African Review December/January 2012

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Europe â‚Ź10, Ghana C1.8, Kenya Ksh200, Nigeria N330, South Africa R25, UK ÂŁ7, USA $12

December/January 2012

African Review of Business and Technology

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December/January 2012

Motor company workers build a community

Volume 47 Number 7

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Power supplies to support mining operations www.africanreview.com

Construction: East African architects and engineers P56

Communications:

Mining:

Satellite connectivity for oil and gas business P28

Investing in value at Mining Indaba P64

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“Keep your love of nature, for that is the true way to understand art better.”

VINCENT VAN GOGH

E N J O Y C H A M P A G N E L A U R E N T- P E R R I E R R E S P O N S I B LY . l a u r e n t - p e r r i e r . c o m

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UP FRONT www.africanreview.com

Editor’s Note

Europe €10, Ghana C1.8, Kenya Ksh200, Nigeria N330, South Africa R25, UK £7, USA $12

December/January 2012

P52

Motor company workers build a community

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ost of the 1.6bn people who live without access to electricity reside in rural areas. Many of those live in African homes, and work for African businesses. Power generation is fundamental to African industry, commerce, and economy. Rural electrification is a key element of African socio-economic development. This issue of African Review of Business and Technology is dedicated to stakeholders’ commitment to improving rural communities through the generation and provision of energy. However, this issue also addresses key developments in finance, technology, logistics, natural resources, construction, and mining. And each article represents a tangible need for investment and advancement in some form of design, engineering, manufacturing, installation, integration and operation, to build on progress already made.

The benchmarks for economic growth are observed, and increasingly adhered to. The strategies are being constantly refined. The solutions are on show, and in market. Which brings us to an important event, a significant exposition of equipment and knowledge to support the continent’s mining operations. Investment in African Mining Indaba is a showcase of the world’s best technology, techniques and people - taking place this February in Cape Town, South Africa. You may read of this event, of this sector, and of all other industries, here.

P63

Power supplies to support mining operations Construction: East African architects and engineers P56

Communications:

Mining:

Satellite connectivity for oil and gas business P28

Investing in value at Mining Indaba P64

Cover picture: Investment in African mining operations, as celebrated at Mining Indaba, drives forward much of the continent’s socioeconomic growth (Photo: Chris Kirchhoff, MediaClubSouthAfrica)

Andrew Croft, Managing Editor

Contents

REGULARS 04 Agenda:

16 Bulletin:

Commercial innovations and initiatives

Events and undertakings at African enterprises

62 Solutions: Key products offered to African industry

P10 P28 FEATURES 20 Finance Opportunities for Kenya’s entrepreneurs in electronic banking and commerce

22 Technology How developments in finance, information security, and satellite communications have made African business management more efficient

33 Logistics

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Technology meets demand in container handling, and as marine traffic grows

38 Oil Economic growth spurs debate over fiscal and industrial measures in Nigeria

41 Power Stable power structures and improved resource management to serve communities and commercial operations, initiatives with sustainable generation technologies, and analysis of the market for diesel generators

52 Construction Corporate social investment for housing and employment opportunities, and calls for a new generation of architectural engineers

63 Mining Audit Bureau of Circulations Business Magazines

tManaging Editor: Andrew Croft andrew.croft@alaincharles.com Editorial and Design team: Bob Adams, David Clancy, Prabhu Dev, Immanuel Devadoss, Ranganath GS, Prashant AP, Genaro Santos, Zsa Tebbit, Ewan Thomson, Nicky Valsamakis and Julian Walker Publisher: Nick Fordham Advertising Sales Director: Pallavi Pandey

Looking ahead to the investment in African Mining Indaba in February 2012, with analysis of reliable power supplies for remote mining operations Advertising Sales Manager: Camilla Capece Tel: +971 4 448 9260 Fax: +971 4 448 9261 Email: camilla.capece@alaincharles.com

Qatar: Saida Hamad Tel: +974 55745780 Email: saida.hamad@alaincharles.com

Special Projects Manager: Jane Wellman Email: Jane.wellman@alaincharles.com

Russia: Sergei Salov Tel: +7495 540 7564 Fax: +7495 540 7565 Email: mne@acpmos.ru

China: Wang Ying Tel: +86 10 8472 1899 Fax: +86 10 8472 1900 Email: ying.mathieson@alaincharles.com India: Tanmay Mishra Tel: +91 80 65684483 Fax: +91 80 40600791 Email: tanmay.mishra@alaincharles.com Nigeria: Bola Olowo Tel: +234 80 34349299 Email: bola.olowo@alaincharles.com

South Africa: Annabel Marx Tel: +27 218519017 Fax: +27 46 624 5931 Email: annabel.marx@alaincharles.com UK: Steve Thomas Tel: +44 20 7834 7676 Fax: +44 20 7975 0076 Email: stephen.thomas@alaincharles.com USA: Michael Tomashefsky Tel: +1 203 226 2882 Fax: +1 203 226 7447 Email: michael.tomashefsky@alaincharles.com

Head Office: Alain Charles Publishing Ltd, University House, 11-13 Lower Grosvenor Place, London SW1W 0EX, United Kingdom Tel: +44 207 834 7676, Fax: +44 207 973 0076 Middle East Regional Office: Alain Charles Middle East FZ-LLC, Office 215, Loft No 2/A, PO Box 502207 Dubai Media City, UAE, Tel: +971 4 448 9260, Fax: +971 4 448 9261 Production: Henrietta Cobbald, Donatella Moranelli, Nasima Osman, Jeremy Walters and Sophia White E-mail: production@alaincharles.com Subscriptions: circulation@alaincharles.com

Chairman: Derek Fordham Printed by: Wyndeham Group US Mailing Agent: African Review of Business & Technology, USPS. No. 390-890 is published 11 times a year for US$140 per year by Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London SW1W 0EX, UK. Peridicals postage paid at Rahway, New Jersey. Postmaster: send address corrections to Alain Charles Publishing Ltd, c/o Mercury Airfreight International Ltd, 365 Blair Rd, Avenel, NJ 07001.

ISSN: 0954 6782

Serving the world of business

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NEWS

Agenda / North Arabic blog for MENA money The International Monetary Fund is now running an Arabic-language blog for the Middle East and North Africa (MENA) region, at http://blog-montada.imf.org The blog, called the Economic Window (‫ )ةيداصتقالا ةذفانلا‬focuses on international issues and economic topics related to the region. The first post was by Masood Ahmed, head of the IMF’s Middle East and Central Asia Department, on how tocreate a more vibrant economy in the region.

The Middle East and North Africa has many strengths on which to build: a dynamic and young population, vast natural resources, a large regional market, and an advantageous geographic position with access to important markets. The blog is designed to encourage debate and offer analysis and potential solutions on economic issues, while providing Arabic commentaries on global topics. It complements the IMF’s Englishhttp://blog-montada.imf.org language blog, iMFdirect, at http://blog-imfdirect.imf.org

Support for Morocco’s solar plans The World Bank recently committed to $297mn in loans to Morocco to help finance the Ouarzazate Concentrated Solar Power Plant Project, taking a historic step toward realizing one of the first large-scale plants of this kind in North Africa to exploit the region's vast solar energy resources. Hence, Morocco takes a lead with the first project in the lowcarbon development plan under the ambitious Middle East and North Africa Concentrated Solar Power (CSP) Scale-up Program. A $200mn loan will be provided by the International Bank for Reconstruction and Development, the part of the World Bank that lends to emerging market governments, and

another $97mn loan will come from the Clean Technology Fund.

“Ouarzazate demonstrates Morocco’s commitment to low-carbon growth and could demonstrate the enormous potential of solar power in the Middle East and North Africa. During a time of transformation in North Africa, this solar project could advance the potential of the technology, create many new jobs across the region, assist the European Union to meet its low-carbon energy targets, and deepen economic and energy integration in the Mediterranean.

That’s a multiple winner,” said World Bank Group President Robert B. Zoellick.

North Africa to play key role in European gas security The Minister of State at the UK Foreign and Commonwealth Office, Rt. Hon. Lord Howell of Guildford, has said recently that North Africa is expected to play a key role in European gas security.

According to Lord Howell, improved interconnection within the EU will increase access for North African gas to markets across Europe, not only those with LNG or pipeline terminals. “Gas markets should operate on a commercial basis and it is the role of European and North African governments to ensure those markets operate as effectively as possible”.

He continues, “The EU will also be a market for solar power generated across North Africa as solar projects come to fruition, although the cost factor will remain central in determining the future energy mix.”

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African Review of Business and Technology - Dec 11/Jan 12

MEA economies reform business regulation

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n IFC and World Bank report finds that 11 out of 18 economies in the Middle East and North Africa improved business regulations for entrepreneurs in the past year, despite political and economic uncertainty in the region. ‘Doing Business 2012: Doing Business in a More Transparent World’ assesses regulations affecting domestic firms in 183 economies - ranking the economies in 10 areas of regulation, such as starting a business, resolving insolvency, and enforcing contracts. The study’s methodology expanded this year to include indicators on getting electricity connections.

Morocco improved its business regulation the most compared to other global economies, climbing 21 places to 94, by simplifying the construction permitting process, easing the administrative burden of tax compliance, and providing greater protections to minority shareholders. Since 2005, Morocco has implemented 15 business regulatory reforms.

New data show that the region can improve access to information on business regulations.

“The region’s entrepreneurs can be empowered by stronger institutions and better access to information,” said Neil Gregory, Senior Manager, Global Indicators and Analysis, World Bank Group. “In more than half of the region’s economies, an entrepreneur must meet with an official to get fee schedules or documentation requirements for many business procedures.

E-government initiatives, the global trend, can help relieve bureaucratic burdens on entrepreneurs by offering transparent and sustainable solutions.”

Over the past six years 17 economies in the Middle East and North Africa have made their regulatory environment more businessfriendly.

“Making business regulations more efficient and accessible increases opportunities for economic growth,” said Augusto LopezClaros, Director, Global Indicators and Analysis, World Bank Group.

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www.volvoce.com

volvo construction equipment

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NEWS

Agenda / East Tanzania infrastructure loan The World Bank has extended $16.5mn for infrastructure development funding to Tanzania.

The funds will be used for the construction of tarmac roads, abattoirs and waste water management systems over the next four years.

Of the money, $9.1mn will be used for the construction of 26 km road in Moshi , Kilimanjaro region, with $2mn for waste water systems development while $164,705 will be used for fixing street lights.

Meanwhile, the European Union (EU) is supporting the revamping transport sector in

the country with a promise of injecting €137mn, according to EU’s Head of Delegation in Tanzania.

The five year (2008-2013) programme is being undertaken in phases.

In the first phase about €70mn ) would be disbursed. Of this funding, the government is to undertake road maintenance.

Further funding will includ improvement of infrastructure of regional importance such as roads, rail, and ports.

Afren’s vision for Kenya and Tanzania

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ndependent oil and gas exploration and production group Afren Plc has committed significant support to those who are visually impaired in Africa.

Working with development charity Sightsavers, the group has made a threeyear investment that will transform the lives of adults and children with disabilities in Kenya and Tanzania.

Mwangi Mumero

Eritrea gains new water supply Following intensive presentations of GWE’s pb aquasolar deep well hand pump during the Water Africa exhibition and conference in 2009 in Ghana, marketing by GWE was very successful, with supply contracts exceeding 2,000 units.

At the same time, first pb aquasolar systems were presented in Abjua, Nigeria, and installed in some of the country’s most populated states. Sizable supply contracts are to be concluded soon. GWE has also opened negotiations on local assembly and partial production in Nigeria.

Furthermore, Eritrea’s Educational Sector has placed an order for 73 pb aquasolar pumps, for schools throughout the country, as a pilot project. Several more projects are in the initial phase. And more and more water and energy authorities are recognising the advantages of pb aquasolar pump systems in rural water supply projects: ease of operation, simple maintenance, very low operational cost and, most of all, sustainability at village level, after some initial training. A minimum of 500 people can draw their daily supply of potable water from one pump. Due to the unique design the pump offers access to water 24 hars a day, either through solar power or manual pumping.

Rwanda sets out for green growth The Government of Rwanda has published a report that sets out a framework for the country to move towards a low carbon economy. The Green Growth and Climate Resilience Strategy states how low carbon development is a win-win situation for Rwanda. It reduces the dependence on foreign imported oil, reduces GHG emissions and acts as a major economic stimulus as payments abroad are replaced by local expenditure for energy production.

However, financial support from the international community and private sector

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is required to make this happen. Rwanda’s economy, which is growing at eight per cent per annum, is vulnerable to oil price spikes, population growth and climate change.

Despite being located in the tropical belt, Rwanda experiences a temperate climate as a result of its high elevation. Analysis on the country’s climate data has shown a 30 per cent higher than the global average increase in the average temperature of 1.4°C since 1970, which is expected to increase by 2.5°C by the 2050s.

African Review of Business and Technology - Dec 11/Jan 12

With lack of education and poverty inextricably linked, Afren’s investment will provide a positive future for students like fourteen-year-old Lawrence Momany from Kenya, who has been supported through primary school by Sightsavers and now attends Kahuru Boys High School where he uses special IT equipment to help him with his studies to become a doctor (Photo: Sarah Elliott/Sightsavers)

This company, which has operations in 12 countries, is investing in its Corporate Social Responsibility (CSR) activity with a focus on improving the lives of people with disabilities. The proportion of disabled children receiving any form of education is as low as 1-3 per cent in some developing countries (1). Afren’s support in Kenya will train teachers to support visually impaired students, provide places for those students and ensure they have low vision devices and Braille books to help them study.

Note: (1) UN (2007) From Exclusion to Equality: Realizing the rights of persons with disabilities

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NEWS

Agenda / South Financier floats 40 per cent shares Finance Bank Zambia (FBZ) is to float 40 per cent of its stake on the Lusaka Stock Exchange (LuSE) and two other bourses, expecting to raise $100mn. Apart from the local bourse, the bank, which narrowly survived a much-criticised takeover, intends to float shares on the London Stock Exchange (LSE) and Johannesburg Stock Exchange (JSX).

According to its founding chairman Rajan Mahtani, the bank was currently on a clean-up process and that it would dedicate the entire 2012 to restore its high status before listing.

“We are going to list Finance Bank Zambia on the Lusaka, Johannesburg and London Stock Exchanges simultaneously but that would only be in the first quarter of 2013. We are now focused on restoring our bank’s pride in the next 12 months,” he said recently.

FBZ, the country’s fifth largest bank, survived a takeover by South Africa’s First National Bank in October 2011, after President Michael Sata-led Government rescinded the sale by Bank of Zambia (BoZ) and gave it back to its original owners.

Finance Bank recently held a consultative meeting with officials from shareholders Credit Suisse led by Chris Carson over the future of the financial institution. Credit Suisse owns 40 per cent shareholding in the 23-year old bank.

The majority shareholders would place 20 per cent of their stake on the stock exchanges while the other 20 per cent would be from Credit Suisse.

Nawa Mutumweno

Focus on Ngezi expansion Sandvik Mining and Construction RSA Materials Handling division’s work outside of South Africa is currently focused on the second phase of the Impala Platinum/Zimplats Ngezi expansion project 150km south-west of Harare in Zimbabwe. This involves the construction of a fourth portal, ore storage facilities and a six-kilometre overland conveyor, which will also collect ore from one of the existing portals and feed all the material to the existing concentrator.

The Ngezi Phase II expansion will see the development of a two-million tons per year underground mine, a twomillion tons per year concentrator module, a 35 000-million litre dam, a nine kilometre overland ore conveyor and employee housing.

The Sandvik-constructed overland conveyor will eliminate the current need for trucking material to the concentrator. An aerial view of the portal crushing and road load out station at Ngezi Future expansions will see several crushing installations and conveyors ultimately linking a total of eight portals to the concentrator. The expansion of the existing concentrator is currently under construction by Dowding Raynard and Associates (DRA), the overall project managers.

An aerial view of the secondary and tertiary crushing and screening operation at Ngezi Sandvik Materials Handling’s involvement in the project began in early 2004 when an initial pre-feasibility study, followed by fullyfledged feasibility studies, was carried out on the use of conveyors to transport ore and waste. This arose from a decision to move mining operations from surface to

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African Review of Business and Technology - Dec 11/Jan 12

Gold opportunities at Otjikoto in Namibia

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uryx Gold Corp. has discovered new zone, the “K2 shoot”, at Otjikoto, in Namibia. The K2 shoot occurs a few hundred meters to the northeast of the PEA pit. It has been intercepted in five drill holes representing 400m of strike/plunge and is open along strike and dip.

Auryx’s CEO, Mr. Searcy comments, “The K2 shoot is a true geologic discovery. The new structurally controlled model that we have developed is a significant step forward in our geologic modelling and drill targeting at Otjikoto. The model describes the mineralisation of the current resource and has now demonstrated predictive powers for locating new zones of mineralisation, such as K2. I expect that this will greatly improve the exploration hit rate and it has positive implications for resource growth.”

The K2 shoot is hosted at a different, lower stratigraphic unit than the Main and West shoots, effectively doubling the amount of potentially mineralized units at Otjikoto. Furthermore, the fold controlled model effectively doubles again the amount of stratigraphy deemed favourable for hosting mineralized shoots as the fold repeated horizons should be intersected at depth beneath the PEA pit.

Auryx is currently testing the potential for up-plunge extensions of the K2 shoot.

Both the Main and West shoots are 1 km long. Each of those shoots is terminated at surface, below calcrete, and may have been longer prior to erosion. The K2 shoot is currently 400m long and open along strike and dip.

Mr. Searcy continues, “These results confirm that the mineralizing system at Otjikoto is far more extensive than what falls within the PEA pit and there is excellent potential for finding mineralisation of robust grade and good thickness.”

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LOW COST OF OPERATION IN POWER GENERATION The low cost of ownership with Volvo Penta diesel power comes from high efficiency engines that offer exceptional reliability for maximum uptime. Easy installation and worldwide support are also reasons why world leading generator set producers choose Volvo Penta.

As a part of the Volvo Group, Volvo Penta has extensive resources for continuous development of innovative generator set engines.

5-16 liter Power Generation range 75 – 640 kW 50 Hz 85 – 630 kVA 60 Hz 70 – 550 kWe Prime and Standby power for Stage 1, 2 and 3A.

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NEWS

Agenda / West Renewable energy in Sierra Leone Addax Bioenergy S.A. recently marked a significant milestone in work undertaken on its energy and agriculture project near Makeni, in Sierra Leone - the start of construction of an ethanol refinery and a biomass-fuelled power plant. The project was started in 2008 and includes the development of a greenfield sugarcane plantation, the construction of an ethanol refinery and a biomass-fuelled power plant, which are due to become operational in 2013.

Attending the ceremony, H.E. President of Sierra Leone Dr. Ernest Bai Koroma commented, “My Agenda for Change identifies agriculture as the engine for socioeconomic growth and development with a wholesome focus on the commercialisation

of the agricultural value chain and promotion of private sector participation. The Addax Bioenergy project is the largest private sector investment in Sierra Leone’s agriculture sector to date and provides a great example of successful investment in our country.”

The President of Sierra Leone went on to present certificates to 20 graduates of the Farmer Field & Life School Programme run by Addax Bioenergy to help durably improve food security through better adapted farming methods. Dr. Joseph Sam Sesay, Minister of Agriculture, observed, “As the only sugarcane ethanol project under construction in Africa that fully complies with international social, cultural and environmental best practice.”

IMF MD visits Nigeria and Niger International Monetary Fund (IMF) Managing Director Christine Lagarde visited Nigeria and Niger in mid-December 2011, on her first trip to Africa since her appointment earlier in 2011. Ms. Lagarde heard from policymakers, the African private sector, and civil society about the challenges facing African countries and underlined the IMF's commitment to reinforce further its partnership with Sub-Saharan Africa.

“African economies have made significant progress over the last few years. However, the world economy is in a critical phase, and in these difficult times, we have to make sure we all work together to tackle the challenges facing all IMF member countries, in Africa and around the globe,” Ms. Lagarde said.

In Abuja, Ms. Lagarde held a series of meetings with the leadership of Nigeria, including President Goodluck Jonathan and Coordinating Minister for the Economy and Finance Minister Ngozi Okonjo-Iweala. In Lagos, she took part in a round-table discussion on “Africa’s Future: Responding to Today’s Global Economic Challenges”, alongside the private sector, academia, civil society organisations and research institutes.

In Niger, Ms. Lagarde met with President Mahamadou Issoufou and took part in a cabinet meeting focused on “The Challenges of Economic Development in Niger”.

Legend Gold closes gold acquisition in Mali

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egend Gold Corp. recently completed the initial closing of the acquisition of the Mougnina exploration permit in the Republic of Mali, West Africa. The Company is paying $500,000 cash and issuing 4,000,000 common shares in exchange for a 100 per cent interest in the Mougnina property, subject to a two per cent net smelter return royalty to be retained by the vendor.

The Mougnina property is an early stage gold exploration property located eight kilometres from the Syama mine, owned and operated by Resolute Mining Limited.

The property consists of an exploration permit that covers approximately 1,20.5 square kilometres and is underlain by Birimian-age rocks of the Bagoé volcanicsedimentary belt. The property has been acquired for its potential to host orogenic gold mineralization similar to that of other Birimian-age volcano-sedimentary sequences. Recent reconnaissance exploration work was successful in delineating several gold anomalies that were partially traced to saprolitic bedrock using shallow pits and auger drilling.

Burkina Faso’s President chairs cyber advisory board Blaise Compaoré, President of Burkina Faso, has been appointed Chairman of the International Advisory Board (IAB) of the International Multilateral Partnership Against Cyber Threats (IMPACT), serving the ITU in cyber security. Mr Compaoré takes over from former Malaysian Prime

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Minister Tun Abdullah Ahmad Badawi, whose tenure of the IAB (2008-2011) coincided with a period of rapid growth for IMPACT - with 137 Member States today formally part of the ITU-IMPACT coalition.

As Chairman, President Compaoré will guide the activities and direction of the

African Review of Business and Technology - Dec 11/Jan 12

IMPACT IAB. He brings a vast experience in telecommunications and international relations, and will continue to spearhead global efforts to bring governments, industry, academia and international organisations together in the fight against cyber threats.

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NEWS

Events / 2012 26-29

6-8

21-24

Plastex

Tyrexpo Africa

Cairo, Egypt www.plastex-online.com

Johannesburg, South Africa www.eci-international.com

International Conference on ICT for Africa

African Mining Indaba

28 Feb-2 Mar

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Cape Town, South Africa www.miningindaba.com

Africa Roads

Africa Trade & Export Finance

22-23

Cape Town, South Africa www.exportagroup.com

Lagos, Nigeria www.africa4it.com

13-15

25-27

Oil & Gas Africa

Broadband MEA

Africa Economic Forum

Cape Town, South Africa www.fairconsultants.com

Dubai, UAE www.broadbandworldforum.com

Cape Town, South Africa www.petro21.com

13-16

26-29

Cards Africa

Power and Electricity World Africa

February 6-9

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Ghana Finance & Investment Accra, Ghana www.euromoneyconferences.com 20-23

Enterprise Risk Management Johannesburg, South Africa www.terrapinn.com 20-23

Johannesburg, South Africa www.terrapinn.com

March 5-7

6-7

Healthcare in Africa

Johannesburg, South Africa www.terrapinn.com

Cape Town, South Africa www.economistconferences.com

18-30

Nigeria Oil & Gas (NOG) Abuja, Nigeria www.cwcnog.com 21-23

Kampala, Uganda ictforafrica.jmcub.com

Africa4IT

Johannesburg, South Africa www.terrapinn.com

Cairo International Fair

27-29

IFSEC West Africa

Cairo, Egypt www.cairofair.com

Ghana Summit

Lagos, Nigeria www.ifsecwestafrica.com

20-21

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Africa Energy Indaba

Angola Oil & Gas

Johannesburg, South Africa www.energyindaba.co.za

Luanda, Angola www.iirangola.com

Accra, Ghana www.cwcghana.com

South and North African cities are the continent’s greenest Cities from the south and the north of Africa deliver the best environmental performance of all major African cities. This is the conclusion of the African Green City Index, a unique study commissioned by Siemens and conducted by the independent research organization Economist Intelligence Unit (EIU). During the past months, the EIU analyzed the aims and achievements of 15 major cities in 11 African countries with respect to environmental performance and policies. Cape Town, Durban and Johannesburg from the south, Casablanca and Tunis from the north as well as Accra, Ghana, were ranked above average. "The goal of the African Green City Index is to provide insights into the strengths and weaknesses of each city and start a dialogue about best practices in the area of green policies and infrastructures. With the Environmental Portfolio and the new Sector 'Infrastructure & Cities', Siemens is in the best position to support urban areas in Africa with green infrastructures," said Siegmar Proebstl, CEO Siemens Africa.

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African Review of Business and Technology - Dec 11/Jan 12

Overall results in the African Green City Index (Source: Siemens)

The African Green City Index examines, for the first time, the environmental performance of African cities in eight categories: energy and CO2, land use, transport, waste, water, sanitation, air quality and environmental governance. The overall result of the study shows that none of the 15 cities rank in the highest band 'well above average'.

"Even the best performing cities in Africa have room to improve their environmental footprint," said Delia Meth-Cohn, Editorial Director for Continental Europe, Middle East and Africa at the EIU. Six cities, mainly from the north and the south, scored 'above average', five cities are in the 'average' band, two cities are 'below average' and two cities rank in the lowest band, 'well below average'.

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EVENTS

EXCON 2011

Building the future for construction markets With substantial growth in both exhibitor and visitor numbers, EXCON continues to cement its position as the largest exposition of construction equipment in South Asia

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XCON 2011 - the sixth international construction equipment and construction technology trade fair organised by the Confederation of Indian Industry (CII) recently in Bangalore, India evoked overwhelming response. More than 35,000 visitors thronged the Bangalore International Exhibition Centre (BIEC) to explore the latest innovations showcased by over 630 exhibitors, including 200 foreign companies.

Delivering the chief guest address at the mega expo, C P Joshi - Union Minister of Road Transport and Highways, Government of India - said, “Mechanisation is imperative to speed up the implementation of India’s infrastructure projects. The growth of infrastructure sector is critical for the country to achieve a sustained economic development in the next ten years.”

The Union Minister said that India has emerged as the second largest country in the world in attracting private investment in infrastructure development. India would continue to attract foreign participation as the country has an open and transparent bidding process, standards for various documents and agreements, and a well-defined dispute resolution mechanism in highways.

The investment made in infrastructure sector in 2011 accounted for 7.9 per cent of the GDP. The figure is likely to increase to 10.7 per cent by 2017. During the 12th Five Year Plan (2012-17), the infrastructure investment would be in the tune of US$ 1 trillion. The ambitious National Highways Building Programme envisages investment of about US$70bn in the next five years with a major share by way of Public Private Partnership (PPP).

Endorsing the Union Minister’s views, B Muthuraman, President of CII, said that India should have a solid manufacturing base, and quality infrastructure to achieve double digit growth. And to achieve both, the country

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needs quality construction equipments.

He also urged the industry to go for high technology absorption, and enhanced design and engineering capability.

“It is important to increase the growth of manufacturing sector. Currently the manufacturing sector contributes about 16 per cent to GDP, and 12 per cent to employment. However, it has the potential to increase its contribution to about 25-30 per cent in these two areas,” he added.

Vision 2020 Quoting the CII-IECIAL Report on The Indian Earthmoving and Construction Equipment Industry Vision 2020: Commanding New Heights - which was released by the Union Minister at the event - Vipin Sondhi, Chairman, Excon 2011, said that the Indian construction equipment industry is expected to grow at a compounded annual growth rate of about 21 per cent to reach the size of US$23bn by 2020 from the current level of about US$3.3bn. By 2020, the industry is expected to create at least two million skilled jobs in maintenance and operation alone – that is, excluding the jobs in the manufacturing of equipments.

The volume of equipment sales is expected to increase from over 60,000 units in 2010 to 3,30,000 units in 2020, according to the study. The growth forecast is based on the structural change globally in the CE industry since 2006; the stagnation in the developed economies and the emergence of new markets like India and China with 23 per cent CAGR; India’s increasing share from two per cent in 2004 to six per cent in 2010; growing urbanisation; shortage of skilled manpower; and the greater role for the private sector in infrastructure development.

In order to convert this big business opportunity for the CE industry, it is suggested that the financial intermediaries

African Review of Business and Technology - Dec 11/Jan 12

The International Pavilion at EXCON

like banks and non-banking financial institutions, the government and industry associations should work together and create an enabling environment.

However, the major task is with the original equipment manufacturers (OEMs) themselves. They have to equip themselves on multiple fronts. Some of the key imperatives for the OEMs to realize the CE industry potential are to incorporate customer insights into their new product offerings, build a robust spares and services business, introduce new service offerings, address the after-sales support needs of different customers and build capabilities to deliver service to the customers, according to the study.

Business opportunities From live demonstrations of equipment for earthmoving and construction, lifting, material handling, concrete making, hydraulics, pneumatics and drills, to a display of power tools and piling, electronics, controls and instrumentation, compactors, and compressors and generators, Excon 2011 was successful in providing visitors, from different parts of the country and across the globe, various business opportunities. ■

S03 ATR Dec-Jan 2012 Advetorial CII_Layout 1 20/12/2011 10:52 Page 15

Leadership in technology.

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That’s why ExxonMobil is investing more than $1 billion annually in research, development and technology application—part of our commitment to developing the breakthrough technologies required to meet the world’s rapidly growing energy needs.

For example, at the deepwater Kizomba projects in Angola, ExxonMobil developed one of the most challenging extendedreach drilling programs ever undertaken.

So whether it’s investing in research and development, delivering innovative petroleum products or investing in communities, ExxonMobil is developing more than oil and gas—we are helping to support Africa’s future.

Learn more about our work at exxonmobil.com

S04 ATR Dec-Jan 2012 Bulletin_Layout 1 20/12/2011 10:54 Page 16

NEWS

Bulletin / South Africa Factory takeover boosts local South African textile business

Electrical manufacturer grows into new premises

South Africa’s embattled textile industry has

Jasco Electrical Manufacturers started out

been given a massive shot in the arm after

over 27 years ago with only 10 employees,

the takeover of a Cape Town polyester fibre

and has grown to employ over 300 staff

factory by an affiliate of polyethylene

members today, expanding to include the

terephthalate (PET) recycler Propet, which

manufacture of a variety of products; due to

says it has been generating 800 tonnes of

this growth, its factory in Kwa-Zulu Natal has

polyester fibre per month since starting

been bursting at its seams, requiring a move

operations at the Killarney factory in mid-

to new, larger premises also in Kwa-Zulu

2011, running at 50 per cent capacity, using

Natal that includes a combined production

mixed PET resin chips made from recycled

factory for the various components and

plastic drink bottles; Propet Executive

brands that allow it to expand its eleven

Director Chandru Wadhwani says,

production lines to fifteen, as well as increase

“Ultimately, we’re looking to clean up the

its daily output to well over half a million

areas we work in by recovering PET

combined pieces a day.

New Holland Agriculture sponsors climate reception

containers, while contributing to a local textile industry under threat.”

Bell partners with Liebherr Manufacturer, distributor and exporter of

Chandru Wadhani at the Propet factory in Cape Town

Tractors on display in Durban, a T8.360 and the NH2, are representative of New Holland’s approach to achieving a sustainable development of agriculture

material handling machines, Bell Equipment Sales Southern Africa’s distribution

Represented by its South African importer,

agreement with construction company

agricultural equipment manufacturer New

Liebherr means Bell is distributing Liebherr’s

Holland Agriculture sponsored and attended

tracked hydraulic excavators - from 20t to

a networking reception held by Climate

85t, from the R906C to the R974C - into

Action in partnership with the United

African markets; Bell Equipment CEO Gary

Nations Environment Programme (UNEP),

Bell said, “We are confident that the premium

and opened in Durban, South Africa, by

product and technical excellence offered by

Achim Steiner, UNEP Executive Director and

Liebherr, together with the world class

Under-Secretary-General of the United

support network offered by the 22 Bell

Nations - alongside the 17th United Nations

Customer Services Centres in South Africa

Framework Convention on Climate Change

and over 40 Bell CSCs and dealers in Africa

(COP17); industry decision makers, senior

will be a win-win partnership.”

officials, Environment Ministers and selected attendees from COP17 were brought together to share in New Holland’s commitment to developing solutions that

Finance for green agenda

make farming more efficient while

Finance mechanisms need to be industry and

respecting the environment - a prionciple

investor-friendly if they are to be effective,

that serves as the basis for New Holland’s

says Yvo de Boer, KPMG Special Global

Clean Energy Leader position, which includes

Advisor, Climate Change and Sustainability;

its pioneering work with biofuels, Tier 4 low-

the Kyoto protocol, the Green Climate Fund,

emission technologies, biomass, the NH2

is an important example, he says, which

hydrogen tractor and the Energy

“must blend public and private finance” if it is to drive effective, large-scale action on the

Independent Farm concept as well as Bell and Liebherr’s machines at a recent product launch in Johannesburg, South Africa

ground in developing countries.

16

African Review of Business and Technology - Dec 11/Jan 12

initiatives related to the Carbon footprint reduction.

S04 ATR Dec-Jan 2012 Bulletin_Layout 1 20/12/2011 10:54 Page 17

Ethiopian Airlines has joined Star Alliance.

Connecting Addis Ababa to more destinations worldwide.

Now my business can compete long distance.

I’ve earned it.

H a i l e Ge b re s e l a s s i e 4 times world champion athlete, holder of 27 world records and Star Alliance Gold Status

staralliance.com

S04 ATR Dec-Jan 2012 Bulletin_Layout 1 20/12/2011 10:54 Page 18

NEWS

Bulletin / South Africa Rewind and refurbishment contract for Konnoco Zambia Repairer of rotating electrical equipment, Marthinusen & Coutts (M&C) is close to completing a contract awarded in January 2011 by specialist winder consulting company DRA Technical Services (DRATS) on behalf of Konnoco Zambia Limited, for the The armature for the DC motors

rewinding and refurbishment of the rock winder and man winder rotating machines for the Konkola North copper project; the rock winder was sourced from Deelkraal gold mine and M&C is conducting a complete rewind of the MG set AC drive motor, the two MG set The armatures for the DC generator

DC generators and the two DC hoist motors.

Fuel cell technology presented at climate change conference Anglo American Platinum demonstrated a platinum-based fuel cell generator to

Andiswa Mlisa, Director Umvoto Africa

attendees at the 17th Conference of the

The field frames for the DC generator

Parties to the United Nations Framework

Commission project known as the Group on

Convention on Climate Change (COP17) held

Earth Observation Network for Capacity

recently in Durban, South Africa; Neville

Building (GEONetCaB), according to remote

Nicolau, Chief Executive Officer of Anglo American Platinum Limited said, “Fuel cell power systems in commercial production can increase the energy efficiency of our mining operations, make efficient use of by-product hydrogen in South Africa and provide growth in global platinum demand. Fuel cells further highlight the green credentials of platinum – in this case as an enabler of energy efficiency.”

The field frames for the DC motors

The 1000 kW hoist armature

18

Normalised Difference Vegetation Index used in the Gateway wellfield, Hermanus by Umvoto

Potential for SADC to tap into space technology

sensing specialist Andiswa Mlisa, a director of

Earth Observation (EO) products and services

Cape Town earth sciences consultancy

- which use orbiting, remote sensing satellite

Umvoto Africa; Mlisa says, “There is an urgent

technology to monitor and map the

need for raising awareness of the value-add

environment - have huge potential for

of EO in the organisational processes, in line

business and social use in the Southern

with the identified societal benefit areas -

African Development Community (SADC),

agriculture, biodiversity, climate, disaster,

and steps are underway to address the

ecosystems, energy, health, water and

bottlenecks holding back use of this

weather.”

technology, through a major European

African Review of Business and Technology - Dec 11/Jan 12

S04 ATR Dec-Jan 2012 Bulletin_Layout 1 20/12/2011 10:54 Page 19

NEWS

Bulletin / South Africa China-Africa collaboration focuses on Bamboo

contractor to undertake the development of

it is expected to be in production beyond

an underground mining operation at Venetia

2045, with a new methodology by which that

A partnership among African nations and

Diamond Mine - based near Musina in

undertakes all activities in the sinking cycle

communities, the International Network for

Limpopo Province, Venetia is South Africa’s

in-line, with no two jobs taking place

Bamboo and Rattan (INBAR) and China is

biggest diamond mine representing about 40

simultaneously - a methodology that,

working to substitute bamboo charcoal and

per cent of the country’s diamond output -

according to Allan Widlake, Murray & Roberts

firewood for forest wood on which 80 per

which is in a feasibility stage and will be

Cementation’s business development

cent of the rural population in sub-Saharan

considered by the De Beers Board in 2012;

executive, is preferred because it offers the

Africa depends for fuel needs; “Bamboo, the

should the project be approved Venetia Mine,

prospect of improved safety.

perfect biomass grass, grows naturally across Africa and presents a viable, cleaner and sustainable alternative to wood fuel,” said Dr. J. Coosje Hoogendoorn, Director General of INBAR at UNFCCC COP17 in Durban.

High quality bamboo charcoal produced in Ghana (Photo: International Network for Bamboo and Rattan)

Contractor chosen for Venetia Diamond project

Passion Through Our People

Murray & Roberts Cementation has been selected by De Beers as the preferred

Allan Widlake, Business Development Executive, Murray & Roberts Cementation

Coralynne & Associates +27 (011) 422 1949

0861 00 ZEST |

www.zest.co.za

CAPE

ZEST Electric Ghana Limited

African Review of Business and Technology - Dec 11/Jan 12

19

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FINANCE

Kenya

Payments system for rural populations TSF and VSF-G use M-PESA as a payment system for Cash For Work project in pastoral areas of Kenya

A

fter nearly two years of drought, the situation in northern Kenya worsened critically in August 2011 in fact, 2011 has been the driest period in the Eastern Horn of Africa for 50 years.

Drought remains a major threat. The number of people facing an acute livelihood/food security crisis in the region is currently around 3.5mn in Kenya, and this number is expected to increase.

Due to long term drought, pastoralists have migrated in search of water and pasture (both scarce), sometimes crossing international boundaries. Trekking for long distances has led to a significant deterioration in the condition of livestock, reducing their market value and income potential. Poor pastoralists have few livestock still alive.

Payment for pastoral populations In response, Télécoms Sans Frontières has launched a pilot project in Kenya using the payment system M-PESA for the benefit of populations in pastoral areas.

The M-PESA pilot project is part of Vétérinaires Sans Frontières Germany’s emergency response programme in Kenya and more particularly of its “Response in Arid-lands for Pastoralists in Drought

affected Kenya (RAPID) project”, funded by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

The objective for VSF-Germany is to conduct Cash For Work activities and thanks to TSF’s expertise, to remunerate the beneficiaries through the M-PESA system.

On 15th October, 2011 TSF and VSF-G began the RAPID M-PESA pilot project.

VSF-G has committed to implementing its RAPID project in the districts of Turkana West, North Horr, Loyangalani and Marsabit South. After evaluation, TSF will initially focus on the Marsabit South district (Marsabit County, Northern Kenya).

This is a five-month collaboration initiative; the TSF-VSF programme will end in March 2012 after implementation in six villages and cities: Laisamis, Merille, Logologo, Kamboe, Lontolio and Koya.

A pioneer in mobile payment M-PESA is an agent-assisted, mobile phone-based, payment and money transfer system with over 14mn users in Kenya as of April 2011. It is a simple and practical solution, particularly in rural areas where bank-ing facilities can be scarce and many people don’t have bank

TSF works with M-PESA and VSF to support livelihoods and food security

20

African Review of Business and Technology - Dec 11/Jan 12

‘M’ is for mobile, ‘pesa’ is Swahili for money” accounts. This system enables people to send money in electronic form, store money on a mobile phone in an electronic account, and deposit or withdraw money in the form of hard currency at any of the 30,000 nationwide M-PESA agent locations.The mobile phone payment system M-PESA is implemented in Kenya

by Safaricom.

The possibility to use these kinds of payment for cash transfer programmes in the future could reduce the logistical costs of such operations, and avoid a majority of the security concerns associated with them. Using mobile networks and technology for transferring money is more secure than carrying cash; and the money goes directly into the pockets of the beneficiary without the risk of relying on intermediaries. ■

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Kenya

FINANCE

The technology to extend financial services Electronic money transfers are enabling enterprising Kenyans to conduct serious business

K

enyans are using less cash in their daily transactions, preferring plastic money and mobile transfer services. Data from the Central Bank of Kenya (CBK) shows that the value of money transfers through mobile money increased by 53.89 per cent to Ksh919.2bn ($9.9bn) at the end of June 2011. The number of transactions effected through money transfer services increased by 44.90 per cent to 364.06mn transactions over the half year period starting January 2011.

Kenya has three mobile money transfer companies - Safaricom’s Mpesa, the market leader at 64.43 per cent, Airtel’s Money at 24.42 per cent and Yu Cash trailing at 11.15 per cent. Over the same period, mobile money customers increased by 72.40 per cent to 17.99mn while the number of agents went up by 46.03 per cent to 46,588.

Growth of money transfer services has been phenomenal, buoyed by the large number of unbanked Kenyans owning a mobile connection. Mobile phone subscription has reached 20mn and service providers have moved to money transfer and data. On the other hand, Central Bank data shows that increase in the middle class has boosted use of debit and credit cards in the transactions. Debit cards issues rose by 68.47 per cent to approximately seven million, while the total number of cards in circulation increased by 22.06 per cent to 8.6mn.

Credit card usage grew marginally to 117,835 from 111,383 as at June 2010 with the value of transactions effected increased by 26.40 per cent to 555.17bn ($6bn). The volume of payment made through electronic funds transfers increased by 55.6 per cent over the same period. Last year, the Central Bank launched the Kenya Electronic Payments and Settlement System (KEPSS) to replace the lengthy and taxing manual cheque clearance. Over the period under review, KEPSS has moved a volume of 1,048,206 transactions worth Ksh18.7 trillion ($0.187 trillion) as at June 2011 compared to 673,368 transactions worth Ksh16.8 trillion ($0.16 trillion) for the same last year.

The advantage of mobile money over paper money is that the value itself has no wear and tear and the associated replacement cost is less,” observed George Wainaina, managing director Kenswitch , one of the companies involved in e -money. He also noted that physical cash places a large burden on the exchequer and ultimately the tax payer, including the cost of printing cash, transportation, distributions, securing, insurance and replacement costs. Another industry player, Oscar Ikinu of Tangaza Money Transfer service, says, “Savings through plastic and mobile money payment are more than it would cost to use cash.”

Growing the money network Increasingly, card companies globally are forming partnerships with local mobile money transfer firms to cash in on rising demand.

Already, Visa has partnered with Safaricom and I&M bank to offer the M -Pesa Prepay Visa Safari Card which gives the 13.5mn users of

mobile money access over 28mn Visa outlets globally. Earlier this year, MasterCard, Airtel and Standard Chartered Bank also launched a payment card to will allow Airtel money subscribers make payments across the MasterCard network. Visa's main goal is to increase card penetration and give consumers more places to use their debit cards yet Mobile money is already doing this through partnerships with supermarkets, hotels and other utility companies.

"Mobile technology introduces a unique opportunity to overcome historical challenges to deliver financial services to more than one billion consumers worldwide who own mobile devices but do not have a formal banking relationship," said Jabu Basopo, Visa Head of Business Development, Sub Saharan Africa. ■ Mwangi Mumero

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African Review of Business and Technology - Dec 11/Jan 12

21

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TECHNOLOGY Banking

Messaging supports mobile banking success The role of the short message in driving financial services forward in Africa, banking the continent's unbanked

D

espite the ubiquity of the mobile platform in today’s connected world, banking is an area which has traditionally lagged behind most markets.

There are signs that this is changing on a global scale, with Berg Insight recently forecasting that the number of mobile banking users worldwide will grow from 55mn in 2009, to 894mn in 2015.

Africa has traditionally led the way in mobile banking. Due to a largely dispersed population and a limited retail bank presence, the majority of the people are ‘unbanked’ (i.e. without a bank account). Research from Gallup (2010) shows that across the entire continent, only 19 per cent of individuals have bank accounts, with the number falling to as low as one per cent in countries such as Niger and the Democratic Republic of Congo.

As traditional banking remains out of reach for the majority, mobile phones are fast becoming the best way to extend financial services to the unbanked. Mobile is the platform with the highest reach of the African population and can provide the infrastructure for transactions and payments across the region. Statistics from Wireless Intelligence recently indicated that the African continent actually surpassed Western Europe during the Messaging is driving banking growth across the continent (Photo: Ken Banks, kiwanja.net)

last quarter of 2010 in terms of mobile connections (547.5mn connections for the former compared to 523.6mn for the latter).

Bearing in mind this high mobile penetration and the role of the mobile thus far in the continent’s wider banking industry, it is perhaps unsurprising that Juniper Research has predicted mobile banking will grow into a $22bn industry across Africa by 2015.

The rise of smartphones and apps In more developed markets, the advent of smartphones and the growth of app stores means that mobile banking is increasingly being touted as a convenient form of online banking. Banks are using mobile as an additional communication channel to reach the consumer and popular banking apps are increasingly becoming linked to Customer Relationship Management (CRM’s) to provide services on the go. As mobile banking apps become ever-more sophisticated, this trend is only set to continue.

While these developments are undoubtedly positive, it is important to remember that mobile banking apps are only accessible to people who own smartphones or who have bank accounts. Across Africa, where neither bank accounts nor smartphones are mass-market, apps are often of little use. According to Informa Telecoms and Media - which provides events, research and training to the global telecoms and media community - smartphone penetration in Africa will reach 15 per cent in 2015, compared with three per cent in 2011.

Though this signifies a considerable increase, smartphones alone will not serve as the key driver of mobile banking in the region. To effectively make the unbanked ‘banked’, a more wide-reaching and accessible method is required.

The appeal of SMS Traditional banking remains out of reach for

22

African Review of Business and Technology - Dec 11/Jan 12

Mobile banking is predicted to grow into a $22bn industry across Africa by 2015” most Africans due to factors such as cost, logistics and a lack of financial literacy. Bank accounts are often expensive to maintain and most Africans live in rural or semi-urban areas where access to a bank is very limited or even non-existent. Africans often cannot go to the bank, so the bank must reach out to them.

SMS is an excellent medium for achieving this, being virtually as ubiquitous as mobile phones themselves. According to Mobi Thinking, over 6.2 trillion text messages were sent in 2010, compared with 10.9bn mobile apps downloaded (IDC). Unlike apps, SMS is available to all types of mobile subscribers, regardless of whether they have a smartphone or are on prepaid or post-paid contracts. SMS-enabled mobile banking uses the existing mobile communications infrastructure which already reaches the unbanked, removing the need for a bank to invest in an application or infrastructure such as ATMs. A further limiting factor of appsbased mobile banking services is the lack of standardisation across mobile platforms.

Currently, if a bank wishes to offer an appbased mobile money service, in order to maximise reach, they need to tailor their offerings to ensure compatibility with the iOS, Android and BlackBerry platforms. SMS does not present this same challenge. Its availability across even the most basic devices means that banks and their partners can engineer one solution to cover their entire mobile-phone owning customer base. &Karol Nita, product marketer at MACH. ■

S05 ATR Dec-Jan 2012 Report Technology_Layout 1 20/12/2011 10:56 Page 23

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TECHNOLOGY Finance

Secure, reliable services T

he mobile phone is changing how consumers around the world pay and get paid, and offers financial service providers in developing countries a new, efficient channel to serve the unbanked and under-banked. In the last ten years, 100mn(1) people have been newly ‘banked’ through mobile services that offer consumers basic financial services that are limited in geographic reach. Today, more than one hundred(2) mobile money programmes provide consumers in developing countries with basic financial services, with several more being planned by mobile network operators and financial institutions. Now, global payments

Reaching consumers who have previously lacked access to formal financial services with secure and reliable electronic payments is finally a reality (Photo: Rachel Strom)

26

African Review of Business and Technology - Dec 11/Jan 12

technology company Visa has introduced a mobile prepaid product, supported by Fundamo (a mobile money platform recently acquired

by Visa) that enables financial institutions and mobile network operators to offer prepaid accounts on mobile phones to unbanked and under-banked consumers. This marks a significant step in efforts to bring wider access to secure financial services and electronic payments around the continent.

The key appeal of the prepaid product Telecommunications services provider MTN Group has begun offering the Visa product to its Mobile Money customers across its markets, initially in Nigeria and Uganda. The core appeal of Visa’s product is that it will enhance the security, scale and interoperability of mobile money programmes, while extending payment functionality by enabling account holders to send funds to each other, send and receive international remittances, make purchases at merchants or online or withdraw funds at automated teller machines (ATMs). ■ Notes: (1) Juniper Research, 2011 (2) GSMA Research, 2011t

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Security TECHNOLOGY

West Africa on security N

ot only does Nigeria have one of the most developed economies in Africa, it is also one of the fastest growing, especially in terms of telecommunications and petroleum production – industries which are often vulnerable to crime and security risks.

Such growth always presents opportunity for security operators, as was witnessed at the first-ever IFSEC West Africa 2011 Security Exhibition and Conference, which attracted 90 exhibitors and 2,214 visitors.

With a security market valued at $3.5bn, according to a Frost & Sullivan market survey, and a GDP which has increased year-on-year, businesses can no longer afford to overlook West Africa as a prime security market.

The nerve centre of West African security IFSEC West Africa 2012 will be held from 6-7 March in Lagos, the very nerve centre of the fast-growing West Africa region. Designed to be a definitive event for the market; it will cover commercial and government security, as well as fire and safety. The event is aimed at CEOs, managing directors, senior security decision makers and security consultants, including engineers and technicians, sales and developmental managers, as well as key project managers. Furthermore, the 2012 itinerary includes the free-to-attend IFSEC West Africa Conference, hosted alongside the exhibition. High-level speakers will deliver keen insight into the security market to an audience of senior management and decision makers from some of Africa and the world’s top companies.

IFSEC West Africa is a new commercial security and fire safety event; its inaugural exhibition in February 2011 in Lagos, Nigeria featured over 90 local and international security companies exhibiting security technology systems and solutions to over 2,000 West African security professionals” “This is an ideal opportunity to not only unpack and explore important issues within the industry but also a great networking opportunity for both visitors and exhibitors,” Cullingworth points out.

“It’s an excellent platform to generate multiple sales leads, engage face-to-face with key decision makers and grow a brand’s security footprint into the West African region.”

Speaker themes will include strategic crime prevention and policing in the region, including private security partnerships with law enforcement.

The conference will also look at the critical importance of protecting the region’s national oil and gas pipeline. ■ www.ifsecwestafrica.com African Review of Business and Technology - Dec 11/Jan 12

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SATELLITE

VSAT

Easy connections in resource-rich areas The role and evolution of satellite communications, and the development of the VSAT market

“I

nformation is becoming the currency.

You move it around and inevitably you're going to find satellite communications there.” Simon Bull, senior consultant with specialised telecommunications consultancy company COMSYS*, can hardly be accused of understatement. But he is right. Consider, for example, the vast number of people working in the oil and gas business who need missioncritical information even when they are far from cellular or fixed networks.

Geologists, geophysicists, drilling engineers, seismic data analysts and others collect massive amounts of disparate data in multiple formats (including GPS, acoustic, compass and other sensor data) and use the information for predictive analysis. Such data can be very bandwidthhungry, as Martin Jarrold points out.

However, such information may still have to be transmitted - and often via satellite communications. Jarrold is Chief of International Programme Development of the Global VSAT Forum (GVF)**. He is also Chairman, GVF-EMP Oil & Gas Communications Conference Series, so is better positioned than most to offer insights into the application of satellite technology to E&P. He explains, “Through the use of satellitebased information and communications technologies (ICTs), widely spread and remotely located experts can, for example, receive oil and gas field data as it is collected in real time and can determine the size and potential value of a payload before any actual drilling begins, a capability that can significantly reduce the amount of time and other resources wasted on drilling sites that don't have a strong yield potential.” This is especially relevant, of course, to upstream in areas like West Africa, where exploration for new hydrocarbon reserves has moved to environments that are dangerous, difficult

28

VSATs are used to transmit narrowband or broadband data for example, for transactions or for Internet access

and expensive to work in and traditional communications networks could be hundreds of miles away.

Markets and solutions Very small aperture terminals - VSATs though which information is transmitted and received to and from satellites, are often the only way that voice and data messages can get through. VSATs are better suited to remote environments than conventional WiFi, WiMAX or cellular networks. But, notes Bull, they still face challenges.

Some of these challenges, which we will discuss in this series of articles, include attenuation, antenna size and stabilisation.

Ironically, however, perhaps the biggest challenge to VSATs has less to do with terrain or geography or hardware than with expense.

As Bull points out, “Our business is always compared with terrestrial. Terrestrial works completely differently. Terrestrial has its downsides: it’s nowhere near as flexible. But when it's there, it's infinitely cheaper than satellite bandwidth. And that’s ultimately the problem...our bandwidth is finite and it's expensive.”

African Review of Business and Technology - Dec 11/Jan 12

And when there is direct competition satellite usually loses out. “Last year fibre arrived in Africa in scale,” Bull continues, referring to the long-awaited arrival of undersea cables on the shores of the continent, “and it destroyed the satellite trunking market. Africa was essentially connected to the rest of the world by satellite. All of that went away last year.”

And yet satellite communications continue to thrive. Why? Simply put because there is often no alternative and thus there will always be demand. And that’s where the oil and gas business comes in.

As Jarrold points out, sophisticated ICT solutions not only make E&P activities more efficient and cost-effective, but are also an ideal fit for streamlining supply chain management and refining processes and leveraging off information gathering from all data points along the supply chain, from production to delivery to the petrol pump.

“With reliable information sharing and collaboration between points on the supply chain, analysts, operators, and managers can optimize their communications and get product where it needs to be, when it needs to be there,” he says. This need guarantees a

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S05 ATR Dec-Jan 2012 Report Technology_Layout 1 20/12/2011 10:56 Page 30

SATELLITE

VSAT

role for FSS (Fixed Satellite Services) VSATs, which, along with portable terminals offered

by MSS (Mobile Satellite Services), deliver communications in remote areas for the oil and gas communications market.

Services, systems and approaches VSAT services are well established today, but it wasn’t always clear that VSATs would take off, as a brief look at the history of VSAT usage suggests. From its inception in the early 1980s, until about the year 2000, a genuinely large market for VSATs and the chance to bring down costs through economies of scale were undermined by one factor in particular: “Proprietary systems, all running a different set of protocols in different product suites,” as Bull puts it.

Then everything changed. Like terrestrial solutions, VSAT systems were redesigned for IP. It opened up the market significantly.

Even then, it wasn’t all plain sailing. The basic protocol for IP use is known as TCP/IP. It can be used over satellite except that the assumptions it makes, and indeed its entire design, are intended for terrestrial communications. By ‘assumptions’ we mean latency tests - the time lag between call made and call received. Such speeds are perfectly adequate for most users but not for TCP/IP, which will automatically make a call again even though it isn’t required. The answer is to make TCP/IP believe all is well to ‘spoof’ it, or, as Bull puts it, “We just tell TCP/IP what it wants to hear.”

With IP now widely used, equipment prices fell. But market expansion coincided with the dotcom and telecom bubbles. And fierce competition resulted. Even big names got squeezed as volumes rose but prices tumbled. Nevertheless money was there to be made - assuming your company survived.

For example, some companies, like US giant Hughes, could offer similar systems to both enterprise and consumer. In fact today Bull says, of a system using VSATs, “It may be running to an oil rig. Their inbound channel rate is 3.6 megs. This is a system which will process 60 megabits of data a second. It’s incredibly functional at that level…At the same time if you want to sell a $300 VSAT to a consumer and give him a one meg transmit, 10 meg return for $50 a month, you do that with the same product!”

Other big names, like Gilat or Viasat, had different approaches from Hughes but were still successful. The upshot today is prices as low as $400-500 with antenna and RF, dipping to the $200-$300 range with subsidies. Don’t forget too that a lot of the VSAT is made up of modestly priced metal and plastic. In addition, chipsets are now standard and pretty cheap. “People would

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VSATs access satellites to relay data from small remote earth stations (terminals) to other terminals (in mesh configurations) or master earth station "hubs" (in star configurations) (Graphic: Sam Churchill)

argue that it’s been commoditised for more than ten years,” says Bull, adding “The push is to be able to sell the whole VSAT for $250 dollars, with a profit, without subsidy. With subsidy, you could get down to $50 or $100.”

However, he adds, while this may one day be the lowest possible price for consumer service VSATs, it does not apply to an offshore oil or gas operation. As he says, “Once you get on a rig, there’s no way the prices are that low for equipment. You could be talking $5,000-$10,000 just for the modem - without an antenna - for some of the sophisticated services and high bandwidth links the O&G guys are running.”

Nor are compatibility questions a thing of the past: you probably can’t take one person’s VSAT and put it on another person’s hub. However, capabilities are greater, prices are falling and we are a long way from the extreme incompatibility of the early eighties, all of which has helped to make up for the relatively high cost and limited availability of bandwidth. Of course actually selling bandwidth is not a bad market to be in, assuming you can afford the start-up costs. Bull explains. “The typical model is: big company comes along, buys a satellite - it costs $300mn - sticks it in the sky and then sells the bandwidth on the satellite over a 15-year period.”

The investment may be big but so is the potential market. The average satellite can cover as much as a third of the globe. Thus, as Bull puts it, “If you don’t sell that capacity in Afghanistan, you sell it in France - or wherever”. However, that is not always the case. As you move up the main satellite frequency bands (from L to, C, Ku and Ka), you gain in concentrated power but lose in terms of coverage. That said, you still have reasonable reach, though it may now be across just one continent, say, instead of two. Bull summarises, “The more you concentrate the power, the more bandwidth you get on the ground, the more efficiency you get, the smaller antennas you get. But

African Review of Business and Technology - Dec 11/Jan 12

the less flexibility you have on the satellite to be able to say, “This market doesn’t work; I’ll move to that market.””

Signalling challenges That isn’t quite the whole story. In search of greater bandwidth and smaller antennas, many end users are indeed moving up the frequency bands, but Bull says: “The downside of going up the bandwidth is you get greater attenuation.” This means that heavy rain absorbs - and therefore ruins the signal. At one stage that seemed to mean that both Ku and certainly Ka would be unusable, but technology has come to the rescue. A link has been engineered that is reliable and acceptable enough that today, says Bull, “Ku band is used everywhere [and] Ka is growing”.

That may explain British satellite telecommunications company Inmarsat’s plans to offer services in the Ka band in 2013 with the launch of its new Global Xpress offering. Of course, this is part of an MSS service, not the FSS of VSATs. However, both mobile and fixed satellite communications offerings are widely used by oil and gas companies and both are hoping to respond to the growing reliability of communications at higher bandwidth. ■ Notes *COMSYS is a specialised telecommunications consultancy company with a core expertise in satellite and VSAT systems. www.COMSYS.co.uk **The Global VSAT Forum (GVF) is an association of key companies involved in the business of delivering advanced digital fixed satellite systems and services to consumers, and commercial and government enterprises worldwide. GVF acknowledges the contribution of Northern Sky Research, the GVF Oil & Gas Communications Conference Series Content Partner, in the responses supplied for this article.

The 16th conference in the series is planned for Luanda, Angola, in Q4 2012. See www.gvf.org for more information.

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Satellite TECHNOLOGY

Network for business S

atellite services provider Intelsat has been gaining new contracts with customers utilising its premier African video distribution satellite neighbourhoods and broadband capacity. Intelsat’s SVP of Global Sales, Kurt Riegelman said, “As we prepare to launch three satellites in 2012 that will provide incremental capacity to the region, we look forward to supporting the continued growth of our customers.”

Programmers join video neighbourhoods, as broadband business grows Multichoice Africa Limited, a premier pay-TV platform operator and programming distributor, expanded its commitment for capacity on Intelsat 904 for contribution services - complementing Multichoice’s DTH capacity on Intelsat 7, Intelsat’s African media distribution neighbourhood at 68.5º East.

Zee Entertainment Enterprises Limited, an Indian television, media and entertainment company, also will begin distributing its programming at 68.5º East. The multi-year agreement spans Intelsat 10, and the follow-on Intelsat 20 satellite, scheduled for launch in mid-2012.

Intelsat’s African infrastructure also includes five Digital Video Broadcasting (DVB) platforms on four satellites, and the flexibility to set up customised VSAT services” Dubai-based operator Strong Technologies LLC renewed its multiyear commitment to the Intelsat 10 video neighborhood at 68.5º East for its DTH platform. The service includes a mix of movies, sports, news and general interest content, carried on such networks as FOX and BBC World, and on several popular local African channels.

Intelsat will provide distribution on its African video neighbourhood on Intelsat 10, and the follow-on Intelsat 20 satellite, and will offer access to Sub-Saharan Africa as Strong expands its programme offerings, regions served and subscribers.

Intelsat also continues to build its position in providing wireless backhaul and other services to Africa’s premier mobile phone operators and enterprise VSAT providers. Recently, Intelsat entered into a multi-year agreement to provide capacity on Intelsat 14 at 315º West to Sonema, a telecom services integrator and operator based in Monaco. The contract renews and expands capacity for enterprise network solutions, allowing Sonema, specialist in VSAT satellite networks, to provide services to organisations in the banking, multimedia and telecommunications, insurance, oil, gas, mining, and government sectors. ■ African Review of Business and Technology - Dec 11/Jan 12

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EQUIPMENT

Technology A cloud strategy for Africa’s microfinance community

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emenos T24,a cloud computing-based solution, a complementary go-to-market model using Microsoft technologies to address affordable access to finance in emerging markets, is now offered by banking software provider Temenos on the Windows Azure platform in Africa.

“We are committed to supporting technology solutions to bring about social change and improve the lives of the underserved worldwide,” said Simon Witts, corporate vice president, Enterprise & Partner Group, Microsoft.

T24 on the Windows Azure platform enables financial institutions to move operations to a low-cost consumptionbased pricing model. Banks no longer need to expend time and budget on provisioning and operating hardware resources running T24 natively on Windows Azure enables them to scale resources effectively and increase volume according to customer demand. www.temenos.com

JSE data now on FTSE app Investors and traders can track the performance of the Johannesburg Stock Exchange (JSE)’s benchmark equity index in real time on their Apple i-Phones and i-Pads wherever they are in the world. This service, where changes to the FTSE JSE Africa Top 40 index value are published realtime, is the result of an agreement between JSE and FTSE Group which sees JSE data available alongside over 60 global indices.

“As global appetite continues to grow for companies with operations in South Africa and the African continent, this development will create easier access to global market information for Captionthe visibility of JSE data to international South Africans whilst increasing investors,” says Ana Forssman, Senior General Manager of Information Products Sales at the JSE. The inclusion of JSE data in the FTSE application is made possible by the FTSE/JSE Africa Top 40 data’s recent changeover from updating every 15 second to live streaming.

“What this means is that every single transaction across all forty companies included in the index is calculated in real-time and generating a real-time index value. A second-by-second calculation is a step forward for South African financial markets,” adds Forssman. itunes.apple.com

World-class collaboration tools for business Microsoft Office 365 brings together Office, SharePoint Online, Exchange Online and Lync Online in an always-up-to-date cloud service, at a predictable monthly subscription.

“Great collaboration is critical to business growth, and because it’s so important, we believe the best collaboration technology should be available to everyone,” said Microsoft CEO Steve Ballmer. “With a few clicks, Office 365 levels the playing field, giving small and midsize businesses powerful collaboration tools that have given big businesses an edge for years.”

A game changer for businesses of all sizes Office 365 is available in a wide range of service plans designed to meet the needs of businesses of all sizes, ranging from the largest to the smallest.

With Office 365, people can stay on the “same page” using instant messaging and virtual meetings with people who are just down the hall or across the world. They can work on files and documents at the same time and share ideas as easily as they can share calendars. www.microsoft.com

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Technology

LOGISTICS

Leading in container handling technology T

he wide range of container handling equipment available from industry specialist Konecranes provides the crucial link for all seaport operators who want to maximise the productivity of their operations.

Whether it is ship-to-shore cranes, rubber tired or rail mounted gantries, straddle carriers, reachstackers or liftrucks, this company is a major global player in terms of design, manufacture, delivery and aftermarket servicing. All container handling equipment available in Africa from this leading engineering business draws on knowledge gained from more than 40 years of extensive experience in maintenance matters, affecting all crane components and drive technologies. Extensive research and development (R&D) work has unearthed highly effective ways of minimising maintenance requirements, and so equipment downtime and costs, whilst maximising reliability and performance at all times.

Konecranes combines advanced technologies with a profound understanding of how container handling equipment operates and a responsive attitude to service requirements. Through preventive maintenance, identifying upcoming trouble before failure occurs, maintenance can be

planned and performed at a time which minimises disturbance to the customer’s process.

Cost-wise, container handling equipment should always be viewed in total lifecycle value terms - meaning the original purchase price is only a small part of the cost equation. Highly significant variable costs incurred down the line can all be controlled by correct timing of necessary scheduled and on-call maintenance activities, spare parts supply and update such as positioning software needs, which all leads to lower total costs of ownership - and more equipment uptime over the anticipated lifetime of the complete crane.

Ongoing business in West Africa Late in September 2011, Konecranes received an order to supply 10 RTGs from Ports & Cargo Handling Services of Nigeria, to be delivered by the end of 2012 to the company's terminal within bustling Tin Can Island port in the business capital, Lagos.

P&CHS is part of the Sifax Group and is responsible for efficient operation of more than 750m of busy waterfront, with specialised berths handling both containers and general cargo.

Group Executive Vice Chair Dr Taiwo Afolabi commented, “Konecranes' RTG experience and its local presence played a big role in our selection process… We are confident that the transition from reach stacker operation to RTG operation will be smooth and efficient.”

Regional Sales Director Antoine Bosquet added, “When delivery is complete, Konecranes will have 32 RTGs in operation in West Africa.”

No details of the actual size of the deal were released, but what is certain is that all the 16wheel, all-electric gantries featured will be equipped with the latest DGPS-assisted positioning technology, including automated steering. This keeps the crane on a straight preset path, thereby improving both safety and productivity, and inventory recording at the same time. Each crane will be able to lift 50 tons, stacking one-over-five boxes high with seven truck-lanes wide.

Another Konecranes representative observed, “Our long history in the crane business has given us the foundation to move forward continually to build the most reliable container handling equipment in the world.

And our sound financial position means our clients know they can count on us to help build their businesses.” ■

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Logistics

Mozambique

Port project to meet increasing demand The spotlight shines on the development of transportation operations and business at Maputo Port Recent expansion has increased Maputo’s capacity to six million tons per annumn

A

ccording to Jorge Ferraz, CEO of the Maputo Port Development Company (MPDC), approximately US$225mn dollars was invested in Maputo and Matola Ports over the last eight years and cargo handled has increased from five million tons in 2003 to predicted volumes of 12.6mn tons for this year. Volumes handled are expected to double in the next four years and grow to about 50mn tons by 2030. Investment in equipment and infrastructure has made a significant contribution to the growth and it is expected that a further $750mn will be invested over the next 20 years. The vision and leadership of the Mozambican government as well as the alignment of Transnet Freight Rail (TFR), CFM, Grindrod and DP World have all contributed to this success story.

“We commend TFR on improved efficiencies. By sweating their assets, they have managed to reduce turnaround time of the trains from 200 hours to 90 hours on the Maputo corridor,” said Dave Rennie, chairman of MPDC and CEO Grindrod Freight Services.

Implementing the Master Plan In 2010, MPDC received an extension to its port concession to 2043, providing a timeline for the implementation of a Port Master Plan and for the subconcessionaires to undertake additional investments. The Prime Minister of

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Mozambique, Aires Bonifácio Aly, recently highlighted the enormous opportunity for economic growth in Mozambique driven by the continued demand for commodities. Maputo provides an ideal corridor for the export market. His Excellency’s sentiments were echoed by the vice Minister of Planning and Development in her key note address.

Infrastructure development is essential, as global economic growth is dependent on Africa’s commodities. The demand for commodities will continue to be driven by growth in China and India. MPDC and its sub-concessionaires have the capital, skills and experience to deliver on these demands.

The Port Master Plan includes numerous projects. The first major capital project which was jointly undertaken by CFM, Grindrod and DP World was the dredging project and this was successfully completed in January of this year. Also part of the Port Master Plan is the development of Grindrod coal terminal (Terminal de Carvão da Matola). Phase 3 of this development which included the installation of a new ship loader and a new stacker / reclaimer was completed earlier this year. This recent expansion has increased the terminal’s capacity to six million tons per annum. The terminal has operated at full capacity since TFR’s upgrade to the rail infrastructure and the improved efficiencies by TFR.

African Review of Business and Technology - Dec 11/Jan 12

Phase 4, which will expand the capacity to 20mn tons and more, is in feasibility planning stage. This will require excavation and land reclamation, the construction of two new berths, a stockyard and railway infrastructure. The final terminal footprint will be in the region of 120 hectares (excluding any reclaimed areas).

Continuing to grow Since rail infrastructure is a key aspect to the success of TCM and other terminals, Grindrod will continue to work closely with CFM and Transnet Freight Rail.

The Chairman of CFM, Rosario Mualeia, has said that CFM is fully committed to delivery of the master plan and is working together with Grindrod and DP World to ensure its success. Mr Siyabonga Gama, the CEO of Transnet Freight Rail, has also talked around the subject of improved efficiencies and future expansion plans, and the development of the Maputo corridor.

Alan Olivier, CEO of Grindrod Limited, has said, “We believe that the demand to move cargo through the coal terminal will continue to grow and we are gearing up to accommodate this increased demand for capacity from both established and junior miners. We look forward to continued interaction with TFR and CFM, building on our relationship with the Mozambican Government and working together with all stakeholders to optimize trade through the port of Maputo.” ■

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South Africa

LOGISTICS

The completion of Cape Town’s harbour expansion, a five-year-long project, will double the terminal's capacity

Harbour grows to get more containers Cape Town is benefitting from commitment to transport and logistics infrastructure

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he R5.4bn expansion of Cape Town harbour's container terminal is on track for completion within budget and ahead of schedule, state company Transnet said, following the dredging and refurbishing of the second of four quays being upgraded.

The recent completion of berth 602 saw 720 metres of quay wall made available to accommodate two 305-metre vessels along the quay.

"This project signifies our commitment to ensure the competitiveness of our economy as custodians of our transport and logistics infrastructure," Transnet CEO Brian Molefe said at a ceremony at the harbour earlier this month.

"The investment, which is part of our R110bn rolling five-year capital investment programme will not only increase capacity but go a long way towards improving productivity and efficiency at our ports."

Key drivers of growth Completion of the five-year-long project will double the terminal's capacity to 1.4mn TEUs per annum. A TEU (twenty-foot equivalent unit) is the volume of a standard 6-metre shipping container.

Commenting on the completion of work at the berth, Public Enterprises Minister Malusi Gigaba said state-owned entities like Transnet, through their expansion projects, were encouraged to be the key drivers of the government's developmental objectives, as articulated in the New Growth Path.

"Modernising our transport infrastructure, especially at our ports, is a significant stride towards lowering the cost of doing business in this country, job creation and economic growth," Gigaba said. "Crucially, this serves as a catalyst for long term growth, investment and efficiencies in the Western Cape region."

Reaping the benefits The project will have a significant impact on Transnet's container handling capacity, which includes the expansion of capacity of container terminals in Durban, and the construction of the Ngqura Container Terminal outside Port Elizabeth in the Eastern Cape.

Transnet Port Terminals CEO Karl Socikwa said the division was already reaping the benefits of the investment. "This terminal consistently exceeds customer expectations including higher ship working hour and our own efficiency targets," Socikwa said.

"From a customer perspective, the rate at which containers are moved per hour has improved by more than 30 per cent over the past 12 months." ■ Key aspects of the project include: 6 Deepening to 15.5m all four berths, together with the Ben Schoeman Basin.

6 Reconfiguring the stack yard to maximise space.

6 Replacing the old ship to shore cranes with eight Liebherr Super Post-Panamax cranes with twin-lift capability. Six of these are already in place.

6 Replacing straddle carriers with 28 Kalmar manufactured rubbertyre gantry cranes that stack containers wider, deeper and higher.

6 Refurbishing the quay wall to support the Super Post-Panamax shipto-shore cranes.

6 Introducing additional reefer plug points for refrigerated containers, with a total of 2 712 reefer points to be served by gantry cranes.

6 Recruiting and training operators of lifting equipment to operate the new cranes.

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S06 ATR Dec-Jan 2012 Report Logistics_Layout 1 20/12/2011 11:01 Page 36

EQUIPMENT

Logistics To pull or snatch?

U

rban legends abound when off-roading; one hears of the military type kinetic rope with magical elastic properties that simply recovers stuck vehicles all day without ever needing to rest! At the same time the debate rages around the use of kinetic straps or ropes as opposed to the use of the humble pull strap.

Simply put, the pull strap is your first line of defence and after the spade one of the first items you buy when starting up, an invaluable item of equipment when putting a recovery kit together. Made of low elongation, high tenacity polyester with limited stretch, it is used to pull or tow stuck vehicles through or over obstacles where a degree of control is required. After securely attaching the strap to both vehicles, one should take up the slack, the recovering vehicle then moves off at a moderate pace to start the recovery. Used as the first line of defence, movement should be gentle with as few jerks as possible. Pull straps can also be used to extend a winch cable and as a tree trunk protector in an absolute emergency.

Your last line of defence will be your kinetic strap or rope. Made of high elongation, high tenacity polyamide, most kinetic straps stretch 20-25 per cent of their length, converting potential energy into kinetic energy. This short sharp elastic rebound is used to recover an extremely bogged down vehicle from sand or mud. After pulling off sufficient practice will allow a good driver to stop before the strap stops him, thereby allowing full utilisation of the kinetic capability and not straining the strap or recovery points on the vehicles. www.liftlash.co.za

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OIL

Nigeria

Subsidy proposals fuel West African debate As economic growth and an expanding middle class continue to underpin Nigeria’s industrial transition, debates intensify over governmental treatment of natural reserves

T

he Nigerian government, organised labour and civil society are set on a collision course following the government’s recent decision to end fuel subsidy. The government says it is ending the $7.5bn annual subsidy from January 2012 because it can better spend that money on infrastructure and social programmes. The long-standing subsidy keeps petroleum prices in Nigeria to an artificially low 40 cents per litre, and the government says the action is vital to the country’s economic future because continuing the subsidy means that Africa’s largest oil producer will find itself importing fuel from Cameroon, Ghana, Chad and Niger.

‘In the quest for a better society, we may have to take decisions which would, at inception, be unpleasant in some cases. But we must face the reality, be honest with ourselves and ensure that we do our best for our country at all times,’ President Goodluck Jonathan said last month. But the Trade Union Congress (TUC) and Nigeria Labour Congress (NLC) are not convinced. The NLC called it ‘a declaration of war against Nigerians.’ According to NLC general secretary Owei Lakemfa, the plan showed the government’s ignorance about the state of poverty in the country and the magnitude of the suffering of the common

man. He said that the country should be refining its own petroleum products rather than exporting crude and importing finished products at a very high price.

NLC president Abdulwahed Omar also waded in saying, ‘We again appeal to the Jonathan administration not to toy with the prices of petroleum products as this will definitely lead to a conflagration in the country. The Congress advises the Federal and state governments to realise that there can be no force in the country greater than the Nigerian people from whom all power must flow. Those who have ears let them heed this advice.’

The All Nigerian Peoples Party (ANPP) also described the plan as inhuman. The party’s national publicity secretary, Emma Eneukwu, said the government should stop feeding Nigerians with illmotivated theories of deregulation, while the main opposition Action Congress of Nigeria (ACN) also rejected the plan. In a November 7 statement ACN called it ‘the handiwork of those propelled by the philosophy of the

A long-standing subsidy keeps Nigerian petroleum prices low

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African Review of Business and Technology - Dec 11/Jan 12

“Washington Consensus” of rolling back the frontiers of the state.’ It said improving government solvency was a ‘cheap argument’ which government thinking should go beyond. Like others, the ACN pointed to the anomaly of an oil producer importing oil for domestic consumption.

Proponents of dropping the subsidy say it mostly benefits the small group of fuel traders to whom it is paid. Because Nigeria refines less than one-third of the petroleum it consumes, those dealers control the importation of fuel to keep pump prices at 65 naira ($0.40) per litre. One operator, who was making a case for the deregulation of the downstream sector, said more than 650bn naira was spent last year on fuel subsidy. He said the subsidy ‘is needless and imprudent as it feeds some people fat.’ He added that those who benefit from regulation of the downstream are the privileged in society, saying contrary to labour organisations’ and civil groups’ views that regulation and subsidy favour the common man, it actually favours the rich, who operate a fleet of private cars.

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Nigeria An emphasis on fiscal discipline The World Bank, on 24 October 2011, endorsed the plan saying the policy and the setting up of the Sovereign Wealth Fund (SWF) coupled with strict budgetary fiscal discipline would be in the interest of ordinary Nigerians. The European Union also said the subsidy removal would ‘accrue more resources to be channelled to development projects capable of generating jobs.’

The umbrella Manufacturers’ Association of Nigeria (MAN) called it a ‘bitter pill that we have to swallow,’ while some private sector leaders who attended a two-day presidential retreat in Abuja in mid-October indicated support. The Organised Private Sector (OPS) however denied backing the plan. Speaking on behalf of the OPS, director-general of the Nigeria Employers Consultative Association (NECA), Olusegun Oshinowo, said the OPS had yet to take a position and advised the government to engage in dialogue with representative organisations of the OPS, rather than ‘individual business owners, multinationals and favoured businessmen in the private sector.’

The government’s subsequent proposal to set up a ‘committee of eminent persons’ to advise it on how to use savings from the planned fuel subsidy removal was also condemned with the NLC describing it ‘as another gimmick from government to force the policy down the throats of Nigerians.’

Petroleum Resources minister Deziani AlisonMadueke announced the committee proposal on the sidelines of the Commonwealth Heads of Government Meeting (CHOGM) in Perth, Australia in October. She said that because government wanted to ensure openness and

transparency in disbursing the proceeds, it would not handle the implementation of the benefits. She noted that Nigerians should not be worried on when the subsidy would be removed, as ‘we are still in discussions with labour and other stakeholders including the National Assembly.’

Refineries under review The National Union of Petroleum and Natural Gas Workers Union (NUPENG) said it would support the subsidy removal on certain conditions: that Nigerian refineries work, that new refineries come on board, that high prices for imported products are no longer paid. According to NUPENG national secretary Dayyabu Garga, there is nowhere else in the whole world where a country blessed with abundant natural resources exports crude oil and imports same for local consumption.

According to him, the union believes that if the products can be refined within the country, they would be sold for less than 65 naira per litre than Nigerians pay for it now.

But the refineries cannot produce enough to meet local demand. Output from Nigeria’s three oil refineries – at Warri, Kaduna and Port Harcourt – reached 4.4mn tonnes in 2010, more than double the 2009 figure. The increase, which was wholly attributable to Kaduna and Warri, was made possible by a lull in militant activity in the Niger Delta and, more particularly, a fall in acts of sabotage against the Escravos-Warri and Warri-Kaduna pipelines.

In 2010 oil product demand in the country rose by 20.1 per cent year-on-year (y/y) to 18.6mn tonnes. Surging gasoline demand was the primary driver of overall growth.

Shell sells stakes in Nigerian oil leases The Shell Petroleum Development Company of Nigeria Limited (SPDC) recently completed the assignment of its 30 per cent interest in two oil mining leases and related facilities in the Niger Delta. Total cash proceeds for SPDC amount to some US$488mn. These divestments are part of Shell’s strategy of refocusing its onshore interests in Nigeria and in line with the Federal Government’s aim of developing Nigerian companies in the country’s upstream oil and gas business.

“As we refocus our portfolio we are strengthening our position for the future,” said Peter Voser, Chief Executive Officer of Royal Dutch Shell plc. “The improvement in the security situation in the Niger Delta coupled with continued progress on key

projects provides the foundation for further investment and growth.”

Oil Mining Lease 26 has been assigned to the Nigerian company FHN26 Limited, an affiliate of Afren plc, for an amount of some US$98 mn (SPDC share). Oil Mining Lease 26 covers an area of some 480 sq-km and is currently producing around 6,000 barrels of oil per day from two fields.

Oil Mining Lease 42 has been assigned to Neconde Energy Limited, a majority Nigerian-owned consortium consisting of Nestoil Group, Aries E&P Company Limited, VP Global, Kulczyk Investments and Kulczyk Oil Ventures, for an amount of some US$390mn (SPDC share). OML 42 covers an area of some 814 sq km and includes the Batan, Egwa, Odidi, Jones Creek fields and related facilities.

OIL

Storing and Exporting Nigerian petroleum There are six petroleum exportation terminals in the country. Shell owns two. Mobil, Chevron, Texaco, and Agip own one each.

Shell owns the Forcados Terminal, which is capable of storing 13mn barrels (2,100,000m3) of crude oil in conjunction with the nearby Bonny Terminal.

Mobil operates primarily out of the Qua Iboe Terminal in Akwa Ibom State.

Chevron owns the Escravos Terminal located in Delta State and maintains a storage capacity of 3.6mn barrels (570,000m3).

Agip operates the Brass Terminal, 113km southwest of Port Harcourt, with a storage capacity of 3,558,000 barrels (565,700m3).

Texaco operates the Pennington Terminal.

Source: NigeriaBusinessInfo.com Macro-drivers, including robust economic activity, booming population growth and an expanding middle class continue to underpin Nigeria’s shift to economic and oilconsuming powerhouse. But micro-drivers, including the fuel subsidies, private sector willingness to import, and logistical improvements were arguably more central to 2010 demand growth.

In the latest review of Nigeria’s downstream sector, Citac, the UK-based independent downstream consultancy, says Nigeria’s consumption of petrol grew by 17.8 per cent to 11mn tonnes, building on steep demand growth of 13.6 per cent in 2008 and 12.9 per cent in 2009. The official pump price remained constant, at 65 naira per litre throughout 2010 against a backdrop of soaring international prices. ‘Nigeria’s PMS [petrol] consumption now accounts for one third of total West and Central African oil products demand,’ Citac said.

Gasoline output from the three refineries more than doubled in 2010 but at 748,000 tonnes, remained relatively insignificant in volume terms. ‘As a result, demand was again satisfied primarily through imports,’ said Citac. It notes that Nigerian demand and import data include unspecified quantities of ‘unofficial exports to neighbouring countries – particularly Benin – where official gasoline pump prices are considerably higher than those in Nigeria.’ In the case of Benin, Citac estimates that smuggled product accounts for 50-60 per cent of ‘real’ gasoline consumption. ‘In volume terms, this equates to between 130,000-150,000 tonnes,’ it said. ■ Jon Offei-Ansah

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OIL

Nigeria

Long-term security to lure oil investors security The opportunities available for improving resource industry productivity and moving up the energy sector value chain

N

igeria has been moving to reassure foreign investors that Islamic militants behind a series of bombings in northern states pose no threat to continued economic growth in Africa's oil giant.

"Anybody who does not want to come and invest in Nigeria now because of this instance of Boko Haram will really regret it because this is very, very temporary,” President Goodluck Jonathan told investors at the 17th Nigerian Economic Summit in Abuja. “For security, there is no country that is completely safe. Even as robust as America is, they don't sleep. They monitor. They watch. It's just that terrorist activities are new in Nigeria. We have challenges of occasional assassination and armed robbery. And those are the kinds of crimes that we are dealing with. This terrorism is new.”

The president says Nigerian security forces are confronting the Boko Haram threat “robustly,” rejecting what he called misperceptions among some that “the government is not doing much”.

"People mainly will expect to live in peace, and one major function of government is to ensure the security of life and property. Any government that cannot provide that then of course you have challenges,” President Jonathan says. “So we are working very hard.

I can assure Nigerians and I can assure the global community that this is a temporary setback and we will get over it.”

Sitting to the president's right at a panel discussion broadcast live by CNBC Africa was Nigeria's top businessman Alhaji Aliko Dangote. The sugar and cement magnate said much of the outside perception of Nigeria has been unfair, especially since it has now had a stable democracy since 1999.

"I know that somebody like me today, for example, if you come on a weekend in Lagos I drive myself and I go out and about,” Dangote said. “You are all global investors.

You know that somebody who even bears

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my name will not be able to drive a car in Brazil. He has to go by helicopter. With respect to them, I am just comparing. If you look at it in terms of security, we are actually really not that bad at all.”

Feeling good about investing The chief of the World Bank's Multilateral Investment Guarantee Agency (MIGA), Izumi Kobayashi, says there is no underestimating the importance of personal security for foreign investors. Minister of Power Bart Nnaji told the summit that the federal government will provide a three-year subsidy as a “cushion to the urban poor and rural dwellers who are unable to afford the planned hike in electricity tariffs.”

That rate hike is central to President Jonathan's drive to complete privatisation of Nigeria's power sector in 2012.

"Nobody will come and invest in the power sector unless you have cost-reflective tariffs,” Nnaji says. “What we have done is to solve the problem by raising the tariff now but providing subsidy to those we cannot afford to pay. That's how it's going to work. This tariff has to be raised.”

Nigeria estimates it will need investments of $10bn a year over the next decade to meet the energy needs of 150mn people. Current demand is about 40,000 megawatts. Current supply is about 4,000 megawatts, with promises to reach 6,000 megawatts by the end of 2012.

Securities & Exchange Commission director general Arunma Oteh says the power and finance ministries have worked hard to develop a partial-risk guarantee for power sector privatisation.

"Multilateral agencies for many years – particularly in Asia, Europe, and the Americas – have used partial-risk guarantees as a way to provide the comfort that investors need to invest in a sector or in a country that they may not be familiar with,” Oteh says. “It allows you to extend maturities for investing. It allows you to

African Review of Business and Technology - Dec 11/Jan 12

feel comfortable that you will get your payment back.”

The always-frank Central Bank governor Lamido Sanusi told the summit that big foreign firms such as MTN should be forced to publicly list their shares on the Nigerian Stock Exchange.

Sanusi also held Nigeria's political class responsible for discouraging investment when new state governors or new federal ministers refuse to honor contracts negotiated by their predecessors.

"People need to understand that if we say this is a 25-year public-private partnership, it doesn't matter the next governor, the next political party, the next government, they are going to respect the sanctity of that contract,” Sanusi says. “I think that is the most critical element of long-term investment.” ■

Scott Stearns

Agreement to study natural gas pipeline

O

ando Gas and Power Limited (OG&P), a Nigeria’ natural gas distribution and captive power solutions company has entered into agreement with the United States Trade and Development Agency (USTDA) to jointly fund a feasibility study towards the development of an interstate natural gas transportation pipeline from the Excravos-Lagos Pipeline System to other Southwest States. The agreement was signed on behalf of Oando Gas and Power by the company’s Chief Executive Officer, Mr. Bolaji Osunsanya, whilst the United States Consul General to Nigeria, Mr. John Stafford signed for the USTDA, at an official signing ceremony hosted by the US Consul General late in November 2011 in Lagos.

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Electrification

POWER

Supplying East Africa’s growing power markets Public and private sector energy stakeholders are attempting to improve power generation to meet expected increases in supply

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ast African nations are seeking ways to improve power production to meet rising demands as local economies grow. Tanzania is currently experiencing an economic upturn, which has lead to rising demand for electricity due to mining and industrial activities especially in the west and south of the country. Currently, the total demand during pick time is slightly over 850MW while the installed capacity is merely 1300MW, leaving the national grid with insufficient backup capacity. This has resulted in regular power outages resulting in lost business revenue and increased cost of doing business especially among industries that are forced to buy stand-by generators.

Its northern neighbour, Kenya, has stepped up plans to produce over 1,300MW of geothermal power to reduce its overreliance on unreliable hydro and thermal sources.

A new study in Uganda indicates that with the current economic growth rate of seven per cent, domestic power demand will increase from 370MW to 1,130MW in 2023. Further studies show that the East African Community states -Uganda, Kenya, Tanzania, Rwanda and Burundi -are facing power shortages due

to climatic change which affected hydrological conditions. It is this in mind that each individual state is working round the clock to seek new viable alternatives and also develop new sites for further development to boost their power production.

Kenya’s power production company, Kengen, has come up with an ambitious plan that targets production of more than half of its power demands from geothermal sources and reduce overdependence of elusive hydro power sources. Statistics from Kengen indicate that the country depends of 1,611MW with the company supplying 1,195MW, private generators contributing 347MW, Emergency Power Producers (EPPs) 60MW and the Rural Electrification programme supplying 9MW.

Power transmission lines are common place in rural and urban East Africa as the economies grow raising power demands

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POWER

Electrification

“We are deliberately pursuing a green energy strategy to cushion Kenyans from weather-induced power shortages and high power prices associated with the rising global oil prices, while assuring availability of adequate electric power for development” said Kengen Managing Director Eddy Njoroge.

Expecting a total of 3,189MW in the national grid by 2018, Kengen plans to expand geothermal production as well as investing more in wind and hydro power. It is expected that geothermal sources will contribute 49 per cent – about 1,500MW with dependence on thermal electricity dropping significantly.

Expansion of a 280MW geothermal project with an extra 140MW at Olkaria I and a new Olkaria IV project are currently underway to boost production.

Olkaria Geothermal Power stations - at the heart of the Rift Valley near Naivasha town- produce the main bulk of geothermal power in the country.

They are not fully developed.

Electrical Officer with Ormat Technologies, a private geothermal power producer with its power plants in Olkaria, Mr. Kenneth Nyaga said it is possible for the country to wholly depend on geothermal power especially because “it is renewable and not dangerous to the environment.”

In Uganda, the report ‘Hydropower Master Plan’ has identified water-generated electricity is one of the best option. Already, seven potential hydropower sites have been identified with three prospective sites - Karuma, Isimba and Ayago - selected for immediate development.

The study funded by the Japan International Cooperation Agency (JICA) also notes that Uganda may benefit from power exports to neighbouring Kenya as demand rises regionally. Since

There has been momentum in the renewables sector in Uganda and Tanzania with European Union funding for two projects - to develop solar photovoltaic clusters and to develop clean energy and Kenya has announced plans to build its first nuclear power plant” 2005, the country has deployed emergency thermal power which has necessitated high subsidies to mitigate high tariff.

In Tanzania, a $63.4mn loan from the Export Import bank of Korea, a South Korea development agency is expected to enhance electricity sector. In particular, some of the funds will be used to co-finance the Iringa-Shinyanga backbone transmission investment project.

“The project will help to increase availability if grid-based power supply to the northern regions of Tanzania,” noted Mustafa Mkulo, Tanzania’s Minister for Finance and Economic Affairs.

The 667km long power line from Iringa to Shinyanga will also facilitate future interconnections with neighbouring countries of Kenya in the north and Zambia in the south.

TANELEC LTD, THEMI INDUSTRIAL AREA, P.O. BOX 7156, ARUSHA, TANZANIA. TEL: +255 27 2507892/4, 2508027, 2503950 INFO@TANELEC.CO.TZ/WWW.TANELEC.CO.TZ 42

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Electrification

POWER

Development Agency to develop clean energy projects worth $800,000 in Uganda.

"We have been witnessing speed of green energy market development, supported by international bodies, African governments, and local communities on the ground and in the near future it will lead to substantial reductions of greenhouse gas emissions," said Camco President, Yariv Cohen.

More long-term ambitious nuclear power plants are also being envisaged.

Kenya has announced plans to build its first nuclear power plant by 2017 while several companies are already exploring for uranium deposits in Tanzania. It is envisioned that by then, Kenya could produce some 4,200 megawatts using nuclear. One proposal being studied is the building of a 1,000 megawatt nuclear power plant, probably along the coast in a joint venture with the government and private companies. A facility of such specifications using South Korean technology would cost as much as $3.5bn to build.

In Tanzania, several companies are exploring for uranium. Australia’s company Uranex has two uranium projects- Bahi incorporating Manyoni and Mbuga regions. Other deposits being explored are in Mkuju-Songea in the southwest. In September 2009 mining approval for Bahi was granted by the Tanzanian government. But experts in nuclear energy point out that cost is the main constraint.

Nuclear power plants require large, upfront investment–usually $2bn to $3.5bn per reactor.

“After the initial large capital investment, power generation becomes inexpensive, much more reliable than hydropower, and cheaper than diesel generators,” said Dr Kamau Gachigi, a material scientist and researcher with the University of Nairobi.

On possible nuclear hazards like the recent one in Japan, Dr Gachigi noted that statistically speaking, a nuclear accident is quite a rare event, but since publicity around it tends to be sensational, everyone gets caught up in the nuclear drama.

When it comes to accident risks, says that a nuclear project in Kenya would face different hazards from that in Japan, as Kenya is relatively much less vulnerable to earthquakes. ■

Huge power transmission talons and rural electrification lines have become common across East Africa. Power demand has shot as more are connected

Development of solar and nuclear energy There has also been momentum in renewables, in Uganda and Tanzania. Recently, the European Union has funded two projects to the tune of $1.8mn. The first contract will see the United Kingdom-based firm, Camco International Limited, develop a $1.0mn solar photovoltaic clusters project in Tanzania in which small-scale solar systems will be installed in 15,000 homes in Lake Victoria region over the next three years. Under the second 492 - Africa Utility Ad - Adapt.ai 1 11/30/11 4:45 PM contract, Camco will provide technical assistance to the Belgian

Mwangi Mumero

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POWER

Renewables

Stable supply structures

Rural electrification in Morocco

S

olar power provider Tenesol is bringing power to more than 163,000 people in Morocco for the first time. The company, in partnership with Morocco’s National Electricity Office (ONE), installed rural electrification systems at more than 26,000 homes in the country’s rural provinces. The 16 year project is scheduled to complete in 2018 at a cost of €25mn.

In Morocco, Tenesol operates under a subsidiary called Temasol which is supplying, installing and maintaining the PV systems.

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African Review of Business and Technology - Dec 11/Jan 12

Established in 2002, Temasol is one of the largest electricity providers in Morocco. The company operates 14 offices in the country and employs more than 80 people.

In addition to this current project, Temasol also provides solar water pumping systems, solar generators for remote telecommunications infrastructure and grid connected PV systems across the country.

The 50 Wp, 75 Wp and 200 Wp rural electrification systems (depending on which Solar Home System the customer chose) consist

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Renewables of a PV panel connected to a battery. This allows households to store energy during the day and use it at night. Temasol also installed power sockets to offer easy connection for lighting, televisions, radios and refrigerators.

More than 1.6bn people in the world live without access to electricity, the vast majority of whom live in rural areas.

Morocco’s rural provinces are home to around 45 per cent of the country’s population.

Modules on the move Rural locations are often remote and isolated. Accessing such areas carrying PV panels, storage batteries and installation equipment can therefore prove tricky. In Morocco, rain and snowfall, particularly during winter, can disrupt transport networks. Muddy road surfaces can also become treacherous and hard to negotiate.

For the Moroccan market, Tenesol’s equipment is supplied from the company’s manufacturing plant in Cape Town, South Africa, and transported by sea. Once in

More than 163,000 people in Morocco are gaining power for the first time

Morocco, Temasol works closely with all available resources to transport the equipment to end-user homes across the country. Occasionally, this means panels complete their journey by donkey, horse or on foot.

When it comes to installation, Temasol can draw on Tenesol’s 27 years of experience working in developing areas where houses are constructed from whatever materials are available. In Morocco wood, brick and metal are used,

POWER

which means buildings vary in structural stability. Temasol engineers must evaluate each home and provide a suitable solution that will stand the test of time.

Train to maintain Temasol also provides maintenance for 10 years to each individual installation to ensure all systems operate efficiently. This service began when the first installations were completed in 2002 and will continue until 2018 when responsibility for systems will pass to ONE. “We are delighted to be involved in this life changing and highly rewarding project,” says Jacques Mathan, Export Sales Director at Tenesol. “Rural electrification is a major part of a country’s socio-economic development and this project reflects Morocco’s commitment to assisting and improving rural communities. Many of the families we work with have never had access to electricity but solar energy is fast becoming the renewable answer to their power needs.” ■

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POWER

Renewables

Project shows potential S

olarWorld Africa, which offers crystalline solar-power technology, and its partner Power Solutions, a South African Engineering, Procurement and Construction (EPC) company, has supplied Africa’s largest roof-mounted photovoltaic system in the Dube TradePort’s ‘Agrizone’ at Durban International Airport.

“Having been present in the African market for two decades, we are very proud to be involved in this lighthouse project which showcases the African continent’s unlimited potential for solar power generation. It is especially important at this time when the world’s focus is centred on the COP17 Global Climate Change Conference in Durban,” says SolarWorld Africa’s Managing Director Gregor Küpper.

This particular photovoltaic installation at the Dube TradePort, will generate power to supply the AgriZone grid with electricity for cold storage for the produce harvested from the 80,000sqm of greenhouses. The electricity will also power the packing lines, packing equipment, offices and storage facilities. The complete installation will off-set the carbon emissions of the Dube TradePort by 830 tons of CO2 every year for more than twenty-five years.

Co-operating for cost-efficiency The photovoltaic installation, with a capacity scheduled to exceed 600kWp, was given permission by the eThekwini authorities to connect to the municipal grid. “Our fit out of

The source of power provides cost efficiencies for operations and a reduced carbon foot print

solar panelling for the pack houses at the AgriZone is part of our overall strategy to drive sustainability of the businesses that are operating from the AgriZone,” says Rohan Persad, CEO of the Dube TradePort Corporation.

“The source of power provides cost efficiencies for operations and lowers our carbon foot print in our first perishables supply chain. We are very

The photovoltaic installation is scheduled to exceed 600kWp

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excited to be working with Power Solutions and SolarWorld in installing the largest photovoltaic installation in the country and in Africa.”

The first phase of the installation took place on the roof of the logistics and storage facility, feeding power to the AgriZone grid before the start of the COP17 Climate Change Conference in Durban in November 2011. The second phase of the installation will be installed on the roof of the warehousing facility once the building construction has been completed.

Meeting energy requirements The solar power generated will supply the AgriZone grid with electricity to power cold storage for the produce harvested from the greenhouses as well as the packing lines, packing equipment, offices and storage.

“This ground-breaking photovoltaic installation will make a significant contribution towards meeting the energy requirements of the AgriZone’s pack houses and in doing so, enable a more sustainable and environmentally sound operation at Africa’s most advanced hydroponics facility,” says Axel Scholle, Managing Director of Power Solutions and lead engineer on the project. ■

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Gas

POWER

Firm future for gas U

nless policies are changed the world is headed for an uncertain energy future and a certain unacceptable rise in temperatures said the International Energy Association when it launched its annual World Energy Outlook in November 2011.

Most of the international media coverage that followed focused on these two issues, standbys of most IEA statements over recent years. The Agency is sometimes referred to unofficially as the energy watchdog of the OECD countries, most of which do not produce much in the way of oil and gas themselves.

This year its views have been reinforced by the effects of the Fukushima disaster in Japan – which means that nuclear power is being downgraded as an energy gap filler – and the unexpected five per cent-plus rise in global CO2 emissions last year which, if continued, means that climate control targets are certain to be missed. Both issues are being debated at the climate change conference in South Africa.

The IEA refers to a coming Golden Age of Gas, one in which Africa with its massive national surpluses will be playing a key part” A positive outlook What most of the rest missed was the extremely positive outlook for Africa's suppliers of natural gas. The prospects for national wealth generation in sub-Saharan countries are particularly strong because so little gas is actually used here except for power generation, the supply infrastructure being so poor in most countries outside SA. The processing and overseas sale of liquefied natural gas, pioneered in Algeria but now a mainstay of the national economies of Egypt, Equatorial Guinea, Nigeria and others, has been what has made the difference - a point which was positively made in an earlier (June 2011) one-off report on this clean and handy fuel from the IEA. This referred to a coming Golden Age of Gas, one in which Africa with its massive national surpluses will be playing a key part.

Hence, the Agency now says, “The world's remaining resources of natural gas can comfortably meet the projections of global demand to 2035 and well beyond.”

Another reason for this welcome scenario is of course the huge role that a completely new source of gas – hydraulic fracturing – has been playing in recent years. Searching for such 'unconventional' gas has barely even begun in Africa yet. The net result, the IEA says, is that global demand for gas is expected to rise from 3,076 bn cm3 (bcm) in 2009 to 4750bcm by 2035 if called-for 'New Policies' – at the centre of the Durban debate – are adopted. And to 5,087bcm if they are not.

Over this period all-Africa's demand will increase to just 161bcm, a tiny increase from an existing minuscule total. Meanwhile, Africa's contribution will increase from 196bcm in 2009 to 442bcm by the target year, principally because of a massive average 6.2% annual increase in output of mostly liquefied gas in Nigeria. This means that by 2035 the region will be supplying nearly 10 per cent of the world's natural gas while it continues to consume hardly any of its own. ■ African Review of Business and Technology - Dec 11/Jan 12

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POWER

Gas

Relief in Cameroon T

he World Bank and the International Finance Corporation (IFC) Boards of Directors recently approved an US$86mn loan and US$82mn Partial Risk Guarantee to support the Kribi Gas Power Project that is expected to supply reliable electricity to over 160,000 households in Cameroon, enabling the country’s first long-term project finance from local banks to the electricity sector.

The Kribi power project --the first power plant to run on natural gas in Cameroon -- has two main components: The first consists of the development, construction and operation of a new 216MW natural gas-fired power plant located near the Mpolongwe village, nine kilometers north of the coastal city of Kribi in South Province of Cameroon. The second consists of the development and construction of a new 100-kilometer 225-kilovolt double-circuit transmission line between the Kribi power plant and the existing Mangombe 225/90-kV substation at Edéa in Littoral Province, including substations and transformers.

“The project targets 163,000 households or approximately 815,000 people, 50 per cent of whom are women. Combined with the 50 MW of capacity the project will indirectly supply to Alucam, the country's aluminum smelter, we expect very positive benefits for the economy,” said Gregor Binkert, Country Director for Cameroon.

Developing capacity, meeting demand The project was conceived against the background that Cameroon’s 1,021 megawatt capacity is insufficient to meet its electricity demand and the development of low-cost hydropower including the Lom Pangar dam on the Sanaga River is not expected before 2015. Cameroon has the potential to generate up to 6,000 MW of reliable allseason hydropower on the Sanaga River in the medium term. The Kribi Gas Power Project provides a low-cost gas power supply option that is necessary to come on-line by the latter part of the dry season 2012/2013

and that increases reliability in a mainly hydropower-based system.

The Government of Cameroon and the AES Corporation, the private sponsor, have created the Kribi Power Development Company (KPDC) to implement the Kribi gas project as a public private partnership. The total cost of the project is estimated at US$350mn.

“The Kribi gas power project will increase the capacity and reliability of power supply in Cameroon through the mobilisation of private financing, including local currency financing.

The Project utilises the IDA guarantee instrument in an innovative way to allow Cameroon’s local commercial banks to support investments in the power sector for the first time. This will build capacity of local banks to provide long-term finance for infrastructure projects, raise local currency revenues for the project and reduce exposure to foreign exchange risk for end-consumers,” explained Astrid Manroth, Senior Energy Specialist and Task Team Leader for the Project. ■

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Diesel generators

POWER

Genset imports soar A 20 per cent genset import increase confirms that Africa is as hungry as ever for energy

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frican imports of diesel generators have increased by 20 per cent from the same time last year. In particular, imports have increased in the low range (0-75 kVA) with 30 per cent growth compared to last year.

Nigeria and Eastern Africa have been the main drivers of this growth, with a peak demand in the beginning of the year.

Important growth of exports from UK and China The UK and China are the big winners of 2011 with 62 per cent and 28 per cent growth respectively. China has been particularly successful in Angola, Kenya, Algeria and South Africa, whereas

Italy

the UK’s growth is entirely focused on Nigeria.

Conversely, some Western European countries have seen their African exports decreased. French exports, for example, have decreased by 10 per cent in the first eight months of 2011, including a big drop in the low range (-45 per cent).

Other countries like Spain and Italy have also reduced their exports to the African continent.

Market snapshot: Algeria, Diversifying?

As one of the most important oil producers in the continent, and

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African Review of Business and Technology - Dec 11/Jan 12

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POWER

Diesel generators positively stable and this could be a sign of a strong relationship between French manufacturers and traders in Algeria. For the others, times are changing and these countries will be competing for a stable share of the market.

It will be interesting to see how this balance evolves in the coming months and for the full year, but with 2010 showing a return to a more traditional pattern of growth, it appears that, in the first eight months of 2011 at least, Africa is still a major market player in terms of energy demand.

Growth of imports further demonstrate that despite the political and economic climate in parts of Africa, there is still a need for reliable diesel power.

with a population of around 36mn, the effects of the financial crisis are potentially marginal on Algeria.

Diesel generator imports have progressed by 11 per cent between 2010 and 2011 but the sources are very different.

From January to August this year, the top three exporters to Algeria have been China, France and Germany; in 2010, the top three exporters were Italy, Belgium and France. The top exporter, China, has seen its market share grow from 10 per cent to 23 per cent across all ranges.

Despite these variations, the trade with France remains

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EQUIPMENT

Power Flexible switches via PoE

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elden has added three new unmanaged low-cost switches from the SPIDER series to its Hirschmann product range. These switches support Fast Ethernet (10/100 Mbps) and have either five twisted-pair ports (SPIDER 5TX PD EEC) or one twisted-pair port and one fiberoptic port for multimode (SPIDER 1TX/1FX-MM PD EEC) or singlemode optical fiber (SPIDER 1TX/1FX-SM PD EEC).

Other features include industrial protection class IP30, a strong metal housing and an extended temperature range from 40° to +70°C. Since all versions are powered via PoE there is no need for a separate power supply or even a socket. www.beldensolutions.com

Marelli Motori opens a new factory in Malaysia Marelli Motori recently inaugurated its new manufacturing facility at Shah Alam, Malaysia. A Grand Opening Ceremony was presided by Roberto Ditri, Managing Director of Marelli Motori, in the presence of the Malaysian International Trade & Industry Minister, Datuk Seri Mustapa Mohamed, the Italian Ambassador, Folco de Luca Gabrielli, and local Malaysian authorities.

The new company, known as Marelli Manufacturing Marelli Motori’s new manufacturing facility at Asia, is already producing Marelli generators up to 75kVA Shah Alam, Malaysia and this is expected to grow in future years.

Mr Ditri said, “This new plant is an integral part of our strategic plan for Marelli to establish itself as a truly global electrical machine manufacturer, operating on the world market with its international Sales, Service and Distribution Offices.”

This important investment confirms Marelli’s position as a world-class manufacturer of electrical rotating machines. www.marellimotori.com

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CONSTRUCTION

Housing

Staff engagement, community building Life-changing opportunities as Mercedes-Benz employees build homes for families in South Africa

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uilding a house is back-breaking work, but doing it yourself fosters a sense of pride and accomplishment – even more so when you’re building for someone who has great need of it. That was the outcome of a week’s work by employees of the Mercedes-Benz group of companies, who got together in the baking heat to build two houses in Orange Farm, south of Johannesburg.

The Mercedes-Benz group of companies (Mercedes-Benz South Africa, MercedesBenz Financial Services South Africa and Daimler Fleet Management) has a wellknown track record for its Corporate Social Investment (CSI) programme, of which a relatively new element is Employee Volunteerism. Employee engagement is a part of our culture - we want to see and be a part of change, and help make a positive difference in people's lives.

To this end, 120 employees, in collaboration with Habitat For Humanity South Africa (HFHSA), went to work and made the seeming miracle a resounding success due to staff and community involvement. Over the course of a week in mid-November 2011, the employees built the houses together from the ground up,

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tossing bricks, making ‘dagha’ (mortar), building scaffolding, installing windows, doors and roofs, and plastering and painting in five days.

Orange Farm, situated approximately an hour south of Johannesburg, started as an informal settlement in 1988 and later was formally established in 1990, when residents were given ownership of the land.

According to 2002 statistics, there are approximately 957,000 people living in Orange Farm.

Apart from both low-cost and permanent houses, the community has a modern library, paved roads, four clinics, an information centre with internet access, a multi-purpose community centre, and a police station. The community also has local government offices representing the departments of Health, Social Development, Public Transport, Housing, and Home Affairs.

It’s the third year that the Mercedes-Benz group of companies has become involved in the project, providing R810,000 to the community through nine houses built over this period as part of the community-run programme.

“You, as Mercedes-Benz, physically help us build the houses as part of your social

African Review of Business and Technology - Dec 11/Jan 12

development initiatives,” says Trevor Molefe, Gauteng regional manager for HFHSA. “But over and above that, you are creating employment within the community, because most of the people working in the project are beneficiaries and community This project not only built a house,; it built a home, a community, and hope for the future

S10 ATR DecJan 2012_Construction_Layout 1 20/12/2011 11:11 Page 53

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CONSTRUCTION

Housing

The project was a resounding success due to staff and community involvement

members who have been trained in construction skills and are now able to put these into use.”

Building communities by building homes The two most recent houses built were

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handed over to Anna Mashiane and Florence Mkhize, and their families. They were selected according to strict HFHSA criteria, based on financial need and willingness to partner with their community group and HFHSA. They also

African Review of Business and Technology - Dec 11/Jan 12

contributed ‘sweat equity’ on other houses within the community before qualifying for their own house.

Now Anna, Florence and their children will finally have brick and mortar homes, providing both with more secure homes than they currently have. “I am so happy right now and my wish will finally come true,” says Florence.

Nobuzwe Mangcu, MBSA Executive Director and Divisional Manager: Group Corporate Affairs, says, “The MercedesBenz group of companies in South Africa is proud of its positive contribution towards community development and its contribution to the Orange Farm community. Shelter is a basic need and, through this life-changing project, we are able to provide some light to the lives of these families.

‘Taking part in this project, you are not only building a house,” says Trevor. “You are building a home, a community, and hope for the future.”

“Thank you, Habitat for Humanity, Mercedes-Benz and my neighbours in the community of Stretford Extension 10,” says Anna. “My children and I will now find peace,” she concludes. ■

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West Africa CONSTRUCTION

Nigeria building growth F

ormer Nigerian finance minister Olusegun Aganga predicted towards the end of 2010 that the country’s growth rate would be in double digits by the end of 2012, if the country's infrastructure and privatisation programme is successfully implemented. In fact, Nigeria’s construction industry is growing fast and is likely to grow astronomically over the next decade.

Estimates suggest that current growth in the construction industry is greater than that of India. Nigeria’s population of approximately 154mn is urbanising at one of the fastest rates in the world, while construction is now only 3.2 per cent of GDP. “From 2009 to 2020, only Nigeria and India will enjoy higher growth rates than China in their construction output,” according to analysis from Global Construction Perspectives and Oxford Economics.

Project developments Domestic banks are planning to establish a transport infrastructure fund that would see US$15bn invested in the sector each year. Progress has also been made on a number of beleaguered road developments in Lagos, Osun and Oyo states over the turn of the year. Meanwhile, the construction of five

new terminals at five airports, as well as the redevelopment of five existing terminals, was approved by the government in February 2011. Daewoo, meanwhile, is expected to sign a formal contract with Total E&C Nigeria Ltd for a new coal-fired power plant in H111, with the project most likely built in the coal-rich South-East of the country. Arrangements have reached an advanced stage between the Bauchi State government and a German firm for the commencement of a 110 megawatt (MW) state-owned power plant.

When the Governor of Lagos State, Babatunde Raji Fashola, took an oath for his second term in office at the end of May 2011, he said, ”The accessible and affordable housing and market schemes driven by reasonable mortgage tenures, the expansion of access to potable water supply, and waste water and sewage treatment will be at the forefront of our developmental and budgeting initiatives.”

The opportunities evident in Nigeria’s construction market, the potential for profitable business, will be highlighted at West Africa Building & Construction 2012, an International Trade Exhibition taking place in Abuja, Nigeria, from 23-25 May 2012. Visit www.ace-events.com to learn more. ■

African Review of Business and Technology - Dec 11/Jan 12

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CONSTRUCTION

East Africa

Engineers extend architectural challenge With a dearth of registered engineers and few graduate engineer training programmes, Kenyan professionals form a close-knit fraternity, meeting regularly to compare notes and share experiences

T

he Architectural Association of Kenya (AAK) Kenya Engineers’ Chapter dinner took place at the Nairobi Serena on 15th November under the theme ‘Achieving Vision 2030 - Quality Control in Construction/Manufacturing’.

The purpose of the dinner was to enlighten the professionals on quality control in the construction and manufacturing industries. The goal is envisaged in their anticipated role in working towards attainment of Vision 2030. Quality control is one of the key determinants for realisation of Vision 2030.

A ‘who’s who’ of Kenyan engineering The ceremony, the main sponsors of which were Proceq SA Switzerland (Platinum) and Doshi & Co (Electricals Ltd (Kenya) and Havells India ltd (Both Gold), was privileged by the presence of the ‘Who is Who’ in Kenya‘s engineering circles. The day’s events included exhibitions; welcome address by the master of ceremony Eng Nathaniel Matalanga; brief introductucion of the Doshi Group of Companies and a presentation by its CEO; brief introduction of Proceq SA by Mr Robert L Ripley; a technical presentation

by Mr Jeff (Proceq SA); talk by Hon Nicholas Gumbo; talk by Eng Matalanga; Talk by Steve Oundo—AAK Chairman (he acknowledged presence of the Kenya Engineers’ Chapter Board and other eminent engineers); remarks by Ministers representative (Mr Kamau) and a key note address by Eng Mohamoud Mohammed, Energy Ministry Assistant Minister who was the Chief Guest. This was followed by dinner and a vote of thanks in a ceremony that went late into the night.

Most of the speakers were lively and humorous. The running theme in their talk was on the need for engineers to re-assert

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themselves as key professionals whose work and services underpin economic growth and development of the country.

Eng. Hon. Gumbo, a Member of Parliament explained that only 5 Engineers are MPs are in the current Parliament as contrasted to very many lawyers among other professionals in Parliament. In effect the legal fraternity has tended to benefit in the fact that most Bills that favour that group have tended to be enacted very fast.

Contributing to development, empowerment, and prosperity The engineers were urged to contribute positively and actively to issues and discussions that promote their empowerment, growth of the profession and the country’s economic growth, development and prosperity. They were urged to be proactive with regards to issues facing their career and to stop being mere observers but active

participants in policy-making and activities that determine their professional and social welfare as well as boosting economic growth and development. They were challenged to contribute positively to Bills such as the National Construction Authority among others still pending and dragging in Parliament.

Since realisation of the Vision 2030 is premised on development of reliable infrastructure in which the engineers play a critical role in developing, engineers could rightfully be described as the foundation of Vision 2030.

And with devolution of the country into counties and county governance, engineers are expected to play a critical role in planning the cities and other structural development work that will now obviously be required in the counties. The engineers’ role is pertinent in ensuring safety and proper utelisation of all physical structures; this should help avoid deaths, injury, loss and damage to property as has

Guests at the gathering - mainly, the engineering fraternity and friends

African Review of Business and Technology - Dec 11/Jan 12

S10 ATR DecJan 2012_Construction_Layout 1 20/12/2011 11:11 Page 57

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S10 ATR DecJan 2012_Construction_Layout 1 20/12/2011 11:11 Page 58

CONSTRUCTION

East Africa

Mr Steve Oundo, Chair--Architectural Association of Kenya (AAK)

Proceq's Robert J Ripley

Hon Mohammoud Mohammed, Kenya's Energy Ministry Assistant Minister

happened in the past when buildings under construction have collapsed due to poor workmanship.

Had the engineers provided a question & answer session, I would have asked about the dearth of engineers in the country; why the Engineering faculties in local universities do not meet the local demand and why secondary students tend to prefer other courses to engineering? I would also have liked to learn what the Kenyan Chapter is doing about the predicaments.

layout and mapping of concrete cover values.

The Pundit lab features on-line data acquisition, waveform analysis and full remote control of all transmission parameters. Along with the traditional transit time and pulse velocity measurement, the ultrasonic test equipment Pundit Lab offers path length measurement, perpendicular crack depth measurement and surface velocity measurement.

The Canin+ Corrosion Analysis Instrument provides two methods for assessing the corrosion of steel in concrete—the half-cell potential method and the concrete resistivity method.

Available with a rod electrode for confined spaces or spot checks or a wheel electrode for large surfaces, the 4-wheel electrode version is the fastest corrosion assessment instrument available. The Dyna pull-off tester determines the adhesive strength of applied coatings and the tensile strength of concrete. Two versions are available with either an integrated manometer or an external display device. With its compact design, tests can be carried out at any point on a structure without prior installation of test devices.

Established in 1954 in Zurich, Switzerland, Proceq SA is committed to the manufacturing of quality non-destructive portable testing instruments for concrete properties and structural parameters, metal hardness and paper roll hardness. Its strong Research & development team continues to create products that set standards in these industries and since 1994 has been certified to the ISO 9001 standards that guarantee the quality of processes, products and services.

South America (Sao Paulo), the USA (Chicago), and through a global network of agents and partners; Proceq’s international presence was undoubtedly felt at the Kenya Engineers’ dinner.

On the other hand, Havells India Ltd is a billion-dollar plus organisation and one of the largest and India’s fastest growing electrical and power distribution equipment manufacturer with products ranging from industrial and domestic circuit power protection switchgear, cables& wires, motors, water-heaters, fans, power capacitors, CFC lamps, luminaries for domestic; commercial & industrial applications and modular switches covering the entire gamut of household, commercial and industrial technical needs.

The essence of Havells success lies in the expertise of its fine team of professionals, strong relations with associates and the ability to adapt quickly and efficiently, with a vision to always think ahead; this perhaps explains the company’s gesture to network with Kenya’s engineers.

The Kenya Engineers’ Chapter governing Council members include: the Chair Eng. Nathaniel Matalanga; Vice Chair, Hon Eng. Nicholas Gumbo; Secretary, Eng. Grace M Kagondu; Treasurer, Eng. Evans C Goro; and Registrar, Eng. Alex Mbugua.

In its mantra, the Association (AAK) urges stakeholders in the country to “Participate in the affairs and functions of the Architectural Association of Kenya today and be part of the team that is determined to improve the advancement of the science and the art of planning and building our cities and urban centres and consequent improvement of the built environment”.

Notably, quality control and assurance are critical considerations in the four engineering disciplines that determine operations in the building and construction environment: these include Civil, Structural, Electrical and Mechanical Engineering. ■

Novel technologies highlighted Proseq SA produces and supplies high quality instruments for non-destructive testing of concrete structures. The dinner presentation was based on these equipments and recent concrete testing technology.

According to educational brochures provided at the event, the Proceq Original Schmidt Concrete hammer was the world’s first and still the most widely used instrument for analyzing the uniformity and compressive strength characteristics of concrete structures while the SilverSchmidt ST/PC Concrete Test Hammer is the first fully-integrated featuring the most accurate rebound value and unmatched repeatability in the industry.

Independent validation testing by BAM( federal Institute for materials Research & Testing, Germany) has shown the SilverSchmidt ST/PC to have less dispersion than the classical concrete test hammer.

The Profoscope Rebar (Reinforcement Bar) Detector & Covermeter is a hand-held device that can also determine rebar diameter. It features unique real-time rebar visualisation, rebar proximity indicators and locating aids allowing the user to ‘see’ the location of the rebar. The Profoscope features additional memory functions.

The Profometer 5+ rebar detector and covermeter is a sophisticated device for locating rebars and for measuring concrete cover and bar diameter. In addition to the standard S model, the Scanlog version offers 2-dimensional display of rebar

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International presence for local support To provide their international customers with local support, the company continually increases its presence through subsidiaries in Asia (Singapore), China (Shanghai),Europe (London, Zurich),the Middle East (Dubai), Russia (St Petersburg),

African Review of Business and Technology - Dec 11/Jan 12

J F N Ng'ang'a

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CONSTRUCTION

South Africa

Rejuvenating the V&A T

hroughout most of 2011, Cape Town's Victoria and Alfred Waterfront (V&A) has been undergoing a R500mn (US$74mn) revamp under its new South African owners, Growthpoint Properties and the Public Investment Corporation (PIC). The revamp, which is the biggest business development at the V&A in over two decades, is due to complete in 2015.

The V&A was bought by Growthpoint in March 2011 from Dubai World and London & Regional Properties for R9.7bn ($1.4bn), making it South Africa’s biggest single property deal to date. The deal to return the V&A to South African owners took almost two years to complete because it was subject to conditions such as exchange control approval. The revamp has focused on the V&A’s Clock Tower precinct, the Fruit Court and the

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construction of parking space around the head office of the investment management firm Allan Gray.

The New Clock Tower Development Of particular note is the work undertaken on the Clock Tower precinct - representing the first phase of the revamping strategy to be complete, offering on completion a fine selection of retail outlets. The precinct has evolve into a vibrant hub of activity, fusing heritage, shopping, restaurants, arts, culture and business. The Clock Tower Offices offer companies a rare opportunity to occupy prime real estate at the V&A, nestled between the sea and mountain, with majestic views from large balconies and terraces - whilst the nearby V&A Marina, home to the city's jet-set elite, lends the precinct an air of quintessential luxury. ■

African Review of Business and Technology - Dec 11/Jan 12

The V&A Waterfront Clock Tower has been an icon of the old docks and remains an important focal point in the Waterfront's redevelopment (Photo: Martie Swart)

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Mozambique CONSTRUCTION

Calls for building codes I

n October 2011, several schools and other buildings in the central provinces of Mozambique had their roofs blown off as a result of heavy winds and rains, causing significant material damage and delays in children's schooling. In Manica alone, more than one thousand houses were damaged by the weather in the last two months, as well as at least 12 schools and nine churches.

The result was "a serious problem that needs urgent attention", according to Hanoch Barlevi, UNICEF Disaster Risk Reduction Specialist, who described the events as demonstrating "the need to improve building quality and build for the long term” in the country. Mr Barlevi added, “We need to ensure that building codes and standards are being followed and that buildings be made to withstand bad weather."

members and that protects the community infrastructure in the long term. According to the Charter, buildings and other infrastructure must be constructed so as to ensure that women and children continue to have access to safe water, sanitation and hygiene and retain the capacity to take appropriate measures against disease and malnutrition.

"Bad construction represents a big loss of resources," says Barlevi. "We need to ensure that schools and other public buildings are constructed to provide continuity of education and other services."

Barlevi emphasises that improving construction is a critical factor in strengthening the resilience of communities to withstand the negative effects of bad Strict enforcement of building codes and weather and calamities. construction of public buildings that are "If we build well today, we can worry a little less resilient to bad weather will save money in the long run and will speed up recovery about tomorrow." after calamities (PHOTO: Erik Cleves Protecting infrastructure to protect communities According to the Children's Charter, it is also Kristensen) The recently approved Children's Charter on essential to ensure proper maintenance and Disaster Risk Reduction has been calling for construction, and construction of roads and bridges, thus enabling early recovery and reconstruction to help educe the risk to children and other community reconstruction in the case of an emergency or calamity. ■

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WATER

Ghana

Technology to treat Ghanaian wastewater How industrial wastewater is professionally treated in Techiman, in central Ghana, with support from German technologists

I

ndustrial wastewater will be professionally treated in Ghana in the future – with support from Germany: DEG – Deutsche Investitionsund Entwicklungsgesellschaft mbH, has helped implement a demonstration facility, which has now been inaugurated in Techiman in central Ghana. The private partner of the project is the German 5 medium-sized company AWAS International GmbH, a specialist for the planning, production and assembly of innovative environmental technology in the sector of water and wastewater. AWAS contributes 203,500 euros to the project. DEG complements this amount by 200,000 euros from funds of the develoPPP.de Programme of the Federal Ministry for Economic Cooperation and Development (BMZ).

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African Review of Business and Technology - Dec 11/Jan 12

The resource water is becoming scarcer and scarcer in Ghana, as a result of population growth, urbanisation and the extension of the irrigation agriculture. At the same time, water pollution caused by industrialisation is increasing. As regards supply of drinking water, Ghana generally relies on open water reservoirs, which industrial wastewater is also discharged into. Water treatment technologies are hardly in place. Waste-water treatment constitutes an immense problem in the out-dated municipal facilities.

This is where the AWAS project comes in: the company installs an exemplary facility for wastewater treatment for Ghana Nuts Limited (GNL), a manufacturer of edible oil. It treats the around 60,000 litres of wastewater which are produced every day, and recycles the major part for the production process. GNL staff are trained on the operation, repair and maintenance of the plant to allow them to use it independently also in the future. In addition, road shows around the topic of wastewater management are being planned. Within the scope of the project, AWAS will install a public fresh water well in the immediate vicinity to the facility, which will, amongst others, supply a hospital under construction. A biological lighting system will be included which is to prevent that bacteria will contaminate the well water.

Knowing how to protect resources The project aims at boosting the know-how transfer and exchange on water management between companies, institutions, the university and the population in Ghana, and at sensitizing the population for the topic in this way. The governmental environment authority of Ghana will be assisted in terms of new standards of water quality.

With the help of the demonstration plant, AWAS will be provided with reliable market data and will be in a position to present itself as a competent partner for water and wastewater treatment in the African market.

The protection of scarce water resources is promoted by DEG also from own funds. Only recently the DEG customer Bauer Resources GmbH has been awarded the Global Water Award in the category “Industrial Water Project of the Year“. Its wetland facility in Oman, co financed by DEG with an amount of US$37mn, treats polluted process water originating from crude oil exploitation. AWAS too is involved in this flagship project: The company has planned and constructed the oil separator upstream to the constructed wetland.

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Power

MINING

Rental specialists power mine operations Finding reliable power supplies when working in remote locations presents particular challenges, which can be met with good rental solutions

An Aggreko power package at Bisha Mine

O

ne of the largest challenges of providing power to a new mine site is the remote locations in which mines are usually situated. Purchasing and installing a permanent power plant is not an easy task at the best of times; trying to do so when operating in the middle of a mountain range or on a desert plateau is truly a daunting task.

For this reason, many mining companies, when in the planning and design stages of a new mine site, will contact a power rental specialist to ensure that the mine will have power it needs while it is being constructed and commissioned.

Power for construction It is during the construction phase that rental power is most needed, primarily because a mine in a remote location will usually not have any permanent power source nearby.

The commissioning of a permanent power plant for a mine can take anywhere from one to three years and even if a mine is located relatively close to a distributed power network, it can take several months for the local utility company to connect the mine to the grid. During this period, power rental can be utilised to provide a fast-track flexible power supply. The rental power package will often consist of a central power plant, which will provide power for the majority of the

site’s needs, including the mining camp, ventilation fans, flood lights and lifts. Smaller generators will be utilised in outlying areas of the site for a variety of other applications.

One company which has recently utilised rental power during the construction phase of a mine is Bisha Mining Share Company (BMSC), a joint venture between Nevsun Resoures and the Eritrea government. BMSC contracted Aggreko, the world’s largest power rental company, to provide a 20MW power package which was used to commission and operate the Bisha gold mine in Eritrea. Situated approximately 300km from the Red Sea, the mine’s location meant that it was unable to access the national grid and had to therefore rely on rental power until a permanent solution could be put in place.

Cliff Davis, Chief Executive Officer at Nevsun Resources, said, “Being in a remote location meant that finding a reliable power supply was a critical factor; however, Aggreko’s lead time and modular flexibility fitted well with our planned production schedule.”

Back-up power Rental power can also provide options for mining companies when it comes to rapid response in the case of unexpected power

outages. One example of this recently occurred in South Africa, when an international mining company was told that due to regional power shortages, it would need to reduce its power consumption by 10 per cent within two months. Due to space constraints, the power plant could not be located at the mine site, therefore, Aggreko connected the 10MW plant to a substation on the same grid and provided the power in the form of ‘wheeling power'.

The 10MW rental power package ensured that the mine had the power needed to meet production targets.

Walking power Beyond providing power for construction and commissioning, temporary power has a variety of other applications, such as the use of mobile power packages for the moving of electric mining shovels, more commonly called 'shovel walks'. Electric mining shovels are usually supplied with power from the local utility grid by a network of re-locatable mining substations for the production areas.

The shovel will typically be connected by a 300-500 meter HV trailing cable at either 6.6 kV/11 kV supply voltages - this allows the shovel to work in the immediate production area. However, when a shovel needs to be moved outside of the mine site to a new

African Review of Business and Technology - Dec 11/Jan 12

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MINING

Power

production area, a delay of weeks can easily be caused if the mining company does not have a network of mining substations leading to the new site. To avoid the costly delays caused by having a shovel out of commission for such an extended period of time, mining companies will often contract a rental power company to provide a mobile power package comprising of synchronised generators which are installed on a walking platform that advances together with the shovel.

The total time required to move the shovel to the new mine site is usually a fraction of the time required to wait for a utility hook-up, meaning that the cost of hiring a rental power package is far outweighed by the cost in loss of production, which can be substantial. In fact, some mining companies choose to utilise a rental power solution even if they have the substations necessary to power the

An Aggreko power package at a coal mine

Temporary power has a variety of applications

shovel walk using trailing cables. Because trailing cables can present an HSE risk and can also cause slow-downs or halts in operations when the cables intersect active mining areas, a rental power mobile shovel walk is often seen as the best solution.

Power for rent With the continuing uncertainty in the metal and mineral markets, mining companies are beginning to look beyond the traditional means of power generation - grid power from local utility providers and purchased generators â&#x20AC;&#x201C; and investigate the option of rental power. Not only can rental specialists like Aggreko provide rapid, turn-key service for remote locations, but for certain applications like shovel walks and emergency power support, they are an integral tool to keep mines operational and to ensure production targets. â&#x2013;

Where the World connects with African mining

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frica and the African continent has channelled billions of dollars towards Africa's mining opportunities, from small diamond deposits to mega coal projects.

Mining Indaba has become the world's best mining investment event and the benchmark for mining investment events around the globe.

Networking for commerce The 2012 Mining Indaba, held in Cape Town, South Africa, from 6-9 February 2012, will gather together more than 6,500 global professionals - all with a vested interest in the African mining value chain. Those attending the 2012 Mining Indaba can expect to participate in discussions with

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more than 40 African and non-African government delegations, learn from more than 1,000 international companies both on and off the exhibition floor, and meet with more than 100 speakers and thousands of fellow investors, financiers and other mining stakeholders.

Knowledge-sharing Mining Indaba is the place where deals are created and solidified and where crosscontinental relationships are nurtured for fuelling investment into African mining. The world-class educational and business programme includes the African Mining Ministerial Forum, and comprehensive assessments of commodity markets and

African Review of Business and Technology - Dec 11/Jan 12

corporate developments, with a particular emphasis on operational sustainability.

Speakers are hand-selected and by invitation only, and they represent the whoâ&#x20AC;&#x2122;s who of global economists, international commodities experts, analysts and mining executives. They include: Tom Butler, Global Head of Mining at the International Finance Corporation; Robert M Friedland, CEO at Ivanhoe Mines; Dr David Evans, Mathematician and Engineer representing Sciencespeak.com; David Hale, Founding Chairman of David Hale Global Economics; and Dr Barry J Eichengreen, International Monetary Historian and author of Exorbitant Privilege. www.miningindaba.com

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EQUIPMENT/ CLASSIFIED

Samsung smartphone offered protection and portability Today’s handheld devices have the innovative technology to hold important contacts, special memories or future appointments all in seven inches or less. Smartphones like the Samsung Galaxy S II allow access to it all and OtterBox provides protection and ultimate portability so life is never stalled; introducing the Commuter Series for Samsung Galaxy S II. The cases provides access to device features, allowing each port to be fully functional through the case.

Designed to provide a professional look and feel while protecting against everyday bumps and scratches, the Commuter Series case for Samsung Galaxy S II is built to withstand the countless demands of busy lifestyles. This multi-layered design features a durable silicone mid-layer, polycarbonate outer shell and optional self-adhering screen protector for a necessary yet stylish safeguard. www.otterbox.com

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S12 ATR DecJan 2012 Solution_Layout 1 20/12/2011 12:08 Page 67

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In 2011, Eaton celebrates its 100th anniversary and a heritage of innovation and expertise that has positioned the company to answer some of the worldâ&#x20AC;&#x2122;s toughest power management challenges.

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