubai and China, as well as to Portugal.

Eight Boeing 737s service domestic flights to 14 destinations in Angola along with regional flights to Johannesburg and Cape Town in South Africa, and to the capitals of Cameroon, Central African Republic, Republic of Congo, Namibia, Cape Verde, Sao Tome, Zambia and Zimbabwe.

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On one hot afternoon in 1987, Aero Industrial Sales (AIS) began an exciting new business relationship with TAAG Angola Airlines. Our company’s founder, Mr Mohammed Mahmoud, worked vigorously to prove to TAAG how his small start-up company could deliver solutions better, faster and economically.

AIS is privileged to have worked with this great African carrier over the past 25 years, serving it with the best that the aviation industry can offer: FAA-accredited safe and economical products; on-time delivery; the latest environmentally green ground support equipment (GSE); and broad and open financing.

In August 2009, TAAG’s entire logistics department and spare parts inventory was destroyed by a devastating fire. AIS, always being committed to give its services without delay and uphold TAAG on any AOG situation, was one of the first to step up to the plate and assist TAAG in re-establishing its warehouse inventory as well as other requirements.

As the commercial aviation industry continues to struggle with the global economic crisis and soaring fuel and operating costs, TAAG continues to show its resilience by completely revamping its ageing fleet—with brand new Boeing 777-200, 777-300 and the 737-NG, and the latest GSE equipment. TAAG has catapulted itself into a new African aviation echelon: it was recognized by AFRAA as the winner of the annual African Aviation Achievement Award during the Stakeholders and Suppliers Convention held in Nairobi, Kenya, in March 2012.

Aero Industrial Sales salutes TAAG’s staff and management, led by Eng. Pimentel Araujo, for its stellar role in the African aviation industry.

We are proud of our two companies’ longlasting business relationship.

On behalf of all the team at AIS, I look forward to seeing TAAG achieve great success in all its endeavours, now and in the future.

Congratulations!

Mohammed Mahmoud President Mohammed@aeroindustrialsales.com www.aeroindustrialsales.com

TAAG Angola Airlines

There has been greater demand for international flights

Destinations like the UK, France, Belgium, plans to expand its international, regional Spain, Germany, Nigeria, Kenya, Morocco and domestic services. “There is currently and Mozambique are served in code share some restructuring taking place in Angola,” with local flag carriers.

Carreira explains. “When the runways Strong growth is projected for the near and airports are ready, we will fly to more future. In 2011, TAAG carried 800,000 domestic destinations. Many people also passengers. “This year we expect to carry want to fly from one country to another 1,200,000 passengers. The busiest periods within Africa, but they can currently only for us are the holiday months of July and do it via Europe or Dubai, so we would August, and December and like to conquer many more January,” says Carreira. capitals in Africa. But much will depend on the Looking more closely at economic growth of these the projections, by far the countries. We also want to greatest increase in demand expand our services into is for international flights. In Europe, which is already a the short term this demand Current size of can be met by the existing major destination.”

TAAG fleet To prepare in a measured aircraft fleet, but TAAG has

13

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TAAG Angola Airlines

AMERICAN GENERAL SUPPLIES, INC. (AGS) For over 30 years, American General Supplies, Inc. (AGS) has partnered with TAAG Angola Airlines to provide them with unrivaled commercial aviation support services.

American General Supplies, Inc. is a commercial aircraft spare parts supplier to the aviation industry, with a particular focus on and expertise in the African market. From three locations in the United States, we supply: • Airframe, engine, avionic components and chemicals • Ground support equipment, tools and shop equipment • In-flight service amenities.

In addition to our being a long-time partner of TAAG Angola Airlines, we also provide a wide range of services to the industry’s leading airlines and support organizations, including: • Establishing branch stock at client locations • Consignment of customer surplus parts • Exchange, repair and overhaul services • Providing technical assistance and training on site or at our offices in the USA.

Europe: Air France, British Airways, TAP Air Portugal Asia: Garuda Indonesian Airlines, Indian Airlines, Pakistan International Airways, Spice Jet, Sri Lankan Airways.

North America: Air Canada, Delta Airlines, United Airlines.

At American General Supplies, we are proud of our long association with TAAG Angola Airlines. African aviation can, as our esteemed partner TAAG Angola Airways does, rely on American General Supplies to satisfy their commercial aviation support needs.

At AGS, our pledge to TAAG Angola Airlines and all our customers is our motto: “Our business is to keep you flying”.

E. kennethc@agsusa.com www.agsusa.com

The AGS customer base is as diverse as our capabilities, as attested to by the following listing of our long-time customers: In Africa and the Middle East: Air Burkina, Air Madagascar, Air Senegal, Ethiopian Airlines, LAM-Mozambique Airlines, South African Airways, TAAGAngola Airlines, TACV-Cape Verde Airlines, Tunisair, Egypt Air, Cameroon Airlines, Kenya Airways, Air Algerie, Air Nigeria, Air Namibia, Precision Air.

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way for this programme of expansion, TAAG and local customers and providing a safe, has already purchased two new Boeing 777s efficient, comfortable and profitable service. which will go into service in 2015. Further To achieve this, the company launched a fleet expansion will take place in 2017 and turnaround programme in 2008. “We have again in the future, catering for further rolled this out into all areas of the business, long-haul destinations, and for expansion of from maintenance and commercial the regional and domestic service. “We plan through to financials,” says Carreira. “And to expand our fleet gradually, as this will we have achieved some big improvements require a major investment,” in our safety record, in passenger confidence and says Carreira. “We are in the confidence of the currently examining all aeronautical authorities, the options, but we hope particularly in the to be able to double our fleet by 2020.”

European Union.”

All of this, however, is As pa r t of this Year TAAG’s turnaround programme was launched dependent upon attracting improvement and international, regional modernisation programme,

2008

A TAAG Angola Airlines Boeing 737-2M2 Advanced at Charles de Gaulle Airport

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TAAG Angola Airlines

“We are currently examining all the options, but we hope to be able to double our fleet by 2020” TAAG has implemented a number of IT tools to manage and survey the operations and engine functionality in real time.

A new safety management system has been put in place and the company is currently implementing a modern integrated aviation management system.

“The improvements are not just IT based, though. We have made significant

changes to the way we manage TAAG. We have changed the board of directors completely, and introduced a range of new management processes that are aligned with best practice in the industry,” reveals Carreira. “These are now in place in our maintenance department, flight operations and in the quality and safety departments.”

Staff also play a critical role in the company’s success, and as part of the improvement programme TAAG has introduced a rigorous recruitment and staff evaluation process supported by a range of motivational initiatives to improve and reward good performance. Part of this is an intensive training programme. “We have a training facility here at Luanda airport where we train our staff and provide refresher courses to ensure they are up to date with the latest industry standards in all areas of the business.”

With increased competition throughout the airline industry in general, and costs spiralling due to rising fuel prices and increased security requirements, the company’s major focus at the moment is to improve the customer experience. “There is a great deal of strong competition flying to Luanda, so our concern now is to create

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the Boeing company Š

Boeing delivers first 777-300ER to TAAG

TAAG Angola Airlines

1.2 million Predicted TAAG passengers in 2012 comfort for our passengers and to build customer loyalty,� says Carreira.

Customers are surveyed at all the interface points: at the booking agencies, at check-in and on board flights. Based on this wealth of information the airport and in-flight facilities and services are continuously being upgraded to increase customer comfort.

Meanwhile, a frequent flyer programme has recently been introduced, offering a range of privileges to loyal customers; a website is now up and running offering online ticket sales and check-in facilities; and a call centre has been opened to enable customers to interact with the company in real time.

Through a combination of modernisation, expansion and improvements to safety, security and customer service the company is raising its profile. But none of these are quick fixes: in each case they have been thought through and tackled in a measured and sustained fashion with the aim of capturing a significant share of the blossoming market in flights within Angola and to regional and international destinations.

For more information about TAAG Angola Airlines visit: www.taag.com

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Newmont Ghana Gold

A helping

hand

Mining operations usually provide much needed employment in developing countries but these jobs have a finite life. A longer point of view is what’s really called for, says George Brakoh written by: Alan Swaby research by: Richard Halfhide

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Newmont Ghana Gold

T

here’s nothing new in the bigger mining companies, operating in third world or developing countries, having social responsibility policies. But the question is not what to do while the mine is in operation but rather how to put in place a sustainable structure that can still function even after the life of the mine is over.

Western companies are often willing and want to spread largess among local businesses but are just as often discouraged by a completely different mindset amongst the host population. Finding the right degree of commercial sophistication, being comfortable that contractors can work within the mine’s health, safety and environmental regime, and of course basics such as punctuality and reliability are all conditions that need to be met.

But George Brakoh, manager of Local Supplier & Contractor Development for Newmont Ghana Gold, feels passionately that it is important that big companies such as his do take the initiative and do put in whatever effort it takes to make the adjustment.

“There are countless requirements,” he says, “that need to be performed around a mine on a daily or weekly basis to keep things running smoothly. They usually involve low levels of skill and compared with the main task of extracting and processing ore, are obviously of less importance and priority. From a purchasing point of view, it would clearly be easier for all this work to be bundled together and outsourced to a single international service provider, passing over

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the problems of training and supervision to someone else. But the fact is that those small services around a plant can make a huge difference to the community, not only in terms of income and additional employment opportunities but also in encouragement and development.”

The Newmont Mining Corporation is not only one of the world’s oldest gold producers, it is also one of the largest. It has significant assets or operations in North and South America, Australasia and the Far East, employing 43,000 staff and contractors worldwide. In fact Newmont cites its cooperative and fair-handed dealings with local communities as one of the reasons why it has continued to operate so successfully for nigh-on 90 years.

In 2007, Newmont became the first gold company selected to be part of the Dow Jones Sustainability World Index.

As such, its operations—wherever they can—place great emphasis on developing local businesses. “It’s not just a question of handing out work,” says Brakoh. “Our aim is that we help create something that will continue in a sustainable fashion long after the life of the mine is over.”

In Ghana, Newmont’s most advanced interest is at Ahafo, some 300 kilometres

north-west of the capital Accra. It took $800 million to put into production which started in 2006. From the outset, developing Ahafo created challenges as the ore body was located beneath an area inhabited by about 1,700 households. Negotiations needed to be handled sensitively and considerable collaboration went into helping and encouraging the affected community to resettle successfully. As well as financial

“We are anxious to help the next wave of employers get started—always with an eye to the time when the mine will have run its natural course” 60 | BE africa

Newmont Ghana Gold

Ahafo local business constructing drainage system at resettlement site

compensation, residents It has to be acknowledged were provided with new that, at this stage, most of these purchases fall into homes, schools and titles to the non-critical or nonland they previously were technical categories. Not not allowed to own.

Year Newmont was “The mine has created that this will always be the selected for the Dow many job opportunities,” case. Newmont, working Jones Sustainability in collaboration with the says Brakoh. “As well as the World Index Ghana Chamber of Mines, 1,800 employed directly by has identified 28 product Newmont, there are another categories which it feels 3,000 contractors on site.

But we are also anxious to help the next can be sourced locally. It is currently wave of employers get started—always with undergoing an in-depth study using an eye to the time when the mine will have specialist consultants on which Ghanaian run its natural course.” manufacturing concerns can be lifted At the heart of Brakoh’s work is the Ahafo to a suitable level for the supply of these Linkage Programme—a three-year project to components. “It’s quite likely,” says Brakoh, increase procurement from local suppliers. “that we will encourage joint ventures

2007

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“It is very rewarding for me to see how individuals can respond and rise to the challenge when they are given the guidance they need” between existing members of our supply chains and suitable local companies.”

In the meantime, the focus is on developing small-scale businesses to the point when they can be accepted as Newmont suppliers.

A database of local businesses wanting to supply to Newmont has been prepared and of these, 47 enterprises have been tutored over the three-year period. “We provide

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them with a working model of what we want from our suppliers,” says Brakoh. “This starts with good communications so that we can maintain rapid contact at all times. Then we need the commercial fundaments—an understanding of how to tender for work, accurate bookkeeping, prompt invoicing— all the sorts of things you would expect in a traditional Western business world.”

Newmont Ghana Gold

Ahafo local contractor building resettlement housing

Not surprisingly, many local residents haven’t had the benefit of an ongoing, formal education but Brakoh has learnt that this is no barrier to success. “One of our quickest growing suppliers,” he says, “started with a single chainsaw cutting down trees. He now employs crews for both construction and tree cutting, he has gone into the car hire business and with the help of a South African mentoring company, has a fledgling general engineering business.”

Local farmers and guest house owners also have been drawn into the pool of suppliers, but never in any charitable way. In each case it is because they have responded well to the tutoring they are offered and then reach the exacting

standards Newmont applies.

“It is very rewarding for me,” says Brakoh, “to see how individuals can respond and rise to the challenge when they are given the guidance they need.

We have had disappointments but most of them take it very seriously and you can see the difference as their confidence grows.

These entrepreneurs learn that Newmont is not handing out favours and that they have earned Newmont’s trust by doing outstanding work.”

For more information about Newmont Ghana Gold visit: www.newmont.com

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written by: Martin Ashcroft research by: Marcus Lewis

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Allana Potash

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Water well drilling on the western portion of Allana Potash license, Dallol Project

Allana Potash

T

he race is on to satisfy accelerating world demand for potash, and in this Olympic year Allana Potash is in gold medal position as its Dallol Project in the Danakhil region of Ethiopia has the finishing line in sight.

Potash is a generic name for a variety of potassium salts, the most common being potassium chloride (KCl), also known as muriate of potash (MOP) and sulphate of potash (K2SO4) or SOP. Around 95 percent of global production is used in fertiliser to improve water retention, yield, nutrient value and disease resistance of food crops such as fruit and vegetables, rice, wheat, sugar, corn, soybeans, palm oil and cotton.

The world’s largest producer of potash, by some distance, is Canada, with the largest consumers being China, the United States, Brazil and India. So why is a Canadian exploration company putting all its resources into developing a potash operation in Ethiopia?

There are many answers to that question, and they all combine to put Allana Potash in a very strong position to supply the growing fertiliser markets in China and India—with Ethiopia’s location on the horn of Africa being virtually next door, compared to Canada or Russia.

First of all, there is an abundance of potash in Ethiopia, where it was first mined in the fourteenth century. “We secured some very interesting drill results from a company called Parsons and Co, an exploration company that was operating in Ethiopia in the 1960s,” said Richard Kelertas, senior vice president, corporate development. “They

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had done well over a hundred drill holes in the depression where we are operating and the results looked extremely promising.”

Until relatively recently, he explained, the principal method of mining for potash was deep shaft, which was not particularly suitable in this region of Ethiopia which is subject to very hot temperatures, so the property had been abandoned. The Dallol Project, however, is perfect for solution mining, a method which pumps brine into drill holes to dissolve the potash, then pumps the resulting solution to the surface where it is transferred to evaporation ponds to dry before final processing to remove the salt.

With the potash deposits being relatively shallow and a hot climate that allows for natural solar evaporation, Allana benefits from minimal capital expenditure and low operational costs into the bargain.

Another bonus is that at a time when some governments have been revoking promises they made to mining operators, the Ethiopian government has been extremely helpful. “When we first looked at it three or four years ago, the infrastructure left a lot to be desired,” said Kelertas. “But we had assurances from the Ethiopian government that they were going to upgrade the road system, and they came through on that. All things considered, low cost, low cap-ex, low op-ex, and the fact that the resource was

quite substantial and shallow led us to go ahead with exploration work a couple of years ago. Most of our drilling has been in the western areas on the salt plain,” he continued, “and there’s enough there for a million tons a year for thirty or forty years.”

The advantages of the climate are quite significant. “This is one of the hottest places in the world,” said Kelertas, “but that helps us keep our op-ex costs very low. We do not have to build expensive evaporators as you do in cooler parts of the world. We’re using

“There’s enough there for a million tons a year for thirty or forty years” 68 | BE africa

Allana Potash

Potash salt and halite crystallization in pilot test evaporation ponds

solar evaporation ponds, involved, but here’s where where the energy from the solution mining scores again. sun evaporates the potash “With a solution mine, the brine. There are some environmental footprint implications to operating is almost nil. It’s only the in a hot climate but plant facility, the pumping, whatever energy you’re the advantages far outweigh Total project cost going to use, the drill sites, the disadvantages.”

The project’s desert the well sites and the piping. location has other Other than that there’s no advantages, too, from an environmental excavation work, and no emissions to speak of. point of view. There’s no flora and fauna and Allana employs a lot of Ethiopians in its there is only a small indigenous population, exploration and development operations so which is actively engaged in the development. a small village has sprung up close to the Concerns about sustainability in potash site, where temporary housing, a school, and mining are just the same as they are in any a medical clinic have been built. “Once we mining operation, said Kelertas, especially start construction that village is going to when open pit or deep shaft mines are get a lot bigger, so we’ll be working closely

$800 Million

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Water well drilling

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with the local authorities, with the village elders and community leaders to make sure that all the local customs are followed,” said Kelertas. “We’ve done a good job on that from the beginning and we have a great relationship with all levels of government, so there haven’t been any issues.”

The only environmental issue that could require further work is in terms of water usage, he added, and work is being done on that now. Water can be a contentious issue in highly populated areas – like for instance in Saskatchewan, Canada, but the Danakhil region has plenty of water and no other end users competing for it.

“There’s no agriculture anywhere near us, and no human settlements apart from our village,” said Kelertas. “We’re doing a lot of hydrological work to find out exactly where the water is and how much we’re going to need, but we don’t see any issues.”

Allana, with advisor BNP Paribas, has already put together over $600 million in soft commitments for debt financing from a group of development financing institutions and export credit agencies.

The full bankable feasibility study being undertaken by German exploration consulting company ERCOSPLAN will be finished by the end of this year, and once that has been analysed the funding will be firmed up. Kelertas also expects to have a couple of offtake agreements signed up by then, too, and Allana’s two anchor partners, Liberty Minerals & Mining and The International Finance Corp (IFC - a subsidiary of the World Bank) will also confirm their pro rata share of debt and

Allana Potash

Allana Potash camp in early 2012

equity financing, so construction of the mine could start in the first half of 2013.

The total project cost with all contingencies (15-20% contingencies are included) is about $800 million. There is no need for gigantic evaporators, but huge solar evaporation ponds have to be built.

“We’ve already put up six pilot ponds and we’re doing the evaporation rate testing right now,” said Kelertas. “Really all you need is a processor, and conveyors to take the raw crystals from the evaporating ponds over to the separators.” The largest portion of the $800 million is for production ($664.4

million) which itself is dominated by the brine processing plant at $188 million.

Also included in the cost projection is $90 million for a new port facility in Djibouti.

Ethiopia is a land-locked country, but its neighbour Djibouti already has a port facility and plans are in place for a new port to be constructed at Tadjoura. “The Arab Fund for Economic and Social Development and the Saudi Fund for Development have financed the Djibouti Port Authority to build the new port facility in Djibouti,” said Kelertas. “This is on the north side, the other side of the bay from the current site – so we don’t have to

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Core drilling for potash

“We’ve already put up six test ponds and we’re doing the evaporation rate testing right now” stand that $90 million any more but we still include it just in case in our cap-ex total.”

Transportation to the ports will initially be by truck – a 600 km journey. “We’ll be shipping two to four large tandem trailer units an hour (two trailer units and a cab, with 40 metric tons in each trailer),” said Kelertas. The product will be stored at the port to be loaded either on container or bulk loading ships.

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Allana is not counting on using rail in its cost calculations, although that option is a distinct possibility before too long.

The Ethiopian government has signed rail construction contracts with the Indian and Chinese governments (a billion dollars each) to build a rail line from Mek’ele to the capital Addis Ababa and from Weldiya to the new port. “That’s under construction right now,” said Kelertas, “and there is a proposal

Allana Potash

Camp prep kitchen

Road rehabilitation work by the government of Ethiopia, Dallol Project

for a line directly from our project all the way down to the new Djibouti port – that would be again about 600 kilometers, and it would cut our transportation costs in half versus truck. But again, we’re not figuring that into our numbers yet.”

The rail line from Mek’ele to Addis Ababa is expected to be finished by 2014/15 and the line down to the port by 2016/17.

If there were three or four potash projects operating in the region, the pressure on the roads would be unsustainable, so rail will be essential in the long run, but Allana expects to be the only project in operation as early as 2014.

“Two years ago there were 110 potash projects throughout the world being considered for development,” said Kelertas.

“Maybe five over the next five to ten years will be built and operating. Our view is we’re the closet to the international markets that want our products, we are probably closest to production of potash, we are the most cashed up, we’re going to have lowest cap-ex and op-ex, and we’re operating in a mining friendly jurisdiction which is also geopolitically an anchor nation in the horn of Africa. We’re in almost the best of all possible worlds and any negatives we have are far outweighed by the positives.” Sounds like a winner to me.

For more information about Allana Potash visit: www.allanapotash.com

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A market for quality

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Andalusite Resources One South African mining company is producing a refractory material on whose properties the world’s iron and steel producers depend written by: Alan Swaby research by: Robert Hodgson

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Maroeloesfontein site

Andalusite Resources

I

n the production of iron and steel, refractory materials fall into the category of consumable commodity—hovering somewhere in the background until all the glamorous hard work has been done and the melted, smelted, refined liquid metal needs moving in a refractory lined vessel from one part of the plant to another.

One of the interesting aspects of these heat-resistant materials, though, is the rate at which they are consumed. Japan is the most frugal, requiring on average just six to eight kilos of refractory material per tonne of steel produced. Germany is not far behind with an average of eight to 10 kilos per tonne of steel. China, on the other hand, is much more profligate. There, an average tonne of steel gets through 25 to 30 kilos of refractory.

“There are numerous refractory materials that can be used,” explains Andreas Pabst, sales and marketing director of Andalusite Resources of South Africa, “and once chosen, there is a strong resistance to change. So despite the obvious superiority andalusite demonstrates in Japan and in Europe, in some parts of the world it is a slow process weaning them away from what they know.”

Andalusite, as your Spanish geography might suggest, was first discovered in southern Spain about 150 years ago. Then, though, it was in the form of a gemstone.

The South African version has also been known for many years but it doesn’t have the same aesthetic qualities as its Spanish cousin. In fact until the 1970s, there was no known use for it. Until, that is, the Weedon family began its pioneering work

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Andalusite Resources of marketing andalusite as PANalytical a refractory material. Since PANalytical is the world’s leading supplier of analytical then, it has been positive— instrumentation and software for X-ray diffraction (XRD) albeit slow—progress to the and X-ray fluorescence spectrometry (XRF), with more than position it holds today. half a century of experience. The materials characterisation “The refractory industry equipment is used for scientific research and development, is understandably extremely for industrial process control applications and for semiconductor metrology. cautious and conservative,” From our offices in Ferndale, Randburg, South Africa, we says Pabst. “Should anything offer the full solution to the analytical X-ray market, both they supply not fulfil its job in X-ray diffraction and X-ray fluorescence. We have three and the refractory fail to highly trained sales engineers, eight customer support contain its load of white hot engineers and two resident application chemists. liquid metal, the financial www.panalytical.com penalties could be enormous; the risk of human injury has to be avoided. As such, it is not unusual for it to take up to 18 months for a new refractory to be assessed and approved.”

Andalusite is an ideal refractory material.

It has high thermal shock resistance so can take the temperatures and fluctuation found with molten metals and ceramics. It has an ultra-low expansion rate so doesn’t crack; and unlike some materials, it has a high chemical resistance—in other words it does not react with other materials while exposed to the extreme conditions of heat

72,000 tonnes

Andalusite Resources’ current annual production Washing the ore

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GROW TH | STABILIT Y | QUALIT Y ASSUR ANCE

MINING & SLURRY TECHNOLOGY (PTY) LTD The challenge of designing, manufacturing and marketing the Buccaneer™ range of pumps has been an exciting journey for Mining & Slurry Technology (PTY) Ltd. Our key success factor has been improving wear resistance in corrosive and abrasive slurries, resulting in extended wear life. Enhanced efficiencies also contributed to reduction on total life cycle cost and improved pump reliability. The Buccaneer™ range of pumps, engineered and manufactured in South Africa, provides the lowest cost of ownership to end users across all slurry pump applications.

Further development of materials used in the construction of the Buccaneer™ pump wearing parts resulted in the new developed SH46™alloy. SH46™ is a material formulated by Mining & Slurry Technology (PTY) Ltd to outlast all previous chrome formulas for wear parts used in abrasive pumping conditions.

The Buccaneer™ Pump range offers the SH46™

material as a substitute to all 27 per cent chrome parts, which are standard on most slurry pumps.

This statement was put to the test on site and SH46™ impellers were installed at Andalusite Resources in RSA. Standard 27 per cent chrome impellers lasted for 10 to 15 days while the new SH46™ impellers operated efficiently for 25 to 28 days.

www.mstec.co.za

ANDALUSITE Resources RESOURCES Andalusite and pressure as reign in says financial director Colin ladles and furnaces.

Bain. “The andalusite is Historica lly, South found in decomposed shale Africa’s deposits of and requires no blasting. andalusite were found in At its widest, the ore body the east of the country, is 800 metres wide and we are mining open cast producing a course crystal down to about 35 metres. of up to eight millimetres.

The ore body goes much In the 1990s, Rhino Minerals began looking deeper but below this level in the west and found Andalusite is found in there are more impurities to considerable deposits of decomposed shale contend with that make the a finer grained material. extraction uneconomical.

Andalusite Resources’ mine, 220 kilometres Once a further two leases that we are north-west of Johannesburg at a place applying for are granted, we will have called Maroeloesfontein near the town of enough reserves to last a hundred years.”

Thabazimbi, is adjoining the Rhino leases.

Four metres of overburden need to be “It’s not a difficult mining operation,” stripped away, leaving the ore to be dug

MINING & SLURRY TECHNOLOGY

Founded in early 2007, Mining & Slurry Technology’s beginnings can be traced back to a small business concern. MST has grown into a strong competitor in the slurry pump industry, launching its very own brand of robust slurry pumps, namely Buccaneer™ Pumps.

Our aim is to manufacture a pump that

exceeds all quality and performance standards when operating under any abrasive and corrosive condition, at competitive pricing. Buccaneer Pumps are supported by our Projects & AfterMarket Service and Quality Assurance programme. This includes installation and commissioning, on-site service agreements and pump training.

Buccaneer™ range of slurry pumps are engineered to provide the absolute best performance under extreme abrasive and corrosive conditions.

Growth – Stability – Quality Assurance www.mstec.co.za

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DMS Powders - the worlds leading supplier of ferrosilicon DMS Powders provides ferrosilicon powders for application in dense media separation (DMS) technology, through a highly sophisticated production process.

The DMS technology can be described as making up a suspension of dense powder in water to form a type of ‘heavier liquid’ thereby separating mineral / metal particles in a sink-float process, as applied in modern dense media plants. The dense medium powder is subsequently recovered and reused.

By means of strict quality control standards we produce a product with the following benefits: • Corrosion resistance • Abrasion resistance • Magnetic properties allowing easy recovery and de-magnetisation • High specific gravity • Economical operating costs

Tel: +27 (0)16 360 5200 | Email: enquiries@dmspowders.com | www.dmspowders.com

Show the world what your company has to offer with our tailored packages

Seen www.bus-ex.com

Andalusite Resources out by two excavators—one of 70 tonnes capacity and Our production expertise is coupled with experienced another of 20 tonnes. A fleet product technical support, long-term customer of 30 tonne trucks ferry the relationships and an intimate knowledge of global logistics. ore just one kilometre to Today, DMS Powders is the largest global supplier of both the processing plant. The Atomized and Milled FeSi with a production capacity ore contains around 12 to of 42000tpa. Our products are produced with proven technology and precision, at our facility in Meyerton, 14 per cent andalusite and 45km south of Johannesburg, South Africa. the extraction process is www.dmspowders.com essentially one of crushing, washing and screening.

However, before any of this starts, run-ofmine ore has to be stockpiled separately as the andalusite varies subtly from location to location. Considering that the composition of the finished product is so critical, considerable care is needed at every stage to ensure optimum quality. Stockpiled ore is continuously sampled and blended before going into a feed hopper. Conveyors take the ore through a series of crushers designed to release the andalusite gradually without shattering individual crystals which, at Maroeloesfontein, stop at three millimetres.

Although as the mine expands further north, the crystallography becomes coarser, and in the not too distant future Andalusite Resources will be able to offer a coarser grade andalusite too.

dms powders

220 KM Distance of Andalusite Resources’ mine from Johannesburg Crushing plant

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Bell wheeled loader

“We have a superior, high quality product but still take a pragmatic view, aware that there is considerable competition within the market” At the end of this sequence is a 40 per cent concentrated slurry which, once it has gone through a bank of cyclones, is enriched to 98 per cent. The final part of the process is to magnetically remove any iron particles that remain, after which the product is bagged ready for despatch.

All the andalusite mined is taken by customers in the refractory industry with

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around 60 per cent going to iron and steel manufacturers. Upwards of a quarter of annual production goes to the local southern Africa market, another 30 to 40 per cent goes to Europe and the balance travels east. Steel makers in Japan have been among Andalusite Resources’ best customers and consistently take around five per cent of production.

“Japan is a very sophisticated market,”

Andalusite Resources

Employees at work

says Pabst. “They were among the first to recognise the benefits of using andalusite and have proven very loyal. Chinese and Indian manufacturers, on the other hand, are still more inclined to buy on price and consequently buy something inferior. We have a superior, high quality product but still take a pragmatic view, aware that there is considerable competition within the market.

Nevertheless, there is much more we could do in those markets providing we explain the benefits to be had from andalusite.”

Last year production was expanded and could be lifted very quickly from the current 72,000 tonnes per annum to 100,000 tonnes. At the moment, though, Andalusite Resources is in cruise mode

View of the mine

and holding back on any increase in output, conscious that there is a trend towards consolidation within an over-supplied iron and steel industry. Instead, the emphasis is on improving quality and developing new products. “We are working closely,” says Pabst, “with German refractory engineers Mine Feuerfest, who are helping us develop new applications which could replace strategically important minerals currently sourced from countries that have a question mark over the reliability of supply.”

For more information about Andalusite Resources visit: www.andalusiteresources.com

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Convincing mines to spend more money up-front on the expectation of lower life-of-mine costs is what one South African supplier is working hard to do

written by: Alan Swaby research by: Marcus Lewis 86 | BE africa

SMT Scharf Africa

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EMTS moves supplies and consumables underground

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SMT Scharf Africa

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t’s a dilemma for both seller and purchaser when new technology comes along that looks as though it should be better—and is declared by the seller to be better—but which requires the buyer to dig deeper in his pockets in the short-term. The mining industry is well known for its conservatism and a preference for sticking with what it knows: after all there is a lot to be said for reliability, even if it does come at a price.

Fortunately, though, knock on enough doors and someone, somewhere, will be found who is willing to try something new.

This has been the strategy of SMT Scharf Africa while marketing its electric monorail transport system (EMTS).

“Globally,” says managing director of SMT Scharf Africa Wayne Busch, “SMT Scharf is most closely associated with coal mining.

But in South Africa—and neighbouring countries for that matter—we have found a niche in hard rock mining operations that go underground in search of gold, platinum, chrome and nickel. Here we are finding growing interest in EMTS.” The role of EMTS is logistical. It isn’t there to remove ore or mining waste but rather to move supplies and consumables underground: bulk materials such as cement, timber or steel for construction, explosives for advancing the mine face.

Nor is EMTS likely to be used where a conventional vertical shaft is in place. But where access to the various operational levels is via an incline or decline tunnel (the system can be used where there is a combination of vertical shaft and decline/ incline systems), Busch argues that the

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R85 million SMT Scharf Africa’s approximate turnover

Workers underground

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monorail is literally head and shoulders above the commonly used technology in the decline method of mining.

“There are two main approaches,” he explains. “Either mine cars running on rail tracks are pulled by winches or the mine uses rubber-tyred vehicles, namely UVs and LHDs. Our monorail has countless operational advantages over both; but in a nutshell, winch power finds it difficult to cope with changes in direction—whereas a monorail can negotiate tight curves with ease—and with winch power you also have double handling, which costs time and adds manpower resources. Alternatively, rubber tyres are quickly ineffective when the slope exceeds nine degrees or there is surface water in the tunnel. Our monorail can operate comfortably at 30-degree inclines.”

It has to be accepted that EMTS is almost certainly going to go into green field mines, as it is unlikely that any mine would abandon the millions invested in the current way of doing things, however great the benefits. But in new developments—and in Southern Africa there are plenty—the benefits of an electrical powered monorail can immediately be felt.

“There is something like a five or six year

SMT Scharf Africa

Monorail system

capital expenditure cycle,” says Busch. “We had a bumper year in 2009 when revenue hit R170 million—twice our normal annual sales. We expect something similar in 2014 as we have many new mining projects currently going through the various feasibility stages that have been costed on using our system.”

So how will these projects benefit from EMTS? First and foremost, by using electricity, all the costs associated with diesel are avoided. Not only the continuously rising price of the fuel itself but also all the cooling and ventilation hardware needed

underground to cope with the fumes and the engine and exhaust heat generated. Instead, a typical SMT Scharf monorail power plant is comprised of four non-polluting 30kw motors that only draw power on the upward inclines. When the monorail is going downhill, the motors actually put energy back into the grid. Given that it employs zeroemission transport technology continuously to go from a zero to 30 degree incline, all these factors combined mean that EMTS not only saves its mining clients money, but gives them a much greener footprint too.

Ongoing maintenance costs for a monorail

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are also considerably less. The electric motors and rolling sets need precious little attention—certainly in comparison with diesel power plants that need regular servicing. Safety is also an issue: should diesel spill or leak, secure footing is compromised—not to mention the inherent dangers associated with winch ropes.

The monorail is designed to carry a standard mine car or skip and can transport six of them at once, giving a total carrying capacity of 20 tonnes. SMT Scharf already has over 20 such systems running at mines run by Impala and a couple of other smaller installations. The longest drift shaft at the moment is three kilometres serving 10 levels, but in other parts of the world there are far longer and more complex rail networks.

While EMTS is not intended to move personnel, SMT Scharf has a sister chairlift system. This has found ready acceptance and there are some 140 installations around Southern Africa. Combine these with the SMT Scharf subsidiary Sareco Engineering and you have a situation where together they hold 85 per cent of the market for personnel chairlifts.

Over the years, since the 1950s, the parent company has metamorphosed

several times as it has been acquired by ever larger organisations until in 2007, it went solo once more and listed on the German DAX. In the process it has gathered a much wider range of products and technologies than are being offered in South Africa. However, at the Electra Mining Conference in Johannesburg later in the year, a new diesel powered shunting trolley, known as Sharman, will

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SMT Scharf Africa

Ongoing maintenance costs for a monorail are less than for diesel-run systems

be launched which Busch believes has a role to play in South African conditions.

“There’s a need,” he says, “for a way of moving supplies and materials into the stopes [the area where the ore face is being excavated usually by drilling and blasting]. This is usually done by winch but in such an inherently hazardous place, anything capable of reducing risk should be welcome. We also envisage many other ad-hoc tasks could be done by Sharman which might otherwise take production equipment out of action.”

SMT Scharf is still a relatively modest operation in Southern Africa although significantly larger than when Busch took over in 2007, when it had a staff of just six employees. Today the turnover

is regularly around R85 million and as well as 17 full-time employees, there are another 60 part-timers.

Although most of the equipment has to be imported there is still around 15 per cent of the value added in South Africa and Busch is hoping that this will be increased in the future by expending the fabrication facilities it has at its headquarters near Randburg in Gauteng. No doubt this will be on the agenda to coincide with the expected accumulation of orders for start-up mines after years of speculation.

For more information about SMT Scharf Africa visit: www.smtscharf.com

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Trollope Mining Services

After being hurt by falling coal prices in 2008, Trollope Mining Services has grown dramatically by taking a more balanced approach written by: Andrew Pelis research by: Paul Bradley BE africa | 95

Caterpillar truck on-site

Trollope Mining Services

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eadquartered in Johannesburg, 2008. At that time we were still very much Trollope Mining Services focused on the coal mining industry, and in provides expertise in surface particular our contracts with Xstrata Coal.” mining services. These The business might have continued to include opencast mining, operate serenely but for the dramatic fall rehabilitation, bulk earthworks, plant hire in the price of coal in 2008, which had and road construction. Much of the work catastrophic consequences for Trollope. involves excavating land and then drilling “Back then 98 per cent of company turnover and blasting, stock-piling usable materials was coal-based but the price of coal fell to and removing any rubble. just $50 a ton, wiping out 90 per cent of Trollope Mining had served the domestic company turnover in one month,” Hopkins coal industry successfully since 1975, but explains. the events of 2008 brought about a change Hopkins, with a civil engineering in focus and the arrival two years ago of background in construction, entered the fray a couple of years later present managing director Guy Hopkins. with a remit to help Trollope “It all started when diversify. “It has been a brothers Peter and John gradual process but from an operating turnover of R278 Trollope bought a bulldozer from a military auction and million in 2010 we should achieve R700 million this began to use their equipment year,” he predicts. “Today at local iron ore mines to Trollope’s projected help with bush clearing,” he we have 14 different clients operating turnover explains. “The business grew from as far away as Australia, this year and they started to acquire Spain and Turkey, who are more equipment which was involved not only with coal operated from the family farm, two-and-a- but also manganese, gold and platinum. half hours north of Johannesburg.

We have focused on servicing the junior “In 1999 the company was sold to a Black miners who may not have the equipment Economic Empowerment company which or the capital to buy the machinery needed was rolled up into the Mvelaphanda Group,” to crush or move earth.” he continues. “Today we are 30 per cent The move into hard rock signalled a owned by a BEE company called Mntungwa shift in strategy as it meant the company’s Resources while John, Peter and Danie Le existing fleet of excavators, crushers and Roux own 70 per cent of the business. By dump trucks needed to be replaced with 2000 the company had grown sufficiently larger machinery. “With the transition that we relocated to Johannesburg, and we spent in the region of R300 million to moved into the current headquarters in upgrade to dump trucks from 40 to 100

r700 million

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Trollope Mining Services

Trollope Mining team

tonnes, capable of shifting hard rock. We and routine maintenance and minor repairs are constantly reinvesting to ensure that we are carried out on-site at each location as have brand new equipment and excavators necessary. More complex work takes place with an average age of 18 months.” in the 1,500 square metre Johannesburg Trollope has a core set of some 200 pieces workshop, built three years ago to house of equipment with a further 200 available 10 bays plus a paint shop, an engine and for ancillary equipment. The company transmission rebuilding shop, a boilermaker operates sites around South Africa and shop, auto electrician division and hydraulic while the main headquarters and workshops cylinder rebuilding shop.

Hopkins feels that a change in Trollope’s are in Johannesburg, there are bases in Thabazimbi and Ogies and culture has also had a significant bearing on the workshops situated at each turnaround in fortunes. site where Trollope has a contract.

“Excluding sub-contractors This is essential given the we have just under 1,100 staff and they have been distances involved and the the key to our success,” he remoteness of some mining Current number of affirms. “It is all about the locations. The company Trollope employees currently has 12 live projects quality of person rather than

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the machines and it has been a question of nurturing and leading our people in the right direction through much clearer communication channels, whether that is through clear audits and finance reporting or direct decision-making. In the past perhaps with three people running the business the message was not always as clear.”

With clearer leadership and regular auditing, the business has thrived in stark

contrast to South Africa’s construction industry. Hopkins is mindful of the impact this is having on the commercial mining environment. “We are a specialist mid-tier open-cast mining contractor and we are much more astute now. Our biggest risk is the construction slump, with those guys entering our sector without the knowledge and expertise that Trollope Mining offers.

Their equipment depreciates much slower

“The prospect of working outside of South Africa is something we have looked at for some time but we will tread conservatively”

Equipment has an average age of just 18 months

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Trollope Mining Services

Equipment in use at mine site

and that affects their rates, while they may not be able to react to customer demands as quickly as we can.

“We are also working towards ISO accreditation by the end of July which will give us greater opportunity to work with bigger companies from Canada, Germany and the United States who have mining operations beyond South Africa’s borders.

The bulk of the operating procedures are in place and we are just finalising our documentation now.

“The prospect of working outside of South Africa is something we have looked at for some time but we will tread conservatively and work with companies that know the territories. Our reputation within the industry sets us apart and while we may not offer

the cheapest service, we are always willing to get clients out of any trouble and have traditionally delivered what the customer wants. There is also scope for us to enter the construction market when it improves: that is definitely also on the radar.”

Hopkins concludes: “Our turnaround has been phenomenal and we need to carry on growing but not at the same rate: we will look to consolidate now. Our debt ratios will play an important role when we come to replenish our fleet but our main focus is on the bottom line, not simply chasing turnover.”

For more information about Trollope Mining Services visit: www.tmsgroup.co.za

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Martin Engineering

One of South Africa’s leading bulk material handling specialists is playing its part in making material handling easier, safer and more productive written by: Alan Swaby research by: Richard Halfhide BE africa | 103

Worker in action

Martin Engineering

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egardless of whether they’re open pit or deep underground, conveyors are the arteries and veins of every mine. They’ve been around since the 19th century and despite over 100 years of trying, the basic design of a conveyor hasn’t really changed much. But while the basics remain consistent, there has been no shortage of ancillary equipment designed to get the best out of what is often one of the largest capital cost centres on a new project or existing mine.

“It’s hard to imagine,” says Warwick Smith, marketing manager of Martin Engineering in South Africa, “a more hostile working environment than a mine.

The loads, the dust, the abrasion, the nonstop action—a conveyor system might look simple but making it work reliably 24/7 is far from simple. We specialise in material handling and flow technology, driving productivity, reducing down time and ultimately making mines more profitable.

Under these conditions, engineering excellence, product component quality and design, and durability are critical.”

Martin Engineering is relatively new to South Africa but it hasn’t stopped the company claiming a majority share in the coal industry of Mpumalanga centred around Witbank or Emalahleni (‘place of coal’), as it’s also known these days. And while the coal industry is the most important sector for the company, it has also grabbed a big chunk of business within the country’s gold mines, diamond mines and platinum mines.

“Within a 100 kilometre radius of our base in Witbank,” says Smith, “there are multiple

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2003 Year Martin Engineering was founded in South Africa

The factory workforce is 20-strong

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coal power stations and in the region of 70 mining operations. Our client list comprises all the blue chip names you’d expect: Eskom, Anglo Coal, AngloGold, De Beers, Exxaro, Xstrata and Vale, to name a few.”

While conveyor systems are relatively simple in design, managing and maintenance of material flow is not. There are a lot of standard products designed to optimise the smooth running of conveyors: belt cleaners, alignment mechanisms, dust suppression systems and impact beds plus an extensive range of flow aids to encourage the material to keep a move-on, such as vibrators and air canons, in many forms. But there is also a lot of bespoke engineering taking place: transfer stations, bins, silos and even equipment such as vibration on side tippers, trucks and rail cars. “Probably the short answer,” says Smith, “is that we do whatever is needed to make bulk material handling easier, cleaner, safer and more productive.”

Martin Engineering owes its start not to a Mr Martin but rather to Edwin Peterson, a foundry pattern maker in Illinois, USA. He noticed workers on the foundry’s mould-making machines overcoming sand blockages by pounding the hoppers with hammers. He also registered that while the process worked, it was noisy,

Martin Engineering

Martin Engineering staff

damaging and not very productive.

Peterson realised that vibrations would stimulate the flow of material and in 1949, he patented the Peterson Vibrolator, essentially comprising a steel ball rotating in a hardened steel raceway, propelled by compressed air.

Peterson left the pattern-making business and used an earlier partnership he’d had as the basis for a new company, adopting its name: Martin Engineering.

In 2003, South Africa joined the other 31 countries in which Martin Engineering operates and formed the eighth international business unit, responsible for

all of Sub-Saharan Africa. It achieved this by acquiring the well-respected Scorpio Conveyor company. “Scorpio had very good belt cleaning expertise,” says Smith, “which fitted in well with the rest of the Martin range. Previously, Scorpio did very well but with a limited palette. Now Martin Engineering has a complete basket of products we can take to the market, as well as first-class engineering skills and manufacturing facilities.”

Visit the factory on the wrong day and it could look a bit like a ghost town. That’s because the only stocks held there are those

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imported items such as the air canons and vibrators. Everything else is made to order and items from the standard range can be turned around and shipped out in less than three days. The volumes passing through the factory are impressive. Typically up to 20 primary cleaners, 30 secondary cleaners, 20 V plough cleaners and up to 40 impact beds a day are being produced—all from a factory workforce of just 20! “We like to keep

things lean,” says Smith. “Everything is preprogrammed and flat sheet high-quality steel is cut by laser, before moving on first to the bending and welding bay and then for powder coating before being assembled. We have a fleet of six delivery trucks working 24/7 and 30 crews on site providing maintenance and installation expertise.”

Out on site, it’s a bit like a Formula 1 pit stop. Mine operators are reluctant to

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Martin Engineering

Centre for Innovation, Illinois, USA

shut the system down any different materials such as more than they have to so polyurethane’s durability,” he says. “We have a very Martin’s crews have to take impressive Centre For advantage of scheduled Innovation located in inspection stops and Minimum firings from Illinois, USA, plus our then get their work done Martin Engineering’s air canons own local solutions and quickly before the mine engineering department. maintenance engineers have finished theirs. Teams of five The rewards are seen in our run by a qualified service technician and products: our competitors’ impact beds, for experts in conveyor technology make sure example, offer only one angle of repose— the conveyor system is running optimally. ours can handle any. Similarly, there isn’t When asked about the reasons Martin another air canon on the market that can Engineering has done so well in such a guarantee the minimum 200,000 firings relatively short time, Smith puts it down to we promise from ours. Our products are innovation and effectiveness. “We have an durable, tried and tested, highly engineered, R&D team constantly testing new material designed around ease of installation and handling technology and evaluating maintenance, and safety.”

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Employee operating machinery

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Martin Engineering Within the Martin Engineering global network, there is expertise on moving just about any type of material; and it’s part of the organisation’s ethos to transfer best practice to other global team members. While Martin Engineering is currently wedded closely to the mining industry in South Africa, Smith is planning to widen the customer base and take some of this technological know-how to other non-mining sectors such as cement, food and grain handling. “While we have been active in East and West Africa, we are moving towards more permanent presence across the whole of Sub-Saharan Africa, having already supplied and installed our products in Tanzania, Mozambique, Botswana, Namibia, Madagascar and Nigeria,” says Smith.

Part of the marketing mix Smith has at his disposal is Martin Engineering’s bible on bulk handling. Foundations is a 600-page hard copy book that contains everything there is to know about maximising productivity and problem solving, and the safe and efficient handling of conveyors. Over the years, Martin Engineering has conducted thousands of Foundations seminars across the globe and has courses tailored from beltsman to mining engineers. The same training programme is now available online.

“We live by a simple but powerful slogan: ‘Problem solved’. That is what Martin Engineering has and will always be about,” Smith concludes.

For more information about Martin Engineering visit: www.martin-eng.co.za

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SGS Ghana

Testing

times

SGS is the world’s leading inspection, verification, testing and certification company; and in West Africa, demand for its services is as high as ever written by: Alan Swaby research by: Richard Halfhide

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Advanced fire assay pouring system for commercial laboratories

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SGS Ghana

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nyone working or simply taking an interest in gold mining will know full well that nothing can be said to potential investors about the value of a prospect that isn’t backed up by independent verification. In fact, as service providers go, there can’t be many that are as busy as those involved with testing and certification.

In West Africa alone, there is so much gold exploration taking place that the region’s number one provider of gold analysis is not only having to work around the clock in many instances but is also having to open new facilities and train many more new technicians to keep up with demand.

SGS is not the only gold analysis organisation operating there by any means but it is the busiest. “Although SGS has had facilities here since the 1960s, SGS Laboratory Services was first established in West Africa in the 1990s,” says regional manager Andrew Clavering, “and initially we had six testing facilities. But the demand has grown to such an extent that currently we have 20 facilities and by the middle of the year, after an investment of over $10 million, another two will have been added and an additional three existing laboratories expanded.”

Actually, not only is SGS the leading testing authority in West Africa, it is also the world’s leading inspection, verification, testing and certification company. With more than 70,000 employees, and a network of more than 1,350 offices and laboratories around the world, the West African operation is small beer; but as SGS knows,

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it’s one of the fastest growing parts of the world for these services.

The origins of SGS go back to the 1870s, as a grain shipment inspection house based in the French city of Rouen. In 1919 Société Générale de Surveillance was registered in Geneva and in 1985 its shares were listed for the first time on the Swiss stock exchange.

Since that initial involvement with grain, the scope of the business has mushroomed and there can hardly be a high tech industrial sector where SGS doesn’t have some involvement. Testing and certification remain at the cornerstone of operations but this has been augmented with many other forms of consultancy, from logistics to outsourcing. In the great variety of SGS laboratories, all forms of samples are analysed—coal, base metals ores, oils, iron ore, environmental analysis and a myriad of others.

In West Africa, though, the focus is largely on iron and gold ores. Exploration for iron ore is currently a growing market and several dedicated facilities have been established in West Africa expressly for the analysis of such ores. However, gold exploration remains a large part of laboratory work in West Africa.

“We do provide analysis of bullion bars at mine site laboratories,” says Clavering, “but

the bulk of the work we do is the analysis of exploration samples, plant samples and additional analysis to provide information for gold extraction processes.”

As such, test facilities are often attached to a particular exploration area. Speed is often of the essence in winning or losing new contracts: geologists want verification of what they think should be down below so that they can plan and continue

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SGS Ghana

Minerals Academy 2012 intake and SGS personnel

exploration work with carefully logged and marked the greatest efficacy. The in order to make sure that problem is that the process the data retains its integrity. is quite involved and with In the same way, material the best will in the world, that passes through SGS must Number of SGS the turnaround time for be equally well marshalled. employees worldwide test results can take five or In fact, a considerable part of six days to process. Given the attraction of using SGS as the current rate of exploration, lead times a test provider comes from the procedures it for all test houses often extend into weeks. employs and the certainty customers have Test drilling provides geologists with about the security of results. rock samples around 40 mm in diameter.

The brief may be to test individual Generally, these are sawn along the axis to sections of the core or to treat the whole provide two semicircular halves. Geologists sample. Either way the first step for SGS may pick and chose which sections of the after logging in the material is to crush it drill core are to be sent for analysis or down to <2 mm particles from where it can they may decide to send the whole lot. be broken up into smaller lots if required Either way, though, the samples have to be and then put into a mill where batches of

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“The bulk of the work we do is the analysis of exploration samples, plant samples and additional analysis to provide information” up to 1.5 kg of the 2 mm grains are ground down to the point where 85 per cent is less than 75 microns. From there, the pulp, as it is known, is fired in a fusion furnace to over 1,000ºC, creating a fusion of slag and a lead button which contains the gold. The final part of the extraction process takes place in a cupellation furnace where the noble gold is released from the base metal. From there, the gold content of the ore is measured by an

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instrumental technique such as an atomic absorption spectrometer.

Of course, while the rate of growth in West Africa might be outstripping other parts of the globe, it’s a matter of relativity. The world over, the search for gold is vibrant and so too is the need for testing and certification. All along the supply chain, demand outstrips supply, so SGS is having to take exceptional steps

SGS Ghana

XRF analysis of samples

to satisfy its customers’ expectations.

“Logistics for the entire SGS world,” says Clavering, “is managed from a global procurement infrastructure. We buy in bulk with a global perspective. We buy the most critical equipment in advance of specific applications and hold onto it until such time as a new test facility is to be opened.”

Also in short supply are the technicians needed to man new facilities. As such, the Geneva corporate headquarters of SGS has allocated over $500,000 to create the first Minerals Academy in West Africa, which opened its doors in April this year. “A group of 15 young graduates,” says Clavering, “has been chosen on the basis of their academic knowledge and related industry experience.

They are being given the opportunity of

progressively going through three tiers of training to learn all they need to work in or manage one of our test facilities.”

Clavering has a soft spot for Africa, having lived in several different parts of the continent, and wants to see it flourish. “Political life is volatile,” he admits, “but not always as much as it seems from the outside. The recent Mali coup disrupted logistics as the borders were closed but the labs worked right through. It is a measure of its faith in the future that SGS is prepared to make capital investments when many others are reluctant.”

For more information about SGS Ghana visit: www.sgs-ghana.com

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Howden Africa, part of Howden Global, is showing impre in meeting the needs of the burgeoning resources industry

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Howden Africa

written by: Samantha Barnes research by: Gareth Hardy

essive growth y in Africa

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Geoffrey Chingwaru

Howden Africa

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n 2008, when many companies were Continuous improvement is at the heart of downsizing or holding onto their staff the thinking of Howden Africa. It is certified by the skin of their teeth, Howden in accordance with the requirements of the Africa kept its people in employment. ISO 9001 Quality Management System and Significant also is that the company, the company has integrated the continual which is listed in the engineering sector improvement components of the system of the Johannesburg Securities Exchange, into its business strategy. The company is grew its turnover from a base of R400 also ISO 14001 and OHSAS 18001 certified. million in 2005 to almost R1 billion today.

In an age where employees typically The company’s customer-focused change jobs many times during their approach is worth emulating. Admittedly lifetime, staff employed at Howden it helps having a track record in Africa of Africa recognise that the company’s farsightedness in developing more than 60 years. “As products and servicing its early as 1925, Howden companies were supplying markets makes it eminently main surface fans to South desirable to build a longAfrican, Zimbabwean term career there. “We have and Zambian mines,” says people with up to 40 years’ Geoffrey Ching waru, service,” says Chingwaru. business development and “People resign to join Howden Africa’s corporate affairs director, other companies but come approximate turnover happy to illustrate an back soon thereafter. example of the enduring Howden is one of the best nature of the company. companies to work for—it is In early 2012, the Howden Global a university in itself.” holding company Charter International This observation is not held lightly by was acquired by Colfax Corporation of this MBA graduate. “There are growththe United States, effectively bringing orientated changes occurring,” says Howden Africa within the ambit of the Chingwaru. This is backed up by Howden American company. Chingwaru anticipates Global’s Howden Academy, developed and a synergistic relationship between Howden presented in partnership with the Glasgow and its new owners. “Customer service Caledonian University in Scotland. The runs through the veins of Colfax, and is Howden Academy provides job-specific the cornerstone of our success, so bringing application engineering training to graduate the two together will further improve our engineers, fast-tracking their transition into focus on supplying our mining customers effective Howden employees; and Howden with turnkey solutions for the lifetime of Africa employees are regular participants. specific projects.”

“Our business goes beyond profits,”

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observes Chingwaru. “We endeavour to support our customers in achieving their goals by aligning our service and product offerings with their requirements.

Realising the value-add to customers of better understanding the processes behind the technology provided to them, Howden Africa offers engineers from among our customers the opportunity to attend workshops on the technologies employed.”

Serving other major industries such as power generation, petrochemicals, agriculture, construction, refrigeration, water treatment, waste disposal, construction and general industry, in addition to mining, is not without its challenges. “People are at the core of our business success. A big

hurdle is acquiring and retaining topquality engineering talent to design and support Howden equipment and systems,” notes Chingwaru.

“Recognising the ageing profile of some of our best engineers, we have introduced structured programmes to develop and retain our engineering edge. Recruitment initiatives include the provision of bursaries to the children of staff who wish to study engineering and finance at tertiary institutions. Site visits to the Howden plant arranged for undergraduate mining engineering students also expose possible new recruits to the opportunities on offer.”

The company actively recruits candidates for its annual apprenticeship

Compressor plant for a Howden thermal ice storage system

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Howden Africa

“As early as 1925, Howden companies were supplying main surface fans to South African, Zimbabwean and Zambian mines” programme in trades such as boiler making, fitting and turning, and welding.

“These skills are core to the Howden business,” explains Chingwaru.

The increased enforcement of environmental legislation within the mining and the industrial sectors is another opportunity for extending Howden engineering know-how beyond its traditional

customer base. “Several Howden products are directly associated with the control of dust and the removal of acids from flue gases,” confirms Chingwaru. “Our bag filter and scrubber technologies control dust at industrial plant and are also employed to keep dust emissions from power station flue gases within regulated requirements.”

The company even plays a part in reducing one of the gases which causes acid rain. “Howden supplies dry scrubbers which control sulphur dioxide emissions from industrial plant flue stacks,” explains Chingwaru.

Howden also offers environmentallyfriendly solutions in other areas. “Our chillers and other cooling plant used on mines use environmentally-friendly ammonia as a refrigerant. Fans supplied to the mining industry can be optimised for energy efficiency, reducing the carbon footprint of each fan.”

The types of technologies offered by Howden to the mining sector are also changing. South African mines are getting deeper, and conventional air cooling methods using surface chillers and blowers are becoming inadequate and energyinefficient, making it necessary to use hard ice plants to cool underground air. At 1,500

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“Our engineered solutions are developed for global applications and our customers are global mining houses within the resources sector” metres underground, rock surfaces reach 57 Celsius, and hard ice plants provide an economical method of cooling.

Prestigious clients include Zimplats, to whom Howden has supplied mine surface fans and blowers. “We have also tendered for the supply of special material scrubbers and sulphur burner and filtration equipment,” says Chingwaru.

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Attuned to ever changing market conditions, Howden Africa is constantly seeking opportunities to extend Howden OEM support to existing and new mining customers expanding into Africa. “Being part of a global company, our engineered solutions are developed for global applications and our customers are global mining houses within the resources sector.”

Howden Africa

Underground booster fan

African companies have unique preferential procurement policies, but Howden Africa has reaped the rewards of the strong relationships built over time by developing an in-depth understanding of customer requirements. “We look at upskilling locals to service the equipment that we supply,” explains Chingwaru. “So we are active in the aftermarket not only in terms of supplying spares, but also in providing local employment opportunities.”

The company supplies turnkey installations in partnership with local fabricators and installation contractors to transfer skills and know-how, creating jobs and local support to customers. “We identify suitable agents and train them in Howden

technologies to effectively and continuously look after our customers,” says Chingwaru.

Four market-focused business units, na mely Howden Power, Howden Projects, Howden Fan Equipment and Donkin Fans, meet the diverse needs of a range of industries. What sets Howden Africa apart from its competitors is that many of the technologies used in these industries, including mine ventilation and cooling, were first conceptualised

by Howden itself.

For more information about Howden Africa visit: www.howden.com

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KPMC

KPMC is a niche BEE project management and engineering company, specialising in combining the practicalities of mining, the challenges of logistics and the volumes of bulk materials handling with innovative solutions and experience written by: John Oâ&#x20AC;&#x2122;Hanlon research by: Marcus Lewis

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PMC began life when Mike Daniel set about re-establishing the materials handling business of UK-based Strachan & Henshaw, getting it fit for South Africa’s post-apartheid era. When S&H changed hands in the early 1990s, he seized the opportunity to claim some of the expertise and talent freed up in that process, bringing in South African partners to establish a truly indigenous South African engineering business: the result was KPMC, a Level 2 BEE enterprise with bulk materials handling at the core of its capability.

KPMC grew quickly after it was established in 2005, and today is known throughout southern Africa and beyond as an environmentally friendly business that uses innovation to reduce the impact and cost of moving ore and minerals from one place to another. The company is organised in two divisions, says Daniel—capital projects, and aftermarket sales and spares.

“We focus on mining products and systems including ore transportation solutions; and the logistics and project management that we do are very important too.”

KPMC understands the business of mining, and has scoured the world to bring the best equipment to Africa—above all, the kind of equipment needed to run modern mines efficiently and at low cost, such as vibrating floor technology for automated ore handling both on surface and underground, and ropeless winders that solve how to travel down a deep-level mine more quickly and safely and more cost-effectively than any other available method.

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Freight train hauling goods

KPMC

But the best equipment is not enough on its own. An effective supplier to the industry needs to be able to put together a package, as KPMC did last summer when the South African engineering company Bateman Engineering asked it to provide three American manufactured agglomeration drums for Areva’s huge uranium mine at Trekkopje in Namibia. “We manufactured the rubber lining in Singapore, the girth

gear and the rails in Germany, shipped it all to the USA where we did the steel fabrication and shop commissioning, loaded it all onto three barges, transported it down the flooded Mississippi and shipped it from Houston to Walvis Bay, then brought it up to the site by road.”

Not long ago it would have been unthinkable to source steel fabrication in the USA but though China was considered,

“We focus on mining products and systems including ore transportation solutions”

Ecofab rail car covers covering fertiliser snake

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KPMC

Coal auger sampler

the USA came up with the overall best price. “America is very competitive right now,” says Daniel. This was an excellent example of how KPMC combines logistics with engineering to deliver a solution.

Each of the clients has different needs, he says, though the reason KPMC pops up in all the largest projects is invariably that it saves them money.

Just about the biggest greenfield coal operations in the region are found in the Moatize basin in the eastern Tete province of Mozambique. KPMC is involved with both large operators there, Vale do Rio Doce and Rio Tinto. It is carrying out the prefeasibility, feasibility and detailed design for

bulk materials handling in Phase 1 of Vale’s project, and is part of the team working on Phase 2. In Rio Tinto’s it will play a vital part in quality control, sampling the road and rail trucks as they leave the mine. “Our equipment is a road truck with a hydraulic pack on the back and an auger that extracts coal samples, pulverises it, screens it and analyses it. The lab result is available before the truck reaches the harbour so they know which stockpile to put it on.” Accurately monitoring the grade of the coal is crucial to achieving the best market price.

South Africa’s economy is doing well and had been shielded from the worst aspects of the global recession but compared with

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its neighbours it is positively stagnant. The drive for future growth in the resources sector lies to the north, and KPMC is already engaged in Zimbabwe, Botswana, Kenya and Zambia, as well Namibia and Mozambique. That’s why the office location at the Johannesburg suburb of North Riding is ideal—apart from allowing the staff to avoid the city’s congestion it is 10 minutes from Lanseria Airport. “Our engineers can fly out to these countries, visit the mine site and be back working on the designs very quickly—it means we can be really quick on our feet!” he says.

The severest restraint on growth in Africa is the lack of infrastructure, says Daniel, and what road and rail links do exist are fragmented. This makes it difficult to supply mines, which are rarely near an existing railhead. “Where there is a railway line we can use that: where there is a road we can use the road. But there are gaps: I can take a train from Walvis Bay to northern Namibia but there is no rail link to Zambia. I have to go onto a road for 200 kilometres, then when I get to Livingstone I go via rail all the way to Dar es Salaam.” But until recently there was no cost effective way to transfer bulk materials from truck to train and vice versa.

Now, KPMC is in partnership with an American company called RailRunner to bring bimodal transport to South Africa— the only hurdle still to cross is approval by rail operator Transnet, expected any time now. Basically RailRunner is a road trailer that can be transferred to rail bogies in a matter of minutes, making use of cheaper rail transport wherever it is available—one

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KPMC

Vibrating floor clearing a grain silo

locomotive and a two-man crew replaces 150 trailers, tractors and drivers so the cost of transportation is drastically reduced.

Daniel believes the introduction of bimodal transport will have as big an impact on African logistics as mobile phones are having on African telecommunications.

The trucks will be manufactured locally, and can be as versatile as the market demands, with side tipping trucks, ISO containers, tankers and even a truck designed to carry an inflatable ‘balloon’ type tank to carry diesel or liquid chemicals to a mine site. The tank can be deflated and the vehicle returned with ore. “It’s a way to make sure we have as much back-haul cargo as possible, cutting the cost of the

operation even further.” Bimodal transport fits neatly with KPMC’s stance—a niche solution that is also highly innovative—as well as with the particular circumstances of the African market and the needs of the mining companies among its clients.

When KPMC offers a service or a product, it looks at the whole life cost as well as the capital cost, he continues, because operating costs account for the greater part of any project. “We keep our costs as low as possible because our clients are not cost makers, they are cost takers, and they have to establish where they are in the global cost curve of their commodity. We are trying to position them at the bottom of the cost curve.”

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Stacker stacking out coal

kpmc

2005 Year KPMC was founded Examples include a vibrating floor that uses just 40 watts of electricity to move material, or a newly launched and SABS approved line of electric trailing cables to feed moving equipment like draglines or continuous miners. Using new rubber formulations, these last longer and increase the uptime of the equipment. And with millions of rand being lost each year to cable theft, a plan to give every cable a microdot ‘signature’ to identify its owner will at last provide a deterrent to opportunists attracted by the black market for copper.

Products and systems like these make KPMC an attractive partner for mining companies, consultants and smelters, and its project management arm means it can always identify the most appropriate technology for a specific bulk handling problem. And to deliver, it needs people, says Daniel. “Among the 20 or so people working at KPMC, we have a huge amount of experience—that is our greatest asset.

But every grey-haired engineer has an apprentice, because it would be unthinkable to lose all that knowledge.”

For more information about KPMC visit: www.kpmc.co.za

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Gijima

The search for differentiation One of South Africaâ&#x20AC;&#x2122;s largest IT support companies is looking at how it can remain at the top by developing different niche markets written by: Alan Swaby research by: Jeff Abbott

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Meeting in progress at Gijima offices

Gijima

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ven for the most sophisticated of IT companies, who are busy developing products so advanced that customers aren’t yet aware that they exist, there still has to be an eye on where the bread and butter comes from.

In the case of Gijima, one of South Africa’s leading IT providers, this amounts to managing and supporting in excess of one million devices of one kind or another, all around southern Africa. This is the kind of work that dedicated IT departments do; in fact, the origins of Gijima go back to such a department in one of South Africa’s major mining companies. In the mid 1990s, though, the management thinking of the time was to divest all non-core activities and to outsource as much as possible. As such, the department was hived off and re-launched, first as AST until this business eventually merged with Gijima a decade later, into what we have today.

“Just over half of our R3 billion turnover,” says Shane Cooper, strategy execution officer for Gijima, “comes from Managed Services, which ostensibly talks to the support of the infrastructure layer. As you can imagine, with almost 90 per cent of the country’s top 100 listed companies on our client list, this is a wide remit that varies enormously from banking and public services, through to mining and hospitality—all of them requiring different kinds of support.”

To keep the wheels turning, in addition to its Johannesburg headquarters, Gijima has 70 ‘points of presence’, as they are

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Gijima field service engineers

referred to, which can vary from a regional office to an embedded desk within an organisation’s own premises.

But as important as this source of revenue is, Gijima is well aware that it is essentially a commodity activity and therefore one that is vulnerable to attack. At the top end of the market, large companies like to deal with other large companies and the 2,700 employees at Gijima certainly make it a large concern in South African terms. But it’s all relative and Gijima therefore works

hard to guard against perceptions that it is not a global player.

At the lower end of the offerings spectrum, though, the barriers to entry are small. Here, price rules the roost and new market entrants are obliged to win their first contracts by undercutting the opposition. As such, the emphasis at Gijima is on developing the professional services side of the business, which takes it into areas that are much more difficult for competitors to replicate.

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Gijima

ccupational health and safety lab

Taking part in corporate social responsibility initiatives

“This side of the attention on the four key industries it has identified business,” explains Cooper, as most important: “is largely project-driven.

We do represent software financial services, industrial suppliers; in fact we are one (including mining and Proportion of top 100 SA of SAP’s largest partners in manufacturing), public listed companies who are services (which currently Africa. But as well as off-theGijima clients accounts for one-third of shelf software from the likes of Microsoft and Oracle, revenue) and commercial (a we are among the largest somewhat broad category bespoke developers and systems integrators that includes hospitality, health, retail and in the country, performing a good deal of education). The ideal is to develop elegant our work with the government. Currently, industry-specific solutions—solutions that for example, we are helping to digitise all address client pain points in a unique way. the country’s title deeds.”

It’s not always easy to measure ranking As far as Gijima is concerned, the trick is but with a reasonable degree of certainty, to keep as far away from generic products Gijima is first or second in most segments and solutions as possible so it focuses its and is definitely the number one SAP

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partner for SAP support services. In the mining industry, it has products that put it at the highest levels of the global market.

All of this, though, is historical and Gijima is more interested in what comes next, as it is here where the greatest opportunities lie to leapfrog over the competition.

“Cloud computing has been around for several years,” says Cooper, “yet it still has to capture wide enterprise appeal—although we consider that it is only a matter of time.

Being able to work on the move has become crucial to the way business is done today.

There is still a lot of apprehension about data security, but when given the opportunity to explain properly, the benefits are being recognised and clients are responding.”

In fact, this ability to talk with the CEO of prospective client companies, rather than at the purchasing level of an organisation, is high on the list of objectives for Gijima over the forthcoming years. “In

“In every conceivable way, we are trying to differentiate ourselves from other suppliers”

Gijima Integrated Services Centre

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Gijima

Gijima exhibition

every conceivable way,” says Cooper, “we are trying to differentiate ourselves from other suppliers.”

Gijima must have done well in this respect with Apple, as it has recently been awarded systems integration partnership status— the first in Africa and one of the very few anywhere in the world. “More and more work is being done on tablets and notebooks that Apple pioneered,” says Cooper. “We are geared up to provide mobile management or bespoke packages; anything clients need to remove pain points.”

Prior to the financial crash five years ago, Gijima had been pursuing an ‘all things to all men’ approach. Now though,

in an attempt to put clear space between itself and the rest of the pack, it is focusing tightly on its four key industry sectors and in particular, on developing the new services it offers. This doesn’t mean that Gijima is any less ambitious than it has been in the past: if given the chance to see its Vision 2025 video, viewers will see that Gijima has a very clear picture of how the future might look and the many different roles it could be playing.

For more information about Gijima visit: www.gijima.com

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Getting nations talking BT is making a mark in Africa with a large expansion in its headcount, its footprint and its support for a communications network that will unite the continent written by: John Oâ&#x20AC;&#x2122;Hanlon research by: James Boyle

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BT Sub-Saharan Africa

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BTâ&#x20AC;&#x2122;s MeetMe service is a new offering to African clients

BT Sub-Saharan Africa

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magine you are a mining company solutions available globally. China has employing a few hundred people at possibly seen the potential for partnership a remote station close to Pofadder or in Africa better than Europe or America Springbok, two of the remotest towns but in the field of communications in the Northern Cape, two hours’ drive it is a British-based company that is from the nearest large town of Upington. It leading today. BT established its Subis no simple matter to keep connected to the Saharan Africa headquarters in South office in Johannesburg, let alone your global Africa in 1992. As a world leader in the HQ in Toronto. You probably wouldn’t put it design and operation of mission-critical this way but you need someone to manage networked IT services that support the an SLA (service level agreement) that will core processes of the world’s leading bring together elements of GPS, phone lines companies, telecommunications providers and fibre to keep you in touch—and provide and governments, it has been able to bring the maintenance for those networks and all network and telecoms services to global the specialised switching companies operating in equipment. Your business Africa, such as Sasol, the world’s biggest maker of depends on having a partner with enough clout to keep motor fuel from coal, and the lines open, and not many Anglo American, which providers can deliver on that controls the world’s biggest Year BT established its sort of SLA. platinum producer.

Sub-Saharan Africa HQ The single big remaining Take an example. bra ke on A f rica’s Business leaders down to the development is its need humblest office workers all for better infrastructure. Typically the read about how advances in technology can situation is not too bad in the coastal ports save them cost and make their work easier. through which it has traded with the rest of But they are rarely IT specialists, says BT’s the world for centuries but communication general manager for Sub-Saharan Africa, between African states still lags. Roads Keith Matthews. Video conferencing can and railway networks are receiving a vast save any company significant amounts of amount of overseas investment as well money especially if it has multiple sites, as support from governments waking up and BT’s MeetMe service, a new offering to the fact that having got rid of colonial to BT’s African clients, can be bundled with control they have an opportunity to cash in, other services from BT, like Telepresence, not only on their natural resources but their in a way that makes no technical demands vast human potential. on the user. “This is video conferencing And Africa deserves the best. It is in for dummies! You open up the link, search a position to choose the most effective the person you want to speak to, click on

1992

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inspired Your weekly digest of business news and views

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LEADERS IN TELECOMS SOLUTIONS

E: contact@voxorion.co.za | www.voxorion.co.za

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their name to set up a session, type them a message to say, ‘Let’s have a quick video call’, then if they have a camera on their PC they switch that on, connect and off you go.”

In South Africa, conducting a twohour meeting for up to 40 people spread between Johannesburg, Durban and Cape Town takes two hours, whereas travelling between these centres would take at least a day out of the schedule of the people, not to mention the cost of air fares or the stress on individuals.

And all BT’s voice solutions are ‘carrier grade’, he adds. Simply, that means they are not subject to internet connectivity interruptions but connect through BT’s MPLS (multiprotocol label switching)

BT Sub-Saharan Africa

Video conferencing can save any company significant amounts of money

system using standard networks. So the MeetMe service incorporates Microsoft’s Lync Communicator as well as BT-developed systems so that participants can show presentations or pass the chairmanship to someone else and behave just as they would in a physical meeting. “There are lots of bits of technology out there and what

I think we do very well at BT is to pull it all into a unified communications approach,” says Matthews.

BT started life as a network company, and the network is the core, because however smart the systems you put out over it, keeping the connection open is the primary concern. “We start from the physical network of global and regional

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solutions, so we can provide customers with the core network they need to run their business. Maybe other people can say that as well but because BT has been active so long we have evolved from being just a pure network player into being able to layer a complete package of additional services onto it. There is a lot of cost efficiency in this model where we take the network that we own, add the services we have built and offer that as a one-stopshop to our clients.”

With more than 100,000 people around the world, BT has the opportunity to refine these services within its own organisation, he points out. With the network in place, it becomes possible to add the voice environment, video services, and then give access to people accessing the network using the iPad, Android devices and smart phones that are booming in Africa. However for business clients there has to be a measure of control: “We help customers manage who is on their network, what access rights they have and what applications they can use and what they can see inside the internal networks of the company.”

BT’s Prosperity growth plan has seen the company feed resources into the areas where its clients are expanding.

Phases 1 and 2 saw it moving into Asia and Latin America, and phase 3, announced in February 2012, will see the number of BT employees in Sub-Saharan Africa grow from 130 to 200. That counts as organic growth, though with a good dose of fertiliser: even more exciting is the decision to buy into South Africa’s FibreCo network, the country’s first

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BT Sub-Saharan Africa

BT has bought into South Africa’s largest open access, long distance, managed fibre network

open access fibre network, and this move represents a by taking up what is an high level of commitment to the regional market. ‘anchor tenant’ status.

FibreCo is building With his eye constantly what w ill be South on developments to the Number of BT employees Africa’s largest open north, Matthews sees—at worldwide access, long distance, last—growing cooperation managed fibre network between the countries of that will span in excess central Africa, especially the of 12,000 kilometres, starting with landlocked countries with no direct access to Phase 1 linking Johannesburg and the WACS, Seacom, SAFE and EASSy system Cape Town with international undersea that now loops round the continent. “Regional cable landing stations in Melkbosstrand operators along the coastline are beginning and Yzerfontein. It coincides with the to talk to their inland counterparts— government’s goal of universal broadband countries that used to be entirely dependent access by 2020. Traditionally BT has not on satellites. For example there is a lot of invested heavily into domestic networks, collaboration between regional operators

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BT employee at work

BT Sub-Saharan Africa to see how they can work together to build terrestrial networks and gain access to the subsea cables that are available.”

One of the features of this market is mutually beneficial collaboration between companies that might be seen as fierce rivals. As an example, in 2011 BT announced an NNI (network to network interconnect) with Internet Solutions, one of the partners in FibreCo, to add more African countries to its delivery footprint. Business advantage always has to be balanced against social growth, Matthews believes. His division employs just one expatriate, and is very active in supporting social programmes; and in Sekunjalo Investments, BT has a local partner generally considered to be among the most successful and progressive of all black-owned groups.

BT encourages its employees to volunteer and allows them time to do this. As part of its portfolio it supports Nkosi’s Haven near Johannesburg, a charity for children who are underprivileged or living with Aids, by building a nursery school. It has also provided an IT centre for Infinite Family, a charity that runs a mentorship programme for such children to interact over video conferencing with mentors in any part of the world—an initiative of which Matthews is particularly proud, since it uses technology to promote transnationalism in a way that chimes with BT’s values as a business.

For more information about BT Sub-Saharan Africa visit: www.bt.com

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Windhoek Cable Accessories

Fibre optics are transforming communication in Africa, and this key supplier is helping to upgrade the system in one of the sparsest countries imaginable written by: Alan Swaby research by: Stephen Vivian BE africa | 157

Feeding cable alongside Chobe River

Windhoek Cable Accessories

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olker Hesse, managing director of Windhoek Cable A c c e s s o r i e s — N a m i b i a ’s leading fibre optic supplier— has one irresistible entry on his CV. When you hear that he used to work on installing spy-proof communications systems for Nelson Mandela, you just have to learn more. However, don’t expect to get much information about bugging equipment: even if that aspect of the work ever came under his remit, the Official Secrets Act would make sure his lips are sealed.

He has now settled for a more conventional life, helping to upgrade Namibia’s communications network by installing new fibre optic networks or replacing copper with glass. “Namibia is a vast country,” he says, “with one of the lowest population densities in the world. There are still corners of the country without a reliable telephone service, not to mention the capacity to transmit data. Running copper to the more remote parts of the country would be prohibitively expensive, so fibre is a natural alternative.”

Through his time with the embassies, Hesse learnt which of the many products on the market worked best and then used his contacts to set up a distribution business in Namibia for communication consumables— cable, connectors, accessories and the like.

That was in 2005 but it didn’t take long before the business was encouraged to get into installations to provide the proverbial one-stop-shop. In the last two or three years, the emphasis has swung very much towards fibre optics, where Windhoek Cable

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Accessories (WCA) has quickly established itself as the country’s leading and most reliable supplier.

“Probably the biggest advantage we have over the competition,” says Hesse, “is our expertise in testing cables before and after installations. Our principal customer is the country’s official telecoms provider: Telecom Namibia relies on us to provide them with accurate data on each length of cable in order to calibrate their amplifiers correctly.”

In fact, WCA is the only Namibian company that can ensure that fibre optic cables are carrying the maximum bit rate possible by undertaking testing for optical dispersion, using either polarization mode dispersion or chromatic dispersion techniques.

The longest run of cable which WCA has been involved with measures a staggering 960 kilometres although interestingly, the client in this case was not Telecom Namibia but Nampower, the country’s electricity generator and transmission authority.

“Throughout Southern Africa,” says Hesse, “power transmission lines make full use of OPGW [optical ground wire] and we are involved with much of this work on behalf of Nampower.”

It works like this: as well as the powercarrying cables strung between transmission

towers, there has to be an earth cable also.

OPGW kills two birds with one stone by running as many as 48 fibre optic cables inside a hollow metal earth sheath.

Despite the technology behind fibre optics, the cable runs themselves are often very low-tech. Certainly one of the techniques is to dig trenches and lay the fibre in buried conduit but fibre optic cable is just as likely to be strung between telegraph poles exactly the way phone lines worked a century ago. There is a lot of remoteness

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Windhoek Cable Accessories

Fibre being installed over Chobe River

in Namibia, providing the perfect cover for weekly attacks by thieves mistaking glass for copper. Once they’ve cut through the line and realised their mistake, the fibre isn’t stolen and simply needs to be reconnected.

Hesse is surprisingly philosophical about these acts of vandalism, even though sending out one of his technicians to make repairs must be more of a nuisance than a revenue source. “Namibia is a very poor country,” he says, “with unemployment far too high.

Sometimes there is no other option than to steal if you are to feed your family.”

At the head office in Windhoek, WCA practices affirmative action and gives first preference to previously disadvantaged individuals when it comes to appointment of new staff or promotions within the

organisation. At the moment, two-thirds of the workforce fall into this PDI category.

Out on site, WCA also tries to create some work for local inhabitants when laying fibre optic cable. “If there are poles to be erected or trenches to be dug,” he says, “we can commission this work locally.”

But the technical work must be done by practiced hands. “Careful attention to detail is essential to make the best connection possible,” he says. “We make sure our technicians are right up to date and fully competent. This can mean refresher courses as frequently as every six months depending on the flow of new connectors or equipment coming onto the market.”

However, Hesse has no plans to make massive increases in size—at least in terms of

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â&#x20AC;&#x153;We make sure our technicians are right up to date and fully competent.

This can mean refresher courses as frequently as every six monthsâ&#x20AC;?

Laying cable in Caprivi Province, Namibia

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Windhoek Cable Accessories

Windhoek Cable Accessories camp site

personnel. The business model he prefers is for WCA to outsource as much of the work as possible. Namibia is such a small market that demand is extremely erratic and fluctuates widely from feast to famine, making it difficult at times to keep a workforce of just 13 fully occupied. The ideal is for WCA to oversee contracted installation, supervising work and running tests to verifying the integrity of connections as they are made.

And there can be a lot of connections.

Fibre optic cable comes in runs of four or six kilometres—the selection depending on the weight of that length of cable and whether it is being buried or suspended. Even so, there can be hundreds of joints in the bigger projects—each as critical as the next.

In new buildings it is now common practice to run fibre optic cables instead of copper, not only from a cost point of view but

also where there is a risk of data corruption.

“Running copper communications alongside electrical supply lines,” says Hesse, “can create magnetic fields which can disrupt data. Hospitals in particular are susceptible.

There’s also considerable cost savings to be made considering the long distances found in some of the bigger hospitals which might be spread over large areas and multiple buildings.”

The work for Hesse and his team might not be as glamorous as thwarting political espionage; but it’s every bit as important to the progression and development of the country.

For more information about Windhoek Cable Accessories email: volker@tigcc.iway.na

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The Allied Group has been using its extensive experience and expertise to take advantage of the booming growth in Africaâ&#x20AC;&#x2122;s telecoms market written by: Catherine Dunlop research by: Paul Bradley

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Allied Group

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A

llied Group is the leading provider of comprehensive logistics and technical services to mobile network operators, wholesalers and retailers, and a value-adding independent specialist distributor of cellular devices and related products such as phones, SIM cards, data cards, netbooks, laptops, collaterals and other accessories in the fast growing sub-Saharan mobile telecommunications market. The companyâ&#x20AC;&#x2122;s addressable market comprises 26 countries, with a total population of over 550 million. Allied shipped approximately 23 million units in 2011 and expects to increase its shipment volume twofold in 2012.

Allied was initially established as a distributor of handsets to mobile service providers and retail outlets. The company soon expanded its portfolio to include value-added services such as managing the end-to-end supply chain for its customers, including all warehousing, customisation, forecasting, purchasing, inventory management and distribution. Through the companyâ&#x20AC;&#x2122;s interaction with both cell phone manufacturers and retailers, Allied created a fulfilment model that minimises the response time for the delivery of customised handsets and for the maintenance and repair of handsets. The logistics business allows the company to offer best-in-class services and strengthen its relationships with its clients.

Allied was established in 2003 by a team with extensive experience in the EMEA region, as well as knowledge of

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Allied Group

Allied shipped approximately 23 million units in 2011

the cellular telecommunications industry and logistics management services. The team had already identified a tremendous opportunity to conquer Africa in the cellular telecommunications space.

“The reason our company is unique is because the evolution of the Allied business model resulted in the company becoming the independent market leader. We customise and specialise to meet the customer’s requirements. Today we distribute cellular phones to major operators, service providers and retailers in South Africa and selected countries in Africa. Allied ships to over 8,000 retail outlets throughout Sub-Saharan Africa,” says Jason Harmsen, Allied’s GM, South Africa Region.

Allied offers a unique combination of local market expertise and best-in-class business practices, and is ideally suited to capture the continued strong growth expected in the mobile telecoms market in Sub-Saharan Africa. “Allied has a blue-chip customer base across the region,” states Francois Van Eyssen, Allied’s CEO, Africa Region. “The company is expected to increase its revenue more than twofold in 2012 as a result of its continued international expansion and winning some key strategic contracts such as the one it signed in 2010 with Telkom, under which the company acts as a supplier of handsets and ancillary products and third-party logistics services to 8ta, the fourth entrant to the South African mobile

Allied has been rapidly expanding its presence in Africa

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Allied Group

“We distribute cellular phones to major operators, service providers and retailers in South Africa and selected countries in Africa” telecommunications market.” The company is also an exclusive supplier of handsets and logistics services to Virgin Mobile South Africa, the continent’s first mobile virtual network operator (MVNO).

Allied’s expansion strategy reflects Africa’s increasingly important role in the global economy. Economic growth stimulated by development of Africa’s natural resources

is anticipated to lead to consumer-facing sectors growing two to three times faster than those in the OECD countries.

The company has comprehensive agreements with key cell phone manufacturers, including Samsung, Nokia, RIM, Motorola and others, who see Allied as the ideal partner to expand their business in Africa. With Nokia, Allied has entered into a fulfilment contract, as well as distribution agreements in Mozambique and Zambia.

And in 2010, the company extended its longterm co-operation with Samsung, entering into a pan-African fulfilment contract covering an additional 18 African countries.

Allied’s contracts reflect a long-term relationship with its partners, supported by its access to diversified distribution channels, including mobile operators, their franchise networks, service providers, retailers and wholesale dealers. Allied makes a high percentage of sales directly to operators, demonstrating its ability to enter into high value-added relationships with its key business customers that deliver abovemarket gross margins.

“Allied has been rapidly expanding its presence into a group of high-growth African countries, in which it plans to sell cellular products and handset services,

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with sales volumes growing above 30 per cent annually,” says Jacqueline ColeCourtney, Group CEO, Allied International Investments. “Since these countries are at different economic and technological stages in the development cycle, Allied has approached these markets with a tailored product offering and a strategy to address specific local needs. Furthermore, the geographical expansion programme is

being conducted in a very cost-effective and efficient manner, from Allied’s six hubs and repair centres located throughout SubSaharan Africa.

“Our focus over the next five years is to connect the African continent by offering the best product and services,” she continues.

“We will also continue our investment programme which started 10 years ago.

Our company is also ensuring that we ‘give

“The company is expected to continue to grow strongly, outperforming its international peers in terms of profitability and growth”

The company offers inventory management services

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Allied Group

Allied provides comprehensive logistics services

back’ to the local communities where we operate, especially through the education of children and training and development of the indigenous workforce.”

“The company’s operational excellence, strong relationships with both original equipment manufacturers (OEMs) and customers, limited competition, and a large share of value-added and logistics services (such as customisation, procurement and fulfilment) result in top-of-the-industry margins and strong profitability,” comments David Morris, GM, Rest Of Africa Region.

“As a result of Allied’s market leadership and unique position in the fast-growing African telecoms market, the company

is expected to continue to grow strongly, outperforming its international peers in terms of profitability and growth.”

Guided by its founders, Allied has a strong and experienced management team, with a highly entrepreneurial and successoriented culture. Over the last few years, the company’s founders have focused on emphasising clear accountability across the organisation and pushing key customer relationships to the operational level.

The growth of GDP levels across Africa and resulting increase in disposable income, combined with an expanding population and higher mobile penetration rates, have lead to increasing demand for mobile devices.

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In addition, the market is benefiting from consumers trading up from older handsets to newer and increasingly sophisticated models, such as smartphones.

The mobile telecommunications devices market in South Africa has shown remarkable growth in the last five years (2006 to 2010), with close to 55 million handsets sold throughout the period and sales growing at 13.7 per cent per annum.

Other African markets in which Allied has already established its presence, such as Zambia, Namibia and Mozambique to name a few, showed even higher growth rates of above 20 per cent annually.

The company has sales agents in many Sub-Saharan countries, including Angola, Botswana, Uganda, Lesotho, Malawi, Swaziland, Tanzania and Zimbabwe, which gives it the opportunity to expand its footprint rapidly.

This growth is expected to continue in the near future, with international experts expecting over 22 million handsets to be sold in South Africa in 2012 (an 18 per cent increase on 2011) and other markets addressable by Allied growing at 20 to 40 per cent per annum or even above 40 per cent, as in the case of Madagascar, DRC and Angola.

In addition to their importance as a means of communications in a continent where mobile networks are the key communications infrastructure, mobile handsets are the number one aspirational product and a status symbol in Africa, with customers willing to spend a significant share of their income on them. As in more developed markets, a key trend in the African mobile handset market has been

â&#x20AC;&#x153;a key trend in the African mobile handset market has been the growing popularity and availability of smartphonesâ&#x20AC;?

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Allied Group

Experts predict that over 22 million handsets will be sold in South Africa in 2012

the growing popularity and availability of smartphones. With such devices generating higher margins than basic handsets for Allied, the expected increase in smartphone sales will have a positive impact on the revenues and profitability of the company. Since Africa has relatively low internet penetration rates and low sales of PCs and laptops, attractive and affordable smartphones, netbooks and tablets are the tools that could provide fast connectivity to the internet to the broad population.

After growing at a world-leading average annual real growth rate of over five per cent between 2002 and 2010 and weathering the global downturn better than the rest of the world, Sub-Saharan Africa is projected to grow in real terms by 5.3 per cent and 5.1 per

cent in 2011 and 2012, respectivelyâ&#x20AC;&#x201D;faster than virtually any other market. Africa is widely expected to play an increasingly important role in the global economy, with the increasing size and attractiveness of its labour force. According to the global consulting firm McKinsey, Africaâ&#x20AC;&#x2122;s rate of return on foreign investment across various sectors is higher than in any other developing region.

This extraordinary growth has coupled with other crucial structural changes that have positioned the region for strong and sustainable future growth and enhanced its political and macroeconomic stability, such as strengthened political commitment to private sector growth, increased investment in infrastructure and education, trade

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The telecoms sector has been an important driver of growth in Africa

Allied Group liberalisation, increased fiscal soundness and monetary discipline and reduced debt levels resulting in improving sovereign credit ratings. The region is continuing its reforms towards a more investor / business friendly environment in order to increase integration with the global economy.

Further, gradual development of common monetary areas and trade agreements between countries with close geographic proximity has also stimulated broader economic growth in the region. “Allied has positioned itself across the region to benefit from this growth opportunity. Overall, the company’s addressable market comprises 26 countries with a population of over 550 million, which are expected to grow their economies at eight per cent per annum through 2015,” says Cole-Courtney.

Africa has also attracted a significant amount of infrastructure investments amounting to $45 billion a year and absorbing more than five per cent of total GDP. In particular, as the telecommunications sector has been an important driver of Africa’s economic growth in the last years, investments in (mostly mobile) telecommunications infrastructure have been growing significantly, with a 33 per cent CAGR between 2003 and 2008.

Allied has demonstrated strongly that it is perfectly positioned and equipped to take full advantage of this growth.

For more information about Allied Group visit: www.allied-mobile.com

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Nashua Mobile

Cellular organisation South Africaâ&#x20AC;&#x2122;s growing SMEs need effective communications but want to avoid heavy investment and long-term commitmentsâ&#x20AC;&#x201D;and Nashua Mobile believes it has the answer written by: Ruari McCallion research by: Paul Bradley

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Employee at Nashua Mobile offices

Nashua Mobile

N

o-one needs to be reminded of the serious effects of the global banking crisis. South Africa’s Nashua Mobile, for example, saw its bad debt ratio just about double during 2009 to 2010. After such shocks, it is not surprising to find that smaller businesses (SMEs: small-to-medium enterprises) are wary of committing to big investments in communications—but they need to have effective IT if they are going to grow and prosper; it is a chicken-andegg situation. Fortunately, Nashua Mobile maintains that it has the answer.

“We are seeking to provide a full, in-house service solution to SMEs,” says Chris Radley, managing director of Nashua Mobile. “We have the solutions to enable a small office, of five to 50 people, say, to run a fully mobile office solution. We can provide the network, the handsets, cloud computing, and website hosting. Plus, we can supply printers, faxes and so on—full, end-to-end office communications functions.”

Nashua is known across the world for its copiers and fax machines; its mobile communications operations are unique to South Africa. But that doesn’t mean it is lacking in experience—far from it. The company was established in 1994 as NedTel Cellular, before becoming Nashua and is a wholly-owned subsidiary of the JSElisted Reunert Limited Group, which also owns Nashua, Reutech and CBI-electric.

Headquartered in Midrand, Gauteng, it employs around 750 people and now stands as an independent telecommunications solutions provider offering a range of

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Nashua Mobile broadband, internet service Allied Mobile Communications provision and mobile data Allied Mobile Communications (AMC) and Nashua through to messaging and Mobile first joined forces in 2003 and the synergies and cellular voice solutions. relationship between the companies has grown from It is one of South Africa’s strength to strength over the years. AMC now supplies a largest independent cellular large part of Nashua’s product range, which is distributed solutions providers and one throughout South Africa.

“We work closely with Nashua to make sure that we provide of the few to offer all four the unique service that they require from a supply chain mobile networks (Vodacom, partner and we always have the latest cell phones and MTN, Cell C and 8ta). cellular technology in their stores, on time,” said Jason The company operates Harmsen (GM for South Africa Region). AMC and Nashua through four divisions: are working on some exciting new ventures for the future, Business; Retail and so watch this space.

Fra nch ise; St rateg ic www.allied-mobile.com Partners and LCR; and Specialised Services. It has over 880,000 contract subscribers that include 170,000 data card customers and 15,000 email customers. Nashua Mobile offers subscribers a broad range of voice and data services through a single point of contact.

“Our value proposition is the singlesource provision of service for all networks,” says Radley. “Individual subscribers can have one service for themselves, another for their family, another for work or other connections; we will provide all of them

“We are seeking to provide a full, in-house service solution to SMEs”

Chris Radley, managing director of Nashua Mobile

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in one, with a single bill. Instead of having various invoices coming in at different times of the month, why not have the convenience of dealing with Nashua Mobile as a single provider?”

Nashua Mobile’s role as a cross-platform supplier is an indication both of its flexibility as a solutions provider and a reflection of the reality of the communications infrastructure in South Africa. Western Europe and North America both have long-established landbased telecoms networks, which have evolved from purely voice connection to be the backbone, skeleton and many of the functioning organs of IT, from EDI to superfast broadband. Africa would have a long and expensive task of catch-up to undertake if it decided to mimic the north—but that isn’t Africa’s way. It is better to innovate and use the cheaper and easier-to-spread mobile networks. The growing demand helps to create a virtuous circle; the network providers can see that their investment will generate growth and fairly rapid return on investment (ROI). The signs are already a lot stronger than straws in the wind.

“We have definitely seen an increase in the number of smartphones, even in our lower packages,” says Radley. “The typical highend user may well have a PC on their desk,

a laptop and will have a decent smartphone.

The prepaid market will probably have a lower-end handset and mostly use it for calls. The higher end, corporate user may have four or five devices, covering all ends.”

The users who may in the past have been viewed as being at the lower end of the corporate market, the SMEs, are in the area that has the potential for most growth.

By offering prepaid, as well as contract

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Nashua Mobile

Customers can choose from a range of handsets

offerings, Nashua Mobile anything similar. Limitations is seeking to stimulate of the network may restrict the growth still further. It what it can do but there are isn’t just about providing further possibilities that we standard solutions, either: it’s will be able to exploit and to Number of Nashua expand, as things progress.” about innovation.

Mobile contract subscribers “Together with Nokia, It is a manifestation of our partners, we were the the company’s proposition, to extend low-cost access first company worldwide to launch a product called Xtreme Data,” Radley to a full range of IT services. says. It is a similar idea to the BlackBerry Nashua Mobile is also concerned with Internet Service (BIS), which allows internet accessibility and efficiency in customer browsing, emailing and instant messaging services. Interaction at its stores is almost at a fixed cost, but, uniquely, it is Nashua completely electronic: customers sign on a Mobile as a service provider and Nokia as the tablet and the contract is emailed to them. hardware specialist that developed it, rather “We are working our way back up than the networks. “We launched Xtreme the whole process. The next step is full, Data before the networks were able to offer online engagement,” says Radley. “Nashua

850,000

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Nashua Mobile Advising a customer

750 Current employee headcount at Nashua Mobile Mobile has a sizable base, across all market segments: our offer can be adapted to suit manufacturing, services, banking and so on. The different segments and what they need are critical in determining the applications we offer.” It has already proved its concept in practice at its own stores and franchises—it has over 200 outlets altogether. Quality reviews of stores have completely eliminated manual paperwork, for example. “We have a GPS facility that we use when we visit. We take photos and upload them, directly to our central system. This has other applications too, for example, readings at remote water reservoirs. Using this technology can enable businesses and government agencies to improve their efficiency ten-fold.” The combination of innovation and dedication, along with progressive employment and training—it has been recognised both under BEE and women’s emancipation— are helping Nashua Mobile to take the country forward.

For more information about Nashua Mobile visit: www.nashuamobile.com

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Winds of change With Eskom no longer having the sole responsibility for electricity generation in South Africa, new independent providers are moving into the market. Cennergi, one of the most recent entrants, is setting itself ambitious targets written by: Alan Swaby research by: Jon Bradley

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Cennergi

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T

here’s something of a paradox in South Africa: the country sits on a sea of coal and yet the government has taken the brave decision that the drastic imbalance between an ever growing demand for electricity and an inadequate supply—a situation that affects businesses and residential consumers throughout South Africa and its neighbouring countries—can’t be solved by building more coal-fuelled power stations. Once the two projects currently under construction at Medupi and Kusile come on-stream by 2015 and 2018, there may never be another coal-powered station built there.

As early as 2003, this had executives at Kumba Resources scratching their heads on what sort of future their considerable reserves of coal would have. The best scenario possible was a plateau in demand as early as 2008. Since then, Kumba Resources has gone through a number of structural and ownership changes with the primary objective of creating a new generation South African company, with a broader spread of shareholders from previously disadvantaged backgrounds— including employees and communities in the vicinity of Kumba’s operations. In 2006, the coal, mineral sands, base metals and industrial minerals were separated from the iron ore interests and emerged as Exxaro—one of South Africa’s largest diversified mining companies.

Thomas Garner was one of those Kumba executives pondering what the future might be like and with the creation

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Cennergi launch venue

Cennergi

Cennergi

Executives after the signing ceremony to commemorate the launch of Cennergi

of Exxaro, he was given the task of the best home for an energy generation investigating all the possibilities further. business, so Garner started to look for “We could see that tariffs would continue suitable partners with which Exxaro could to rise,” he says, “in response to a general joint venture. The outcome of this search shortage of electricity capacity worldwide. has now been made official: Exxaro and It was also clear that we had to work the Tata Power Company of India have towards a low carbon economy and with formed a 50:50 partnership to create a that, we developed the model of having new energy company, Cennergi, of which Garner is the CEO. an independent energy producer operating across Throughout the past the spectrum of energy decade, while South Africa sources—coal and gas at has been plagued with energy outages and load one end and renewables at shedding has become a the other.”

Proportion of its portfolio way of life, there has been Within Exxaro, there Cennergi is earmarking was the realisation that a plenty of discussion among for wind power mining company was not industry members about

30%

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From this forum came the blueprint for energy supply known as IRP2010 (integrated resource plan) which sets out the targets for what contribution each energy source should provide.

Consumers are going to have to get used to much higher electricity prices. The IRP indicates a long-term electricity price at more than 150 per cent of current levels.

Coal and nuclear will remain the backbone of supply but after Kusile is finished, there is provision for only one more coalfired power station in 2027—a prospect which will temper Exxaro’s current coal operations in South Africa. On the other Thomas Garner, CEO of Cennergi hand, the industry will be encouraged to invest in Cliffe Dekker Hofmeyr Cliffe Dekker Hofmeyr is a leading South African business renewable energy sources law firm positioned to help companies with their legal with a target contribution needs anywhere in the world through our depth of of 16 per cent. resources, capabilities and experience. We have offices “We have set ourselves the in Johannesburg and Cape Town. We are affiliated to DLA target of being the largest Piper, a global law firm with extensive African capabilities independent electricity and an unrivalled international network. supplier,” says Garner, “and www.cliffedekkerhofmeyr.com as such, we are aiming for

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a 15 per cent share of the market which means we envisage producing 16GW by 2025. To achieve this will mean considerable investments and in this respect, the very solid balance sheets of Exxaro and Tata Power will be indispensable.”

The race is already on. Cennergi has won two licences to produce wind generated electricity with a total capacity of 234MW. And while there is still some confusion about the economic efficiency of wind generation, Garner is in no doubt that it will work. “It’s very difficult to make a true comparison of costs,” he says, “because measuring the total impact of CO2 emissions and water pollution from fossil fuels is so contentious. But developing countries like ours have the

Cennergi

Cennergi hopes to produce wind-generated energy at a comparable price to coal-powered

advantage of being able to learn from the mistakes made in the northern hemisphere and even leapfrog into more efficient technology.”

Garner is convinced that by applying the same principles developed by Exxaro to maintain its mining equipment, Cennergi will be able to produce windgenerated energy at a comparable price to coal-powered. “Exxaro uses RCM to

understand cost drivers,” he says. “We regularly extend the operating life of equipment much longer than suppliers promise and at a lower cost. Our dump trucks, for example, take a battering but still double the life span the manufacturers recommend. We shall apply the same principles to our generation equipment.”

With the total number of turbines involved, it’s not difficult to see that the cost

“We are aiming for a 15 per cent share of the market which means we envisage producing 16GW by 2025” BE africa | 195

Cennergi

234mw Combined generating capacity of Cennergi’s two wind power licences of maintenance can be critical. The two wind farms currently underway account for 31 3MW units and 70 2MW units. Eventually, though, if Cennergi sticks to its plan of having 30 per cent of its portfolio supplied by wind power, there could be anything up to 2,000 units in operation by 2025.

In the meantime, the second technological cab off the rank is solar power. Cennergi has one photovoltaic project it has developed from scratch underway and a second it has acquired.

In fact, it seems likely that this model of taking over independently produced and financed installations will play a large part in Cennergi’s growth. “Now that the field is open to independent suppliers,” says Garner, “there is every indication that many smallscale projects will be developed. But long term, such fragmentation is inefficient and it will be part of our overall strategy to offer these developers a way of realising a return on their investments while consolidating the independent sectors into a viable and sustainable block.”

Cennergi has two photovoltaic projects underway

For more information about Cennergi visit: www.cennergi.com

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Business and belief

Power Providers Company Limited

One of the great things about Tanzania, says Clive Jones, the managing director and co-founder of Power Providers, is that it allows you to reinvent yourself endlesslyâ&#x20AC;&#x201D; and his life and company both testify to that written by: John Oâ&#x20AC;&#x2122;Hanlon research by: Jeff Abbott BE africa | 199

View of power house with solar arrray

Power Providers Company Limited

A

n axiom of business is that it should be economically viable, generating from its sales more than those sales cost, plus overheads. That is a necessary principle for starting a business but not a sufficient one: many entrepreneurs never look beyond that principle and indeed their measure of success is how big that surplus can be and how rich they can get. But it is surely better to judge an enterprise on its contribution to the wellbeing of society and not just on how big it is.

In the case of Power Providers the cart definitely follows the horse. The green energy business that Clive Jones set up five years ago in the northern Tanzanian town of Arusha is a commercial success by any standards, having grown from zero to an annual turnover of more than $1 million. But it has been grown on its founder’s conviction that developing alternatives to fossil fuels is imperative for human survival—something every schoolchild knows, but is impeded by political and commercial inertia.

Jones is an environmental biologist by training. Back in 1979 when he graduated there were few jobs to be had in this field so he indulged his yearning for adventure: “I mobilised my lifestyle to enable me to travel,” as he puts it. This took him first across India, then to Africa and his first encounter with Tanzania. Always a competent mechanic, he was sent to the Ngorongoro Crater to fix a broken-down truck for an expeditionary overlanding company he worked for at the time.

From that moment, he says, he was

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hooked on East Africa and its wildlife, an obsession that turned itself into a 12-year career in tourism. “For four years I ran primate trips—Tanzania’s tourist industry was in its infancy and I was in heaven, in the heart of the Serengeti plains with a truckful of clients and hardly another soul in sight!”

But the safari business was moving up-market and he fell out of love with it as it started to attract clients looking for luxury ahead of the hands-on encounter. He went back to his area of specialisation and moved into the field of conservation, working with NGOs such as the Frankfurt Zoological Society and becoming instrumental in Tanzania’s accession to the international Ramsar Convention, setting standards for wetlands management and helping Tanzania to find its place on the natural resources map.

After a period working with the legendary wildlife film-maker Hugo van Lawick, Jones was engaged by the African Wildlife Foundation to manage the Manyara Ranch, a 45,000-acre asset sandwiched between Tarangiri National park and Lake Manyara National Park. The ranch is in a very important wildlife corridor, he explains, on land used by pastoralists, notably Maasai, and farmers: “My mandate was to manage this ranch to find the balance point between the communities and the wildlife, while encouraging sustainable models of tourism.”

One of the problems of running a remote station like the Manyara Ranch is providing energy to scattered facilities, with no chance to connect to the grid—and in any case Tanzania enjoys an erratic mains electrical supply to only 10 per cent of the population.

The solution for the office, cattle sheds and accommodations at Manyara was found in solar power, charging an array of batteries to provide a continuous, reliable electricity supply. Jones, by now married and realising that the ‘bush’ is not the best place to raise

“In Tanzania, if you focus on service and quality it is difficult to go wrong” 202 | BE africa

Power Providers Company Limited

Solar array at remote bush lodge

children, had reluctantly concluded that it might be time to trade the absorbing but illpaid world of conservation for something more grounded and, hopefully, lucrative. Solar power was the natural choice, combining a real market need with the opportunity to get involved with technologies that had fascinated him since his university days when he had spent time at the Centre for Alternative Technology in Wales.

He contacted Zulfikar Mohamed, a successful Tanzanian businessman, whose company Radio Wave Communications Limited installed solar powered telecommunications, and the decision was made in 2007 to set up Power Providers to supply renewable energy to companies and individuals looking for a robust, reliable and

independent power supply.

The new company’s first installation established Power Providers’ value to the high-profile end of the conservation movement. The first production of the newly established Disneynature Studio was Crimson Wing, a story about flamingos, filmed at Lake Natron on the border between Tanzania and Kenya close to the active volcano Ol Doinyo Lengai. The production crew were anxious to reduce their dependence on diesel generators and the need to maintain supplies of fuel, but also their impact on the fragile environment they were working in. “It was a very good start for us and we got some excellent photographs of the solar array with a group of Maasai against the backdrop of the volcano.”

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Despite promotional material most companies would die for, Power Providers has never found the need to advertise, and has grown entirely on recommendation.

Demonstrations of solar installations at the annual Karibu (Welcome) tourism trade fair in Arusha successfully proved to that industry how the sun alone can provide all the power needed for a small establishment, and word of mouth has done the rest. “In

Tanzania, if you focus on service and quality it is difficult to go wrong,” Jones declares.

Today Power Providers’ client list includes major tour operators, hotels, aviation and media companies as well as NGOs and conservation organisations. They come to Power Providers not because it is the only player, but because it is the most professional. “Our focus is on a start-tofinish service, from design to installation.

“Our focus is on a start-to-finish service, from design to installation.

We like to engage the client closely in the design process”

Tented camp solar installation

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Power Providers Company Limited

Water from remote solar pump installation

We like to engage the client closely in the design process.” A crucial part of the work, he says, is education: clients can’t be expected to understand about renewable energy and its advantages.

Power Providers starts out with a load analysis based on their projected power consumption, budget and operating costs, looking at their expected requirements for at least five years. “You need to have a system that will last for the duration of the battery bank,” says Jones. “You do not want to grow out of your battery bank—you want to grow into it. We nurture their engagement in renewable energy opportunities. We are one of the few companies in Tanzania that will do that, and I think that gives us an edge.”

A responsible approach to business is really

just self-interest, he explains. He hates it when his clients complain, so he sources the most reliable technologies available on the world market—not the cheapest. Batteries are the most vulnerable component, but if they break down it is usually because they are not looked after, so Power Providers insists on including battery monitors in any system, and on training the client’s staff in both operation and maintenance.

Larger establishments may not be able to afford to go solar all at once. No matter: Jones and his team will help plan a phased changeover. The goal may be to reduce generator use or to improve the green accreditation of the client’s business, starting with a 50 per cent reduction in generator run time and moving to a hybrid system.

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Solar array on power house

“You need to have a system that will last for the duration of the battery bank. You do not want to grow out of your battery bank—you want to grow into it” “We try to support them through the whole process, from being a 24-hour oil guzzler to being a solar and wind-powered entity, with a generator only as a backup for the very rare times when there is no sun or wind.”

As things stand, most solar energy installations are comparatively small scale.

Jones is already looking forward to being able to supply much larger systems, though, based on the microgrid model pioneered

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in the US where a nexus of sustainable sources can be linked to form a system that can disconnect from the power grid and independently generate and store its own energy. Power Providers is already in discussions with potential partners to provide a microgrid solution that would provide an alternative to the national power company Tanesco. Microgrids would, he thinks, be a potential way of providing

Power Providers Company Limited

Array at Karibu Trade Fair

solar power to people who cannot at present afford the otherwise often-onerous upfront costs of solar installations.

Power Providersâ&#x20AC;&#x2122; growth has been entirely self-funded to date by ploughing profits directly back into the company.

External finance could have lubricated a faster growth profile but loan terms with local banks have unwieldy agreement terms, long transaction times and onerous costs which, it can be argued, can endanger rather than enable a companyâ&#x20AC;&#x2122;s growth potential. One of the two main limitations to steady and manageable growth is the lack of appropriate financial vehicles for short or long term loans and the fact that skilled Tanzanian human resources are in extremely short supply. This puts a lot of

Village solar water pump installation

pressure on cash flow management and the ability of senior managers to delegate an ever increasing workload.

However, Power Providers has been able to build a small, committed and proud workforce, through the explicit hiring of Tanzanians and placing a firm emphasis on in-house training in order to create a professional skill base. Its open and trustworthy way of doing business has won the company an inestimable bonus in the form of goodwill and trustâ&#x20AC;&#x201D;and at the end of the day, these too are reflected in the bottom line.

For more information about Power Providers Company Limited email: info@powerproviders.co.tz

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Some companies grow by spreading their wings; but one South African company is continuing to focus on the original business sector it started with written by: Alan Swaby research by: Jeff Abbott

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Atmei Construction

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Bulk tank being installed

Atmei Construction

W

hen a fledgling business starts by bashing metal into one shape, it is understandable and quite normal that expansion of the business comes about by bashing it into different shapes. Surprising then, that even after 40 years, the very specialist firm of Atmei Construction is still very firmly wedded to the market segment it chose when Bert Meiring and his partner Bill Atkinson began a small jobbing construction company in the petrochemical sector in the Gautang city of Krugersdorp, 30 kilometres north-west of Johannesburg.

“The founders started by installing what are known as BTF tanks,” explains project manager Justin Bode. “These are 2,000 litre bulk-to-farmer tanks used by oil companies to get fuel to outlying farms. They are pretty simple and robust containers about two metres long and one metre in diameter.”

The ‘At’ part of the Atmei name has long gone but the business still remains with the Meiring family. In the 1980s, Bert’s sonin-law Jacques Petrie joined the business and was soon putting his drive and energy into taking the company to new heights.

Manufacturing facilities were expanded, new skills and machinery acquired and two other branches opened in other key parts of the country, bringing the total Atmei workforce to 250.

“Instead of diversifying,” says Bode, “the company strategy has been to concentrate on the petrochemical industry and dominate the installation side of things. After all, while there are farms or mines in South Africa,

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there will be a need for fuel and lubrication handling systems.”

As such, by far the bulk of Atmei’s clients are either the fuel companies themselves or the mining houses where fuel installations are needed. But in the drive to be the market leader, the array of products and services has grown dramatically from the original small installation and maintenance work that was done.

“I wish there was some other expression that we could use,” says Bode, “other than ‘one-stop-shop’, but that is exactly what we are. We now have all the disciplines to design and build civil work, electrics, pumps and controls. We cost and engineer the whole process, taking full responsibility for sorting out any problems that might arise.

The client appoints us and then receives a completed fully functioning installation.”

Atmei estimates that it has undertaken the majority of all mining industry fuel installation projects in South Africa. Any shutdown in mining production carries a massive cost and mines go to extraordinary lengths to ensure that the wheels don’t stop turning unless planned that way. One of the largest installations Atmei has carried out was at the Khumani Iron Ore Mine in the Northern Cape. The scope of work there

summarises most—but certainly not all— that Atmei does.

Bulk supplies of fuel are delivered to Khumani and stored in 16 by 82 cubic metre above-ground tanks. To constantly re-fuel the fleet of heavy earth moving equipment and light duty vehicles, Atmei supplied Khumani with an additional bank of five re-fuelling points fully illuminated for

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Atmei Construction

Pumping station

round-the-clock use. A state-of-the-art fuel data management system was integrated to the existing facilities and vehicles were fitted with tags and data transmitting devices.

The project also included an elaborate lube storage and dispensing facility with storage tanks for five different grades of oil, all the pumps, meters and hoses needed for lube dispensers at the vehicle workshops and a corresponding waste oil recovery system comprising tanks, pumps and sumps.

Where the mining process takes place underground, the mine operators need to make a fundamental decision whether or not to bring the vehicles they use to the surface for refuellingâ&#x20AC;&#x201D;with the inevitable loss of production timeâ&#x20AC;&#x201D;or to take the fuel

underground to the vehicles. But at the pressures encountered with vertical head at 800 metres below ground level, diesel fuel is highly combustible and such an approach creates numerous health and safety issues.

Atmei has developed systems to ensure that underground re-fuelling can be carried out without danger. Rather than shipping the fuel underground in tanks and taking up valuable skip capacity, fuel can be taken underground by a pipeline inside the vertical shaft to a centralised point. Batching systems such as these are technically demanding to design and build but provide mine management with much more streamlined operations.

But regardless of where tanks are

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and exactly how they are configured, an absolutely vital part of the mix, and one which Atmei claims sets it apart, is the ability to respond around the clock should any maintenance issues arise.

“It doesn’t matter whether we were the original supplier or not,” says Bode. “If there is a leak or spillage that needs to be cleared up, we can get a response team there quickly.”

With such close links to both mining and petrochemical companies, it’s not surprising that Atmei is finding more and more work over the South African borders and into neighbouring territories.

Already there are offices in Botswana and Namibia; and more offices may follow if recent contracts such as those it has won at a Mozambique coal mine and Zambian copper mine continue to flow.

“We cost and engineer the whole process, taking full responsibility for sorting out any problems that might arise”

Lube service unit

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Atmei Construction

Diesel bowser

As with most South African companies, Atmei takes its social responsibilities seriously and does what it can to improve the lot of those classified as previously disadvantaged. With too many still coming out of school with poor qualifications, Atmei runs a training system whereby youngsters are paired with an experienced mentor who will help them learn on the job.

Those who show the necessary aptitude are then encouraged to take external educational and training programmes, with the aim of progressing within the company and eventually becoming a mentor for the next generation.

In order to thrive in South Africa, companies need a BEE partner which is the conduit for ownership and reward for

the black community. Atmei is currently in negotiations with a new BEE partner with the aim of lifting its current certification of level 4. Ironically, this may lead to the first diversification of the company in 40 years, as the partner in question is keen for Atmei to investigate involvement with projects related to renewable energy.

“This won’t mean any less effort on our traditional work,” explains Bode, “but the additional investment this arrangement will generate will enable new business sectors to be explored.”

For more information about Atmei Construction visit: www.atmei.co.za

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Water for lif written by: Ruari McCallion research by: James Boyle

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fe

Sukuma Consulting Engineers (Pty) Ltd Getting clean and safe water for those who desperately need it is just one of the areas of operation for infrastructure specialists Sukuma

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ne of the most insidious hangovers from South Africa’s turbulent past is the lack of a true, nationwide infrastructure of roads, water and other utilities. Electricity is an essential for everyday life, and work in particular, but even the inhabitants of houses a long way from the mains supply will probably have access to electricity at their workplace.

Roads help to boost economic activity and logistics efficiency, but rugged buses and allwheel-drive vehicles will overcome pretty much everything short of a completely washed-out carriageway.

Water is the real essential for life: without it, human life is impossible, but many of the country’s citizens are still without ready access to a supply of clean and safe water.

“The policy of the government of South Africa is that everyone should have access to a potable water supply within 200 metres of their individual household,” says Mike Maher, managing director of Sukuma Consulting Engineers, which is headquartered in Pietermaritzburg, Province of KwaZulu Natal. The company is a provider of professional services in civil engineering. Its consultants operate mainly in the fields of water and roads infrastructure, providing capabilities and resources in the civil engineering elements by providing design and project management services.

“We provide a full range of professional services from initial project feasibility investigation through to design and project management,” Maher continues, “and we

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Main road reconstruction, Dundee, KZN

Sukuma Consulting Engineers (Pty) Ltd

try to maintain an even balance between public and private sector work. We are a small company and our primary focus at present is on community water supply to rural areas, but we have been involved in a number of large-scale projects including roads, shopping malls and housing estates, as well as a fast-track project for the Toyota Motor Corporation to build the first container terminal in the world owned and operated by them, situated near Durban.”

Turnover in terms of projects handled is in the region of R150 million and the company’s permanent staff are mostly at degree or civil engineering diploma level. “One of the biggest challenges in running a consultancy is in maintaining a balance between staff and

workload, and when necessary the workforce is supplemented by contract workers who are mainly utilised in the supervision and monitoring stages of a project.”

The company is currently involved in a major project to provide water supply to the Injasuthi area of KwaZulu Natal, which is situated in the foothills of the Drakensberg mountain range. It is a vast, mountainous rural area, with a thinlyspread population amounting to around 95,000 to 100,000 people. The project entails the construction of a 1.2 million cubic metre dam, treatment works, pump stations and about 150 kilometres of pipelines. Although originally planned to be built over seven years, the programme

Mike Maher

Container terminal in operation

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Sukuma Consulting Engineers (Pty) Ltd

“We are a small company and our primary focus at present is on community water supply to rural areas” now has to be accelerated to complete it in no more than four. As well as the physical challenges of the area, there are ‘soft’, social challenges as well. “The project area covers nine different tribal areas and will therefore require full-time social interaction to ensure that the needs of all role players are consistently addressed.

Community and council liaison will play

an extremely vital role in ensuring the success of the project,” Maher explains.

The total project value is high, estimated at R260 million, but it seems a small amount when compared to the estimated R570 billion needed to address water supply backlog throughout the country over the next 10 years.

Part of the basis for the founding of Sukuma was the emergence of Black Economic Empowerment (BEE). “Sukuma was founded in November 2000,” says Maher. “And the drivers for setting it up were the changes happening in South Africa at the time, mainly the advance towards more BEE, especially in construction. We saw the opportunity to build a smaller company, which would have a more equitable black ownership and overall staff component. We started out with nine employees and have gradually grown to our present full-time staff complement of 18. The company is one-third owned by previously disadvantaged individuals and 65 per cent of all staff are black.

“We have stayed relatively small by choice,” he continues. “The state of the industry and projected workloads do not favour any major expansion plans at present and I would rather continue

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River crossing

Sukuma Consulting Engineers (Pty) Ltd as we are for the foreseeable future.

Our company strategy is to nurture our existing clients, maintain control on the quality of all our projects, and most importantly, to develop competent skills.”

In order to ensure that the company continues to deliver quality to customers and maintain its reputation and standing, Sukuma is investing in training its own people.

“Good people are like gold,” Maher says.

“We are developing larger training schemes within our own company: we always have youngsters that we take out of technical college and we provide in-service training for them. We have taken on a number of very genuine guys and we invest a lot in them, in helping them to grow. There are a few who I really think are going to make it and who are already featuring in our directors succession planning.

“Unfortunately, we have also lost a few good youngsters over the years, mainly to government departments, but as they rise through the ranks themselves they have remained loyal and are proving to be good clients in return.”

Sukuma is a member of the Consulting Engineers of South Africa (CESA) and as such, subscribes fully to its Code of Conduct and Business Integrity Management System. It also has a certified ISO 9000: 2008 Quality Management System, which is audited annually.

For more information aboutSukuma Consulting Engineers (Pty) Ltd visit: www.sukuma.co.za

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avis ghana

Riding growth

in Ghana

We talk to Mona Boyd, managing director of Avis Ghana, about how she is preparing her business for an explosion in demand written by: Gay Sutton research by: Robert Hodgson

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Nissan Patrol

Avis Ghana

T

he brand name Avis is known the by the stagnant economy and an absence world over for prestige car hire of business infrastructure. By the time the and fleet management services, company was awarded the coveted Avis and is synonymous with quality, franchise in 2001 it was operating with 15 reliability and, of course, cars, had established an enviable reputation security. Operating in over 165 countries in the marketplace, and its drivers were around the globe, Avis is often seen as a taking clients to most West African lifeline for business people and diplomats countries including Togo, Benin, Côte d’Ivoire, Burkina Faso, Mali and Senegal. venturing into unfamiliar territory.

The company to hold the Avis Ghana “For many of our customers, it was often franchise began operating in 1994 with quicker and safer to rent a vehicle from just three cars and a vision of quality and us and to be chauffeur-driven across West business management that would quickly Africa rather than attempt to fly to their differentiate it from the rest. “Ghana at destination,” Boyd says. that time had just had its It wasn’t until oil was first successful democratic discovered in Ghana twoelections after a string and-a-half years ago that of coups, and there was the business environment virtually no business changed dramatically, with infrastructure,” explains an influx of global businesses Number of countries owner and managing and clients. At that point, where Avis operates director Mona Boyd. Most with 65 cars and operating worldwide competitors were informal, a combination of rent-a-car simply operating from and car leasing services, beneath a tree with no concept of managing Boyd recognised the risks to the business and growing a business or operating with as well as the enormous opportunities, overheads. But from the very beginning, and she moved rapidly to respond to the Boyd targeted quality. “Being American I change. Significant investment along with went to the community I knew best, the new expertise would be required if the American community. We put maps in our company was to take advantage of growth, cars, dressed our drivers in black slacks, and maintain its leading position. white shirts and shoes, and gave them Over the subsequent 18 months she written instructions and a full tank of petrol, forged a joint venture partnership with which was unheard of in Ghana.”

Avis South Africa to form a new company, Drivers received thorough customer Avis Fleet Services, Ghana. Twenty per cent services training, a process that quickly owned and financed by Avis Ghana and became formalised into a corporate training 80 per cent by Avis SA, the new company standard. Growth, however, was hampered went into business in March this year,

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Avis Ghana

Marc Carr and Mona Boyd

“Companies coming into Ghana meet our staff and immediately want to hire them” bringing in expertise and technology from South Africa. “Now, all fleet management and leasing contracts are managed by Avis Fleet Services, Ghana,” she continues. “If a customer requires 50 vehicles on lease, for example, the new company can buy those vehicles and provide that service. And this has liberated our vehicles to supply the increasing demand for rent-a-car services.”

The rent-a-car service continues to be chauffeur driven, and is now supplemented by a well utilised point-to-point service.

Moreover, with the Ghanaian roads improving in quality, the company is planning to introduce a self-drive car hire facility in the future. Customer service is high on the corporate agenda, and all customers are surveyed as a matter of routine, with Avis Ghana seeking feedback on performance and looking for ways to improve its offering. Meanwhile, staff and systems are being put in place to establish long-term customer relationships.

From a sales and marketing perspective,

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Avis Ghana

Avis Ghana’s front desk coordinator Fouzia Abubakari

Avis Ghana and Avis Fleet Services, Ghana maintain high standards of professionalism. work very closely together, providing a This investment in skills has been so seamless Avis service from a single contact successful that it has presented the company point to all corporate, government and with one of its greatest challenges: how to retain valuable staff. private customers.

“Our problem is that companies coming The Ghanaian business environment has certainly been challenging, and one into Ghana meet our staff and immediately of the most serious issues is the paucity of want to hire them. So we not only spend a business and management skills. To fill this lot of time creating a highly professional gap, the company has been organisation but we’re also continuously investing in working to create a familytraining, sending staff on like environment for them to MBA courses, and paying work in. I do a lot of activities for degree and postgraduate to promote friendships among my staff, and if we courses. At the ground level, Avis Ghana’s stake the company’s 60 drivers can’t compete with the high in Avis Fleet are given customer care salaries offered elsewhere, Services, Ghana we supply other perks. For training four times a year to

20%

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“In the next five to seven years I want to increase our fleet to 500 vehicles and expand our footprint into all the major cities” example, we’ve set up a scheme for staff to buy shares in the company, and we also reward exceptional work with shares.”

The company has kept ahead of the competition by utilising the latest technology. Two years ago it implemented an in-house reservation and fleet management system providing an online booking service and secure payment by credit card. This links into the Avis World System, giving

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customers seamless worldwide access with the distinctive Avis branding.

Expansion and service development is continuing on all fronts. Avis Ghana is setting up a hospitality suite and offices at Kotoka International Airport, the point of entry for many corporate clients.

When this opens in June this year it will complement the two existing outlets in hotels in the capital, Accra. Preparations

Avis Ghana

Avis Ghana has been working with an increasing number of global services companies

are also underway to open an office in the oil industry centre of Takoradi a month later, in July. Further into the future the plan is to expand into the cities of Kumasi, and Aflao, on the border with Togo.

Boyd believes that the changes that have taken place so far in Ghana are just a sign of things to come. “The oil industry has already had a big impact. We are providing transportation services for four major companies in the oil industry, and we’ve been working with an increasing number of global services companies flooding into Ghana: Google, IBM, Morgan Stanley...the list goes on. But I think the future impact is going to be much bigger,” she says. “So we don’t have time to wait for that to happen, we need to be ready before it does.”

Over the next 18 months the plan is to increase the rent-a-car fleet to about 100 vehicles. “I have a big vision for this company. In the next five to seven years I want to increase our fleet to 500 vehicles deployed across the country, and expand our footprint into all the major cities, as well as mining areas and locations where industry arises,” she concludes. This will all require significant investment: “Once our current expansion initiatives are completed I will be turning my attention to the possibilities.”

For more information about Avis Ghana visit: www.avisghana.com

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Silver Star Auto Limited

A star in the making In the 16 years since its inception, Silver Star Auto has created and maintained an impressive market share for Mercedes-Benz in Ghanaâ&#x20AC;&#x2122;s automotive marketâ&#x20AC;&#x201D;and is now set to expand its network even further written by: Becky Done research by: Richard Turner

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Silver Star Auto Limited Mercedes-Benz showroom

B

lessed with an abundance of natural resources that include gold, diamonds, bauxite and manganese, the West African country of Ghana is currently experiencing a boom in trade and activity that is bringing with it a steady increase in footfallâ&#x20AC;&#x201D;and of course, more people means more vehicles. Ghanaâ&#x20AC;&#x2122;s automotive industry therefore looks set to be a key beneficiary from this period of growth and change.

Founded in 1996, Silver Star Auto Limited is a general distributor of Mercedes-Benz in Ghana, dealing with the sale and service of Mercedes-Benz vehicles, as well as the sale of spare parts. The company started life in the premises of Japan Motors on Graphic Road in Accra with only six technicians, until 1997 when it moved to the premises of Modern Automobile Services (MAS) in another area of the city. Thanks to its consistent professionalism and the quality delivery of its services, the company soon found it was beginning to struggle for adequate space to hold all its cars, so it became necessary to move the workshop to an ultra-modern service centre at Tema in October 2003. The showroom was also subsequently moved to the ground floor of Silver Star Tower, Airport City, in January 2008.

Silver Star Auto is owned by the Japan Motors Company, which can trace its roots back to the beginning of the last century. In 1912, the late Salem Kalmoni and his brother Subhi arrived in the-then

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Gold Coast from their native Lebanon, establishing in 1965 the private company Japan Motors Trading Company Limited.

This was an offshoot of the family motor vehicle spare parts and transport business, Kalmoni & Sons, which had been started in 1920 by Salem and his brother. Japan Motors went on to become the first company to import Japanese vehicles into Ghana and West Africa.

Since then, Japan Motorsâ&#x20AC;&#x2122; growth has been impressive, and the company now has seven companies in its stable: Silver Star Auto Limited; Modern Automobile Services (MAS, formerly Enyidado Industries Limited); Oman Fofor Trading Company Limited; Advance Construction & Development Limited; Lakeside Estate/ Agri-Cattle Limited; Silver Star Tower Limited; and Star Property Management Limited. MAS deals in a wide range of vehicles from Korea and China; Oman Fofor Trading Company Ltd is the sole authorised distributor of Canon Products in Ghana; Advance Construction is a professional construction company; Lakeside Estate is a real estate company specialising in affordable housing; and Silver Star Tower and Star Property Management is a real estate

developer and property management company seeking to promote trade and development in Ghana.

Silver Star Auto has five main departments and three sub-departments.

The main departments are: Sales, Spare Parts, Workshop, Customer Care, and Human Resources/Administration.

The sub-departments are: Workshop (Passenger Cars), Commercial Vehicles

â&#x20AC;&#x153;Silver Star Auto strives to value its employees and clients, promote growth, and demonstrate integrity and respectâ&#x20AC;?

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Silver Star Auto Limited

Servicing a car

and Reception, all specially mu lt imedia products geared towards audioset up to provide comfort and convenience to the visual applications. companyâ&#x20AC;&#x2122;s customer base.

Silver Sta r Autoâ&#x20AC;&#x2122;s mission is clear: to And business is clearly Year Silver Star Auto promote the Mercedesbooming: Silver Star Auto was founded Benz and Smart brand of has recently added two new products to its stable: vehicles by developing and Foton Heavy Duty Trucks implementing strategies and Parrot Bluetooth Products. Foton is that result in high sales and exceptional the worldâ&#x20AC;&#x2122;s second largest commercial after-sales services to its customers in vehicle manufacturer and the first in Ghana, leading to an optimum return Asia. Meanwhile, Parrot is a global leader on investment for its shareholders. It in wireless devices for mobile phones, aims to achieve this by providing a priding itself on cutting-edge innovation. supportive work environment that allows Parrot is responsible for developing the its employees to pursue professional most extensive range of hands-free kits excellence, while positively contributing on the market for cars, including wireless to the communities in which it operates.

1996

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Mea nwh i le, the growth, and demonstrate company’s vision is to be integrity and respect. the premier automobile In its 16 years of dealership in Ghana, operations, Silver Star providing exceptional Auto has successfully Awarded the Chartered value to its customers made Mercedes-Benz a Institute of Marketing through services of the sure brand choice in the Ghana Motor Firm highest qualit y. The market. The company has of the Year company is also committed created and maintained a market share that puts to continuously increasing it at a definite advantage its market share in the automobile industry by making Mercedes– over its competitors, and has come to be Benz the brand of choice in Ghana. Its known as a destination for the optimal motto is ‘Quality service, our passion’; satisfaction of all automotive needs. its goal is customer satisfaction; and its The company has also received a number wisdom is ‘Do it right the first time’. In of awards, including the Chartered everything it does, Silver Star Auto strives Institute of Marketing Ghana Motor Firm to value its employees and clients, promote of the Year 2007.

2007

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Silver Star Auto Limited

Mercedes-Benz service centre

But the company does not only strive to further its own success; it also positively seeks to contribute towards the wellbeing of others. Not simply content to be one of the nation’s leading service providers in the automobile industry, Silver Star Auto also takes it upon itself to give back to the community, and makes generous annual donations to the World Food Program’s fight for the eradication of hunger, the

Nouguchi Memorial Institute, and the SOS Children’s Village. In addition, each year Silver Star accepts more than 20 attachment students coming from different universities, polytechnics, regions and fields of study. The company has also been sponsoring the Thom Kabalan Basketball tournament organised by the Greater Accra Basketball Association.

Furthermore, Silver Star opens its

“Each year Silver Star accepts more than 20 attachment students coming from different universities, polytechnics, regions and fields of study” BE africa | 241

Team meeting in progress

Silver Star Auto Limited doors to a number of school/polytechnics (including the Multikids Inclusive School, Koforidua Polytechnic, the American International School, the Al-Rayan International School and the Ghana Society for Islamic Education and Information) for field trips, to allow students the opportunity to acquaint themselves with the new technologies being used in the automotive sector, encouraging them to study diligently in order to work with these technologies in their career.

On March 23 2010, two sets of MercedesBenz ML automatic transmission units, valued at GH¢30,000, were generously presented by Silver Star Auto to Koforidua Polytechnic to assist students in the automobile department with their studies.

Silver Star Auto has committed itself to developing the Mercedes-Benz brand of vehicles by developing and implementing strategies that result in high sales and exceptional after-sales services to customers in Ghana. It is a company that is well recognised in Ghana for valuing its employees and clients, and it demonstrates a commendable level of integrity and respect.

The company now plans to expand its express service network to Kumasi and then to Takoradi within the next three years.

For more information about Silver Star Auto Limited visit: www.silverstar.com.gh

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Against a backdrop of increasing competition from cheap imports and rising transport costs, Astral Foodsâ&#x20AC;&#x2122; CEO Chris Schutte explains how South Africaâ&#x20AC;&#x2122;s leading integrated poultry producer is going from strength to strength written by: Andrew Pelis research by: Jeff Abbott

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Astral Foods Ltd

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Meadow Feeds Randfontein

Astral Foods Ltd

T

he story of Astral Foods’ consistent year-on-year growth traces back to its beginnings in 2001 when conglomerate Tiger Brands decided to unbundle its agricultural arm.

Astral’s current CEO Chris Schutte had already been with the poultry arm of Tiger Brands for some 18 years when the decision was taken to create the new business, and after moving to Astral in 2002 has now been in the poultry industry for close to 30 years. The infrastructural, cultural and operational expertise to ensure Astral Foods was an instant success was in place from the beginning, and Astral listed on the Johannesburg Stock Exchange during April 2001.

“April 2011 saw the 10th anniversary of our listing and we are currently trading at a healthy R125 price as one of the top 100 companies on the Stock Exchange,” Schutte states. “When Tiger Brands unbundled the 25 business units there were already measures in place to ensure we operated efficiently and to high quality standards from day one.”

Headquartered in Doringkloof, Centurion, the company operates a decentralised business with three main divisions producing chicks, manufacturing feed and slaughtering poultry. While similar South African companies may specialise in one area, Schutte says that Astral Foods is the largest fully integrated poultry producer in the country, boasting seven local feed mills and four abattoirs capable of slaughtering 4.3 million broilers every week.

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industrial products and services.

Montagu Office Park Building Number 2 Corner Cedar Road & Cedar Lakes Boulevard Broadacres Gauteng, South Africa Tel: (+2711) 745-9600

Cargill

Founded in 1865, our company employs 142,000 people in 66 countries.

We help customers succeed through collaboration and innovation, and are committed to sharing our global knowledge and experience to help meet economic, environmental and social challenges. We originate, process and distribute grain, oilseeds and other commodities to makers of food and animal nutrition products. We also provide crop and livestock producers with farm services and products.

www.cargill.co.za

Cargill offers supply chain solutions and risk management services to the Southern African agricultural markets.

Our customers include producers in all of the major grain and oilseed producing regions and also the end consumers of raw materials. Cargill delivers to the main participants in the animal feed industry as well as to white maize and wheat millers and oilseed crushers.

It is Cargillâ&#x20AC;&#x2122;s philosophy to create distinctive value through building long term strategic partnerships with its customers. Cargill is proud to be the supplier of South African maize to

Astral Foods and wishes them every success in our future growth together.

T +27 11 745 9600 www.cargill.co.za

Cargill is an international producer and marketer of food, agricultural, financial and industrial products and services.

Montagu Office Park Building Number 2 Corner Cedar Road & Cedar Lakes Boulevard Broadacres Gauteng, South Africa Tel: (+2711) 745-9600

www.cargill.co.za

Founded in 1865, our company employs 142,000 people in 66 countries.

We help customers succeed through collaboration and innovation, and are committed to sharing our global knowledge and experience to help meet economic, environmental and social challenges. We originate, process and distribute grain, oilseeds and other commodities to makers of food and animal nutrition products. We also provide crop and livestock producers with farm services and products.

Astral Foods Ltd

Bird at Natchix

Most of the poultry is The business has had to adjust to changing produced for South Africa’s transportation dynamics in leading supermarkets with further supplies to South Africa: rail transport, wholesalers; and Astral is now which once accounted for making its first enquiries into up to 85 per cent of Astral Foods’ logistics provision, entering the quick service Astral Foods’ investment has greatly reduced as a restaurant market. in acquisitions and result of increased mining, “At any time we have as automation over the making agricultural use of many as 34 million chickens last decade on the floor and we sell 1.3 the rail roads a lower priority. million tonnes of feed per “This was always one annum both to our own internal operations of our strong points but we now rely on and externally to the open market,” road systems, which accounts for 85 per explains Schutte. “So we are involved in cent of our transportation but which is the industry from breeding through to three times more expensive,” Schutte the marketing of chickens but we are also reveals. “As a consequence, our base costs heavily into nutrition.” for the raw materials we use in our feed

R500 million

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Breed of Choice The Ross 308 has a strong partner and distributor, Ross Poultry Breeders, a division of Astral Operations Ltd in South Africa - together they are continuing to grow and lead in the market.

The Ross 308 breeder offers the best balance of important genetic traits and increased broiler performance improvements each year. The Ross 308 breeder is owned by Aviagen who invest 10% annual gross revenue in the breeding program and continued product development to ensure performance efficiencies and bird health improvements are available to all customers. Ross 308 is the breed of choice.

An Aviagen Brand

www.aviagen.com

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Astral Foods Ltd have gone up significantly Ross 308 and we have had to look at The Ross 308 has a unique selection programme where our business units employing the multiple environments of first class are located. This has meant pedigree facilities together with more challenging, moving closer to grain and industry-like conditions to identify the most efficient and maize production. robust families as the source for future commercial stock.

“At the same time our These selection conditions together with the introduction of new technology in lifetime feed conversion monitoring, energy costs have been rising also a first in the industry, is providing the data to ensure by an average of 25 per cent the current Ross 308 product performance is increasing each year over the last four at a faster rate than the competition and keeping the years,” he continues. “The product at the forefront of the industry. combination of these two www.aviagen.com challenges puts pressure on the poultry industry here in South Africa and creates a tougher environment for us to compete with cheap imports from countries like Brazil.”

Schutte says that whilst the efficiency of South African poultry producers compares favourably with other areas of the world, rising production costs are making the industry less competitive and susceptible to the threat of cheaper imported meat that may not be subjected to such stringent quality checks.

“White meat such as chicken breasts is always sold at a premium price but some countries will sell their less desirable portions (like chicken legs) into South Africa at cheaper prices than they can get Staff at Ross Poultry Breeders

“We are currently trading at a healthy R125 price as one of the top 100 companies on the Stock Exchange” BE africa | 251

Astral Foods Ltd at home,” Schutte explains. He says that decade with further spend likely in the near Astral Foods is trying to meet this problem future. “Some of the acquisitions we have head-on by opening channels of dialogue made have been opportunistic but we have with the government now that it has joined only ever made purchases out of free cash the South African Business Chamber. and have never borrowed to achieve,” Schutte “We hope over the next couple of years emphasises. “The strategy has been part of to see some improvements that will make our focus to add value within our markets us more competitive and has seen us diversify g loba l ly wh i le at into producing a local level we are now dairy feed as well as preparing for economic poultry feed in recent years. fitness for the next 10 years.” “ The c om bi n a t ion of organic growth and Part of that preparation acquisitions has seen a has seen Astral Foods 40 per cent increase in invest some R500 million in Projected monthly feed acquisitions and increased volume from the poultry output of new feed mill automation over the last side of the business. We

30,000 tonnes

Broiler breeders - parents

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are constantly looking at new business opportunities and sites that will increase our geographic reach,” he adds.

A recent investment in the company’s KwaZulu Natal poultry site will see production increase from 120,000 to 300,000 birds slaughtered each week and should be completed within two years.

Further spend on a modern feed mill in Standerton will increase productivity while reducing the number of necessary workers, Schutte says. “The site, when fully operational in February 2014, will produce 30,000 tonnes of feed a month requiring

approximately 60 people to run the factory over three shifts. Using new equipment and technology sourced from Europe (where we regularly purchase machinery), the new mill will consume up to 30 per cent less energy when compared to existing facilities.”

Astral Foods has already passed stringent quality assurance tests as it looks to supply the burgeoning retail fast food marketplace.

The growth of companies like KFC and McDonald’s in Southern Africa has not escaped notice in Doringkloof: “It is a market that has grown significantly and we have to take a serious look at it,” Schutte

“We are constantly looking at new business opportunities and sites that will increase our geographic reach”

Meadow trucks

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Astral Foods Ltd

View of Earlybird Farm

insists. “The contracts involved offer considerable stability as they come with cost-plus protection.”

Elsewhere the company has commenced poultry production in Mozambique and Zambia and is set to expand these operations while also looking at opportunities in Swaziland. “We aim to double our capacity in Zambia and we will also look to invest further in our existing plants in line with our gross domestic produce (GDP) growth,” Schutte adds.

Research into improved animal feed nutrition is another key area of development and Astral has agreements in place to work with international companies Provimi and Cargill as they explore new feed developments. “Feed is a key driver for our contract producers, in particular how well they manage the feed conversion into

meat,” Schutte states. “We work very closely with each farmer to ensure they meet our quality assurance expectations and ensure that they continue to invest in their assets to improve production.”

Schutte believes that recent trends have seen increased consumption of chicken with a rising middle class and consumers eating more chicken rather than staple food products, which bodes well for Astral Foods. “We have seen a 50 per cent increase in chicken consumption over the last decade and still believe that poultry is the best converter of raw materials into protein.”

For more information about Astral Foods Ltd visit: www.astralfoods.co.za

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