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finning south america: emirates steel:


trinity exploration & production:

More than meets the eye Changing the landscape in Trinidad for the better

hyderabad metro rail:



BIG IDEA Opportunities for mineral exploration in Ontario abound. Powered by global leaders in innovation and safety standards, our mining practices are among the safest and most sustainable in the world. With business costs lower here than in most G7 countries, Ontario suppliers are more competitive – so you can depend on quality goods and services, delivered on time, on spec and on budget. Innovation is at our core. Make Ontario your next big idea.


in non-metallic minerals, including diamonds, was produced in Ontario in 2012

$2.6B in gold

$1.5B in copper

$1.4B in nickel


in other metals such as platinum and silver

Paid for by the Government of Ontario.

business excellence

Business John O’Hanlon Editor Will Daynes Editor Matt Johnson Art Director Louise Culling Production Designer Richard Turner Director of Sales Vince Kielty Director of Editorial Research

Business Excellence brings you content from leading business influencers and strategic thinkers providing inspiration and guidance to help you and your business grow. We showcase some of the best examples of successful organisations from around the world giving you a unique insight into how they operate.

HINT: For the best experience, click the fullscreen icon

Sharon Rooke Administration & Operations Matt Day Head of Technology Andy Turner Chief Executive

Contributors George F. Brown, Jr. Consultant & author Exact Software Business Software Developers Markus Christen Associate Professor of Marketing Tommy Arvinell Managing Partner Bicom Business Software Developers Mush Honda QA Director, KMS Technology

Subscriptions & Enquires

Jacquard House, Queen Street, Norwich, NR2 4SX. England

Infinity Business Media Ltd

The content of this magazine is copyright of Infinity Business Media Ltd. Redistribution or reproduction of any content is prohibited. Š Copyright 2013 Infinity Business Media Ltd.

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12 technology

flexible telecom

A publishing company with telecom challenges of its own finds the ideal solution in a flexible, feature-rich platform from Bicom Systems.

20 technology

Professional services – thrive in a genuinely global, flexible market space Two key reasons why professional services companies need the right ERP.

28 top ten

Tips on How to Best Manage Offshore Teams

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Too often, companies think about offshore product development only as a means to cutting costs and accelerating time to market. This short-sightedness can yield poor results without a plan in place.


34 operations

A brave new world of work

Companies face losing customers and revenue unless they equip changing workforces with the information sharing tools they need to take them out of the digital dark ages.

40 operations

Sizing a sales force & setting its direction



Markets change, competitors react and your sales force can easily be left looking at yesterday’s needs: sizing and allocation are the key.

48 strategy

Focus is Good… If It’s the Right Focus How having a focused strategy can create considerable value.

58 Economics

Abenomics – Calculated risk or reckless gamble?

One year on since the word ‘Abenomics’ entered the economic dictionary, we look at the arguments for and against Japan’s game changing policy strategy and its possible future implications.


62 Event preview

Dates for your diary A selection of upcoming events.

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business showcases


oil & gas: 64 Trinity Exploration & Production More than meets the eye

As CEO, Joel “Monty” Pemberton explains, Trinity Exploration and Production’s business has never been just about recovering oil and gas.

82 Recope



Costa Rica’s pillar of competitiveness

Costa Rica’s national hydrocarbons importation, refining and distribution company is taking a leading role as the country prepares to lead the region in green energy.

Energy & Utilities: 92 Energia Llaima /Sunmark

A bright future beckons

The result of an alliance between two industry leaders, Energia Llaima/Sunmark is a company leading the way in launching ground breaking solar thermal and hydroelectric projects across Chile.

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100 Hidroeléctrica de Cahora Bassa

A symbol of national pride


The Cahora Bassa dam is more than Mozambique’s defining engineering achievement: its development by Hidroeléctrica de Cahora Bassa (HCB) is the keystone of southern Africa’s quest for sustainable and reliable power

mining & minerals: 110 Levon Resources

Rich in resources and resolve

In the last twelve months Levon Resources has worked hard to consolidate and progress its assets, gaining 100 percent ownership of the Cordero Project, one of the largest silver resources on the planet.

118 Finning South America


Equipment and services which drive the economy


The most important partner in the distribution of Caterpillar equipment and services worldwide, with it’s focus on delivering an excellent service.

126 Mariana Resources

Leading South American exploration

Mariana Resources’ highly experienced team is allowing it to transform its developing discoveries into robust projects.

128 bdo

Innovative thinking and insight

With more than 100 offices from Vancouver to St. John’s, BDO is one of the leading accounting and advisory firms in Canada, and an invaluable service provider to the countless mining companies that call the country home.

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136 Ontario Mining Association

A province of possibilities

The mining sector has always existed as a pillar at the centre of Ontario’s growth. Thanks to the efforts of the Ontario Mining Association (OMA) its role in defining the province’s future will only continue to gain importance.

144 Coastal Gold Grade is king

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The coast in question is that of Newfoundland, where Coastal Gold’s Hope Brook property is in rapid development towards becoming a very significant producer.

154 Potash Ridge Growing green

Potash Ridge’s Blawn Mountain deposit in Utah has got everything going for it, pulled forward by the market and pushed forward by an enthusiastic team in a supportive jurisdiction.

164 Petra Diamonds

A diamond in the rough


A leading independent diamond mining group, Petra Diamonds is fast becoming an increasingly important player in the rough diamond market thanks to the leveraging of its impressive asset portfolio.

172 Base Resources

The path to production

Base Resources’ Kwale mineral sands operation is a game changer for both the company and the Republic of Kenya.

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Promoting responsible mineral development in Africa

The Southern and Eastern African Mineral Centre (SEAMIC), an international organisation under the umbrella of the United Nations Economic Commission for Africa.

190 Swakop Uranium

Namibia’s gift to global green energy

Chinese capital and the combined resources of southern Africa’s experience in mining come together in the Husab uranium mine, a project that confirms Namibia’s leading position as a uranium oxide producer.

200 Foskor: Phalaborwa

Feeding South Africa’s growth

As the only vertically integrated phosphate producer in South Africa Foskor is vital to the country’s agriculture sector: its Phalaborwa mine is one of the largest open cast operations in the world.


210 Howden Africa Focused yet diverse

Howden Africa is a market driven, customer orientated company: its main business activities are the design, manufacture and marketing of air and gas handling solutions to a wide range of industries.

220 Planet Projects Men of steel


Planet Projects is a well-established South African fabrication and boiler-making company with a client list that reads like a who’s who of the country’s mining and infrastructure sectors.

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transport & logistics: 234 Hyderabad Metro Rail Metro and more

The Hyderabad Metro Rail has pulled together the experience of cities across the world to create a mass transport system that suits India.

236 MCLI

A pathway of prosperity

The Maputo Corridor is just one part of a network that is key to securing Africa’s economic future with private, public, regional and continental interests in the balance.


250 The South African National Road Agency Limited (SANRAL ) Driving South Africa’s development Keeping the economic arteries of the country in a condition befitting Africa’s largest road network.

258 RwandAir

Winging to Africa’s heart

RwandAir is a young airline with a young fleet: it is making full use of Rwanda’s position to link with Africa’s capitals and beyond.

manufacturing: 268 Emirates Steel

Shaping a low carbon future

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The unwavering dedication Emirates Steel has towards producing only the finest quality products also extends to the company’s commitment to health and safety, the environment and energy efficiency.



280 Alpine Lounge

Alpine Lounge goes lean

South Africa’s premium furniture manufacturer is adopting best manufacturing practices more often associated with automobiles than luxury seating.

292 University of Kentucky – Lean Systems Program 2013 Lean Users Conference: Leaning in the right direction


Glenn Uminger discusses the recent 2013 Lean Users Conference, shares some of its success stories and reveals his early hopes for next year’s event.

food & drink: 298 Country Bird Holdings

Chicken and egg

A leading brand in South Africa with its sights set on growing markets across the continent.


telecoms: 322 Airtel Madagascar

Making waves in Madagascar

Airtel Madagascar is a relative newcomer to this resource rich, ecologically diverse and culturally vibrant island nation but its ability to bring together the economic and social strands that unite the people is making a big difference.

BE Directory 334 4ward-design

Technology advancing industry

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TELECOM A publishing company with telecom challenges of its own finds the ideal solution in a flexible, feature-rich platform from Bicom Systems Laura Espinosa Edited by Will Daynes

Words by

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oving one’s home can be, I’m sure many will agree, a challenging, stressful experience at the best of times. The same holds true for relocating a business, something the Business Excellence team have experienced firsthand recently. As anyone in the publishing business will attest to, there is a lot more to a company like ours than simply a few individuals who produce the features you see before you. Indeed the reality is that a vast amount of infrastructure contributes towards the day-to-day running of our business, the most important of all revolving around communications. Prior to our move we had long been users of a particular telecoms service provider, however in preparation for our relocation the opportunity was taken to look into possible alternative solutions that could support our operations as we entered a new era in our own development. Until recently, we had been using a Hosted Service Provider. We looked into various alternatives from other hosted platforms (some were actually using the Bicom Systems PBXware Cloud Edition for Service Providers as it turns out). We began to explore on-premise hardware options as it appealed to have the flexibility of using different service providers for call traffic. PBXware was billed as a software tool possessing more feature-functionality than perhaps any other product of its kind. We are very happy to say it lives up to its billing in every way. The Move to PBXware Given our new found familiarity with PBXware, we asked Bicom Systems

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for an install and must thank them for extending themselves in every manner. The download burned and installed smoothly. The set-up wizard took thirtyminutes. That may seem long but it was comprehensive and efficient in setting up the Communications platform to a point of basic working. Anyone with any experience with Linux could successfully install and start using PBXware. The best part was that most of our staff couldn’t even tell the system had changed. While they may have noticed faster connections or clearer calls, there was no training or learning curve involved. We did not lose any days or even hours acquainting ourselves and ‘figuring out’ the new system. Desk phones were up and running quickly so calls were not lost. We were very pleased with the smooth transition process and impressed with the short amount of time it took. More Feature-Functionality Than Ever Before From the day we installed PBXware we began noticing and appreciating its features and tools. Going into each of those useful features would fill far too many pages, but we will highlight our two favorites here. PBXware’s Least-Cost Routing is truly phenomenal. This is something we do use frequently with calls to obscure locations. We have enjoyed a significant drop in expenditures on those calls. While most companies boast low connection costs and rates, it is not often that those claims hold true. On the contrary with PBXware, the rates are impressively low. Being able to use Bicom Systems’ SIP Trunks has been great.

Another favorite feature is the extreme flexibility of this platform. Bicom Systems is willing to customize and create a bestfit solution for the price of off-the-shelf. The fact that we can now control this customized platform on our own is truly amazing. That kind of flexibility makes PBXware stand out from the competition.

“Bicom Systems is willing to customize and create a best-fit solution for the price of off-the-shelf � 16 |

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We cannot imagine being restricted by another platform ever again. While we have not yet fully taken advantage of the desktop application and softphone gloCOM, it does not take long to realize what a powerful and indispensable tool it is. Some of our employees have paired gloCOM with their desktop phones and are now able to control their phones from their desktop and enjoy features like being able to copy and paste a phone number from an excel sheet into gloCOM. We look forward to continuing to explore gloCOM and its enhancements to the desktop phone as well as its softphone features.


There are many other features we could discuss: conferencing, call recording and monitoring, enhanced ACD queues, routing, FoIP, instant messaging, LCR, and PSTN/VoIP trunks, to name a few. The “Advanced” section of each feature topic seems to deal with every scenario imaginable. Of course ‘every’ would be a little too far-fetched, but reading the sales literature they do have an answer to any and every missing feature! Aside from the obvious benefits of these features and capabilities, we have noticed subtle changes in the office environment: more time to spend on customers or sales, better communication with our end users, even less stress in the workplace. PBXware and gloCOM, with their efficiency and ease-of-use, deserve some of the credit. We are looking forward to growing and evolving with PBXware and Bicom Systems at our side and hope service providers around the world would do well to consider providing their own customers with such a value add. More on Bicom Systems With the migration of our communications infrastructure complete and our expectations of Bicom Systems more than fulfilled it seems only fitting to take a closer look at how this particular business got to where it is today. “About five years ago we asked ourselves a very important question; do we specialize in one part of the communications systems business or do we cover the whole breadth? We chose the harder, slower option of covering

gloCOM interface Desktop and mobile

Web User Self Care This features management and administration of: Enhanced Services and CDR (Call Details Records)

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the whole range of products,” explains the man responsible for Bicom Systems’ worldwide sales, Stephen Wingfield. “We did this for several reasons,” Wingfield continues. “Most of our core was the same technology and the investment is there to be reused, what you learn from different onsite installs can be fed into the Hosted Edition and likewise. However, the single greatest driving factor is our belief that each reseller relationship is our most valuable asset and that in communications, you simply do not know what your next sale wants.” Available in Business, Call Center, and Multi-Tenant editions, PBXware has been deployed to thousands of organizations from small businesses to non-profit organizations to governments to enterprises and service providers. Increasingly, service providers are incumbents as well as challengers as Bicom Systems SWITCHware supports the growing number of large selfhealing clusters. “We work very hard with resellers

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“With PBXware if we don’t have it, we will build it to your exact need” at pre-sales,” Wingfield states, “often providing the quotes and the materials at source so they can be adapted to local language & conditions. Often though, what wins the bid is to provide a custom solution for the cost of off-the-shelf. The argument can be devastating when up against traditional vendors. Why pay large amounts and possibly still not have exactly what you need. With PBXware if we don’t have it, we will build it to your exact need.” This sounds tall at first but one of the things that we appreciated most about PBXware is its Open Source Flexibility and the way that flexibility is in the DNA, not just of the product, but the company. Built on Asterisk, PBXware was the world’s first Professional Turnkey Communications System to use open source. “A few times we considered whether to open up and create ‘another’ Open Source Project. However we never did. We stuck with the notions of turnkey and the commercial guarantee to work. It’s paid off well. Others came and went, we’re still investing,” Wingfield adds. That turnkey principal has been taken by Bicom Systems in two directions. One is for the service provider. With their TELCOware product, a provisioning system allows the delivery of a Turnkey Phone Company. The other direction of the turnkey principle is in Unified Communications.


gloCOM is the desktop application that brings together online chat, video, presence, parking, faxing and more. “gloCOM is a very major play for us,” Wingfield elaborates. “For service providers offering the hosted model it deals with their two biggest issues, stickiness & churn!” As before what seemed like an almost extravagant claim, was justified with what was clearly a very deep knowledge and far-sighted approach by the company. Where many service providers constantly have to lower their bundle costs just to keep customers, Bicom Systems sees a very genuine alternative business model. In the near future gloCOM will be going mobile. Not as just another SIP client that scarcely works but to treat smartphones as an equal part of the switch. Whether you are at your desk or out and about you can be seen and you can see your colleagues and interact with the same efficiency. For the service provider this means an integrated offer to customers, not just of ‘the mobile

“Our individual journey with PBXware and Bicom System’s support team has been exceptional” transport’, but the whole solution. More value, but significantly, a customer cannot just disassemble all of their IVRs, queues, desktop and mobile applications because a competitor is offering half a cent less to call grandmother on the weekend. The service providers that take this space first will be in a far less pregnable position going forward. Our individual journey with PBXware and Bicom System’s support team has been exceptional, with a painless migration of our entire infrastructure and great support from the Bicom team throughout the process. Over the coming months we will revisit this subject and look at how Bicom Systems is helping others, particularly service providers like our readership.

About Bicom Systems Since 2003 Bicom Systems has been researching and integrating innovative Open Source Telephony Projects to commercialize by unifying with its suite of Telecoms Management Softwares. In September 2004 Bicom Systems launched its PBXware software and became the first company to deliver an Open Standards Turnkey Telephony System. The concept of “Professional Open Standards Telephony” was born. By unifying the best of open standards telephony and its own proprietary software Bicom Systems provides SMBs, Enterprises and Governments worldwide with turnkey solutions that take account of clients’ exact needs within a very cost-effective framework. This mix takes the best of royalty-free softwares, vibrant open source communities, available custom development backed up by accountable, professional support services brought together with commercially coded Management Tools. Warranted and supported - a safe choice for all organisations.

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Professional servi genuinely global, fle

Two key reasons why professional se Words by

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ices – thrive in a exible market space

ervices companies need the right ERP

ct Software

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he professional services landscape is changing – and fast. Professional services firms are embracing the opportunity to tackle new markets, finding economies of scale in larger operations that align well with international clients. However, with increased complexity comes greater difficulty in managing the business effectively. Expansion must not come at the cost of efficiency and responsiveness. As a result of this, it’s clear that the human shape of these organizations is also changing significantly.

Key trend 1: Internationalization Whilst small professional services firms remain in the majority, many of the businesses that dominate the sector have successfully realized growth in volume and complexity through geographical expansion. Whether organically or through M&A, they have successfully sought out new opportunities abroad and committed to creating genuine in-country presence overseas. Diversity as a defense mechanism To have the best chance of surviving into the medium to long term, diversification can be an important part of the corporate strategy – not just in terms of the services and expertise that you’re able to offer, but with respect to physical location as well. With every country experiencing problems of some kind, not to mention the introduction of new measures and regulation to try and repair the damage, spreading an operation across borders can be an effective way to manage the risk

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and uncertainty associated with any one region or set of evolving legislation. Fertile ground for M&A In the period following 2008, most western economies have seen a significant drop in demand for consultancy and other professional services. As belts tightened, the appetite for hiring external experts for major projects had to be decreased. Handle it in-house, wait or forget. While successful services companies changed their priorities and business models to adapt to the changing environment, many either didn’t survive this drop in demand, or were led into significant downsizing. This in turn provided new opportunities for the stronger businesses. Healthy companies with cash in the bank or continuing access to finance could put M&A firmly on their strategy radar. Absorbing or joining other businesses provided an effective route for companies to achieve international growth, strengthening their


“To have the best chance of surviving into the medium to long term, diversification can be an important part of the corporate strategy” position by spreading potential risk over multiple markets. International reputation a valuable asset Firms that can source the investment needed to achieve this expansion often find an immediate advantage in tendering for work against smaller domestic companies. The prestige associated with running an international operation can be a key differentiator in competing for work with local only companies, particularly if customers have international ambitions of their own. Green shoots sprouting from the ashes In addition to the new opportunities that are appearing as Europe evolves out of the crisis, the rest of the world also offers niches for services companies willing and able to offer services overseas. The BRIC countries, for example, are showing a thirst for ‘Western’ knowledge. Domestic enterprises are luring companies in to benefit from their experience as they look to capitalize on new markets filled with expanding businesses. German car manufacturers starting up joint ventures with Chinese automotive companies is one example, the learnings of a mature multinational the key to enabling these local operations to continue their impressive growth curves.

Both parties benefit with such an approach, the western company able to gain valuable penetration in a new sector. The local knowledge gives them a head start in overcoming the challenges associated with breaking new ground, whether economic, social or cultural. They get an open door to the economies actually achieving and maintaining growth. Emerging markets showing signs of maturity Whereas this was initially only interesting for manufacturing and wholesale businesses, the rapid development of these markets has now made it compelling for services businesses. The relatively young companies who have excelled there are now in need of experienced management, accounting and legal advice. The combination of local presence and international experience from a trusted foreign brand can be a powerful sales tool with prospective clients. And with most of the emerging markets having invested heavily in education over the last decades, why not benefit from highly skilled individuals who are able to deliver excellent quality for a fraction of the cost associated with western professionals.

Key trend 2: Flexibility People today want greater choice than ever before, being able to make the most of their talents and their earning potential,

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“In terms of supporting this change toward greater selfemployment, connectivity and mobile technology is playing a major role” while also having greater control over their work-life balance. Traditional employment models are increasingly seen as outdated and irrelevant. More and more people are turning away from fixed employment to work for themselves. They see themselves as products, uniquely positioned and hyper-specialized, branding their experience against specific corporate issues.

reputation is on the line. Having local skills is no longer essential, it now a realistic option to bring in a genuine specialist from almost anywhere. In line with the benefits of internationalization, a new office in Asia could still benefit from lower local salaries for the majority of employees, with specific expertise shipped in whenever it’s necessary to ensure promises to customers are kept.

Cultural shift It’s become so commonplace that some commentators have suggested a near future where payrolls consisting of 50% fully-contracted employees, and half freelancers. Despite the challenges of managing a workforce with such a large external component, this flexible set up is widely considered to offer benefits for companies of all sizes.

Underpinned by technology In terms of supporting this change toward greater selfemployment, connectivity and mobile technology is playing a major role. As the ease with which telecommunications become available further increases, it’s likely that more than 5 billion people will have access to mobile technology and internet within the next ten years. And not just within the growing collection of mega cities – broadband is coming to the rural communities of the world at pace. A global consciousness, the likes of which has never been seen before, will become a distinct reality. Insight into what the rest of the world is doing, in real time, will become practically taken for granted. And companies will be able to look for both customers, and expertise, almost anywhere.

Cost effective Despite the relatively higher fees demanded by freelance consultants, using contractors allows companies to easily adjust the payroll in line with workload, without compromising the ability to take on and deliver complex assignments. And with their enthusiasm to make their skills count and expand their personal portfolio, the contractor will often work wherever they are required, and with the determination and commitment expected of someone whose personal

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Corporate evolution How this will affect the development of companies has been much discussed.


Many have suggested the emergence of mega-companies, conglomerates that extend their reach on a genuinely global scale. They will likely expand their portfolios to include presence in wide, diverse ranges of products and services, using their financial might and brand power to reach out to and then attract new customers. At the same time, a further explosion of microentrepreneurs will likely be a key component in these gigantic corporate engines. They will target niche skills, using powerful interconnectivity and global communications to allow them to service practically any client anywhere. In ‘Age of hyper specialization’ MIT’s Tom Malone suggests something similar - super specialized freelancers doing fractions of existing jobs on a global scale. Given how many work floors now have freelancers in the mix, it seems we’re already well on the way to realizing this scenario. Indeed, flexible workforces are already a significant aspect of many smaller services firms experiencing insecurity

in the current financial climate. In harder times, working with outsourcers, subcontractors and freelancers equals ‘no projects, no costs’. Significant flexible layers in companies will become more and more common, making it easier to run a ‘skeleton crew’ when business is slow. Personal marketing easier with ‘The human cloud’ MIT have referred to use of the ‘human cloud’ by all kinds of services businesses, platforms built by intermediaries connecting freelance professionals with corporate jobs. In addition to simplifying job-hunting for self-employed specialists, they facilitate human resources and recruitment activities for companies, often providing additional services for tracking and then managing performance and financial transactions. If this trend continues, it could soon be that company HQs regularly consist merely of management and some specialized professionals – the rest of the company’s

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“The future seems to hold the promise of increased international expansion” activities taken care of by people who are brought in as and when it’s necessary.

The importance of the right IT infrastructure The future seems to hold the promise of increased international expansion, supported at least in part by the adoption of more flexible workforces. Global enterprises will offer high quality services, leveraging empowering digital communication to blend external niche expertise with a core of more traditional employees. That said, whatever the chances awaiting these businesses, it’s also clear that these changes will bring significant new operational pressures – for both management and IT. Get ready Any professional service business looking to continue its development and achieve growth will likely have these two areas on their strategic radar. With that in mind, what should they be doing to ensure they are ready to profit from these trends when relevant opportunities appear? How can you prepare your company for a journey in either or both of these directions? How do you compete successfully against the other companies that leverage these trends successfully?

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Choose software with international support Working in an international environment will ask a great deal from your company, both strategically and operationally. HR alone, with employees in different countries, from different backgrounds and speaking different languages will be a major challenge. And then there’s the financial side – cross-border data management and reporting, with overall co-ordination of financial results to follow at the top level. Accounts payable and receivable may need to be managed in multi-currency, with transactions not always directly related to the country they’re realized in. How will you handle sending a Spanish consultant to a project in the UK? Invest in ERP that can support multi language, multi legislation and manage central master data from across multiple subsidiaries and you’ll be off to a great start. Choose software with full integration Project management and administration will also need to work smoothly with the ERP system, integrated with financials to ensure minimum information leakage and maximum insight across the company. Strong control mechanisms will need to

“The future of your company may well rest in hands outside your country” be in place, as will powerful solutions for planning and resource management to ensure you know who’s doing what, when. It will help ensure people are optimally deployed on the projects that are underway, and that it’s clear who is available for the ones sitting in the pipe. Maybe you’ve got a consultant in France looking for work, and a project in Africa short on capacity. You need to be able to put 2 and 2 together to ensure efficient profitable use of resources. Internationalization and flexibility – perhaps the two key themes shaping the future of professional services operations. The future of your company may well rest in hands outside your country, hands that perhaps aren’t even on your direct payroll. Taking time to ensure the right IT structure is in place will enable businesses to benefit from the exciting opportunities these changes in the market space will certainly offer.

About the author Exact develop ERP, CRM, HR, financial and industry-specific business software for more than 100,000 customers around the world. Based in the Netherlands, where they remain market leader in the SMB segment, their on-premise, hosted and cloud solutions focus primarily on manufacturing, wholesale & distribution, professional services and accountancy companies. With offices across Europe, Asia, Australia and America, their internationally oriented products combine with local support to offer real customer value. Read more Exact business insights at:

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Tips on How to Best Manage Offshore Teams Too often, companies think about offshore product development only as a means to cutting costs and accelerating time to market. This short-sightedness can yield poor results without a plan in place Words by: Mush Honda

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Top Ten tips


ore and more organizations are outsourcing software product development but many are hard pressed to know much about managing a team that may be thousands of miles away on another continent. Too often, companies think about offshore product development (OPD) only as a means to cutting costs and accelerating time to market. Such an approach can produce poor results with your projects if you don’t take into account certain issues like cultural barriers, metrics and workflows. The smart strategy is to focus on the needs and skills of the team and to implement procedures that will help manage them better. Your standard bottom-line goals -- cutting costs and accelerating time to market -- will take care of themselves if you can follow these ten tips for managing OPD. >>>

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manage offshore teams Roadmap 10 Establish for Refinements

To ensure that the offshore team continues to increase its value to the project team, it is important to leverage the daily, weekly and monthly reports/metrics to identify areas of improvement/streamlining for testing processes and test strategies. These refinements should be prioritized and scheduled for implementation by the team, and tracked for progress along with other project deliverables.

Don’t get 9 hung up on cost

The lowest rates don’t always equate to the lowest total cost of the relationship and ownership of the end product. More importantly, the lowest rate doesn’t necessarily solve the business challenges you are encountering in this everchanging world. The offshore team is a partner and should become an extension to the project team. Many OPD projects fail because they were railroaded by a cost saving agenda.

8 Don’t Forget Metrics

Offshore team deliverables and activities should be gauged with quantifiable metrics such as timeline delays, actual-to-estimated effort, QA-to-production defect ratios, and so on. Metrics should be established under at least three categories: timelines, productivity, and quality. These metrics should be established at the beginning of the project, and tracked either by release or on a monthly basis.

Root Cause 7 Use Analysis on defects

Root cause analysis (RCA) metrics on defects can be leveraged to improve software quality

by fixing the ineffective areas of the software development process such as requirements, design, code verification, unit testing, test planning, and QA testing. The end result is drastic improvements in the overall quality of the software, and that means happy customers and lower development costs.

Process 6 Establish Workflows

A clearly defined testing activity workflow should be established and reviewed with the offshore team, to ensure that all team activities are synchronized. Documenting a process workflow allows the team to streamline, validate and verify expected activities that could impact the project delivery timelines. It can also have the advantage of automating redundant tasks and ensuring that uncompleted tasks are followed up, not overlooked.

Detailed 5 Track Onshore/Offshore

Planning and Tasks

To ensure that the offshore team understands the assigned tasks and is progressing as expected, it is very important to have a milestone-driven WBS (Work Breakdown Structure) that identifies the effort associated with each task, and identifies the timeline of when the tasks need to be completed. This level of detail ensures that everyone is clear on their assignments, and that any delays (and corresponding affects) can be identified as early as possible, so that a mitigation plan can be implemented if need be. Team progress on assignments and activities should be followed up with daily, weekly and monthly reporting, leveraging defined templates where possible. BE Monthly

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Top Ten tips Create Strong 4 Communications

The distance between remote teams working on the same project can be eliminated by use of communication tools such as IMs, VOIP-based phone calls, online meeting tools and other electronic mediums. However, communication is only as good as the information provided. All relevant documentation and domain knowledge must be continuously shared with members of the offshore team.

Clearly Define Roles 3 and Responsibilities

To ensure that all members of the project team understand their expected tasks, it is vital to establish clear roles and corresponding responsibilities early on. Create a collaborative, pyramid-style team structure for the offshore team, so that the key people responsible for daily communication with the rest of the project team are identified, along with an obvious reporting hierarchy.

Language 2 Eliminate Barriers

Working with remote teams on different continents/countries requires strong and effective communication. It’s critical for the key contacts between the offshore team and the project team to familiarize themselves with the pronunciation and grammatical styles of each other, while also ensuring that the offshore team obtains International English certifications, such as TOEFL. In addition, when possible, I recommend that the team leaders from the vendor side and client side visit each other’s offices to understand the culture of the companies and to instill a sense of partnership.

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1 Know Your Team

It’s important to address people correctly. People respond well when somebody knows how to spell and pronounce their name. To infuse a sense of team spirit, attach a face to the person who is communicating via e-mail, phone or IM. Have a kick-off meeting for a project team, where each person introduces himself or herself with some basic personal information such as a hobby or interest, to help establish a ‘human-side’ to the offshore team. While meeting in person might not be a possibility or even desirable, given that we are talking here about learning to create global team-working, the liberal use of video conferencing can really improve the relationship with remote teams – and people need to get used to it.

In summary

Establishing and managing an offshore team is a complex challenge. Cultural differences, time zone variations and lack of face-to-face time contribute to the intricate nature of the offshore team model. In addition, some companies focus too much on cost-cutting objectives. To successfully manage an offshore test team, a company needs to focus on people, processes and communications.

About the Author Mush Honda is QA Director at KMS Technology, a provider of IT services across the software development lifecycle with offices in Atlanta, GA and Ho Chi Minh City, Vietnam. KMS services include application management, testing, support, professional services and staff augmentation.

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A brave new

world of work

Companies face losing customers and revenue unless they equip changing workforces with the information sharing tools they need to take them out of the digital dark ages Words by

John O’Hanlon

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sector in particular seems to have n a very short space of time – less spent millions on IT systems and then than a decade really – technology millions more on setting up firewalls has changed the way people live their lives. It has also changed and restrictions to access that limit their the way they work. It was in 2008 that data geographically and departmentally Kevin Roberts, the worldwide CEO of within the organisation. The fact is that Saatchi & Saatchi, told me how his the real excitement of the digital age iPhone freed him from the constraints has been dampened by the entrenched of geography, enabling him to run the conservatism of big businesses – tankers business as effectively from his home in that are turning frustratingly slowly. New Zealand as from his office in New The problem is not just that workers York or Lancashire, where he happened to are not allowed to use personal devices be at the time. Distinctions between work for work; managers think their job is and leisure time had all but disappeared to manage, and that to manage is to from him – the technology control. Despite all the was beginning to enable a talk of empowerment different approach to work people management “It is as if we and to the very structure is seen as directing of the organisation. the behaviour of were fish, which That was five years employees, not freeing after aeons ago, since when platforms them up to pursue the for accessing information ultimate goals of the suddenly became have progressed beyond business. To do that aware of water!” what was imaginable even would mean allowing then. In another five years access to information the capability and reach of – allowing them to knowledge storage and capture systems become iWorkers, a word which (no brand will undoubtedly progress even faster. connotations here) could be defined as The futurologist James Gleick last month intelligent workers, intuitive workers, came up as he can be relied on to do, inspired workers: reliable and skilled with an elegant insight when he said: “It employees who have 24/7 access to all is as if we were fish, which after aeons the necessary information to meet the suddenly became aware of water!” Just needs of the business and its clients. imagine what will be available to us by According to new research 2018 – and imagine is all we can do. commissioned by Ricoh Europe only Roberts and Gleick are far from being four percent of business leaders would the only people who have been excited currently describe the majority of their by the possibilities linking technology staff as iWorkers. This is based on and life, of which business is just a responses from 735 senior business and part. But it seems to have been a hard IT decision makers across eight vertical sell at the corporate level. The public sectors, education, legal, utilities/

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energy, healthcare, public sector, retail, manufacturing and financial services sectors in the UK, Ireland, France, Germany, Spain, Italy, Netherlands, Belgium, the Nordics (Sweden, Finland, Norway and Denmark), Switzerland and Russia. Things can’t stay that way. Ineffective information sharing is having an enormous impact on the effectiveness of enterprises with lost revenues, lost customers and a lack of customer insight, in that order, identified as attributable to information bottlenecks. The people questioned predict significant change over the next five years, with 37 percent believing that by 2018 the majority of their workforce will be iWorkers. The study also shows there are challenges to overcome prior to increasing

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“The population of iWorkers is forecast to rise significantly: the question is, are businesses ready?” the presence of the iWorker in European businesses. While almost three quarters are investing in new technologies to improve employee productivity inside and outside of the office, the majority highlight the need to review existing processes so that employees can access business critical information more easily. Over 70 percent believe the inability to access documents from a mobile device is holding their business back, while twothirds say that unsuitable search functions are preventing employees from finding the information they need to help the business move forward. In addition 62 percent say that disjointed information silos are hindering the sharing of information. David Mills, COO at Ricoh Europe says: “The population of iWorkers is forecast to rise significantly: the question is, are businesses ready? Business leaders are more aware than ever before of the need to further optimise the way they use technology and eliminate the information silos occurring across the business. There is an urgency to review and change traditional ways of working and keep up with technology-led change, which will continue to bring new challenges.” Ricoh is a good example of a company that has reinvented itself to survive. Known as a supplier of equipment like copiers and fax machines – not so long ago key


vehicles for information sharing – it had to transition from its old manufacturing mindset and become a service company. David Mills modestly describes himself as a born again photocopier salesman but he is in reality as much a futurist as James Gleick. “The next five years are as much an opportunity for Ricoh as for our clients – we are in the fortunate position of having a soft landing ahead of us.” By this he means that the company is still actually growing on the hardware side though that may not be the case by 2018. As long ago as the 1980s Ricoh was confident that the future of the workplace was digital and set about re-engineering itself to focus on the technology that would support this vision, such as OCR, introduced in 1985. Now the company’s technology and consultancy is already helping many businesses across the globe to receive, store, search, index, digitise and extract monetary value from critical information, unlocking the power of ‘Big Data’ by making it easier to manage and understand. It is this topic and the issues surrounding it that formed the recent research report examining the next important questions in the ‘Big Data’ challenge for European businesses. As Mills puts it: “Now is the time for organisations across Europe to optimise critical business and document processes to prepare more effectively for the future. With greater innovations and technology led-change on the way, the establishment of the iWorker as a more informed workforce is essential to realising business growth, improved business agility, efficiency, productivity and responsiveness to client needs.” What this research confirms is that the

“The establishment of the iWorker as a more informed workforce is essential to realising business growth” majority of businesses are still in the digital dark ages. They are in no state to drive digital transformation. It’s certain that a lot more technology-led change is on the way. Businesses will need to be able to adapt quickly to new client demands, economic conditions and to maintain a competitive advantage. To meet the challenges posed by this change, IT management should no longer be sidelined as a supporting role: instead CIOs should be given their head to influence business models, client interaction and employee productivity. This should start with business critical processes - the number one ranked activity to impact business growth, says David Mills. “CIOs can combine technology expertise with commercial acumen to review, and change the organisation’s traditional ways of working. In turn they will gain much more than cost savings. The business will benefit from being able to move forward with a more productive and agile working model where employee knowledge sharing is enhanced and they are more responsive to client needs. In the longer term, with these strong foundations in place, the CIO can focus on the core business areas and successfully lead the organisation into a brighter digital future.” The likes of Kevin Roberts may see a bit further than this, but it would be a start.

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Sizin & settin

Markets change looki

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ng a sales force ng its direction

e, competitors react and your sales force can easily be left ing at yesterday’s needs: sizing and allocation are the key Words by

Markus Christen & Tommy Arvinell

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too small sales force is a loss of income and a too large or incorrectly allocated one is a waste of resources. Many companies use their sales managers’ gut feelings to determine how many sales people they should have and how they should be allocated. This means that one of the most important decisions for growth and profitability is based on the hidden assumptions of a few people. A company we recently worked with discovered they were spending too much resources on segments with little potential and too little on segments with great potential – they were wasting resources in some markets while missing opportunities in others. A sizing and deployment analysis answers the questions: • H ow large should the sales organization be? • How are resources best allocated across geographies, segments and products? With the current dominance of financial management in most companies, sales executives need to learn to speak the language of finance – they need to be able to present fact-based evidence to effectively argue for and secure the resources necessary to capture the potential of their markets. That evidence has come within

easier reach as companies have much more data on markets, costs and sales force activities than they had just a few years ago. Today, most companies have a CRM system of some sort. The data in them are of varying quality but the quality gaps can usually be bridged fairly easily. We propose to use data on markets and profitability to find the best number and allocation of people, and if any assumptions have to be made, to make them explicit and clear so that they can be valued and so that any risks associated with them can be managed. Experienced sales managers’ instincts are valuable and should be used, but assumptions should be clear and used in a structured approach, as no single person can know all markets and customers and then balance that versus revenue and profit potential. Traditional approaches to sales force sizing and allocation The budget approach is based on the faulty argument that “we have as many sales people as we can afford”. This is counterproductive since sales spending should not be seen as a cost but an investment that provides a return. A sales manager in a company that uses the budget approach will likely need convincing arguments to gain support to change the sale force size, as budget levels tend to become anchored and stick over time.

“Sales executives need to learn to speak the language of finance – they need to be able to present fact-based evidence to effectively argue for and secure the resources necessary to capture the potential of their markets” 42 |

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“The most commonly used approach is based on historical revenue and margins� The most commonly used approach is based on historical revenue and margins. A sales person is assigned an estimated target revenue or profitability and sales resources are allocated to segments and products so that each sales person’s territory meets that target. The strength of the approach is its simplicity. Simplicity is valuable as it makes it easier for people to understand and to motivate changes. But revenue and profitability are historical while sales resources should be invested where the future potential is. Therefore this approach is best in markets and for product and service offerings that change very little. A similar approach is to replace historical revenue and profitability with potential revenue and margins. This approach can be useful as it is forwardlooking and relatively simple. It does however not account for the threshold effect and decreasing return on sales (see below), and it requires almost as much data as the more comprehensive return on sales optimization. With a work build-up approach, companies estimate the amount of work needed to cover targeted segments and add that work up to get the number of people required. It is a good as a complement to other approaches and for new markets where potential cannot be estimated.

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Scientific approaches to sales force sizing and allocation • Optimizing return on sales Return on sales optimization (ROS) utilizes basic optimization techniques to find the size and allocation of the sales force that provides the highest profit for the company. The return on sales optimization approach has been used for decades in industries with large sales forces like healthcare and pharma. The sales force however is a cost centre but also a means for revenue generation, and since ROS optimizes profits, as opposed to sales cost, it is a powerful tool to gain insights into profit and revenue management. The profit optimization is based on estimates of potential sales through an estimation of the sales response curve, data on segment and product profitability, and costs for sales resources. A strength of ROS is that it takes the threshold effect and the decreasing return on sales into account. The threshold effect is a consequence markets and customers requiring a certain amount of sales resources to start generating significant sales. There is no point for a sales rep to spend time to identify a customer’s needs if he does do not have time to finish the deal, and as the word spreads, within the customers’ organizations or between customers in a segment, companies typically spend less sales resources for additional euro of sales. Similarly, as the market potential becomes exhausted it takes an increasing amount of sales resources to secure each additional euro of sales, making it nearly impossible to capture 100 percent share of any market. Not accounting for these effects may lead to incorrect conclusions,

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especially for large changes in sales force size or allocation. The weakness of ROS is that it requires estimates of return on sales that sales managers are not used to making explicit. They will feel uncomfortable doing so, at least the first time around, and there will be errors in their estimates. Therefore a ROS exercise should be iterative, to allow for testing and scenarios, and it should be used regularly to enable a feedback and learning process based on actual outcomes. An additional benefit of ROS is that it can generate not only sizing and allocation insights but also sales and call plans.

“A strength of ROS is that it takes the threshold effect and the decreasing return on sales into account”


“With the most efficient sales units identified, a company can identify best practices within the best-performing units and leverage those best practices to make the other sales units as efficient.” • Efficient frontier benchmarking Efficient frontier benchmarking (EFB), as a tool for operational improvement used to benchmark and improve operational efficiency in various industries, has been proven effective for sales force sizing and allocation. It has been used in industries like for example business equipment manufacturing and production equipment manufacturing. It utilizes the statistical techniques regressions and linear programming to determine the optimal size and allocation of the sales force. It can effectively account for differences in markets, competitive situation and market potential, and identify not only the optimal

size and allocation but also the efficiency frontier across a company’s sales units. Therefore it has the valuable additional benefit of providing data on the relative efficiency of the internal sales units. With the most efficient sales units identified, a company can identify best practices within the best-performing units and leverage those best practices to make the other sales units as efficient. The profitability impact of making all sales units as efficient as the most efficient one is likely as large as that of achieving the optimal size and allocation of the sales force. To be effective, EFB requires a number (typically more than 10) of fairly homogenous sales

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districts, some knowledge of competitive activity, and data on sales, sales costs and sales activities that is readily available in most companies. • Considerations for implementation The scientific approaches ensure that the decision of sales force size and allocation is based on facts, that assumptions are made explicit and can be tested, and that the decision will have the highest quality possible. However as no approach is perfect it is advisable to use a combination of approaches to balance their respective strengths and weaknesses. For example a scientific approach combined with a simpler approach as a reality check. Balance number of sales representatives with number of people in sales supporting roles A sales person needs support to be effective. This is especially true in complex industrial sales where many companies have specialized roles for example for technical sales and pre-sales engineering. When managers change the number of sales representatives they also need to scale the number of people in supporting roles accordingly. Take caution as the optimal ratio of sales to sales support people can vary across segments depending on how customers buy.

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Where in the business cycle are you? Market potential is a key piece of information in several of the sizing approaches. The problem is that potential can vary greatly over the business cycle. To determine the optimal size of a sales force size based on potential at the top of the business cycle can greatly overestimate the optimal size and profit potential. Sales resources are expensive to attract and train and having to let go of them due to an error in estimated potential can be a costly mistake. This can vary depending on the economics of the business but as a conservative rule of thumb we recommend companies to size their sales forces using a potential at approximately 25 percent from the bottom level towards the top level of the business cycle. What is your time perspective? The optimal size of the sales force depends on which time perspective you adopt. This is simply because spending on sales resources is an investment that takes time to bear fruit – new or reallocated sales people will need time to develop business with their new customers and they will need time to learn. During that time they will not be as effective as the current sales people are, but the company will have the full cost (except bonuses) from day one. Manage risk A company we recently worked with discovered they were targeting too many new segments, running the risk of not gaining critical mass in any of them, and facing a great risk if their sales


“The most important consideration is probably the competencies of the current people” expectations were not met. There are great costs and risks involved in a large change in sales force size and allocation. The scientific approaches to sales force sizing and allocation can provide powerful insights with potential to greatly improve the performance of a company. The conclusions are however based on data that may contain errors. No market data is perfect, markets can change, competitors can react and expected returns may not materialize. Companies with long sales cycles need to take extra care, as they will need to spend more before they see the results of the changes. The best way to mitigate these

risks is to gradually transition towards the optimal size and allocation while collecting new data and reiterating the sizing and allocation exercise to confirm (or contradict) earlier results. Plan the transition carefully Besides risk, the most important consideration is probably the competencies of the current people, cost and time to train them, and availability of people to recruit. Managers need to have a structured approach to define the competencies required to sell and identify any gaps versus the competencies of their current or newly recruited sales people. Competence gaps can be for example lack of product or industry expertise, or lack of consultative selling skills. Managers also need to make sure sales people do not end up spending too much time on travelling. These considerations limit how quickly the targeted size and allocation can be achieved.

About the authors Markus Christen is Associate Professor of Marketing at INSEAD, the top-ranked business school in Paris, Singapore and Abu Dhabi. His work has appeared in Marketing Science, the Journal of Marketing Research, the Journal of Marketing, Management Science, the Harvard Business Review, and the Financial Times. Professor Christen consults with corporations and teaches courses on marketing and pricing strategy in INSEAD’s top-ranked MBA programs and in various executive seminars in Europe and Asia. He has also worked in industry for several years, as a production engineer, consultant and marketing manager. Tommy Arvinell is founding Partner of Wallhof Consulting, a management consultancy focusing on commercial strategy and operations. For 15 years, Tommy has worked with industrial and technology clients in Europe, Asia and the USA on strategy, commercial effectiveness and organization effectiveness. He holds an M.B.A. from INSEAD and a M.Sc. in Industrial Engineering and Management from Linköping University.

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Focus is

If It’s Right

How having a foc create consid Words by

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Good ‌

s the Focus

cused strategy can derable value

e F. Brown, Jr.

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ome years ago, I worked with a major equipment supplier whose products were relevant to virtually every vertical market. The president of this company had decided to define a new sales model, motivated by his observation that “As I spent time in the market, I learned that we had customers everywhere, but that we weren’t special to customers anywhere”. That’s a common issue for firms with broadly relevant products and services, and there are always good reasons and strong advocates for almost every possible opportunity to make a sale to a customer. The president of the firm mentioned above had worked with his sales team and defined a set of priority markets on which he wanted to focus. His questions were “How do we do that?” and “What actions do we have to take so that customers see our focus and reward it by seeing us as ‘special’, hopefully elevating us to preferred supplier position?” As we began to work with this organization on ways to achieve the goals they had defined, we first began to work to understand the selected markets on which they planned to focus. That yielded a surprising discovery. While all of these markets had scale, they were by and large mature markets, growing slowly (or not at all), and ones that offered margins that were minimal (and in some cases, non-existent). There were other vertical

markets that were far more attractive in terms of growth and profit potential, albeit few with the scale that seemed to dominate the initial set of selections. There was another issue with their choices. Reflecting the maturity of these markets, the customers within them largely selected products from the Good-Better position on the GoodBetter-Best scale, and with the breadth of competitive offerings available for GoodBetter products, typically made purchase decisions on the basis of price. This firm and its distributors often wailed about the “Three bids and a buy” mentality of these customers, and about failing to gain any traction with their innovations and upgraded offerings. In fact, this firm’s sweet spot clearly involved products in the Better-Best range, where it technology advantages had established a leadership position and a few instances in which its offerings were unique in the industry. The first step in achieving focus is making sure the focus is the right one. The case study above defines the two dimensions which I emphasize in evaluating choices for focus. First, it is necessary to determine if the potential market has the right characteristics – sufficient scale, reasonable growth, and decent profit potential. Without them, in some reasonable combination, you can be successful in achieving a focused approach to markets and customers, but

“First, it is necessary to determine if the potential market has the right characteristics – sufficient scale, reasonable growth, and decent profit potential” 50 |

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fail to realize rewards from doing so. When someone advocates a focus on a market that doesn’t pass that test of reasonableness (and there will always be such advocates), ask them to finish a presentation to the Board of Directors that starts with a slide saying “We are dominating our targeted markets, but unfortunately, those markets are small, shrinking, and unprofitable”. That deck will never appear, and you can move on to look at markets that have attractive scale, growth, and profit potential. But that is not the only thing to consider in evaluating markets. As the example above suggested, it is very important to determine how well your firm’s competencies and position fit with the factors important to that market. In the case study, the fit was poor. Expertise in producing high-value Better-Best products was a poor fit for markets that were looking for highly-efficient, low-cost producers of rather standard Good-Better products. That was a serious problem for the firm in the case study. And while matching well to the factors that drive customers’ purchase decisions is critical, there are other business drivers of similar importance. Another firm with which I worked was considering targeting an industry that was moving much of its

“It is very important to determine how well your firm’s competencies and position fit with the factors important to that market” 52 |

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R&D and design work to Asia, mostly to India and China, a region in which that firm had few resources and almost none that specialized in development or design. At minimum, that lack of fit ensured that the time frame for achieving success would be medium to long term, at best, and that a focus on the firms in that industry would require quite a bit of catch up. A similar consideration involves the existing relationships with firms across candidate markets. If you have strong existing relationships, that provides a head start for strategies involving focus. If not, it is certain that any strategy involving focus (or other elements) will take some time to achieve customer penetration and will require supplanting the existing major suppliers. Long term strategies can be good, but only if they are recognized as long term and the firm selecting them has the appetite and resources to stay the course. Still another firm with which I’ve worked had developed some strong competencies in energy efficiency in its products, a result of its own focus on sustainability. As it considered target markets on which to focus, it realized that some target markets had a similar business driver, and that their expertise would play well in those segments. A match in such business drivers is another good reason for considering a market for focus. A contrary example involved a firm that was considering a number of markets that were highly regulated. It recognized, fortunately early on, that it had no expertise or experience in working in a highly regulated industry, a factor that


militated against selecting such targets for focus despite some other attractive characteristics of those segments. It is thus both the quality of the prospect market in terms of scale, growth, and profitability and the fit of the market with the company that determines if the focus is right. And making a careful assessment as to the quality of the focus strategy is a key first step in the process, one that becomes more and more obvious as some of the ideas about how to implement a strategy of focus, as described below, enter into the equation. Focus requires choices and investment. And it’s critical to remember that a decision to focus means that there will be some markets and customers on which the firm has to know and act from the perspective that “this isn’t our focus”. The latter is among the hardest elements of implementing a focus strategy, but unless that happens, the strategy is hollow and very unlikely to succeed. After helping the firm in the case study above make a mid-course correction in its selection of markets on which to focus, attention was turned to the original question, to define the steps required to “make focus real”. The insights that emerged from that process suggested three key themes that must be addressed and that can help other firms that are looking at strategies involving market focus. The first question that must be asked is “What are the things that customers in the selected markets care about, the things that they will notice if we focus on them and do them well, the things that they will say distinguishes us as a supplier?” The

“The most frequent failing I’ve seen in getting to an answer to this question involves firms that think they know the answer” examples given above suggest possibilities – expertise in producing products at the right points along the Good-Better-Best spectrum, insights into managing in a regulated environment, expertise in energy efficiency, the right resources in key country markets, etc. Almost every element of go-to-market strategy can potentially enter into the equation here – products, services, pricing, channels, global presence, etc. – and should be evaluated as part of the process to answer this first question. The most frequent failing I’ve seen in getting to an answer to this question involves firms that think they know the answer. My counsel is that wishing doesn’t make it happen, and far too often, the internal perspectives as to what will matter to customers in the selected industries are more wishes than reality. The real answer to this question must come from the market, from the customers in the industry on which focus is intended. And it takes a very strong, somewhat atypical voice of the customer program to get meaningful answers that contribute to decisions on how to implement a focus strategy. Most voice of the customer programs are retrospective, and emphasize elements of the current transactions between

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“A successful focus strategy will emphasize unmet needs, as opposed to just raising the bar slightly on strategy elements about which customers are largely satisfied” suppliers and customers. A successful focus strategy will be very future focused, requiring insights as to what is keeping customers awake at night, the challenges on their own horizon that might define a supplier success story for the supplier that helps them to address them. A successful focus strategy will emphasize unmet needs, as opposed to just raising the bar slightly on strategy elements about which customers are largely satisfied. It is not only getting customer input, but getting customer input on hard and illdefined questions that allows firms to come up with a winning answer to the key questions outlined above. The second key theme that must be addressed in developing a focus strategy involves the question “Who in our firm must contribute, and how, if we are to succeed”? The firm in the case study had only involved the sales team in its first attempt to select targets for focus (and, to be fair, recognized that some other parts of their organization would have to make changes as the strategy was implemented). But it’s often not the sales team that will have to make the most significant changes in response to the decision made on focus. The examples above again provide illustrations. Had the firm in the case study gone forward with its initial choices, there would have had to be mega-changes in product development (to focus on the Good-Better

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segments) and in manufacturing (to shift the focus to low-cost operations). Had the firm considering an industry shifting key activities to Asia selected that industry as one on which to focus, it would have required building competencies in that region that could make positive contributions to key relationships. For sure, the sales team in both of these firms would have had to make changes, but they alone had no chance of success unless other parts of the organization also made parallel changes. Change is a challenge, and requires very active leadership involvement if it to be successful. My earlier research on the obstacles to successfully implementing changes to a firm’s business model defined the two factors that most frequently stood in the way of successful change management: “Internal resistance to the new business model” and “The implementation process was poorly managed”. Moving to a focus strategy is a major change to most firm’s business model, and these two obstacles will rear their ugly heads and thwart the change unless executive-level leadership gets out in front of them, constantly selling the change and its importance, making sure that the right resources are in place, and underscoring the importance of the change through measurement, review, and rewards. Again, wishing doesn’t make it reality. Strong and ongoing leadership


is required to implement a focus strategy. I note that it’s not just leadership that is required to address this second theme. Very often, the resources in place are not the right resources to deliver what is required to get customers to recognize and reward the firm for the contributions that it makes as part of its focus strategy. At a recent meeting of the Institute for the Study of Business Markets, one speaker addressed the emerging challenges in his industry with the comment that “If you learn that you now have to climb trees, you need to hire some squirrels rather than trying to retrain the horses”. For many firms, a focus strategy requires new competencies. Sometimes it requires new channel partners. Sometimes it requires new suppliers. A critical part of addressing this second theme involves an honest assessment as to whether the mix of squirrels and horses, distributors, suppliers, and other key resources is likely to yield success. The third question which I believe is critical to success with a focus strategy involves competitive response. It is critical to ask the questions “In the segments on which we’ve decided to focus, who are the key competitors? How will they respond to our decision to focus on the customers on whom they are also focused? Why will we win?” Unless the segments your firm

has selected for focus are ones in which you are already the market leader, there are competitors that are doing something right in those segments, firms that will not accept your hopes of gaining share without a response. In my experience, I’ve learned two key lessons about how to think about these questions. First, competitive response and competitive advantage are only meaningful when you successfully put yourselves into the customer’s shoes and look at purchase decisions and supplier relationships from their perspective. In the case study I’ve used in this article, several of the sales team members with

“Very often, the resources in place are not the right resources to deliver what is required to get customers to recognize and reward the firm for the contributions that it makes as part of its focus strategy” BE Monthly

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whom I spoke believed that customers in the initially-targeted segments would “love our products since they are clearly better than what they are buying”. The fact was that those customers knew that, had known it for a long time, and knew that the price points associated with those clearly-better products were outside their range. They were not going to change. Wishing, again, isn’t going to define reality. Understanding how customers evaluate competitors and their products, and determining whether a competitive strategy will respond to their priorities is critical to the success of a focus strategy. The second lesson relevant to this question is that this evaluation cannot be static. That involves bad news and good news. The bad news is that the competitors’ offerings will not be static. Especially when they have strong positions in the segment, they will respond to your firm’s decision to focus on their competitors (unless your strategy involves wishes that they already know will not

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“The good news is that what is important to customers today may change in the future” fly with their customers). And they will probably start out in a better position to make changes than your firm is in, if they have good relationships with customers. Experience and research confirm that customers are usually unwilling to embrace innovations and changes unless they have great confidence in the supplier with whom they will be working. And even very strong firms are often surprised that their reputation is not enough to convince a prospect to risk a change from a supplier with whom they are familiar and comfortable. The same offering is much more likely to be embraced from a trusted supplier, and many customers will accept a partial measure when they have confidence in the supplier over a full measure from a supplier about which they are unsure. The good news is that what is important to customers today may change in the future, and some of the most successful focus strategies that I’ve observed have involved suppliers that understood and were positioned to respond to emerging challenges facing the customers in the targeted industries. You see that now in example after example. Customers placing a much greater emphasis on energy efficiency (e.g., the lightweighting initiatives in the automotive industry) are open to new suppliers with the right


materials expertise. Customers entering new global markets are open to suppliers with expertise, presence, and the ability to help meet local content requirements. One of my clients in the telecommunications industry is an executive that has been in that industry “forever”, seeing the incredible changes that have taken place. He once told me that “The biggest change he had to confront was the dramatic change in the industry’s cycle times”. He went on to note that “Many of our traditional suppliers just couldn’t step up to that change, and we had to restructure more parts of our supply base than we had ever expected”. So, once again, a future focus is critical to the understanding of the ways in which a focus strategy can respond to emerging needs of customers. Focus can be a very good thing, and I’ve seen numerous success stories that were built on a decision to focus on a selected set of industries and customers, to move away from the philosophy of trying to be everything to everybody. But those success stories always had two important chapters, the first involving decisions about the industries and customers on which to focus, the second involving the actions that would ensure

“The focus strategy can create considerable value and allow the firm implementing the strategy to capture some of that value” that those industries and customers would applaud the effort. Good decisions along the first dimension involve assessing the relative quality of candidate segments and the match between your firm and those segments. The second dimension requires a customer-based understanding of what to do to make the focus strategy resonate with customers, a real and firmwide commitment to implementing the strategy by the firm’s leadership, and a careful assessment of the changes that are facing customers and the responses that are likely from competitors. With highquality insights and decisions along all of those dimensions, the focus strategy can create considerable value and allow the firm implementing the strategy to capture some of that value.

About the author George F. Brown, Jr. consults with industrial firms on growth strategy through his firm B-to-B Advisors, Inc. He is the coauthor of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs and the cofounder of and a Senior Advisor to Blue Canyon Partners, Inc., which he served as CEO for fifteen years. George has published frequently on topics relating to strategy in business markets, including articles in Industry Week, Industrial Distribution, Chief Executive, Business Excellence, Employment Relations Today, iP Frontline, Industrial Engineer, Industry Today, and many others.

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‘Abenomics’ Calculated risk or reckless gamble? One year on since the word ‘Abenomics’ entered the economic dictionary, we look at the arguments for and against Japan’s game changing policy strategy and its possible future implications Words by

Will Daynes

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n 26 December, 2012, Shinzóō Abe took office to become Prime Minister of Japan for the second time, and in doing so once again became head of government of the third largest world economy by GDP. In the year since his return to power, Prime Minister Abe has perhaps been most synonymous across the plant with the term ‘Abenomics’. A portmanteau of Abe and economics, Abenomics refers to the economic policies advocated by Prime Minister Abe, policies aimed at expanding the economy of Japan, boosting its annual GDP growth, through a combination of measures including aggressive quantitative easing, an increase in public infrastructure spending and the well-published devaluation of the yen. During the global recession Japan suffered a particularly severe loss in real GDP, with 2009 seeing it fall 5.2 percent against a global average of 0.7 percent, and a 27 percent reduction in exports. Naturally this resulted in an increase in unemployment and an almost complete suspension of major infrastructure projects. With a target of resolving Japan’s macroeconomic problems, Prime Minister Abe’s government went to work immediately by introducing a raft of monetary and fiscal policies, and

economic growth strategies in the hope of encouraging public investment. Specific policies have included inflation targeting at a two percent annual rate, correction of the excessive yen appreciation, setting negative interest rates and the expansion of public investment. So, based on what we have seen over the last twelve months, is it safe to say that the adoption of Abenomics has been a success? While the yen has indeed depreciated, to the point that it was 25 percent lower against the US dollar in the second quarter of 2013 compared to the same period in 2012, what has this meant for the citizens of Japan? For starters the country’s unemployment rate has lowered from 4.0 percent in the final quarter of 2012, to 3.7 percent in the first quarter of 2013, a small yet positive continuation of a recent trend. Abenomics meanwhile has certainly helped Japan’s stock market, which has risen by 55 percent in the past year, and consumer spending has helped push first quarter economic growth up 3.5 percent annually. Taken at face value all of the above evidence is cause for optimism, optimism that has seen Prime Minister Abe’s approval ratings soar to 70 percent of the electorate who consider him to be the architect behind Japan’s progress away from recession .

“The broad goal of Abenomics was to boost annual GDP growth, which stood at two percent at the end of 2012, and raise inflation to two percent via short-term stimulus spending, monetary easing, and reforms” 60 |

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“From the moment the policy strategy was announced some critics immediately highlighted the risk of hyperinflation, the collapse of the yen and the simple fact that the plan might do little to reserve Japan’s deeply entrenched deflation” There have however been plenty of voices quick to warn of the long term negative effects of Abenomics. From the moment the policy strategy was announced some critics immediately highlighted the risk of hyperinflation, the collapse of the yen and the simple fact that the plan might do little to reserve Japan’s deeply entrenched deflation. From the opposite side of the political benches in Japan, Democratic Party of Japan President Banri Kaieda has been very vocal about several measures of Prime Minister Abe’s economic plans and the administration’s plan of inflation targeting, claiming that it could eventually result in a drop in real wages should jobs and salaries only increase marginally. European Central Bank policymaker, Jens Weidmann, was another to express his concern, stating that government interference and pressure on the Bank of Japan could endanger their independent and may even lead to currency wars. This was a view shared by Russian Central Banker, Alexei Ulyukayev, who raised the possibility that other countries might follow Japan’s lead and engage in destabilising devaluations. While these initial fears have yet to be realised, controversy continues to

surround Prime Minister Abe and his flagship economic policy. In October 2013 he made the announcement that he would raise Japan’s sales tax in April 2014, from five percent to eight percent. This is projected to increase again to ten percent in 2015, with the fear being that this rise will halt recovery as higher prices fail to be matched by higher wages. The International Monetary Fund has also since predicted that Japanese economic growth will slow from two percent to 1.2 percent in 2014 due to the hike. So, even with Abenomics creating several positive changes in Japan’s fortunes over the last year it is clear that the country continues to face considerable challenges and risks in the adoption and execution of its Prime Minister’s grand plan. These are still early days for Prime Minister Abe and his economic strategy. What is equally true is that almost the entire developed world will find itself entering into 2014 with nearzero interest rates. These countries would like nothing more than to be able to reverse this trend and if Japan shows that such a radical approach like Abenomics achieves this it will be very encouraging for all concerned.

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3-6 FEBRUARY, 2014

Cape Town, South Africa

Cape Town South Africa

Where the World Connects with African Mining. Mention offer code M14BE and save US$100 through 13 December 2013 Presented By:


www.m in in gin m


Dates for your diary 40th Annual Conference on Explosives and Blasting Technique

mining indaba 2014

3-6 February 2014 cape town, south africa Investing in African Mining Indaba is the world’s largest mining investment event and Africa’s largest mining event. For 19 years, Investing in African Mining Indaba along with its partners in Africa have channeled billions of dollars of foreign investment into the mining value chain. Mining Indaba is the world’s largest gathering of mining’s most influential stakeholders and decisionmakers vested in African mining. 2013 was a record breaking year, with more than 7,800 individuals representing more than 1,500 international companies from 100 countries and approximately 45 African and non-African government delegations. This is where the world connects with African mining. Global professionals including key mining analysts, fund managers, investment specialists, and governments clearly define Mining Indaba as their preferred venue for obtaining the most current economic and mining developments from the world’s leading experts on African mining. It is held annually at the Cape Town International Convention Centre in Cape Town, South Africa and is organised by Mining Indaba LLC. READER OFFER: Quote offer code M14BE to obtain your Business Excellence US$100 discount.

9-12 February Denver, Colorado, USA The International Society of Explosives Engineers will sponsor the 40th Annual Conference on Explosives and Blasting Technique at the Hyatt Regency Denver at the Colorado Convention Center in Denver, Colo. Launched in 1975, the Annual Conference on Explosives and Blasting Technique is the world’s largest forum for commercial explosives and blasting technology, presenting the latest developments and bringing together researchers, educators, field blasters and manufacturers.

2014 CONEXPO-CON/AGG 4-8 March 2014 Las Vegas, Nevada, USA

CONEXPO-CON/AGG will represent an immense unveiling of all the newest equipment, technology and product breakthrough in construction. From earthshaking big iron to groundbreaking innovations, it’s all assembled in one place to help you work smarter. CONEXPO-CON/AGG 2014 – If it’s new, it’s here!

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Trinity Exploration & Production

More than meets the eye Trinity Exploration and Production’s business has never been just about recovering oil and gas. As CEO, Joel ‘Monty’ Pemberton explains, it is equally about behaviour, rigour, purpose and changing the landscape in Trinidad for the better

written by: Will Daynes research by: Vincent Kielty

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Trinity Exploration & Production


n much the same way that Trinity Exploration and Production operates under the motto that “it’s not just about oil”, Joel ‘Monty’ Pemberton has lived most of his working life with the belief that it’s not just about how much money one can earn. “I think this outlook was borne out by the way I was brought up to never really be focused on money alone,” explains Trinity’s Chief Executive Officer. “It was back in 2003, during my time working in London that I decided to take a step back and look at my own future. In doing so I realised that even though I was getting paid handsomely for my work at the time, it would only be when I followed my own aspirations for a better life that I would truly be happy and that I would begin to reap the rewards that only such efforts can bring.” It was in Bruce Dingwall, Executive Chairman of Trinity, that Pemberton found a kindred spirit when it came to this way of thinking and this helped greatly in convincing Pemberton to join, what was then Ten Degrees North Energy, as Chief Financial Officer in 2005, before being promoted to his current position in 2009. Since Pemberton assumed the role of CEO the company has rebranded itself as Trinity, becoming the full cycle independent oil and gas producer that it is today, with onshore and offshore assets in Trinidad and South Africa. Headquartered in San Fernando, Trinity’s focus is Trinidad where it operates assets on both the West and East coasts. The company’s core values are behaviour,

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Trinity Exploration & Production rigour and purpose, while its staff of more than 270 individuals possess an excellent understanding of the local operating environment and business culture. Trinity is seeking to build Trinidad’s first independent oil and gas company of scale. It hopes to achieve this by growing reserves and production for the benefit of all stakeholders, and to its credit it has to date shown it has considerable ability to do so by quadrupling its production levels in the years since Pemberton became CEO. “While Trinidad is one of the world’s major oil and gas producers, the marketplace

SCHLUMBERGER TRINIDAD INC. The LiftWatcher real-time surveillance service provides remote communication and control of all artificial lift systems and surface controllers through a web-based interface. Schlumberger experienced surveillance engineers monitor alarms and alerts 24/7, 365 days a year. Based at one of many Artificial Lift Surveillance Centers (ALSCs), they analyze data from multiple wells across several fields simultaneously and in real time. Data are transferred via satellite to and from remote locations, hostile environments, and sites with limited or no data acquisition capabilities. Where an existing SCADA system is in place, the LiftWatcher system can extract the data and process it with the same top-quality results. From motor temperature to continuous flow, ALSC engineers review alarm events for all measurements at the wellsite. An ALSC surveillance database contains more than 700 data signatures—conditions that cause

alarms to be sent, one third of which are considered critical to preventing ESP downtime, misuse, or failure. The engineers analyze data summaries and poll data on demand. Using Schlumberger best practices and systematic workflows, they identify probable causes and quickly report remediation options for rapid implementation. Recommendations are relayed directly to field personnel, who review them via text messages, e-mail, or a user-friendly Web application. Critical events requiring immediate action to prevent equipment failure are also communicated by phone. When engineers see an opportunity to optimize a well, they recommend the use of the LiftPro Well Optimization Service for improving underperforming artificially lifted wells. LiftWatcher and LiftPro are marks of Schlumberger.

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Southern Supplies Ltd.



Southern Supplies Limited is dedicated to providing our customers with a diverse range of oilfield and industrial products that improve their performance and productivity. We also introduce Kerui Group Holding Co. Ltd as an agency we represent in the oilfield. Kerui is a National Hi-tech enterprise and one of the leading enterprises in China petroleum equipment industry base.

40-44 Sutton Street, San Fernando, Trinidad W.I. Telephone: 868-657-5194 | 868-652-8816 | 868-653-2531 | |

Seen “The delivery of Total Fluids Management (TFM) product achieved through project management, design and distribution of drilling, workover and completion fluids to oil and gas industry customers within the framework of Wellbore Management and Surface Solutions� Baroid Trinidad Services Limited Certified to ISO 9001:2008 since 2006 Certificate of Registration No. 10000121 QM08

Contact us today and put your company in the spotlight! Phone: 868-624-6620/648-3783 Email:

Trinity Exploration & Production is characterised by its Southern Supplies Limited (SSL) lac k of i ndependent Southern Supplies Limited (SSL) has come a long way companies operating in since its humble beginnings in 1982, and is now a major the region,” Pemberton player in the supply of industrial equipment, pipe, valves continues. “What we have and fittings, tools, and hardware in the region. instead is a large number Our strategic local and international partnerships with some of major conglomerates of the world’s leading brands, manufacturers and suppliers, together with a dynamic and responsive international with incredibly large asset supply chain, allow us to fulfill just about any demand portfolios. This creates an that a customer can bring us. ideal scenario for built vehicles like Trinity to come in and partner with these companies in order to help them monetise every drop of oil or gas that they would otherwise miss.” Such efforts create a win-win situation for both Trinity and the major oil and gas players in the region, particularly given that Trinidad is home to significant reserve pools and lots of acreage in which Trinity can apply its model to great effect. Underpinning this however is Trinity’s own asset portfolio, which itself has seen an increase in production of some twelve percent since February of this year. “As this production continues to grow and cash continues to flow into the business it helps to reaffirm our own strong position in the marketplace,” Pemberton highlights. “Furthermore, we will commence the

“Since Pemberton assumed the role of CEO the company has rebranded itself as Trinity” BE Monthly | 71

WHEN PRECISION IS PARAMOUNT Specialising in Heavy Haulage & Equipment Rental since 1945 We are the best source for large-scale construction, engineered heavylifting, equipment rental and multi-modal transport throughout the Caribbean. We are keen to show clients how it is that we are best suited to serve their projects. Container Transport • Project Warehousing Crane & Equipement Rental • Turnkey Project Cargo Handling Irregular & Oversized Load Transport Port Cargo & Material Handling • New Equipment Sales Heavy Lift & Haul Engineering • Heavy Haul Transport Rigging Engineering • Customs Brokerage Affiliated companies are as follows: Advance Readymix Limited – Concrete Suppliers Vega Minerals – Quarry Operators, Aggregate Suppliers

Tel: 868 653 3802 | Fax: 868 652 8030 E-mail: |

Trinity Exploration & Production drilling of two more exploration wells in the coming weeks, which lie within existing assets and could potentially double the size of Trinity by themselves.” Back in 2009, when Pemberton assumed the role of CEO, the company was producing approximately 1,000 barrels of oil equivalent per day (boepd). As a result of its efforts to grow both internally and through the acquisition of new assets Trinity today produces some 3,830 boepd. At the same time its labour force has also grown from 120 employees to more than 300 at press time.

THE PARAMOUNT TRANSPORT AND TRADING COMPANY With a passion for service, Paramount was solidly anchored from the roots of Joseph Lutchmansingh in 1945. The Paramount group, first secured their place in the energy sector in 1967 by assisting with the construction of a desulfurization plant for Texaco Trinidad, and have since maintained a frontline presence building on experience gained by the demands of the highest standards known worldwide. The Paramount name is now reinforced with an employee base of over 500 committed individuals who can celebrate 3 generations of best practice, refinement and evolution. Through the years our clients have pushed the boundaries and Paramount have stepped up each and every time to deliver with exceeded expectation – size and volume are part of our daily routine. Through heavy lift equipment rated in excess of 700 tonnes, heavy haul capabilities beyond 1 kiloton and loads over

200 ft in length we have been known to draw a crowd while executing an impressive array of well planned lifts, twists and turns. Paramount’s value is not defined by lifting / moving a load within the parameters of our equipment; it is our ability to execute without incident, safely and as planned. Paramount’s potential is enabled through the technical skill of our workforce, providing customised solutions to the dynamic business needs of our clients. The Paramount influence in the construction industry includes the successful partnering of our own ready mix concrete plants (Advance Readymix Ltd.) with our quarry under the name of Vega Minerals Ltd. Our passion for refinement brings with it new, cutting edge equipment, which has enabled us to offer our clients a truly superior product, resulting in an ever expanding market footprint.

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Petroleum Contracting Services Limited is a locally owned and operated service company established and registered in Trinidad and Tobago in 2004. We have since grown to be one of the largest local on-land providers of swabbing services, crude oil transportation and drilling site preparation.

265 Goodman Road, Penal, Trinidad W.I. Phone/Fax: 1 (868) 647 6655 Email:

Trinity Exploration & Production The first half of 2013 saw the company bring At Petroleum Contracting Services Limited, we pride a total of six onshore ourselves in providing integrated services ranging from development wells into turn-keysolutions to one-off oilfield services. We are production with an average committed to providing the highest level of service to our initial production rate of partners. Our philosophy, accountability and work ethic 150 barrels of oil per day have fostered long term relationships with many of the existing on-land lease operatorships. We have a reputation (bopd), ahead of a budget to uphold and it’s our mission to do so, while continuing of 50 bopd per well. The to deliver the highest quality of service that our clients two exploration wells that demand, in an honest and trusted environment. Pember ton prev iously We have extensive in-house expertise which translates mentioned, and which into viable solutions that help improve our efficiency and the company has already reliability without compromising our primary commitment to secured two jack-up rigs to health and safety. E. drill with zero cost options for additional rig slots if required, will bring this figure to eight wells for the year. The company’s work for the year doesn’t end there however. On the contrary, Trinity intends to continue with its onshore development campaign by drilling a minimum of five new wells by the end of 2013. In light of these plans the company has updated its production guidance to 4,200 - 4,500 boepd exit rate for 2013. Trinity strongly believes that Trinidad, a prolific hydrocarbon presence, offers significant remaining potential for oil and gas producers and that it is

Petroleum Contracting Services Limited

3,830 boepd Currently produced by Trinity

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Quality Service BuildS laSting relationShipS At EDG, we combine world-class engineering, design and project management with complete project team support. Through EDG’s project experience and our extension of staff approach we have become a trusted consultant to Trinity Exploration and Production Company, LLC. Our quality service, cost-effective solutions, and the character of our staff allow us to be a dependable resource to our clients, worldwide. For more information about EDG and our portfolio of engineering services, please visit us on the web at

Better people

“Trinity Exploration and Production LLC values the relationship we share with EDG a company which we consider to be knowledgeable, professional and thorough in all of its operations. As well, Trinity considers EDG to be a competent provider of brownfield engineering support for our business.” Chief Operating Officer, Trinity Exploration and Production

Better BuSineSS | 1.888 .EDG .9298

Trinity Exploration & Production uniquely positioned to capture upcoming opportunities. As such it makes perfect sense that its current focus is trained firmly on the island. However it is important to remember that as an independent company with significant international experience possessed by its upper management, Trinity understands that as it expands as a business so too will its geographic reach. “Of course we don’t know exactly where things will take us in the long run,” Pemberton says, “but what we do know is that having a solid business,

EDG INC In December of 2010, EDG partnered with Trinity Exploration & Production, LLC (formally Bayfield Energy Galeota Limited) to provide engineering services for a Brownfield program located offshore of the East Coast of Trinidad. Trinity called on EDG to provide an action plan for renovating four existing offshore platforms, interconnecting pipelines, and an onshore terminal they had recently acquired. These platforms were originally commissioned more than thirty years before and had seen little attention or upgrades over the years. EDG leveraged significant offshore, operations, design, construction and laser scanning experience to frame the opportunities and provide workable improvement alternatives without compromising the existing production. Using laser scanning technology, EDG was able to create accurate as-built information to indicate all of the modifications that had occurred over the decades. This data

was leveraged by EDG’s multidisciplined team to successfully complete the project, which included engineering, design and drafting, procurement services, project and document control, construction management, inspection and laser-scanning. EDG’s project team of process, mechanical, electrical, instrument, and structural engineers quickly became an extension of Trinity’s staff, a team of reliable engineers that could be deployed when required. It was through quality execution and prompt responsiveness that EDG championed the project. From initial engagement to effective and innovated engineering solutions, EDG has earned Trinity’s confidence as their trusted advisor. EDG, Inc. is a multi-discipline, international, engineering, design and project management firm serving the Oil and Gas and Industrial Markets in eight offices worldwide for over 30 years.

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Envirospec was incorporated in 2005 to serve the needs of residential, commercial and industrial customers with air and water purification and filtration systems.

• Waste Management – this deals with the remediation and recycling of waste bi-products. • Electrocoagulation process • Centrifugal process • Automated Tank Cleaning Services - which deals with the cleaning out of chlorides and other sediments present in water storage tanks. • On-Site Analysis and Evaluation • Roof Cleaning • Bottle-less Water Dispensers – this comprises of the rental of our bottle-less water dispensers at a low monthly cost. • Other Biodegradable Solutions for Industries

Tel: (868) 649-9208, (868) 376-9598, (868) 289-6388 | Email:

Southern Maintenance Services Co.Ltd

Southern Maintenance Services Co.Ltd Merging experience, technology, training and safety, to produce a level of service that surpasses our competitors, while focusing on our priorities, which are, our customers, employees and the environment. Products and Services we provide: • Pipeline Construction • Sandblasting and Painting • Welding and Fabrication • Labour Supply - On land and Offshore • Procurement • Transportation • Civil and Marine Construction LP #55, Isthmus Road, Galeota, Guayaguayare, Trinidad, WI. Telephone – 1-868-630-3257 | 1-868-630-1970 | 1-868-630-6195 | E-mail –

Trinity Exploration & Production built upon solid assets, Envirospec can take you to the right Founded in 2005, a Company with humble beginnings, places. What we also know started when Mr. Marvin Wilson (CEO), saw the need to is that what we are doing provide air and water purification systems to customers today is helping to grow with the aim of improving the overall health and well being our business, increase of customers and the environment at large. Envirospec has our options and flexibility, since expanded to offer a range of products and services that are geared towards providing high quality, environmentally and ultimately create safe, cost effective solutions. We guarantee professionalism a sense of excitement while continually modifying our applications, with market that can be felt throughout research and development, to meet and exceed our the company.” customers expectations. Without Question our products and It is also Pemberton’s services are committed to ameliorating an environment that hope that Trinity becomes is rapidly deteriorating. something of a trendsetter E. in the region. “The basin today is dominated by major international oil and gas companies. What we feel we need is more companies like ours to come in and look at monetising every single piece of acreage and extract value from material that wouldn’t otherwise be subjected to work. We believe that more Trinity’s in the marketplace will create a greater scope for oil and gas opportunities and helps create a natural chain throughout the region of

“What we have here is one of the most sophisticated industries of its kind, anywhere in the world” BE Monthly | 79

businesses that will each profit from the development of the sector.” Pemberton also hopes that the work of Trinity, and others within the sector, goes some way to helping the vast majority of Trinidadians to begin to really appreciate the size of the industry that exists on their doorsteps and the economic benefits it brings to the island. “What we have here is one of the most sophisticated industries of its kind, anywhere in the world,” he enthuses. “What you find here is upstream oil, upstream natural gas, mid-stream processing, downstream energy, export infrastructure and all the service companies that go with it, all of which occurs in an area no larger than 51 square kilometres, on an island with a population of just over 1.3 million.” With so many opportunities located in one area it is Pemberton’s belief that it is only a matter of time before Trinidad’s oil and gas sector opens up further still to national and international investors, and Trinity wants to be on-hand to help facilitate this. “We are unique in the sense that being an operator on the ground we understand how things operate, how to bring the right people on board, how to build the right relationships and so forth. This places up is a strong position to help make things happen in a part of the world where a vast amount of potential is just waiting to be harvested.” For more information about Trinity Exploration & Production visit:

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Costa Rica’s pillar of competitiveness Costa Rica’s national hydrocarbons importation, refining and distribution company Refinadora Costarricense de Petroleo SA (Recope) is taking a leading role as the country prepares to lead the region in green energy

written by: John O’Hanlon research by: David Brogan

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he situation for obtaining gasoline, diesel oil and other oil products in Costa Rica is not ideal just at present. Following an accident in 2011 it was decided that the country’s refinery at Moin, part of the Caribbean, or east coast, port of Limón, was too expensive to run, and since then the country has relied entirely on imported petroleum products. Costa Rica is the most developed and stable democracy in Central America and it is happily named – it has a lot of coast on the isthmus that links the continents of North and South America, and though not rich, it is prosperous enough, strategically placed for trade, and its 4.5 million citizens enjoy a good standard of living with a per capita income of around $10,000. According to CIA figures and estimates, Costa Rica’s economy was affected fairly mildly by the global recession. It contracted 1.3 percent in 2009 but resumed growth at about 4.5 percent annually between 2010 and 2012. While the traditional agricultural exports of bananas, coffee, sugar, and beef are still the backbone of commodity export trade, a variety of industrial and specialised agricultural products have broadened export trade in recent years. High value-added goods and services, including microchips, have further bolstered exports. Tourism continues to bring in foreign exchange, as Costa Rica’s prolific biodiversity makes it a key destination for ecotourism. Last year Costa Rica’s oil sector generated $2.175 billion. Foreign investors remain attracted by the country’s political stability and relatively high education levels, as well as the incentives

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Heard Tell us about your company and we’ll tell everyone else

Recope offered in the free-trade Felguera IH zones; and Costa Rica has Felguera-IHI, a company participated by Spanish attracted one of the highest Corporation DF and Japanese IHI Corp., is the leading levels of foreign direct Spanish company in providing LSTK EPC fuel storage investment per capita in Latin solutions for all ranges of industry products, temperatures America. Four years ago Costa and pressure conditions, from regasification terminals to Rica’s leaders declared that individual storage tanks. With more than 40 years presence in the global market, and state-of-the-art technology, it would become the world’s has references in the USA, and several countries in the first carbon-neutral nation by Middle East, Europe, Africa and Latin America, where has 2021, taking transportation, developed three major LPG integral expansion projects energy, into consideration, for RECOPE Moin Refinery in Costa Rica, involving a total and everything else including increase in capacity of 17,500cbm. agriculture, which accounts for a staggering 37 percent of Costa Rica’s emissions. The country won’t be able to achieve these goals without its own refining capacity. The organisation responsible for hydrocarbon products is 50 years old this year. Recope was established by the legislative assembly, or Congress, as a commercial company, though it remains 100 percent governmentowned. And the company is already playing its part in the battle against emissions, having implemented a decision in 2011 to lead the entire region in introducing low sulphur diesel. Needless to say, ensuring a constant supply has been a challenge, though Recope’s distribution division, located at El Alto de Ochomogo in the town of Cartago and led by

“We have enough capacity to supply all demand at this moment, and are building new tanks to ensure we have enough products to supply to our clients in the future” BE Monthly | 87

60,000 bpd Capacity of new Recope refinery

its sales and distribution manager Francisco Rojas Esquivel, has stepped up well. Recope has built up an adequate infrastructure across the country, with four tank farms strategically located to supply the main towns. They are linked with each other and to the oil port at Moin by a network of pipelines. Three pipelines run from the Atlantic, or Caribbean coast to the capital San Jose, and three more from the Pacific coast. “We do not have any problems with pumping – we have enough capacity to supply all demand at this moment, and are building new tanks to ensure we have enough products to supply to our clients in the future,” says Rojas. Recope also has operations in Costa Rica’s three international airports at Liberia, Limón and San Jose itself, as well as the main domestic airports. “We do have an issue with tank capacity, and we are working on that right now to increase aviation fuel capacity at these airports.” A new tank farm and sales terminal is being constructed at Liberia airport in the north of the country, and will be in operation by the end of the current year, he says. The aviation fuels side of the business was probably the segment that the recession hit hardest, though it affected all products. “We had a hard time in the 2008 crisis but we are recovering from it now!”

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His problems will be over when the new and expanded refinery has been built at the Moin site, and that could be delivered by 2018, he says. However there are one or two hurdles to be overcome before that happens. In 2009, Recope and the China National Petroleum Corporation (CNPC) formed Soresco, an equal joint venture, to upgrade and expand the 25,000 barrels per day (bpd) Limón refinery that was badly damaged by fire in August 2011. The project was to have been carried out with a loan of up to $900 million from China Development Bank. Once built, the refinery would be leased back to Recope for 15 years. However the feasibility study on which the project was based was rejected by the Costa Rican

Controller’s office because it was carried out by HQCEC, a subsidiary of CNPC — an arrangement prohibited under the Soresco JV agreement. The office also said the study may have underestimated costs to inflate the project’s estimated rate of return of at least 16 percent, and further that it failed to address project risks, analyse the Costa Rican oil market and regulatory framework, or provide financial details to back up its calculations. Costa Rica has been commended for sticking to best practice in this matter, but its task now is to get the project back on track. “A new feasibility study has been commissioned,” says Rojas, “and we are working to a Plan B as requested by the government.” The revised plan will increase the capacity of the refinery

“A new feasibility study has been commissioned for the refinery project” BE Monthly | 89

“The revised plan will increase the capacity of the refinery dramatically” dramatically, tripling to 60,000 bpd. It has been prepared with the help of experienced regional partners like Petrobras in Brazil and Ecopetrol in Colombia, to include the products that will take Costa Rica towards its carbon neutral future: products like biodiesel and bioethanol, produced from crops like corn and sugar cane. The great advantage of bioethanol for the environment is its potential to be carbon neutral on a lifecycle basis – meaning the carbon dioxide (CO2) emitted during its use is offset by the amount it absorbs from the atmosphere during its growth.

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Though Recope will probably not be producing its own bioethanol, it will be able to obtain it locally, among other places from the modern plant of the sugar refiner CATSA, for blending into increasingly lowemission fuels. Another green innovation at the refinery will be the introduction of LNG to provide the heat required in its processes, and the existing electrical equipment at the plant is being assessed for conversion. At present it is not clear, he says, whether Recope will be given the mandate to distribute LNG as its use


increases nationally. From its incorporation it was given a monopoly to import, refine and distribute hydrocarbon products but whether LNG comes under this statute is disputed. It would make sense though, as Recope has the infrastructure and the expertise to undertake this work seamlessly, Currently Recope employs around 1,800 people, and construction work at the refinery will provide up to 2,500 construction jobs, though a high proportion of these may be filled by Chinese contract labour. But however it is delivered, it can’t come too soon for Francisco Rojas. It will, he says, allow Recope to play its full part in the regional leadership position that Costa Rica has adopted where it comes to adopting low emission fuels on the road to a carbonneutral country.

The job of overseeing the implementation of Plan B for the refinery, as well as completing expansion of the Moin oil port and upgrading the tank farm to increase Recope’s LPG and oil storage capacity, has been given to veteran company president Litleton Bolton Jones following the collapse of the earlier agreement. The harbour expansion is well under way and should be complete by the end of 2014 – the $96 million project funded by Recope and built by a Mexican-Costa Rican consortium will allow the oil terminal on the country’s Caribbean coast to accommodate tankers of between 40,000 and 80,000 tons. For more information about Recope visit:

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A bright future beckons

Energia Llaima /Sunmark

The result of an alliance between two industry leaders, Energia Llaima/ Sunmark is a company leading the way in launching ground breaking solar thermal and hydroelectric projects across Chile

written by: Will Daynes research by: Louisa Adcock

Energia Llaima /Sunmark


o some, solar power represents the perfect environmental energy source, one which will be ever present so long as the sun continues to shine. Arguments for solar power also draw on the fact that solar power plants promote clean energy production by producing virtually nothing in the way of pollution, thereby reducing greenhouse gas emissions and the carbon footprint of a project. Solar energy itself is typically captured through solar collectors that absorb the impact of sunlight and transform it into heat. During this process the collectors diffuse the radiation of the sunlight, which is absorbed by a thermal fluid that travels through the system, transferring heat to the process through heat exchangers arranged according to requirements. Insulation of the bottom and sides of the manifold minimises heat loss from the collector, with a flat solar collector capable of reaching a temperature of about 120 degrees centigrade. The cover is made of a special glass, anti-reflective tempered glass, which is also designed to ensure lower energy loss. In addition, this glass protects the collector against the effects of dust and rain. Headquartered in Las Condes, a commune in Santiago Province, Chile, Energia Llaima/ Sunmark specialises in the supply of heat from solar thermal plants through the maintaining of service contracts. These contracts stipulate that the company make all the necessary investments in bringing a plant to life, taking direct responsibility for the installation, operation and maintenance of the facility in question. This is very much

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Weekly Because a month is a long time to wait... Your weekly digest of business news and views

Energia Llaima /Sunmark a modern model of business in this part of the world and Ulog, a key logistics partner in the Pampa Elvira Project, is is one that allows energy a member of Ultramar Group, a Chilean shipping company companies to focus their own in business for the last 60 years. As a Freight Forwarder efforts and resources on their we have more than 12 years of experience giving complete core business, while Energia logistic solutions to our partners. We have access to a wide Llaima/Sunmark remains global network, with our own offices in Latin America and Agents representing us all around the world. Ulog offers a responsible for obtaining flexible service and adapts to the needs of its customers, solar energy and creating attending to specific Oil & Gas, Energy, Mining and Project the economic savings that areas with experts committed to your business. Some of this energy source brings in our services include Air and Ocean Freight, Warehousing, the long term. Oversized Cargo, POM and other supply services such as Energia Llaima/Sunmark Comex and Insurance. We are truly passionate to deliver acts as an energy service innovative logistics solutions. compa ny, de sig n i ng, developing, installation, operating and financing solar energy projects, with the principle aims of reducing investment costs, and operation and maintenance outlay for the client. These aims are hugely significant for the company’s clients, the majority of whom are now benefiting from the relatively stable price of solar energy compared to the volatility of conventional fuel markets in recent years. As the name suggests, Energia Llaima/ Sunmark is the product of a strategic alliance between two entities that could already boast impressive legacies within their fields of


$300 Billion Investment made by Energia Llaima/ Sunmark towards major projects in 2012

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“Solar power plants promote clean energy production by producing virtually nothing in the way of pollution, thereby reducing greenhouse gas emissions� expertise. Managed by a highly experience team and backed by a group of important Chilean financial investors, Energia Llaima has always been dedicated to the development, implementation and operation of renewable energy projects centred on both solar thermal and mini-hydroelectrical sources. In the latter category the company has been responsible for projects including the Central Guaiacum Hydroelectric Plant, a 12MW facility located in Rio Maipo, which

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has been in operation since September 2010. Today the company can be found in the process of developing a further 15 hydroelectric projects, ranging in capacity from 2.5MW to 18MW. Meanwhile, from a solar thermal perspective, Energia Llaima has spent the last two years conducting studies into how such power generation can be made applicable to the mining sector. Sunmark on the other hand is a world leader when it comes to large-scale solar

Energia Llaima /Sunmark

thermal solutions. With over 22 years of experience in building solar panels and distributed heat distribution systems, Sunmark’s project offering comes with full ISO:9001 and Solar Keymark certifications. The company’s operations and projects can be found in numerous countries, in each of which its employees commit to Sunmark’s principles of superior sustainability, reliability, efficiency in production and economic rationality. In 2012, Energia Llaima/Sunmark invested more than $300 million into projects that will take place over the following five years and will boast a combined capacity of between 130MW and 140MW during that time period. One of the bigger projects to take place since the aforementioned investment programme began has been the construction and

operation of a thermal solar plant of behalf of Minera Gaby, located southwest of Calama, at a cost of $26 million. The agreement for this particular project, valued at $60 million, will see Energia Llaima/Sunmark oversee the operations and maintenance of the plant for a minimum of ten years. With three other major solar projects, as well as large hydroelectric projects set to occur at Cuenca Bio Bio, Cuenca Cautin, Cuenca Ranco and Rio Maipo, all now also in various stages of development, the future certainly looks sunny for Energia Llaima/Sunmark. For more information about Energia Llaima /Sunmark visit:

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Hidroeléctrica de Cahora Bassa

A symbol of ational pride The Cahora Bassa dam is more than Mozambique’s defining engineering achievement: its development by Hidroeléctrica de Cahora Bassa (HCB) is the keystone of southern Africa’s quest for sustainable and reliable power

written by: john o’hanlon research by: candice nice

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Hidroeléctrica de Cahora Bassa


he Cahora Bassa dam was completed in 1974 just as Portuguese control of Mozambique was coming to an end. It was conceived as a colonial project, Portugal’s infrastructural master work, that was designed to ‘foster human promotion through an improved standard of living for thousands of Africans who live and work there’ and that the power station would also boost economic revenue for Mozambique as it would sell cheap electric energy to South Africa and other neighbouring countries. However in the years of internal conflict that followed independence in 1975 the dam’s transmission lines were regularly sabotaged, to the extent that 1,895 towers needed to be replaced and 2,311 refurbished over a distance of 893 kilometres on the Mozambican side of the line. This made HCB’s task of generating, transmitting and selling clean electricity a difficult one. A protocol signed in 1975 between Mozambique’s ruling party Frelimo and the Portuguese government provided for the project’s eventual transfer to full Mozambican ownership once the investment made for its construction was paid back. Decades of wrangling between Mozambique and its former colonial ruler over who should pay for damage to the dam in the war of independence and the subsequent civil war created an atmosphere of tension that was finally laid to rest six years ago with the transfer of all but a 15 percent holding. The reversion of majority control to the government, for a consideration of more than $900 million, was celebrated as a

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Hidroeléctrica de Cahora Bassa moment of immense national INTELLICA pride; so much so that it INTELLICA is a consulting firm guided by professionalism, has been regarded by some thoroughness and integrity with the sole purpose of as a ‘second independence’ helping its customers achieve operational excellence and for the country and market competitiveness. heralded a final break with INTELLICA bets on solid and lasting relationships with its its authoritarian colonial customers, putting their interests first, valuing teamwork through continuous interaction. Since 2009 INTELLICA has past, with Mozambique’s maintained a solid relationship with HCB. President A r mando We wish to highlight the support we have been providing Guebuza declaring: “Cahora for HCB throughout various initiatives and projects to Bassa is ours!” improve their management processes, with special focus on In 2012 the sense of the design and implementation of HCB’s Human Resource urgency in Portugal to resolve Integrated Strategic Management System. the issue increased sharply HCB has been an example of operational and management excellence and a regional and international reference in as its economy came under promoting socio-economic and environmental development pressure from international by producing clean energy. We wish to remain the first choice lenders to privatise state for HCB when it comes to strategy consulting, management, assets at a time when Portugal human resources and corporate finance segment. itself is in deep recession. Jorge Mondlane, Intellica Managing Partner In November last year the Maputo administration and the government of Portugal signed an agreement that handed over a further 7.5 percent of the shares, giving Mozambique 92.5 percent ownership, with just a final 7.5 percent remaining in the hands of the Portuguese power company REN. Over the next two years, REN will

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HidroelĂŠctrica de Cahora Bassa relinquish its holding in HCB, in exchange for shares in a company that will operate a new electricity transmission line, the CentreSouth (CESUL) project from Tete province to Maputo which is needed because the existing line, from Songa to South Africa, cannot carry any more power. The estimated cost of CESUL is about $1.8 billion. This means that from only 18 percent national ownership ten years ago Mozambique has finally realised its ambition to take over the dam completely from Portugal, allowing HCB to sell more power to other African nations.

Currently Mozambique sells electricity to neighbouring SADC countries South Africa, Zimbabwe and Swaziland. Botswana, Malawi, Tanzania and the DRC have also expressed their desire to purchase power from Mozambique. Mozambique is growing at a very fast pace. So are the other countries mentioned, and South Africa will always be able to make use of this source of clean power on its northern border, within easy reach of its industrial base in the provinces of Gauteng and Limpopo. Power is transmitted to South Africa via a 1,420-kilometre high

ABB ABB is a global leader in power and automation technologies. Based in Zurich, Switzerland, the company employs 145,000 people and operates in approximately 100 countries. We maintain seven corporate research centers, employ 8,000 scientists and support 70 university collaborations around the world. ABB is a state-of-the art manufacturer of high voltage bushings and tap-changers concentrating on supporting its customers in achieving their targets in maximizing their assets at the highest level of efficiency, safety of operation and the environment. ABB has extensive resources especially in the areas of high voltage engineering,

transformer technology and process knowledge in solutions that set standards within the market. The final products, high voltage bushing or tap-changer dependability is ensured through extensive testing beyond international standards combined with decades of experience from development and operation. We, as ABB are proud to be associated with such highly renowned companies as HCB, who recognize and supports quality, technical knowledge, integrity and open communication� E.

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voltage direct current (HVDC) line from the Songa substation at Cahora Bassa to the Apollo converter station near Johannesburg. Around 20 percent of HCB’s production capacity is directed towards Mozambique, which might seem a small proportion but represents a substantial increase when it is considered that as recently 2007 only 13 of output was consumed locally. Much of this increase is accounted for by the major coal and other mineral exploitation projects in Tete province, where the dam itself is located, such as Vale’s deposit in the Moatize Basin, and Rio Tinto’s Benga coal mine. As downstream industries develop in the port cities of Maputo and Beira and elsewhere, and the economy grows thanks partly to associated infrastructure development, demand for power is expected to increase rapidly. “There is no development without electric energy,” HCB’s CEO Paulo Muxanga says. “Because we are aware of this, we are always expanding our electrical power production capacity.” Muxanga, a former transport minister, replaced his Portuguese predecessor in December 2007 becoming the first Mozambican to occupy the position of chairman of the board of the Cahora Bassa It was under his leadership that HCB went through a period of unparalleled growth that culminated with reporting its

first profit in 2010. The following year saw a growth in profitability of more than 262 percent, to $130 million. On the production side, HCB maintains an enviable level of 99 percent reliability. Nevertheless to a greater or lesser extent Mozambique itself, South Africa, and all the other countries in the SACD region struggle with intermittent supply, causing problems

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Hidroeléctrica de Cahora Bassa

and added cost for industry of every kind. This is largely due to transmission issues, which HCB is determined to address. The new $800 million power transmission line project linking the central and northern regions of the country, the so called CentralNorth project, should be operational by the middle of 2015. The dam’s existing power station on the south bank of the river contains five turbines, each with the capacity to generate 415 megawatts, giving the company a total notional generating capacity of around 2,075 MW. By far the most transformational project in preparation is a completely new power plant on the northern bank of the Zambezi River which, with a planned capacity of 1,245

MW, will effectively double output over the coming five years. More power stations are planned for Tete, including a new dam at Mepanda Nkua, 60 kilometres downstream from Cahora Bassa. Between them, Mepanda Nkua and the Cahora Bassa North Bank power station will produce as much again as HCB’s entire current generating capacity. That will again throw the burden for getting that power to market onto the distribution networks, both within Mozambique and beyond its frontiers. For more information about Hidroeléctrica de Cahora Bassa visit:

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Rich in resources and resolve

In the last twelve months Levon Resources has worked ha consolidate and progress its assets, gaining 100 percent o the Cordero Project, one of the largest silver resources on

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Levon Resources

ard to ownership of n the planet

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Drilling the porphyry zone at Cordero

Levon Resources


n an age where negative stories seem to supersede positive news the vast majority of the time, it is always refreshing to hear an optimistic voice or opinion. We have all been privy to the damaging effects that have come in the wake of the sharp fall in metal prices and economic activity in the mining sector, a prolonged event that has seen a lot of company’s share prices plunge as they fail to raise much needed capital, however if you search around you will find people that are much quicker to speak of the opportunities that do exist today. One such individual is Ron Tremblay, president and chief executive officer of Levon Resources. “For us, the downturn in the metals industry presented an opportunity to channel our efforts on securing the last piece of the puzzle when it comes to the Cordero Project.” The puzzle piece Tremblay speaks of is the Aida mining claim, located in a central part of the Cordero Project, itself found in northwest Mexico. “Prior to purchasing the Aida claim we had spent the better part of the last five years trying to strike a deal under extremely difficult circumstance,” he states. “As luck would have it, the market conditions allowed us, with a lot of effort and hard work on our team’s part, to finally come to an agreement to purchase the claim at a cost of $2 million.” With a complete package now in place Levon Resources recently set about conducting a drilling program on Aida. Should drilling prove successful it will allow the company to re-evaluate its resource calculation. These latest developments represent the next phase in the growth of what is one of the world’s largest silver resources. In less than four

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years Levon Resources has amassed a resource at Cordero containing 364 million ounces of silver indicated and a further 91 million ounces inferred. Additional indicated resources of 945,000 ounces of gold, 6.1 billion pounds of zinc and 3.3 billion pounds of lead have helped establish Cordero as one of Mexico’s premier polymetallic porphyry targets. Having successfully cut back on expenses in the last 18 months or so, a process which the company intends to continue while metal prices remain low, Levon Resources also carries with it the knowledge that it retains considerable dollar value in the form of its underground assets. With Tremblay confident

View of Cordero dome

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that we will see a new high in terms of silver prices in the future, as well as increases in the value of gold and zinc, it stands to reason that the company’s aforementioned assets will only appreciate over time as the economics improve. “I am one of those people who seek out opportunities before they happen, not after,” he says. “I am also a believer in the fact that one can’t fight against the tide of change and therefore one must deal with the things that can be dealt with during challenging times in order to be best equipped to take advantage when good market conditions return and deal from a

Levon Resources

“The market conditions allowed us to finally come to an agreement to purchase the Aida claim at a cost of $2 million” position of strength. This is precisely what we have done by continuing to advance the Cordero resource in a key area, in a responsible, cost effective way.” With the company in an extended period of exploration and development it can also look forward to an IVA tax refund that could exceed

$4 million in total. Of course such a large sum of money does not simply get handed over in one go. The company has had to carry out a great deal of due diligence and complete a large volume of paperwork to ensure that everything is carried out in accordance with Mexican and international regulations. “To date we have met all of the qualifications necessary to receive these funds, while a recent audit also indicated no issues therefore we expect to begin receiving our tax refund in the coming months,” Tremblay highlights. “In line with our policy of reinvesting back into the company, a proportion of this will then most likely be used to cover the cost of our latest drilling program.” The company’s operations schedule, as estimated at the time of writing, indicates that the drilling program on Aida should be complete by the end of January 2014. Once this has happened Levon Resources will be able to provide its Tucson, Arizona based engineers with the assay information and data that will be required to model and optimize the pit design for future recovery to take place. This information will also help give the company a clearer picture of what Cordero has to offer in terms of its total resources. “Early indications suggest that we could be looking at an asset containing somewhere

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Team Geology

“The company’s operations schedule, as estimated at the time of writing, indicates that the drilling program on Aida should be complete by the end of January 2014” north of 600 million ounces of silver,” Tremblay explains. “In terms of the pit itself we are potentially looking at a pit design of over three kilometres long, two and a half kilometres wide and up to one kilometre deep. Based on the information we have to hand at present we could be looking at anywhere between a 60,000 to 125,000 tonnes per day operation with a 25-plus year lifespan.”

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While a great deal of Levon Resources’ efforts are understandably focused on Cordero, it has not prevented the company from evaluating the possibility of securing further growth outside of Mexico. “We continue to look at different opportunities all over South America, Central America and North America,” Tremblay enthuses. “What we are specifically looking for are highly

Levon Resources

Core drilling at Cordero

Commercial water well drilling rig for high velocity wells

prospective properties that have the potential to support a large scale mining operation in a good jurisdiction. It also needs to be an opportunity that we can earn into at a reasonable cost, much like Cordero.” Despite the excellent progress made by the company in the last few years, Levon Resources, and the Cordero Project in particular, remains an extremely undervalued opportunity for investors. Now, with 100 percent ownership of the Aida claim obtained and with signs of an upturn in the metals market beginning to appear, the time could not be better for interested parties to get on board. “What Cordero represents is the perfect opportunity for investors to get involved,

basically on the ground floor, with a well advanced project backed by a company that has enough capital in place to carry out work for at least the next ten years without having to go back to the market to raise extra finance,” Tremblay concludes. “There is no doubt in my mind that it is because of these factors that the big boys out there continue to watch us closely and that it is only a matter of time before one or more of them puts their cards on the table and gets involved.” For more information about Levon Resources visit:

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Finning South America

Equipment and services which drive the economy Finning is the most important partner in the distribution of Caterpillar equipment and services worldwide. Today, its focus is on delivering an excellent service, which includes expert advice, and the constant innovation of products with the highest safety standards

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Finning South America


roviding service for what we sell� is the formula which has endured for eight decades and managed to consolidate Finning as the most important partner in the distribution of Caterpillar equipment worldwide. This is stated by Marcello Marchese, CEO of Finning South America, who has led the company since June 2012, taking command of the Argentina, Bolivia, Chile and Uruguay branches, where the company is positioned as the major CAT equipment and services distributor for the mining, construction, energy, forestry and oil & gas industries. With more than a decade promoting the growth of the locations in which it operates, Finning has committed to deliver value to its customers and their industries, as well as to the local economy by generating employment, creating more than 7,800 jobs and counting and more than 100 facilities spread throughout the region. With the acquisition of the distribution of the former Bucyrus brand, Finning completed its range of solutions for the mining market, allowing it to provide the broadest line of solutions to the customers in this sector. The product offering ranges from mining trucks, hydraulic and cable shovels, loaders and drilling rigs, as well as a portfolio of services including, condition monitoring, training of operators, technicians and skilled mechanics, consulting, and an effective range of available spare parts. In the construction industry, this company offers a powerful line of Caterpillar equipment. Among them it is worthwhile mentioning

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the wheeled and tracked tractors, loaders, excavators, graders, rollers, compactors, skid steer loaders, material handlers, pavers and other equipment for public works and infrastructure projects. Regarding the power systems area, Finning is specialized in delivering solutions to those seeking power systems for the different industries, applications, mining projects and support equipment, thereby covering power requirements from 13 kVA to 3,000 kVA in one generation unit. For larger power, it also develops projects for generation plants with facilities and multiple interconnected equipment. The forestry equipment Finning sells is designed for all types of forestry work, from thinning, harvesting, loading, field management and forest road construction. For the oil & gas market, Finning has a wide range of drilling, gas compression, well maintenance, pumping and power generation products, for emergencies or continuous power generation for oil extraction fields. Relying on a team of experts provides clients with a broad portfolio of solutions as well as the best technology and is part of the seal of this Canadian company. They differ from other competitors in the efficiency and support that as a dealer is provided for each one of the CAT

pieces of equipment that are sold in different industries where CAT is present. For Finning, the sale of equipment is only the beginning of a high-level commitment and the beginning of a relationship of loyalty which is sustained by experts and by cuttingedge technology in comprehensive services. In this context, a range of technological solutions which Finning has for equipment and fleet management is inserted.

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Finning South America

From its Technology has better availability Solutions center, which boasts of its fleet and therefore, better productivity. state of the art technology and is managed by high standard T his new system specialists, the company equally offers specific Jobs created by Finning conducts assessments, online plans for equipment in South America tracking and diagnosis of the control, productivity and condition of the equipment. support, according to the Thus, for example, a client needs of each individual can detect in real time the exact moment of customer, including the ability to know the possible failures, which contributes to prevent location, fuel consumption and operating incidents and maximize productivity. It also times, among other parameters. allows for the implementing of preventive Advisory services, technical support measures, because the system advises and diagnostics of customer value are also components replacement and maintenance. provided. This is cooperative and collaborative Marchese, the highest executive of the work, which allows access to this information company at a South American level, ensures from a computer or mobile device. This is that the customer saves time and money, one example of how the company is working


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“Marchese believes that these tough times are an opportunity to adjust and allow the organization to be more efficient and innovate with its customers” to combine world class technology and the know-how of the Finning experts. Another service which is most valued by customers is the “online specialists and technicians,” program, which is essentially a contact center assisted by experienced technicians and is available to address concerns and help customers to identify potential failures in their equipment, delivering step by step recommendations to solve any problem.

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They also provide technical advice to Finning technicians who are on site, by means of a video camera system which sends live images to online specialists, enabling timely and effective assistance. Although Finning South America has not been indifferent to the slowdown in mining and the swings in construction, Marchese believes that these tough times are an opportunity to generate adjustments and

Finning South America

allows the organization to be more efficient and innovate with its customers. The company has focused on training in order to have available professionals who are better prepared for the industry. This new value proposition, materialized with the Finning Technical Institute, FIT. A modern building located in the most important mining area of Chile, Antofagasta, it has been supported through an investment of $12 million, with high-tech equipment spread across more than 13,000 square meters, allowing for teaching and training under a system of learning, using competences for the Finning mechanics and technicians, maintainers and operators of its customer portfolio. The FIT also supports young people in the region who the company

also provides access to apply for available degrees, with the aim of giving them better future employability. Finning continues to take an optimistic view when faced with an uncertain outlook for the mining and construction markets, betting on offering the most comprehensive portfolio of equipment and services of the sector. This will allow it to provide continuity to the different lines of training and specifically consolidate a history of loyalty to their customers which began over 80 years ago in the world of large industrial suppliers. For more information about Finning South America visit:

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Leading South American exploration The work of Mariana Resources’ highly experienced team is allowing it to transform its developing discoveries into robust projects

Mariana Resources


ariana Resources Ltd is an AIM quoted South American gold, copper and silver exploration and development company focussed on advancing mineral rich projects up the resource development curve. Mariana has an extensive project portfolio in southern Argentina poised to generate value uplift in the long-term; however it is the company’s transformational leap into Peru which has excited investors, and where the company believe that significant economic opportunities exist in the near-term. Mariana’s Peruvian opportunities consist of two highly prospective and potentially company-making gold/copper/ silver projects optioned from TSX-V quoted Condor Resources Inc. The 102 sq km Condor de Oro prospect in Northern Peru, where Mariana can earn 51 percent , is situated along the Cordillera del Condor corridor, one of the most significant emerging gold and copper belts in the world. Importantly, extensive geophysics and sampling work conducted at Condor de Oro points to the prospect containing a highly mineralised intrusive related porphyry system with the potential to host a multimillion ounce gold and base metal deposit. With this in mind Mariana has commenced an initial 1500m drilling programme with assay results due Q4 2013. The company believes these results will confirm the

mineralisation, economic and companymaker potential of the project. Mariana’s can earn a 70 percent interest in the second project in Peru being the advanced Soledad gold-copper-silver project located in the Cordillera Negra metallogenic province in Central Peru, 34 km south of the Pierina gold-silver mine operated by Barrick Gold Corporation. This project complements the company’s diversification strategy into Peru and offers excellent exploration upside which the company plans to drill in the first half of 2014. In addition, Mariana has assembled an impressive 200,000 hectare portfolio of gold, copper and silver projects in the prolific epithermal gold-silver district of Santa Cruz province, Argentina. The area has seen considerable corporate activity as companies seek out these major discoveries. Mariana has proved its ability to advance projects from discovery to resource phase; the Las Calandrias project was taken by the team from an initial discovery to a maiden Gold Equivalent resource of 519,000 ounces. Due to the current political climate, Argentina forms a longer-term delivery strategy for the company from which to deliver value for shareholders for the future. For more information about Mariana Resources visit:

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Innova think and insi

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ative king ight


With more than 100 offices from Vancouver to St. John’s, BDO is one of the leading accounting and advisory firms in Canada, and an invaluable service provider to the countless mining companies that call the country home

written by: Will Daynes research by: Peter Rowlston

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t was almost 350 years ago that the seeds of Canada’s mining sector were sown with the discovery of coal on Cape Breton Island, Nova Scotia. Three and a half centuries on and there are more than 800 mines across the country providing direct employment for more than 363,000 workers. Today Canada ranks first in the world for the production of potash and uranium, and among the top five for the production of nickel and diamonds, with its mining industry contributing approximately five percent of its gross domestic product. Present in Canada for more than 90 years, BDO has been a witness to much of the mining sector’s development during that time period, in the process becoming one of the country’s leading accounting and advisory firms in its own right. A member firm of the international BDO network, which boasts over 1,000 offices in 135 countries, the company has worked with thousands of clients in exploration, production and service companies, developing its services to address key industry issues such audit and assurance, domestic and international taxation, risk management, business valuations, technology solutions and transaction services. “Recent years have certainly seen the firm focusing on industry expertise when it comes to our service offering,” states National Energy and Natural Resources Leader, Michael Madsen. “Historically the bulk of our work has been audit or tax related, however much of our growth is now stemming from speciality service areas such as valuations, risk advisory, transaction services and IT solutions, which are tied directly to the mining sector.”

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Historical services they may be, but audit and tax related offerings remain an allimportant speciality of BDO. “From an audit perspective,” explains Energy and Natural Resource Partner, Tammy Thompson, “our clients understand the benefits that come from our extensive understanding of the industry here in Canada. This experience helps us in identifying key issues and helping businesses of all sizes, from juniors to larger producers, navigate through them.”

As Madsen goes on to highlight, the firm has worked hard in recent times to emphasise the need for clients to demand more from their audits in times of economic uncertainty than they may have done so in the past. “What these clients should be demanding today is a service that provides input and advice of how to control costs, how they can better access global markets and how to do business in these unfamiliar environments. I think that is where we have been able to deliver a cohesive strategy around

“Going forward BDO plans to stay in tune and evolve with Canada’s mining sector as well as the players operating within it”

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what we offer to companies situation where the country is playing host to somewhat of a in the middle market that they maybe haven’t been able waiting game where there are to access in a cost efficient those who possess assets but manner before now.” no capital, and others with Years that BDO has been Prior to the economic crisis, capital who are looking for present within Canada at a time when metal prices good, long-term prospects. reached record highs and “Despite the changes that have occurred in recent years, rapid growth was a priority of virtually every major mining player in the significance of Canadian involvement on the market, Canada’s mining industry was the world mining scene should by no means be experiencing the same flurry of activity as downplayed,” Madsen continues, “what with most of the other leading regions in the world the country remaining home to a rich resource were seeing at the time. This unfortunately based economy and two of the world’s strongest meant that the country was not immune to mining exchanges in the form of the TSX and the subsequent effects of the global downturn TSX Venture exchanges.” which resulted in metal prices softening, One of the major areas expected to be the investor confidence worsening and activity focus of future Canadian mining investment decreasing at pace. What this created was a will be the Northern Ontario Ring of Fire, the


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National Energy and Natural Resources Leader, Michael Madsen

“One of the major areas expected to be the focus of future Canadian mining investment will be the Northern Ontario Ring of Fire” name given to the massive planned chromite mining and smelting project in the James Bay Lowlands which has been described as one of the most promising mineral development opportunities in Ontario in more than a century. “Attempts have been made to develop this area for some time now,” Thompson says.

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“On-going efforts of the Ontario Ministry of Northern Development and Mining will continue to position Ontario for future success and to highlight the long-term importance of the Ring of Fire. Meanwhile, BDO already has offices based in the northern areas meaning we are well positioned to help in creating the jobs


Energy and Natural Resource Partner, Tammy Thompson

and infrastructure that the region will require. This presence has also allowed us to forge excellent relationships with local communities which we expect to serve us well in the future.” “While the Ring of Fire represents a massive area of untapped potential, with that comes a host of challenges,” says Business Development Manager, Carlos Lobo. “Fortunately these are challenges that can be overcome with the use of new technologies and Canada is very much at the forefront of innovation.” Becoming one of Canada’s most important service providers has been neither a quick or simple journey therefore it goes without saying that, in order for the firm to retain its standing

with the country, going forward BDO plans to stay in tune and evolve with Canada’s mining sector as well as the players operating within it. “In order to achieve this,” Madsen concludes, “we see ourselves not only continuing to offer the types of service that got us to where we are today, but continuing to strengthen our delivery of non-audit type services as we expand our suite of speciality service offerings to all sizes of mining companies.” For more information about BDO visit:

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A provi possib

The mining sector has alwa centre of Ontario’s growth. Ontario Mining Association ( province’s future will only c

written by: research by: Pe

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Ontario Mining Association (OMA)

ince of bilities

ays existed as a pillar at the Thanks to the efforts of the (OMA) its role in defining the continue to gain importance

Will Daynes eter Rowlston

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Ontario Mining Association (OMA)


ining has been a fundamental province and is one of the longest serving part of Ontario’s economic trade organisations in Canada. While a great fabric for centuries and is now deal has changed in the 90 plus years since seen as an integral component its founding, the fundamental mission of the of its future. Ontario’s native OMA remains the same and that is to improve population is widely credited with being the the competitiveness of the industry while first to tap into the province’s mineral wealth, consistently promoting safety and sustainability. while major discoveries and mine development By maintaining its core commitment to in the 20th century helped to underpin these ideals the OMA has helped create a Ontario’s rise to the status of Canada’s mining jurisdiction revered for being one of most populous and wealthiest province, the safest in the world. Indeed, over past 30 and supported Canada’s development as an years the sector’s lost time injury frequency industrialised and globally has improved by 90 percent competitive nation. and it is now at a level of 0.5 Today, mining in Ontario is per 200,000 employee hours. The OMA puts its success a multi-million dollar industry with a total of 38 mine sites in advocating for industry operating throughout the advancement down to province, which collectively its ability to harness the are bringing to the surface a collective strength its highly range of metals and minerals engaged members. It is proud Average revenue including nickel, gold, copper, to serve as a focal point for produced from mining in Ontario per year zinc, platinum, salt, calcium discussions on the issues and opportunities facing the carbonate, gypsum, talc, and mining community and to since 2008 diamonds. A key contributor to Ontario’s economy as well offer its members a unified voice on matters as being an engine for regional development, of public policy and opinion. mining in the province produces revenues A goal of the association is to overcome the of around $10 billion per year on average. challenges that impede the competiveness Furthermore, given that 90 percent of the inputs of responsible operations and to foster an to production are Canadian and 75 percent of environment that bolsters mining’s potential to mineral output is exported to markets in the be the cornerstone of Ontario’s new, innovationUnited States, Europe and Asia, the industry also oriented green economy. With this goal in contributes immensely to improving Ontario’s mind, the OMA offers its members support international balance of trade. in a number of areas such as navigating the Established in 1920, the Ontario Mining provincial policy network, gaining valuable Association (OMA) is the body tasked with insights and building important relationships representing the mining industry of the by joining OMA committees and developing



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“...we work as strategic partners with our clients...�

Irwin Lowy LLP is a Toronto, Ontario law firm focused on corporate and securities law, including public and private debt and equity financings, stock exchange listing matters, continuous disclosure and mergers and acquisitions.

IRWIN LOWY LLP 365 Bay Street, Suite 400 Toronto, Ontario M5H 2V1 (416) 361-2515

inspired Your weekly digest of business news and views

Ontario Mining Association (OMA)

Pure wire gold in granite and quartz

industry positions, strategies and initiatives programs, and of course, championing and helping to shape legislation, policies, the long-term viability of the industry. guidelines and best practices. One of the things the OMA has always Further OMA support comes in the form been keen to highlight is the fact that the of coordinating industry initiatives and impact of mining goes far beyond mineral offering opportunities for extraction and processing, expert practitioners to with it being linked to many collaborate on innovative other industries and sectors solutions, networking with in the economy, including industry colleagues, nontransportation, construction, governmental organisations, equipment manufacturing, communities of interest, civil environmental management, servants and elected officials, geological services, education Invested in mineral furthering public awareness and research. It also provides exploration and and support of the mining a major boost to the region’s deposit appraisal in financial sector, what with the industry and delivering Ontario in 2011 Toronto Stock Exchange (TSX) innovative communications



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being the leading global mining exchange, listing more of the world’s public mining companies and raising more mining equity capital than any other. A recent study by the University of Toronto, commissioned by the OMA, highlighted the fact that the benefits from opening a single new mine include millions of dollars of tax revenue for government and the creation of a number of highly skilled, high paying jobs.

These benefits are shown to be worth $277.8 million per annum in direct, indirect and induced benefits; 2,280 employment-years of direct, indirect and induced opportunities; and $83.8 million in taxes to all levels of government each year. Meanwhile, the construction and building phase of one mine has the potential to increase GDP by $130 million and to offer as many as 2,000 employment opportunities. Further

“The OMA puts its success in advocating for industry advancement down to its ability to harness the collective strength of its highly engaged members�

Mine with railroad track - underground mining

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Ontario Mining Association (OMA)

economic gains can also be made through the construction of infrastructure to support the opening, operation, closing and rehabilitation of said mine. In 2009 the value of mineral production in Ontario was recorded as $6.3 billion. This increased to $7.7 billion in 2010 and again to $10.7 billion in 2011, before coming in at $9.2 billion in 2012, despite global economic uncertainty and weakened demand for commodities. The financial year of 2011 also saw $1 billion invested in mineral exploration

and deposit appraisal, the highest level ever achieved. With a multitude of opportunities yet to be explored across the province and an increase in activity expected with the demand for commodities slowly increasing, expect this record level to be broken again in the not-too-distant future. For more information about Ontario Mining Association (OMA) visit:

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Coastal Gold

Grade is king Coastal Gold’s Hope Brook property located in Newfoundland is rapidly developing towards becoming a very significant producer

written by: John O’Hanlon research by: Marcus Lewis

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Mine site looking north

coastal gold


he market has a lot to answer for, and so do investors in search of a quick buck. Where gold mining is concerned, it is a wellknown fact that as the price on the international metal exchanges fluctuates the viability of higher cost mines comes into question. There are properties all over the world that have been put into mothballs either because all the high grade material has been taken or because they can’t any longer sustain a decent margin. In many cases this is not the whole story, however. The President and CEO of Coastal Gold Dr Bill Pearson is a geologist with a stellar track record in exploration, specialising in resurrecting mines that had been thought expired. He explains his apparent instinct for divination as merely a result of 40 years of learning and applying geological principles but what is not in question is that he has done it before. “Over the years I have developed a speciality in taking old and unloved mines and reassessing them giving them a new look and getting them back into production.� As VP for Exploration at Desert Sun Pearson directed exploration programs that increased the overall resource base at the Jacobina mine in Brazil by 1.4 million ounces of gold and discovered a major new extension to the Canavieras deposit that is now being developed by Yamana - with a projected mine life of 30 years. And for Central Sun he and Peter Tagliamonte discovered new zones at the Santa Pancha mine and at Orosi (now Libertad) in Nicaragua as well as significantly expanding mineral resources in the region of Limon and laying the foundations of what is

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now a $1.6 billion company. Team building from top to bottom is one of Bill Pearson’s strong points. This summer he welcomed a new chairman to the board of Coastal Gold – Justin Reed is that rare animal, a banker trained as a geologist. When his company Castillian Resources first looked at the Hope Brook deposit, discovered in 1983 by BP-Selco, and mined from 1987 to 1997 with total production reported to be 752,153 ounces of gold plus a copper

concentrate, he felt immediate recognition. Others thought the prospects were too low grade and had no potential because everything significant had been found, but they were wrong. It was a familiar picture, he explains: “It was the technical work that was lacking. It needed proper geological work and engineering work. Once it got into production the geological work took a back seat, and of course this deposit was producing during a very low gold price era.” Any exploration was

“The people here are a pleasure to work with: they love working on ‘The Rock’”

New camp infrastructure

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coastal gold

Mine site looking south

limited to the immediate area economic assessment (PEA) round the mine, but Pearson on Hope Brook. The work is has since shown that it is now progressing well with remarkably wide open. Newfoundland contractor Castillian changed its New Valley Drilling, and the support of local communities name to Coastal Gold in which make up the bulk of June this year following the workforce. Even Dave a merger with Ridgemont Drilling campaign under way Iron Ore and reflecting the Copeland the Chief Geologist company’s confidence that is a Newfoundlander, though with global experience. it can now focus all the energies of its experienced team on Hope Work is progressing well on all fronts. As Brook, properties outside of Canada have well as drilling, further attention is being paid been disposed of. The merger and the $2.7 to the old tailings. Preliminary work carried million funding it released, paved the way to out last year showed recoverable gold at about achieving its immediate milestones, a 4,250 one gram per tonne – in tailings produced metre resource definition diamond drilling when the old plant was running at maximum programme and competing a preliminary efficiency. Metallurgical, geotechnical,

4,250 metres

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“We have weathered the storm over the last 18 months and are ready to take Hope Brook forward” environmental and engineering work under technical manager Allan Polk is progressing apace and the results of this work will form a key part of the PEA. In every way, Newfoundland is a great jurisdiction to work in, and he clearly appreciates the lack of political and regulatory issues compared with many gold mining countries. Power is a case in point. Before he spent $14,000 on a line to link the camp

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with the grid he was spending $5,000 a week on diesel; now the camp, and eventually the production plant, can enjoy reliable supply for a quarter of that cost. “We have an airstrip, a wharf, existing tailing ponds, a ramp to 350 metres below surface, and we can bring all we need in by boat,” he enthuses. “Newfoundland’s main shipping port, Port aux Basques, is just a 70 kilometre sea journey to the west and the town of Burgeo is only 30

coastal gold

kilometres to the east.” However the greatest advantage Newfoundland offers is its skilled workforce. “The people here are a pleasure to work with: they love working on ‘The Rock’ having worked on forestry, fishing and mining all their lives. They fix things before they are broken!” The results of the drilling programme will be out by the end of this year and the PEA completed early in 2014. Drilling is currently taking place in two areas known as the Footwall and South West Pit Extension. Next year attention will move to the longer term potential of the property, a large area to the west of the historical mine called the 240 Connector Target. “We won’t be able to drill it in the current program but if we can establish the bridge from the South West Extension into that

target the potential expansion is tremendous.” This is more than just a gut feeling. With significant past production, he feels that there is a lot of misunderstood geology going on. “The key thing is that if you want to find a big mineral deposit you need to get into a big system and that is what I always liked about this project – it is a very big system, also very under explored.” An important discovery he has made is that some of the old drill holes on which people were assessing the area were simply in the wrong place, or had failed to go deep enough. Drilling and geophysics have identified a major fold structure that closes below surface in the Connector Zone, he says, which explains why shallow historical drilling failed to intersect the gold bearing

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Core analysis program

coastal gold rock. Understanding these fold structures, he adds, are the key to unlocking the potential of Hope Brook. And Hope Brook is far from being the whole story. “It is part of something much bigger. It is not rocket science to realise that if we have some success here we are looking at a very substantial pit here, all of it open down dip and along strike!” He also believes that the historical grade analyses are seriously flawed. “I believe historical drilling seriously underestimated the grades because of problems of grinding but also because they were only looking for higher grade material.” In the circumstances prevailing in the 1990s mid-grade and lowgrade samples never even got analysed, so they show up as zero in the database. “We are busy filling in gaps in the old drilling, eliminating historical holes we don’t think fit the picture. I am very confident we will see a big increase in grade in the next resource assessment. Naturally we want to expand ounces but right now getting the grade up is our prime focus.” Coastal gold is a company to watch. It has strong investor support and will attract those investors who believe the gold price will recover going forward. Bill Pearson at any rate is optimistic. “I think now we have weathered the storm over the last 18 months and are ready to take Hope Brook forward – just watch what happens over the next half year!” For more information about Coastal Gold visit:

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potash ridge

Growing green

Potash Ridge’s Blawn Mountain deposit in Utah has got everything going for it, pulled forward by the market and pushed forward by an enthusiastic team in a supportive jurisdiction

written by: John O’Hanlon research by: Richard Halfhide

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potash ridge Ross Phillips, COO and Jeff Hillis, CFO at the Blawn Mountain Project


here’s a sense of purpose at Canadian junior Potash Ridge – and the tone is set by its President and CEO Guy Bentinck a Chartered Accountant who has devoted the 20 years he has spent in the mining sector to finding smart ways of securing finance. He is not a man whose head can be turned by specious arguments: every step in the development of a project has to be considered, and realistic contingency planning built in. Still, it’s impossible to miss the excitement and real passion behind his proposals for the company’s Blawn Mountain potash deposit. At first glance the pace seems to have been a breakneck one since he joined the company two years ago, at a point where Potash Ridge had done no more than acquire the rights to the property, in which it has a 100 percent interest. There’s a good explanation for this fast track development. In two years the project has come from virtually nothing to being a project with 40 years’ worth of reserves and a pre-feasibility study (PFS), completed November 7, that demonstrates its technical and economic viability. It has a lot to do with the fact that this is a well-understood resource, explains Bentinck: “This deposit was extensively evaluated in the 1970s, not for the potash but for alumina.” At the time, potash was of little interest compared to the alumina that the alunite ore also contains. The equivalent of $100 million at today’s values was spent in proving the resource and getting it ‘shovel ready’, and a pilot plant based on well understood technology

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Potash Ridge has offices in Milford and Salt Lake City, UT and in Toronto, Ontario

ran satisfactorily for three years before the market for alumina collapsed, and with it the prospects for financing Blawn Mountain. In April 2011, Potash Ridge gained ownership of all the historical data that had been amassed: “Boxes and boxes of drilling results, engineering reports, test work, permitting applications and the like fell into our lap and allowed us to develop the project very quickly,” he says. “And we expect to be able to continue to use the historical data from the remaining part of the resource,

which does not, however, form part of the basis for the PFS.” Development has been helped by other factors too. For one thing, all of the property is on land owned by the State of Utah. It is a lot harder to get a project permitted if it is on federal land and has to go through agencies like the Bureau of Land Management, the Corps of Engineers or the EPA, which are notoriously restrained where resource developments are concerned and very slow to take decisions. Utah, whose resources

“Drilling results, engineering reports, test work, permitting applications and the like fell into our lap and allowed us to develop the project very quickly” 158 | BE Monthly

potash ridge

645,000 tons

Annual SOP production play a major part in the State economy, on the other hand takes a very ‘can do’ approach to mining. It is not hard to see why the state would want to support Potash Ridge. The land that hosts the deposit is owned by the School and Institutional Trust Lands Administration (SITLA), whose land holdings are all designated for development in one form or another. “The basic business proposition is that the revenue derived is earmarked for education in Utah. We are going to be paying the School Fund around $30 million a year in royalties when we are up and running,” says Bentinck. Add to that more than a billion of capital investment in this remote part of the state, and the creation of around 500 full time jobs and the case for development is unassailable. As long as it does not go the same way it went in 1980, that is. Well that is where Guy Bentinck shows his crusading side. He is looking for every opportunity to make understood the distinction between MOP and SOP. Let us get it straight from the start: Potash Ridge is focused on sulphate of potash (SOP), a premium potassium source that is used in crops that are sensitive to chloride

Guy Bentinck, CEO of Potash Ridge

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or fertiliser burn. Tobacco, pineapple, soft chloride in many cases will reduce yields. fruits, salad crops, apples oranges and If the chloride content isn’t managed, it can avocado are all examples and there are lead to low quality crops and inhibit plant plenty more. Growers of these crops have growth in dry soils and saline areas. two choices – SOP or nothing. That SOP is a separate product, not a niche Muriate of potash (MOP) is the most subset of regular potash has been graphically common potassium source used in demonstrated over the course of 2013. MOP prices slumped from over agriculture, accounting $400 a ton to close to $300 for about 90 percent of following the collapse of a all potash fertilisers used Russia/Belarus cartel, but worldwide. A few plants like sugar beet actually like over the same period SOP chloride; many tolerate it prices in North America rose. “The tenuous link between including leaf crops and Full time jobs created MOP and SOP in people’s soya, but the presence of


Drilling was completed in 2013 in support of Potash Ridge’s Prefeasibility Study, which was released in November

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potash ridge

“We are going to be paying the School Fund around $30 million a year in royalties when we are up and running” minds really does not seem to be there any more. The supply dynamics of regular potash don’t exist with SOP and the market impact on regular potash has not affected SOP one iota: that is the competitive advantage of our project as against many other regular potash development companies.”


The PFS that is currently giving Potash Ridge a warm glow is in fact a very conservative document. It does not take into account any potential alumina by product credits, and the closer one looks at it the lower the risk appears. Contingency elements of around 15 percent have been built into capex and opex estimates; the jurisdiction is friendly, the infrastructure available and the deposit is a surface one, unlike so many potash resources. The fundamentals of potash are sound, as the world strains to get more productivity from less agricultural land, and the product gets an additional fair wind from the growing recognition of sulphur as a plant nutrient. “When legislation was enacted to require scrubbers to remove SO2 emissions, crop yields started declining!” When the alunite ore is roasted as part of the SOP process, SO2 is driven off, captured, and converted into sulphuric acid. That will provide an additional revenue stream, as will the alumina, which was after all what the deposit set out to produce 40 years ago, so there’s quite a bit of it. The residue from the leaching process is alumina rich, and though it does not form part of the current business case for the mine this could yield significant tonnage of material suitable for sale as a substitute for bauxite in smelting

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“Too many projects today get stalled because management did not think through the financing arrangements early enough�

Areas 3 & 4 seen in the distance have had little exploration work to date

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potash ridge plants – there is a strong demand for this material, he says, especially from China. Another potential market is to sell the material as an ingredient in manufacturing ceramic proppants used to keep hydraulic fractures open. With shale gas deposits taking a front seat in global energy markets, this is a growing procedure, and these proppants are an essential part of it because they perform much better than sand. Potash Ridge is expecting to produce 645,000 tons of SOP each year, and 1.4 million tons of concentrated sulphuric acid. The company now plans to embark on a full feasibility study (FFS) early in 2014, permitting activities are already underway and offtake arrangements for sulphuric acid production are going well, with an agreement already signed with a purchaser to take 20 percent of acid production. “We are currently negotiating with third parties on build, own and operate contracts to provide gas, power and water assets at the site.” He is confident he will be able to start construction in 2015, to start commissioning the process plant in 2017 and reach full production in 2019. “My primary focus here is on expediting the project. Too many projects today get stalled because management did not think through the

Core sample

financing arrangements early enough.” This is not a trap that Guy Bentinck will allow Potash Ridge to fall into: however he does have one big remaining challenge, and that is to bring on board a joint venture partner to take a good proportion of SOP production, to share the capital cost of development and maybe also smooth the way to borrowing such sums as may be required along the road to sustainability and profitability in the future. Discussions are already under way, and with the PFS out of the way, these will gain momentum in the new year. For more information about Potash Ridge visit:

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Petra Diamonds

A diamond in the rough A leading independent diamond mining group, Petra Diamonds is fast becoming an increasingly important player in the rough diamond market thanks to the leveraging of its impressive asset portfolio

written by: Will Daynes research by: Robert Hodgson & Candice Nice

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Petra Diamonds


The Kimberley underground mines in South Africa

irst listed on the AIM in 1997, with a market capitalisation of £10 million, Petra Diamonds has since grown into a leading independent diamond mining group and an important supplier of rough diamonds to the international market. A year after its listing Petra made significant new kimberlite discoveries in Angola, before later identifying a sizeable kimberlite field in the country at Alto Cuilo. As a result of its rapid success the company entered into a joint venture in 2004 with BHP Billiton to continue the exploration of its Angolan projects. In the years that followed Petra would go on to merge with ASX-quoted Crown Diamonds, operators of three producing diamond mines, and would acquire assets including the Koffiefontein mine and the Kimberley Underground mine in South Africa, as well as the Williamson mine in Tanzania. In 2013, the company’s production has increased to 2.7 million carats. In acquiring a total of five of the world’s most important diamond mines Petra has compiled for itself a major diamond resource of more than 300 million carats. With this base behind it the company has set out a transparent growth plan that is expected to see production rising from its current levels to approximately five million carats by the end of the 2019 financial year. Everything that the company has achieved to date has been with the aim of becoming a diamond mining group of global significance. Through its strong and responsible leadership, Petra is investing in the expansion and optimisation of its world-class assets in

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Petra Diamonds order to deliver significantly geovia increased production in the GEOVIA’s (formerly Gemcom) longstanding partnership years to come. Underpinning with Finsch Mine spans more than a decade. “From open Petra’s strategy is a focus pit to underground long hole open stoping and block on safety and sustainability, caving, Finsch’s use of GEMS and PCBC in addition to thereby driving value GEOVIA’s software customisation and services have for all stakeholders. been key to the success of Finsch’s extensive and varied mining operations”, Johan Langenhoven, Survey Analyst, Petra operates an Petra Diamonds. integrated and transparent business, with commitment to its values being present at every step of the production cycle. At the forefront of said cycle is the company’s exploration programme, which is presently focused in Botswana, where modern exploration techniques offer the potential to make new discoveries in previously explored areas. Meanwhile, from a mining and development perspective Petra operates both underground and open-pit operations in South Africa and Tanzania, with expansion plans in plans for each of its core assets. Following the processing phase, where ore material is disaggregated to extract the rough diamonds, the cycle moves into the sorting process where, once cleaned and acidized, the rough diamonds are sorted by in-house experts who assign them to parcels according to their shape, size, clarity and colour. Last but not least, Petra’s internal marketing team sells the rough diamond parcels by competitive tender in the key markets of Johannesburg and Antwerp, Belgium. Over the years the company has invested significant capital in order to extend the lives of its mines. Such an approach has helped reaffirm the fact that it is a business very Cullinan mine in South Africa much focused on value as opposed to volume

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production, with Petra going to great efforts to meticulously plan its mining and processing operations to capture a mine’s optimal rough diamond profile. Petra is committed to the responsible development of its assets and as such corporate social responsibility is integral to the way that the company structures and operates its mining, development and exploration projects. In its own words, Petra strives to make

a lasting contribution to the “triple bottom line” of people, profit and planet. This involves enhancing the local environment to the benefit of employees and communities, and is achieved through various initiatives that aim to stimulate local socio-economic development, as well as by upholding high standards of environmental stewardship. As well as endeavouring to create a zero harm environment for its employees to work in, the company also works to

“Petra has tried to foster a culture in which innovation and creativity in the workplace is encouraged and rewarded”

The Koffiefontein mine in South Africa

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Petra Diamonds

Rockbreaker breaking ore on top of a grizzly underground at Cullinan

ensure that these same men and women are empowered and accountable for their own actions, something it believes encourages them to work to the very best of their abilities at all times. Furthermore, Petra has tried to foster a culture in which innovation and creativity in the workplace is encouraged and rewarded. The company believes that no-one knows its operations better than its own employees and accordingly it looks to leverage its internal skills-base wherever possible. When it comes to its end product, Petra believes in the responsible mining and sale of its diamonds, and will only operate in countries which are members of the Kimberley Process. As a legitimate diamond miner operating in South Africa, Tanzania and Botswana, 100

percent of Petra’s production is fully traceable and conflict-free. As is the case with any forward thinking business, Petra is always looking to generate efficiencies across its operations and has applied a “back-to-basics” approach designed to review and assess areas for improvement at all times. Key focus areas at present include power and water usage, security and the effective use of labour. All of this is conducted in the knowledge that using past experience to improve future performance is integral to the company’s long-term success. For more information about Petra Diamonds visit:

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Charting a path to production Base Resources’ Kwale mineral sands operation is a game changer for both the company and the Republic of Kenya

written by: John O’Hanlon research by: Richard Halfhide

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Base Resources

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Tim Carstens

Base Resources


n 2008, after a career spent “being dropped into things that had to be turned round and fixed”, Tim Carstens founded Base Resources. The MD’s intent was clear - to build from scratch a meaningful resource company - and he has accomplished precisely that. Base listed on the ASX in October, 2008, with a portfolio of Australian iron ore projects. Carstens and his team, recognising that these assets would not produce any company-makers, “set sail round the world looking for the right opportunity we could build the company around”. In July, 2010, Base acquired its 100 per cent interest in the Kwale minerals sands project in Kenya. By the time the company dual-listed on London’s AIM bourse in January, 2013, it was clear that this project was rapidly emerging as the company-maker Carstens had set his sights on. Situated just 10 kilometres inland and 50 kilometres south of Kenya’s principal port of Mombasa, Kwale had already undergone investment surpassing $60 million to progress the project through resource definition, government approvals and Definitive Feasibility Studies (DFS) when Base took the reins. This meant the project was well advanced, allowing its new owner to fast track financing and development. “It was the ideal project to build our business model round, get our team in place, the capital base, the reputation to move to the next project and beyond,” Carstens says. His is a sentiment encapsulated by Base’s development model for Kwale. Instead of delegating project execution to a single

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ECPM contractor, Base engaged best-in-class specialists in port construction, dam building, process plant design and construction, and power land access infrastructure. “We have our own integrated management team that knits the whole thing together,” Carstens explains. “That model has worked well. It enables us to anticipate issues before they become reality and get engaged with the contractors very early, while we have plenty of options for dealing with those issues, supplementing the horsepower when we need to and keeping the project ‘on the rails’.” Kwale is of genuinely strategic importance to Kenya’s future mineral production and the sector’s role within the nation’s economic wellbeing. As well as proving up Base’s company mettle as an explorer, developer, and producer, the project heralds the dawn of a significantly enhanced mineral sector in Kenya. Kwale is Kenya’s first large scale modern mining operation and is poised to have a huge impact on GDP: income from titanium mining at Kwale will see mineral exports displace coffee as the fourth highest foreign exchange earner and contribute an estimated $225 million in royalties and taxes over the 13-year life of the mine. Beyond the numbers underpinning Kwale’s medium-term beneficial impact, the project is seen as a poster child for future large-scale resource development in Kenya. According

to Kenya’s Vision 2030 framework, Kwale is a long-term development blueprint to create a globally competitive and prosperous nation and transform Kenya into ‘a newly industrialising, middle-income country providing a high quality of life to all its citizens by 2030 in a clean and secure environment.’ There is collateral benefit for the government, Carstens emphasises, in terms of Kwale being a catalyst for future inward investment and development of the mining industry. “The government has been enormously supportive

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Base Resources

Pushing first ore to DMU

and has played its role.” company does business.” The So it’s important for ‘establishment’ phase of the Kenya, but it’s a blueprint to project involved the relocation of some 500 households. the future of Base Resources too, wherever it goes next. While most of these Workers on site at peak Reaching this point has taken households were squatting more than paying lip service on the land, Base treated all to CSR, Carstens says. He as if they were landowners in sees CSR more as the language of obligation the relocation and compensation process. This whereas, Base engages with the community on relocation was completed in compliance with a more transactional basis as a core function The World Bank’s Equator Principles. Roads of its business. “We give them what they need were re-routed, all infrastructure replaced so we get what we need” he says. Base wants and enhanced. Mosques, churches, schools, the communities to be satisfied with the value community hall and a new regional health and benefit the Company’s activities deliver centre have been built. to them. “In exchange, we have a proud “Employment is obviously very important workforce and a supportive community that is in a situation like this,” Carstens explains. an active and positive referee for the way the “During our peak construction phase, we


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had 2,400 people working on site, of whom 1,000 were from the local community – many had never had a job before.” Currently, 1,600 Kenyans are working onsite at Kwale and, for a country that has a very underdeveloped mining sector, Kenya has a good skills base, Carstens confirms. “71 percent of our operational workforce comes from the coastal province. There’s a good general level of education. And at a more advanced level, we have three or four comparatively young geology graduates working in the business; according to our exploration manager the guys coming out of Kenyan universities are as good as the guys coming out of Australia!” On the ground, Kwale has progressed with amazing efficiency and speed for a

DMU & process plant

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country new to mining. An eight kilometre access road, a 700 bed camp, a 16 kilometre 132 kVA power line and substation and the tailings facility have all been completed as well as the eight million cubic metre Mukurumudzi Dam that will provide water for the project while giving reliable year-round supply to the communities downstream. And the finishing touches have been put to Base’s dedicated Likoni Port facility, just across the channel from Mombasa itself, complete with a 65,000 tonne storage shed from which ilmenite and rutile is loaded onto ships via a conveyor system and a 1,000 tph shiploader on the wharf. Kwale’s infrastructure is in place. Its mining unit and concentrator are running well in the ramp up process ahead of commissioning of the ilmenite and rutile separation circuits at

Base Resources

“Zircon has very similar physical Properties to the remaining minerals in the concentrate and requires as much art as science in the separation process” the end of November. Commissioning of the zircon circuit will follow in January. “The key milestone for me is going to be in January, when we wave goodbye to our first bulk shipments,” Carstens says. “We will ramp up the ilmenite and rutile fairly quickly, so by May both will be producing at the full run rate. Zircon always takes a little longer. We will be most of the way to our target run-rate for zircon by mid-2014 but achieving the full

30,000 tonne per annum rate will most likely take all of 2014.” Mineral sands concentrate production is largely straightforward from a technical standpoint, Carstens explains. Ilmenite’s magnetic qualities, courtesy of its iron content, mean it can be extracted using powerful rare-earth magnets, while rutile, as a conductor, is amenable to electrostatic separation. “Zircon is different. It has very similar physical properties to the remaining minerals in the concentrate and requires as much art as science in the separation process. It is always the hardest part of a mineral sands plant to get your arms around.” Base has offtake agreements in place for all of Kwale’s production of rutile, ilmenite and zircon for the first year and most of the first 5 years of production. Ilmenite and rutile are predominately used as inputs in the production of titanium dioxide (TiO2) pigments used in paints, papers, ink, plastic and a huge array of other applications. Zircon is mostly used in ceramics and has many high-tech applications. China is the world’s largest consumer of all these chemicals: its demand for them has grown steadily and will certainly continue. As Kwale’s production profile is established, Base is also mindful of leaving a beneficial

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Process plant

Base Resources legacy in Kenya beyond Kwale’s 13-year mine life. Base Titanium, the parent company’s wholly-owned operating subsidiary in the country, is not just getting behind its in-house training programmes but also a scholarship programme for talented youngsters. It is also exploring a partnership with Business for Millennium Development (B4MD), an Australian not-for-profit organisation founded to build awareness and provide market insights on inclusive business opportunities in developing countries, to establish a agricultural development programme to get people efficiently growing selected crops that can be marketed globally to B4MD’s programme partners, among them the world’s largest food groups. In the near-term, Base remains fully supportive of its partner, the Government of Kenya, and continues to discuss ways in which changes to the nation’s mineral legislative frameworks can drive national economic prosperity and build a globally competitive destination for mining investment. “The real challenge at the moment that the Kenyan government is wrestling with – like many others in Africa and elsewhere – is getting in place the right fiscal and regulatory settings to balance the need to attract investment and at the same time maximise local benefit and participation,” Carstens says. “That’s something we really want to contribute to.” For more information about Base Resources visit:

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Promoting responsible mineral development in Africa The Southern and Eastern African Mineral Centre (SEAMIC), an international organisation under the umbrella of the United Nations Economic Commission for Africa: its sphere of influence continues to widen as does the relevance of its services to both public and private sector interests

written by: John O’Hanlon research by: Candice Nice

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The Director General of SEAMIC



EAMIC traces its origins back through the next phase of its development. to the late 1970s with the He explains the changes he has seen so far as establishment of the Eastern follows. “In the late 1990s, thanks to the well and Southern African Mineral advanced restructuring programmes in Africa Resources Development Centre and the privatisation of the minerals sector by (ESAMRDC), supported by UNDP and African states, the role of governments with various bilateral support programmes from respect to the mineral sector was changed the UK and Japan. Its headquarters were to become a regulatory body, and because of established in Dodoma in central Tanzania, this the role of SEAMIC was also changed. and in those days its remit was principally to SEAMIC was reorganised with a new role to carry out regional geological surveying and provide mineral related services and trainings to provide consulting services for programs and hence started to draw in the private sector of its founding member states, Ethiopia, as well as public institutions. The new role of Tanzania and Mozambique. These were later the Centre was realigned to become a mineral joined by Uganda, Angola resource services provider”. and the Union of the Comoros The Centre has a Governing followed by Kenya in 2006 Council, made up of the and Sudan in 2010 bringing Ministers responsible for the total membership to mineral resources from the eight. The name ESAMRDC member states. It is supported African states currently was also changed to the more by a standing committee members of SEAMIC pronounceable SEAMIC, and of the Ministers’ advisers. moved its operations to an The Board of Directors extensive new site at Kunduchi, to the north supervises the activities of the Centre and of Dar es Salaam. In 2007, at a meeting reports to the Governing Council which meets in Maputo, Mozambique the organisation once a year to approve the work programme announced that it was now open to all and budget of the Centre. SEAMIC is now an ISO 9001:2008 African states, with a mandate to provide mineral related quality services and testing certified institution, with state-of-theas well as consultancy work for the private art laboratories. “The facility provides and public sectors. The mission of the the member states and the private Centre is to “Promote socio-economic and sector, including small and large scale environmentally responsible mineral sector mining operations with geoinformation development in Africa.” and associated data processing services, The Director General Ketema Tadesse, who particularly geochemical and airborne served as Chairman of the Board of Directors geophysical data processing and mineral from 1997 until he took over the executive analytical laboratory services, for the entire leadership in 2006 to lead the organisation region,” he says.


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The work of the Centre is distributed across two major departments providing five technical services. These are: 1. Testing of chemical and environmental samples is carried out in the laboratories under the Chemical & Environmental Service, whose capabilities include whole rock analysis, X-ray fluorescence (XRF) and AAS/ICP-OES techniques, fire assay gold analysis and purification. 2.  M ineralogical, Petrological and Gemmological Service conducts analyses including X-ray diffraction technique; to name only a few of the techniques at its disposal. 3. Then there’s the Minerals Processing and Small Scale Mining Service that serves

big mining companies and small scale mining operations in processing and upgrading of different types of minerals and conventional bench scale operations; 4. Industrial Minerals Applications Service for bench scale industrial minerals product development mainly ceramic assay crucibles, tableware and other products; and 5. Geoinformation Services for geoscience data management and dissemination. There are 35 permanent members of staff, with a core of nine professionals, five technicians and seven laboratory assistants. The Kunduchi site covers a large area, Tadesse points out, and it needs its large warehouses to house all the rock samples it is sent for

A gem cutting training course practicing faceting of gemstones

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“Our principal activity is making high tech analytical services available to major companies, to small scale enterprises, and also to our member states” archiving and sample preparation prior to analysis. The laboratories themselves are fully equipped and certified. Work on mineral processing, chemical and environmental analysis, gemmology and petrology (including a separate lapidary unit for working on grinding and polishing gemstones) all have their own separate sections, and there is another for industrial minerals. On the one hand these facilities are working laboratories, providing services to clients – at cost (without any profit) both to member governments and the private sector clients, making this undoubtedly the best value-for-money resource available in Africa. “Our principal activity is making these high tech analytical services available to major companies, to small scale enterprises, and also to our member states with a view to provide an incentive to developers and thereby accelerate mineral resources development in the member states,” says Tadesse. “And within the technical departments we also provide training in instrumental analysis, sample preparation, assaying gold and precious metals and a whole range of other specialisms for university students and the private sector.” On the other hand this is a training facility, unique on the continent of Africa and possibly one of its best kept secrets. Demand for its

services will grow significantly as more states join SEAMIC, and the proposed students’ hostel at Kunduchi, for which the land has been set aside, will be built. Training is a significant source of funds for the Centre, though no fees are charged to universities and students sent by member governments and private companies are charged at cost. Among the courses on offer are a three week gemstone cutting course for miners, dealers and other interested parties, mineral laboratory management, environmental analysis, ore beneficiation testing methods, geophysics and geoscience data processing, The lion’s share of SEAMIC’s income which is up to 60 percent comes from the US $62,000 annual contribution paid by each member state, while the remaining income of 40 percent is derived from the sale of other services and training activities, notably chemical and environmental analysis and the work done on samples by the minerals processing laboratory. A further source of income is consultancy work, gem cutting and identification, and ceramics. The last is a growing capability: the ceramics laboratory has produced low tension electrical insulators and fire clay crucibles for the regional markets, and now makes a range of tableware that is sold to support the work of the Centre.

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The geoinformation department deals with data processing and management as well as documentation and archiving data. This important work contributes to the mapping of geological data for the whole of Africa, and SEAMIC co-ordinates the submission of the survey data from different states to the One Geology portal, which aims to create dynamic digital geological map data for the whole world. The information for Tanzania, Uganda, Kenya and Ethiopia has already been uploaded. SEAMIC has achieved much under Ketema Tadesse but he has a number of other pressing objectives in his sights. One is to pursue capital projects through joint venturing – an example would be to establish a gold refining plant on the Dar es Salaam site. Another is to advance the goals of the African Mining Vision (AMV), which was adopted by Heads of State at the February 2009 African Union summit following the October 2008 meeting of African Ministers responsible for Mineral Resources Development. “It aims to make better use of Africa’s mineral wealth in ways that will benefits population and help them rise out of poverty,” he says. The AMV is a first and foremost developmental mining approach that insists that the road to growth is through building economic and social linkages that benefit Africa itself. The African

Mineral Development Centre (AMDC) an implementation body for AMV has been established by the African Union through the support of the United Nations Economic Commission for Africa (UNECA) and the African Development Bank (AfDB) which will make use of the services of SEAMIC’s Geoinformation facilities and expertise in realising this vision. This programme for the coming five years will be funded by the World Bank and the governments of Australia and Canada with the aim of collecting geoscience data and process the same; and analyse samples generated from explorations activities from all African countries. SEAMIC has the capacity to receive and analyse this data, and the Director is keen to see the agreement finalised. A further goal is to set up a regional minerals analytical ‘fingerprinting’ laboratory for the eleven member states of the International Conference on the Great Lakes Region (ICGLR), headquartered in Burundi. Its main objective will be to install a high tech laser ablation mass spectrometry (LA-ICP-MS) analytical technique to pinpoint where particular minerals come from with the view to avoid exportation from conflict zones. The program is designed to stop illegal mining activities that are fuelling conflicts in the Great Lakes

“All the ore deposits in the Great Lakes region will be analysed and entered into a database” 188 | BE Monthly


Environmental samples analysis using Inductively Coupled Plasma (ICP) technique

Region. “All the ore deposits in the Great Lakes region will be analysed and entered into a database. Anyone wishing to sell a commodity will be obliged to send it to the laboratory for analysis to be established at SEAMIC. Once the samples are analysed by the LA-ICP-MS analytical technique the results are sent to Burundi to be matched against their master database. The benefits to these governments will be incalculable, and it will be a useful source of revenue for SEAMIC too.” As set up, and as defined by its name, SEAMIC is a regional body. However as soon as it concretises its pan-African initiative and as other countries outside of the eastern and southern African region join the organisation, SEAMIC will have to drop its S and E and align itself with the new agency being set for

the whole of Africa, “... to create equitable, transparent and optimal exploitation of Africa’s mineral resources.” The African Minerals Development Centre’s creation by the AU and UNECA that was announced in March this year, is envisaged to benefit SEAMIC in the very near future as the data processing work that will result from the setting up of this new body will be allocated to SEAMIC. To make use of the expertise and the already installed laboratories invitations have been sent by SEAMIC to all mineral rich African nations to join the Centre. For more information about SEAMIC visit:

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Swakop Uranium

Namibia’s gift to global green energy Chinese capital and the combined resources of southern Africa’s experience in mining come together in the Husab uranium mine, a project that confirms Namibia’s leading position as a uranium oxide producer

written by: John O’Hanlon research by: Jeff Abbott

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Swakop Uranium


onstruction of one of the world’s largest uranium mines was officially inaugurated on April 18 this year, with fireworks, foot-stomping, marimbas and a fountain that danced to classical music, when a ground breaking ceremony took place at the mine site in the desert near Swakopmund in Namibia. Swakop Uranium’s $2.5 billion Husab project has been in development since the signing in Beijing of an EPCM contract in November last year, but the ground breaking ceremony was an opportunity for the partners in the project, including the China Africa Development Fund, the China Guandong Nuclear Power Holding Company (CGNPC) and the Namibian government-owned Epangelo Mining Company to reiterate the project’s importance for Namibia. The Swakop deposit is undoubtedly the most significant uranium discovery of recent years, even decades, said Swakop Uranium’s CEO, Mr. Zheng Keping. “It will elevate Namibia past Niger, Australia and Canada to the second rung on the world ladder of uranium producers,” he said. “The eight kilometre uranium mineralisation has been confirmed as the highest grade, granitehosted uranium deposit in Namibia.” Until April 2012, Swakop Uranium was a 100 percent owned subsidiary of Extract Resources, an Australian company listed on the Australian, Canadian and Namibian stock exchanges. During April 2012, Taurus Minerals Limited of Hong Kong, a subsidiary of CGNPC, a large, clean energy corporation under the supervision of the State-owned Assets Supervision and Administration

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Breakthrough productive solutions. Long recognised for our ability to engineer productive equipment, Joy Global is taking production to even higher levels through the enhancement of cost-focused technologies. Our proven productive solutions are setting the standard for surface and underground mining world wide.

Steeledale, Johannesburg South Africa Joy Global, P&H and Joy are trademarks of Joy Global Inc. or one of its affiliates. Š 2013 Joy Global Inc. or one of its affiliates. All rights reserved.

Swakop Uranium Commission (SASAC) of Joy Global the State Council of China, It starts with an unparalleled commitment to mining. became the new owners Our business is focused solely on serving surface and following a successful underground mining operations with superior equipment takeover of Extract Resources and direct service that achieves the lowest cost per unit of which was subsequently production over the life cycle. delisted. CGNPC’s investment Our reach is global, with facilities and service centers that span six continents and more than twenty countries. But in Swakop Uranium was our focus remains local. Our people and services are close not only the biggest in to the mines to provide better decisions and solutions. Namibia since the country’s Above ground and below, we strive to create a more independence, but also seamless experience that raises the bar for the entire by far the single biggest industry. And it starts with Joy Global. investment by China in Africa. In November 2012, the Namibian state-owned mining company, Epangelo, and Swakop Uranium finalised an agreement for the subscription of a ten percent stake in Swakop Uranium in a deal valued at $226-million. More than $100 million was spent in getting the project to the construction phase, which as we have seen will cost another $2.5 billion. The mine is being developed as a conventional, large-scale load-and-haul opencast mine, feeding directly into a conventional agitated acid lead process, incorporating ion exchange and solvent extraction circuits. Both these processes are necessary to obtain the optimum amount of uranium from the ore and to concentrate and

“Husab will elevate Namibia past Niger, Australia and Canada to the second rung on the world ladder of uranium producers” BE Monthly | 195

purify it. Construction of the Husab mine, is progressing well. Most of the main contracts have been awarded, bulk earthworks are well in progress, construction of the permanent road and bridge to the mine site is under way. Nampower, Namibia’s state energy supply company, has approved guaranteed power supply of 50 MW for the mine and the first water was delivered via a temporary pipeline from the Rössing reservoir into a newly-built pond on the Husab mine in February 2013. For this purpose, Swakop Uranium purchased a redundant pipeline from Areva (owner and developer of the Trekkopje uranium mine). Permanent water will be come from a desalination plant, either from the large-scale plant Areva built to supply water to its own mine, or from a new desalination plant that is going to be built near Swakopmund. The tight schedule for construction envisages a plant in full sustainable production by the end of 2016. Pre stripping will commence next year; the next significant target is to have a stockpile of a million tonnes of run of mine (ROM) material ready by mid2015, with the permanent water supply so critical to the project available by the end of the third quarter of that year. At that point it will be possible to ‘cold’ commission’ the

plant, with first uranium production taking place by the end of 2015. Assembly of the massive Komatsu haul trucks that will be used on the mine started in August 2013. The trucks, each with a payload of 327 tonnes, are delivered to site in a knocked-down kit form at a rate of two trucks per month. While 26 of these trucks will be procured during the project phase, 39 of them will be operating on the mine when

“Each gigawatt of increased new capacity will require about 150 tpa of extra uranium mine production” 196 | BE Monthly

Swakop Uranium

the mine starts producing at as two South African road its nameplate capacity of 15 authorities,” said Komatsu’s million pounds of uranium Gerhard Klopper. The huge dump bodies are the last part oxide per annum. Getting of the truck to be fitted: it the first two dump bodies takes two cranes to lift them. the 2,250 kilometres from 15 million pounds of Johannesburg to the site in Capital cost of the uranium oxide (U₃O₈) is June was a major logistics Husab Project within spitting distance of operation. The bodies are 14.6 metres long, 10.7 metres the largest uranium mine in wide and 5.4 metres high. the world, McArthur River “Every step of the journey had to be carefully in Canada, which can produce up to 18 measured and investigated before the million pounds a year. It is certainly a lot 50-tonne load could be granted permission more than its local competitors Rössing, the to travel. Even then, strict conditions were longest running operation producing around applied and the vehicles needed to be four million pounds annually and Langer accompanied by at least two escorts from Heinrich at about five million pounds. That the transportation company Transcor, as well it is backed by China comes as no surprise.



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Swakop Uranium Despite the question mark that Germany’s retreat from nuclear posed, as well as the Fukushima incident, nuclear remains the most developed source of green power and is being enthusiastically pursued by China, India – and even the UK. Swakop Uranium’s, director of communications and stakeholder involvement Grant Marais, says that even though the uranium price will remain low in the short term, the company believes that prices will increase substantially in the medium and long term. The World Nuclear Association 2011 Market Report reference scenario (following the Fukushima accident) shows a 48 percent increase in uranium demand from 2013 to 2023, he says. “Each gigawatt of increased new capacity will require about 150 tpa of extra uranium mine production routinely, and about 300 to 450 tonnes of uranium for the first fuel load. About 435 reactors with a combined capacity of over 370 GWe, require some 78,000 tonnes of uranium oxide concentrate, containing 66,000 tonnes of uranium from mines, or the equivalent from stockpiles or secondary sources, each year. This includes initial cores for new reactors coming on line.” Uranium mines worldwide currently supply some 68,800 tonnes of uranium oxide, containing 58,344 tonnes of uranium. That’s about 86 percent of utilities’ annual requirements and it leaves a significant shortfall, he adds. For more information about Swakop Uranium visit:

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Feeding South A

As the only vertically integrated ph Foskor is vital to the country’s ag mine is one of the largest open

written by: Jo research by:

200 | BE Monthly

Foskor: Phalaborwa

Africa’s growth

hosphate producer in South Africa griculture sector: its Phalaborwa n cast operations in the world

ohn O’Hanlon Candice Nice

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Foskor: Phalaborwa


halaborwa in Limpopo Province in the Phalaborwa area as early as the 8th holds reserves of some 2.5 billion century. At that time the Ba-Malatji metaltonnes of phosphate-bearing ore, working tribe, on discovering iron and copper or five percent of proven world 150 kilometres north of Bushbuckridge where phosphate rock reserves. The they had settled, moved to this site and named Phalaborwa complex, within which Foskor’s it ‘Phalaborwa’, which means ‘better than operation is situated, is a geological intrusion the south’. Here they established a primitive caused by sub-volcanic activity approximately smelting and metalworking industry, 2,000 million years ago. The complex is unique some of the remains of which have been as it is host to many valuable minerals, the preserved and are on display at the Foskor most relevant of which are phosphate, copper, Museum in Phalaborwa. zirconium, iron and vermiculite. Rio Tinto’s Foskor is a wholly owned subsidiary of the Palabora Mining Company is a near neighbour Industrial Development Corporation (IDC). of Foskor and is South Africa’s only producer The company was established in Phalaborwa in 1951 with the aim of making of refined copper Development of modern the South African fertiliser mining activity started at industry independent of the beginning of the century phosphate rock imports, when several geologists and has since grown into noted the occurrence of the a successful commercial phosphate bearing mineral, enterprise. The Phosphate Rock & Copper division as well apatite, in the vicinity of Tons of ore as the Zirconia Business Unit Loolekop. The presence of processed annually are situated in Phalaborwa apatite was first described in 1906 and an unsuccessful in the Limpopo Province, attempt at mining phosphate ensued. In and together with the Phosphoric acid and 1940, however, the eminent geologist, Dr. Fertiliser division situated in Richards Bay, Hans Merensky, started mining vermiculite KwaZulu-Natal, comprise the two operating in Phalaborwa and proved the phosphate entities within the Foskor Group. reserves to be truly vast in extent although Foskor’s Mining Division in Phalaborwa low in grade by world standards. extracts phosphate rock (foskorite and Archaeological evidence and carbon isotope pyroxenite), from which Foskor’s Acid Division dating indicate that primitive mining and in Richards Bay produces phosphoric acid smelting of copper took place at Phalaborwa and phosphate-based granular fertilisers some 1,000 years ago, followed by the for local and international markets. The smelting of iron ore 700 years later. From phosphoric acid is exported to India, Japan, artefacts found in the area it is known that the Netherlands, Bangladesh and Dubai, and copper of remarkable purity was produced a small quantity sold locally. Phosphoric acid



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Akulu M toiletries facility w sulphon manufa

The Chl supply c and inst

Contact us: 011 806 8700 |

Akulu M and pet certainly


Marchon has a unique 36 year history as the leading supplier of chemical raw materials to the surfactants, s, personal care and household industries. Two manufacturing sites, first and foremost the Chloorkop which was constructed in 2008 and commissioned in 2009, operates the latest technology Ballestra nation plant which primarily produces sulphonic acid, sulphated alcohols and esters. Secondly the Mobeni acturing site, specialises in the production of various grades of petroleum jelly and mineral oils.

loorkop site is also home to a National Distribution and Warehousing centre which encompasses a total chain management structure. Akulu Marchon also operates a fleet of tankers and trucks ensuring delivery tant access of quality products to customers.

Marchon Mobeni, has a highly specialised team, assuring quality and producing top grades of mineral oil troleum jelly which complies to stringent standards.The formal quality management system and standards y adds value in the market to the Akulu Oils product range.


Akulu Marchon is a division of AECI a company listed since 1966 on the JSE Securities Exchange which has its origins dating back to 1894, as a Nobel dynamite company at Modderfontein, near Johannesburg. The AECI portfolio of businesses include AEL Mining Services, Africa’s leading explosives supplier and the Specialty Chemicals Cluster which comprises of 15 value-adding specialty chemicals in which Akulu Marchon is one of these. Heartland Properties a services business, optimizes the value of real estate holdings surplus to AECI’s operational requirements by selling land and selectively investing in revenue-produced buildings to act as a catalyst for sales. AECI’s vision to be the chemical and mining services supplier of choice for customers in its chosen markets. In South Africa, several of the companies trade and have an international reach with various customers

206 | BE Monthly

and suppliers across the globe. They use world class technology to operate in South Africa, the rest of Africa and in other emerging markets. Safety, Health, Environment and Quality are of paramount importance to Akulu Marchon. Both sites, are OSHAS 18001:2007 accredited, as well as accredited with ISO 14001: 2004 and ISO 9001: 2008 certification. Akulu Marchon is a signatory of the Responsible Care™ initiative through the Chemical Allied and Industries Association, whereby Management Practice Standards are verified by independent third party auditors. Akulu Marchon have been audited successfully against these standards which are also supported in line with internal company policy and AECI’s Green Gauge initiative. Akulu Marchon has extensive Principal representation covering a diversity of household and personal care markets, as well as other industrial and agricultural markets, supplying a range of customers from multi-nationals to local manufacturers and companies. For Akulu Marchon to meet its vision and objectives of striving to deliver value, a dedicated sales team is supported by a team of highly specialised technical chemists who assist with the development of various formulations, provide application assistance and trouble shooting, as well as offering the latest market trends information and product briefs and training. E.

Foskor: Phalaborwa

has agricultural, industrial, medical and retail applications. Products made from phosphoric acid include catalysts, rust proofing materials, chemical reagents, latex, dental cements, tooth whiteners, toothpaste, disinfectants, food supplements, carbonated beverages, waxes, polishes and animal feed. The opencast mine in Phalaborwa, in South Africa’s Limpopo Province, has the capacity to yield 2.6 million tons per annum of phosphate rock concentrate from processing 35 million tons of ore per annum. Once crushed, milled, concentrated and dried, most of the phosphate rock concentrate is transported by rail to Foskor’s processing plant in Richards Bay, 800 kilometres away on the country’s east coast. Agricultural markets continue to drive the business. “While the phosphate rock is used to produce a wide range of products including food and industrial grade phosphates, the bulk

of future expansion will be driven by increasing demand in the fertiliser and feed markets.” Says Foskor’s Chairman M G Qhena who is also the CEO of the Industrial Development Corporation of South Africa (IDC), Foskor’s parent company. “Global granulation capacity is estimated to rise by a total of seven million tons of phosphoric acid input between 2012 and 2017. Similarly, new capacity of some 0.9 million tons of phosphoric acid is expected over the same period.” Given the attractive margins available to vertically integrated producers, the location of this new downstream capacity is increasingly being dictated by the availability of rock resources. Most of this additional demand will be met by projects located in Africa, the Middle East and South and Central America. The future for Foskor therefore seems favourable from a global economic perspective.

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Following some challenges mainly attributable to equipment failure, the management committed Foskor in 2011 to a strategy of asset replacement costing around R320 million over a three year period. The benefits of this programme cannot be overemphasised, says Mr Alfred Pitse, Foskor’s CEO: “New technology and reliable production capacity will reduce plant downtime and maintenance costs, provide additional production capacity, improve the utilisation of equipment, ensure compliance with anticipated environmental legislation and improve the safety and health of both our employees and the surrounding communities.” The company takes its stakeholder relations very seriously. “The relationship between Rio Tinto’s Palabora Mining Company (PMC), Foskor and Ba-Phalaborwa Municipality is very important,” says Pitse. “PMC mines in the same area as Foskor and for this reason there should always be respect for the relationship between Foskor and its fellow corporates.” If the businesses should collaborate, the local people are even more important. “Foskor’s operations can dominate the socioeconomic destinies of the communities in which we operate,” he says. “We therefore work closely with government at national, regional and local level to support their social

imperatives and policies, and provide financial and in-kind support for specific projects that improve education levels, alleviate poverty and upgrade local infrastructure.” The company hosts three schools on its premises at no cost, two at Phalaborwa and one at Richards Bay. It adopted the former Stanbury Primary School and renamed it Foskor Primary School in November 2009. Foskor is also encouraging early childhood development training at a pre-school in

“Being recognised as one of South Africa’s top employers enables us to attract and retain only the best in the industry” 208 | BE Monthly

Foskor: Phalaborwa

Phalaborwa by partnering with the national Department of Basic Education in providing teaching aids and development programmes to educators in the region. At Richards Bay Foskor is reconstructing the Ntambanana Community Centre as a lodge for widows, orphans and other vulnerable persons. This community centre will be equipped with training facilities for business start-ups and will offer assistance to entrepreneurs. At tertiary level Foskor sponsors the University of Zululand’s Science Centre to ensure that Zululand’s communities have access to worldclass science and technology apparatus. Not merely one of the region’s biggest employers, Foskor is also one of the best places to work. This was confirmed when in August it was one of the few organisations that achieved the exclusive Top Employers South Africa

2014 certification. Companies were assessed on such criteria as primary and secondary benefits and working conditions, training and development, career development, and culture management. Only those companies that met the most stringent research criteria received the Top Employers South Africa recognition. As Vice-President for Corporate Affairs and Human Capital, Sarah Luthuli said: “This award is a great achievement not only for Foskor as a company but also for our employees. Being recognised as one of South Africa’s top employers enables us to attract and retain only the best in the industry.” For more information about Foskor: Phalaborwa visit:

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Howden Africa


yet diverse Howden Africa is a market driven, customer orientated company: its main business activities are the design, manufacture and marketing of air and gas handling solutions to a wide range of industries

written by: John O’Hanlon research by: Jeff Abbott

BE Monthly | 211

Compressor plant for a Howden thermal ice storage system

Howden Africa


owden Africa was established in companies to focus on supplying a range of Johannesburg in 1952, to supply market-leading products to applications where fans for the mining and power performance and reliability are paramount. generation industries, just under The Howden business units located in Africa a century after the Scottish are Howden Power, Howden Fan Equipment, engineer and inventor James Howden set Howden Projects and Donkin Fans. What sets up the parent company in Glasgow. Howden Howden Africa apart from its competitors is was an innovator par excellence, but his most that many of the technologies used in these successful invention was a forced draught industries, including mine ventilation and system that dramatically improved the cooling, were first conceptualised by Howden performance of steam boilers. itself. The business units are supported by two Today Howden and its many subsidiaries world-class manufacturing centres designed have a long history of innovation in the air to service their particular needs, both located and gas handling field. It has grown to become in South Africa. The Johannesburg operation a worldwide organisation handles a range of large with over 4,200 employees scale engineered plant and products, including the design and companies in 17 countries. Its equipment can and fabrication of turnkey be found in virtually every projects. It manufactures industry, but particularly equipment including fans, The year Howden Africa heat exchangers, furnaces and in those such as power was established cooling systems, gas cleaning generation, petrochemicals, solutions and dust scrubbers. mining, steelmaking and cement manufacture, where the most arduous The Port Elizabeth centre is responsible air and gas handling duties are to be found. for the design and manufacture of the So Howden has been a major engineering comprehensive range of Donkin preforce in Africa for over 60 years – well over engineered fans and accessories. Howden in fact, since as early as 1925, Howden customers thus have the benefits of a companies were supplying main surface fans personal service and a presence in Africa to South African, Zimbabwean and Zambian with all the additional advantages of access mines. In early 2012, the Howden Global to an international network of world-class holding company Charter International was technological and engineering skill. Its acquired by the global manufacturing group involvement in the past development of Colfax Corporation of the United States. Africa’s industrial infrastructure is in this way Though the customers probably did not detect matched by its commitment to the future. any immediate change in the service they Howden Power has supplied virtually all receive, the synergies with Colfax’s existing the boiler Forced Draught (FD), Induced fluid handling capabilities will help both Draught (ID) and Primary Air (PA) fans for


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Internoise (Pty) Ltd t/a International Sound Control & Insulation 13 Francolin Street, Somerset West, 7130|Tel. +27-(0)21- 855 1530 | Fax. +27-(0)21- 855 0875 |

WE SOLVE YOUR NOISE PROBLEMS TURN-KEY SOLUTIONS • Survey / Measurements / Advice • Acoustical & Mechanical Design • Engineering & Fabrication • Installation & Commissioning • 25 Years Worldwide Experience • German Experts MAJOR CONTRACTS • Power Stations (via Howden Power) - Medupi and Kusile P.S. for Eskom South Africa, 2 x 6 Boilers - All Silencers for FD- Fans 8000 x 8500 x 5050 mm and for the PA – Fans 2000 x 2900 x 1500 mm • Mines (via Howden Fan Equipment) - Ø 5673 x Ø7172 x 2800 H conical Silencer, Zondagfontein Mine, South Africa - Conical Silencer Ø 4163 x Ø 5000 x 4000 lg. Paardekraal Mine, South Africa

• Mines (via Actom - ex Alsthom/ABB-Flakt) - Ø 6300 x Ø 6829 x 1500 high conical Silencers, Thubelisha Mine, South Africa - Ø 6600 x Ø 7258 x 2500 high Conical Silencers for Shondoni Mine, South Africa - Ø 6600 x Ø 7258 x 2500 high Conical Silencers for Impumelelo Mine,South Africa • Mines (directly) Anglo – Gold - Ø 4310 x Ø 6625 x 3000 long Inlet Silencers for Bulk Air Cooling Towers at Anglogold-Ashanti Moab Khotsong Mine, South Africa. De Beers - Large Blow- off Silencers for Main Compressor House at Cullinan Diamond Mine, South Africa.




W E D E S I G N , E N G I N E E R , M A N U FAC T U R E A N D I N S TA L L E F F E C T I V E A N D E C O N O M I C S O L U T I O N S

Howden Africa all of Eskom’s fossil-fired fleet of 13 power stations dating back to the 1960s. However as Africa’s leading supplier of boiler fan and air pre-heater technology it also supplies, petrochemical, sugar, paper and many other industries. It maintains a comprehensive inventory of parts and detailed records of every major installation. Additionally, it frequently finds a way to make considerable medium and long-term savings by refitting older plants with up-to-date fan and pre-heater equipment that offers far greater efficiency. It is happy to provide costed proposals for

any installation, whether or not it currently uses Howden equipment, to investigate the potential advantages of a partial or total refit.” Africa’s deep mines represent some of the most challenging and demanding situations in the world. Howden built its reputation by providing solutions for engineered systems in harsh environments and has taken the demands of deep mine ventilation in gold mining, where excavations often extend to depths of thousands of metres, in its stride. The quality and performance of equipment such as underground booster


INTERNOISE (PTY) LTD Company owner and MD, Heinz J. Beinroth (Dipl.-Ing & Dipl. Wirtsch.-Ing), has more than 25 years experience in the Noise Control Industry. Heinz worked for 15 years with G+H Montage, largest insulation & noise control company in Germany with some 5500 employees (Head of Export Division). A further 7.5 years was spent at Willich, the second largest insulation and noise control company in Germany where he

held the position as Area Manager for South and Southern Africa. In 1995, Willich set up their South African Division and in 1999 the Willich Division was taken over by H.J. Beinroth and the name changed to Internoise (Pty) Ltd. t/a International Sound Control & Insulation. Over the last 25 years they have been involved in many major noise control projects in the USA, India, UK, Indonesia, Malaysia, U.A.Emirates and Germany. Their South African projects include Kendal, Letabo, Matimba, Majuba (Power Stations), Saldanha Steel, Sasol 2 and many others.

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Specialists in: • Detailing, planning and fabrication of all types of structural steelwork, Platework and piping with specialised welding capabilities. • Plant fabrication and have the capacity to fabricate shop and site assembled Tanks, Chutes, Storage Bins, Silos, Ducting, Conveyors, Structures and Launders. • Drawing office service includes detailing and developing fabrication items for various industries. • Planet Projects has a comprehensive construction team to perform site erections and construction duties. Planet Projects is an ISO 9001:2008 and OHSAS 18001:2007 certified company and all work undertaken is subject to our Quality Assurance and Safety Processes. Tel: 011 738 1700 | E-mail:

Industrial Cleaning - T: +27 16 971 1218 | E: Hydraulics & Engineering - F: +27 16 971 35 30 | E:

Howden Africa and surface ventilation units PLANET PROJECTS has helped to introduce Our line of business is the detailing, planning and Howden products into other fabrication of all types of structural steelwork, plate work facets of mining such as dust and piping with specialised welding capabilities and we scrubbing and temperature also specialise in plant fabrication and have the capacity control, designing and of fabricating all types of shop and site- assembled Tanks, manufacturing a range of Chutes, Storage bins, Silo’s, Ducting, Conveyors, Structures and Launders. process compressors to cool Planet Projects is an ISO 9001:2008 and OHSAS deep-level gold mines. 18001:2007 certified company and all work undertaken is The technologies offered subject to our Quality Assurance and Safety Processes. by Howden to the mining Our clients include Howden, Alstom, Bhubezi Projects, sector are changing. South Bateman, TWP Projects, Anglo Platinum, Impala Platinum, African mines are getting Xstrata Coal, Group Five and Goldfields.. deeper, and conventional air cooling methods using surface chillers and blowers are becoming inadequate and energyinefficient, making it necessary to use hard ice plants to cool underground air. At 1,500 metres underground, rock surfaces reach 57 degrees, and hard ice plants provide an economical method of cooling. The acquisition of Donkin Manufacturing in 1988 strengthened Howden’s position in medium and smaller fans that can shift up to 13,000 cubic metres per hour. The company had built up a considerable reputation since its foundation in 1956. Donkin has a modern, comprehensively-equipped manufacturing facility with full performance and noise level testing capabilities in Port Elizabeth, and sales offices in Johannesburg, Cape Group Marketing Director, Geoffrey Chingwaru

“Howden has been a major engineering force in Africa for over 60 years” BE Monthly | 217

Town and Durban. Donkin Fans supplied several different fan types for installation in the new soccer stadiums constructed for the 2010 World Cup, for example the Nelson Mandela Bay Stadium in Port Elizabeth. And it doesn’t just supply the local market, having built up a considerable export business, including the recent supply of 500 HVAC ventilation fans, comprising both roof units and axial flow fans, to the prestigious Old Town Commercial Island project in Dubai. The diverse capabilities of the business come together in Howden Projects, which provides cost effective turnkey solutions to a variety of industries including mining, manufacturing and power generation. Wherever air cleaning is an issue, a system can be designed to keep particulate levels within statutory levels. Howden can design and supply single units, to integrate with and improve a customer’s existing plant, or become totally involved with the development of new projects from feasibility studies and consultancy right through to a full design, manufacturing, installation, testing and commissioning package with the highest standards of engineering and quality control throughout. A good example is its work at Eskom’s Majuba power station

in Mpumalanga, which boasts the world’s largest fabric filter plant - designed, built and installed by Howden Gas Cleaning. Howden Africa has always been a great place to work and to acquire engineering skills. Being part of a global group allows

“South African mines are getting deeper, and conventional air cooling methods are becoming inadequate” 218 | BE Monthly

Howden Africa

Howden main surface fan

the expertise and experience gained in one location to be applied in another and is an essential part of the approach that has kept Howden at the forefront of technology, and it has long recognised the importance of allowing individual engineers to develop their skills and knowledge to the full. In 2008, the company took the groundbreaking step of adding a formal dimension to its training capabilities by instituting Howden Academy, a residential training course in which engineers from all Howden business units are brought together for an introduction to the technologies and business

practices it employs and the industries in which it operates. This has the additional benefit of reinforcing the spirit of friendship, co-operation and shared knowledge that has always distinguished the company and is exemplified in South Africa by its support for broad-based black economic empowerment (BBBEE) as the best route to empowerment for all the country’s communities. For more information about Howden Africa visit:

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Planet Projects

Men of steel A well-established South African fabrication and boiler-making company with a client list that reads like a who’s who of the country’s mining and infrastructure sectors

written by: John O’Hanlon research by: Jeff Abbott


t was in 1969 that Douglas Simpson founded his fabrication business to serve the burgeoning industries of South Africa’s Gauteng Province. Today Planet Projects, the brand name under which the company sells its services, is located in the Labore district of Brakpan, an industrial town near to Benoni in the municipality of Ekurhuleni and conveniently located to the east of Johannesburg. The town has excellent road and rail links to the mining operations of South Africa, which today tend to be Planet Projects’ principal customers. The company has been involved in an impressive array of high profile projects such as Great Basin Gold’s Burnstone mine in the South Rand area of the Witwatersrand Goldfields in Mpumalanga Province, Goldfields’ South Deep mine to the

south-west of Johannesburg, Xstrata Coal’s Atcom mine and Anglo’s Waterval smelter. Other major clients include Alstom, Howden Energy Systems, Bhubezi Projects, Bateman, TWP Projects, Anglo Platinum, Impala Platinum, Xstrata Coal and Group Five. Though the company lists many of the majors in its client list the company still serves a wide range of industries from infrastructure to manufacturing and mining services. From its 6,168 square metre production area Planet Projects offers services such as the detailing, planning and fabrication of all types of structural steelwork, platework, and piping with specialised welding capabilities. It also offers a drawing office service which includes the detailing and developing of fabrication items for a range of industries. Total production capacity is 850 tonnes per month.

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“Planet Projects’ internal transportation division ensures that its clients can rely on deliveries that are both on time and competitive” So while Planet Projects’ primary offering to its clients would be the detailing, planning and fabrication of structural steelwork and platework, it also specialises in plant fabrication and has the capacity to fabricate all types of shop and site assembly tanks, chutes, storage bins, silos, ducting, conveyor structures, launders (troughs used for washing ore), furnaces and incinerators.

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Each client has its own requirements. Planet Projects’ internal transportation division ensures that its clients can rely on deliveries that are both on time and competitive in price. Its fleet includes tractors, double and tri-axle trailers and pick-up trucks. The construction team can travel to the client’s site to carry out on-thespot erection and construction duties. With

Planet Projects

so many years of experience, the team is well qualified to ensure that all essential quality, health, safety, legal and statutory requirements are followed. Planet Projects is an ISO 9001:2008 and OHSAS 18001:2007 certified business: quality and safety are twin priorities in all the work it carries out. The work Planet Projects does is diverse and all of its operators have to be skilled. Training is thus an essential part of its remit – both to fill its own vacancies and to address the skills shortages that affect the industry as a whole. The company is accredited to offer both welder and boilermaker institutional training and it offers apprenticeships in both trades. As well as on the job training, these apprentices

receive theoretical instruction and do practical work in a controlled environment. An important aspect of this focus is it certification as a merSETA workplace. MerSETA is one of the 21 Sector Education and Training Authorities (SETAs) established to promote skills development in South Africa, and encompasses manufacturing, engineering and related services. Planet Projects is participating in the accelerated artisan training programme (AATP) project as well as other merSETA skills development projects. For more information about Planet Projects visit:

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Hyderabad Metro Rail

Metro and more The Hyderabad Metro Rail has pulled together the experience of cities across the world to create a mass transport system that suits India

written by: John O’Hanlon research by: Abi Abagun

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Aesthetic construction of Hyderabad Metro Rail elevated viaduct

Hyderabad Metro Rail


yderabad, the capital city of Andhra Pradesh, sits on the banks of the Musi River to the north of the Deccan Plateau. With a metropolitan population approaching eight million people it is the fifth most populous city in India. India’s cities generally experience the same challenges of traffic, pollution, pressure on services and the like as those in other parts of the world, but they have their unique characteristics as well according to the Managing Director of Hyderabad Metro Rail Limited NVS Reddy. For one thing, they tend not to have sidewalks – life at ground level can be chaotic! That’s why it was a good idea to devise an elevated rapid transit system for the city. Congestion was bad, and the lack of transport efficiency of this city, which is a powerhouse of India’s burgeoning pharmaceutical and IT sectors, was holding it back. The project was initially launched in 2008 as a pubicprivate partnership (PPP), the largest in the world. In 2010 following an abortive initial bidding round, the Concessionaire (Design, Fund, Build, Operate & Transfer) contract was awarded to Larsen and Toubro, India’s largest, most respected and diverse engineering, construction and infrastructure organisation. Chief Executive & Managing Director of L&T Metro Rail (Hyderabad) Ltd (LTMHRL) is Vivek Bhaskar Gadgil, who is clear about the challenges of delivering such a massive project but along with Mr Reddy, delighted that it was awarded the accolade of “Global Engineering Project of the Year” at the Global Infrastructure Forum in New York earlier this year.

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vossloh India has developed Rapid Transit systems to make travel easier for commuters across the Mega cities of the Sub-continent to cater to the increasing needs of people. Metro rail is successfully running across 4 cities (New Delhi, Chennai, Bangalore and Mumbai) and VOSSLOH has been a partner in the development of those systems from day one. By supplying its maintenance-free and well proven fastening system (Type 336), VOSSLOH has shown to be a reliable source for making rail travel fast and safe. This partnership is now going to continue in the development of Hyderabad Metro Rail (MRTS)

project, which will span over a length of 72 km (Phase 1) and will cover 3 high density traffic corridors. The Metro Rail system under construction is a completely elevated system using a Standard Gauge (1435 mm) track and the electrical traction is 25 kV AC, 50 Hz overhead traction system.

Hyderabad Metro Rail

Hyderabad Metro Rail cantilever type station

The project is based on the public-private fares, rental from developments around the partnership Model (PPP) and uses a highly stations, and advertising. It will enjoy this innovative financial structure that calls for for a concession period of 35 years, which is very little in the way of public funds. Out of extensible by another 25 years after which the a total investment of the equivalent of $2.6 entire project will revert to the government. NVS Reddy is the driving force behind the billion the Indian government provided ten percent in the form of viability gap funding, project from the government side. A financial the remainder coming from equity put in heavyweight with many infrastructure by L&T and bank loans. The government of projects under his belt, Reddy has travelled Andhra Pradesh through its Public Sector the globe to assess the success or failure of Enterprise (PSE) is spending their solutions to similar problems. “We are not simply another $33 million on land acquisition, road widening, building a metro here in Hyderabad: I want to make relief and rehabilitation. Apart from that there will be use of this opportunity to no more public funds: L&T redesign Indian cities as eco-friendly, people-friendly is carrying the remaining Track length in Phase 1 risk, its return coming from cities. We have the latecomer


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advantage: I am able to avoid the mistakes and emulate the best practices!” He was deeply impressed by the work of Mayor Enrique Peñalosa in Bogotá. “He completely transformed what used to be one of the worst cities in the world and made it one of the best. He created quality public space, provided good connectivity and introduced bicycle stations at the bus stops. I am going to do that in Hyderabad.” He went to London (where you are never more than five minutes’ walk from the tube) and Paris to see what can be done about congestion, but found closer benchmarks in Singapore, Hong Kong, Taipei and Bangkok, where he learned lessons from the BTS Skytrain, an elevated metro like the one being built at Hyderabad. “Having built it they saw its full potential was not being realised: then, taking advantage of the height above road level they built skywalks below the tracks that straightaway became a landing to connect the stations with adjacent facilities, whether retail, entertainment or educational. It made Bangkok an efficient city.” Hyderabad’s Metro Rail grasps that concept from the outset. The tracks are approximately 8.5 metres above road level; the clearance required for road traffic is 5.5 metres. The remaining three metres is people space, he says. “In that gap I am going


to build skywalks giving access to schools, colleges, hospitals, residential complexes and commercial complexes so one does not have to go down into the roads.” Unlike many of the other 200 or so mass transit systems in the world Hyderabad will have built in intermodal connectivity, rather than having to have it retrofitted. Because the Metro, he points out, is just part of a much larger vision for the city. “Phase I,

“We have the latecomer advantage: I am able to avoid the mistakes and emulate the best practices!” 230 | BE Monthly

Hyderabad Metro Rail

unching Girder – State of the art construction equipment used to build elevated viaducts of Hyderabad Metro Rail

the current work in progress, The depots and stations is a 72 kilometre stretch, with will become hubs of economic, 66 stations and three depots, social and educational while Phase 2 will see a activity in their own right. further 75 kilometres built. “I am building a symbiotic The system connects with relationship between the property developers and the existing main line stations, Overall investment and bus depots, and will link ridership,” says Reddy. “The in the project stations and surroundings to a new bus rapid transport become destinations. Malls, (BRT) system throughout the city as well as being supported multiplexes, t heatres, by bicycle lanes – and of course the skyways. restaurants and food courts, social spaces – Far from a simple metro it is part of a complete everything people want should be available urban redesign that will transform Hyderabad near a metro station. It will bring down into a people-friendly, green city. Reddy has congestion at road level.” one eye on Singapore’s ‘one-hour city’ concept Now that it is fully under way, the whole where no journey within the metropolis should project should be complete by 2017. More take longer than that time. than a third of the 2,500 single pillars rising



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“Every city has its ‘appetite’ and we have to get the balance right between offices, malls, multiplexes and the like” from the central reservation of the roads have been built. The eight kilometre test track and the ‘mother depot’, the eventual control hub at Uppal, should be completed by the end of 2013 ready for the rolling stock and advanced signalling systems to be trialled by the end of 2014. The Concessionaire’s task has been as onerous as that of redesigning an old and intractable Indian city. L&T’s first achievement

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though was in securing the contractual and financial arrangements in record time, says Vivek Gadgil. In this L&T’s clout with the ten nationalised banks involved was a key element. He then had to bring together a team of consultants from around the world, something that was negotiated with resounding success. The last major contract signed earlier this year was with Otis Elevator Company (India) Limited, for 670 elevators

Hyderabad Metro Rail

Aerial view of the Hyderabad Metro Rail Mother Depot

and escalators, its largest ever contract. Now 96 percent of contracts have been granted. Almost all the high tech equipment has to be imported, making procurement a risky business, much of it outside of L&T’s control. Nevertheless he has made some smart moves. “We were lucky in that I was able to close two large contracts in Indian Rupees.� This gives greater predictability on two large, fixed price contracts from Korean suppliers Hyundai Rotem and Samsung. These companies are responsible for the rolling stock and the automatic fare collection system (AFC) respectively. Other key suppliers now on board are Thales Canada for the signalling and communications equipment, Tata Corus for the rails, Vossloh for the rail fastenings and Voestalpine for the points and crossings.

Engineering challenges included untracked underground utilities and the selection of the best signalling systems. The Metro will run on the latest communication base train control (CBTC) signalling system, the first time a purely wireless system is being installed in India. Since this is the first time the Commissioner of Railways, who has to permit the system for commercial use, has seen it, it has been necessary to support that office every step of the way with information and data says Gadgil. Actually, all this is great stuff for Larsen &Toubro, whose engineering ability has been proved time and again since its foundation in Mumbai in 1938. Delivering a megaproject like this will only enhance its reputation and bring in more infrastructure

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Hyderabad Metro Rail work in the region. But the PPP model carries more risk than cash contracts. In theory ‘transit oriented development’, the construction and lease of a huge portfolio of commercial property on land provided by the government should pay back handsomely over the concession period: in practice, this is notoriously unpredictable territory. For example if more office space than the market can bear suddenly becomes available, rental levels will fall. “It makes it different; it also makes it difficult. We are going to construct the Metro over five years but 18.5 million square feet of commercial development takes much longer. I am not talking about the physical constraint but the business constraint: every city has its ‘appetite’ and we have to get the balance right between offices, malls, multiplexes and the like.” Whatever the problems though, VB Gadgil and NVS Reddy share the palpable excitement of making Hyderabad one of the world’s most efficient cities. It’s a nettle that must be grasped, Reddy emphasises: “India is still only 35 percent urbanised. Even in the towns only about two percent of the people have cars. So the car will be a nightmare for Indian cities: we need to advance the public transportation model and make all the human needs available near the metro stations and depots to have any hope of controlling congestion.” Top view of the Hyderabad Metro Rail elevated viaduct construction

For more information about Hyderabad Metro Rail visit: |

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A pathway of prosperity The Maputo Corridor is just one part of a network that is key to securing Africa’s economic future

written by: John O’Hanlon research by: Robert Hodgson

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Image credit: Grindrod SA & Maputo Port Development Company


he Maputo Corridor is a great African success story in terms of regional integration between the regions of Swaziland, southern Mozambique and the industrialised regions of Mpumalanga, Gauteng and Limpopo. And it is a traditional route for people and goods to take when they want to get from South Africa to the sea. In the 1970s 40 percent of South Africa’s exports went out through Lourenço Marques, as the capital of Mozambique was then called. The situation has changed out of recognition since then. South Africa has developed specialised hubs at Durban, Richards Bay, Port Elizabeth and Coega that take much of its bulk exports, cars, container traffic and the like, but Maputo has invested too, and has developed as a multiterminal port that suits many freight carriers. And it retains its geographical advantage for anyone situated in the north of South Africa. The number of businesses and people wanting to use the corridor is growing at a rapid rate as Africa’s economy expands. In 2004 eight interested parties came together to form the Maputo Corridor Logistics Initiative (MCLI). It is a non-profit organisation designed to present to the interested governments the case for sustained investment in the corridor to keep pace with the growing pressure on the infrastructure, and work together to anticipate and plan for future growth. It was inaugurated to support the Maputo Development Corridor (MDC), launched as a ‘spatial development initiative’ (SDI) in 1996, as the governments of South Africa and Mozambique sought to rebuild their economies and restore trade and

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Mozambique Community Network S.A.. What is it?

Mozambique Community Network (MCNet), is a Public Private Partnership, with the main objective to facilitate international trade and enhance the business environment in Mozambique with innovative solutions designed to facilitate international trade. The major objectives of MCNet are the design, implementation and operation of the Single Electronic Window (SeW) in Mozambique. A SeW is a complete trade facilitation solution that includes all infrastructure and resources necessary for an efficient, effective, sustainable and continuous operation of a system for the clearance and monitoring of goods movements. E.mail: |

MCLI MCNET & CUSTOMS CLEARANCE EFFICIENCY SINCE SEPTEMBER 2011 Mozambique Community Network (MCNet), was created on 2009 within the context of improving the business environment, following a Public and Private Partnership (PPP) model in accordance with current Mozambican legislation. The company was created as a joint venture between the public and private sector, with the Government holding 20% of the total shares, another 20% held by CTA (Confederation of Business Associations of Mozambique) and 60% held by Escopil, with SGS as a strategic partner responsible for the implementation and operation of the Single Electronic Window (SeW). The system observes the best practices and international standards established by such organizations as the UN Economic Commission for Europe (UNECE) and embraces the principles established by the Revised Kyoto Convention. The system is a complete trade facilitation solution customized to take account of the conditions pertaining in the Mozambique business environment, involving 2 components, namely Tradenet, working as a messaging tool for data submission by the trade community to Customs and Customs Management System (CMS), a closed network for declarations process by Customs. The SeW system boasts a number of advantages, including reducing the time and cost involved in the clearance process, the fact that operations are performed faster and safer with the use of computers, that the amendment of errors can be made faster and that it enables an increase in competitively.

MCNet provides since September 2011 two systems for information exchange that enables a faster sharing of information among the users, government entities and others that depend on this information for their operation. Mozambique TradeNet (TradeNet) is the SeW server that contains a platform that allows the sharing of information among several parts involved in the processing of commercial documents for the clearance of goods. Mozambique Customs Management System (MCMS) is a Customs Management System for the processing of goods clearance operations. These two systems bring benefits to Mozambique Customs and to the Trading Community, such as the submission of declarations, 24 hours a day, 7 days a week, the validation of declarations performed automatically by the system, integrated risk assessment module for customs, the automatic clearance of goods, a powerful monitoring tool for customs and an integrated database enabling accurate trade statistics. E. Call centre +258 21 34 11 10

Official launch of SeW by former prime Minister and Minister of finance

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$204 million Investment needed to upgrade Mozambique rail link

Maputo car terminal

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investment ties. Today MCLI has more than a hundred members. “We see ourselves as part of the African Union’s push to increase regional trade and also inter-African trade,” says Barbara Mommen, the organisation’s Chief Executive Officer. “But also we see more and more from the AU and the United Nations Economic Commission for Africa (UNECA) that the corridors are being used to push at a greater speed the implementation of a truly continent-wide free trade area.” The Maputo Corridor links to the transKalahari and trans-Oranje corridors and the much longer North-South Corridor that links Dar es Salaam with Durban through them to a pan-African network that will be the key to the continent’s economic growth. She sees it as one of her tasks to sell this broader vision to the members, who naturally focus on day to day issues connected with getting their cargoes through the congested border crossings and thence to the ports at Maputo and Matola. It is becoming increasingly evident that the corridors will play an important role in the social as well as the economic development of Africa. And not just in making them efficient tools to allow mining companies to rush Africa’s wealth to the ports. Mozambique in particular has to be prudent about its


Lebombo border dry port

exploding coal industry. “How do you derive benefits for the man on the ground in such a big picture?” she asks. “We have always assumed that if we can ensure that goods and people move and at the same time create the environment for economic development along the routes so these benefits trickle down. But we don’t really know that.” Barbara Mommen is determined that MCLI

should be more than a lobbying group for the transport industry but should engage all the stakeholders in a true public-private partnership whose aim is to improve living standards, and the economy of the region as a whole. “My grand vision for the Corridor is to have a special economic zone from Ressano Garcia to Matola.” There’s plenty of opportunity, she points out, for support

“We see ourselves as part of the African Union’s push to increase regional trade and also inter-African trade” BE Monthly | 243


Distinctive Clearing is a personalized and professional Clearing Agent that has risen above the rest with “Sky is the Limit� approach. The full spectrum of services we offer is as follows: We specialize in cargo clearance via road, rail, air and sea freight across africa and all over the world. We specialize in repair and returns and special attendance on bonded cargo to be acquitted. We obtain SADC and EUR1 certificates. Telephone: +27 (0)1379 38475 | Cell phone 082 924 7295 | Email:

MCLI industries, tourism, mineral distinctive clearing beneficiation activities and We specialise in cargo transported via air, road, rail and sea the like to grow. Just as much freight. With over 14 years of experience we attend to all as the large corporations, procedures, delivering personal “hands on’ service in the she asks how MCLI can be shortest possible time to avoid costly delays at the borders. relevant to the small traders An open door policy is in place for all our customers (mostly women) carrying meaning we are available 24/7 all year around to assist with custom processing of shipments. goods on their back or their Guaranteed service satisfaction is the basis of our business head between Komatipoort making us DISTINCTLY the best clearing agent at the and Ressano Garcia. “We Komatipoort/Lebombo border. need to ask that increasingly E as we see the growth of bulk cargo driven by demand from India and China. I wonder are we doing any real service to the poorest? I believe we need to start broadening the scope of our organisation, not so much into social issues as to understanding the underlying dynamics we are facing.” Of course these concerns have to go hand in hand with the need to ensure that Corridor traffic is economically viable, efficient and corruption-free. MCLI has been spending a lot of time lobbying the three governments of South Africa, Swaziland and Mozambique to engage them in a memorandum of understanding with the South African Revenue Service (SARS), representing the public sector and MCLI the private sector, to work closely on advancing the economic Maputo ship loader

“My grand vision for the Corridor is to have a special economic zone from Ressano Garcia to Matola” BE Monthly | 245

trajectory of the region. To do this will require a shift in her organisation’s role. “At the moment this is not possible because of our pure freight focus so I think it important that we get the balance right. We can do that by involving the governments and understanding their policies on economic growth and see how we might leverage their work to benefit the corridor from an

efficiency, economic growth and a research point of view. That way you create a balance of accountability which does not exist in our present arrangement.” Though MCLI is in fact a coalition of private and public sector partners it runs on goodwill. That will always be needed but the goals need to be hardened up. “We have the multinationals pushing coal and magnetite and

“Our key message is that it is vital to create the environment for borderless trade”

Loading of sized coal

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Maputo Port

other commodities through the ports at a rate of knots but where does that leave the man on the street in those communities along the corridor? We need to balance the exports with manufacturing beneficiation and want to move towards providing or facilitating research on the corridor that can be passed on to government agencies to work with us. We have a moral obligation to answer these questions.” Meanwhile there are plenty of headaches to be faced if Maputo is not to lose traffic to the alternative ports to the south. The creakiness of the rail link, which is double track electrified on the South African side but single track and not electrified on the Mozambican side. A bad crash closed that line earlier this year. The loss was great. Before

the accident the Ressano Garcia line carried seven goods trains and two passenger trains a day. Each month it carried 30 trainloads of coal and iron ore from South Africa to Maputo port. “It was something of a wake up call for the corridor,” says Mommen. “Now there’s a plan to spend $204 million on upgrading the track and rolling stock.” The three operators in the corridor, MCLI partners Transnet Freight Rail (TFR), Swazi Rail and Portos e Caminhos de Ferro de Moçambique (CSM) have formed a joint operations centre that, she feels, will offer a more robust approach to future needs. The pressure for rail to function efficiently needs to be kept up though. Road capacity is bursting at the seams with up to 600 trucks

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MCLI trying to get through the border crossing daily. For an African border post it copes quite efficiently, she concedes, but so much more could be done quickly if the political will was there. “We need the implementation of the one stop border post which was agreed by the governments in 2007 and still has not been implemented. Without that we are not going to be able to compete with Durban.” And though the port itself is open 24/7/365 the crossing shuts overnight except at peak periods over Christmas and Easter. “This is a short corridor and you want to maximize turnaround times,” she says. MCLI has made good progress on issues like corruption, which will decline as the trade environment gets fairer and the goals of trade facilitation and customs modernisation are advanced, Barbara Mommen believes. “Our key message is that it is vital to create the environment for borderless trade: I think the political will is there now. SADC, COMESA and the EAC have agreed to implement a free trade area in 2014. The African Union was looking to that tripartite free trade area to be the precursor to a continent-wide FTA. It is a complex situation and I may be over simplifying it, but smaller countries are still seeing their revenues running the wrong way. Nevertheless I believe that if you see the bigger picture the benefits of vibrant intraAfrican trade are far greater than the loss of customs duties.” For more information about MCLI visit:

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Driving Sout development

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th Africa’s t By working closely with the government, its customers and partners, The South African National Road Agency Limited (SANRAL) keeps the economic arteries of the country in a condition befitting Africa’s largest road network

written by: Will Daynes research by: Abi Abagun BE Monthly | 251


here are of course a number of reasons behind South Africa’s growing competitiveness amongst global markets in the last decade or more, however one that stands out in particular is the country’s modern transportation sector. South Africa’s roads, railways and ports are already regarded as a crucial engine for economic growth and social development, and stand to develop further still through the government’s stated intent to invest billions of Rand in the years to come. Measuring some 747,000 kilometres South Africa’s road network is the largest found anywhere on the continent, with the drive from Musina on the country’s northern border to Cape Town in the south representing a 2,000 kilometre journey alone. While South Africa’s Department of Transport is responsible for overall policy, road building and maintenance falls under the remit of the South African National Roads Agency Limited (SANRAL), as well as nine provinces and local governments. SANRAL was established as an independent statutory company, operating along commercial lines, through an Act of Parliament in April 1998. The purpose of the company is to maintain and develop South Africa’s expanding national road network and to manage assets with a depreciated replacement value of 238 billion Rand, excluding land. Operating under the terms of its founding legislation, The South African National Roads Agency Limited and National Roads Act (Act No. 7, 1998), SANRAL is governed by a board of eight people, six of whom are appointed by the Minister of Transport; the Chief Executive

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Bridging the gap between road infrastructure and environmental sustainability CCA Environmental (Pty) Ltd is a firm of environmental consultants based in Cape Town, South Africa. The company provides a broad range of environmental consulting services to the private and public sectors for projects relating to:

• Roads and related infrastructure • Oil and gas exploration and production • Water and sewer infrastructure • Solid waste and wastewater management • Renewable energy • Housing developments • General commercial and industrial developments • Rail and related infrastructure • Tourism and resort developments • Miscellaneous

+27 21 461 1118/9 | |

SANRAL Officer, who is appointed by the Board; and a representative of the Minister of Finance. SANRAL has proactively sought alternative sources of finance for road infrastructure and opportunities to reduce dependence on taxbased revenues. It has done so be harnessing the core skills and experience in road development and management of a highly motivated, professional and passionate team of people. SANRAL’s principal tasks are to strategically plan, design, construct, operate, rehabilitate and maintain South Africa’s national roads

in order to mobilise the country’s economy, generate revenues from the development and management of its assets, and undertake research and development to enhance the quality of life of all South African citizens. Further to this, the agency exists to advise the Minister of Transport on matters relating to South Africa’s roads, and finance, plan, construct, provide, operate and maintain roads in neighbouring countries upon request from the Minister of Transport and in agreement with the respective countries. These tasks are in line with the strategic

CCA EnviroNmental (PTY) LTD The highly professional and experienced staff of CCA Environmental has, collectively, been involved in providing environmental consulting services for over 300 projects. Clients include various authorities, parastatals and private sector businesses such as large industry and private developers. CCA Environmental has, since 2000, provided environmental consulting services to SANRAL for various road projects in the Western Cape, Northern Cape, Eastern Cape and KwaZulu-Natal. These services range from comprehensive Scoping studies and Environmental Impact Assessments for highly complex and controversial projects, such as the N2 Wild Coast Toll Highway between East London and Durban, to Basic Assessments for small-scale projects such as community access roads in rural areas in the Eastern Cape. Other services provided to SANRAL include the compilation of Construction Environmental Management Programmes, formulation of Environmental

Management Programme Reports for the use of borrow pits and quarries and provision of Environmental Control Officer services during the construction phase of projects. For all projects, CCA Environmental ultimately ensures compliance with all applicable legislative and regulatory environmental requirements and the delivery of high quality information to decisionmakers. Our highly motivated team brings the following benefits to our project involvement: a strong base of specialist sub-consultants; proven experience in public participation; and sound project management skills. Experience gained on SANRAL projects has enabled CCA Environmental to successfully procure and provide similar environmental consulting services abroad, such as the Environmental Impact Assessment currently being completed for a road decongestion programme in Mauritius. E.

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objectives of SANRAL, as defined in its strategic vision. These include the management of a national road network ensuring best value for money, to continuously improve the efficiency of business practices, to maintain market confidence, to carry out the government’s targeted programmes to better the life of all citizens, and to work in co-operative partnership with road users, transport providers, relevant authorities and the private sector. The agency has two primary sources of income that help fund its activities. Non-toll roads are funded from allocations made by South Africa’s National Treasury, while toll roads are funded from borrowings on the capital and money markets – bonds issued on the Bond Exchange of South Africa (BESA) in the name of the South African National Roads Agency Limited, or through the concession of roads to private sector consortia. SANRAL actually introduced and consolidated the concept of Public Private Partnerships in South Africa, a move that culminated in the internationally acclaimed Maputo Development Corridor. In meeting the objectives set by the government, SANRAL leverages its procurement process to empower people,

strengthening the capacity of individuals and communities to enable them to better the course of their lives. This form of economic empowerment is critical to meeting the Millennium Development Goals as set out by the United Nations in 2000. Furthermore, SANRAL is committed to eradicating poverty through the creation of

“SANRAL is committed to eradicating poverty through the creation of opportunities for engagement in productive activities by poor people” 256 | BE Monthly


opportunities for engagement in productive activities by poor people, especially those residing in rural areas. This takes the form of targeted procurement of works and services, training people to become economically active and the promotion of small, medium and micro enterprises (SMMEs). This particular strategy enhances the provision of basic services, builds capacity, advances gender equity, acts as a catalyst for development in other growth areas, creates employment, and develops small and medium enterprises which alleviates poverty and improves the status of women. This brings women into the mainstream of the economy, which is particularly important in respect to

unemployed rural women who are the most disadvantaged sector of our society. Since it was established, SANRAL has been an active participant in communities throughout South Africa. The national road network itself makes a vital contribution towards security, safety, economic growth and social development, while also influencing both the cost and flexibility of the country’s economy, and the business and recreational opportunities of South Africa’s citizens. For more information about SANRAL visit:

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Winging to Africa’s heart RwandAir is a young airline with a young fleet: it is making full use of Rwanda’s position to link with Africa’s capitals and beyond

written by: John O’Hanlon research by: Robert Hodgson

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wanda may be one of Africa’s smallest nations, and one with an unenviable recent history to say the least, but since its now President Paul Kagame was elected in 2003 it has experienced a decade of relative peace and security. This has enabled Rwanda to take advantage of its strategic location within the African continent. ‘Landlocked’ can also mean ‘central’: Rwanda is situated at the heart of Africa, and therefore well placed to act as a hub for regional air traffic

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The country’s new national carrier began operations on 1st December 2002 under the name RwandAir Express, with passenger transportation as its primary activity though it held a concession to carry out airport ground handling of freight at Kigali International airport, Kanombe, as an ancillary activity. In March 2009, following a tragic accident at Kanombe, it was decided that the airline would stop being a fleet borrower and become a fleet owner and operator. To mark the change of direction the company changed its name to RwandAir.


Since 2009, RwandAir has built a reputation as a reliable timekeeper that offers affordable fares to most capital cities in eastern Africa while operating a young, state-of-the-art fleet. Passenger numbers have just about doubled each year as the airline acquired new aircraft and opened new destinations. Today the airline operates a fleet of seven aeroplanes made up of two Boeing 737-800 NG series planes with a capacity for 154 business and economy class passengers, two Boeing 737-700s seating 120, two Bombardier 75-seater CRJ900

NextGen and a Bombardier Dash 8-200. RwandAir was the first African carrier to fly the 737-800 NG with its interior mood lighting and enhanced ‘Sky’ interior design. This aircraft offers a much higher operating range capability than was previously available, in the region of 6,000 kilometres. RwandAir is now able to offer direct flights to south-western Europe, Asia Minor and Southeast Asia as well as the Middle East and any number of West African destinations. In April this year Bombardier Aerospace and RwandAir announced that a purchase

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RwandAir agreement for one Q400 Oando Marketing NextGen turboprop airliner Oando Marketing is Nigeria’s leading petroleum retailer, at a cost of approximately distributing 1-in-5 litres of petroleum products sold in $33 million. “As demand Nigeria. It also supplies jet fuel to local and international for domestic and regional airlines in search of efficient aircraft refueling services. travel in Africa accelerates, A subsidiary of Oando PLC, Oando Marketing delivers our 67-seat, dual-class Q400 excellent service by leveraging a variety of operational strengths. These include skilled staff, presence at Nigeria’s NextGen aircraft will ensure key international airports, fleet of ultra-modern aircraft RwandAir is well positioned refuellers and strategic partnerships to provide services to offer increased capacity across West Africa, most recently with GOIL in Ghana. on popular routes that are Oando is ISO 9001: 2008 certified, a member of Joint being opened and serviced Inspection Group (JIG) and a Strategic Partner of IATA. with our 37-seat Bombardier Dash 8-200 aircraft,” said John Mirenge, RwandAir’s Chief Executive Officer. “The Q400 NextGen turboprop is the right aircraft to develop our domestic and regional market and to firmly support RwandAir on our path towards growth and increased profitability.” Stressing the importance of getting fleet selection right for the passenger profile that RwandAir is targeting, he added: “We are also complementing our new dual-class Bombardier CRJ900 NextGen regional jets by offering similar cabin amenities on the Q400 NextGen aircraft, providing for a seamless passenger service between the two aircraft models and aligning our total fleet strategy towards a unified passenger experience. We

“Africa is not short of people who want to fly” BE Monthly | 263

As pioneers in oil trading, we are constantly expanding our scope of operations to provide fuel, consultation and related support services to our global client base. Major services provided by Royal Petrol are listed below: • Royal Aviation • Royal Lubricants • Oil and Petroleum Trading • Consultation Service • Financial Solutions • Into Plane Negotiation and Inventory Fuel Programs


Kenya Airways Technical offers maintenance services to Kenya Airways and third party airline aircrafts and aircraft components guaranteeing world class service, quality and on time performance. We provide the following services: • Base Maintenance for A and C-checks and aircraft modifications • Line Maintenance for

Transit, Daily, 48Hour and weekly checks • Components maintenance in Technical Workshops • Technical Services including Engineering, Planning, Training and Quality Assurance. Kenya Airways Technical is currently responsible for the maintenance of RwandAir aircrafts in Nairobi, Mombasa, Lagos and Accra stations.

Email: Telephone: +254-20-6422097 |


Contact us today and put your company in the spotlight!

RwandAir are developing the RwandAir brand and we are gaining Royal Petrol is a worldwide fuel service company, which momentum in the region has proven itself as the leader in the industry for trading of through selection of the right lubricants and various petroleum products,bunkering and aircraft and right services for aircraft refueling. After being the preferred fuel provider our growing market.� in the Middle East, Africa and Asia for years, Royal Petrol This is a well-tried plane. is today globally recognized for its distinguished service standards and worldwide reach. As pioneers in oil trading, RwandAir will become the we are constantly expanding our scope of operations to 12th operator of Q400 and provide fuel, consultation and related support services to Q400 NextGen aircraft in our global client base. Africa, and its Q400 NextGen aircraft will join more than 40 Q400 and Q400 NextGen aircraft that are already in service with, or have been ordered by, eleven operators in nine countries in Africa. Now RwandAir serves most East African Community (EAC) capital cities with daily flights and flies to Johannesburg and Dubai three times a week. Recently it introduced flights to Lagos in Nigeria, Libreville in Gabon and to Brazzaville in the Republic of Congo. Current destinations include Nairobi, Entebbe, Mombasa, Bujumbura, Dar es Salaam, Kilimanjaro, Johannesburg, Brazzaville and Dubai. In 2012 RwandAir launched direct flights to Mwanza, Tanzania’s second largest city and a key centre for the mining and minerals industry. Until then there were no direct flights between Kigali and Mwanza and passengers

Royal Petrol

$33 million Cost of new Bombardier Q400

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“We are in the heart of Africa and almost every other African country is between three and four hours’ flight time from Kigali” had to travel via Dar es Salaam. Additionally the company has codeshare agreements (a form of aviation industry arrangement where two or more airlines share the same flight) with SN Brussels on the Kigali-Brussels sector and Ethiopian Airlines on the Kigali-Addis Ababa sector. In February 2013, Mirenge announced that the airline would soon add Accra, Cape Town, Harare, Juba and Zanzibar to its list of destinations.

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John Mirenge, himself a Rwandan citizen, was appointed CEO of RwandAir in October 2010. A graduate of Uganda’s Makerere University he is also Chairman of Tristar Investments and Prime Holdings, a government-owned investment company, and a director of The Rwanda Investment Promotion Agency. From 2008 until 2011 he also served as a non-executive director of the South African power


utility Eskom. Under his leadership the company has broadened its horizons. Keeping up passenger numbers is not the primary problem for a growing carrier like RwandAir, he says. “Africa is not short of people who want to fly. But over the last 18 months we have developed our strategy and stopped thinking like a small airline. We have decided that rather than just meeting existing demand we need to go out and create it. We want to be a catalyst for air transport in the region, stimulating the market and demonstrating that flying is not something reserved for the well-off.” He would like to see Kigali become a mini-hub within Africa; and this is no fanciful vision. “We are in the heart of Africa and almost every other African country is

between three and four hours’ flight time from Kigali,” he points out. Apart from the codeshares it already has in place, RwandAir signed an agreement with Turkish Airlines two years ago that extends the African carrier’s reach into Asia, particularly South East Asia, as well as other international destinations including North America. With a young and competitive fleet, RwandAir is now in a much better position to realise Kigali’s potential and its aspiration to become what has been describes as the economic turntable where east meets west. For more information about RwandAir visit:

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Emirates Steel

Shaping a low carbon future The unwavering dedication Emirates Steel has towards producing only the finest quality products also extends to the company’s commitment to health and safety, the environment and energy efficiency

written by: Will Daynes research by: Candice Nice

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istorically known for its large hydrocarbon wealth, which gives it one of the highest GDPs per capita in the world, the UAE’s decision in recent years to diversify its economic plans marked an important shift in the growth of the GCC country. It has subsequently proven to be a hugely successful move, with the country’s non-oil and gas GDP outstripping that attributed to the energy sector, accounting for 64 percent of its total GDP. This trend is reflected in Abu Dhabi, the wealthiest emirate of the UAE, with substantial new investment being made in industry, real estate, tourism and retail through the Abu Dhabi government’s industrial diversification policy. A driving force for implementing this policy is Emirates Steel. Wholly owned by Senaat, the UAE’s largest industrial conglomerate, Emirates Steel is the only integrated steel plant in the UAE, utilising the latest technology to produce high quality rebar, wire rod and heavy sections. Established in 1998, Emirates Steel grew in a relatively short period of time from a simple re-roller of imported steel billets to a complex integrated manufacturing plant, using modern solutions to meet market demand and generate value for its various stakeholders. In 2012, the company achieved a capacity of 3.5 million tons, following two expansions and an investment of $3 billion. One of the core objectives at the heart of Emirates Steel today is its desire to meet market demand by producing steel in a safe and sustainable way. Amongst its

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CEO of Emirates Steel His Excellency Saeed G Al Romaithi

Emirates Steel

Emirates Steel is the largest steelmaker in the Middle East to produce structural steel up to a million tons a year

most important sustainable development priorities the company endeavours to provide the necessary training and personal protective equipment to maintain the safety of its employees. Also included in these priorities is Emirates Steel’s on-going efforts to utilise the CO2 it generates during the iron reduction process at its DRP plants, and its work to promote environment and resource conservation. In November this year Abu Dhabi National Oil Company (ADNOC) and Masdar, the

nation’s renewable energy company created a joint venture company to develop commercialscale projects for carbon capture, usage and storage (CCUS). It will build a $123 million CO2 compression facility and a 50 kilometre pipeline, along which CO2 will be pumped to ADNOC’s oilfields. Emirates Steel is a key partner in this project – the CO 2 its plants generate will feed the project when it goes operational in 2016 and the compression plant will be located close to its premises. The project

“Wholly owned by Senaat, the UAE’s largest industrial conglomerate, Emirates Steel is the only integrated steel plant in the UAE” 272 | BE Monthly

Emirates Steel

800,000 tons Emirates Steel will free issue the captured CO2 to Masdar will sequester up to 800,000 tonnes of CO2 annually – a massive contribution to Emirates Steel’s carbon footprint, which at the same time will improve ADNOC’s oil recovery. “CCUS presents a viable technology for energy-intensive industries to lower their carbon footprint,” said His Excellency Saeed G Al Romaithi, CEO of Emirates Steel. “By capturing and eventually storing our CO2 stream, Emirates Steel sets an example of supporting Abu Dhabi’s sustainability objectives through operating environmental friendly heavy industries within the emirate of Abu Dhabi.” This is far from the first time that gas has been pumped underground to improve oil recovery, and in the past the UAE has used surplus hydrocarbon gases for this purpose. However, with the nation’s rise in its energy demand, this CCUS project will allow the UAE to preserve its natural gas for domestic electricity generation. The feed from the Emirates Steel plant, containing 90 per cent CO2 , will be transferred to a common compression and dehydration facility at the project site in Mussafah. The feed stream will be compressed into dense phase; delivering a CO2 stream through 50 kilometres of pipeline network, to be injected in an onshore field, operated by ADCO. It is worth noting that

Fourth steelmaker in the world licensed to manufacture nuclear grade steel

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Emirates Steel is the first steelmaker in the world to capture its CO2 emissions on this scale, with the possible exception of some North American projects. Protection of the environment has always been a key priority when it comes to Emirates Steel’s operations, with the company maintaining the belief that the steel production industry will only be able to show sustained development if it

can help minimize negative impact on the environment. It is this thought process that underlines the company’s ecological policy. “It is also for this reason that we are committed to continued compliance to all environmental regulations, to protect present and future human well-being in our local environment,” Al Romaithi added. Emirates Steel’s environmental protection activities are based on a series of principles.

“Emirates Steel is the first steelmaker in the world to capture its CO2 emissions on this scale outside North America”

3,500 trees to be planted all around the steelmaking complex

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Emirates Steel

Monitoring the environment is a key priority

These involve conducting business in a socially and environmentally responsible manner, using best available techniques, preventing environmental pollution, having an environmentally friendly approach at all times and reducing the generation and accumulation of waste products. The result of these actions helps to reduce the impact on the environment from the company’s production activities, while at the same time aiming to provide a favourable living environment for the UAE community. June 2009 saw the company put into action a comprehensive Environmental Monitoring Plan. Designed to fulfil the requirements of Abu Dhabi’s Environmental Agency, the plan involves the monitoring of effluent, WTP sludge, stack

emissions, ambient air quality, groundwater, ambient marine water, sediment, and noise emissions. An approved independent laboratory carries out the required measurements and monitoring reports are prepared and reviewed against regulatory limits. Emirates Steel conducts regular stack monitoring for SOx, NOx, CO and PM to meet the requirements as set out by the Environment Agency of Abu Dhabi. Meanwhile, the company has installed state of the art technologies such as low NOx burners and dry de-dusting units across its operations to minimise emissions. This has helped the company to achieve regulatory compliance consistently according to the monitored parameters.

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“the steel production industry will only be able to show sustained development if it can help minimize negative impact on the environment� When it comes to ambient air quality, a real time ambient air quality and meteorology monitoring station has been commissioned at the industrial City of Abu Dhabi. Owned by Emirates Steel, it is operated and maintained by the Higher Corporation for Specialized Economic Zones (ZonesCorp), the industrial sector regulatory authority.

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The process of non-contact cooling in the steel making process sees the use of both seawater and fresh water. In its role of an environmentally conscious business, Emirates Steel has operations in place to ensure that the wastewater generated from the process undergoes different stages of treatment prior to reuse and discharge. Furthermore, in its attempt to achieve

Emirates Steel

Green belt project: A responsible business

excellence in the field of by-product recycling, constant efforts have been made to match the rates of recycling and generation for oxide fines, iron fines, slag, refractory, and mill scale. In addition, efforts have also been made to improve production processes and reduce waste. Arguably one of the strongest examples of Emirate Steel’s commitment to sustainability and responsible business is its Green Belt Project. This undertaking has seen the company initiate a treeplanting program around the perimeter of operations. In one area in particular, 150 palm trees have been planted together with more than 2,000 Conocarpus Erectus trees, also known as Damas trees, in addition to

grass and ground cover. In total, an area of approximately 15,000 square metres has been planted. These new trees and other green areas are irrigated by the treated wastewater that previously would have been discharged back into the sea. Protecting the environment with sustainable landscaping is a key priority at Emirates Steel. The company wants to be sure that it can minimize its environmental impact by drawing water very carefully from local sources. During Phase 1 of the Green Belt Project Emirates Steel has sought ways to embellish the surroundings by embarking on a green belt and associated road network project. As part of this project, the company

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Emirates Steel The Emirates Steel Industrial Complex

is planting 3,500 trees around the main boundary fence and surrounding its stockyard. In addition to enhancing the green areas, the project helps the company to control dust emissions from plant activity and improves road safety. It is also used as a bunker for more storage space and as a controlled area for materials. The long-term plans of Emirates Steel from an environmental perspective revolve around building on the impressive efforts it has already made. Naturally this will involve an increase in environmental investments, which will enable the company to rank among the best GCC companies in terms of environmental protection, thus strengthening its competitive advantage and contributing to its own sustainable development. The proof is there to see. Over the years, the company has striven to improve its processes and controls, has invested capital to increase efficiency and decrease energy use, and fostered a culture of resourcefulness and accountability. As it looks to the future, Emirates Steel will soon become one of the first steel companies in the world to sequestrate CO2 on a large scale. Together with other energy reduction initiatives, it is believed that this will provide the company with one of the lowest carbon footprints compared to any integrated steel plant in the world, a fact of which it can be immensely proud. For more information about Emirates Steel visit:

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Alpine Loung goes lean South Africa’s premium furniture manufacturer is meeting the challenges of a changing market by adopting best manufacturing practices more often associated with automobiles than luxury seating

written by: John O’Hanlon research by: Vincent Kielty

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Alpine Lounge


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Aerial view of the factory

Alpine Lounge


member of the Bravo Group, South Africa’s largest and most diverse furniture ma nu f ac t u rer, A lpi ne Lounge has left behind the world of high volume mass-produced furniture. It is a premium marque and its Ashanti brand can only be described as aspirational. Founded in 1969 it has built its reputation on state-of-the-art technology, quality products, on-time delivery and caring and efficient after-sales service. Alpine Lounge only uses top quality raw materials and enjoys exclusive use of indigenous leather types sourced from South Africa and Namibia. In fact one of the company’s unique selling points is appreciated by the discerning purchasing independent and therefore not suited to the mass market. Leather furniture has come into demand from a mass market in recent years; at the same time leather-look PU (polyurethane) and microfibre-faced fabrics have been perfected to the extent that it’s now virtually impossible to tell the real thing from the imitation. Car seating in particular, which consumes the pick of hides but routinely uses plastic on the non-contact sections of top of the range car seats, presents a challenge to the purist so perfectly matched are the colours and the textures. Alpine Lounge furniture on the other hand makes a virtue of the marks that distinguish African leather whether from cattle grazed on the veldt or other indigenous species like gemsbok (sourced through strictly controlled culling programs in Namibia). These hides show tick bites, thorn scratches and even the scars left by fighting. They tell

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Hanni fine quality leathers since 1724 We at Hannitan are proud to be associated with Alpine Lounge.

Hannitan Leather, under the management of Rudolf Hanni, started from very humble beginnings. Hannitan has expanded into the largest supplier of furniture leather in South Africa, producing an average of 1,200 hides daily. The tannery produces a wide variety of upholstery leathers including, aniline leathers, semi-aniline, full grain, corrected grain, buffed leathers and oil pull-ups in a huge selection of colours. Hannitan manufactures a HANNI range of leather goods including travel bags, hand bags, leather cushions, leather folders and slippers to various outlets . It also offers a customized service manufacturing for various other well known labels and brands. Hannitan supplies its own range of leather care products including waxes, silicones and hydrophobic products.

Tel: +27 (0)11 817 2150 | Fax: +27 (0)11 817 5259 | Email:

Alpine Lounge Alpineand Lounge feature text tempor incididunt labore a story are appreciated Lawrence van derutMerwe, to here...Lorem ipsum et dolore magna Operations aliqua. Ut by go a select but significant Alpine Lounge’s enim ad minimDirector veniam,– quis and Technical and dolor sit amet, consectetur number of purchasers across Africa elit, and insed the UK, he has exercitation seen it all, ullamco having nostrud adipisicing do laboris nisithis utcompany aliquip for ex where Alpine Lounge has a been with eiusmod tempor incididunt devoted all but 40 years. consequat. ea commodo ut laborefollowing. et dolore magna All this makes Alpine Currently theredolor is an Duis aute irure in aliqua. Ut enim ad minim Lounge a quis niche nostrud leather international in shortage of reprehenderit voluptate veniam, exercitation laboris leather,esse as cattle ranchers in furniture ullamco manufacturer. velit cillum dolore nisi ut aliquip ex ea commodo South America, world’s Other companies in the eu fugiat nullathe pariatur. consequat. main source, haveoccaecat moved group focusDuis on aute the irure mass Excepteur sint non proident, sunt marketinwhile Alpine Lounge dolor reprehenderit in This is a caption this is a caption cupidatat into shorter-term farming, in culpa qui of officia prides itselfvelit on its high level voluptate esse cillum and many the deserunt Chinese animare id estaggressively laborum. Lorem ipsum dolor of customisation customer focus. “These mollit dolore eu fugiat and nulla pariatur. Excepteur imports rather than amet, consectetur adipisicing do are huge brand assets, non but proident, they havesunt not sit economically priced. It’s a fact ofelit, life sed Alpine sint occaecat cupidatat in culpa qui our officia deserunt mollit id eiusmod tempor incididunt ut labore et dolore immunised company from the anim market Lounge has to live with, he says, and he is est laborum. Lorembyipsum dolor sit Ut enim minim quis revolution caused the influx of amet, good magna findingaliqua. weapons with ad which to veniam, fight back. consectetur adipisicing elit, sedChina,” do eiusmod exercitation ullamcocame laboris ut quality lounge furniture from says nostrud One key breakthrough lastnisi year

HANNITAN LEATHER CC The Hanni family have dedicated itself to an unbroken lineage in the leather trade since 1724. The Hanni family coat of arms Rooster symbol is incorporated as the main element representing the forefathers and next generations of the Hanni family. The crown signifies the handing over of the Hanni family trade of leather tanning from the father rooster to the son rooster. The father rooster holds two arrows namely craftsmanship and quality which is

passed onto the next generation. The son rooster holds one arrow, signifying innovation to adopt to new trends and current changes. E.

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South Africa’s largest producer of polyurethane foam. Solutions in any shape, size and type. Tel: +27 (0)21 5352280 |

Quality Springs cc Distributors Of Industrial Staples, Coil Nails, Pneumatic Tools, Sagless Zed Springs, Hardware Products & Accessories to The Furniture & Allied Manufacturing Industries.

Telephone: +27 11 402 4250/7 | Fax No: +27 11 402 6661 | Email KZN Branch: Telephone: +27 32 551 2262 | Email: |

Alpine Lounge when van der Merwe went Vitafoam to America, after Alpine Vitafoam South Africa is proud to be associated with Alpine secured the Africa-wide Lounge, a premier brand in the furniture industry in South licence to manufacture and Africa. As the leading producer of polyurethane foam in distribute La-Z-Boy products. South Africa we offer our customers innovative solutions that This major US brand assist in product development and improvement. Vitafoam founded in 1927 had begun has been a major supplier to Alpine Lounge for many years and congratulate Alpine on their success and look forward to to struggle too, some seven making new contributions to their future success. or eight years previously, but the common denominator was not just the competition from China. La-Z-Boy was founded in the 19th century and its designs reflected that but more importantly it was still manufacturing in a way consistent with mass production – the Ford model of motor manufacturing, if you like, which that industry had already abandoned in favour of the Toyota Production Method (TPM). “We started producing on line back in the mid 1970s, the time TV came to South Africa. And the factory was still laid out that way until last year. But the market has changed. We don’t have the volumes to enjoy the same economy of scale. Stoppages are more frequent due to shorter runs and line imbalances result from that, Sewing department so it is no longer advantageous to produce smaller quantities on line.” He put in some time in Quality Springs the States to learn how some We specialize in the BeA and Brett range of pneumatic tools and employ qualified technicians to service and maintain seven years ago La-Z-Boy these products both”in house” and on site at our customers had switched over to cell premises. Our mission is to offer the best quality products manufacturing, adopted lean and service on our ever increasing product range. We practices in its factory and are proud of the fact that we have established long-term revolutionised its designs, relationships with our clients and we continue to assist its methodology and quality them with their requirements. standards. At the same time it had revamped its design

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14 Chestnut Grove, Bower Road, Wynberg, 7800 Tel: 021 761 0513 Fax: 021 761 0915 Email: Procurement Services is hugely grateful for being granted the opportunity to honour the relationship we have enjoyed with Alpine Lounge since 1979, to whom we value the status of being a preferred and worthwhile supplier. The function of Procurement Services is to select suitable supplies for Alpine Lounge. This begins with the selection and sustainability of the raw material, starting from the forest, its species and density. From there our reliable and sustainable sawmilling procedure is equipped to selectively cut, dry and define the quality that is required by Alpine Lounge. Alpine Lounge has secured the highest quality of raw material, specifically selected and processed for their individual needs and has built secure and much valued supply sources. On behalf of all of our selected suppliers we would like to thank Alpine Lounge for its past support and we wish to reinforce our gratitude and commitment to its future and continued success.


Contact us today and put your company in the spotlight! 288 | BE Monthly

and marketing thrust to appeal to a younger audience, even getting Brooke Shields in as the ‘face’ of the La-Z-Boy brand. “I was struck by how successful they had been in turning the business around. It pulled them out of the red and into the black and the business is now fully recovered and doing very well internationally.” Back in South Africa he persuaded his CEO that, facing the threat from low cost imports and a changing market dynamic, the business should adopt the same approach that had delivered such a great result for La-Z-Boy. As a result the entire group has started its lean journey, an initiative that will undoubtedly deliver results across the value chain from raw materials procurement to showroom, though

Alpine Lounge

Adam recliners and sofa

it starts with production. It’s early days in a process that started in September 2012 but will, he emphasises, never end. “There’s a huge task ahead of us. We are starting with a five-year transformation programme, that being continuous improvement, or Kaizen. I believe it will take us forward into the next decade and beyond, as lean manufacturing is the survival kit for modern manufacturing.” Cell manufacturing differs from single element procedures, where each operator

repeats the same step on a production line. Instead there may be six operators, multiskilled and between them taking complete responsibility for the product. “There are so many advantages when you work out the return rates compared to online,” says van der Merwe. “Quality is so much better, as is general control of production, particularly with smaller runs. You can identify product that is relatively easy to produce, what falls into the middle area of complexity and what

“I was struck by how successful La-Z-Boy had been in turning the business around” BE Monthly | 289

“Lean manufacturing is the survival kit for modern manufacturing” requires more work – and allocate these to particular cells, with people who have matching skills.” The lean journey is a challenge to people used to the old ways, and some move on, but there is no turning back. Cell manufacturing delivers better productivity with fewer people, less waste, better quality and faster lead times. The factory is already looking a very different place, he says, with clutter

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disappearing, and everything that is needed close to hand, visible and accessible. This new manufacturing approach suits the increasing complexity and technical sophistication of furniture, a large proportion of which falls into the ‘motion’ category, with dynamic options built in. Alpine Lounge is the biggest manufacturer of motion furniture in South Africa and has been producing it in increasing quantities since 2002. To keep

Alpine Lounge

Panda in leather-look microfibre

pace with the growing sophistication of these systems as well as the volumes needed, Alpine Lounge recently shifted its sourcing to Leggett & Platt, the leading global supplier of mechanisms that can, for example, now recline a seat forward – or rather, ‘incline’ it like the latest aircraft seats into a 180 degree lay-flat position. This also means its back can be close to a wall, making it more suitable for the smaller room. Finally, Alpine Lounge is now much in demand for cinema and auditorium seating, one sector of the market that seems to be recession proof. “Perhaps people go to the pictures to forget their problems!” Lawrence van der Merwe speculates. Whatever the

reason it is a growing market for Alpine Lounge, in happy partnership with the leading installer Destiny Seating. One UK cinema, Vue in Manchester, has just been completed, major cinema chains in South Africa are ordering, and the company is providing the seating for four cinemas in Doha, Qatar. Alpine is looking forward to the opportunity that offers to combine its luxury cinema offering with the innovative design and highly decorative finish beloved of customers in the Middle East. For more information about Alpine Lounge visit:

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University of Kentucky - Lean Systems Program

2013 Lean Users Conference:

Leaning in the right direction The University of Kentucky’s Lean Systems Program Director, Glenn Uminger discusses the recent 2013 Lean Users Conference, shares some of its success stories and reveals his early hopes for next year’s event

written by: Will Daynes research by: Vince Kielty

292 | BE Monthly


hile the theme of the conference remains mostly the same, the finale of a year’s worth of hard work, what we do hope to do is mature the event and the presentations that take place each year,” states Lean Program Director, Glenn Uminger. The conference he is referring to is the University of Kentucky’s Lean Systems Program, 2013 Users Conference, held on 10-11 September, 2013. “While this conference is still in its infancy, what with 2013 being only its third year, we are greatly encouraged by the increase in attendance that we have witnessed compared to previous years,” Uminger explains. “Even more importantly is that we continue to see a growing number of strong examples of Lean applications being adopted by businesses from a wide range of industries.” This increase in examples led to this year’s conference being typified by the sheer volume of rich and meaningful presentations that took place, each of which highlighted the success individuals and businesses have had when it comes to the implementation of Lean processes, and the subsequent results of this. “There were certainly a number of key themes that consistently appeared during the

Pete Gritton, retired Toyota Human Resources VP and Lean instructor leads a discussion at the 2013 Users Conference

conference,” Uminger highlights, “from the reinforcement of just how critical hands-on, decisive leadership is to Lean transformation to the importance of setting out a clear plan from the offset. Tying in to the latter point was the idea of enduring consistency, whereby companies must realise that adopting Lean is a test of endurance and one that requires flexibility and adaptability. Last, but by no means least, it is about people and aligning the behaviour and performance of people to your business’ plans.” As one would expect, these themes helped make up the building blocks of some of the more impressive case studies showcased at

“We continue to see a growing number of strong examples of Lean applications being adopted by a wide range of industries” 294 | BE Monthly

University of Kentucky - Lean Systems Program

“What Uminger has seen has clearly given him even greater optimism about the future adoption of Lean processes” this year’s conference. Two of the standout examples that immediately come to Uminger’s mind involve the healthcare sector, specifically the efforts of T.J. Samson Community Hospital and Dr William Thornbury. In the case of T.J. Samson Community Hospital, what it has done is apply Lean thinking to the way in which it delivers patient care, both from a day clinic and overnight care perspective. Recognising the need to expand their operations, the hospital acquired an abandoned former Wal-Mart building and meticulously went about redesigning it into a dedicated clinic. “What the hospital did,” Uminger says, “is compartmentalise the functions of the clinic to deliver a quick, fluid service to all who visit it, making the process of arriving, receiving treatment and leaving a streamlined one. The success of the clinic has also led to the main hospital itself being able to better clarify its own function, services and processes as well.” As far as Dr Thornbury, whose brother Neil is in fact COO of T.J. Samson Community Hospital, is concerned, his presentation focused on how he has been using Lean thinking to deliver as much service to as many patients as possible. Dr Thornbury’s answer was to develop and implement a revolutionary e-visit service dubbed Me-Visit. Designed to

strengthen the relationship between patients and their physician, Me-Visit helps patients connect with their medical provider using mobile technology. “This device that Dr Thornbury has implemented allows his patients to contact him via their mobile device, upon which he can utilise his knowledge of the patient, their history and various symptoms to diagnose and prescribe treatment quickly and efficiently,” Uminger enthuses. “Furthermore,

Brandon Spencer, Kentucky Chick fil A manager, discusses how they have incorporated lean principles to running the kitchen side of things in their stores

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Jenny Cerwinski, Lean Coordinator at T J Samson Community Hospital explaining how consideration of flow, positively affected their new clinic setup

Dr. Neil Thornbury, COO, des lean transition underway at

“Like Lean itself the very adoption of the process is about constant improvement” he can attach all the necessary documents and information about the diagnosis and treatment at the same time. What that essentially means is he is providing the patient with more information and support in a matter of minutes than would be achieved through a face-to-face visit. This is something that really encapsulates what Lean is all about and it is something that he is working

296 | BE Monthly

to promote across the country.” With the 2013 Users Conference only a matter of weeks behind us, thoughts have already turned to 2014’s event, occurring on 30 September and 1 October next year. “Our early hopes for next year’s event are that we will hear examples from our client companies that show a deeper penetration of Lean thinking and the use of broader

University of Kentucky - Lean Systems Program

scribing the current status of the T J Samson Community Hospital

Ownie McBride, Lean Systems Program instructor answers an attendee’s question at the 2013 Conference

applications that create great success stories,” Uminger reveals. “On top of this of course we would love to see attendance levels continuing to rise and we think a 25 percent increase on this year would be a good target for us to aim for.” Turning back to the present day and all that Uminger has witnessed in the past several weeks, what he has seen has clearly given him even greater optimism about the future adoption of Lean processes throughout different sectors and industries. “Like Lean itself,” he concludes, “the very adoption of the process is about constant improvement. In order to help facilitate this we continue to work with both our established and newer client companies

tangibly, joining them out onsite or inviting them to our facility, and what we have seen gives us great encouragement. Long before we think about who will be presenting at next year’s conference we will be helping these companies to develop their implementation and practical application of the process. That will ultimately mean that next year we can not only look forward to hearing more mature examples from our previous clients, but also about the next generation of Lean success stories.” For more information about University of Kentucky - Lean Systems Program visit:

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Chicken and egg Country Bird Holdings (CBH) is a fully integrated poultry company with breeder facilities, hatcheries, broiler sites and processing plants and feed mills: a leading brand in South Africa, its sights are set on growing markets across the continent

written by: John O’Hanlon research by: Jeff Abbott

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Nutri Feeds delivery truck



evin James acquired CBH in 2003 when it was a small and struggling operation processing just 250,000 chickens a week at its Bloemfontein location. However, having just shaken the dust of Zimbabwe, where he had built up a thriving poultry business, he hit an auspicious moment for the South African market, with feed prices declining and chicken prices firm. A year later he and his partners were able to buy and restart an operation in Mafikeng turning out 400,000 birds a week. They increased the capacity of both operations and by 2007 had a joint weekly capacity of 1.5 million birds. To this they added a number of feed mills, and in that year listed the group on the Johannesburg Stock Exchange. Today the group employs 5,379 people and trades its poultry into the South Africa market under the Supreme Chicken brand and its animal feed under the name of Nutri Feeds, now the leader in animal feed manufacturing in South Africa with manufacturing plants in Viljoenskroon, Mafikeng and Bloemfontein. “The feed market is very consistent,” says James. “We produce 500,000 tonnes of feed a year, around half of it for our internal use and the rest sold into regional and even global markets. We have three abattoirs, each of them working double shifts to produce half a million birds a week and additionally we have our own breeding programme.” After just five years, then, CBH is now the third largest poultry producer, and at times has been the largest poultry exporter in South Africa.

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Albrecht Machinery since1

Pty (Ltd)


Solutions for food producers & manufactures Freezing, Chilling, Frying, Cooking, Roasting, Baking, Proofing, Searing, Steaming, Blanching, Thawing, Drying, Slicing, Dicing, Cutting, Peeling, Breading, Battering, Coating, Filling, Multihead Weighing, Product Forming and Extruding Machines, Thermoforming Packaging Machines, Carton Erectors, Fillers and Closers, Dough processing, Pie and Bread lines, Bread roll lines, Baking Equipment

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• 2nd hand machinery dealers • Equipment moving and refurbishing • Equipment servicing


5,379 People employed by CBH group

Feed may be a consistent market – chicken meat is more volatile. At the time of listing, the South African poultry industry was quite buoyant. Since then rising maize prices have chipped at margins and rapid expansion of the poultry industry has led to over-supply. But an even more serious challenge has come from cheap meat flooding into the country from overseas, particularly the EU and Brazil. The South African Poultry Association has asked the International Trade Administration Commission of South Africa to raise duties to as much as 82 percent from

CBH founder, Kevin James





Solutions for food

Established in 1949 to service the growing needs of the food industry in South Africa, Albrecht Machinery has developed a reputation as a leading supplier of equipment and turnkey solutions. The quest for reliable new equipment and innovations is on-going in a bid to ensure that local industries are exposed to the best that the world has to offer. The company is currently agents for a number of global players in food processing equipment. These companies have been selected for their individual areas of

expertise and their compatibility with others in the stable to provide solutions to various Through our World Lea processing and packaging needs. We have an extensive service and spare parts network with technicians based in Johannesburg, Cape Town and Durban. Our technicians are highly skilled in multi disciplines. We strive to build partnerships with our customers and believe that we have a vested interest in their success.

Freezing, Chilling, Frying, Cooking, Blanching, Thawing, Drying, Slicin Coating, Filling, Multihead Weighi Thermoforming Packaging Machin processing, Pie and Bread l

Frigoscandia Spiral Freezers




Cabinplant Multihead Weighers

VacForm se


Frigoscandia | Stei T: 0861 000 516 | E:

We also offer the f • Project management • AutoCAD drawing services • Trained technical support

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The Ross® 308 is driven by industry-leading investment in R&D and new technology that continues to yield the greatest rate of genetic improvement for customers like you. This long-term commitment to research and genetic progress together with world-class support of a knowledgeable, regional technical team gives you not one, but two, key advantages. We are proud to be associated with Ross Breeders Zambia and look forward to a future of providing unequalled value to your business.

CBH Arbor Acres

Arbor Acres has remained a leading product and generated trust and respect in the global poultry industry with: • An easy to manage breeder with excellent chick production • A broiler with the best growth rate and outstanding feed conversion • Dedicated service team experienced in Africa • Support from the industry’s leading R&D breeding programme.


The Ross 308 has a unique R&D breeding and selection programme utilising first class pedigree facilities together with more challenging, industry-like conditions to identify the most efficient and robust birds for future breeding stock. The use of multiple selection environments together with life time feed conversion testing enables the Ross programme to improve faster than competitors.

CBH produce 500,000 tonnes of feed a year

the current 5-27 percent range, saying that as many as 20,000 jobs are being put at risk across the industry. CBH has not escaped the effects of this unfair competition. “Producers are selling the breast meat and thighs on their own markets and dumping the leg quarters cheaply on South Africa,” he points out. But CBH has a strategy that is mitigating the damage. The company has been very successful in penetrating the demanding QSR (Quick Service Restaurant) market, selling value added products to expanding chains

“The company has been very successful in penetrating the demanding QSR (Quick Service Restaurant) market” BE Monthly | 305

CBH like KFC, Hungry Lion and Captain Dorego. These products now make up 15 percent of CBH’s total production of around 3,000 tonnes a week and the plan is to increase this segment to around 35 percent, which he feels is eminently doable. The result will be a balanced business selling a third of the product into retail, a third wholesale and a third to the foodservice market. These plans are keeping the marketing department very busy at the moment, backed up by investment in plant and machinery. Specialised cutting equipment, crumbing lines and tumblers are examples of the sort of machinery that has to be sourced

BIDVEST LAUNDRY GROUP For over 35 years, Bidvest Laundry Group has been leading the field in total laundry solutions and we pride ourselves on being South Africa’s Industrial Laundry of choice. And we do it all – from work-wear, mat rental, bulk laundry, hotel guest laundry, on-premise laundry and even eco -friendly industrial laundry equipment- you and your staff will never have to worry about clean laundry. • Our service is comprehensive, from A to Z • We are ISO9001 compliant and operate to the highest standards • We only use top of the range SABS approved chemicals, including our specially formulated advanced detergents • Our laundries are state-of-the-art, with built-in redundancies to ensure no downtime (backup generators, compressors, boilers, water storage, fire protection)

Bidvest Laundry Group considers the protection of the environment as essential and is also committed to sustainable use of the environment. That’s why we have implemented a number of green policies and constantly monitor and improve our water, fuel, and chemical efficiencies. We are also exploring alternatives to phosphates in our detergents, reducing our electricity consumption through variable speed controls, and using boreholes to reduce our eco-footprint. All in all, Bidvest Laundry Group is a fast, reliable and fresh solution to all your laundry requirements. And, as a proud member of the Bidvest Laundry Group, we have the credentials and clout to consistently deliver on our promises. Truly, Bidvest Laundry Group is your A-Z solution to laundry excellence.

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CBH from abroad. Additionally all the abattoir lines are Farmwise offers a comprehensive futures and physical being upgraded to meet the brokerage service to the Agricultural industry. Our standards required globally clients include producers and consumers in the Food by the customers. All three and Feed sectors. processing plants have Farmwise has developed an internet based trading system achieved YUM food safety that enables our clients to monitor the market in real time, as well as placing electronic orders. accreditation and can supply As one of the founding members of the AMD Division of KFC, CBH’s biggest QSR SAFEX, we have stood the test of time. customer, with product, but other outlets like Nandos, Hungry Lion and Captain Dorego each have their own specifications. With something like 12 percent of the South African foodservice market already captured, there is plenty of room for CBH to expand. Exporting into Africa is hard to do if your production base is in South Africa. Most of the neighbouring countries have taken measures to protect their indigenous producers, some imposing very high import duties, some entirely banning imports of frozen poultry. The only solution is to set up businesses in these markets, and that is something CBH is continuing to focus on. In fact, with operations already set up in Zambia, Namibia and Botswana it was Kevin James’s original intention of leaving


$25 million Loan amount from the IFC to fund its African expansion

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CBH Zimbabwe to focus on these countries had not an unmissable opportunity arisen in South Africa. Now the emphasis is once again on Africa. CBH has in fact already started its return to Zimbabwe where it has been given the KFC franchise. The first restaurant will open in Harare in November – something of a departure for a company that is primarily a breeder and producer but the longer term plan, when the time is right, is to set up an operation to supply poultry to the trade. In April this year the IFC (International Finance Corporation, the private sector funding arm of the World Bank) provided

Operators in the Botswana factory

BIOMIN Mycotoxins a serious threat to broiler producers Broiler operations are under enormous pressure to produce chicken meat for the lowest possible cost. Feed conversion, growth rate, mortality and hatchability are all monitored carefully and strategies are constantly reviewed to maximize efficiencies. As production is fine-tuned, there is increased attention placed on the effect of mycotoxins on the bird. Consumption of even low levels of mycotoxins can lead to decreased feed consumption, poor growth rate and increased susceptibility to disease. Higher levels lead to clinical signs such as beak and intestinal lesions, kidney disorders and mortality. Unfortunately, mycotoxins often occur in low concentrations that are difficult to detect, interactions between individual mycotoxins are not well characterized and unidentified mycotoxins may be causing the sub-optimal performance. The dilemma for broiler producers is to counteract the risks associated with mycotoxins, against the

cost of ensuring they do not adversely affect bird performance. While mycotoxin analysis will provide some indication to the type of mycotoxins and levels present, the speed of chicken meat production usually means this information is only useful in ‘hindsight’. Mycofix® Select provides the solution to the dilemma faced by broiler producers. This product is added into the feed and will deactivate Deoxynivalenol and other Trichothecenes, as well as bind adsorbable mycotoxins (e.g. aflatoxins). When clinical mycotoxicoses is seen in the birds or the feed contains highly contaminated/high risk raw materials, treatment levels of 1.5 – 2.5 kg Mycofix® Select per tonne of feed should be used. The Mycofix® Select recommendation for subclinical mycotoxicoses, with 1.0 kg per tonne being more appropriate for those flocks which are under immunological, environmental or nutritional stress. E.

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EASY PACKAGING SYSTEMS Due to the nature of the market we operate in and industry standards, we are constantly improving on our products and offering.

We offer a wide variety of plain and printed packaging and packaging products and accessories: • Polyethylene Bags (Plain and Printed) • Fresh Produce Bags • Sheeting • Tubing • Shrink Wrap (Plain and Printed) • Shrouds • Pallet Wrap • Food Wrap • Machine Wrap • Refuse Bags • Form File & Seal (Plain and Printed) • Book Covers • Industrial Packaging Products • Plain & Corrugated Board • Packaging Tape / Strapping We are pleased to list some of our achievements thus far: • We are proudly a BBEE Level 4 supplier and contributor • We are SABS approved • We are ISO9000 approved • We fully comply with HACCP requirements

Contact us: T +27 11 837 6789 | F +27 11 837-1031 | E

Providers of professional veterinary services to the pig and poultry industry throughout the SADEC region and beyond.

Preferred supplier of day-old broiler chicks and hatching eggs. Tel +27 (0)18 632 0336/9 Email


“Africa needs dynamic regional agribusiness companies that help encourage competitiveness” Easy Packaging Systems

Easy Packaging Systems has been operating for over 19 years. It was the determination to succeed, and to offer the very best in quality and service that has ensured the success of the company. We have grown from strength to strength and become a major force within the packaging industry. We employ a large workforce of dedicated employees who are linked to a fully operational factory..

CBH with a loan of $25 million, convertible to shares within two and a half years from disbursement, to fund its African expansion plans. Apart from the money to increase production and set up new operations, this is a massive vote of confidence from an organisation committed to helping African economies and companies that catalyse growth. “Africa needs dynamic regional agribusiness companies that help encourage competitiveness and can expand successful models outside their home markets,” said

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Morupule Coal Mine (MCM) is located

Tel: +267 492 0667 Fax: +267 492 0643

14 kilometres west of Palapye in eastern Botswana. With a vision of being recognised as a leading coal energy business, MCM delivers energy for the benefit of its stakeholders in a sustainable and responsible manner.

CBH Saleem Karimjee, IFC Senior Country Manager for Southern Africa. With increasing urbanisation and disposable incomes, per capita meat consumption is expected to double in Africa by 2030, particularly that of poultry, which is cheaper relative to other meats. “We are spending $15.5 million in Zambia on upgrading our hatchery from 380,000 to a million birds a week” Also in Zambia, CBH has bought a ‘grandparents’ farm. Hatchlings become the great-grandparent flock, which produce grandparent stock, which in turn produce parent stock – it is the offspring of the parent stock that are raised for meat production, so the operation in Zambia will supply Angola, Zimbabwe,

MORUPULE COAL MINE In 2000, Debswana acquired MCM as its 100 percent owned subsidiary and it has since grown both in stature and production to be a dominant influence in the coal mining sector in the country and region. Situated above the Kgaswe coalfield, which is endowed with good quality coal contained within four main seams, MCM is estimated to hold reserves of approximately 2.91 billion tonnes of coal within the number 01 and 02 seams, with a total inferred inventory coal resource of 12 billion tonnes across all the seams within the mining lease area.The main customer for MCM’s thermal coal is the adjacent Botswana Power Corporation (BPC), with supply historically going to the existing 150MW Morupule ”A” Power Station. In 2008, South Africa advised Botswana of its intention to

gradually terminate export of power to Botswana and other neighbouring states. This resulted in BPC constructing a new 600MW power station. MCM rose to this national challenge for power supply and executed its own MCM Phase I expansion project that resulted in a threefold increase in installed capacity to 3.4 metric tonnes per annum. Since the successful completion of its Phase 1 expansion, MCM continues to explore its vast reserves and is currently undertaking further exploratory and investigative work (Phase II expansion) with the objective of establishing an open pit mine in the northern boundary of its mining lease area to meet the additional regional and overseas markets’ demand for coal.

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A hEAD START FoR hEAlThy ChICkS With the new product hP AviStart in the poultry feed you benefit from: • Excellent digestibility • High in energy • Just 5% dosage in prestarter • Supports optimal performance up to slaughter • Attractive return on investment • Available in a non-GM version

Distributed in South Africa by: NUTRIBASE CC P.O. Box 74155, Lynnwood Ridge, 0040 Pretoria Tel: (+27) 12 004 0165,

Feel free to discover

Contact: Pietman Blignaut Tel: + 27 12 348 9291 Cel: + 27 82 322 8297 Email:


ELECTRICAL & HARDWARE Suppliers of: Hardware, Building Materials, Paints, Electrical & Plumbing Fitting Email: • P.O. Box 33546, Corner of Kalambo & Cha Cha Cha Road, Lusaka, Zambia. Telefax: 231454, 233528

Northend, Cha Cha Cha Road, P.O. Box 33546, Lusaka, Zambia. Telefax: 222875

CBH Nutribase

Nutribase focuses on supplying feed additive solutions that create economic benefits for our customers. We have proudly been a business associate of Country Bird Holdings since 2008, supporting them towards success. Nutribase products include: • Hemicell enzyme: Assisting with the reduction of feed cost, while supporting health parameters. • Avistart (Hamlet Protein): Improves pre-starter feed quality, bird health and production parameters at slaughter. • Biostrong feed additive: The natural solution for profitable poultry production Nutribase, your partner to create value through feed additives.

Botswana, Mozambique, Malawi and Uganda with the parent stock for breeding. These are all territories that Kevin James and his associates know well. However the biggest prize of all in Africa is Nigeria, its most populous and diverse country. CBH is actively and currently moving into Nigeria with a turnkey project, he explains, in partnership with four partners who came from Zimbabwe

$15.5 million Investment amount for the Zambain hatchery

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BTC Products & Services (Pty) Ltd +27828535201 +27823319720

BTC Products is a company specialising in chlorine dioxide technology. We offer a full technology package based around Chlorine Dioxide. This package includes: • The design, supply, installation and maintenance of our Chlorine Dioxide Generators and associated dosing control and automation systems. • The supply of the precursor chemicals for use in conjunction with our chlorine dioxide generation systems • Ready-To-Use Solutions. • Monitoring of residuals and supply of the test kits. • Technical Service and Back-up. BTC Products is in a unique position of being able to offer specialty expertise in a variety of chlorine dioxide applications for disinfection

and oxidation within agricultural to food & beverage as well as industrial applications. Chlorine Dioxide is a powerful oxidizing with broad-spectrum efficacy against bacteria, fungi, algae, viruses and protozoa. The basic properties of chlorine dioxide that differentiate it from other disinfectants are: • Not sensitive to system pH. • Does not produce carcinogenic by-products. • Provides a residual disinfectant level. • Is significantly less corrosive than chlorine. • Is 100 – 1000 times more effective at removing/preventing biofilm than chlorine.

Chlorine dioxide and disinfection solutions B S I

Boiler & Steam Installations c.c.

Our products are of high standards and we wish to maintain this standard for customer satisfaction. We are proud to be able to inform you that we have supplied and continue to supply major industries. We specialise in: • the manufacturing of the NEW THERM “O” STEAM BOILER • reconditioning of secondhand boilers • gas, oil, water & compressed air pipelines • steam and condensate systems • boilers and steam controls

• calorifiers & heat exchangers • chimney stacks, hotwell tanks etc. • underfeed stokers and spares • water treatment plants • new and secondhand spares • mobile boilers • boiler re-tubes • boiler services and inspections

11 - 1st Road, Bredell, P.O. Box 10425, Aston Manor, 1630 Tel: +27 (11) 396 2737 | Fax: +27 (11) 979 3097 | Email: | After hours: Andries Jacobs - 083 268 4077 | Dirk Jacobs - 083 395 3788

CBH eight years ago at the BTC express invitation of the Chlorine dioxide is a powerful disinfectant, that goes a then president Olasegun long way in the effort of satisfying consumer demand for Oba sa njo. Oba sa njo a better quality food product with lower chemical input. gave each of them 1,000 BTC Products is specialist company, whose focus is on hectares near the western how best to undertake dosing, process integration, control and monitoring. We put together full service packages, city of Ilorin. covering design, installation, servicing and maintenance. Kevin James is very Our aim on offering our expertise in partnership with our excited by the project. customers to meet their food quality goals. It is along “With 4,000 hectares at these lines that we have implemented chlorine dioxide our disposal we will have a as the primary process water disinfection system for breeding operation, a feed Supreme Poultry Processing Plants. mill, and a broiler operation there, doing 250,000 birds per week by the end of this year. We will be supplying KFC in Lagos and the local market there.” Many people think that Nigeria is a difficult market to crack, and are put off by reports of inter-community conflict. Well, that does not apply in Kwara State, he observes, where Muslims and Christians coexist harmoniously. And he has found Nigeria to be the most collaborative of the many African governments he has worked with when it comes to cutting the red tape associated with getting permits, arranging investment and the like. The Nigerian operation is already in pilot production, processing 25,000 birds

“Many people think that Nigeria is a difficult market to crack, and are put off by reports of inter-community conflict” BE Monthly | 319


25,000 Number of birds processed per week by the Nigerian operation.

a week, and the feed mills and houses are under construction. It will be in full production by the end of 2014, with a target output of 100,000 birds a week – with no lack of demand from a population that is both affluent and famously fond of chicken. The area is already benefiting: “We are empowering a lot of the farmers there,” says James. “We buy 90 percent of our maize from the Ilorin area, and we give them soya bean seed for them to grow and supply back to us.” Wherever there is a need for poultry in Africa, Country Bird will be present, he promises. “We have a training school in Zambia for people who know about farming and want to go into poultry. That gives us a real edge, having high calibre managers at our disposal.” Trainees come in from Angola and other territories, and South African staff are trained there for deployment in other countries including the staff needed to supervise the Nigerian business, who recently concluded their training. For more information about CBH visit:

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Airtel Madagascar

Making waves in Madagascar Airtel Madagascar is a relative newcomer to this resource rich, ecologically diverse and culturally vibrant island nation but its ability to bring together the economic and social strands that unite the people is making a big difference

written by: John O’Hanlon research by: Candice Nice

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Airtel Madagascar


t is hard to believe that it is only just 20 years since the Bharti group listed its telecommunications business on the Bombay Stock Exchange, soon after that bringing its cellphone operations together under the Airtel brand. At the time, just ten years from the founding of the business by Sunil Bharti Mittal, it had yet to extend its coverage to the whole of India, let alone the whole sub-continent, though by 2009 it had launched into international operations by launching a network in Sri Lanka. The rapid roll-out of the business has been attributed to its pioneering outsourcing model, whereby its infrastructure is maintained by world leading organisations like Ericsson, Nokia Siemens and IBM, enabling it to offer low per-minute rates to its subscribers, while giving them a level of functionality that is every bit as good as that available in the USA or Europe. Nevertheless it really was only yesterday – in 2010 to be precise – that Airtel went truly international when it acquired the African operations of the Kuwaiti company Zain Telecom for $10.7 billion. Zain had entered the African market in 2005 through the $3.4 billion purchase of Celtel International which had operations in 13 countries in that continent. By the time the business was bought by Airtel in 2010 it had more than 40 million customers in Africa, and a presence in Burkina Faso, Chad, Democratic Republic of the Congo, Gabon, Ghana, Kenya, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda, Zambia – and Madagascar, where it takes the second place in the mobile telecoms market, with 39 percent of the market and more than 1.5 million customers.

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H.B.C. are a complete tower site building and maintenance company, including: • Surveying/measuring works per site location • As-build drawing & site documentations • Numerical analysis & dimensioning • Logistics & Transport • Civil works • Rigging • Slab, shelter & equipment installation • Site earthing • Electrical installations & commissioning • Maintenances: Tower inspection, retorque, painting, fencing, rusty parts, road access, up grade

T: + 261 33 07 325 22 E: /

Airtel Madagascar Today Bharti Airtel GANGES INTERNATIONALE PRIVATE LTD is one of the largest GIPL (Ganges Internationale Pvt Ltd), started in 1991 telecommunications manufactures and supplies Tower for Telecommunications, companies in the world with Windmills, Power Transmission & Distribution and Railway operations in 20 countries Electrification. The Company has earned the reputation in Africa and Asia. Based in for timely delivery, quality and total reliability of its tower India’s capital, the company installations. At the core of its reputation lie GIPL’s team of committed, skilled and experience professionals who is one of the four largest will oversee the A-Z of your tower installation. GIPL has mobile operators in the a production capacity of 24,000 MTPA (Metric Tons Per world in terms of number of Annum) and galvanising capacity of 28,000 MT per annum. subscribers. In India, it offers a wide range of services: including 2G and 3G mobile services, fixed line, broadband, ADSL, IPTV and DTH, and solutions for enterprises and national and international long distance services to mobile operators. In other markets, it provides 2G and 3G mobile services and mobile banking and financial services. Bharti Airtel had over 275 million customers across its markets at the end of July 2, 2013. Moving into Africa was an inspired strategy for Airtel. The needs of its subscribers in Asian markets are closely aligned to those in Africa, but as is well known, mobile telecommunications is an area in which Africa is now acknowledged as leading the world. Spurred by a lack of fixed line infrastructure and the geographical and political H.B.C. dispersal of populations that H.B.C. have a very good relationship with Airtel Madagascar, working with them as a main contractor since still rely on highly localised 2006. We are committed to providing our client’s with economic ecosystems for the best possible products and services, whilst also being their livelihood Africans have costeffective and affordable, without compromising quality. found innovative ways of Our experienced staff offer the best skills and service to our leveraging mobile technology client’s, enabling them to establish communication systems to their advantage. This has to suit their individual needs. made them the teachers E. / rather than the learners in

BE Monthly | 327


Our core philosophy is the creation of path breaking comprehensive solutions rather than just products. a) Telecom Business: Telecom vertical provides comprehensive energy management products and solutions to wireless telecom players. b) Energy Management: Reime’s pioneering R&D endeavours, aimed at developing a comprehensive range of cost- and energy-efficient solutions

for the wireless telecom sector c) Operations & Management Services: Operations and management service (O&M) is an extended solution provided for remote location management and to optimize efficiencies. The unique model is designed to manage equipment and energy. The services include diesel filling, battery life optimization and site environment management

• TELECOM BUSINESS • ENERGY MANAGEMENT • OPERATIONS & MANAGEMENT SERVICES We have worked with Airtel Madagascar since 2011, providing the following: • Construction Works: 52 Pylons • Managed Services: 156 Sites Phone: +261 33 37 660 06 E-mail:


Airtel Madagascar

$10.7 billion Cost of Bharti Airtel’s acquisition of Zain

this sector, something that the top-down business development model of many western telecoms companies, anchored by generations of legacy, have struggled to take on board. The Airtel offering was developed from scratch to meet the needs of today. It is not surprising that as a result Airtel is far and away the most innovative mobile cellular operator in Madagascar and one that can be said to be disrupting the market. It was the first operator to introduce many advanced services including a BlackBerry prepaid service, ‘Validité dynamique’, ‘Chat’ a national and international customer SMS service available 24 hours a day, seven days a week. The ‘Information Kiosk’, which sends out smart stuff that people choose to receive via SMS is particularly popular. Examples are jokes, horoscopes, exchange rates which can be crucial in cross border African trading situations or thought for the day. ‘Music Box’

“The remarkable growth of Airtel Madagascar is directly related to our desire to be an innovative company” BE Monthly | 329




• Importation • Sale and work facilities and maintenance of electrical equipment • refrigeration • air conditioners • computer networks and telephone • lightning arresters • lightning Franklin

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Contact us today and put your company in the spotlight!

Airtel Madagascar

allows a subscriber to dedicate a song to credit – for the customer’s own phone or any someone special, and ‘CpourToi’ allows the other Airtel subscriber’s. transfer of credits from one person to another In the short time that has elapsed since its in a simple and secure transaction. establishment here Airtel Madagascar, has However if you asked small business grown from strength to strength, says CEO customers and people with family living Heiko Schlittke, a German national with more away from the island the single most than 20 years of experience in FMCG, media important and differentiating and telecommunications, innovation from they would including Celtel. “Making probably say Airtel Money. services accessible to people This service allows them to in remote areas is a priority,” pay for purchases, settle bills he says. “Already Airtel has the and access bank accounts largest mobile phone coverage, securely and in real time, at with access to major cities any time. The revolutionary communities connected by the money transfer service also major highways. In fact ours is Airtel Madagascar allows person to person the only company to cover all subscribers transfers and to top up phone 22 regions of the island.”



BE Monthly | 331

Airtel Madagascar Achieving this level of coverage, however, is merely a service goal, essential but not to be confused with the objective of really touching people’s lives in a transformative way. “The remarkable growth of Airtel Madagascar is directly related to our desire to be an innovative company that works to achieve a positive difference in people’s lives by facilitating communication and supporting communities.” Airtel is committed, he emphasises, to providing consistently improved products and services, and opening up new worlds of opportunity. “Our goal is to expand the world of possibilities and opportunities, whether in music or culture.” The music sharing capabilities of mobile phones make Airtel the ideal partner for programmes that promote the many genres of music created by the Malagasy people, and the company invests in many of these, paying special attention to the most disadvantaged and vulnerable segments of the population. Just after his inauguration in 2002, President Marc Ravalomanana established his leadership in HIV prevention. He chairs the nation’s multi-sectoral HIV/AIDS programme Conseil National de Lutte contre le SIDA (CNLS). Airtel Madagascar is an active partner in the programme, with a special information hotline. It also supports the President’s fund for bringing infrastructure, including schools, to remote areas of the island. For more information about Airtel Madagascar visit:

BE Monthly | 333

TECHNOLOGY ADVANCING INDUSTRY Industry thrives on innovation. Notably so throughout Africa, where industry is inspired and groundbreaking by necessity. This innovation-rich continent is the base of operations for technology solutions experts, 4ward-design.


pecialising in Video Conferencing, Audio-Visual Systems, Home Automation and Home Theatres, 4warddesign develops bespoke technology solutions for commercial and residential projects. Their business philosophy is “to harmonise our client’s technology experience by designing stable installations with specifically selected components and with the user experience in mind”, explains Darryl Katz, 4ward co-founder. Recently, a brief from Konkola

“4ward-design’s services are not limited to corporate projects or specific sectors” 334 | be directory

Copper Mines afforded 4ward-design the opportunity to develop a solution in keeping with this specific vision. Konkola Copper Mines (KCM) is Zambia’s largest private sector employer, and a subsidiary of Vedanta Resources Plc, a London-listed diversified FTSE 100 metals and mining group with operations in India, Australia, Namibia, South Africa, Ireland and Zambia. The mining giant required a premium boardroom solution for their Lusaka Head Office, which would seamlessly integrate and control its various aspects (HD video conferencing, light control, motorised projector and blinds, DSTV) via a Creston control system. The results were so successful that an additional custom solution was installed in the Chililabombwe office. “KCM has acknowledged the harmony and simplicity in their technology experience


with the boardroom solution,� adds Katz. 4ward-design’s services are not limited to corporate projects or specific sectors, but encompass a range of proficiencies within the residential, commercial, hospitality, and education sectors. Consultation and Design is a vital service which offers deliverables including requirement interpretation, conceptualisation and solution specification; supplied in detailed drawings and documentation in industrystandard formats. This service ensures efficient, cost-effective installation, even if an alternative provider implements the actual solution. Standard System Sales are predesigned and configured systems packaged according to commonly requested features. Available across various price tiers, they are designed for DIY installation and are particularly

suitable for remote or inaccessible sites. These systems carry a 12 month guarantee and are built to the same stringent quality standards as the tailored solutions. While system requirements and specifications may differ, 4ward-design’s focus is always on user experience. This means that solutions integrate intelligent technology with smart designs, resulting in intuitive, beautifully simple systems with sophisticated capabilities. 4ward-design 17 Prince Street Oranjezicht Cape Town 8001, South Africa T +27 860 105 944

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ONLY GOING TO ONE MINING INVESTMENT SHOW THIS YEAR? MAKE IT PDAC. March 2 – 5, 2014 International Convention, Trade Show & Investors Exchange Metro Toronto Convention Centre Toronto, Canada

Prospectors & Developers Association of Canada

Profile for Business Excellence Magazine


Dec 2013


Dec 2013