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ISSUE No. 71 | www.bus-ex.com

levon resources:

Rich in resources and resolve The Cordero Project is one of the largest silver resources on the planet finning:

country bird holdings:

BDO:

HERE’S WHY ONTARIO, CANADA

IS YOUR NEXT

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.

YourNextBigIdea.ca/Mining

$2.9B

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

$2.6B in gold

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$787M

in other metals such as platinum and silver

Paid for by the Government of Ontario.

business excellence

Business John O’Hanlon Editor johanlon@bus-ex.com Will Daynes Editor wdaynes@bus-ex.com Matt Johnson Art Director mjohnson@bus-ex.com Louise Culling Production Designer lculling@bus-ex.com Richard Turner Director of Sales rturner@bus-ex.com

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.

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

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issue No.71

6 16

6 strategy

Focus is Good…

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

16 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.

20 Levon Resources

Rich in resources and resolve

20 4 | BE Weekly

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.

contents

28

28 Finning South America Equipment and services which drive the economy

The most important partner in the distribution of Caterpillar equipment and services worldwide.

36 bdo

Innovative thinking and insight

52

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.

44 Ontario Mining Association A province of possibilities

Thanks to the efforts of the Ontario Mining Association (OMA) its role in defining the province’s future will continue to gain importance.

52 Country Bird Holdings Chicken and egg

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

76 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.

84 Energia Llaima /Sunmark A bright future beckons

84

Leading the way in launching ground breaking solar thermal and hydroelectric projects across Chile.

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Focus is

If It’s Right

How having a foc create consid Words by

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George

Strategy

Good ‌

s the Focus

cused strategy can derable value

e F. Brown, Jr.

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Strategy

S

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” 8 |

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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” 10 |

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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

Strategy

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

Strategy

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 Weekly

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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

Strategy

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. gfb@BtoBAdvisors.com

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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 Words by

Will Daynes

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O

n 26 December, 2012, Shinzō 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” 18 |

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Economics

“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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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

written by: Will Daynes research by: James Boyle 20 | be weekly

Levon Resources

ard to ownership of n the planet

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Drilling the porphyry zone at Cordero

Levon Resources

I

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: www.levon.com

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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

Edited by: Will Daynes research by: Richard Halfhide 28 | be weekly

Finning South America

P

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.

“With more than a decade promoting the growth of the locations in which it operates, Finning has committed to deliver value to its customers�

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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

7,800+

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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: www.finning.com

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Innova think and insi

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ative king ight

BDO

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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BDO

I

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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BDO

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

90+

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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

BDO

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: www.bdo.ca

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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)

M

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

$10

Billion

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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 www.irwinlowy.com

inspired Your weekly digest of business news and views www.bus-ex.com

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

$1

Billion

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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: www.oma.on.ca

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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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CBH

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Nutri Feeds delivery truck

CBH

K

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)

949

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

Through our World Leading Food Machinery Suppliers

Frigoscandia Spiral Freezers

Stein M series fryers And coating equipment

Double D Ovens

Portioning

Extrusion

DJM FORMING & EXTRUSION

Cabinplant Multihead Weighers

Albrecht Machinery Carton Freezers VacForm series

Frigoscandia | Stein | DSI | Double D

foodprocessing

T: 0861 000 516 | E: gcc@albrechtmachinery.co.za We also offer the following in-house services: • Project management • AutoCAD drawing services • Trained technical support

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

CBH

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

Albrec

ALBRECHT MACHINERY

since1

949

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

P

Extrusion

FO EX

Cabinplant Multihead Weighers

VacForm se

E. gcc@albrechtmachinery.co.za

Frigoscandia | Stei T: 0861 000 516 | E:

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

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WHY IS ARBOR ACRES THE INTEGRATOR’S CHOICE?

LOW COST PER CHICK

PARENT STOCK PRODUCES EXCELLENT CHICKEN NUMBERS

SELECTED TO OPTIMIZE FEED EFFICIENCY

BEST GROWTH RATE AND LEADING FCR

LOW COST PER KILO

EFFICIENCY AND YIELD ADD PROFIT

ARBOR ACRES FITS ALL STAGES OF THE INTEGRATOR’S PRODUCTION CHAIN AND HAS WELL-ESTABLISHED PERFORMANCE CREDENTIALS TO IMPROVE YOUR PROFITABILITY AND SUCCESS. We are pleased to have partnership with Supreme Poultry to continue serving customers in the region. aviagen.com

GENETICS PLUS SERVICE PLUS PERFORMANCE.

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. www.aviagen.com

ROSS

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. www.aviagen.com/ross

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

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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. www.bidvestlaundry.co.za

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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 www.farmwise.co.za 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

Farmwise

$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. office.za@biomin.net www.mycofix.biomin.net

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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 sales@easypack.co.za

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

Preferred supplier of day-old broiler chicks and hatching eggs.

Tel +27 (0)18 632 0336/9 Email optichicks@nwk.co.za www.optichicks.co.za

CBH

“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.. www.easypack.co.za

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 www.mcm.co.bw

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. www.mcm.co.bw

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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, anta@nutribase.co.za

Feel free to discover www.hamletprotein.com

Contact: Pietman Blignaut Tel: + 27 12 348 9291 Cel: + 27 82 322 8297 Email: pietman@nutribase.co.za

RANAN TRADING LTD.

ELECTRICAL & HARDWARE Suppliers of: Hardware, Building Materials, Paints, Electrical & Plumbing Fitting Email: ranan@zamtel.zm • www.ranantrading.com 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. www.nutribase.co.za

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

BTC Products & Services (Pty) Ltd +27828535201 +27823319720 brandon@btcproducts.co.za www.btcproducts.co.za

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: bsi.aj@mweb.co.za | www.boilerandsteam.co.za 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 www.btcproducts.co.za 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 weekly | 73

CBH

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: www.cbh.co.za

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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

T

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

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Energia Llaima /Sunmark

question. This is very much a modern model of outlay for the client. These aims are hugely business in this part of the world and is one that significant for the company’s clients, the allows energy companies to focus their own majority of whom are now benefiting from the efforts and resources on their core business, relatively stable price of solar energy compared while Energia Llaima/Sunmark remains to the volatility of conventional fuel markets responsible for obtaining solar energy and in recent years. creating the economic savings As the name suggests, that this energy source brings Energia Llaima/Sunmark is the product of a strategic in the long term.

Energia Llaima/Sunmark alliance between two acts as an energy service entities that could already compa ny, desig n i ng, boast impressive legacies developing, installation, within their fields of operating and financing solar expertise. Managed by a Investment made by energy projects, with the highly experience team Energia Llaima/Sunmark principle aims of reducing and backed by a group of towards major important Chilean financial investment costs, and projects in 2012 investors, Energia Llaima has operation and maintenance

$300 Billion

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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� 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 has been in operation since September 2010. Today the company can be found in the process

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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 thermal solutions. With over 22 years of experience

Energia Llaima /Sunmark

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: www.ellaima.cl

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Driving Sout development

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SANRAL

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 weekly | 85

T

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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SANRAL

E N V I R O N M E N TA L

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 | info@ccaenvironmental.co.za | www.ccaenvironmental.co.za

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. info@ccaenvironmental.co.za www.ccaenvironmental.co.za

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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 the engagement in productive activities by poor people” 90 | be weekly

SANRAL

opportunities for the 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: www.nra.co.za

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3-6 FEBRUARY, 2014

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