African Business Review Magazine - December 2015

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December 2015 • www.africanbusinessreview.co.za

Mineral assets CUPRIC AFRICA’S DEVELOPMENTS IN BOTSWANA

DIAGEO

Pioneers sustainable alcohol model

TOP 10

South Africa’s most reputable brands

EXECUTIVES IN AFRICA An insight into Nigeria



EDITOR’S COMMENT

Holistic investment H E L L O A N D W E L C O M E T O the December issue

of African Business Review! What a year! As Editor, I have had the pleasure to chart the progress of the continent as it continues to rise, and have spoken with some of the key influencers that are making it happen. Our cover story on Cupric Africa explores its recent work in Botswana, developing one of the most significant copper discoveries in the past few years, using a socially and environmentally sustainable business model. From our exclusive interview with David Croft, Diageo’s Global Sustainable Development Director, we learn how the global alcohol beverage giant has focused its CSR operations on the continent, working to minimise waste while also working with a number of critical social programmes. Straight from a business trip to Nigeria, Executives in Africa Director Richard Putley shares his insights on the country’s economy after Muhammadu Buhari’s victory earlier this year. Our Top 10 this month expands on data collected by the Reputation Institute and looks at South Africa’s most reputable brands – which one do you think has made the top? Wishing all ABR readers the best of luck going into 2016 which, I’m sure, will be a fruitful year.

Enjoy the issue! Nye Longman Editor nye.longman@wdmgroup.com 3


CONTENTS

6

Features

FINANCE An insight into Nigeria

LEADERSHIP Diageo Pioneers

sustainable alcohol model

12

TOP 10 South Africa’s 10

most reputable brands

18 4

December 2015


Company Profiles MINING Cupric Africa

28 52

42 ENERGY

Weir Services

SUPPLY CHAIN Oriental Weavers Group

62

ENERGY Atuabo Free Port

5


FINANCE

6

December 2015


7


FINANCE CERTAIN THINGS HAVE not changed since my last visit, the traffic being one of them! However even with the challenges they face each and every day, the Nigerians remain the same dynamic, motivated and aspirational population they have always been and this is infectious and also motivational for me as a frequent visitor. They comprehend that several years of decay cannot be turned around

overnight, and they remain focused on applying the ‘business as usual’ rule. The most significant change I saw personally was on arrival at the airport. I braced myself for the usual requests at immigration, but found the process this time round was quick, efficient, polite and largely painless with all the officials embracing the policies and philosophies of the new President, and I have to say it was impressive. I found out later in the week from

In order to protect the Naira, the government has implemented a strict restriction on foreign currency used to buy imported goods and raw materials

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December 2015


AN INSIGHT INTO NIGERIA

one of our clients that, recently, when a very high ranking government official had been stopped by customs on his arrival at the same airport, he had explained to his security team that he was prepared to be searched telling them: “Let this man do his job I am happy to comply.” While meeting with our clients and reviewing ongoing business development, I was also keen to understand how the government under President Buhari had already impacted on Nigeria, both commercially and to Nigerians in general. During my four-hour car journey from the airport to the hotel in Ikoyi I asked my driver if he had noticed any changes. He gave me a beaming smile and an emphatic “Yes!” A great endorsement to Buhari. “I now have over 18 hours of light. Previously, I only had four hours and was spending over 5,000 Naira a day on diesel, now I only need to spend 3,000 Naira each week! I can afford to run an additional three A/C units and have my eye on a new flat screen TV!” One client mentioned that he had not seen his generator repair man for six months, when he used to have to

‘The rise in transparency and accountability means that, however painful it is, all the clients I spoke to, view this need for competition as a positive thread’ – Richard Putley visit at least once a month last year. Another client shared with me that the costs of running the generators for their business had also dropped significantly. What it was costing last year to run them for six weeks was now buying five months worth of fuel and significantly impacting the bottom line. While this increased disposable income for the consumer is finding its way into the economy, things have however toughened up for businesses in the manufacturing and FMCG sectors. In order to protect the Naira, the government has implemented a strict restriction on foreign currency used to buy imported goods and raw 9


FINANCE materials. The list is of 41 key items which includes oil, sugar and rice as well as, unbelievably, toothpicks! This has increased costs significantly, eroding already lowered profit margins previously boosted by the significant reduction in fuel costs. The long term perspective is that that the implementation of such a policy will go a long way to help conserve the nation’s hard earned foreign exchange and boost production activity. In addition, the key leaders are supportive of these patriotic initiatives that should move the country forward, at the same time as reinforcing a firm stance on anti-corruption. Businesses have had to change

their strategies, forcing them to be more efficient and rationalising their product offering as well as fighting in competitive markets to maintain their market share. There is an ongoing issue with finding the talent to deliver these strategies and having the capacity to retain them. What we are seeing is that many organisations are now working hard on implementing formalised talent management strategies, really engaging with staff, capability building and offering increased training which is engendering loyalty rather than just raising remuneration levels. The rise in transparency and accountability means that, however painful it is, all the clients I spoke to,

Left to right: Richard Putley, Sarah Fitzgerald Managing Directors of Executives in Africa 10

December 2015


AN INSIGHT INTO NIGERIA

There is an ongoing issue with finding the talent to deliver these strategies and having the capacity to retain them view this need for competition as a positive thread. The current situation will cause the economy to diversify away from oil and gas and look at sectors which will lead to Nigeria becoming more self-sufficient. Inward investment is definitely picking up post the election. During 2014 there was a ‘wait and see’ policy adopted by some investors who did not understand the country and its mechanism, however one client was far more positive about the future than he was in 2013/14 and concurred

that the medium term return from investments is now more attractive. His expectation is to see significant investment during 2016, now that the country has woken up and is more accountable, especially from organisations who have previously been risk averse and had concerns about opening operations in Nigeria. Nigeria is still an underdeveloped and immature market which will continue to develop and mature, perhaps not as fast as some had predicted. 11


LEADERSHIP

Pioneers sustainable alcohol model W R I T T E N B Y N Y E LO N G M A N

Through its holistic approach to social responsibility and environmental impact in Africa, Diageo is proving on a daily basis that it is possible to lead in your sector and do so sustainably DIAGEO’S ALCOHOL BRANDS are well known across the world including in the African markets that it serves. Over years of operating on the continent, the company has been able to bring global brands to new markets, while attaining an unmatched reputation for local relevance. Capitalising on this strong position, across so many different markets, Diageo has worked to ensure that its growth across the region is both socially and environmentally sustainable. 12

December 2015

2020 targets Although sustainability has long been a priority for Diageo, the company recently crystalized this approach into a robust vision for the mid and long term. Taking into account its carbon emissions, water consumption and material usage, as well as its scope to impact societies in a positive way, the company has set some ambitious goals for completion in 2020. David Croft, Diageo’s Global Sustainable Development Director says: “Water is a key priority for us


Over years of operating on the continent, Diageo has been able to bring global brands to new markets and we use a variety of methods to improve water efficiency across our operations, like reducing water pollution, replenishing water in stressed areas and encouraging sustainable agricultural practices. This year we improved water efficiency by 10 percent, which helped us meet our 2015 target of a 30 percent improvement overall. “Alongside water management, reducing our carbon footprint and driving operational efficiencies also remains a key focus for us to deliver

effective manufacturing and business activities in a low carbon future. In 2015, we measured a nine percent year-onyear reduction in carbon emissions, equivalent of 68,400 tonnes.” Backing up these ambitious goals is the company’s internal ‘Green IQ’ programme, which aims to engage all 33,000 of its employees across the globe. This was headed up by CEO Ivan Menezes who actually appointed Croft into his strategic position in the company to provide dedicated oversight. 13


LEADERSHIP

“This year we improved water efficiency by 10

percent, which helped us meet our 2015 target of a 30 percent improvement overall” – David Croft Sustainable supply chain Croft is keen to highlight that Diageo’s approach to sustainability was holistic and notes that the company examined its entire supply chain, from grower to consumer, in search of efficiencies and opportunities to make savings. He says: “Take carbon, for example; we further aim to reduce absolute greenhouse gas emissions from our direct operations by 50 percent, and achieve a 30 percent reduction along our total supply chain. Packaging has a 15 percent reduction target for 2020 and we aim

Diageo aims to reduce absolute greenhouse gas emissions from its direct operations by 50 percent

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December 2015

to achieve zero waste to landfill. “Other targets include sourcing 80 percent of our agricultural raw materials locally in Africa by 2020 and establishing partnerships with farmers to develop sustainable agricultural supplies of key raw materials” Croft expands on the company’s target to involve more local producers in its supply chain efficiency drive: “Our Meta Brewery in Ethiopia has a direct contract with each smallholder, and provides access to a package that includes seeds, fertiliser, agronomy training, crop insurance and mechanisation. Once we are sourcing locally, we will work with roughly 20,000 farmers to meet volume requirements.” Socially sustainable Alongside its global and regional targets to reduce consumption, Diageo is also pioneering a range of socially-driven initiatives across the countries it operates in which go way


D I A G E O P I O N E E R S S U S TA I N A B L E A L C O H O L M O D E L

beyond the current trend of merely employing locals in its facilities. It comes back to how the company can use its presence in a particular market to partner with organisations to maximise the change it can achieve. Croft explains: “We’ve worked with numerous partners including WaterAid on various water projects in Africa through our own Water of Life initiative. The programme has been running since 2007, providing access to safe drinking water for people in Africa. “Since then, we have completed over 200 projects in 18 countries and brought clean drinking water to 10 million people. In the last year

David Croft Global Sustainable Development Director

alone, we provided 600,000 people with access to safe drinking water. “For example, in Northern Uganda, the programme provided clean drinking water as well as a holistic healthcare programme to 500 households in the Apac district,

Diageo has brought clean drinking water to 10 million people

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LEADERSHIP

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December 2015


D I A G E O P I O N E E R S S U S TA I N A B L E A L C O H O L M O D E L

Diageo Sees Africa Contributing 20 percent to global sales funded by a partnership between Ugandan Breweries Limited and the Lifeline Fund, a US based NGO.” Diageo also strives to ensure that its consumers drink responsibly and have a number of targeted initiatives across the continent, including the ‘Dry Drive’ initiative in South Africa, and targeting underage consumption through the Red Card initiative in Uganda. By 2020 the company is looking to have recruited 1 million responsible drinking ambassadors, and has already recruited 40,000

across Africa this year alone. To conclude, Diageo’s model considers and works across the entirety of its value chain: from its farmers and suppliers, to its commercial customers and to the consumers who enjoy its products. Accounting for every aspect of its operations in this introspective but entirely open way is a model for all businesses seeking to operate sustainably and may well become the norm across the spectrum of business. 17


TOP 10

South Africa’s 10 most reputable brands Research from Reputation Institute uses reputation as an umbrella term to grade how companies perform across a range of variables including corporate citizenship, governance, innovation and leadership

Written by: Nye Longman


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TOP 10

10

CAPITEC BANK

Capitec Bank offers its customers a simplified, low fee retail banking experience; it has even been praised by a number of South African unions for these aspects of its operations. In a recent interview, Capitec CEO Gerrie Fourie highlighted that the bank was attracting over 100,000 new customers per month.

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December 2015


S O U T H A F R I C A’ S 1 0 M O S T R E P U TA B L E B R A N D S

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STANDARD BANK Standard Bank is one of South Africa’s ‘big four’ banks, marking it as one of the country’s most successful and well developed financial institutions, operating in 32 countries globally, 20 of which are on the African continent. Alongside commercial banking, Standard Bank has an investment banking wing, for which it provides management services.

08 SPAR

Spar is one of the country’s largest retailers and has been operating in South Africa for over half a century. Its 875 stores offer customers a choice of bulk buying, convenience and neighbourhood shopping; it also has a specialist store, SaveMor, that caters to rural and township customers.

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TOP 10

07

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December 2015


S O U T H A F R I C A’ S 1 0 M O S T R E P U TA B L E B R A N D S

05 MR PRICE (MRP) Mr Price Group (MRP) is a quality fashion retailer and is one of the fastest growing of its kind in the country. Cash sales make up around 80 percent of total sales and, alongside its bulk-buying business model, it is able to simultaneously grow and offer low prices to customers. Alongside apparel, it also has homeware and sportswear product lines.

06 FIRST NATIONAL BANK Another of South Africa’s ‘big four’ First National Bank offers customers across the continent a range of personal and corporate financial services including insurance, global commercial banking and a variety of loan packages. It also has an advisory capacity offering expertise to investors in agriculture, education, healthcare, franchises, financial institutions and the public sector.

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TOP 10

MTN It is said that MTN is the fifth largest telco in the world; its country coverage and over 210 million subscribers worldwide indicate that the company must at least be doing something right. Alongside the standard voice, data and messaging services that all telcos typically provide, MTN also has its own ‘life-style’ message service providing daily fashion, health and fitness tips.

SHOPRITE

Shoprite Holdings operates over 2,000 corporate and 270 franchises across 1 African countries. It has a range of diffe stores as a part of its original brand: th include its original Shoprite retail store and its high class Checkers sister bran as well as furniture and food outlets. Th year it managed to increase its sales b percent to R113.7 billion by opening 17 new stores in South Africa.

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December 2015


0 16 erent hese es nd, his by 11.2 70

S O U T H A F R I C A’ S 1 0 M O S T R E P U TA B L E B R A N D S

02 PICK ‘N’ PAY Pick ‘N’ Pay brands itself on being “the quintessential family store focused on the customer” and with its diverse product lines, it is easy to see why it has risen to such a high place in the Reputation Institute ranking. Alongside more traditional food and wine offerings, the retailer offers customers clothing, pharmacy and baby products, as well as the opportunity for entrepreneurs to franchise.

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TOP 10

01 WOOLWORTHS

Woolworths Holdings Limited has had strong ties with the UK’s high-end retailer, Marks & Spencer for many decades and it shares the same model. It offers food, homeware, clothing, and beauty and also, unlike so many other retailers, offers customers high street financial services in the form of loans, and insurance, as well as both credit and store cards. Its brand is propagated by over 150 corporate stores, 51 international franchise stores and 69 South African franchise stores.

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December 2015


S O U T H A F R I C A’ S 1 0 M O S T R E P U TA B L E B R A N D S

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Developing Botswana’s mineral assets Written by: Nye Longman Produced by: Anthony Munatswa


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CUPRIC AFRICA

Through a series of strategic investments, acquisitions and partnerships Cupric Canyon Capital is set to make significant advances in copper mining

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December 2015

C

upric Africa (the mining arm of Cupric Canyon Capital) has positioned itself to become a significant player in Botswana’s copper sector; having complied with various regulatory measures and having deployed its resources strategically, the company is now set to solidify production at one of the most important copper discoveries in the past few years. Operations In 2013, Cupric Canyon Capital acquired two important mining properties in connection with its purchase of Hana Mining; these are known as ‘Banana Zone’ and ‘Zone Five’ and contain significant copper deposits, including some silver credits. Sam Rasmussen, Cupric’s CEO for Africa, explained that, following some previous exploration and drilling undertaken by the previous owners, the company had stepped up work, particularly in Zone Five. He says: “There was a very small time period from when Cupric took over to the realisation that we should step up operations at Zone Five, where geologists realised that there was more copper than we first realised. “Banana Zone is large, with low grade copper; Zone Five is also large (now very large!) and has very high grade. Cupric began drilling in 2013 and went where Hana hadn’t covered. The drilling totals around 175,000 metres, mainly concentrated on Zone Five. “As you drill and identify so much resource


MINING

The mining site and facilities at Khoemacau

you have to put plans to it. We put plans to that and on 9 March 2015 we were granted mining licenses to both sites. The mine continues to get bigger and the studies we do also have to grow. We have a robust project as it is, but it’s getting larger and the grades are increasing; we are seeing some higher grade deeper down.” As the current phase of drilling in Zone Five nears completion, the deposit is expected to contain nearly 100 million tonnes of mineable sulphide copper ore, Rasmussen says: “We are expecting 50,000 tonnes per annum of copper metal over the ten year period; that translates to 125,000 tonnes per annum of concentrate annually.” He adds that Zone Five also contained silver credits which are about 380 grams of silver per

50k tonnes The amount per annum of copper metal to be extracted over the tenyear period

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CUPRIC AFRICA

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December 2015


CUPRIC AFRICA

MINING

tonne of concentrate, providing roughly 1.5 million ounces of silver each year. The copper concentrate has an average of about 40 percent purity. Competitive stance Being in a financial position to weather the challenges of the copper industry (not to mention the recent fall in global copper prices) Cupric has been able to leverage its strong capital position to strategically acquire assets that will complement its operations. Cupric’s wholly owned subsidiary, Khoemacau Copper Mining Pty. Limited (KCM) acquired the Boseto assets and licenses formerly owned by Discovery Metals Limited when it went into liquidation earlier this year. Rasmussen says: “We purchased the Boseto operations from a liquidator for $34

‘Being in a financial position to weather the challenges of the copper industry (not to mention the recent fall in global copper prices) Cupric has been able to leverage its strong capital position to strategically acquire assets that will complement its operations’

Close up of a Bornite example recovered from deep drilling at Zone 5

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CUPRIC AFRICA

Kalcon

Since 1989 27 Years experience in Botswana Primary focus in civil engineering, roads and earthworks, mining and mining infrastructure

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December 2015

MODULAR TREATMENT PLANT

JWANENG


MINING

million. Now we will combine the Boseto plant infrastructure with the Zone Five mine which will come together to make an attractive copper and silver concentrate producing operation” Specifically, the Boseto plant will provide Cupric with a milling capacity which is located only 30 kilometres from Zone Five’s operations; these combined factors will enable the company to make significant capital expenditure savings in the mid to long term. The volume and quality of Cupric’s mineral assets (particularly copper) has put the company at a naturally competitive advantage, but the company also strongly benefits from its strategic financial partnership with Barclays Natural Resource Investments (BNRI). Rasmussen says: “We have two percent copper in the ground at Zone Five whereas

Drilling rig on location

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There are challenges operating in a remote part of Botswana

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MINING

Banana Zone was only 0.6 percent over all. This is obviously a marked change and with the structurally controlled nature of the Zone Five deposit allows it to be readily and easily mined using underground methods. “In terms of size, we have identified about 100 million tonnes of resource. We have a 3.6 million tonne per annum plant, a 25 plus year lifespan. Size is how we distinguish ourselves. We have a larger denominator, therefore our unit costs are down. I can safely say that on operating costs we are in the lowest quartile of copper producers.” He also explains that receiving the majority of its funding from BNRI was also a strategic advantage, since the bank had a seat on the board, supported by a team of industry experts. He adds: “Barclays are obviously very big. They’re experienced and results driven, and they have a very thorough methodology. For every dollar we spend they rightly expect to see an increase in value.” Responsible growth Clare Calver, Head of Human Resources and Communications explains that not only did her team have to tackle the ‘everyday’ HR trials faced by mining companies, but also navigate the challenges of operating in a remote part of Botswana. She explains how the company was facing up to this challenge: “We have done a lot of benchmarking – we have worked with consultants based in

The extraction samples storage area

“In terms of size, we have identified about 100 million tonnes of resource. We have a 3.6 million tonne per annum plant, a 25 plus year lifespan. Size is how we distinguish ourselves” – Sam Rasmussen, CEO

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CUPRIC AFRICA

Property PROPERTY Values, VALUERS,Managers MANAGERS & ESTATE AGENTS & REAL Estate Agents

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www.okavangoproperties.com enquiry@okavangoproperties.com Above Lewis • Old Mall • Opposite Rileys Garage • Maun • Botswana

Katlego is a 100% citizen company. Formed in 1999 and has done jobs in most parts of Botswana. Mostly deals with central goverment, local councils and lately mining companies like KOEMACAU COPPER MINING IN MAUN. We thank khoemacau copper mining to give us a chance to show what we can do and open a door for us in the mining sector as it’s been dominantly foreign companies.

Tel (+267) 392 2344 | Fax (+297) 397 4886 Email sales.katlego@gmail.com Plot 20701, Block 3 Industrial Gaborone PO Box 50944, Gaborone, Botswana 38 December 2015

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MINING

Zone 5 staff

Botswana to inform our benefits strategy.” “We have made a commitment to the local communities where we look to resource lowerskilled positions from the local communities and the local district. Expatriates are built into our model and will be a reality for the first few years of our operation. We will have a job shadowing programme; for every expat we find a national counterpart. Skills transference will be closely monitored. “We are very mindful of the psychosocial aspect – they are surrounded by bush and sand for three weeks at a time. We operate in a

115 Number of jobs to be supported by Cupric Africa

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CUPRIC AFRICA

“We are very mindful of the psychosocial aspect – they are surrounded by bush and sand for three weeks at a time. We operate in a very remote part of the country and try to keep our staff busy on the social side so they have other outlets” – Clare Calver, Head of Human Resources and Communications

Management and team at Zone 5

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December 2015

very remote part of the country and try to keep our staff busy on the social side so they have other outlets. We make sure that they have recreational opportunities. We have been very successful thus far and will continue to be so.” Furthermore, she adds that Cupric Africa has gone beyond the norm in an effort to


MINING

ensure that its workforce is well looked after, backed up by the consultancy work taken with Botswana specifically in mind. This has culminated in the provision of a comprehensive employee benefits package which includes pensions, medical aid and bonus schemes. In short, in just a few years Cupric has been able to become a significant player in Botswana and has done so by not only making the right financial investments, but also by ensuring that its teams are both well trained and well provided for. Its future, and potential legacy in the region are certainly both exciting.

Emergency assembly point, Khoemacau

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Well ahead

with Weir

Written by John O’Hanlon Produced by Anthony Munatswa


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WEIR OIL & GAS SERVICES

Weir Services’ expertise allows production of oil and gas in some of the world’s most challenging operating environments and the company provide critical components and services to its clients in the Middle East, where low oil prices are not inhibiting its long term strategy

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December 2015

O

ne of Scotland’s proudest companies, founded by brothers George and James in 1871, Weir is known around the world for its pumps, and everything that stems from pump and high pressure flow technology, like valves and safety systems in a wide range of industrial applications. Its oil and gas division designs and manufactures pumps and ancillary equipment for global upstream and downstream oil and gas markets, and is a very strong business in the Middle East, which depends so heavily on hydrocarbons for its revenues. The Middle East business, together with Europe, North Africa and the CIS countries has been headed up since 2009 by Managing Director Vikas Handa, who has held senior positions with the group since 1999. “Basically, my territory is the eastern hemisphere,” he says, “though I am based in the UAE and the main focus of my attention is the offices we have in Dubai, Abu Dhabi, Oman, Aberdeen, Azerbaijan, Kazakhstan, Saudi Arabia and Iraq.” The O&G division deals with two main product lines manufactured by the company, he


ENERGY

The wellhead is a critical point of any well, both from a production and a safety point of view

explains, high pressure pumping (where Weir is the global leader supplying equipment to extract shale gas and tight oil) and wellhead equipment. The wellhead is a critical point of any well, both from a production and a safety point of view. Weir has traditionally led the market in valves and other components, such as blowout preventers (BOPs), however 2012 saw the company make a step change when it acquired the American wellhead manufacturer Seaboard for $675 million. The acquisition was a strategic one, designed to capture the growing fracking market in the States, however this equipment gave Weir, in any case the largest provider of O&G equipment in the Middle East, with significant new capacity. To meet the demand in the local market, it was decided to build a new manufacturing facility at its heart,

1500 Number of employees at Weir oil and gas Services

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UAE, Dubai, JLT, Cluster T, +971 (0) 4 4529802 Iraq, Basra, Al Brathiya, +9647 801099758 E-mail: info@srg-iq.com Web: www.srgme.com

Silk Road Group “SRG” is an oil and gas service company with offices in Basra, Baghdad and Dubai, UAE. Since its establishment in 2004, SRG’s assets have increased rapidly, providing its clients in the energy sector in Iraq with quality and proactive services and support strategies to assist in achieving their business objectives. SRG’s Basra workshop is built over 75,000 sqm in North Rumaila and with the presence of variable skills on site. The group is currently supporting activities and operations in Um Qaser, Zubir Oil Field, Rumaila Oil Field, West Qurna 1 & 2, and Badra. Our services include EPC contracts, installation and fabrication, shutdown activates, consultancy and procurement. Our competitive advantage is to work close with our trusted clients offering tailored services and solutions that are fit-for-purpose to meet our clients’ business objective and targets.

VISION Despite of the current challenging times, SRG is progressing with relentless commitment to safety and quality, unlocking its potential to improve its value to its clients and their strategic growth.

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WEIR OIL & GAS SERVICES

ENERGY

so Weir has built a 250,000 square foot plant in Dubai to manufacture Seaboard wellheads and also Weir’s SPM branded valves and high pressure flow control equipment, delivering them to customers in the region at a competitive cost. The new plant employs more than 300 people, and is staffed by professionals from more than 20 different nations. “It is right at the heart of the marketplace, close to the customer, catering for their needs and meeting their demand for tighter lead times while ensuring the highest quality standards in a trusted product. It is the first such plant in the UAE,” says Handa with apparent pride. Dubai, he adds, is a place which will always attract the best talent. There’s no denying the industry is in a tighter spot than it has ever been, nevertheless this is the best time to make the investment. “We are a new entrant in this market. Seaboard was the fourth largest wellhead manufacturer in North America but had little share in the ME. We are starting from scratch in this market place at a time when everybody is looking for ways to save money, and we can help them do that. The customer focus is on two fronts: who can supply them a quality product in the most cost effective way and who can deliver in the shortest time and give the fastest service? We are already well known for the quality of our service, and that is how we have been growing our business. We have built this plant locally so that we are closer to our customers, can respond

It’s Weir’s OEM pedigree that differentiates it and has established it locally

‘By manufacturing in the region we can make sure our costs are minimal so we will be cost effective’

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WEIR SERVICES

Our company is established in Iraq 2005 with its main office in Basra, is one of the leading Iraqi firms in the specialized field of both mechanic electric Engineering services, general trading and contracting, Our company participated in many projects including overland and marine equipment installation and maintenance. Our Projects • Designing Power Distribution Boards • Electric And Plc Controllers • Rehabilitant A Wide Variety Of Cranes

Our Clients SOC, IPC, EPPC and Many Others Tel +9647801009426 | +9647806548731 Email info@durrat-alkhaleej.com | Web www.durrat-alkhaleej.com 80 Alhayat Bld. | Ashar korneesh | Basrah | Iraq

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December 2015

Tel +91-2827-252857, 252858 | Fax +91-2827-252856 Email sudhir@arrowtechnocast.com Web www.investmentcastingmfg.com


WEIR OIL & GAS SERVICES

ENERGY

in the fastest time, and by manufacturing in the region we can make sure our costs are minimal so we will be cost effective.” It’s Weir’s OEM pedigree that differentiates it and has established it locally. Much more than simply a supplier of product, from its fully equipped local workshops it runs complete maintenance operations and takes on maintenance management projects all the way from the wellhead to the processing plant and power stations for companies like Lukoil, BP, Shell and Adnoc. “Since I joined 16 years ago, our businesses here have grown substantially. Now we are moving into the wellhead pressure market and marketing it strongly in the region. We are making big investments in manufacturing plants and growing our capabilities in the region.” Weir has landed major maintenance contracts with all the key players, notably Saudi Aramco, Saudi electric company and the mining concern Maaden in Saudi Arabia and Adnoc, Adco and Adma in the UAE. In Iraq it has long standing maintenance management contracts with Russia’s Lukoil. Last year Weir acquired the Weatherford OCTG threading/ machine shop and inspection business in Basra. The move to the Weatherford purposebuilt facility will provide the infrastructure and space it needs to expand these services. “By investing and acquiring the former Weatherford machine shop business and growing our presence in Iraq, we have demonstrated our

Weir has built a 250,000 square foot plant in Dubai to manufacture Seaboard wellheads

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WEIR OIL & GAS SERVICES commitment to the country,� says Handa. It was also in 2014 that the company signed a contract with Lukoil to provide general maintenance services for the West Qurna-2 oilfield in Southern Iraq, one of the largest undeveloped oilfields in the world. The two year agreement, worth a total of $98 million, covers delivery of mechanical, electrical, maintenance and pipeline services for the related production facilities, including the Mishrif Central Processing Plant. Weir invested more than $8 million in establishing its service centre in Basra, Iraq and it is the first in-country location to offer fully comprehensive maintenance services

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for all kinds of rotating equipment, valves and wellheads. The facility was also the first in Iraq to obtain API and ISO licences, he adds. In Iraq 50 percent of the highly committed workforce is local and Weir is investing in improving the country’s engineering skills base. It runs a state of the art training and apprenticeship programme for its own employees and makes it available to its partners. Petroleum Development Oman (PDO) is a case in point: Weir has a contract with PDO to give Omani nationals mechanical and professional training as well as workshop management. “We train them on the job, and that contract went so well that PDO has extended it for the next six years and added 40 people to that training programme. It has been accredited by the ECITB, so we certify those national engineers with a proper vocational engineering qualification.” Capital may be tight, but production needs to be maintained when oil and gas are the main sources of prosperity. “Our strategy is simple,” says Vikas Handa. “We are in this business for the long term. I have seen many downturns in my career though this one is probably the most challenging so far. But we will see it through and there are always opportunities. That’s why we are investing in new products and new facilities, ensuring we can grow market share by being even closer to customers delivering engineering solutions they need, when they need them.

API valve

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A Major Boost To The Ghanaian Economy Written By Sam Jermy Produced By Anthony Munatswa


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AT U A B O F R E E P O R T

Strategically located in the Gulf of Guinea, the brand new development will be a dedicated oil and gas free port

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A

tuabo Free Port is set to provide a major boost to the economy of Ghana, as the $700 million facility begins construction next year before becoming operational in 2017. Having recently completed a number of preliminary activities onsite, the company and China Harbour Engineering Company have signed a construction agreement establishing the latter as the main contractor of the project to build a dedicated three-quay port. It is also estimated that over 1,000 jobs will be created as a direct result of the project. In terms of maritime activity, there are three clear areas for the impending facility, which will become Ghana’s third major port. One is an offshore logistics base where goods are received for the offshore oil and gas industry, collated and marshalled onshore and then shipped offshore to the rigs and other vessels during the exploration, appraisal and field development and production phases. The second area is value-added work such as subsea fabrication; this provides the infrastructural platform for companies to do more work in-country which means the company keeps aligned with local content regulations in Ghana. Thirdly, there will be the rig and vessel repair sites where the vessel owners will be able to come in and have their vessels repaired or rigs maintained and repaired by various service companies. Steven Gray, Director at Atuabo Free Port, said: “We have a number of companies who’ve


ENERGY

Video: Atuabo Free Port

signed up to MoUs with us and are already present in Ghana supporting the oil and gas industry. In addition to the three main areas, there are other elements of the project, such as the logistical movement of personnel. There’s an aerodrome on the site where fixed wing planes can fly in from Accra, and then the rotary wing helicopter operations would operate from there to the offshore platforms. “Then we will have the technology park area where companies who are just seeking office space other than industrial facilities can locate themselves. Predominantly, it’s an international effort: you have to have

1,000 Number of jobs to be created by the project

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AT U A B O F R E E P O R T

We Are Creating A Brighter Future!

• Marine Engineering • Road and Bridge • Railway

• Airport • Complete Plant • Dredging and Reclamation

China Harbour Engineering Company Ltd. (CHEC) is a world-renowned international contractor. CHEC has 40 overseas branches and offices with business activities covering more than 70 countries and areas including Ghana, Ivory Coast, and lots of Africa countries. The company is currently employing over 7,000 domestic and international staff to undertake 10 billion USD worth of projects. CHEC is focused on basic infrastructure construction, and principally engaged in the survey, design, construction and supervision of road, bridge, port, terminal, channel, railway, tunnel, airports, civil work and other infrastructure construction, capital dredging and reclamation dredging, the investment of transportation infrastructure, development and operation of urban complex, estate development and etc. CHEC prides itself on providing a full service to its clients and uses its international engineering experience, global business network, talented management team and robust financial backing to offer clients a wide range of service options such as D&B, EPC, PMC, BT , BOT and PPP. Apart from the contractor for AFP Project CHEC has also executed the Ghana Fufulso-Sawla Road Project, Ivory Coast Abidjan Container Terminal Project, Guinea Conakry Container Terminal Project and etc. We are focusing on provide an one-stop solution for our client from the feasibility, design, construction and operation. We are working towards a win-win situation for all our client and partner.

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Tel 00225 2135 7650 | Email checwa@chec.bj.cn | Web www.chec.bj.cn


AT U A B O F R E E P O R T

ENERGY

international contractors that the financing partners are comfortable with - firms that have the expertise to handle the construction risks while delivering services on time. “But in addition to that we’ll have a situation where if companies want warehouses or offices built, then that area is being identified as the area where Ghanaian contractors can execute their work.” Regional hub In terms of the capital structure, the Ghanaian government has a 10 percent ownership share, held by the Ghana Infrastructure Fund as a freehold; a further 35 percent will be purchased by Ghanaian state enterprises such as Ghana National Petroleum Corporation and Social Security and National Insurance Trust. Then the international shareholders and a number of international partners will make up the remaining equity. Because Atuabo is set to be a dedicated hub for the oil and gas industry and not just a rudimentary container shipping port, Gray believes it can subsequently become much more of a regional player in West Africa than a country player in that respect. He said: “This will be particularly true for the rigs; we will be meeting a high demand that is not currently met in this area. The offshore supplier vessels have greater choices, but there are still capacity issues in West Africa in terms of facilities that can

Ghanaian government has a 10 percent ownership share, held by the Ghana Infrastructure Fund

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AT U A B O F R E E P O R T

Quality and Excellence

Tel: +233 (0)302 742030 Fax: +233 (0)302 742035 info@taysec.net w w w. t a y s e c . n e t

No.1 14th Avenue New Achimota Estate P.O.Box OS 1010 Osu, Accra Ghana

At Taysec we strive in all aspects, from project inception to maintenance of the finished facility to provide quality results on time and within budget.

Atuabo Free Port anticipates that Hull Blyth & Co. Ltd is the foremost provider of agency services to non-liner and liner shipping throughout West Africa. With coverage of all major ports through our established network of offices in Ghana, Nigeria, Cote d’Ivoire & South Africa and through hub agency services in the rest of West and East Africa. Hull Blyth is strategically positioned to provide a comprehensive and quality service to the shipping, Oil & Gas Principals seeking comprehensive and reliable shipping services for its operational excellence deliverables in a region offering rapid growth and strong future prospects. Our Services Cover • Vessel Agency • Liner Agency Services • Oil & Gas Services • Tanker Services • Bulk Operations • Logistical Support – Clearing & Forwarding • Travel Agency & Protocol Department

• Crew Change & Premium Travel Services • Project Cargo Support • Terminal Operation, Warehousing & Collateral Management • Deconsolidation • Procurement Service • Real Estate & Estate Management Services • Onboard Vessel IT Support services

Hull Blyth Ghana Limited Gateway House | Fishing Harbour Road | P.O Box 214 | Tema Tel +233 (0) 303 219219 Email enquiriesghana@hull-blyth.com

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there will be work opportunities in Ghana for offshore activities from 2018


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repair and maintain offshore supply vessels. “Also with the infrastructure deficit on the continent, and Ghana is no different from other African states, this is a project where they’ve opened up the private sector to come forward with a solution: they’ve addressed the infrastructure deficit for this particular sector without using their balance sheets. “There are no government guarantees and there is no payment for constructing this facility from the Government of Ghana, so it frees up additional government funds that could be used to develop existing port infrastructure and other maritime sectors. “We see the potential certainly in the Ghanaian offshore context, the port being able to reduce the operational cost of oil by up to 90 cents to one dollar a barrel, which is significant.”

The port could be able to reduce the operational cost of oil by up to one dollar a barrel

Direct benefits During the construction phase, about 70 percent of the workforce will be Ghanaian. During the operational phase, Atuabo Free Port is a platform that allows other companies to execute their work, so although Gray cannot speak for the tenants coming into Atuabo and where they will source their people from, they will be encouraged to employ Ghanaians who have the skills they require. Certainly Atuabo Free Port’s focus is recruiting from the Ghanaian market and Ghanaian labour resources in the first instance. As part of social engagement with the w w w. a t u a b o f r e e p o r t . c o m

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Key Personnel

Steven Gray Director

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community area surrounding Atuabo, one of the social intervention programs is the establishment of a community based manpower agency set up by the majority shareholder and international partners. Resources and the profits accruing to the agency will be reinvested back to skills development so there is a sustainable skills development funding for the community who today largely have fish or agricultural based careers. Gray said: “They don’t necessarily have all the skills needed for the oil and gas industry, so this is a way to support skills development through a sustainable business model.


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“We anticipate that there will be quite a lot of work opportunities in Ghana for the offshore activities from 2018 onwards. So it certainly is going to be an energetic market in the early years. But I think, you can look at Atuabo Free Port as a regional hub as well. “Ghana for all the right reasons is seen as a gateway to other countries in West Africa; the English language, the rule of law, a stable democracy – it’s all there. We’re already seeing that with Expro, Halliburton, Schlumberger having their regional offices located in Ghana. “As the capacity and quality of the indigenous companies improve, they’ll be able then to sell their services to other markets and clearly you see the regional markets as their first entry points to support industries. We’re seeing a lot of that already manifesting, where the Ghanaian companies are exporting their skills to Liberia, Searra Leone and so on.” Time is clearly money in Oil and Gas: when you have a rig operation, it is costing anywhere from $0.5 million to $1 million per day, so even an hour’s delay costs companies a considerable amount of money. Atuabo Free Port can offer firms the ability to have a sustainable business, not just for the exploration phase but also the development and production phase and so that may well make marginal fields profitable. This is just one of the reasons why Atuabo Free Port will be a welcome addition to the West African offshore oil and gas industry from 2017.

‘Atuabo Free Port’s focus is recruiting from the Ghanaian market and Ghanaian labour resources in the first instance’

Company Information INDUSTRY

Energy HEADQUARTERS

Accra, Ghana PRODUCTS/ SERVICES

Ports & Terminals

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Dream weaving

Written by: Lucy Dixon Produced by: Daniel Prit


tchard 63


O R I E N TA L W E A V E R S G R O U P

The ability to respond to changing markets has helped Oriental Weavers become one of the world’s most successful carpet manufacturers

O

ne of the world’s largest carpet manufacturers, Oriental Weavers Group was founded in 1979 by industrialist and entrepreneur Mohammed Farid Khamis. The company’s Supply Chain Director, Tarek Shedid, has been working for the company for just over a year and, in this time, has implemented a centralised system for procurement, planning and warehousing, as well as moving some previously outsourced operations in house. This vertical integration helps to reduce costs by allowing economies of scale and ensuring the company is in control of both production and distribution. Shedid says: “Our strategy is to transform to a secure supply chain model whichwill include

Oriental Weavers produces three grades of machine woven carpets

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three levels: content, technology and culture. We have central corporate procurement for the group and we have central logistics for the group, which includes shipping, customs clearance and taxation. By the end of this year, we will have covered the whole activity over the group.� Oriental Weavers produces three grades (A, B and C) of machine woven carpets and rugs for the market, and it also operates as OW Hospitality, which produces woven broadloom products, with offices in London and the American cities of Dalton, New York and Las Vegas. In 2014, the company produced 113 million square meters of carpet and rugs, which equals 5.7 billion Egyptian Pounds, a three percent increase on

17,300

Number of jobs to be supported by Oriental Weavers Group

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O R I E N TA L W E A V E R S G R O U P

Materials. Powering Ideas.

INTERNATIONAL LIMITED A LEMPRIERE GROUP COMPANY

As New Zealand’s largest wool exporter specialising in quality scoured products, New Zealand Wool Services International Ltd are proud to be a major supplier of Oriental Weavers to compliment their woollen carpet range.

Innovative Solutions Delivering Success

Tel +64 3 357 8700 Fax +64 3 357 8720 Email Info@woolserv.co.nz Web www.woolserv.co.nz 30 Sir William Pickering drive, Christchurch, 8053, New Zealand

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Trinseo textile binder solutions deliver success through innovation, market expertise, and operational excellence. www.trinseo.com


S U P P LY C H A I N

2013. Shedid speaks fluent Arabic, English and French – he studied for an MBA in France and has previously worked in the UK – languages are incredibly useful as Oriental Weavers operates on a global stage, with facilities in China and the USA, as well as Egypt (95 percent of production takes place in Egypt). Shedid explains that the company uses cost efficiency, technology and innovation to deliver growth. “A flexible production capacity that can respond to market conditions exists across all price points,” he adds. With products to suit every budget, Oriental Weavers ensures it is successful across different sectors. Part of its flexibility is achieved by having some of the biggest factories in the world and a fully integrated production line, capable of exporting to around 130 countries worldwide. Oriental Weavers had traditionally imported

Oriental Weavers’ HQ

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O R I E N TA L W E A V E R S G R O U P

“We now have to think outside the box to innovate and keep our position as market leader” – Tarek Shedid, Supply Chain Director 68

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Oriental Weavers owns some of the largest factories in the world

polypropylene, a raw material from the Gulf, as well as China and Korea, and Shedid believes that moving away from this is crucial, so that any issues in these areas will not affect production. It now operates a complete production process — from producing polypropylene granules as raw material for synthetic fibres, to spinning and dyeing yarn. And then weaving, finishing, packing, delivering and distributing the products through its domestic and international distribution facilities and retail outlets. Shedid also talks about the importance of amending the corporate structure of the company. “Oriental Weavers is currently changing so it can adapt to the markets. For example, we now have to think outside of the box to innovate and keep our position as market leader.” Examples of such innovation in order to meet the company’s 2020 objectives include being w w w. o r i e n t a l w e a v e r s . c o m

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O R I E N TA L W E A V E R S G R O U P

Oriental Weavers exports around 55 percent of its production

the first in the world to develop four millionpoints-per-square-metre technology and an automated carpet warehouse – the only one of its kind in existence. Oriental Weavers exports approximately 55 percent of its production through a distribution network that includes offices in the United Kingdom, Egypt and the United States. Distribution and warehousing centers in Egypt, the USA, UK and Canada offer direct access to the largest markets in the world. Such a global business is a challenge, as Shedid explains: “It is not easy because the market is very dynamic and the competition is very aggressive. We have a lot of challenges, especially in Egypt, such as the foreign currency shortage. But Oriental Weavers is able to withstand this given our international exposure. As for the energy shortage in Egypt, 70

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we did not suffer from this due to our diversified supplier base of the oil-based raw materials.” As a result of the restructuring, Oriental Weavers has been working closely with a consultancy which can give an impartial view. Shedid adds: “This has helped us to have the right direction for the coming 20 years, but we needed someone with a helicopter view to give us this clear direction.” The direction Shedid talks of includes its focus on ensuring it has a world-class workforce. Shedid himself has been working with HR to develop a training programme to make the most of its 17,000 staff and allow talent to be developed from within. He adds: “We have the best salary structure, as well a bonus scheme, a retention policy and an end of service policy. All of that is designed to create loyalty for the group, a group family.” w w w. o r i e n t a l w e a v e r s . c o m

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