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BusinessExcellence Weekly

ISSUE No. 73 | www.bus-ex.com

The City of Tshwane:

Tshwane on the move The City of Tshwane is fast-tracking a new public transport policy aimed at social transformation as much as traffic decongestion

eti aluminyum:

greenland minerals & energy:

zambeef:

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

$1.5B in copper

$1.4B in nickel

$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

Contributors Stephen Archer Director of Spring Partnerships

HINT: For the best experience, click the fullscreen icon

Robin Hafitz CEO of Open Mind Strategy Allison O’Keefe Wright SVP, Research and Strategy at Open Mind Strategy

Subscriptions & Enquires info@bus-ex.com

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Infinity Business Media Ltd

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

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issue No.73

6

6 operations

Mergers and Acquisitions The RISKS OF FAILURE

12

We examine some of the main reasons why so many mergers and acquisitions fail.

12 marketing

Millennials: A Marketer’s Worst Nightmare?

How to reach a generation that likes to consume everything that’s out there but can spot faked passion at a glance.

20 The City of Tshwane Tshwane on the move

20 4 | BE Weekly

The City of Tshwane is fast-tracking a new public transport policy aimed at social transformation as much as traffic decongestion: its Bus Rapid Transit (BRT) system called A Re Yeng, is a key building block of this policy.

contents

28 Randgold Resources

Reaping Africa’s golden rewards

As its third quarter report for 2013 highlights, Randgold Resourses’ African discoveries continue to surprise and create huge value for their stakeholders.

36 Greenland Minerals & Energy

28

the final furlong

36

Greenland Minerals and Energy Ltd is an exploration and development company focused on the Kvanefjeld multielement project in South Greenland, which was recently given the nod by the Danish and Greenlandic governments.

46 Maersk

Riding the waves of change

As Maersk Line’s Chief Operating Officer, Morten Engelstoft explains, despite being the largest container ship operator in the world, Maersk Group continues to steer itself forward into new areas of growth

58 Eti Aluminyum

Among the integrated elite

Since it was privatised is 2005, Eti Aluminyum has channelled a great deal of effort and capital into a comprehensive modernisation programme that is now set to bear fruit.

68 Zambeef

Feeding a nation

Zambeef has grown from very humble beginnings to become one of the largest integrated agri-businesses in Zambia.

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Mergers and A The RISKS O

We examine some of t so many mergers a Words by

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Step

Operations

Acquisitions OF FAILURE

the main reasons why and acquisitions fail

phen Archer

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C

orporate mergers and acquisitions have even higher failure rates than marriages and that over half of them have destroyed shareholder value.

According to research from KPMG, 90% of mergers and acquisitions fail, compared with around 40% - 50% of marriages. But such daunting prospects have failed to deter big corporations like American Airlines and Office Depot from attempting to defy the odds.

Companies merge for a variety of reasons: expansion of market share, acquisition of new lines of distribution or technology, or reduction of operating costs. But corporate mergers fail for some of the same reasons that marriages do - a clash of personalities and priorities.

The fact that mergers so often fail is not, of itself, a reason for companies to avoid them altogether. It does, however mean that merging is never going to be a simple solution to a company’s problems.

Here are some of the main reasons for the M&A failures: Synergies So often the synergies are propounded around technical knowhow, such as complementary products or market access.

This may be sound in theory, but the execution so often fails because it requires

extra efforts from all employees in both companies. An example is the epic failure of the when eBay decided to buy Skype for $2.6 billion in 2005, only to sell the company four years later for $1.9 billion.

Apparently, it didn’t work out because eBay and Skype were unable to integrate their technological systems successfully.

Above all, to gain synergies, as with most gains for M&As there needs to be change. Change is difficult, especially in large companies. British Airways only really shook off the BEA vs. BOAC divide for the 1970s when it moved to Terminal 5 in 2007. Change integration for full synergistic gain can only happen by creating the framework that is practical and that allows people to work in happily.

Even in these modern times, business leaders think that change and synergies can be forced through. Indeed, even publicly they will say “we will push this through”. Therein lays the admission that there is a barrier.

Back office savings There only needs to be one HR, finance, IT, manufacturing, and marketing function.

When Orange merged with T-Mobile in 2010 there was talk of £545m back office savings.

This number is not trivial and behind this will be vast amounts of disruption. Look what happened when NTL bought Virgin

“The fact that mergers so often fail is not, of itself, a reason for companies to avoid them altogether. It does, however mean that merging is never going to be a simple solution to a company’s problems” 8 |

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Operations

“Two businesses often have very different strategies and growth models. These are the fundamentals of a business usually unseen from the outside though usually detectable once on the inside” or when Barclays bought Woolwich. There was chaos and huge customer frustrations as the service levels fell during the merging of functions. That said, the back office savings are usually the most reliable source of upside in an M&A. Strategy and growth models Two businesses often have very different strategies and growth models. These are the fundamentals of a business usually unseen from the outside though usually detectable once on the inside. M&As often demand some alignment of strategies.

This assumes that one or maybe both were flawed in the first place. The result is either a new one or the imposition of one party strategy on the other. This usually

leads to some level of failure. One only has to look at GE and its ‘blueprint’ for acquisitions to see how the ‘one size fits all’ approach to business strategy leads to failures. Each business, market and customer franchise is unique in some way – no matter how small that may be. This often gets overlooked though ignorance or arrogance.

Brand management The brands are often ignored by the M&A planners because they fail to fully understand what makes up brands and their equity. The same should not be true of the boards but none the less, how often have we seen M&As where very strong brands are swept aside by

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“Clashing cultures can be the undoing of the deal unless a proper culture adoption, harmonisation or change programme is in place� the name of the new owner. This can be disastrous and destroy value and indeed simply throw away existing and loyal customers. All brands should be respected and invested in where they have current and future value.

Customer focus This is so often forgotten in the M&A frenzy. Boards do not stop and say – what will the customer think of we shift distribution, adopt common pricing etc etc? The customer is the life blood of the business along with its cash. How can this be forgotten? Still M&As take place with the arrogance to ignore the customer.

Management competence Is the competence in both organisations to equal measure and if not then how will balance be achieved? Does the acquiring company really understand its new acquisition? Too often the acquirer parachutes in its own team and fails to grasp the idiosyncrasies of the acquired company. If a new, single board is to run the combination then so often this board cannot manage to complexities of the new, larger organisation. Simple management weakness is a common trap.

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Operations

Company culture Clashing cultures can be the undoing of the deal unless a proper culture adoption, harmonisation or change programme is in place. This needs managing well with strong champions.

Culture is a great enabler but it can be the hidden destroyer. One option is to start afresh. This involves setting aside the cultures of the two organisations involved and creating a new culture for the new organisation.

This approach proved highly successful in the merger of Glaxo Wellcome and SmithKline Beecham in 2000 forming GlaxoSmithKline (GSK). Both organisations decided to engage their combined workforce in a process of defining and instilling a new vision and new set of values for GSK that everyone could sign up to. Nearly fourteen years later, the company is not only a huge commercial success but is also recognised around the world as one of the best companies to work for.

Leadership Orange has outstanding, proven leadership. All too often leadership is tested beyond its abilities when it comes to handling a bigger commercial enterprise with integration challenges.

This is one area that is more vital than most. For shareholders the true motivation of leadership is critical. This must be fully understood.

The analysis It’s no secret that plenty of mergers and acquisitions don’t work. Those who advocate mergers will argue that the

“All too often leadership is tested beyond its abilities when it comes to handling a bigger commercial enterprise with integration challenges” merger will cut costs, boost revenues by more than enough to justify the price premium. It can sound so simple: just combine computer systems, merge a few departments, use sheer size to force down the price of supplies and the merged giant should be more profitable than its parts. In theory, it all sounds great, but in practice, things can go awry.

But remember, not all mergers fail. Size and global reach can be advantageous, and strong managers can often squeeze greater efficiency out of badly run rivals. Nevertheless, the promises made by deal makers demand the careful scrutiny of investors.

The success of mergers depends on how realistic the deal makers are and how well they can integrate two companies while maintaining day-today operations.

About the author Stephen Archer is a business analyst and director of Spring Partnerships, a UK business consultancy that advises companies like Carlsberg, GE Healthcare, Disney and others about their leadership and corporate strategy. www.spring-partnerships.com

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Marketing

Millennials: A Marketer’s Worst Nightmare?

How to reach a generation that likes to consume everything that’s out there but can spot faked passion at a glance Words by

Robin Hafitz & Allison O’Keefe Wright

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illennials” (born between 1982 and 2000) are referred to in marketing and research circles as the largest and most elusive generation of all time. They are often painted as a group of self-obsessed, multi-tasking, digital natives with short-attention spans, limited brand loyalty and a sense of entitlement that knows no bounds. In other words, a generation that seems like a marketer’s worst nightmare.

While many of the descriptions above may, in fact, be supported by data, they certainly don’t paint an accurate picture of this generation. But it’s hard to get a complete picture when much of the data appears contradictory.

Focus on one data set and you’ll hear that they are a generation of activists, uniquely equipped to join forces as a community and mobilize, more dedicated to making a difference and leaving their mark than any generation before. Is this true? Yes. Does this mean that they don’t also spend endless hours playing mindnumbing video games, partying, and just having fun? Of course not – they’re young!

Research continually shows that Millennials are a generation more likely to be friends with their parents and eschew the “Generation Gap.” True?

Absolutely. Does this mean they never

“These are people who marathon full seasons of ‘Breaking Bad’ in two days and then find themselves in a cat video wormhole” 14 |

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act out or rebel against their parents?

No - that ‘s part of what young adults do as they grow as individuals.

Probably most commonly, you hear that Millennials are a generation obsessed with authenticity, that they demand it from brands, from celebrities, and from content, and that without it you will never win their love. Is there truth in this? Absolutely. Does this mean that they hate studio created popstars, so-fake-you-can-smell-it reality TV shows, and fantasy fiction? Come on.

Check your Twitter trends.

Marketers need to decode Millennials as people So how do you make sense of this seemingly contradictory generation?

We believe the reason marketers find Millennials so hard to decode is because they focus too much on Millennials as “a people,” and too little on realizing that they are in fact “people.” People with varied passions. People with personal and contradictory views. People, like us, influenced by their time and life stage and making the best of it. And, frankly,

Marketing

at over 80 million strong, they’re too big a cohort to pigeonhole.

Are we saying that generational insights are useless? Given what we do for a living, of course not. We ARE saying is that as an industry, we need to learn not to obsess over such finite extremes.

For example, just because Millennials watch and share a crazy amount of short form video online, doesn’t mean that TV and long form content is dead to them.

These are people who marathon full seasons of ‘Breaking Bad’ in two days and then find themselves in a cat video wormhole. So much for short attention spans. Both a love of short-form and a passion for long-form can co-exist in the same person - this generation, and the world, do not operate with an either/or switch. It’s both/and.

The both/and can come into focus, though, when one realizes that both their short form snacking and long form binging are driven by the same undercurrents: a desire for control, the immediate availability of amazing quantities of great content (and even more crappy content), and a love of

“For Millennials, that means they’re enjoying short-form and long-form content, just-made and re-discovered content, silly and deep content - as long as they like it” immersive entertainment experiences developed early on by their interaction with games.

Ubertrends fuel contradictory behavioral trends To break these subcurrents down: the desire for control is an ubertrend not limited to Millennials. Give people DVRs and remote controls, Google search and immediate gratification capabilities, and you unleash the beast in us all: “I want what I want when I want it” (An ubertrend we call IWWIWWIWI). Short form video gives the sense of control provided by less commitment. Bingeing on long form allows people to refuse to participate in the cliffhanger syndrome. I WILL find out what happens next, and I will do it NOW. The availability of content is also something that affects us all. It means we have more to choose from, so our menu of stuff that we like tends to grow.

For Millennials, that means they’re enjoying short-form and long-form content, just-made and re-discovered content, silly and deep content - as long as they like it. And bigger and better TVs, 3D movies, and – most of all – games spawned

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their particular love of immersion in entertainment. The high quality long form created by networks like AMC, FX, HBO and Starz shares something with the short form wormhole facilitated by Reddit or YouTube - the sense of total immersion.

The implication for marketers is to look not just at the behavioral trends, but also at the undercurrents that portend them. To think of Millennials not as some weird group with seemingly contradictory behaviors, but as a huge group of individuals affected by the subcurrents of their time, and embracing the both/and of multiple possibilities. Both short-form and long-form represent opportunity, if they are immersive, served up in a way that taps into consumers ‘ desire for control, and can rise to the top of the content heap for some group of people by speaking to their passions or hitting their hot buttons.

We spend a lot of time talking to people about their viewing and consumption habits, their values and beliefs, their selfdefinitions and dreams. Though they are as diverse as - well - individual people, there are many common undercurrents that we’ve seen, the understanding of which can help marketers and

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“Millennials are likely to keep shacking up at Mom and Dad’s home, to save cash. It’s a good thing they also tend to like Mom and Dad” programmers get smart about how to connect to this sometimes seemingly contradictory generation.

“It’s the (passion) economy, stupid” Millennials are people, and people are, of course, deeply affected by their circumstances. After all, “The Greatest Generation” wouldn’t have been if they hadn’t had a war to fight. For Millennials, a key circumstance is that they are coming into their own in the workforce in a weird time (though it may be the New Normal). Income disparity is growing, global economic energy is moving away from the USA, diminished expectations are the norm, and money has shifted into just-invented, technology-centric sectors.

The economy is slowly improving, but Millennials are stuck dealing with a world in which the “next generation” can no longer expect to out-earn the previous one. Their results are, again, seemingly contradictory behaviors that make sense given the undercurrent: Tech Entrepreneurialism lives side-by-side with anti-Wall Street activism. A person can actually admire celebrities who “sell out” and “get paid” and still buy into

Marketing

Russell Brand’s call to revolution against income disparity.

Under a number of notable Millennial behavioral “trends” lays economic reality as an undercurrent - often in combination with several other undercurrents. For instance, Millennials are, in fact, likely to keep shacking up at Mom and Dad’s home, to save cash. It’s a good thing they also tend to like Mom and Dad (coming in Undercurrent 3). Millennials are buying fewer cars, which are expensive and less necessary than in the past, which is driven partly by simple economics. That, by the way, creates a market for other sorts of proofs of adulthood and rites of passage, such as learning to cook (Millennials are big foodies), or buying oneself a watch to reward a personal achievement.

Millennials: The passion generation?

One of the most interesting things that we’ve seen among Millennials as a result of the undercurrent of diminished economic expectations is what we call the rise of The Passion Economy. One might even call Millennials “The Passion Generation.”

With less of a go-go economy (and a lot

“Millennials are far more likely to define themselves by their passions, whether completely individualistic and idiosyncratic or popular and trendy - or both”

of Millennials underemployed as baristas or Task Rabbits), career has become less important as a source of identity to Millennials than to previous generations - even for those tech entrepreneurs.

Millennials are far more likely to define themselves by their passions, whether completely individualistic and idiosyncratic (that’s what the Long Tail is for) or popular and trendy - or both.

They participate in, trade and barter in; both create and consume, a Passion Economy of products, services, ideas, and memes. From Kickstarter to Quirky to Reddit to Twitter to Etsy to Potterworld, and on and on - brands, platforms, and channels that “get” the Passion Economy will do well with Millennials.

Geeking out for fun and profit In The Passion Economy, geeking out is cool. In fact, geeking out for fun and profit is one of Millennials favorite sports.

People used to be generally smart, and specifically stupid. A competent adult couple could kill a deer and gut it, break it down and cook it, plant a garden, build a wall, school some kids, make some clothes, write letters, sing a song, and play

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“Many Millennials would love to - and even expect to - make a living from their passion(s), if not soon, then down the road” the piano. Now we are generally stupid and specifically intelligent. (Thanks to Colin Collard for this idea) We “outsource” competence in killing and gutting and raising our food, educating our children, making our clothes, and our music.

We focus on being specifically intelligent in whatever thing we make a living at, or get our jollies doing (which might be making or collecting music, of course). As the fire hose of Internet content has given us more and more opportunity to become more and more specifically intelligent, geeking out on passions has become a cool way to express one’s identity. You know more about sports drinks than anyone else? Great! Tell me about that! Whether geeking out about barbecue, ‘Breaking Bad,’ ‘ Big Data,’ or butterflies, it’s all-good, and gives you cred in The Passion Economy.

Many Millennials would love to - and even expect to - make a living from their passion(s), if not soon, then down the road. Their make-up videos, cooking or nutrition blog, content creation, Kickstarter idea, Etsy store, etc., are what they “see themselves doing” down the road. Will they succeed? Well, certainly not all of them. But we can expect their infusion of passion into the corners of the world to result in some interesting

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consequences over the next decade. And if they don’t make money, they still get the satisfaction of expressing expertise and creativity, achieving status and recognition, and having influence by cultivating and sharing their passion.

Doing > Owning In The Passion Economy, experience is valued more than objects. Ben Hindman, a brilliant millennial tech entrepreneur, told us, “If someone posts a picture of themselves on Facebook standing by the car they just bought - that they OWN - I would think that was sick. But if they show me themselves driving it, or show how much expertise they have about it, that is cool.”

Over and over, we see among Millennials that even though they can probably multi-task you under the table, they ‘re also striving more to actually focus (and even unplug) to dive deep into the things they really love. When something truly matters, they will both immerse themselves in it with focus, as well as explore all the fringes of it available in our long-tail world.

For marketers and content-publishers, The Passion Economy invites you to tap

Marketing

“To think you can reach ‘Millennials at large’ with any message or idea is unrealistic - there are just too many of them, and they are just too diverse”

into organic communities of passion to sell your wares. It suggests that you connect Millennials to the content they need to Geek Out over your brand. It implies that you should invite them to express their passion through their own creativity - after all, we can thank passion for content phenomena like Fifty Shades of Grey and The Mortal Instruments, which started out in the Fan Fiction world - a Passion Economy if ever there was one.

What’s your passion?

Most importantly, as a marketer or brand-builder, if you want to connect with Millennials, focus on your own core meaning. We’re not talking about a meaning you’ve “created” to match some trendspotter’s idea of what Millennials

want, but a meaning that makes you feel passionate, and that your people are genuinely passionate about. Don’t worry obsessively about Millennials’ generational differences, but do study and embrace the passions and idiosyncrasies that can connect them as individuals with your unique offering. Make sure also to get to know the Millennials that really “get” you...they are uniquely equipped to spread a meaningful message to millions.

To think you can reach “Millennials at large” with any message or idea is unrealistic - there are just too many of them, and they are just too diverse. But if you make sure you know whom YOU are and can express it authentically and with passion, you’re likely to make the connection.

And don’t forget to thank each and every one of them, personally, later. Is that really too much to ask after everything they do for you?

About the authors Robin is CEO of Open Mind Strategy, LLC; Allison is SVP, Research and Strategy at OMS. Together they have conducted extensive qualitative and quantitative research with young consumers around the world, and have broad experience developing audience insights for a wide range of consumer brands and entertainment/content companies (MTV, AMC, Yahoo! Comedy Central, Amazon, EMI, and many others). Allison is technically a Millennial. Robin is not. www.openmindstrategy.com

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The City of Tshwane

Tshwane on the move The City of Tshwane is fast-tracking a new public transport policy aimed at social transformation as much as traffic decongestion

written by: john o’hanlon research by: james boyle

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A

city grows up over decades, an expression of the society that creates it. As society changes, the city becomes a repository of its own past, reflecting layers of its history. So Rome is a modern capital and at the same time a museum of a past civilisation. Not ideal for cars, but they live with it! But some of South Africa’s urban legacy is not so worthy of preservation, and they don’t need to live with it.

A case in point is that the major conurbations are still largely laid out along pre-1994 lines, when the major centres of employment were situated downtown in what is called the Central Business District (CBD), with the middle class mainly white population in conveniently placed suburbs.

The majority of the workers had to live in townships at arm’s length, and well outside of the ‘better’ parts of the city.

South Africa’s transformation took place a mere 20 years ago, as we are painfully reminded in the immediate aftermath of the death of its architect Nelson Mandela.

Though progress has been made it has been neither practicable nor affordable to rebuild the cities from scratch and a number of legacy problems mean that too many of the previously disadvantaged remain disadvantaged.

On top of the congestion that rising GDP has delivered, as it has everywhere, too many of the working population have to make a long and difficult journey to and from their place of work.

The City of Tshwane is one of the worst affected. It was formed in 2000 from the amalgamation of 13 local councils including

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The City of Tshwane

amongst others Pretoria, Centurion and Ga-Rankuwa. Its population today stands at about 2.9 million compared to 2001 when it was 2.1 million.

In 2011, the City of Tshwane announced that it would develop an Integrated Rapid Public Transport (IRTPN) through the provision of a high quality and affordable public transport system. The plan focuses on high-frequency corridors where passengers are transported on a dedicated lane where public transport should enjoy priority over private transport. The plan will also provide Tshwane with a permanent and recognisable public transport framework consisting of radial and circular routes. Bus Rapid Transit (BRT) was identified as the appropriate mode of transport to lead the transformation of public transport in the city.

The target market for A Re Yeng is everyone living in the City of Tshwane, and those visiting too. The present transport options are not integrated, says A Re Yeng’s Executive Project Leader (EPL) Lungile Madlala. “There is a government subsidised bus system but in the City of Tshwane there are only two subsidised operators, serving limited routes.”

For the rest, she says, people rely on a plethora of minibus operators. There is no integration: “We need to integrate all modes of transport

Signing the MOU: City

including rail, with universal access so you don’t have to walk far from your house to link with a service that will take you where you need to go.”

Ms Madlala and her team visited cities all over the world before concluding that South America had the closest model to South Africa’s, to use as a benchmark for Tshwane’s own BRT. Over the next three years the city is expecting to spend R3.6

“We need to integrate all modes of transport including rail, with universal access” 24 | be weekly

The City of Tshwane

y of Tshwane’s Mayor, Cllr Kgosientso Ramokgopa (centre) with representatives of Tshwane Regional Taxi Council

billion implementing the Though providing the new system. This represents outlying townships with the cost of building new affordable and reliable sections of bus lanes, transport, the system is stations and depots, around designed with all sections Of Tshwane’s buses will 154 new vehicles, and of society in mind, she be powered by CNG supporting infrastructure emphasises. A key benefit will be to provide car owners such as the intelligent with a realistic alternative, transport management system, CCV cameras, and the upgrading reducing inner city congestion. Public of the entire traffic light system that will transport will take priority, she promises, give priority to BRT buses. In line with with non-motorised transport options Tshwane’s Sustainable Energy and Climate facilitated by providing cycle tracks and Change (SEED) programme all the buses walkways designed around the access points procured will conform to the highest to the system. emissions standard Euro 4, and 30 percent So what will happen to the many private of them will be powered by Compressed bus and taxi operators once the A Re Yeng Natural Gas (CNG). becomes operational? Far from losing their

30%

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livelihood, they will be brought into the system, empowered and given a boost. The industry has survived without government subsidies: now it has new opportunities.

When the city and the Greater Tshwane Regional Taxi Council (GTRTC) and Transport Operators Peace Initiators Conglomerated Associations (TOPICA) signed a Memorandum of Agreement (MOA) in June the chairman of GTRTC Mr Abner Tsebe gave his full support, saying: “The mayor wants to see billionaires created out of this project. We can actually own and run the BRT buses ourselves if we work together and are united.” It will be a bit like a co-operative, says Lungile Madlala: “They will come in and have shares in the

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Bus Operating Company. That way they will all have assets in a new business that is more economically viable.”

Clearly the present private operators will have to commit or leave the business, taking a payoff from the operating company – competition on the A Re Yeng routes would not fit the new business model. However a high level of buy-in is expected. Upskilling, training, a regular income and benefits are among the many new rights that the scheme will bring to its operators.

As well as stimulating existing employment opportunities BRT will generate approximately 12,000 new jobs including those related to construction.

The City of Tshwane

“Former taxi and bus operators will all have assets in a new business that is more economically viable” The first phase of construction is already in full swing, with some sections of road and one station building already completed at Arcadia Street, Hatfield. This inception phase, stretching seven kilometres from Nana Sita Street (formerly Skinner Street) in the CBD to the suburb of Hatfield, will be complete and operational in 2014, says

Madlala. “Then by the end of 2015 we will be working on a bigger scheme that will run from Rainbow Junction (Wonderboom Station), which a new urban core to the north of the city, to the CBD. In 2016 we plan to link with the Menlyn Node, which is another major development project.”

The A Re Yeng system is far more than merely a transport project, Lungile Madlala emphasises. It will contribute significantly to building a national democratic society.

Reduced travel times between home, work, retail and social destinations and improvements in traffic congestion and road safety are just a start. “It will stimulate areas that are quite depressed. We will encourage development in the region of the stations, and these areas will be kept safe and secure.

We want disabled people, single women, mothers and children all to feel safe at all times,” she says. The fact that CCTV cameras will monitor the entire system should make people feel more confident, and a reduction in crime will certainly be another side effect of A Re Yeng.

For more information about The City of Tshwane visit: www.tshwane.gov.za

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Randgold Resources

Reaping Africa’s golden rewards As its third quarter report for 2013 highlights, Randgold Resourses’ African discoveries continue to surprise and create huge value for their stakeholders

written by: Will Daynes research by: Jeff Abbott & Robert Hodgson

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Randgold practises a non-discrimination policy, striving to recruit and retain the best people and draws on talent from the populations of the countries in which it operates

Randgold Resources

I

f any proof were needed to support the belief that Africa has become one of the world’s epicentres for mining success over the last decade, one arguably needs to look no further than Randgold Resources. An Africa-focused gold mining and exploration company, it has been the architect behind a host of major discoveries to date in Mali, the Côte d’Ivoire, Senegal and the Democratic Republic of Congo (DRC).

Included among said discoveries are the company’s 7.5 million ounce Morila deposit in southern Mali; the seven million ounce Yalea deposit and the 5.5 million ounce Gounkoto deposit, both in western Mali; the four million ounce Tongon deposit in the Côte d’Ivoire and the three million ounce Massawa deposit in eastern Senegal.

The Morila mine was very much Randgold’s first success story. Financed and built by the company it has gone on to produce more than six million ounces of gold since October 2000, distributing more than $2 billion to its stakeholders. More recently, the company’s Tongon mine in Côte d’Ivoire poured its first gold in November 2010, while its Gounkoto mine, south of Loulo, Mali, delivered first ore to the Loulo plant in June 2011 and paid its first dividends to shareholders in mid-2012.

Today Loulo-Gounkoto complex is the flagship of the company and it was its strong performance in the three months to the end of September 2013 that powered Randgold to an 80 percent quarter on quarter profit increase, a feat made all the more impressive by the fact that the company experience a three percent drop in the average gold price received during this period.

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T

hrough a diverse set of services including strategic facilitation workshops, strategic business reviews and analytics to align the business effort for effective implementation of its strategy.

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Randgold Resources It was here that an increase in the grade of product, Strategnos was established in 1999, and is synonymous coupled with a substantial with sound Strategic thinking teamed with a comprehensive improvement in recoveries, Understanding and Knowledge of Business Practice. helped deliver Randgold a 36 Strategnos occupies a niche Market, improving Business percent increase in production and Supply Chain Management, by employing the Expertise to a record 165,146 ounces of a highly skilled Team of Consultants and Analysts.The name Strategnos merges the two Greek words, Strategia over the previous quarter. and Gnosi, meaning Strategy and Knowledge respectively; The improvement in the hence our fundamental Foundation - Building Business recovery rate was achieved through Strategy and Knowledge. through the commissioning www.strategnos.com of a milling circuit recycle crusher and a new oxygen plant. Other projects completed during the quarter included the conversion of the mine’s generators to heavy fuel oil and the expansion of the carbon in leach (CIL) tank.

The quarter also saw the early commissioning of the company’s Kibali project in the DRC, meaning that 2013 will be remembered as the year that the Kibali project achieved its first gold pour and commenced commercial production. It was in 2009 that the company acquired a 45 percent interest in Kibali, a project that stands at 10.9 million ounces of mineral reserves and at the time was recognised as one of the largest

strategnos

550,000 ounces

Randgold’s 2014 production target for the Kibali project Nzoro River hydropower sources for Kibali

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As part of the Kibali project, Randgold has funded and managed the upgrade of the main access route between the towns of Doko and Aru on the Ugandan border

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undeveloped gold deposits in Africa.

As well as coming online well ahead of schedule, Kibali is now expected to exceed its 30,000 ounce production forecast for the fourth quarter of 2013 and it is well on the way to meeting Randgold’s target of 550,000 ounces for 2014. Today the company is busy ramping the project up to full capacity on its plant’s oxide circuit, with the completion of the remaining plant and hydropower stations, and the commissioning of the sulphide circuit, scheduled for next year. Furthermore, the development of Kibali’s underground mine is progressing well and to schedule.

In Randgold’s third quarter statement, Chief executive Mark Bristow was keen to highlight that the successful start-up of the project represents a remarkable combination of geology, metallurgy, engineering and logistics, as well as negotiation and diplomacy.

“The Randgold team only moved on site in January 2010 and in less than four years it has built a world-class gold mine in one of Africa’s remotest regions, in the process more than doubling its reserves to 11.6 million ounces and increasing its resources to 21 million ounces. While doing this, we have also completed or progressed major performance-enhancing capital projects at Loulo-Gounkoto and Tongon.”

During the quarter, performance at the aforementioned Tongon asset improved in line with the company’s plan, with mill throughput rising significantly thanks to the commissioning of a new of related capital projects. The progress Randgold has made to date in 2013 at Tongon will continue into the fourth quarter during which time a further

Randgold Resources

Randgold is committed to providing the safest possible working environment for its employees

“As well as coming online well ahead of schedule, Kibali is now expected to exceed its 30,000 ounce production forecast for the fourth quarter of 2013” mill tonnage ramp-up is scheduled, alongside the commissioning of new crushers and a cyclone pump upgrade.

“Our focus now is on securing steady-state production at Kibali while completing the rest of the development, and on achieving the full benefit of the performanceenhancing projects at Loulo-Gounkoto and Tongon,” Bristow added in his third quarter statement. “We’re also still maintaining a strong emphasis on exploration, which has traditionally been the driver of Randgold’s

growth. At Kibali, where an upgrade of the underground mine plan has already delivered an interim increase in reserves, continued exploration points to a further upside, and in West Africa, our geologists are moving back into the field after the rainy season to follow up identified targets.”

For more information about Randgold Resources visit: www.randgoldresources.com

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Greenland Minerals & Energy

the final furlong Greenland Minerals and Energy Ltd is an exploration and development company focused on the Kvanefjeld multi-element project in South Greenland, which was recently given the nod by the Danish and Greenlandic governments

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

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Looking south over Narsaq towards the north Atlantic

Greenland Minerals & Energy

I

n 2006 when he seriously started to sell his conviction that Greenland would be the next game-changer in the global supply chain for minerals, Rod McIllree found that the investment community in his native Australia shared neither his enthusiasm nor his outlook. In Australia not many people had heard of the Ilimaussaq Complex right at the southern tip of Greenland, which had been investigated by geologists from Greenland’s ‘mother country’ Denmark for decades and had been found to be rich in uranium. So he turned his attention to North America and Europe where he found an audience much more interested in understanding Greenland’s potential. “It was much simpler to sell the story there,” he says. “Greenland’s continuously stated position is that it sees its future intimately entwined with the development of a successful mining industry.”

In early 2007 GME acquired a majority interest in an exploration licence covering the northern Ilimaussaq Complex, and has subsequently increased that to 100 percent. The Kvanefjeld project is among the world’s most strategically important mineral projects because of the large amount of rare earth elements (REEs) that it contains. These are a group of about 17 minerals that have come into increasing demand for applications such as high powered magnets, lasers, mobile telecommunications and other electronic applications, optics, ceramics and the like. They are not in fact uncommon in the earth’s crust, but there are not too many places where they occur in commercially exploitable quantities. “Kvanefjeld is the largest global example of a uranium and rare earth deposit,” emphasises McIllree.

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20% Proportion of Greenland’s GDP that Kvanefjeld could generate

Southern Greenland enjoys moderate temperature ranges allowing for almost year round exploration

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China currently dominates the market for rare earths, accounting for more than 90 percent of global supply and at least 60 percent of consumption, however a considerable proportion of China’s production came from illegal sources sourced on the black market.

Now China is tackling the environmental issues associated with this black market and as a consequence there is less supply available at a time when demand is rising with the result being reflected in rising prices for the critical rare earths. It has cut back exports of all REEs from the 35,000 tonnes it supplied in 2010, and banned exports of the heavier rare earths terbium and dysprosium.

Understandably a number of projects are being advanced urgently to fill the gap.

Kvanefjeld undoubtedly has the scale to supply 20 to 30 percent of the urgent and growing need from European and North American markets and GME is well placed to become one of the world’s largest and most cost-effective producers of these speciality metals. It has many other advantages over rival projects. The sheltered fjord the deposit sits on is open to shipping all year long and is close to transatlantic shipping lanes.

Distances from project to port is less than ten kilometres and the town of Narsaq is not much

Greenland Minerals & Energy

The first drill hole being set up in 2007

further. Narsarsuaq international airport is 40 kilometres away and low cost power can be supplied from hydroelectric generation.

And if this did not trump the projects under consideration elsewhere in the western hemisphere, this is a non-refractory deposit.

Refractory ores examples of which might be allanite or monazite eudylaite or other zirconium based minerals have to be broken down using what Rod McIllree calls a ‘hot chemical sledgehammer’. Kvanefjeld on the other hand can be processed in open air leach tanks with dilute acids. This vast resource is also amenable to simple beneficiation (pre treatment concentration) through a simple floatation step where the company is getting industry leading

upgrades of more than 10 times allowing for huge cost savings downstream.

Until very recently just one thing stood in the way of GME. This was the Danish (and Greenlandic) government’s blanket ban on the exploitation of radioactive minerals. While rare earths are not radioactive the resource is mixed up with commercially significant quantities of uranium. When in the 1970s the Danish government backed examination of this site, it was uranium that it was interested in, but that interest was extinguished when Denmark decided to terminate its programme for nuclear power generation.

The problem for GME has been that it couldn’t separate the rare earths without separating

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“from the Danish government down to the local population at Narsaq, there’s a consensus that everyone wants this to happen” the uranium, and that was forbidden. But in October this year Greenland’s parliament voted to remove its long standing zero tolerance policy. This was not exactly a bolt from the blue, as it had been anticipated since November 2011 when Greenland’s Bureau of Minerals and Petroleum amended GME’s exploration licence over Kvanefjeld to include uranium giving it the right to apply to exploit uranium along with other economic minerals.

As far as Kvanefjeld goes, uranium is a

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by-product, with around 15 percent of the revenue attributable to it. Uranium has a ready market to sell any product into but McIllree points to the ability to tie in with a major to potentially supply upwards of three million pounds for more than 50 years, it’s an attractive alternative to unstable production.

“This policy change is a transformational event for the company as it now allows us to move forward with the mining licence application and continue to progress end

Greenland Minerals & Energy

Looking north up the Narsaq Valley

user engagement,” says McIllree. A bigger transformation, he continues, lies in the statement it puts out to the world at large.

“Greenland, and its government, is now our biggest advocate; it is very vocal about its desire to get a mining industry up and going, and this is going to be one of the main foundations of the country’s move toward eventual independence. This is not a niche event – it is something that is being discussed at all levels of government from the Danish government down to the local population at Narsaq, where there’s a consensus that everyone wants this to happen.”

Lifting the ban on exploiting materials like uranium and thorium was a transformative event for the company, but it is the beginning not the end of the process. A regulatory and safety structure needs to be established

by the Greenland government covering the extraction, processing, handling and transportation of these materials. In this it will no doubt benchmark on Canadian best practices which have been in place for a long time, and are particularly relevant considering the geology of north eastern Canada is identical to Greenland – they were a single land mass not that long ago in geological time.

However the decision is a signal that GME can now move Kvanefjeld on with confidence and one that will be noted by current and potential investors. “At the moment we are working with the regulatory bodies in Greenland and Denmark to identify the most appropriate implementation model for all stakeholders,” says Rod McIllree. “Three main modules are required to produce the REEs and uranium: the first is the mineral

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“we are working with the regulatory bodies in Greenland and Denmark to identify the most appropriate implementation model for all stakeholders�

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Greenland Minerals & Energy concentration process which occurs immediately adjacent to the ore body. A second, an intermediate refining step will probably also be done in Greenland though we are still considering the economic implications of that.”

The final stages of stockpiling and shipping the concentrates will require investment in roads and port facilities, and finance will have to be raised for this. However the path is now clear to lodge a mining licence application in 2014.

By then GME will have firmed up its implementation strategy, with partners the government can accept and thereby assure total downstream security of the product: uranium is a new industry for Greenland, still sensitive, and one it wants to get right.

Depending on how long it takes for the licence to be issued (and given the importance of Kvanefjeld to the nation that should not take long) he hopes to start construction early in 2015 to a schedule that will allow production to start at the beginning of 2017.

“We would see one or two ultimate end users for the REEs and a single recognised western uranium utility refiner as an offtake partner for the uranium.”

Kvanefjeld is the one project that will put Greenland on the map processing between three and four million tonnes of rock a year to produce 400,000 tonnes of mineral

Local Greenlandic work force

concentrate. It will, says Rod McIllree, generate more than 20 percent of Greenland’s GDP, boosting employment and downstream industries on top of the direct funds it will contribute in tax and royalties and will finally get Greenland off Denmark’s books. “The economic significance of this project cannot be overstated. When we look back years from now it is this policy event that will be seen as the spark that brought to life Greenland’s long awaited minerals industry” says McIllree, clearly conscious that Kvanefjeld is at the same time, both a company maker for GME and a foundation stone for the nation of Greenland.

For more information about Greenland Minerals & Energy visit: www.ggg.gl

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Riding the waves of change As Maersk Line’s Chief Operating Officer, Morten Engelstoft explains, despite being the largest container ship operator in the world, Maersk Group continues to steer itself forward into new areas of growth

written by: Will Daynes research by: Peter Rowlston

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Maersk

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Maersk

F

or some companies their very name has come to be synonymous with their particular area of industry.

Think mobile phones or tablets and Apple springs to mind. For oil and gas it will be BP or Royal Dutch Shell, while mention of the fast food sector immediately conjures up images of McDonalds or Burger King. While these businesses are hugely different when it comes to what they do, what they share is the fact that their strong history and track records of success have made them the leaders in their field.

The same holds true for Maersk Group, arguably the most recognisable name in the global maritime world. Made up of four core business, Maersk Line, APM Terminals, Maersk Oil and Maersk Drilling, with Services and Other Shipping set to become its fifth core business unit from 2014, the group today employs around 121,000 people across 130 countries and generated some $59 billion in revenue in 2012 alone, a figure that is all the more astounding when one considers the challenging environment the group finds itself in at present.

“Our market as it exists today is unquestionably tougher than it has been in the past,” states Maersk Line’s Chief Operating Officer, Morten Engelstoft. “At present we are witnessing a trend whereby our more mature markets are experiencing flat development, while emerging markets are slightly better, giving us a global annual growth rate of between three and four percent.”

While growth of any kind is of course welcomed, it does pale in comparison to the ten-plus percent yearly growth that the

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NUTEP – Russian growth success story NUTEP (situated in Novorossiysk and owned

by DELOPORTS) is the most modern container terminal in the South of Russia • Constructed greenfield in 2004-2005 with several completed expansion projects since inception • Modern technological equipment and infrastructure • Own 5-track railway park • Throughput capacity – 350 thous. TEUs • Container turnover in 2012 – 215 thous. TEUs • 32% of container turnover of Russian ports in the Azov and Black sea basin • Plans to launch construction of a unique deepwater berth for ocean container vessels

DELOPORTS Tel.: +357 25 591 501 E-mail: deloports.com E-mail: post@deloports.com www.deloports.com

Maersk

“Maersk Group today employs around 121,000 people across 130 countries” industry regularly experienced in the years between 2002 and 2007. Nevertheless, where there is growth today there is opportunity, particularly if you happen to be the largest container vessel operator on the planet.

“Emerging markets are definitely the source of any green shoots we are coming across at the moment,” Engelstoft continues, “with Latin American, African and Intra-Asia freights all experiencing strong growth characteristics in recent

years. Meanwhile, what we term our back haul business, meaning business moving from regions such as Europe into China, is also picking up well, which is a reflection on the fact that China is importing more now than it has previously.”

The reality of the situation that the container industry finds itself in today is that it is a highly fragmented market in which a vast number of players are essentially competing to offer very similar products and services.

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$59 Billion In revenue achieved by Maersk in 2012

Understanding the necessity to stand out amongst such a crowd Maersk has focused a great deal of effort on the service it provides its clients by creating its own Customer Charter. Made up of eight key components of services that its customers themselves highlight as being most important to them, the Customer Charter provides a transparent overview of how the business is performing in these areas and what its long term targets are for improving itself further.

Another area in which Maersk is very much taking the lead is energy efficiency. The drive towards this actually began in 2007 when the group set itself a target of reducing CO2 emissions per container kilometre by 25 percent before 2020. Remarkably this figure was actually achieved eight years ahead of schedule in 2012. Maersk Line would then go on to raise the bar further by setting itself a 40 percent reduction target by 2020.

One of the more impressive examples of Maersk’s work in this field is without doubt its new Triple E class of vessels, launched in July 2013. Measuring 400 metres in length and boasting a capacity of 18,000 TEU, the Triple E vessel is the largest ever built. It will also represent one of the most energy efficient vessels on the planet, reducing CO2 emissions by around 50 percent per

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Maersk

container moved, compared to the industry average CO2 performance on Asia-Europe trade routes.

“In many ways the Triple E vessel showcases the way Maersk Group undertakes a continuous process of innovation when building for the future,” Engelstoft enthuses.

“It also highlights how we do not shy away from ploughing considerable amounts of capital into better, more fuel efficient vessels,

what with each Triple E vessel representing $185 million in investment, $30 million of which has been spent on environment and efficiency improvements.”

By mid-2015 Maersk expects to have received delivery of the 20 Triple E vessels it has on order, each of which will be periodically deployed into the group’s network where they will replace older vessels that are operating along the Asia

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“This methodology of building upon Maersk’s achievements will ultimately see it further improving on the successes of the Triple E in the years ahead”

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Maersk to Europe trade lines where much of the group’s business is currently emanating from.

Interest in these massive new additions to Maersk’s fleet has been impressive.

More than 250 customers and government officials, and thousands of people, have participated in events in the maiden voyage ports of call; however Maersk’s attention is already turning towards applying the Triple E’s fuel and energy efficiency learnings to other Maersk Line vessels, and replicating it across the group’s different business divisions.

“Looking at the Triple E it should be immediately clear that they are built upon industry leading experience, innovation and confidence in our abilities,” Engelstoft says. “A good example of this is the vessel’s Waste Heat Recovery System, the installation of which costs approximately $10 million per vessel alone. The purpose of the Waste Heat Recovery System is to reduce the engine’s need for fuel and therefore its CO2 footprint. The effect is a reduction in the engine’s fuel consumption and CO2 emissions by approximately nine percent.”

This system was actually developed and perfected on earliest vessel classes, before being upgraded to become a key feature of the Triple E’s energy efficient design. It is this methodology of building upon Maersk’s achievements that will ultimately see it

further improving on the successes of the Triple E in the years ahead.

A separate development that has occurred in recent months took place in June of this year. It was then that news broke that Maersk Line, MSC Mediterranean Shipping Company and CMA CGM has agreed, subject to regulatory approval, to establish a long term operational alliance on East-West trades, called the P3 Network.

“If and when we get regulatory approval, we will operate a joint network of approximately 250 vessels with a total capacity of around 2.6 million TEU,” Engelstoft highlights. “The creation of this network will benefit all parties by providing increased cost efficiency and will also provide our customers with better

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Maersk

$185 Million The amount invested in each Triple E Class vessel

frequency, increased coverage, lower CO2 footprint, and ultimately a better product.”

While 2013 will go down as a year of big achievements for Maersk Line; longer term we know that the coming months will remain challenging, with annual market growth expected to reach between four and five percent.

One of the primary reasons for this will be the increase in vessel capacity set to be delivered throughout the world’s major markets. This trend however is expected to subside during 2015, meaning that the sector does still possess encouraging growth potential in the long-term.

“Our own business approach revolves around the fact that we want to grow with the market, retaining our market share,” Engelstoft concludes. “In the meantime we will continue to work to improve our bottom line by working to reduce our cost levels to among the lowest in the industry, and to deliver best-in-class customer service, all while carefully watching how the industry performs so that we can grow accordingly as the environment evolves.”

For more information about Maersk visit: www.maersk.com

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Eti Aluminyum

Among the integrated elite Since it was privatised is 2005, Eti Aluminyum has channelled a great deal of effort and capital into a comprehensive modernisation programme that is now set to bear fruit

written by: Will Daynes research by: Abi Abagun

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T

he world’s second most used metal after steel, aluminium is blessed with a host of positive characteristics that have made its use invaluable to the modern world.

The most common metal found in the earth’s crust, it possesses a remarkably low weight-tostrength ratio, high resistance to corrosion, is easy to shape and is 100 percent recyclable.

Despite aluminium’s importance to several multi-billion dollar sectors, including the aerospace, transportation, medical and construction industries, surprisingly there remain only a handful of integrated aluminium producers in existence today. One of the elite few is Turkey’s Eti Aluminyum.

Eti Aluminyum was originally established in 1962 by the Turkish government, with 15 years passing before it reached full capacity production in 1977. More recently the company embarked on a transition into the private sector when it was acquired in 2005 by the Turkish construction, energy and mining group Cengiz Holding. This event kick started a comprehensive modernization process for the company, one that continues to this day.

Eti Aluminyum is Turkey’s only producer of liquid aluminium and it is the country’s only fully integrated producer which takes in untreated ore downstream and then has the capacity to fulfil every process requirement to the finished product. The company has its own bauxite ore mines located just 20 kilometres away from the factory and this is the starting point of its operations—the chemistry of aluminium means it is always found combined in other minerals, most frequently bauxite ore.

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Eti Aluminyum

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Combined with Cytec’s unmatched R&D capabilities and world-class application expertise, we con the right level of performance. To learn more about how the premier supplier of mining specialty tomorrow, visit cytec.com/specialty-chemicals/alumina-processing.htm

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As the demands of the industry are changing, Cytec is partnering with mining companies around the world to deliver reagent solutions for the recovery and production of copper, alumina, gold, nickel/ cobalt, polymetallic ores and many other metals and minerals.

Cytec Industries provides the alumina industry with value-adding, efficiencyenhancing technology for all stages in Bayer Process alumina production. Cytec’s technological innovations for alumina processing began with programs for the solid-liquid separation processes and the introduction of synthetic polyacrylate flocculants to replace starch.

Cytec developed the HX flocculants over 20 years ago and since then has remained the premier supplier to the mining industry.

Our flocculants are constantly improved to better meet the industry’s requirements and CYFLOC® ULTRA Series, is the latest advancement in flocculant. The performance benefits includes: • Allows difficult to handle bauxite (high silica >5%) to be processed economically.

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• Overflow suspended solids are reduced by 50% or more over polyacrylate flocculants, resulting in significant improvements in filtration.

• Gives superior results over existing HXPAMS at reduced dosage requirements • Rapid settling rates allow for high throughput in settler operation.

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Eti Aluminyum

Hot rolling mill

Using the technology of today there are two main production phases. These are bauxite primary ways of producing aluminium, the mining, aluminium production, liquid first being from ore, creating what is known aluminium production, the alloying and as primary aluminium, and the other being casting of the liquid aluminium, and the from scrap, creating secondary aluminium. last but by no means least, the production Eti Aluminyum’s SeydiĹ&#x;ehir Aluminium Plant, of semi and/or end products through the located in the Central Anatolia region of Turkey, use of the aforementioned casting, rolling is an integrated primary and extrusion processes. aluminium production plant.

Today Eti Aluminyum From here the company is provides employment for more than 1,300 individuals, able to convert aluminium while its plant possesses the ore into metallic aluminium capacity to process some by first processing the ore and then shaping it through 460,000 tonnes of bauxite ore Processing capacity the use of casting, rolling and each year and 60,000 tons of at Eti’s Seydisehir aluminium per annum. There extrusion systems.

Aluminium Plant of is also an on-site casting The integrated production bauxite ore per year facility with a capacity of process itself consists of five

460,000 tonnes

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75,000 tons a year. Eti Aluminyum produces primary and cast aluminium products as well as wet and dry aluminium hydroxide, calcined alumina and a small quantity of high Mg-alloyed plates. In addition, the company’s facilities are also equipped to handle the production and commercial sale of aluminium hydrate, alumina, and aluminium sulphate and vanadium sludge.

The aluminium hydroxide product is used by aluminium sulphate, poly aluminium chloride (PAC), zeolite and other special hydrate producers. The metallurgical alumina product is used mainly by the smelter department internally, as well as by refractory, ceramic and other special alumina producers. The casting products consist of re-melt ingot, alloyed and non-alloyed ingots, billets and slabs. Here, re-melt ingots are used by billet and slab producers while the alloyed and non-alloyed ingots are used by piston producers, cable manufacturers, etc. Billets are used by extrusion producers and slabs are used internally by the rolling plant. Meanwhile, the high Mg-alloyed plates that the plant produces are typically used by machinery builders, ship builders and the defence industry.

Since its privatisation, modernising the legacy of Eti Aluminyum’s plant and related

facilities has been a key priority. While its existing infrastructure has undoubtedly served the company well for almost 40 years, a comprehensive upgrade was nevertheless of paramount importance if it was to be able to increase equipment and process efficiency, plant productive, improve work conditions and safety, and reduce emissions.

Making all of this a reality was always going to be quite the challenge and it is one that the

“Machinery used throughout Eti Aluminyum’s operations is being systematically brought into line with new technology and regulations” 66 | be weekly

Eti Aluminyum

company is continuing to face meeting around 15 percent of up to as we enter 2014. As Turkey’s annual aluminium well as upgrading all of the demand. Therefore it stands equipment and infrastructure to reason that many within relating to its two methods the country are waiting Of Turkey’s annual excitedly for the company’s of aluminium production, aluminium demand machinery used throughout modernisation plans to is provided by Eti Eti Aluminyum’s operations is bring about an increase Aluminyum being systematically brought in its plant’s production into line with new technology output from 60,000 to and regulations, while great 75,000 tonnes of aluminium progress continues to be made towards the by early 2014, a target that appears well construction of a new coal powered steam within its reach. boiler plant and the installation of a more modern smelter. Both the latter undertakings For more information about are expected to be completed in 2014.

Eti Aluminyum visit: Eti Aluminyum’s Seydişehir Aluminium www.etialuminyum.com Plant is estimated to be responsible for

15%

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Zambeef

Feeding a nation

Zambeef has grown from very humble beginnings to become one of the largest integrated agri-businesses in Zambia

written by: Will Daynes research by: Jeff Abbott

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Zambeef

W

ith limited capital, the company known as Zambeef was incorporated in 1994.

Employing 60 staff, slaughtering 180 cattle per month in a rented abattoir, delivering meat via a single Land Rover and selling it through two rented butcheries, it was very much a small-scale operation to begin with. Nevertheless, through a combination of organic growth and acquisitions, the company went on to become one of Zambia’s largest agri-businesses, achieving a compounded organic growth rate of over 20 percent in real terms between 2003 and 2008 alone.

Today boasting annual revenues of approximately US$255 million and providing employment for more than 5,500 people, the Zambeef group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed, flour and bread. The group also has large cereal row cropping operations, principally maize, soya beans and wheat, with approximately 8,350 hectares of row crops under irrigation and 8,650 hectares of rain-fed/dry-land crops available for planting each year. Furthermore, the company is today is the process of rolling out operations into Nigeria and Ghana.

The scale of Zambeef’s current operations is truly staggering. In addition to slaughtering some 60,000 cattle per year it is also responsible for producing approximately eight million litres of milk, 20 million eggs and 120 million tonnes of feed per annum, while also processing 3.5 million chickens and 90,000 hides.

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....keeping Zambia moving Established in 1992, Autoworld has positioned itself as one of the leading companies in the motor trade industry in Zambia with eleven branches throughout the country.

Autoworld is a retail store and fitment centre catering to the needs of any vehicle or boat with an extensive range of quality guaranteed products and services offering a one stop shopping experience.

We primarily operate in the replacement automotive parts industry with a focus on product ranges from accessories through to lifestyle equipment. Autoworld are dealers in both automotive and marine products from a wide range of global manufacturers.

Our product & service range offered includes: • Motor Vehicle Parts • Accessories • Tyre Specialists • Garage Equipment

• Fitment Centre • Boats • Marine Engines • Marine Accessories

Tel: +26 0211 237716/19 | Fax: +26 0211 223323 Email: info@autoworldzambia.com | www.autoworldzambia.com

Zambeef While the size of the autoworld business has changed Established in 1992, Autoworld has positioned itself as dramatically since the midone of the leading companies in the motor trade industry 1990s, its vision and strategy in Zambia with eleven branches throughout the country. remains virtually the same, Autoworld is a retail store and fitment centre catering to that being for Zambeef to be the needs of any vehicle or boat with an extensive range seen as the most accessible of quality guaranteed products and services offering a one stop shopping experience. Our vision at Autoworld is to and affordable quality protein keep Zambia moving by supplying a staggering range of provider in the region, and vehicle, marine and lifestyle products. to increase the efficiency www.autoworldzambia.com and capacity of its primary production facilities.

To achieve this, the Zambeef group continues to pursue a vertically integrated business model, from primary production to processing and distribution to retailing the finished products in a value-added form directly to the end consumer through its own extensive retail network. The vast majority of Zambeef’s food products are retailed directly to the end consumer through Zambeef’s extensive retail network. Indeed the company has one of the most impressive distribution and retail footprints in Zambia, consisting of 91 retail outlets, three wholesale centres, six fast food outlets and 20 Shoprite butcheries.

The company’s three wholesale centres were opened in 2011 in order to attract

“Zambeef group continues to pursue a vertically integrated business model” be weekly | 73

Versapak Zimbabwe began operating in Harare in 1995.

The company is the leading manufacturer and distributor of expanded polystyrene and printed rigid plastics in the country.

Product Range Foam Trays & Boxes for •Butcheries •Fruit & vegetables •Fast Food available in both plain and printed varieties Rigid Products •Dairy Product yoghurt cups •Yeast containers•Disposable cups Bottle and Jars •Petroleum Jelly jars and closures •Beverage containers Other products •Clingfilm for both industrial and domestic use • Vacuum bags •Fomopads -which are used to absorb excess moisture in packaging

We always strive to bring the best products to the consumer by using the latest advances in technology such as in our “Ultra-zorb” range of products that eliminate the use of the traditional fomo pad.

We recognise the need to care for the environment and are actively involved with Environmental Agents, Non – Governmental Organisations and Local Authorities.

We have a wide network of distributors who offer their customers professional service and advice as well as competitive prices. We also sell directly to the public.

For a list of distributors please visit our website www.versapak.co.zw

Zambeef business from the large commercial sector in Zambia.

Versapak Zimbabwe was established in 1995 and is the Elsewhere, Zambeef is leading manufacturer and distributor of Plastic Packaging in continually investing in the country. Our company has a proud history of involvement upgrading and refurbishing in the food packaging industry and offers high quality existing stores as well as products that meet both local and export market demands for opening new retail outlets food grade packaging of the highest standards.

Versapak supplies the Zimbabwean market and exports each year. It also operates one products to Zambia, Malawi and DRC. of the largest transport and www.versapak.co.zw trucking fleets in Zambia, which are serviced and maintained at its own workshop.

One particular quality that the business possesses that assists it in standing out amongst similar enterprises in the region is its commitment to the continuous improvement of its environmental and social management. To this day the company continues to subscribe to the United Nations Millennium Development Goals, while also actively assisting and supporting worthy causes, activities, organisations and charities.

Among the important aims that Zambeef supports is the eradication of extreme poverty and hunger, achieving universal primary education, the improvement of basic health care, and the fight against HIV/AIDS, malaria, TB and other diseases.

Zambeef has also signed up to an

Versapak Zimbabwe Pvt Ltd.

$255 million The company’s approximate annual revenue

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UNITY Quality and Service

Unity group of companies based in Zambia are experts in packaging and distribution with a strong subsidiary specializing in work-wear and clothing. “Unity� group of companies is the preferred supplier to the Zamanita Group of Companies, Zambian Breweries, Tradekings Group and other leading biscuits and beverages manufacturers in Zambia VISIT US ONLINE

www.unity.co.zm UNITY | Ulengo Road, Ndola, ZAMBIA. Phone: +260-212-650222 | Fax: +260-212-650131 | Email: info@unity.co.zm

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

Seen www.bus-ex.com

Zambeef

Environmental and Social Action Plan, which for Zambian citizens and local pension funds requires the company to achieve a number of to buy shares in the company. With most local international standards on the environment, pension funds as shareholders in Zambeef, health and safety, and social responsibility. almost every full-time Zambian employee The most recent independent consultant benefits from the success of Zambeef, which reports stated that Zambeef continues to make ensures the company helps with wealth good progress in delivering the approved creation within Zambia.

Environmental and Social Action Plan.

Further to this, Zambeef has a number of Perhaps not surprising, given its size, operations in largely rural areas, and in many Zambeef is one of the largest employers in the of these rural areas the company is one of country. It also boasts a strong the largest business partners development record, being and employers, through one of the largest investors the procurement of locally in the agricultural sector in produced raw materials, Zambia over the last ten years. resulting in povert y The company’s listing on alleviation and sustainable Employees working the Lusaka Stock Exchange in development of these for Zambeef today rural economies.

2003 provided an opportunity

5,500+

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Zambeef Examining what the immediate future holds for Zambeef it is clear that the company’s aforementioned integrated business model provides it with strong foundations for growth, foundations including the underpinning of margin capture and value-add, the security of its supply chain, and the reducing of risk and earnings volatility.

Several recent large capital investments have certainly helped showcase the company’s determination to grow further still. These have included successfully integrating crop production to its Mpongwe farm ahead of budget, and the upgrading and expansion of its activities at uts subsidiary Zamanita, where it has doubled its crushing capacity.

Targeted re-investment on the other hand is helping to drive Zambeef’s organic growth, specifically through the increasing of its production and efficiencies in its stock feed, dairy and milk processing divisions, and by adding additional retail and wholesale outlets where they are required. All of this combined is expected to see the company return to positive net cash generation over the coming year. This will enable Zambeef to start paying meaningful dividends from 2014.

With the company well placed to achieve its long-term ambition of becoming one of the largest food producers in the region, it is understandable why the board of Zambeef looks forward to the future with confidence.

For more information about Zambeef visit: www.zambeefplc.com

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