FEBRUARY 11 emea

Businessexcellence ACHIEVING

FEBRUARY 2011

O N L I N E

www.bus-ex.com

Energy

conscious

South Africa’s Ingula Pumped Storage scheme is designed to cope with peaks in demand

Editor’s letter

EDITORIAL

Managing Editor Becky Done bdone@bus-ex.com Editor In Chief Martin Ashcroft mashcroft@bus-ex.com

DESIGN

Production/Creative Director Zachary Smith zsmith@bus-ex.com Production Design studio@bus-ex.com

BUSINESS Director of Sales Sean Brett sbrett@bus-ex.com Sales Manager James Martin jmartin@bus-ex.com Assistant Research Directors Vincent Kielty vincent@bus-ex.com Sam Howard showard@bus-ex.com Richard Halfhide rhalfhide@bus-ex.com Robert Hodgson rhodgson@bus-ex.com Administration & Operations Alice Doran adoran@bus-ex.com Chief Executive Andy Turner info@bus-ex.com Subscriptions info@bus-ex.com

Infinity Business Media Ltd Suite 22, St Francis House Queens Road Norwich, NR1 3PN UK Tel: +44 (0) 203 137 7100 Fax: +44 (0) 1603 666466

www.bus-ex.com

A

one-stop-shop

For many industries and business sectors, the global recession has created something of a buyer’s market; and it’s the forward-thinking companies who are adjusting their operations accordingly.

One way to gain the edge over your competitors is to offer the full range of products or services that your customers might require—in other words, to become the proverbial one-stop-shop.

This issue of Business Excellence Online is testament to the increasing number of businesses who are discovering the power and benefits of taking this approach.

For Abdool Tayob, chief executive of Bakers Transport, expanding the company’s service offering was a logical way of fulfilling its customers’ expectations. Bakers realised its South African clients had joined the global trend of expecting a complete one-stop logistics function, so it recognised the need to adapt accordingly. “Without doubt, the growth we have enjoyed in recent years has come from meeting our customers’ demands (and therefore maintaining our long-term relationships), by diversifying into a fully-fledged

logistics service provider,” he explains.

HGS Ghana Ltd, a support services provider to the mining and industrial sectors, has had a similar experience.

“Our original focus was as a hydraulic solutions provider to the mining industry,” explains Steve Timms, managing director.

“We quickly expanded to take on board hydrocarbons in general; since then, we have grown to offer a full support service that takes in all manner of mining and industrial operations.”

Realising the benefits that this enhanced offering has delivered both to HGS and its customers, the company is now planning to take it one step further. “Our aim now is to be a ‘one-stop-shop’, offering protection and support to all kinds of machinery where there is a requirement for protection or maintenance,” Timms confirms.

More and more customers are seeking out a seamless and straightforward experience when procuring goods and services; and if your business can offer everything they’re looking for, then that’s one sure-fire way to stand out from the crowd.

The content of this magazine is copyright of Infinity Business Media Ltd. Redistribution or reproduction of any content is prohibited other than: - You may print or download to a local hard disk extracts for your personal and non-commercial use only.

- You may copy the content to individual third parties for their personal use, but only if you acknowledge the magazine as the source of the material.

You must obtain our written permission to commercially exploit any content.

© Copyright 2011 Infinity Business Media Ltd.

12 4

www.bus-ex.com February 11

STRATEGY: The road to recovery An individual view of the prospects for business and the global economy in 2011, from Stephen Archer.

8

OPERATIONS: Sustainable IT Strong information management and clear user guidelines lead to a robust, less expensive and more sustainable IT infrastructure.

12

SUPPLY CHAIN: ERP potential Lessons from the front line: how to ensure the maximum return on ERP your investment decisions.

16

SUSTAINABILITY: Fair comment What can you do to comply with fair trade principles, and what should you look for in a fair trade supplier?

20

Engen Petroleum New frontiers This petroleum products marketing company is managing change and ensuring future growth by understanding its customers’ needs.

26

BAT Nigeria A strong foundation This tobacco giant continues to work with government to clamp down on illegal trade and benefit local communities.

38

Contents

94

66

Impregilo South Africa Energy conscious Construction of South Africa’s Ingula Pumped Storage scheme has required a high level of logistical and technical know-how.

48

Zamtel New connection The future looks bright for this telecoms provider, thanks to ongoing investment and an organisational restructuring.

58

Alba Power Winning customer confidence One of the UK’s leading Rolls-Royce aeroderivative gas turbine specialists, offering a comprehensive service around the world.

66

Landsnet The low cost link in the chain Iceland has little in the way of natural resources with the exception of clean energy, which it is putting to good use to boost the economy.

74

ECG Engineering Consultants Group Diversity holds the key Construction work in the Middle East has created opportunities for consultancy firms that can deliver diversity in engineering.

80

American Hospital Dubai Where care matters most Bringing the highest standards of healthcare to a region which has traditionally offered poor or indifferent levels of medical care.

88

Gladstone Area Group Apprentices Ltd Industrious skills This organisation is training and preparing the next generation of tradespeople to maintain Central Queensland’s proud industrial heritage.

94

AREVA Resources Southern Africa Vertical powerhouse The Trekkopje Mine and desalination plant represents the largest direct foreign investment ever made in Namibia.

88

110

Bujagali Energy Limited Powering o pportunity Uganda is about to benefit from a reliable source of clean energy for its grid, as well as a boost to its economic growth.

February 11 www.bus-ex.com

5

6

www.bus-ex.com February 11

154

116

138

City Power Johannesburg Feel the force In keeping with Johannesburg’s intention to become a world class city, City Power’s vision is to be a world class electricity distributor.

116

Bakers Transport One-stop solution Originally a haulage company, but now transformed into a one-stop logistics provider, to keep pace with customer demand.

124

BAT Congo People power A business transformation project to develop a people-based working culture involving everyone in the organisation.

130

Goba (Pty) Limited Structures and infrastructure Building world class infrastructure is still a work in progress for South Africa’s leading consulting engineering firm.

138

HGS Ghana Ltd Supporting true productivity A full support service for mining and industrial operations, protecting customers’ assets and maximising their efficiency and productivity.

144

Cosumar Morocco A sweeter tooth Modernising the country’s sugar industry by implementing industrial and agricultural best practices.

150

Polaris International Industrial Parks Making history This project near Cairo looks set to become an historic milestone in the cementing of economic relations between Turkey and Egypt.

154

Kishco Group Fabric of society The flow of discarded garments from the West into western India is supporting a thriving and lucrative textile industry.

160

Maputo Port Development Company A hub for progress TMozambique is making great strides in improving its situation—and the port of Maputo is playing a significant role.

Shipping Corporation of India India’s merchant strength TWithout an efficient shipping industry, and one company in particular, India’s economy would not be as vibrant as it is.

178

The

roadto

recov

Stephen Archer, business analyst and director of Spring Partnerships, outlines his economic and business predictions for 2011

W

hat level of economic growth can we expect in 2011? I am forecasting growth of around two per cent in the UK on the basis that 2011 will see some unwinding of debt, though not enough to fuel GDP—quite the opposite as credit remains tight. We should in fact be content if growth is over 1.5 per cent, and over 2.5 per cent will be very good.

We are one of the safer EU economies. Inward investment (vital) should increase, as should exports as the global economy shows genuine recovery and the pound stays relatively depressed. The UK will look like one of the better economies to base a business in.

Will there be a double dip? No, there will not be one; the fragile UK recovery and the stuttering US recovery have served to undermine confidence and drive investors away from equities to treasury bonds, gold and other safer havens. However, corporations are generally performing well and certainly far better than a year ago as evidenced by late enthusiasm for equities at the very end of 2010. Even the airline industry looks healthier. Cash piles are also being amassed in the corporations. The cash pile in US large businesses is around $2 trillion—enough to effectively wipe out the US national deficit.

So might we get a second dip? Consumer demand remains moderate and many are still reducing debt; and those that have cut personal debt are being more cautious. In the US, recovery has brought about a sharp increase in imports and a very unhealthy negative trade balance in 2010. Confidence in the government’s ability to manage the recovery is shaky. Nonetheless, the only likely cause of a second dip will be a climate of self fulfilling prophecy: everyone becomes a little more cautious and as a result, most indicators go the wrong way. Even this will only cause more of a blip, within the next three quarters.

But as I have always said, the recovery will be bumpy (some call it choppy) and so we must not read too much into a new negative trend.

8

www.bus-ex.com February 11

Strategy

very

,

February 11 www.bus-ex.com

9

10

www.bus-ex.com February 11

Strategy

Inflation: The inflation figures announced last week were higher than expected but the reasons are twofold; partly fuel-related but more to do with a long period of price stability which has built up inflation pressure. This pressure is being released as price rises out of necessity and against a backdrop of more confidence in the economy as a whole. For this reason I do not expect the rate to rise much higher (if at all) and for it to drop back by spring after the VAT effect has settled in.

The rate should not (though it may) cause panic in the Monetary Policy Committee who may wish to raise interests rates. This inflation is not due to the economy hotting up—it is instead catching up.

Currencies: Dollar down to $1.70 and the euro down to €1.30 against sterling during 2011. The US dollar should, and I think will, be allowed (and encouraged) to float down to help its exports. Its current account balance is a disaster and I feel that Obama’s options are limited. China will not want to re-value the renminbi and will not do so.

One cannot talk too long about currencies without considering trade imbalances. China has yet to declare that it sees a risk in its vast trade surplus; I think that point may come in the next two years, but not too soon and not in early 2011.

The big question is over the euro: arguably, this has been overvalued for some time. With a large part of the eurozone in debt troubles, it is remarkable how strong the currency is. Two things can happen with the euro. Firstly, against sterling the euro will fall 10 per cent within the next six months. We are witnessing the beginning of the end of the euro as we know it: the model is fundamentally flawed (http://stephenarcher.eu/ the-end-of-the-euro/).

Logically, the broke economies—the PIIGS— should exit the euro in order to be able to devalue their way out of trouble. In reality, they cannot afford to do this with the bail debt that they now carry— so far only in the case of Ireland and Greece. No, the back may be broken by the political backbone of Germany that runs out of patience (and funds) with the feckless partners. Indeed, the German courts may do this before the electorate does.

What will happen to employment figures?

Unemployment figures will climb back up to the 2.6 million level from the 2010 low of under 2.5 million. Only 100,000 more? Yes, I think the

pessimism is excessive on unemployment; this is rooted in fears of inflation, state layoffs and a slowdown from other pressures. The economy will be more buoyant in 2011 despite the cutbacks staring to bite. This is a paradox; but so it will be proved in my view. Investment will increase and with it employment—enough to largely cancel out any other unemployment from the state.

Will there be industrial action? I am less optimistic on this; the unions have shown a tragic level of unintelligence in forcing industrial action through and never achieving a thing aside from public ill-will and costs to its members—Bob Crow of the RMT being a good case in point. Industrial action I think will become more fashionable in 2011 (for fashionable is all that you can call it)— especially if the weather is nice. Mobs do not turn out in blizzards and rainstorms. The ideology is not that dedicated!

Will interest rates change? No change until Q2, when it goes up 0.25 per cent. Not a big jump but symbolically huge. This will be in response to the inflation level and will be seen by the outside world as a gesture of confidence in the economy on behalf of our central bank. If the 0.25 per cent rise does not cause any adverse reactions, then they may raise it by another 0.25 per cent in Q3.

What’s going to happen in banking? Less than the public thinks—or hopes! Here is an area where there will be some softening of taxation plans. The political headlines and the execution detail will diverge somewhat. The electorate despises the banks; but they are vital to the UK economy and cannot be allowed to go offshore.

Will there be more quantitative easing?

Quantitative easing will be inevitable in 2011.

This is not a widely held view and it might get ‘repositioned’ as debt swap or bond re-issue; the amounts needed are eye watering. Banks all over the advanced economies face a huge refinancing challenge over the coming few years. Private sector funding will mature and state funding will need to be paid back. The total bank funding is at least US$5 trillion of medium to long term funding maturing over the next three years. UK banks will need to refinance or replace around £750 billion to £800 billion of term loans and liquid assets by the end of 2012. For this reason alone, I think quantitative easing is inevitable in 2011.

February 11 www.bus-ex.com

11

Sustainab

By controlling the use of IT resources through strong informa management and clear user guidelines, organisations can attain a more robust, less expensive and more sustainable IT infrastruct insists Richard Barker, CEO, Sovereign Business Integra 12

www.bus-ex.com February 11

Operations: IT management

IT

ble

ation a far ture, ation

W

hen selected prudently and used economically, IT is the most effective business enabler industry has ever seen. But prudence has not been on the agenda for the majority of IT departments in recent years. Released from the tight constraints of expensive hardware and storage technology experienced throughout the 70s, 80s and early 90s, over the past decade most departments have adopted a relaxed attitude to expanding the infrastructure—a move that has seen storage capacity double year on year.

February 11 www.bus-ex.com

13

While times were good, such strategies appeared viable, on the surface at least. Adding components at will enabled organisations to adopt a ‘store everything’ approach, easing compliance requirements and theoretically ensuring that critical business information was always available.

The result has been an investment in terabytes of storage which, even at vastly reduced prices, is still a significant overhead. Furthermore, such careless IT and information management is, in reality, a hindrance. Not only has it added

14

www.bus-ex.com February 11

unnecessary cost and complexity to many organisations but it has also created massive business continuity risks.

Tumbling prices for servers, networks and disk space, and ever increasing capacity that apparently delivered a seemingly endless supply of additional resource, have encouraged appallingly inefficient IT practices.

Most notable is the way in which organisations have allowed, even encouraged, users to share information with no thought to control

Operations: IT management

or infrastructure implications. Emails, with attachments, are regularly copied to tens of people and, hence, stored multiple times. One individual makes a change, resends the document, and it is stored numerous times again, creating an unnecessary storage requirement and using up additional bandwidth as the emails pass around the network.

Organisations are now also choosing to store everything online—yet just how often is this information required and, frankly, how long will it take to retrieve? Even the most stringent regulations that demand information to be held for several years do not expect companies to retain it online—an archived record is fine. So why are organisations wasting huge amounts of money and resources on near-line storage of information that is simply not required for day to day business?

Many companies use digital cameras to share images with customers—but how many recognise the bandwidth implications of higher resolution images? Those cameras offering the highest resolution can use up to ten times as much bandwidth as slightly lower resolution alternatives.

But is anyone in IT counting the cost?

Furthermore, there has been a change in attitude: most users expect to use the office network for personal use; they share multimedia files and download music to their MP3s.

Yet the implications for network performance are extraordinary: in one organisation a single user’s music files took over 48 hours to travel around the network, causing huge productivity delays—with the attendant operational cost.

This lack of discipline in information management, from personal use to poor practices, has dramatically increased the resources consumed by the average IT infrastructure. And while the costs may have appeared irrelevant in the past, today, with budgets being slashed and user numbers reduced, such a cavalier attitude has to change.

How many business leaders realise that this explosion in information and infrastructure is fundamentally compromising business continuity?

Do they recognise the new challenges in place for effective disaster recovery strategies?

Buying the extra resource once is fine maybe, but having to buy it twice to cope with the increased DR demand is madness; and just how long will it take to restore all this unplanned, uncoordinated

data? In the majority of cases, while an organisation may ideally want a maximum three hour recovery time for key systems, simply restoring the data will be likely to take over 12 hours—fundamentally undermining operational risk management.

Systems resource may be cheap, but it still has a cost. And in today’s economy any cost is a negative drain on the balance sheet. Simple changes to the way in which files are managed, shared, stored and reused can make a tremendous difference to the amount of server space a company needs.

This in turn will reduce back up requirements and make recovery from any disaster quicker, easier and potentially less expensive.

Furthermore, judicious management of resources can significantly extend the lifetime of equipment, delivering further savings to the IT budget.

IT departments need to stop throwing infrastructure at a demanding user base. They need to regain control and recognise that this is a business issue not a technical one. Yes, wise investment in technology that will enable business in the leanest way possible is key to minimising bandwidth and maximising business efficiency.

But attitude is key. The workforce must be educated in best practice and strong controls put in place to ensure reasonable use of resources.

If there is one good thing to come out of the recession, it will be that organisations will become far more prudent when it comes to purchasing and managing technology. There will be a return to the sustainable practices of the past: users will not be allowed to exploit the corporate network or to consume essential bandwidth for their personal needs and strong information management policies will be enforced to improve efficiency and reduce the demand places on the infrastructure.

And, critically, IT resources will be mustered to support not only day to day requirements but also to ensure that the disaster recovery strategy is workable and affordable.

IT departments may be feeling the pinch, but a return to good, business based IT practices will not only enable organisations to address IT costs today but will stand them in excellent stead as the recession lifts and the economic outlook brightens.

Richard Barker is CEO of Sovereign Business Integration, an independent IT services and business solutions specialist. www.sovereign-plc.co.uk/

February 11 www.bus-ex.com

15

pote

Lessons from

16

www.bus-ex.com February 11

Supply chain: ERP

ential

m the front line: ensuring the maximum return on ERP investment decisions

By Mike Stanbridge, Infor

T

he business world is unpredictable and ultimately imperfect. Managers are accustomed to making decisions with incomplete information and investing in strategic change without being able to fully test their assumptions of what that change will bring.

February 11 www.bus-ex.com

17

Investing in ERP is a classic example of this.

As a vendor we rarely see decisions based upon extensive hard facts and exhaustive scenario planning. Customers simply lack the time to consider demand fluctuations, sources of downtime, space constraints and bottlenecks that are part of their organisation and that could impact on the success of such an investment.

As a result, many businesses have explored ‘short-term’ ways to mitigate the risk of such implementations. For example, bringing in a project manager with greater ERP experience is often thought to be a good start. However, many businesses fail to recognise the importance of

large task that pulls in massive amounts of data and can radically improve the way a manufacturer does business. However, even with the most sophisticated implementations of ERP, businesses often miss one of the key opportunities for return associated with such tools—the ability to act as a central “data warehouse” that can accommodate simulation. This enables manufacturers to explore possible options for the future by testing and retesting theories.

This exploration of “what-if” scenarios is one of the hottest topics in manufacturing right now. As competition has increased, manufacturers have needed to drastically cut costs of production.

“ERP is often the most critical, strategic technology inves for it to be imperfect or to spend time and further resour understanding their own idiosyncrasies and processes. As a result the newly hired ‘ERP expert’ simply adds another opinion rather than imposing objective data evaluation.

Trial and error is not really a viable option for food manufacturers. ERP is often the most critical, strategic technology investment being made and no business can afford for it to be imperfect or to spend time and further resource bringing it up to speed. Furthermore, some businesses attempt to carry out basic modelling on business processes on the humble spreadsheet, but this is rarely flexible enough to allow the deeper levels of questioning needed to extract real value from the ERP system.

So how does a food manufacturer go about ensuring a decision to invest in ERP is the right one? How does a business secure the strongest possible ROI? The key is to understand the full capabilities of ERP tools from the outset.

Typically, production planning tools such as ERP are used to focus on generating a plan, determining the best sequence of manufacture or to ascertain the “lowest cost” method of achieving a production target. This is, in itself, a

18

www.bus-ex.com February 11

Simulating alternative scenarios of manufacture, distribution or even marketing and then identifying the best route forward, can yield a critical insight into the future direction and success of the business.

Case study: a UK brewer develops production One of our clients—a leading UK brewery—was suffering from the constraints imposed by various factors within its production. Legacy brewing equipment, such as coppers and mash tuns, had been in use for decades and demanded manual control and intervention. The brewery is located in a protected, historic site making the physical aspects of process change exceptionally difficult.

Lastly, as with most brewers, working with yeasts exerts a profound, unpredictable influence on process times and outputs, which has made it difficult to achieve standardisation.

Against these challenges the business was looking to grow through increasing both volume and product variety. However, implementing the changes to production to achieve this was fraught with risk in the face of such variables.

The alternative scenario planning, linked to ERP, will be critical to controlling this evolution.

Supply chain: ERP

For example, the planning team identified that one of the major bottlenecks was the number of fermentation vessels available—a view confirmed by the brewing team. Thus, a major factor in the scenarios run through the ERP system was the number of tanks required, their role, and their sizes.

Part of this calculation was obviously reliant on business forecasts but the ERP system also flagged the likely changes required in installing these vessels and also demonstrated opportunities for developing new product variants. Using the ERP system will ensure that the investment made was flexible enough to fulfil all business requirements for the next two years.

that the total efficiency of the factory can be considered and improved upon. This even enables the exploration of potentially less efficient subprocesses in certain areas in order to achieve a more efficient “whole”. Delivering this level of flexibility is one of the most profound but least understood returns on an ERP investment.

Conclusion From a strategic viewpoint ERP allows the client to test scenarios which would otherwise be considered too radical. Most importantly, it allows a manufacturer to assess where investment decisions and effort would be best focused.

In the immediate term this will mean better returns

stment being made and no business can afford ce bringing it up to speed” The crux of ensuring this return is to ensure accurate, consistent stock and process flow information was passed from the production plant and into the planning systems. Previously this information was dependent on manual recording and entry of this information into spreadsheets.

As a result it was prone to delay and error.

In order to provide a more robust planning solution the brewery’s SCADA control systems have also been integrated with the core ERP system to provide live stock movements. This information is then used to feed the planning systems on an ad-hoc basis, enabling the production planner to react quickly to changes dictated by either the variable brewing process or plant failure.

However, beyond rapid reaction, this solution will also enable the planner to simulate alternative production schedules multiple times in a day. In the short-term this will deliver agility and allow the brewer to react to changes within the fermentation process. Critically, the interface with ERP will mean the brewer can see and understand the impact on both upstream and downstream processes.

Proactively, simulation and ERP will mean

on existing systems. Taking maximum advantage of all current assets is vital for food and drink manufacturers. The usual outcome is an increase in volume that can be processed and therefore reduces the impact of fixed costs against each unit of production. As food manufacturers emerge from recession the improvement to the bottom line that this can deliver will be vital, but also increasingly seen as a minimum requirement of such investment.

Consequently, in order to deliver greater confidence and return on investment, the ability to develop planning models into the realms of changing strategic direction is a significant advantage. “What-if” scenario exploration is the hidden treasure of ERP investment and many firms are now beginning to dig deep enough to find it.

Mike Stanbridge is a supply chain expert within Infor Professional Services. He is responsible for designing and implementing supply chain change within the food and other industries. Based in the Birmingham office, he has performed process redesign activities in the UK, Europe and the Far East with project sizes ranging from £10k to £1m.

February 11 www.bus-ex.com

19

S u s t a i n a b i l i t y : Fa i r trade

Fa

comme F

air trade practices have become the norm for many western companies and they are becoming an important part of the CSR policies for many businesses around the world. While European laws ensure staff welfare and high standards of employment, many businesses require products or services from further afield. How

20

www.bus-ex.com February 11

Nick Jones, managing of fair trade and sugg

S u s t a i n a b i l i t y : Fa i r t ra d e

air

ment

g director of Nexus Collections, discusses the importance gests what you should look for in a fair trade supplier

February 11 www.bus-ex.com

21

can anyone hope to claim they are running a socially responsible business if they are sourcing a product—even tea or coffee for the canteen— from an inappropriate source? It is therefore vital that we all take time to consider the whole supply chain when running our businesses.

The gradual success of “Fair Trade” over the last few years has largely been due to strict enforcement of employment, welfare and environmental laws. Recently, the growing public consciousness of using eco-friendly products and services has made companies do more to become green, but there is still work to be done.

workers demanding better working conditions, wages and other employment benefits—all of which sound perfectly reasonable to me!

Out of China’s 200 biggest exporters, 153 are foreign that supply products for the first world.

It is a fact that many of the suppliers to these exporters, particularly the local companies, are turning a blind eye to the workers’ demands of higher wages and better working conditions.

Clearly, many fair trade and green consumers here in the UK, including businesses, could be purchasing products unaware of their background.

All our work to adhere to various standards and

“Fair trade is an organised social movement and market that aims to help producers in developing countries mak conditions and promote sustainability” Such action should not be taken for legal reasons but from a genuine desire to improve the world around us and benefit other people.

According to the Co-operative Bank’s annual Ethical Consumerism report, the ethical market in the UK grew by 18 per cent over the last two years, and the Fairtrade mark has become a common sight on our supermarket shelves. To maintain a level of fair trade awareness and achievement many companies ensure that they meet the fair trade standards at every stage of their production. To do so, they issue strict guidelines to suppliers or deal with suppliers that have a sound record of fair trade.

As previously mentioned, supply chain communications are not generally a problem in Europe (although there was the unforgettable story recently of children working on a British potato farm), but they do become a little murkier once we step beyond our own borders, and certainly those of the EU. In countries like China, which dominates the world’s manufacturing and supply, fair trade laws are not strictly enforced.

Many companies do not provide healthy working conditions for employees, forcing them to work for long hours at a minimum wage. Unfair treatment of workers has led to labour unrest in China with

22

www.bus-ex.com February 11

other CSR standards become a mockery when the three miles of cable needed to run the broadband in our office come from a far-eastern sweat shop.

Complying with fair trade is important to ensure a decent standard of living for the workers and their families in factories all over the world. It is important that people who make the products we consume are not exploited and have access to proper welfare measures. Environmentally, fair trade can be used as an effective tool to fight climate change. In many countries, the supply of perishable commodities is dwindling due to the exploitation of land and water. The clear message from the Fairtrade movement is that many of the products which we enjoy in Europe, such as coffee, tea, fruit and chocolate are likely to become increasingly scarce and expensive due to climate change. Surely it therefore makes sense to use ethical sources if we hope to continue supplying tea to our staff for another 50 years.

In essence, fair trade is an organised social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. What therefore should you look for in a fair trade supplier?

Attributes could include: decent wage policies,

S u s t a i n a b i l i t y : Fa i r t ra d e

healthy working environment like hygienic toilets, recreational facilities, fresh air and clean water and reasonable working shifts.

These are all taken for granted here in most of Europe but are considered luxuries for many. The employer must also ensure that the workers have additional employee benefits such as staff holidays. Here at Nexus, we are very conscious about employees’ rights—to such an extent that we recently invested over $200,000 in a state of the art, fair trade factory in China, making

t-based approach ke better trading

it (we believe) the world’s first ethical manufacturing facility for conference bags. Above all, the factory is designed to ensure the highest level of working conditions to its employees.

As a part of our recent developments, the new factory and offices are fully air conditioned and have modern recreational facilities. In a country where employees live on site (often only returning home once per year) we have provided brand new staff quarters with eco friendly hot water supply and a homely feel—rather than the usual “bunk-house” style of accommodation.

These facilities have set new standards for Chinese workers in the textile sector with higher wages, staff bonus schemes and additional staff holidays. We

February 11 www.bus-ex.com

23

“We recently invested over $200,000 in a state of the ar making it (we believe) the world’s first ethical manufacturin

24

www.bus-ex.com February 11

S u s t a i n a b i l i t y : Fa i r t ra d e

have even organised themed parties and upgraded the staff canteen to provide more of the food which the staff enjoys. We believe that the industry must become more CSR focused—the groundwork has been laid but there is still a long way to go and we intend to be a part of that process.

There are other numerous ways to help communities across the world that can be a part of our wider CSR policy. Many NGOs and welfare organisations support families by sponsoring

rt, fair trade factory in China, ng facility for conference bags� education for children of families working in tea and cocoa plantations. Business can offer donations to such charities across the world.

Fair trade is not just a marketing buzz word, but a prerequisite for ethical business practices in the 21st century. It is our moral responsibility to respect human rights and care for our planet.

We need to ensure that our partners and suppliers in the developing world adopt fair trade practices and provide good working conditions and welfare measures for employees. While it is easy to consume cheaper products, it is also imperative to ensure that the products are not made at the cost of human lives and the environment.

Nick Jones is managing director of Nexus Collections, Europe’s largest conference bag supplier to the events industry. www.nexuscollections.com

February 11 www.bus-ex.com

25

New frontiers 26

www.bus-ex.com February 11

s

Engen Petroleum

Maintaining growth at a manageable rate is hard enough, without the added complications of red tape when that growth is crossborder. Wayne Hartmann gives Andrew Pelis an insight into the strategy behind an ambitious international expansion programme

A

s South African businesses thrive in the post-Apartheid era, many companies are looking at opportunities to develop the entire sub-Sahara region. There is no guarantee of success, however, and the ability to adapt to local dynamics and customer preferences is a major challenge.

February 11 www.bus-ex.com

27

Engen Petroleum

“We have invested over £14 million over the past three years on supply chain infrastructure and recently opened a new depot in Zambia, which will significantly increase our capacity to support growth” For Engen Petroleum, the challenge of expansion involves international red tape, differing customer expectations, variable transportation networks and often limited IT infrastructure. Despite these considerations, Wayne Hartmann, general manager for the International Business Division, has overseen a period of continued growth, as the oil company gathers momentum towards fulfilling its EPIC 2016 Vision.

“We are a petroleum products marketing company

(downstream) operating in sub-Saharan Africa, with our headquarters in Cape Town, South Africa,” he explains. “We operate a refinery in Durban from where we make approximately 40 different products, ranging from LPG through to HFO, which we market across Southern Africa.

“We are not involved in oil production; we purchase crude oil from other areas of Africa and the Middle East, which we refine and then market and distribute. The Durban site produces 125,000

February 11 www.bus-ex.com

29

ERM ERM salutes Engen’s success in Africa. Engen has demonstrated leadership in environmental and social performance in the countries where it operates. This includes programmes to protect the environment; enhance the communities in which it operates; and ensure the safety of its employees.

We are proud to support Engen’s efforts to operate responsibly and sustainably.

barrels per day and employs about 1 500 people (700 of which are contractors). Engen as a group employs in the region of 4,500 staff.”

Today Hartmann oversees the company’s extensive network of service stations across 18 countries in sub-Saharan Africa and exports to many other territories, mostly in Africa and the Indian Ocean Islands. “By March 2011 we will be running in excess of 1,650 retail sites with 448 of those based in neighbouring countries,” he says.

“We are very much guided by market and customer expectations and feel that our awareness of the cultural differences in each country has given us a commercial advantage—different markets have different needs and our approach reflects that.

“Since 2006 our target has been to aggressively grow the business outside of South Africa by eight to ten times and we aim to accomplish this by 2016, which is where the name ‘EPIC 2016’ comes from. We have tripled our income to date and we are on course to meet our target.”

The company has been in business for over a hundred years and was formerly owned by Mobil, until it pulled its business interests out of South Africa at the height of the Apartheid era. Engen was then taken over by local mining house Gencor and was subsequently renamed Engen and listed on the Johannesburg Stock Exchange.

“In 1996 Petronas bought 30 percent of Engen and took 100 percent ownership in 1999. A subsequent de-listing of the company occurred concurrent with the sale of 20 percent to a local empowerment company called Worldwide Africa Investment Holdings,” Hartmann explains. “For many of our non-SA businesses we have local shareholders who better understand what is

February 11 www.bus-ex.com

31

Engen Petroleum

“We are very much guided by market and customer expectations and feel that our awareness of the cultural differences in each country has given us a commercial advantage” happening in regards to local policy and also what local customer preferences are. This makes a huge difference and the end result is a richer outcome—I expect we will see more of this approach in the future,” he adds.

Engen has two major distribution channels, the first being its retail arm, which concentrates on service stations, offering a variety of services depending on the requirements in-country. “Since we decided to expand across the sub-Sahara region we have built 20 to 30 stations each year.

They represent our brand through an initiative to train staff and franchise owners.” The strategy

February 11 www.bus-ex.com

33

Engen Petroleum

continues to work and the recent acquisition of seven businesses from Chevron adds to a list of previous purchases from multinational companies including Shell and Total.

The second distribution channel is the business to business sector, where Engen has forged strong relationships with a number of industries including airlines, mining and transport companies.

International trade puts extra strain on supply chain management, which is one of Hartmann’s main challenges now. “This is definitely a work in progress for us and we often encounter national regulations that determine where we have to source products from, meaning we can’t always use our Durban production. We have invested over £14 million over the past three years on supply chain infrastructure and recently opened a new depot in Zambia, which will significantly increase our capacity to support growth.

“Another challenge is ensuring that we have

enough skilled people for an organisation that wants to grow rapidly. We run in-house training schemes to develop staff with technical skills and we have a targeted personal development programme, which runs alongside a graduate recruitment initiative.”

One of the key areas Engen is looking to improve on is its carbon footprint. Hartmann says this is far from straightforward, in an area where other companies can gain an advantage by operating in a less committed fashion. “We have to strike a balance and we are currently rolling out an aggressive growth programme that invests in technology and environmental measures that will stand us in good stead for the future. We are trying to reduce the amount of cooling that takes place at each station by using solar and wind power and different building materials.

“We are trying to understand the latest best practices and better manage our use of power in areas such as lighting. All of this costs money

February 11 www.bus-ex.com

35

Engen Petroleum

“Change must be managed well; we must understand where the customers are and what their needs are—that is where our continued growth will stem from” of course and not every competitor considers their environmental impact in this manner, which keeps their costs down and is sometimes used against us competitively.”

Hartmann has been with Engen for 25 years and was formerly in charge of the Durban refinery. He is positive about what happens next. “The next twelve months will see the transition period for the Chevron businesses we have acquired.

We must integrate these sites into our existing operation and ensure the people are motivated to succeed. We will look to make more acquisitions in the future and Kenya, Uganda and Ghana are areas to focus on.

“Change must be managed well; we must understand where the customers are and what their needs are—that is where our continued growth will stem from,” he concludes. www.engen.co.za

February 11 www.bus-ex.com

37

Astrong founda O

ne of the world’s most ethnically diverse countries, Nigeria is not only Africa’s most densely populated region—with all the benefits that such rich human capital could provide—but it also has one of the fastest growing economies in the world. Rich in oil and liberated from constraint in 1999, it was identified by Goldman Sachs some five years ago as one of the ‘Next 11’—countries with the potential to take their place among the largest economies in the 21st century world.

38

www.bus-ex.com February 11

B AT N i g e r i a

g

ation February 11 www.bus-ex.com

39

B AT N i g e r i a

Pomat Peters Nigeria Limited The vision is clear just as the focus is right: meeting our numerous clients’ high expectations in the provision of advertising support materials produced locally but world class in standard.

Established in 1989 and located in AbuleEgba, Lagos, Nigeria, Pomat Peters Nigeria Limited has carved a niche for itself as a reputable Nigerian company to be reckoned with in the provision of high-grade point of sale and outof-home advertising support materials that are second to none in quality, to numerous clients across all strata of business interest.

The company has invested heavily in both human and material resources, enabling it to adopt a seamless style of operation that ensures a tailor-made solution to customers’ particular needs.

Because we keep pace with global technological advancements, meeting the challenges of producing highly technical and quality materials, as well as prompt delivery, has made us a foremost player in the industry.

The company’s vision is to be a true Nigerian company with capacity to compete in the global market. We have already exceeded the expectations of our clients in Nigeria and the West Coast, thereby making our mark in the world market through quality production of point of sale materials in Nigeria to all parts of the world.

We therefore invite you to see us as your partner for growth and enjoy our numerous services: full colour screen process printing; large format digital printing; construction/production of point of sale materials; construction/ production of signages; production of promotional items.

Come and have a taste of the best the world can offer. Pomat Peters: Nigerian company, world class standard.

In recent years a sea change has also been occurring in the country’s tobacco industry, led by a joint effort between the government of Nigeria and global tobacco giant British American Tobacco (BAT). Although most of Africa’s tobacco is grown in the east, Nigeria has broken that mould, and has successfully been growing and processing tobacco since the early 1900s, leading to the founding of the Nigeria Tobacco Company (NTC) in 1912.

For many years, BAT played a silent role in Nigeria as a 60 per cent shareholder in NTC. However, the accession of a civilian government in 1999 led to significant political and economic reform, ushering in an era of greater stability and growth, and BAT emerged from the shadows to acquire the remaining shares in NTC in 2000. Today the company goes under the name of BAT Nigeria (BATN) and is recognised country-wide as a major employer and a contributor to the national economy through a mixture of significant tax revenue and work in the community. It directly employs around 835 people across its factories in Ibadan and Zaria, its offices in Lagos and Abuja, and in other areas such as security and agronomy. Indirectly, though, the employment level reaches 14,000 through its tobacco farms, suppliers and distributors.

“As a global corporation, we tend to find that in countries where we are able to establish a good working relationship with the government, and that relationship incorporates the interests of the company, the community and the government in terms of revenues, then we are able to build a very successful operation,” explains Bassem Bekdache,

BATN’s head of Corporate and Regulatory Affairs.

From its inception as a company in Nigeria in 2000, BATN established a close working relationship with the government through a memorandum of understanding (MOU), which it signed in 2001. Under the terms of the MOU, the company agreed to bring production of all popular brands to Nigeria through phased expansion, to increase sales of legal tobacco products inside the country and to create an export trade to surrounding nations.

The first phase of this began immediately, with a significant $150 million investment in the construction of a new state-of-the-art manufacturing plant at Ibadan, Oyo State. Alongside this, investments were also made in upgrading and improving the existing facility at Zaria, Kaduna State. Progress has been significant and steady: all brands bar one are now manufactured in Nigeria, including the highly popular Benson & Hedges, Dunhill and St Moritz.

Meanwhile, the company has built strong trading links and a sophisticated supply chain to deliver into 14 of the surrounding countries, contributing some £60 million to the economy in export revenue.

It is, however, in the clampdown on the illegal tobacco trade that BATN has forged the closest working relationship with government. When BATN was formed in 2000, only 10 per cent of tobacco sales in Nigeria were made legally, and this had been costing the government millions in lost tax revenue in addition to increased public health risks due to quality issues.

BATN’s strategy for increasing the sales of legal

February 11 www.bus-ex.com

43

44

www.bus-ex.com February 11

B AT N i g e r i a

“We make a conscious effort to ensure that we don’t just favour the area in which we operate, but to benefit the whole country” tobacco products has three elements. Firstly, the company has been steadily increasing the output from its factories and building a network of retail outlets through which its products can be sold legally across the country. Secondly, it has been working with those retail partners to ensure they no longer sell illegal products. Thirdly, the company has been working closely with government agencies, sharing information and aiding with the analysis of suspect and seized products.

Since 2000, the balance of supply has shifted dramatically in Nigeria. Today, over 80 per cent of products sold in the country bring tax revenue into the national coffers. “And we’re still moving in the right direction,” Bekdache says. The challenge, however, will be to continue improving on this figure and finding a way to tackle the deeply entrenched 20 per cent. And as further inroads are made into this significant volume of illegal trade, production at the BATN factories

February 11 www.bus-ex.com

45

“At a time when many manufacturing companies are operating wel we are achieving 80 per cent utilisation” will have to increase to fill the gap.

“Manufacturing continues to be one of our current areas of focus,” Bekdache says. “At a time when many manufacturing companies are operating well below capacity, we are achieving 80 per cent utilisation, so it’s important that we continuously work to increase our efficiency and our productivity.”

The most recent investment into manufacturing capability has been in the area of quality control.

Improvements to plant and laboratory equipment have been made, and a rigorous new set of methodologies has been introduced, backed and embedded by training. As a result, the company has been awarded the globally recognised ISO/ IEC 17025:2005 accreditation for quality testing and calibration at its laboratories. “This is a major achievement for Nigeria, because it positions the Nigerian factory as a hub for testing and calibration,” Bekdache says.

The other major strand of the company’s strategy in Nigeria is to operate according to the principle of mutual benefit—in other words, to put something back into the local communities. This is managed through the BATN Foundation, which is funded by a percentage of company profits and focuses on tackling the four most serious social issues.

Firstly, the lack of clean and safe drinking water is one of the biggest causes of preventable disease, so the foundation has commissioned many new boreholes around the country, each equipped with a 20,000 litre water tank, solar panels, water management buildings and accessories. Secondly, the foundation is supporting and promoting agricultural development through programmes that enable traditional subsistence farmers to adopt modern farming techniques, as well as constructing cottage industries to process cassava and palm oil, and improving animal husbandry.

The foundation also works to improve the local environment through a tree planting campaign, and in the north of the country this is part of the national effort to combat desert encroachment.

46

www.bus-ex.com February 11

Finally, the foundation is working to enable local people to acquire useful skills. To date, vocational training centres have been constructed at Zaria and Jere in Kaduna State, and Ibadan in Oyo State. “We have now completed a total of 99 projects across Nigeria, including a recent project in Abuja,” Bekdache says.

One of the challenges facing BAT, and indeed any organisation seeking to make a difference to the lives of local people, is the sheer ethnic diversity of the country. Carved out of Africa in the early 1900s, its borders are largely defined along commercial lines, and the country is host to some 300 ethnic groups, all of them with clearly defined needs and struggling to integrate as a nation.

As a consequence BATN has developed a policy of even-handedness in its involvement with the Nigerian community. “We make a conscious effort to ensure that we don’t just favour the area in which we operate, but to benefit the whole country,” he continues. “In practice, we meet January and February to review our plans for the coming year, and to identify the projects we will undertake.”

These decisions are based on a thorough analysis of the project proposals submitted to the foundation’s technical committee. There is considerable dialogue with stakeholders in the regions as well as input from the marketing teams in the field, and all of this feeds into a formal sustainability and stakeholder report.

In addition to work through the foundation, the company operates a wide range of initiatives to help its tobacco farmers, to encourage more tobacco growing and crop diversity. In recent years, the scope of this initiative has been extended to include the provision of higher education scholarships for young people interested in taking up agriculture as a career. “We have been doing this since 2004 as part of our support to the farming community. To date we have provided a total of 65 scholarships,” Bekdache says. “And again, we deliberately choose candidates from across Nigeria and also try, where we can, to

B AT N i g e r i a

ll below capacity,

encourage girls too.”

Nigeria is certainly not a country without challenges. Earlier this year, for example, more than two million people were displaced by floods in the north of the country. For BATN, the challenge was to resume deliveries into the affected area as quickly as possible. “The concern was that if customers didn’t have access to legal products, illegal ones would make a comeback, because illegal producers would take far greater risks with their delivery methods.” There also continues to be a problem with an erratic power supply, but BATN understands the constraints, and has provided its own solution to the problem.

“We have built momentum with the communities, with the consumer and with the government, and we have a commitment towards working within the Nigerian context,” Bekdache asserts. “For us, the most important thing is to maintain this momentum and to continue working in partnership with the government,” he concludes. www.batnigeria.com

February 11 www.bus-ex.com

47

Energ Gianni Porta, operations director for Sub-Saharan Africa at civil engineering construction firm Impregilo S.p.a., talks to Jane Bordenave about the Ingula Pumped Storage Scheme

I

mpregilo Group is the result of a complex operation of industrial concentration which, in successive phases, was concluded in the early 1990s with the final integration of four of Italy’s leading civil engineering construction companies. The combined history of these four entities gives Impregilo a pedigree that stretches back nearly 100 years, to the beginning of the 20th century. Worldwide, the firm currently has projects in 30 countries and has been working in Africa since the Kariba Hydropower project in Zambia in the 1950s. Its current main project in South Africa is as part of a joint venture known as CMI Joint Venture, building a hydroelectric pumped storage scheme known as the Ingula Pumped Storage Scheme.

48

www.bus-ex.com February 11

Impregilo South Africa

gy February 11 www.bus-ex.com

49

Impregilo South Africa

Mercedes-Benz Commercial Vehicles “Mercedes-Benz

Commercial

Vehicles

and

its

extensive dealer network throughout Southern Africa will continue to focus all business activities around our full product line-up and extensive range of services, all aimed at supporting the customer,” says Kobus Van Zyl, Vice President, Commercial Vehicles, South Africa.

The success of the Fleetboard telematic system has been confirmed with a number of fleets.

Competitive rates and commitment to customer service

have

seen

Mercedes-Benz

CharterWay

make inroads into the industry. CharterWay offers customers a one-stop shop for all their service needs. Driver Training is a key focus area for Mercedes-Benz Commercial Vehicles and various programmes

are

successfully

implemented

throughout the dealer network.

“Our joint venture partners are CMC di Ravenna, an Italian company like ourselves, and local contractor PG Mavundla,” says Gianni Porta, operations director for the Sub-Saharan Africa division of Impregilo. “This joint venture was formed specifically to take on the Ingula project; however it was a partnership that came very naturally for us. Although we are separate companies and this is our first joint venture in South Africa, we have been co-operating with CMC di Ravenna for a number of years on other projects around the globe.”

The pumped storage scheme at Ingula is being carried out for electricity supplier Eskom and is designed to allow the scheme to cope with peaks of electricity demand that occur each day—a method that has been in use for many years in the Alps. It will also enable other power stations on the grid to run more efficiently. “Coal power stations produce the same level of power constantly. The Ingula Pumped Storage Scheme makes use of this excess power during off peak times to re-pump the water at the plant from the lower reservoir to the upper one,” Porta explains. “Thus it uses low cost energy from the coal-fired plants to produce highcost energy at times of high demand. By doing this, the grid works more effectively.”

February 11 www.bus-ex.com

51

Impregilo South Africa

Despite the fact that the finished product itself is fairly typical of pumped storage schemes, the project is not without its difficulties. “During the construction phase of the project we will be drilling and blasting tunnels totalling approximately 13 kilometres. Here the challenge is in the complexity of the structure itself, as there are a lot of interconnections and different priorities in execution of the works,” says Porta. “There is a considerable underground powerhouse to be built and a large transformer cavern too. We will be facing challenges that are common when carrying out work underground, such as excavating and not always knowing what you will find in the rock in front of you.” Fortunately to date there have been no major surprises, nevertheless it is something that the workers, engineers and project managers have to be aware of and prepared for.

There are also some technical challenges that have required innovative solutions from

February 11 www.bus-ex.com

53

“The amount of supplies and equipment we can bring in from abroad is limited to specialist equipment so broadly speaking, our supply chain is local”

54

www.bus-ex.com February 11

Impregilo South Africa

the company. For the excavation of the shafts, raise boring techniques have been employed, which eliminate the need to use explosives. Additionally, Impregilo has worked with equipment suppliers to design and develop its own custom machinery for use in the construction process.

The use of local subcontractors, suppliers and workforce is very important for Impregilo. “The amount of supplies and equipment we can bring in from abroad is limited to specialist equipment so broadly speaking, our supply chain is local,” says Porta. As well as benefiting the local economy, this arrangement also means that the organisation’s supply chain is easier to manage and the likelihood of any equipment or other necessary products being delayed in transit is greatly reduced.

The benefits for the local economy and population do not stop there. Effective and extensive training of its personnel has always been an important focus for Impregilo and means that the benefits received by locals who join the workforce do not end with the project. “We take a very strategic approach to training,” asserts Porta. “Worldwide, we have 20,000 employees on our payroll, many of whom have followed us from one project to another once we have provided them with the training they need. At Ingula, we have initially brought in international personnel who already have the necessary training.

Gradually, as the local workforce becomes more and more skilled, the people we brought in initially to fill the knowledge gap will move onto other projects and the South Africans will take on their roles.”

This mix of nationalities on site is one of the things that makes Impregilo really unique. “We currently have 28 different nationalities working on this project and we feel that in this way we really embody

February 11 www.bus-ex.com

55

“Coal power stations produce the same level of power constantly. The Ingula Pumped Storage Scheme makes use of this excess power during off peak times to re-pump the water at the plant from the lower reservoir to the upper one�

56

www.bus-ex.com February 11

Impregilo South Africa

the idea of the South African ‘Rainbow Nation’,” explains Porta. “Once we have finished the Ingula Pumped Storage Scheme, we hope that many of the workers will move with us to new projects, either in South Africa or abroad, or that they will have the transferable skills necessary to move on to another local company.”

Besides training, the firm has a number of other corporate and social responsibility initiatives in place, not least of which is its environmental focus. “The Ingula project is actually a sustainable development itself, using a closed loop system, meaning the water used to drive the turbines is the same liquid recycled over and over again. Inevitably there will be some loss through evaporation, which cannot be helped, but that is the only wastage in the whole process,” Porta explains.

The re-use of water is especially important in an arid environment like South Africa, where low

water levels and drought can present a problem.

Other environmental plans put in place to ensure that the construction process has minimal impact on the area surrounding the pumped storage scheme are audited on a regular basis by Eskom.

The company also uses this opportunity to monitor improvements and through this evaluation can see that there is ongoing improvement in this area.

Once the Ingula project is finished, Impregilo will be focusing on winning further unique and challenging work in South Africa. “We are working to be able to develop other projects—we want to get involved in the interesting schemes where there is a need for technical and logistical know-how.

There is a lot of competition in our market, but I am confident about us being involved in other projects here and that we will be able to form further joint partnerships with South African contractors,” Porta concludes. www.impregilo.it

February 11 www.bus-ex.com

57

New

connec Hans Paulsen, managing director of Zamtel, Zambia’s only total communications solutions provider, talks to Jayne Alverca about the restructuring programme that is creating the foundation for a brighter future

Z

amtel dates back to 1913 when the company was a pioneer in Africa’s nascent telecommunications industry and the driving force behind Zambia’s first telephone exchange. Yet despite attaining a unique competitive advantage as Zambia’s only complete communications services provider, years of subsequent management inertia led the company almost to the point of bankruptcy.

58

www.bus-ex.com February 11

Zamtel

ction February 11 www.bus-ex.com

59

60

www.bus-ex.com February 11

Zamtel

A seminal point in the company’s evolution occurred in June 2010 when a 75 per cent stake in Zamtel was acquired by the LAP Green Network, which already has a footprint in six other African countries providing voice, data, fixed, internet and business continuity services to over four million customers.

The remaining 25 per stake in the company remains in the ownership of the Zambian government.

Hans Paulsen was chosen to breathe new life and vigour into the organisation. He believes his 10 years of experience in the African telecommunications industry, including a spell with Uganda Telecom—another government owned incumbent—has proved invaluable. Moreover, he can also point to a track record in handling successful mergers and acquisitions on behalf of the energy giant Shell.

“My first priority and immediate focus has been getting in place the right team of people needed to take Zamtel forward. The foremost driver of any business is its people,” he states. When he joined the company in July 2010, Zamtel had a headcount of 2,300 people and was literally drowning in the expense of its payroll commitments. “HR costs averaged 70 per cent of turnover. To put it plainly, the company was heading in one direction and that was towards disaster,” he explains.

The transformation he is determined to bring about has involved restructuring the organisation in ways that extend far beyond cutting the headcount. “We had to create a more appropriate organisational structure because this is the engine and framework for facilitating change. When I joined the company,

February 11 www.bus-ex.com

61

Zamtel

it had a very confused pay structure and grading system. People in non-critical positions were receiving more reward than key managers, simply on the basis of their length of service. As a result it had become impossible to attract the right calibre of people. We undertook a review and reevaluation of all our HR evaluation processes and job descriptions to start putting in place a new performance-orientated culture.”

The restructuring process has required that all posts be re-advertised with internal applicants applying on the same basis as outsiders. “We wanted to have continuity, but only if it was combined with talent and ability. Where talent existed, we have sought to retain it but with a new purpose and direction,” he asserts.

The recruitment drive is almost complete and by January 20011, Paulsen expects all key positions to be filled. “Then we can start to really get to grips with our own internal processes,” he continues. “A review has already begun to look at more efficient ways of working, especially with regard to automation. Now that we have fewer people, we need to eliminate labour-intensive manual processes wherever we can and identify more efficient and productive working practices.”

Paulsen’s third priority is the inherited investment programme that Zamtel is pursuing to retain its competitive edge. The company has already begun a project to decommission all old analogue landline exchanges and replace them with next generation network (NGN) exchanges.

The modernisation programme will enable customers to get additional features such as fast and

February 11 www.bus-ex.com

63

“My first priority and immediate focus has been getting in place the right team of people needed to take Zamtel forward. The foremost driver of any business is its people”

affordable broadband internet, audio and video conferencing, as well as new features such as missed call notification.

The first phase of the migration is due for completion early in 2011 and will see exchanges at Ridgeway, Chinika, Emmasdale and Lusaka Main overhauled and replaced with next generation technology. Phase two of the project will install new and advanced next generation network exchanges country-wide.

Another inherited project in progress, again nearing completion, is a nation-wide fibre optic network to provide broadband backbone connectivity. Zambia is a landlocked country and at present is heavily dependent on satellite communications. Zamtel is

64

www.bus-ex.com February 11

working to integrate the national network into the international subsea cables that lie off the African coast and that can only be accessed by passing through a number of neighbouring countries. “The aim is to create multiple links that will place Zambia at the centre of a new communications hub, so we are never reliant on any one link. Broadband is one of the fastest growing areas and we need the additional capacity that these linkages will give us,” Paulsen adds.

Dates have already been set next year for a new service aimed at the Lusaka business community.

The Lusaka Metropolitan Optic Fiber Network will have the capability of carrying voice services, data services, fast ethernet (FE), gigabit ethernet

Zamtel

(GE), broadband internet, video and multimedia services such as television. The network relies on a connection of strategic access points using high capacity optic fibre technology. These connections are in a mesh formation to provide alternative routing of traffic in case of a fault on any one link. On completion, it will offer a new level of resilience and a future-proof network for many new business platforms.

“We are working to complete, but also to enhance all of these projects,” Paulsen comments.

“Sometimes we are finding that initial design plans and projections are no longer capable of meeting their objectives and some supplementary expenditure may be required, but we do not see this as a major barrier.”

The company will be spending close to US$170 million over the next 30 months, says

Paulsen, with investment aimed at the roll-out of a 3G network in several urban areas; expanding the 2.5G network—the plan is to deploy 450 sites; expanding capacity to handle 2.5 million customers; upgrading of the fixed switches; investing in a state-of-the-art call centre; and automating the current back office processes.

“In a year’s time Zamtel will be a different company,” Paulsen says. “We have already made great progress in transforming the company and a great start on a journey that will see us with subscriber growth, an increase in market share and better technology and people. From a financial perspective, it is also very important that we deliver shareholder value and I am confident that our accomplishments will be reflected in a much healthier balance sheet next year,” he concludes. www.zamtel.zm

February 11 www.bus-ex.com

65

W

confi 66

www.bus-ex.com February 11

Alba Power

Winning customer

fidence Honoured for Outstanding Export Achievement in the Global Business Excellence Awards and Best SME in the Best Business Awards, Alba Power had a good 2010 and is poised for an even better 2011. Senior sales manager Grahame Martin explained why to John O’Hanlon

F

ounded a mere ten years ago, Alba Power has become one of the UK’s leading Rolls-Royce aeroderivative gas turbine specialists, offering a comprehensive range of gas turbine overhaul, maintenance and support services. Rolls-Royce Avon and Olympus units are used all over the world, and during its first ten years Alba Power has built its customer base to over 140 global clients, including many major power generation and oil and gas customers.

February 11 www.bus-ex.com

67

These are the company’s two main customer groups, explains senior sales manager Grahame Martin. “Land-based power generators typically use gas turbines for ‘black start’ operations, something power stations need to have as a standby when their main generators may go off line.

They can use their back-up gas turbines, usually aeroderivative gas turbines, to get them back up and running again. The other customer group consists of oil and gas producers. Their light weight versus exceptional power output makes aeroderivative engines well suited to offshore operation.”

The requirements of these two markets are very different. Black start capability is a must and power generation companies are often required contractually to have a back-up facility in case their main form of power generation fails. The other use for the turbines would be for ‘power peak lopping’ at times of exceptionally high demand from the national grid network system.

68

www.bus-ex.com February 11

Alba Power

February 11 www.bus-ex.com

69

Land-based installations are therefore commonly designed to function intermittently, whereas petrochemical production platforms need power all the time. “Our oil and gas customers typically run them 24/7. Since they are burning their primary product, in the form of natural gas, they have the advantage of being able to discount their fuel cost.”

The two market groups share a businesscritical requirement to have their installation available at all times, however. Alba Power ensures that this is the case. The company was founded to address a perceived inflexibility in the support available from the OEMs, says Martin.

“We decided there was an opportunity to take a more flexible approach and serve the customers, working with them more as a partner: that has been our focus and our unique selling point.”

Alba Power operates from a custom-built new gas turbine workshop and stores complex on the outskirts of Aberdeen, Scotland, the oil and gas capital of Europe. Set in six acres of land with space for future expansion, the facility has pristine strip and build bays, horizontal and vertical balance machines, comprehensive tooling, clean lines and inspection areas, as well as an extensive spares storage area.

After years of investment, Alba Power has built up the world’s largest stock (over three million line items) of spare parts, components and consumables for Avon and Olympus gas turbines, all with full service history, traceability and certificate of conformity as appropriate.

“We know which engine it has come from, what the hours and starts are, and where it has been installed. And any part needs to meet the required technical specifications. We can guarantee it is dimensionally correct and suitable for overhaul before we would consider overhauling any part, issuing it to the customer and supplying an industry enviable warranty.”

Alba Power also carries a fleet of Avon 1533, 1534 and 1535 and Olympus “A rated”, “B rated” and “C rated” gas turbines for immediate sale or exchange. Critically, adds Martin, while the OEM’s competence stops with the engine, Alba Power takes responsibility for the overall package requirement, including controls, valves, pumps, motors and the like. This level of service has led to the company developing an impressive customer base in the UK and throughout the

70

www.bus-ex.com February 11

Alba Power

February 11 www.bus-ex.com

71

world. Business is split roughly 50-50 between the UK and overseas markets, and Alba Power has worked with customers in Europe, the Middle East, the US, Africa and Australasia. “In December we were proclaimed a ‘Premier Overhaul Facility’ by the Australian government following a job we did there,” says Martin. “With approximately 10,000 miles and a 10-hour time difference there were challenges to overcome; but Alba Power provided the client with a loan Avon for the overhaul term, keeping them involved and informed at every stage of the overhaul process.”

Now Alba Power looks forward to more contracts in Australia and is actively looking to expand its international business in 2011. The company is growing in confidence and increasingly winning tenders like the one it landed last year for the municipal utility Stadtwerke Düsseldorf, against direct competition from the OEM and other independent operators.

As these contracts prove, Alba Power is equally adept at working on the customer’s site as it is in its own facility, having developed a strong reputation for organizing and executing highly efficient and speedy field repair and overhaul services. The company retains some of the best field engineers in the industry, with extensive experience of onsite problem-solving. Its field teams are fully resourced with advanced inspection and tooling kits and a comprehensive stock of spare parts to eliminate the frustration of delays through extended waiting times for parts or tools.

In recent years, Alba Power has also invested heavily in state-of-the-art controls technology and experienced technical controls personnel to extend the range of its support services. It can now support all controls and troubleshooting needs 24/7, 365 days a year, with a vast amount of technical expertise in all variants of turbine control systems. It can also provide a bespoke retrofit to meet the exact requirements of the customer, including remote monitoring to aid trouble-shooting plus the capability to view the turbine control HMI live from anywhere in the world.

Martin is delighted that Alba Power has won some coveted awards and has come through the economic climate in the last two years relatively unscathed. But nothing pleases him more than to be able to point to a 100 per cent first-time pass rate on units tested at its gas turbine test facility

72

www.bus-ex.com February 11

since it was set up in the new millennium. “As an independent company we rely on our ISO 9001 and 14001 approvals very heavily to establish customer confidence,” he says.

2011 will see the commissioning of an all-new multi-million dollar dual fuel test bed facility that will provide customers with the most detailed baseline gas turbine data available, further increase confidence and gain for Alba Power an even larger share of this vital niche market. www.albapower.com

Alba Power

February 11 www.bus-ex.com

73

The

lowcost link in the chain 74

www.bus-ex.com February 11

n

Landsnet

Iceland has little in the way of natural resources with the exception of clean energy, which it is putting to good use to boost the economy, as Alan Swaby discovers

F

rom an energy point of view, environmentalists must love Iceland: where else do you have 99.9 per cent clean and near zero per cent controversial energy? Up until 30 years ago, electricity was exclusively hydro-generated; these days, one third comes from geothermal—but whichever way you look at it, it’s clean and sustainable.

Nor is there any energy wasted in exporting electricity to the outside world. Iceland produces what it needs and consumes what it produces.

February 11 www.bus-ex.com

75

76

www.bus-ex.com February 11

Landsnet

In a model similar in every way to the preprivatisation days of the United Kingdom, Iceland once had a number of state and municipal owned, vertically integrated companies that generated, distributed and sold electricity to the end users.

Landsvirkjun (the national power company) operated the main grid with a centrally fixed tariff.

In 2003, the government brought that to an end when a new energy act was passed, complying with EU requirements to separate the three functions and have them operate independently with as much competition as possible. The idea was not to sell off the family silver, nor to generate revenue for the exchequer; but rather to produce an element of competition and get the various components working with improved efficiency in order to drive down costs and tariffs.

There are mixed views within Iceland as to whether these objectives have been universally met; but at least Landsnet can hold its head up high. Landsnet is the middle link of the chain— between generators and consumers—with the responsibility of managing the national grid. All power stations with a capacity of 7.0 MW and higher must be connected to the grid. As such, Landsnet presently receives power generated at 19 different locations. Then, though a network of more than 3,000 kilometres of transmission lines and about 70 substations and transformer stations, electricity is supplied to distribution

February 11 www.bus-ex.com

77

system operators at 57 locations who have the responsibility of transmitting power onwards to end consumers via their own distribution networks.

In addition to electricity distributors, Landsnet’s customers include end users with extremely high energy consumption, such as aluminium and ferro-silicon alloy producers.

“When Landsnet took over responsibility in January 2005,” explains CEO Thordur Gudmundsson, “the grid was transporting 8.300 GWh per annum.

Now, the figure is double that and the new Alcoa aluminium smelter at Fjardaál alone is accounting for a major part of this increase.”

In fact, underlying increase in demand for energy is currently a modest one per cent per annum. It had been bobbling along at two or three times this rate until the economy was de-railed by the financial crisis. Nevertheless, the grid has doubled its load in a relatively short time. This has involved considerable investment in new lines and switching equipment but the investment would have been considerably more had Landsnet not squeezed the last drop of efficiency out of the network.

“We have been working closely with specialist consultants,” says Gudmundsson, “who have, together with our experienced engineers, given us the tools to monitor the grid’s performance and make modifications at the least hint of trouble. By being able to carry out on-line risk assessments by means of a wide area measurement system, we have largely been able to avoid disruptive

problems. As such we have increased the grid’s productivity enormously.”

In one sense, Landsnet has come a long way in a relatively short period but in reality they had been planning for privatisation for almost a decade before it happened. Landsnet is largely run by the same management team in place before the segregation from Landsvirkjun. As long ago as 1977 they were planning the steps they thought would be needed when the inevitable structural changes came into place. “Of course,” says Gudmundsson, “until the actual details were published, our thoughts were largely hypothetical. Once the official regulator was appointed we were able to work together in a much more productive way. We hadn’t got everything right but nor were we far off the mark.”

The result has been a seamless transition, a huge improvement in capacity and performance— all achieved with only minor increase in its charges since 2005.

Iceland is Europe’s second largest island after Great Britain. It’s roughly circular in shape with a diameter of around 400 to 500 kilometres. Its 100,000 square kilometre area is home to a population of not much more than 300,000 people and they are weighted very heavily to the south-west corner, around the capital of Reykjavík. Nevertheless, the whole perimeter of the island needs to be serviced with transmission lines crossing countless mountains and fiords.

Despite the benign influence of the Gulf Stream, which helps to moderate the subarctic climate,

“By being able to carry out on-line risk assessments by means of a w we have largely been able to avoid disruptive problems”

78

www.bus-ex.com February 11

Landsnet

planners of Iceland’s grid have to design for fierce winds and frequent icy conditions. So much so that Iceland is a key test laboratory for researchers into how best to cope with harsh climatic conditions.

Designers and engineers have also had to learn how to cope with the demands of supplying such an energy-hungry plant as the recently completed Alcoa Fjardaál in the east of Iceland. It’s one of the most modern aluminium production facilities in the world and represents Alcoa’s first greenfield project in 20 years.

Since 1900, when the electrical energy required to convert aluminium from alumina was more than 55 kWh per kilogram, technological advancements have driven that down to 13.3 kWh per kilogram at the company’s most productive plants. Even so, the 336 pots at Fjardaál consume 5,050 GWh a year.

As part of Landsnet’s commission, it has the authority to set up an energy market where the market players will be able to shop around and get the best deals for themselves. This is expected to help drive down costs, although it’s unknown at this point whether the pain will simply be transferred onto weaker shoulders who have no strength to bargain for a better deal.

The mechanisms are in place for such a system to be introduced; but the powers that be have decided that such a new system would be one headache too many in the current financial climate, and its introduction has been deferred until the economy has regained equilibrium. www.landsnet.is

wide area measurement system,

February 11 www.bus-ex.com

79

Dive D

hold

espite the prolonged period of economic downturn across the Western world, the construction industry in the Middle East continues to thrive.

Countries and emirates such as Egypt, Dubai and Abu Dhabi have embarked on a sustained period of development that has created 21st century infrastructure and attracted plenty of foreign investment to the region.

80

www.bus-ex.com February 11

Construction wor opportunity for c Ashraf Khalil, vic Division at ECG E company has gro

ECG Engineering Consultants Group

ersity

ds key

rk across the Middle East has created a wealth of consultancy firms that can deliver diversity in engineering. ce president and head of the Business Development Engineering Consultants Group, tells Andrew Pelis how the own across a changing landscape for the past 41 years

February 11 www.bus-ex.com

81

82

www.bus-ex.com February 11

ECG Engineering Consultants Group

Of course, Egypt’s reputation for expert design and construction traces back thousands of years, so the resulting success of companies like ECG Engineering Consultants Group (ECG) comes as little surprise and has created a need for the Cairo-based company to seek larger premises.

As demand in the region has grown, ECG has expanded its range of speciality skills and can now offer its clients master planning, feasibility studies, project management, architecture and engineering designs, and construction management and supervision services on a variety of construction projects including buildings, power, water and waste water, oil and gas, transportation and urban development for mixed use.

ECG was formed at a time when Egypt was undergoing an extensive infrastructure upgrade, as Ashraf Khalil, vice president and head of the Business Development Division, explains. “The firm was established in 1969 and up to the mid1990s as much as 95 per cent of our work was

related to water and waste water in Egypt. A lot of the infrastructure was financed by international agencies and brought further development to the region, which enabled us to expand.

“Today we are headquartered in Cairo and have offices in Egypt and five other branches including Doha (in Qatar), Dubai and Abu Dhabi (in the UAE) and Khartoum (in the Sudan), while we are now creating a centre in Riyadh, Saudi Arabia. We are also in the process of re-opening our office in Damascus, Syria, as demand has picked up there too.”

Khalil is in no doubt that the real estate development boom that engulfed the area played a significant role in changing the shape of ECG and says that this was the primary reason for the company diversifying its services.

Away from water projects, one of the biggest recent jobs has been the construction of the three million square foot Smart Village along the CairoAlexandria desert road. It is Egypt’s first fully operational information technology cluster and

February 11 www.bus-ex.com

83

“We have worked on lots of major projects and were involved in resolving the power shortage problem in Egypt last year�

84

www.bus-ex.com February 11

ECG Engineering Consultants Group

business park, which is home to multinational and local companies; governmental and financial organisations; educational institutions; and research and development centres. The project involved ECG as master planners, designers, construction managers and supervisors and illustrates how widely the company has diversified.

“We have worked on lots of major projects and were involved in resolving the power shortage problem in Egypt last year,” Khalil relates. “The Egyptian government implemented a crash programme and together with an international contractor we helped to design two power plants, 1,000 and 500 megawatts, in six weeks, which required a lot of shift work but was delivered ontime and within budget, and met our strict quality criteria.”

The company’s attention to quality has contributed greatly to its long-standing relationships with the Egyptian government and contractors. Khalil says that ECG is ISO 9001 accredited and has implemented the same rigorous quality procedures across its whole scope of services. “Maintaining quality requires patience and persistence and we must remain strong to enforce these values. That is where our Quality Control department comes in—we have 20 employees focused purely on quality, who report directly to the president of the company.”

The company has also relied heavily on its computer systems and Khalil says that today the business runs a virtually paperless operation. “We have been using computers exclusively since the

February 11 www.bus-ex.com

85

early 1980s and were pioneers for our approach back then. Today our systems are centralised and everything can be monitored across the different divisions, whether it is projects, proposals or safety measures.”

ECG invests heavily each year on continuous training of its 2,000-plus employees, which Khalil says in turn has helped to build a strong base of loyal customers. “Our human resources is our biggest expenditure, in particular our focus on training to maintain our high standards of quality,” he says. “This in turn generates repeat custom from our clients. In 2009 our turnover was EGP 350 million; last year we were able to surpass EGP 400 million. To achieve these figures, it is essential for our employees to have the best available skills and knowledge, so we run a lot of in-house training sessions and have a considerable training budget. We recognised a long time ago that the success factors in a consulting office are management and human resources.”

The figures endorse that belief and by the end of 2010 the company had completed construction projects with a combined value surpassing US$70 billion. While the economic climate has affected some aspects of the business recently, Khalil says that loyalty and diversified skills have sheltered ECG from the harsher effects of recession. “Real estate in Egypt has not been as affected, and some of our other sectors like power and oil and gas have provided reasonable growth.

We currently have three very successful sectors in

86

www.bus-ex.com February 11

building, water and waste water, and industrial/oil & gas that offer exciting potential.

“In business development we also recognise the growing awareness (and marketing importance) of green buildings and have already completed the design of two LEED-designed buildings. We currently have five LEED-trained employees, with more on the way.”

ECG has now outgrown its corporate headquarters, which has resulted in the current search for a new location around Cairo. “We have to purchase the land first and will then construct a new site which will harp back to our earlier years when we had a restaurant on-site; it will also include a gymnasium for employees,” Khalil describes.

More immediately, the company is in the process of re-activating its licence to operate in Syria. The recent award of a construction management and supervision real estate contract has given ECG fresh impetus to re-enter the Syrian marketplace and Khalil hopes that the licence will be active by mid-June.

Add in the award last September of a contract to supply engineering services to Pirelli Tyre on its new Alexandria production line, and an agreement with Ebid Group Qatar that promises to strengthen ECG’s relationships in Qatar, and the New Year is set to be busy. “We have a target to achieve for 2011 that is 25 per cent larger than 2010 [in terms of turnover]. There are always ups and downs within our business but I can honestly say that it is a good time to be in consultancy,” Khalil reflects. www.ecgsa.com

ECG Engineering Consultants Group

February 11 www.bus-ex.com

87

Where care

matter

88

most

www.bus-ex.com February 11

Following its recent expan Hospital Dubai has consolida the foremost facility of its kind Thomas John Murray, CEO, talk

rs

nsion, the American ated its position as in the Middle East. ks to Jayne Alverca

American Hospital Dubai

T

he American Hospital Dubai was created with a simple mission: the overriding aim of its founders, a private Emirate family, was to introduce the highest standards of American healthcare to a region which had traditionally offered poor or indifferent levels of medical care, usually compelling the sick to travel overseas for treatment.

Years of committed work and dedication led to the American Hospital becoming the first healthcare facility in the Middle East to be accredited by the Joint Commission International Accreditation (JCIA) in 2000. This body sets rigorous international quality standards that focus on the areas which most directly affect patients. Accreditation demonstrates that the hospital has been evaluated for its access to care, assessment of patients, infection control, patient and family rights, and education. Other standards addressed include facility management and safety, staff qualifications, quality improvement, hospital leadership and information management.

February 11 www.bus-ex.com

89

American Hospital Dubai

“Great care has been taken over details such as the view from rooms and the availability of natural sunlight which we think is very important to the healing process” In another first, the hospital’s medical laboratory was also the first private laboratory in the Middle East to become accredited by the College of American Pathologists (CAP). This is the United States’ largest association for American Board-certified laboratory pathologists and the recognised world leader in laboratory quality assurance.

“From a professional perspective, these accreditations, which are reviewed every three years, show how committed we are to achieving and preserving the highest international standards in the services we offer. These are very stringent benchmarks which we take seriously,” states CEO Thomas Murray.

Since the original hospital was built, it has undergone several major expansions, most notably the addition of a new patient out-care facility in 2006. Attention is now focused on the latest development—the largest in the hospital’s history—which is a 240-bed inpatient bed tower. The new seven-storey tower creates an additional 50,000 square metres of space and has been designed by international architects Ellerbe Becket, with the building work executed by Dhafir Construction.

Both companies have an extensive international track record on complex projects of this type.

February 11 www.bus-ex.com

91

“A very important feature we continue to serve our patients is that all of these new rooms are private,” Murray explains. “We strongly believe that offering privacy is a better way to care for patients and their families. Family is a very important concept here and we wanted to create an environment as comfortable and appealing as possible.”

As one of the world’s leading healthcare designers, Ellerbe Becket was commissioned to plan and design the tower’s state-of-the-art facilities. Their approach is inspired by the belief that the design of healthcare environments can impact on clinical outcomes as well as the overall experience of patients, their families and care givers.

“We wanted to create an environment of light and space,” Murray continues. “Some of our rooms are actually suites and all are at least 30 per cent bigger than the norm. Great care has been taken over details such as the view from rooms and the availability of natural sunlight which we think is very important to the healing process.”

Another facet of the hospital’s current expansion phase includes the addition of facilities related to the oncology departments. “We are on the point

92

www.bus-ex.com February 11

of commissioning a linear accelerator which will greatly enhance the treatment we can offer to cancer patients; and we are also in the process of upgrading our breast imaging centre for early detection,” he explains.

Murray is also very proud of the hospital’s pioneering Joint Replacement Programme. The newly designed and refurbished Total Joint Replacement Regional Center of Excellence is the first unit to be relocated to the fifth floor of the new building. It features 44 inpatient rooms, as well as medical/surgical units and supporting areas.

“People travel from neighbouring countries specifically for this service which has a track record of achieving exceptional results,” states Murray. “Our Cochlear Implant Programme is also set to expand and this again is another area where we can point to outstanding results.”

The Total Joint Replacement Center at the hospital is unique in the Middle East and is one of only four in the world, along with similar centres in Holland, Spain and the UK. Dr. Samih Tarabichi, the Center’s medical director, has performed over 4,000 joint replacements and is ranked as one of

American Hospital Dubai

the world’s leading experts in this field.

“All of our physicians are outstanding and Board-certified in either Western Europe or the US, which is a standard we will always preserve.

We have very fine primary care physicians through to outstanding cardiac and open heart surgery experts,” Murray states.

For example, Professor Dr Uwe Klima, who is based at the Heart Center within the hospital, has pioneered a new and highly promising surgical technique. In October 2010 he became the first surgeon in the world to perform a new technique in coronary artery bypass graft surgery (CABG). The surgical procedure is based on a medical device called an external saphenous vein stent (eSVS), which dramatically reduces the high failure rate of traditional grafts—50 per cent of which will have failed after 10 years. Dr Klima holds exclusive rights for the medical device and treatment in the Middle East.

Another recent breakthrough has seen

Professor Michael Weber, director of the Center for Limb Lengthening and Limb Reconstruction, receive exclusive rights in the UAE to the Fitbone limb lengthening procedure. This is the latest technology related to limb strengthening and involves using a motorised ‘nail’ which is surgically inserted inside the bone. The aim is to facilitate new bone growth through a minimally invasive technique.

“The combination of our range of facilities and some of the finest doctors in the world means that we can offer a very comprehensive range of services,” asserts Murray. “We are extremely proud of this institution and its achievements.

The services we offer are second to none as a result of the dedication of an exceptional team of people. For a number of years we have had a leadership position in this part of the world and we are determined to preserve and build upon this reputation,” he concludes. www.ahdubai.com

February 11 www.bus-ex.com

93

F

or roughly 100 years, the Gladstone area of Central Queensland, Australia, has been a hive of industrial commerce. Since 1914, Gladstone Port has offered a multi-commodity deepwater harbour, ideal for transporting coal, while the hinterland has also built up, with alumina plants and aluminium smelters, coal mines and other resource-rich industries. Gladstone is also set to become the location for the world’s first coal seam gas (CSG)-to-liquid natural gas (LNG) plants in the next few years, which will put an even greater emphasis on the requirement for plenty of skilled labour.

That is where organisations like Gladstone Area Group Apprentices Ltd (GAGAL) come into their own, training and preparing the next generation of tradespeople to maintain the Central Queensland area’s proud industrial heritage. GAGAL operates as a not-for-profit organisation and has developed Australia’s youth for a quarter of a century. “Our core business is managing the employment and training of trade-based employees. We also operate other divisions which support that activity, including our community division,” says CEO Kerry Whitaker.

Community is indeed a key word for GAGAL, which is headquartered in Gladstone and operates other centres in Biloela, Blackwater and Rockhampton.

The organisation has helped to develop careers for over 2,000 people in these communities since 1985. “We use a uniquely Australian concept called ‘group training’,” Whitaker explains. “The idea started about 30 years ago and came to Gladstone in 1985. Traditionally, an apprentice is indentured for up to four years; however, that can be tough for an employer to commit to in the modern world, so group training allows GAGAL to become the employer and allows us to rotate apprentices through a variety of industries to ensure that they achieve all the necessary competencies required to acquire their trade qualification.” The strategy has worked well for GAGAL; and skills diversity has assisted the region’s growth with a steady stream of local talent trained in areas such as carpentry, machining, welding, plumbing, painting and all the engineering trades.

94

www.bus-ex.com February 11

Ind

ski

The Gladstone ar but with so much labour skills. Ker explains to Andre

Gladstone Area Group Apprentices Ltd

dustrious

ills

rea of Central Queensland has a long history as an industrial area— h activity, by the mid-1980s there was a shortfall of appropriate rry Whitaker, CEO of Gladstone Area Group Apprentices Ltd, ew Pelis how her organisation has helped to fill that gap February 11 www.bus-ex.com

95

96

www.bus-ex.com February 11

Gladstone Area Group Apprentices Ltd

Far from having a negative impact, the recent global financial crisis presented GAGAL with an opportunity to turn the circumstances to its advantage. “There are always peaks and troughs in industry but also in regards to the demand for certain skills. During the downturn, many businesses cut their workforces and a large number of apprentices waited for work assignments that were not available. We operate a number of workshops through the GAGAL Technical Training Centre (GTTC) and were able to keep our apprentices engaged with work contracted by local businesses.”

The GTTC is comprised of a number of workshops catering for the trades of metal fabrication, fitting and turning, diesel fitting, carpentry, cabinetmaking, painting and decorating, and electrical. Additionally, GAGAL is able to quote on manufacturing, construction and painting jobs.

Each workshop is run by internal staff with the workshops used as ‘incubation centres’, where the newest recruits can learn basic trade skills and important safety measures before they commence work with clients.

GAGAL is currently expanding these facilities to include industrial abrasive blasting and spray painting to support work undertaken in the metal fabrication workshop; but while the organisation works closely with local businesses introducing new technology, affordability is an issue.

“We work with other bodies to develop innovation. Our machinery often comes from our relationships with local businesses and we are lucky to have some very good partners who assist us,” Whitaker says. The company is eligible for government grants; and with these grants, GAGAL is looking to develop its engineering skills training centre at its Biloela site.

GAGAL has a unique approach to hiring its technical experts at the workshops. “As a not-for-profit organisation, we are limited in what we can pay and certainly can’t compete with international mining companies. As a consequence, we have implemented a successful recruitment drive, hiring older tradespeople who are unable to work on the tools anymore, perhaps through injury. We have fantastic people here, willing to train apprentices from 18 to 50 years old. Twenty per cent of our trainers/supervisors are 60 to 70 years old and they provide apprentices with a real life work experience. I believe that an apprenticeship is more than a programme just for skills acquisition—it is also designed for young people to learn life skills.” As you might expect from a quality training programme, the success rate at GAGAL is high.

GAGAL has helped to train young local people at risk of disengaging from education through a series of initiatives including the government-supported Get Set For Work programme. It is currently working on a new initiative called the GAGAL GIVE (Get Into Vocational Education) programme,

February 11 www.bus-ex.com

97

a partnership between Central State Primary School, Queensland University of Technology and GAGAL. The project aims to deter young people from disengaging from education at Year 4 level (aged eight to nine) by engaging them in tradebased activities that keep them at school and improve literacy, numeracy and attendance levels.

The GAGAL GIVE is a project with an eye to the future; and Whitaker hopes that it will eventually play its part in providing quality applicants for both trade-based and university careers to support the continuing expansion of Gladstone’s industries.

“The new CSG/LNG industry will create enormous opportunity,” she says. “We are community-based and try to get as many apprentices through our programme and into local industry as we can. With a focus on service and looking after people, we are very proud of the contribution we make. Other regions have expressed interest in our unique model and the services that GAGAL provides.

For now though, our concentration is on Central Queensland. Without GAGAL, 2,500 people wouldn’t have trades today,” she concludes. www.gagal.com.au/

98

www.bus-ex.com February 11

Gladstone Area Group Apprentices Ltd

February 11 www.bus-ex.com

99

Vertic

powerhou

Enrico Barbaglia, vice president of mining for AREVA S talks about the role of uranium mining in the nuclear ene the progress of the Trekkopje Mine and desalination plant represents the largest direct foreign investment ever m

100

www.bus-ex.com February 11

AREVA Resources Southern Africa

cal

use

Southern Africa, ergy chain, and , a project that made in Namibia

A

REVA is the world’s largest uranium producer. It has a market share of about 15 per cent and is active in four of the world’s five richest uranium producing countries. The extensive mining interests of AREVA cover exploration, extraction and the processing of uranium ore, as well as the reclamation of sites after production has finished.

February 11 www.bus-ex.com

101

AREVA Resources Southern Africa

PanAvest As a fully integrated logistics provider, PanAvest manages a broad range of services in the supply chain network. With over 50 years of collective experience in the C&F industry, we pride ourselves on

“tailor-made”

solutions

for

our

respective

clients in the mining, manufacturing, fishing and energy industries in Namibia. Our vision: “To be the preferred strategic partner in the C&F industry in Namibia”.

Namspace Namspace specialises in the design, manufacture and erection of prefabricated modular structures in Africa.

Our extensive experience in the planning, design and erection of prefabricated camps in the sectors of mining, construction, military, police, education and health services has enabled us to offer professional turnkey projects throughout Africa. Namspace has taken prefabricated modular buildings to the next level—these buildings are dust free, well insulated and last for 30 years plus if maintained.

Enrico Barbaglia, AREVA’s vice president of mining in Southern Africa, is keen to point out that mining is emphatically not all that this company is about. “The mining operations of AREVA have to be seen within a global context,” he explains. “Our mining operations in Southern Africa are part of a much bigger nuclear energy chain, or even more precisely, part of a larger energy production chain.”

The company has a small interest in gold, but uranium is what really matters. This is because uranium feeds AREVA’s nuclear business further down the line. AREVA is the only company with a presence in every industrial activity linked to nuclear energy: mining, chemistry, enrichment, combustibles, services, engineering, nuclear propulsion and reactors, treatment, recycling, stabilization, and dismantling.

After the Mining Business Group has done its work, the front end of the group converts and enriches the uranium and designs the fuel for the nuclear reactors. Other business units deal with reactor design and construction and then there are

the activities needed to commission and maintain the reactors. At the back end of the process is decommissioning and clean-up. Lastly, there is the renewable energy unit that develops wind energy, bio energy, solar and hydrogen power solutions.

Barbaglia explains how this level of vertical integration and involvement in the full energy production cycle has shaped the mining group.

“Unlike some mining companies who are only interested in extracting commodities at the lowest possible cost within the most immediate time frame, we take a much longer-term view.

What matters most of all is that we can guarantee stability and security of supply throughout the lifetime of the reactors that are commissioned further down the line,” he says.

In response to global concerns about dwindling supplies of fossil fuels and their effect on the environment, as well as geo-political uncertainty, the nuclear industry is enjoying a renaissance.

AREVA is circa 90 per cent owned by the French government and almost 80 per cent of France’s domestic power supply is generated through its 58 nuclear reactors. Now, other energy-hungry countries are considering following suit and sharp spikes are anticipated in demand when a number of long-term nuclear projects finally come to fruition over the next decade. Demand is nothing if not buoyant. However, Barbaglia explains that the market for uranium is highly complex. “Last year was marked by the highest level of speculation we have ever seen. There is a producer and a user in an ideal world—intermediaries inevitably have an interest in manipulating the market to their own ends,” he says.

Barbaglia believes many new entrants are creating the illusion that a flood of uranium will hit the market at prices not worth taking out licences for. The hype which surrounds the oil market, he says, pales by comparison. “Hundreds of feasibility studies have been completed, but the vast majority will never see a gram of uranium extracted. Many junior players are more interested in talking up the market than in actual execution,” he says.

He is also keen to stress that for AREVA as a full cycle company, price is only one facet of the equation. Security of supply is everything and this means that geographical diversification is fundamental. As such, AREVA often operates in diverse countries with varying socio-political

February 11 www.bus-ex.com

103

AREVA Resources Southern Africa

Turgis Turgis has enjoyed a long, fruitful relationship with AREVA on the Trekopje Project where it played the role of Lead Consultant for surface infrastructure.

With offices in South Africa and the UK, Turgis provides integrated mining, process, environmental and engineering solutions for all commodities.

Turgis offers the following services across the full mining project value chain: study work from Conceptual to Definitive (“Bankable”); due diligence and technical audit; detailed design; environmental; operational

support;

mining

business

support;

project management; and owner’s engineer role.

More information is available on: www.turgis.co.za

as well as cultural contexts. However, Barbaglia also points out that AREVA’s differentiation allows for the group to adequately cover for both the technical and political difficulties it may face in the various countries in which it operates.

Barbaglia cites AREVA Resources Southern Africa’s relationship with the Namibian government as an example of where AREVA is successfully partnering with the government and relevant stakeholders in the country in order to meet its business objectives as well as the country’s.

“Namibia is a very reliable trading partner with transparent business practices and a very high degree of political stability. We know we can make long-term business plans, which is vital for a company like ours.”

February 11 www.bus-ex.com

105

AREVA Resources Southern Africa

International SOS International SOS supports Areva at the Trekkopje Uranium mine in Namibia by providing on-site primary and emergency care to employees and managing patient movement via ground or air ambulance.

International SOS is the world’s leading international healthcare,

medical

assistance,

and

security

services company. Operating in over 70 countries, International SOS provides integrated medical, clinical, and security solutions to organisations with

international

operations.

Services

include

planning and preventative programs, in-country expertise, and emergency response. A global team of 7,000 employees led by 970 full-time physicians and 200 security specialists provides health and security support to enable its members to operate wherever they work or travel. Members include 69 percent of the Fortune Global 500 companies. www.internationalsos.com

In Namibia, AREVA has a large scale emerging uranium project called Trekkopje Mine, approximately 40 kilometres into the desert from the town of Swakopmund. The Trekkopje deposit is a shallow, high tonnage, low grade uranium deposit hosted by calcretised palaeochannels.

When commissioned the mine will process 100,000 tonnes of crushed ore per day to eventually produce 3,000 metric tons of uranium per year. Mining of the deposit’s upper layers and then the uranium ore will be carried out in the traditional way: explosive detonations, extraction with shovels and transportation by truck to the primary plant. Output at the Trekkopje mine is expected to start in 2012 with a predicted lifespan in the region of 12 years.

Barbaglia is keen to stress that creating conditions of economic and environmental sustainability has a special relevance. “As a major industrial player with recognised expertise in the energy sector, it is our responsibility to establish and nurture positive relationships with the government and local institutions wherever we operate.”

For example, in April 2010 AREVA opened a desalination plant to serve the Trekkopje mine. It is a highly innovative project—the first of its kind in Southern Africa—with the capacity to produce 20

February 11 www.bus-ex.com

107

108

www.bus-ex.com February 11

AREVA Resources Southern Africa

million cubic metres of potable water per annum.

While featuring state-of-the-art technology with screen filtration, ultra filtration, reversed osmosis and chemical treatment, the plant will supply the Trekkopje mine with desalinated water taken from the Atlantic Ocean, thus preserving Namibia’s water resources. The water is delivered to Trekkopje through a 48 kilometre long pipeline supported by three pump stations. NamWater, Namibia’s state-owned water supplier, will be able to buy the excess water to supply other mines and companies operating in the Erongo region.

“Bringing our plans in Namibia to fruition is a major part of our strategy for the future,” concludes Barbaglia. “We have formed an exploration joint venture with the Namibian government which is working extremely well and we expect to undertake many other projects together.” www.areva.com

February 11 www.bus-ex.com

109

Powering

oppor

The Bujagali Hydropower Project in Uganda will not just provide a reliab energy for the Uganda grid, but will also spur employment opportun

110

www.bus-ex.com February 11

Bujagali Energy Limited

rtunity

ble source of clean nities in the future

T

he Bujagali Hydropower Project is a hydroelectric project located on the Victoria Nile River near the town of Jinja, Uganda, being developed

by Bujagali Energy Limited (BEL). The power plant is intended to provide clean, efficient energy to the local community, which is in desperate need of an increased electricity supply. The project achieved financial close in December 2007 and is expected to start generating power later this year, before reaching full completion in early 2012.

February 11 www.bus-ex.com

111

112

www.bus-ex.com February 11

Bujagali Energy Limited

M+R Spedag Group Key to success in big infrastructure projects is logistics. Over decades, M+R Spedag Group has grown knowledge and experience in project logistics. During that time, M+R Spedag Group has played a crucial role in almost all major projects in East Africa, often as the exclusive logistics provider.

The Bujagali Hydro Power Plant is another project led to success by logistics powered exclusively by M+R Spedag Group.

The developer for the project, BEL, is a projectspecific company co-owned by an affiliate of Sithe Global Power, LLC (Sithe Global), Industrial Promotion Services (K) (IPS) which is an affiliate of the Aga Khan Fund for Economic Development (AKFED), and the government of Uganda. Sithe Global is an affiliate of the Blackstone Group.

The project is being constructed on an engineering, procurement and construction (EPC) basis with Italy’s Salini as the main contractor.

“After the completion of the Bujagali project, BEL will operate the facility for a 30-year term, at which point it will then be transferred to the government of Uganda. Should there be other power development opportunities within Uganda or the east African community, the BEL sponsors, IPS and Sithe Global would consider investing in the new undertakings,” states project director Glenn Gaydar.

The Bujagali Hydropower Project is a major undertaking for the country. Uganda is in urgent need of new sources of electricity, as many domestic customers and the business community suffer from rolling blackouts lasting between 12 and 24 hours.

The power problems not only impact negatively on the direct quality of life of Ugandan citizens, but also on the nation’s economy. Some businesses and homes have access to oil or diesel powered standby generators, however this alternative is far from ideal, as it is both expensive and heavily polluting. The Bujagali Hydropower Project will produce 250 megawatts of energy, remedying the acute need for electricity in the community as well as providing generation capacity to support economic growth. Crucially, it will do so in an affordable and clean way, eliminating the need for personal or community diesel fired generators.

“Ultimately, Bujagali will supply the country with relatively inexpensive, clean and reliable energy which will significantly reduce the disruptive power outages currently being experienced,” says Gaydar.

“This will support growing energy needs for rapid economic growth which in turn creates employment and improves the general welfare of the population.

The project will also enhance rural electrification.

“It is also important to note that the Bujagali project will generate its power only from the water already released from Lake Victoria through the upstream power facilities at Owen Falls,” Gaydar adds.

The environmental aspect of the Bujagali Hydropower Project has been exhaustively addressed. While hydroelectric power is in itself a clean, renewable source of energy, the initial construction of the dam and related structures can cause environmental impacts in the immediate area, which need to be properly mitigated. BEL has taken the view that it should leave the area in a better condition than it found it, so the new riverbanks that will be formed in the creation of the reservoir for the dam will be replanted with native vegetation as well as trees along the downstream river banks. Fish stocks will also be monitored, not just during the construction phase of the project but on an ongoing basis once the power plant is in operation, with native fish restocking taking place as necessary.

“Environmental conservation actions—such as tree planting of over 400 hect-acres and soil erosion management—have taken place,” says Gaydar. “To address potential social impacts by the project, livelihood restoration programmes that cover agricultural and animal extension services, construction of markets and a new piped water supply system are in progress. BEL has also supported the establishment of business development centres that train and facilitate local entrepreneurship, including providing the initial capital for a micro-finance programme. The extension of the local electricity grid to provide supply to project affected communities is also under active consideration,” he confirms.

Alternative water supplies such as groundwater wells and standpipes are being developed for villages in the surrounding area that will have restricted access to the river. Additionally, 308 hectares of the 388 hectares needed to form the reservoir for the dam already exist naturally on the Victoria River,

February 11 www.bus-ex.com

113

which means that flooding of the surrounding area will be minimal compared to similar projects.

“BEL has a very robust programme covering social and environmental mitigations which it is implementing alongside the construction of the project,” says Gaydar. “The aim is not only to uplift the welfare of the communities that live around the project but also to make them sustainable beyond the life of the project.”

Other social mitigation actions include education—where BEL has helped construct and equip classroom blocks both at primary and nursery school levels—and youth skills training, which has seen over 400 young people acquire formal training in various skills. Health and sanitation interventions include the training and equipping of Village Health Teams, community-based disease prevention/ control and sanitation programmes, and the construction and supplying of medical clinics.

Many jobs have been created during the construction of the project itself. During the peak of construction activities, about 3,000 workers were employed by the project, most of whom came from the vicinity of the project site. The local community has therefore been upskilled, creating a more attractive workforce for potential investors and start-up businesses.

The Bujagali project can therefore be summed up as this: a holistic development that benefits all aspects of the local community in a thoroughly modern way. BEL has seized the opportunity to develop a reliable and renewable source of energy that is not only relatively environmentally benign but that also promotes the wellbeing of

“Ultimately, Bujagali will supply the country with relatively inexpen which will significantly reduce the disruptive power outages current the local community, while providing Uganda with a principal source of power that will catalyse the country’s economic and social development in the short to medium term.

There are few power projects that can make such broad claims, which is what uniquely distinguishes the Bujagali Hydropower Project from similar developments. That Bujagali is destined to be the bedrock of Uganda’s future energy production seems a certainty. www.bujagali-energy.com

114

www.bus-ex.com February 11

Bujagali Energy Limited

nsive, clean and reliable energy tly being experienced�

February 11 www.bus-ex.com

115

Feel force the

C

ity Power Johannesburg (Pty) Ltd is a municipal-owned enterprise which was created in 2000 as the best way to meet the city’s current and projected electricity needs. In keeping with Johannesburg’s intention to become a world class African city, the vision of City Power is to perform as a world class electricity distributor.

116

www.bus-ex.com February 11

City Power Johann a world class elec

City Power Johannesburg

nesburg (Pty) Ltd is realising its vision to become tricity distributor. Jayne Alverca reports

February 11 www.bus-ex.com

117

City Power Johannesburg

“Last year, City Power had a turnover of R3.726 billion, providing electricity to over 300,000 users�

Accountable to the Services and Infrastructure Department of the City Council, which is currently being re-engineered as a centre of excellence, City Power is wholly centred on the purchase, distribution and sale of electricity within the geographical footprint of the City of Johannesburg. The only exception is the area that takes in Soweto and Sandton (these are serviced separately by a distinct provider, Eskom).

As a city, Johannesburg presents many development challenges. For example, the population is expanding relentlessly, growing by almost 16 per cent last year. Then there is the structure of the city itself, which takes in over 100 informal settlements, where many poor households

still lack supporting services and basic amenities.

It is a source of great pride to City Power and other service providers that the independent audit conducted through the Empowerdex Service Delivery Index ranks Johannesburg as one of the best municipalities in the country in terms of delivering good services to its citizens.

The study regularly measures the performance of all of South Africa’s 231 local municipalities, 46 district councils, six metropolitan municipalities and provinces on their service delivery record.

With regard to the delivery of water, sanitation and electricity services, Johannesburg received a score of more than 90 out of 100 in each of these categories and was ranked second overall in the country after

February 11 www.bus-ex.com

119

City Power Johannesburg

Siemens The Siemens Energy Sector is the only company worldwide that supports customers with our own efficient products, solutions, services and knowhow along the entire energy conversion chain— from the production of oil and gas to power generation and the transmission and distribution of electrical energy. For more information visit us at www.Siemens.co.za

Cape Town. The study confirmed the findings of the City’s own annual customer satisfaction survey, which reflects a steady growth in satisfaction with service delivery over the last few years.

2010 was an especially important year for Johannesburg and a year in which City Power had an equally high profile. The company was tasked with safeguarding and enhancing the supply of electricity for the facilities that hosted a range of world class sporting events, including the Soccer Confederation Cup of Nations and the Davies Cup tennis series. A reliable electricity supply was pivotal to the success of these events and the reputation of the City.

Last year, City Power had a turnover of R3.726 billion, providing electricity to over 300,000 users. The customer base—which includes prepaid, domestic, agricultural and commercial users—is segmented by demand, from the large power users at the top of the demand pyramid to the broad base at the bottom.

Each segment is characterised by its own distinct requirements; hence for corporate customers, it has been a priority to improve the wire network to reduce outages and power surges. Excellent progress has been made, with over 70 per cent of customers now rating the service as good.

In line with the government’s commitment to ensure all South Africans have access to electricity, the introduction of 50 kWh basic free electricity per month has been key to customer satisfaction for residential customers. This means that, irrespective of income, each householder can run two 60 watt lamps and a TV set for four hours per day and still only consume just over half of the free allocation. The Johannesburg programme

was one of the first and most ambitious of a series of similar initiatives in South Africa and has brought great benefit to the poorest communities.

All customers have access to a sophisticated call centre, which manages over 63,000 calls in the peak winter months and provides a singlesource service for all queries, applications and payments. Putting in place a strong service ethos, reinforced by regular customer forums and feedback mechanisms, has seen the customer satisfaction index soar.

The most recent results show that the customer satisfaction target of 75 per cent was easily exceeded. The last customer satisfaction survey showed that 80 per cent of key commercial and corporate customers were satisfied with the service, while the satisfaction of domestic consumers was even higher, at 84 per cent.

Some of the highlights of recent achievements include an outstanding health and safety track record with zero fatalities recorded for either employees or the public. Other achievements include the installation of many more new street lights, which the City sees as fundamental for a sense of safety and well-being. Meanwhile the

February 11 www.bus-ex.com

121

“Recent achievements include an outstanding health and safety track record with zero fatalities recorded for either employees or the public�

122

www.bus-ex.com February 11

City Power Johannesburg

electrification of the poorest parts of the city continues to gain momentum, with many more new customers being added to the network.

City Power sees itself as a progressive and dynamic employer, focused on providing the best working environment in the industry and operating at consistently high levels of productivity. All employees enjoy retirement fund and medical aid benefits and the new employee wellness clinic has adopted a pioneering approach towards HIV and AIDS prevention.

Cutting-edge human resources practices and policies have positioned City Power as a preferred employer in Johannesburg. This has enabled the company to attract some of South Africa’s most talented people, as well as to achieve outstanding results in promoting gender equity and black economic empowerment (BEE) within the workforce.

Looking towards the future, City Power is now committed to improving its responsiveness to faults. Said then-managing director, Silas Zimu, in the last company report: “Unfortunately there are some targets that we were unable to meet specifically in the area of call answering times and responsiveness in the restoration of faults within 1.5 hours. These areas of non performance are attributable to environmental and operational issues which include limited call centre capacity, skills shortage, traffic congestion and budgetary constraints.�

In 2011, City Power is also clearly committed to deepening its environmental strategy, which forms an integral part of its mission statement.

The company recently achieved stage one of ISO 9001:2008, the next challenge being to achieve full accreditation. www.citypower.co.za

February 11 www.bus-ex.com

123

One-stop

solutio Logistics companies have had to rethink their business models over the last few years, as customer trends have moved away from the traditional long haul service to a one-stop solution.

Abdool Tayob, chief executive of Bakers Transport, talks to Andrew Pelis about how the changes have benefited this family-run success story

O

ver the past few years, there has been a major shift in the manner in which companies approach their logistics requirements. The days when long haul was the preferred practice are long gone. Today, logistics companies have become one-stop-shops providing 3PL and 4PL solutions.

For family-run businesses like Bakers Transport, the change has injected fresh impetus. This South African business made its name as a long haul company, transporting fast moving consumer goods, packaging products and white goods across the sub-Sahara region. However, over the past few years, the company has diversified, firstly into distribution and then into warehousing.

124

www.bus-ex.com February 11

B a k e r s Tr a n s p o r t

on February 11 www.bus-ex.com

125

This change in strategy has yielded an impressive annual growth rate, as chief executive Abdool Tayob explains: “At the moment, Bakers Transport has transformed itself into a fully fledged logistics company. We began investing in distribution about eight years ago—more for our clients’ needs—and later on we offered our own warehouse management. Today, we operate with over 65,000 square metres of warehousing space.”

The main reason for the changes, explains Tayob, was that the company realised its South African clients had joined the global trend of expecting a complete one-stop logistics function, and it recognised the need to move into these other service functions. “Without doubt, the growth we have enjoyed in recent years has come from meeting our customers’ demands (and therefore maintaining our long-term relationships), by diversifying into a fully-fledged logistics service provider, as well as revisiting our corporate culture,” he explains.

The cultural change was brought about by a buy-out of other family shareholders almost two years ago that saw two existing directors, Abdool Kader Tayob and Shabir Ahmed Tayob, take control of the company. Their father Aboobaker Suleman Tayob, who founded the business, is no longer operational, but is rather a strategic advisor for the group. “We have kept the business within the family,” Tayob affirms, “but my father is no longer involved in the day-today running of the company. Over the last two years we have made efforts to introduce a stronger management structure and corporate feel to operations,” he continues. “We have a forward thinking senior management team and executive board in place, to handle strategic and executive decisions.

This is all a far cry from the company’s beginnings in Pietermaritzburg, back in 1973. “We started from very humble beginnings when my father operated with one truck. For the first 15 years we had slow growth, and it has really been over the last 10 years that we have grown into a medium-sized operation. To give you an indication of our expansion, 15 years ago we had a relatively small fleet and workforce. Today we boast the largest independent fleet in South Africa and run 10 sites (including truck stops) across the country.” Bakers pays tribute to its dedicated employees and loyal clients for their hard work and support, and acknowledgement of success is to God Almighty.

By 1988 the company had grown sufficiently to relocate to its current larger premises in M’kondeni, as Bakers’ evergrowing fleet of Mercedes-Benz vehicles underwent further expansion. The relationship with the German supplier remains a focal point of the business. “Our ties with Mercedes-Benz have been in place since we purchased our first brand new truck back in 1980,” Tayob explains. “We have an ongoing vehicle replacement programme in place and over the last 36 months we have spent approximately R60 million on upgrading our fleet.

126

www.bus-ex.com February 11

B a k e r s Tr a n s p o r t

February 11 www.bus-ex.com

127

“The growth we have enjoyed in recent years has come from meeting our customers’ demands by diversifying into a fully-fledged logistics service provider” “This has been a big plus for us as we chose the right product from the outset,” he continues. “In my opinion, we have the world’s best product and package available, thanks to the reliability of the vehicles, their flexibility for different applications— depending on terrain and the type of load—and for the aftersales support we receive. Crucially we also make savings over the longer period and vehicle costs have proven quite static.”

Cost savings are at a premium for a business that has to pass on rising fuel prices to customers.

To counter this problem, Tayob says that Bakers has invested heavily in intensive driver training and high-tech software aimed at keeping fuel consumption to a bare minimum. “We spent around R4 million to create our Driver Training Academy

128

www.bus-ex.com February 11

five years ago,” he states. “Our centre is accredited

by Mercedes-Benz Germany. We took the courage to sign off the project and it has proved hugely successful in improving customer services and keeping costs down. We currently employ three full-time and two assistant trainers who provide ongoing training around the country.” Bakers now realises the return on investment of the decision.

“We have also benefited from keeping abreast of IT trends with regards to our IT system. We run two systems: Opsi Plato provides us with routine scheduling that enables us to identify the shortest route for our drivers, reducing time and fuel costs. For fleet management and driver performance we also use Mix Telematics which provides live information on driver behaviour and route patterns. We run a

B a k e r s Tr a n s p o r t

monthly incentive programme for our drivers and we are able to use this software to identify winners.”

Bakers is currently implementing an integrated WMS system which is close to completion.

South African logistics companies are now facing a raft of legislative changes that impact on the issues of environment, quality and health and safety. Tayob welcomes the changes currently being implemented and feels these will help to clean up the industry. “It [legislation] is moving more towards international standards and is having a positive impact on our industry,” he asserts. “Prior to the mid 80s there was a lot of red tape and we operated under a permit system; but that has all changed, and anyone with cash has been able to buy a truck and start a business. This has resulted in a drop in industry standards and a “cowboy market” with poor road safety. Fortunately, this is all starting to change and the legislation will create a level playing field. Quality is very important to us—we are now working towards attaining ISO: 9001 accreditation in August 2011.”

Bakers Transport’s ISO: 9001 aspirations further underline its clear corporate structure, something Tayob feels will help win more big contracts without compromising family values. “We have to keep pace with human capital and recruit the right people and skills, but we must also keep the same flavour as we grow,” he says. “Infrastructure will present a challenge as volumes get bigger and we will need greater automation. These are the big challenges for the next couple of years which include quality of professional drivers and a diminishing workforce; we must make sure that we don’t let it run away from us.

“In the meantime, 2011 will be a year to review our strategy and consolidate our ‘Breather Strategy’.

God willing we are confident and excited about the success that lies ahead. Our plan for 2011 is securing the foundation and setting the stage, as we move towards becoming a ‘World Class Company’ and ensuring the solid manifestation of ‘Performance Driven Logistics’ in every aspect and activity within the Bakers organisation”. www.bakerstransport.com

February 11 www.bus-ex.com

129

People G

power

lobal tobacco company BAT has been operating in the Congo since 1939 as the Congo Tobacco Company, establishing its first factory at Stanleyville (now Kisangani) in the heart of what, for many years, was the country’s main tobacco growing area. In spite of political upheaval and fierce wars, BAT has remained loyal to Congo, seeing it evolve from the Belgian Congo to Zaire, and eventually to the Democratic Republic of Congo. During this time, the company established a second factory at Lubumbashi in the south and a third in Kinshasa and eventually changed its name to BAT Congo in 2006 by presidential decree.

130

www.bus-ex.com February 11

BAT Congo has b Republic of Cong talks to Gay Sut to tackle sickle c business is being

B AT C o n g o

e

r

been operating in the Democratic go for 72 years. Steve Lusinde tton about the company’s efforts cell anaemia, and how the g transformed through its people February 11 www.bus-ex.com

131

B AT C o n g o

“We brought in the very latest equipment and materials and essentially doubled our capacity, increasing the number of production lines from two to four. As a result, our facilities are unique in the DRC”

Today, the company has consolidated its operations to a single, extensive state-of-theart facility in the capital Kinshasa, and directly employs over 200 people in the business. “We also employ a further 1,500 people indirectly across our subcontractors and distribution channel, as well as some 5,000 people farming the tobacco,” explains head of Corporate and Regulatory Affairs, Steve Lusinde. “All of which comes to a grand total of over 6,500 direct and indirect employees in the

DRC, making us a major employer and significant contributor to the economy.” In 2009 alone, BAT contributed around US$40 million to the treasury.

“Between 2001 and 2006 we invested in extending the capacity of our factory,” Lusinde says. “We brought in the very latest equipment and materials and essentially doubled our capacity, increasing the number of production lines from two to four. As a result, our facilities are unique in the DRC,” he continues.

February 11 www.bus-ex.com

133

Alongside rationalisation and consolidation, the company’s development strategy has been enshrined in a business transformation project called ‘Congo Transformation’ which was launched in 2009. The target is to organically grow the company by 60 per cent by 2015—a period of just six years—and to bring about a comprehensive business improvement. An essential part of this is developing a peoplebased working culture. “We decided to involve everyone in the organisation,” Lusinde says. “We developed nine ‘work streams’—essentially think tanks. Each one was composed of people drawn from all areas of the organisation.”

Each work stream was asked to come up with possible improvements for a designated function within the company and to present the results of their brainstorming at a meeting at the end of the first year. “Crucially, the most junior staff were designated to do the presentations, to develop ownership of the projects and develop leadership skills. It was astonishing to see the individual potential being realised throughout the company.”

Some of the projects have been taken further and developed into full trials and then rolled out as standard practice. One highly effective example was the suggestion that shipping products to the north of country would be more cost effective via the Congo River rather than by plane. “We are now shipping much of our product by this route, and we expect to save around US$4,000 a year by doing so,” Lusinde comments. Across the company, the overall transformation scheme has resulted in cost savings of around £4 million a year.

134

www.bus-ex.com February 11

“O clo

One of our business principles is that we should be ose to the community in which we operate�

February 11 www.bus-ex.com

135

Going forward, the company has now initiated what it calls GM breakfasts, where junior staff take breakfast with the general manager, and this has resulted in significant operational improvements across the company. “Within 20 minutes of the start of the first breakfast, we found they began to talk about the issues facing them every day,” Lusinde says. That first breakfast was with the company drivers who are employed to work from 8.00am to 5.00pm. Their issue was that they were often expected to remain behind for long hours into the evening and night, and yet received a fixed overtime allowance regardless of the hours they had worked.

“That was simply not fair,” Lusinde says. “So we promised to return to them with a clear response.”

The general manager met with the managers who used drivers, explained how this regime was clearly unfair and how the staff felt they were being exploited, and he laid a solution in front of them. If the mangers needed a driver outside normal hours

cell anaemia. Endemic in sub-Saharan countries, the disease causes great pain and suffering. “Here in Kinshasa alone some 300,000 people suffer from the disease, and across Congo that figure rises to more than one million,” Lusinde explains.

“Our first initiative was to completely refurbish the specialist hospital here in Kinshasa, and this was a huge undertaking. The second was to buy a truck and transform it into a mobile screening service, the Drepa Mobile, which now travels across the province providing a free test for the disease.”

More recently, the company has participated in the purchase of two high specification machines for testing newborns. The first one was installed in 2007 and the second just last year. “There are only four of these in the whole of Africa, and two of them are here in Kinshasa.” The test is offered free and purely on a voluntary basis.

Looking to the future, one of the big challenges facing BAT is the illicit tobacco trade, which has

“Our ambition is to grow organically by 60 per cent over the next five years” they would have to pay the driver from their own pockets. If it was not convenient, the driver would have the right to leave the car keys and go home to his family and return to work the next day.

“Initially the drivers thought it was a joke, but within three weeks everyone adapted to the new regime and it has become normal practice in the company,” Lusinde says. “This was a revolution for the drivers and has worked really well.” Lusinde has now developed a system for consolidating the results of the breakfast meetings, negotiating change and ensuring that improvements can be delivered.

BAT also invests considerable time and resources on corporate social investment. “One of our business principles is that we should be close to the community in which we operate,” he says. “It’s the mutual benefit principle: we believe in adding value to the communities in which we operate.”

As well as working in the usual areas of education and community, the company has been making a big difference by working in partnership with Initiative Plus, an NGO lead by the Congolese First Lady and the French NGO, Noir et Blanc, to tackle sickle

136

www.bus-ex.com February 11

doubled in Congo in the last three years and leaves the company with a significant struggle on its hands. “Our market share, particularly at the lower end of the market, has been falling. By contrast, our ambition is to grow organically by 60 per cent over the next five years,” he says. “However, we are confident that by working closely with customs and the tax authorities we can find a way to contain the phenomenon, track and fight it.”

There are undoubtedly large sums of money involved. “And those who engage in the illicit trade are very dangerous people,” Lusinde concludes. But the company is fighting its corner in the way it knows best, by supporting the authorities, tracking the activities of the illegal traders and by employing its well developed people skills. “We’re organising press conferences to develop awareness of the issues and explain the implications. And those communications will go out through the newspaper and television.”

With BAT Congo’s track record of working in the community and its people-oriented business practice, the hope is that the messages will be heard and understood. www.bat.com

B AT C o n g o

February 11 www.bus-ex.com

137

Struc infrastru

and

2010 was South Africa’s year of pride: it was never going to be easy business as usual following the World Cup but building world class i still a work in progress for Goba, the country’s leading consulting e

138

www.bus-ex.com February 11

Goba (Pty) Limited

ctures ucture

y to get back to nfrastructure is engineering firm

S

outh Africa has been somewhat shielded from the global downturn thanks to a number of factors, including its conservative fiscal policies and sound banking system. But there’s no doubt that the 2010 FIFA World Cup was a terrific boost to the economy in general and the construction industry in particular. Goba is a name that seems to crop up in connection with almost every major project in South Africa—from mines and tunnels to transportation, roads, dams and pipelines and port development—so it was hardly a surprise to find it was involved in the design and construction supervision for the outstanding football stadia that fronted the contest.

February 11 www.bus-ex.com

139

140

www.bus-ex.com February 11

Goba (Pty) Limited

Goba was fortunate to have been involved in the conceptualisation, design and construction management of no less than four of the world cup stadia—the multiple award-winning Moses Mabidha Stadium in Durban; the Greenpoint Stadium in Cape Town; the Nelson Mandela Bay stadium; and as lead designers for the Mbombela Stadium. In addition Goba was involved in the preparation of transport operational plans for the World Cup event in Cape Town, Johannesburg and Mbombela.

Founded in 2001 through the merger of two established companies, Goba Moahloli & Associates and Keeve Steyn Incorporated, Goba has built up a unique reputation for professional integrity linked with the ability to deliver complex specialised projects effectively. Its executive chairman Trueman Goba is one of two civil engineers on the 26-strong National Planning Commission headed by the minister for National Planning, Trevor Manuel, since its foundation in April 2010.

Talking to Andy Griffiths, a director and executive committee member of the firm, based in Johannesburg, you get a real sense that working for Goba is more than just a job because its people are involved in the construction of history making infrastructure projects for the nation.

When Griffiths left his native Wales 30 years ago to join Keeve Steyn, he soon found himself involved in the Lesotho Highlands Water Project, which now supplies 20 per cent of Gauteng’s water needs. It was, he says, the opportunity of a lifetime for a young engineer to design and supervise construction of a massive 185-metre high concrete arch dam and create 115 kilometres of hard rock tunnels using tunnel boring machines, and it occupied him for nearly 15 years!

More recently, Goba engineers have had the satisfaction of being able to work on projects just as vital to national growth, such as the Berg River Dam that brings water to Cape Town, and the Gauteng Freeway Improvement Project (GFIP) as well as managing the recent widening and deepening of the entrance to the Port of Durban. The main contract for this last project was awarded in May 2007 to a consortium of Dredging International of Belgium and Group Five of South Africa, while project management was carried out by Transnet Capital Projects and its joint venture EPCM (engineering, procurement and construction management) contractor HMG

February 11 www.bus-ex.com

141

(Hatch, Mott MacDonald and Goba).

The ability to work well in a joint venture or consortium is one of Goba’s key strengths, says Griffiths. “We were fortunate to be able to get involved through HMG in the five-year Transnet Capital Works Programme, which included the Durban Harbour project.” The same joint venture was responsible for improvements to the 861 kilometre-long railway line from Sishen to Saldanha, and refurbishment and expansion of the iron export facility at Saldanha, South Africa’s deepest port, among other works for Transnet, the state-owned rail and ports authority. Says Griffiths: “The Durban Harbour project followed on nicely after the Durban Harbour Tunnel, for which Goba won a number of South Africa’s prestigious design and construction awards. This new tunnel under the harbour entrance, some 35 metres below sea level, saw the first use of a mixed-shield slurry tunnel boring machine in South Africa.”

These may be dramatic projects, but 40 per cent of Goba’s turnover comes from the Transportation Division, the largest of Goba’s four divisions. Here Goba has been involved in several multi-million rand projects throughout the country, including the Gauteng Freeway Improvement Project Phase 1, a R23 billion (US$6 billion) project, which saw a major upgrading of the main freeway network in Gauteng and the introduction of electronic toll collection in the country. In addition, Goba is at the forefront of the national initiative to restructure public transport services within South Africa through its involvement in the planning and operation design of integrated rapid public transport networks in three of the five major metropolitan areas in the country.

The second largest division at around 30 per cent is the Mining Division, says Griffiths. “We do a lot of work on mine surface infrastructure— things like materials handling, haul roads, water

142

www.bus-ex.com February 11

and power reticulation, polluted water dams and control systems, as well as the offices, workshops and buildings on the surface. We are currently involved in two very large new mines for Sasol.”

Working in a joint venture with RSV Enco, Goba has been providing EPCM services for the multibillion rand Thubelisha mine shaft development, a new mine designed to produce 10.6 million tonnes per annum (mtpa) of coal starting from the first quarter of 2012.

The same joint venture carried out the technoeconomic feasibility studies for another Sasol project, the Impumulelo mine, and was then awarded the EPCM contract. Construction will start at Impumulelo this year, with production expected to start early in 2014 with an eventual target of 8.5 mtpa expandable to 10.5 mtpa.

Recent months brought a concept study for another coal mine at Emalahleni, 200 kilometres to the east of Johannesburg. The Zonnebloem Project, as it is known, is being developed by Xstrata, while United Manganese of Kalahari (UMK) has brought Goba in to assess a new manganese mine at Hotazel in Northern Cape.

“Generally mining work is keeping a good number of our 500 permanent staff pretty busy at the moment,” says Griffiths.

On the water side, Goba is involved with supervision of the 85 metre-high De Hoop Dam in Mpumulanga, the 40 metre-high Thune Dam in Botswana and the 120 kilometre VRESAP pipeline and abstraction works designed to augment water supply to the Mpumulanga coalfields, as well as the new Mokolo-Crocodile Water Pipeline, another mega water transfer project design to augment water supplies to the Medupi power station and the Waterberg coalfields.

Having such a variety of different specialisms under one roof makes it difficult to guarantee continuity of work, Griffiths points out. “People have

Goba (Pty) Limited

to be flexible and adaptable and have a range of skills; but even so it is important for us to select our joint venture partners judiciously. If you have two or three firms pooling their resources you have the breadth of skills and capacity to undertake these large projects. Because these projects are not always continuous it is not always possible to maintain a large dedicated team all the time, and I think one of Goba’s successes has been that we work very well in such partnerships; we pride ourselves on our integrity and the way we do business and I think partners enjoy working with us.”

Goba’s ethic is well summed up by its mnemonic EQUIP (excellence, quality, ubuntu [respect], integrity and professionalism). “We try to hit the right balance, and promote BEE through training and mentoring as well as maintain social responsibility without compromising technical excellence and quality.” Each of the company’s offices in Gauteng, KZN, Eastern Cape and Western Cape is treated to a weekend away once a year where current strategic issues are explained to staff, and external speakers arranged to give advice on personal development and motivation. The weekends also include team building sessions and give all staff a chance to socialise with one another as well as getting the chance to meet Trueman Goba and the other Exco directors on equal terms. It does a great deal to advance cohesion and mutual respect, he says.

South Africa has been comparatively sheltered from the global storm, concludes Griffiths, who is confident that Goba will continue to expand. “In 2011 we expect the government to continue to put funds into infrastructure. There are a number of big projects we have our eyes on at the moment in transportation, water and power. And we have the feeling the mining houses are starting to get more positive and will be making investments in new mines and mine expansions.” www.goba.co.za

February 11 www.bus-ex.com

143

Suppo

Steve Timms, managing director o talks to Jayne Alverca about what it and enhance mining and

144

www.bus-ex.com February 11

HGS Ghana Ltd

true

orting

productivity

of HGS Ghana Ltd, means to protect d industrial assets

M

ining and industrial plant does not come cheap. Even the most basic installation will typically represent an investment that can be measured in millions of dollars. Once a mine is up and running or an industrial plant is commissioned and functioning, its owners will share a single objective—the operation, be what it may, must be as efficient, productive and safe as possible, with downtime through equipment failure kept to an absolute minimum.

HGS Ghana Ltd was formed in August 2006 to support customers across West Africa in maximising the value of their capital assets. In global terms, 2006 might not have counted as a good year in which to launch a new enterprise; however steadily increasing commodity and mineral prices have enabled HGS to buck the trend and establish a pronounced growth curve.

February 11 www.bus-ex.com

145

Headquartered in Accra, there is also a regional HGS office in Côte d’Ivoire and Burkina Faso, and the company is now also working with customers across the West African region in Mali, Guinea, Niger and Nigeria.

“Our original focus was as a hydraulic solutions provider to the mining industry,” explains Steve Timms, managing director.

“We quickly expanded to take on board hydrocarbons in general; since then, we have grown to offer a full support service that takes in all manner of mining and industrial operations. Our range of services and products is now very broad but all of our offering has a common purpose. We are wholly geared to protecting our customer’s valuable assets and maximising their efficiency and productivity in a safe working environment and in an environmentally friendly manner.”

From a mining perspective, HGS offers support services for all mobile equipment involved in the excavation process, as well as fixed plant such as crushers, mills and conveyors. On the industrial side, the company works with customers as diverse as cement-making facilities through to bottling plants. More recently, a capability has been added to support Ghana’s booming offshore industry, where there is a requirement for specialised high performance hose and super-large hose reels.

“Our aim now is to be a ‘one-stop-shop’, offering protection and support to all kinds of machinery where there is a requirement for protection or maintenance,” says Timms. “If a poor-quality or badly fitted hose bursts, or an improperly maintained excavator refuses to budge, thousands of dollars per hour will evaporate into nothing. We work 24/7 to ensure that none of our customers ever experiences this type of scenario.”

Remote-location solutions for the hydraulic needs of the mining sector is still a speciality, and HGS supplies the best flexible hydraulic hose and fittings on the market from Italian manufacturer, Alfagomma, as well as many other ancillary items such as greasing equipment, pumps, pressure gauges and adaptors. The company has a growing footprint in sating the region’s thirst for industrial lubricants—this is met through the product range of Lincoln, the world leader in lubrication equipment and systems, based in the US. Hose reels are supplied through Cobra and Reelcraft, another two leading industrial brands. “We are fundamentally a service and solutions provider but we quickly realised that a world-class service requires the backing of world-class products and that is why we act as an agent and distributor for many of the world’s best known industrial brands,” explains Timms.

The company also offers fully stocked and equipped containers with on-site training, enabling the customer to run and maintain the facility internally. Alternatively, HGS personnel can be located on-site.

Timms is particularly pleased with the track record that HGS has achieved in servicing some of the planet’s most inhospitable and lonely locations. “Some of our work in Sierra Leone and Nigeria has presented great logistical challenges and we are very proud of

146

www.bus-ex.com February 11

“We are wholly geared and maximising their e environment and in an

HGS Ghana Ltd

to protecting our customer’s valuable assets efficiency and productivity in a safe working environmentally friendly manner�

February 11 www.bus-ex.com

147

148

www.bus-ex.com February 11

HGS Ghana Ltd

the comprehensive solutions we have been able to deliver at remote installations. When it comes to fuel farms, for example, we can offer a complete handling service of the fuel supply from the point of delivery to the point where it is dispensed into the machines it will operate.”

He attributes the company’s strong track record and rapid growth to the attention paid to ensuring that all staff, who are a mix of African nationals and expatriates, have a complete understanding of the task in hand. The 60 employees currently on the payroll have typically worked within the hydraulic, greasing or fuel supply industries and can be counted on to have a broad knowledge of most operational and logistical problems likely to be encountered.

“We believe strongly in empowering and upskilling the people we work with,” Timms affirms. “They are the ones who are crucial to delivering customer satisfaction and developing the business into the future. Our national staff are regularly sent overseas for training, or we will bring equipment experts to Africa.

The fire suppression systems that we sell, for example, are manufactured in Australia and so we have had staff from Australia visit to train both our own people and customers. Proper training is fundamental if people are to develop the skills and confidence that can only come from a profound understanding of the equipment and products they are working with.”

Timms is delighted at the headway that HGS has achieved in just five years; but he is cautious about the benefits of sustained rapid growth. “We are constantly on the lookout for new services and products that have a good strategic fit with our core focus on asset protection. Evaluation is ongoing, as we want to offer our customers as comprehensive a service as possible.

“However, there are still so many new business opportunities that await us in West and North Africa.

We would not want to overstretch ourselves by reaching beyond those geographic areas where we know we can deliver an excellent service. This is what we have built our reputation upon, and it must be preserved at all costs,” he concludes. www.hgs-gh.com

February 11 www.bus-ex.com

149

A

sweeter

tooth

Continuous improvement is not just a manufacturing issue.

Moroccan sugar company Cosumar is making improvements across the company, from agricultural practice through to customer service. Ben Sansom reports

T

here is no doubt that the world is developing a sweeter tooth, and Africa is playing its part in boosting demand. Global figures show that over the past few years, the increase in sugar consumption has outstripped the growth in production; and in Africa, these figures are even more impressive. Between 2000 and 2008, consumption increased by 30 per cent, while sugar imports soared by 73 per cent, with the largest consumers being Egypt—also a major producer—as well as Nigeria, Algeria and Morocco.

Although there is a long history of sugar production in Morocco, the cultivation and processing of sugar cane reached its zenith way back in the ninth century, largely centred around the regions of Souss and Chichaoua. Following a period of steady climate change which affected the region’s ability to grow sugar cane, however, the industry declined and eventually production ceased completely.

It wasn’t until 1929 that the tables began to turn. The first refinery in Morocco (COSUMA) was founded by a consortium of foreign investors, and took the first step towards revitalising the Moroccan sugar industry, opening a refinery to process imported raw sugar. Investments in advanced technologies and the construction of new facilities, along with a policy of continuous improvement, ensured steady company growth. The company was part-owned by the state in 1967 and became Cosumar, the Moroccan Sugar and Refining Company. The government opened a range of new sugar mills within different perimeters of Morocco and began promoting the return of agricultural land to sugar cane and beet production. Ownership by Omnium North Africa (ONA) in 1985 ensured Cosumar remained in a position to play a key role in the continuing expansion of the sugar industry in Morocco.

Today, the company employs some 2,500 permanent staff and is once again independent. With the privatisation of state interests in the sector, Cosumar acquired the four public sugar companies, a move that elevated it to the position of Morocco’s sole national sugar company. Producing over 1.2 million tons of sugar a year, the company currently has the capacity to produce over four million tons of beet and cane sugar cultures, which leaves ample capacity for expansion.

150

www.bus-ex.com February 11

Cosumar Morocco

February 11 www.bus-ex.com

151

152

www.bus-ex.com February 11

Cosumar partners with some 80,000 beet and cane producers located in five well irrigated agricultural areas of Morocco: Gharb, Doukkala, Loukkos, Tadla and Moulouya. Operating as five companies with nine industrial sites, the company produces some 45 per cent of the national sugar requirement from nationally produced crops.

Some 80 per cent of this output is from sugar beet and 20 per cent from sugar cane. A further 55 per cent of the national requirement is refined at the Cosumar plants from imported raw sugar.

Since acquiring the four national companies in 2005, Cosumar has been working closely with the government and the Moroccan Interprofessional Sugar Federation (FIMASUCRE) and is participating in the national Moroccan Green Plan—a scheme which aims to promote food security, improve farmers’ incomes, protect and conserve natural resources and integrate agriculture into the national and international markets.

The Cosumar contribution to this plan has been enshrined in the Indimage 2012 business plan.

“As part of Indimage 2012, we have allocated a total investment of 3.6 billion dirhams to continue the modernisation of our industrial facilities, the optimisation of our agricultural performance and business efficiency, and the service to our customers and partners,” said CEO Mohammed Fikrat.

Launched some five years ago, the programme is targeted at modernising the sugar industry across the country and improving productivity, efficiency and quality by implementing industrial and agricultural best practice.

In 2009 alone, the company invested two billion dirhams into expanding the sugar refining unit in Casablanca and modernising its operations to international production standards. Forty million dirhams has been spent on implementing an integrated management system for quality, security and environment, which will not only monitor product quality, but also environmental performance. As a result of this, the company has already achieved substantial energy savings by identifying and implementing improvements such as changing the crystallisation method used in the refineries.

Meanwhile, efforts continue to be made to limit the impact of manufacturing and agricultural activities on the environment, with projects including the investment of 1.6 million dirhams to improve waste

treatment units as well as for the introduction of clean technologies across group operations.

At Suta, the Oulad Ayad plant has also been extended to increase sugar beet processing capacity from 6,400 to 8,000 tons a day. The work included the commissioning of a tower diffuser and a thin juice decalcification unit. Meanwhile, a new bagasse boiler costing 50 million dirhams has been installed at Sunabel Mechraa Bel Ksiri.

Using a by-product of sugar cane as a biomass fuel, the new boiler produces steam to process the beet, and optimises energy consumption by replacing coal with a by-product which would otherwise be a waste product of the site.

“As for the upstream agriculture, we encourage and support farmers in improving their performance through the promotion and widespread use of good practice,” Fikrat said. And this support was much appreciated during 2009 when after a period of water scarcity heavy rains caused widespread flooding and disruption to the sugar growing cycle.

One of the challenges for the agricultural sector in Morocco has been a shortage of labour.

Cosumar has addressed this by introducing mechanisation into the sugar growing process, and has seen crop production improve significantly. Both the Doukkala and Tadla areas have enjoyed a clear breakthrough in beet harvesting capacity through the introduction of mechanisation, while the use of mechanical harvesting at Loukkos increased from 58 to 90 per cent between 2006 and 2009.

As the final strand in the Cosumar strategy for business improvement, the company has been sharpening its customer focus. A customer satisfaction survey showed satisfaction levels varying between 50 and 80 per cent, depending on subsidiary. Improving customer satisfaction to over 80 per cent in every subsidiary by eradicating the causes of dissatisfaction is now a primary company-wide target. In addition, the company has begun a pilot scheme to explore the feasibility of forming contractual relationships with its customers, particularly with the wholesalers who represent around 80 per cent of the sugar market.

“These projects have not only allowed us to build a better medium term profitability, but also to better serve our customers and partners, thus promoting a sustainable performance for our business,” Fikrat said. www.cosumar.co.ma/site/index.asp

February 11 www.bus-ex.com

153

Making

history Polaris International Industrial Parks looks set to become an historic project that will cement economic relations between Turkey and Egypt. Osman Arikan, general manager, and Elif Gurpinar, corporate communications director, talk to Jayne Alverca

W

hen Polaris International Industrial Parks was officially launched in January 2008 by the Turkish president, Abdullah Gul, the event marked an historical milestone in the long history of friendship and co-operation between Egypt and Turkey.

Polaris International Industrial Parks is a Turkish-Egyptian joint collaboration between Polaris Foreign Investments, which is headquartered in Istanbul; SIAC Industrial Engineering Co., a private Egyptian construction and development company; and Egyptian businessman Mohammed Kassem, who is an active member of the business community in Egypt, with a strong presence in the textile and IT sectors.

It is the first initiative of its kind on Egyptian soil and unique as a private industrial park in a region where state control remains the norm. “This is the largest Turkish investment ever made in Egypt and the first private industrial park not only in Egypt but in the region,� states general manager Osman Arikan.

154

www.bus-ex.com February 11

Polaris International Industrial Parks

February 11 www.bus-ex.com

155

“At an early stage it was realised that the concept had an app We soon realised that many other international manufacturers were The Polaris project offers synergy at a number of levels and is set to enhance the competitive standing of both countries. It harnesses the competitive manufacturing capability of Egypt in comparison to Turkey and also Egypt’s special access to the US market through the QIZ agreement. Moreover, Egypt enjoys very good relations with the EU and is increasingly assuming an economic leadership position in both the Arab and African trade arenas.

Arikan explains the background to the project. “The partnership arose out of the excellent relations that Egypt has traditionally held with Turkey. In 2005, the Egyptian minister of Trade & Industry His Excellence Rashid Mohamed Rashid, who is of Turkish descent and very familiar with the country, paid an official visit. Consultations with the Turkish business community gave rise to the idea of Polaris International Industrial Parks as the best way the two countries could work together for the benefit of both.

“However, at an early stage it was realised that the concept had an appeal that extended far beyond the Turkish investor community,” he continues. “We soon realised that many other international manufacturers were also interested in developing a footprint in Egypt.”

156

www.bus-ex.com February 11

Polaris International Industrial Parks

peal that extended far beyond the Turkish investor community. also interested in developing a footprint in Egypt” The first project, which is located at 6th October City, near Cairo, is now nearing completion and is ahead of schedule. A $1.5 billion investment will provide industrial space and supporting service areas for up to 50 companies on a 2,000,000 square metre site. Many additional facilities will also be made available, such as a health centre, shopping and leisure areas, training centre, daycare facilities and housing.

“A total of 13 different developers have worked on the industrial project and our contribution has centred on the design and marketing as well as the infrastructure, which is now almost all in place,” explains Elif Gurpinar, corporate communications director. “The industrial units and warehousing and logistics centres are already sold out and there is no available land left on the first stage of the project.”

The project has been delineated by the Egyptian prime minister as a special investment zone with a primary focus on light manufacturing such as textiles, furniture, light metal processing, automotive parts, pharmaceuticals and food; and Arikan explains that investors have been carefully selected according to many criteria and especially their environmental impact.

February 11 www.bus-ex.com

157

“We have taken a very critical look at all our investors,” he comments. “For example, we have clustered our investors according to their environmental impact, not their industrial processes. All investors operate in light industries with clean processes. We have also worked with Cairo University to ensure that we abide by the strictest environmental regulations in accordance with government directives. This was another first step in the Middle East and it is now becoming obligatory for all industrial parks to report in this way. We are very pleased to have taken a lead in this step forward.

158

www.bus-ex.com February 11

“As the first environmentally friendly industrial park in the region, we set great importance on the additional value we add to investors through measures such as our solar lighting system which is also a cost saving that we can pass on. We also wanted the park to remain a green and attractive place, so we have left 90,000 square metres of planted open space,” he adds.

Gurpinar is keen to point out that Polaris has an equally carefully planned approach to corporate responsibility. “We are in private-public partnership with GTZ, a German Development

Cooperation, with whom we will be working to advance a gender-based approach to training and employment at an on-site training centre. Major manufacturers in Egypt complain at the lack of qualified labour, yet unemployment is still very high. We believe we can help to close the gap and again, it is the first example of an initiative of this kind taking place in the world.”

Although the first project of the Polaris vision has now been realised, Arikan stresses that it is not viewed as a finite project. Rather, he envisages a state of continuous evolution. “We have an agreement to finalise the infrastructure and sales, but we will continue to provide many support services and will start work on a housing development which we named Mira Istanbul this year.”

Mira Istanbul will accommodate its residents by offering a range of lifestyles for working professionals such as technicians, expatriates and junior to senior managers as well as their families. Bringing new standards of modern living, Mira Istanbul offers serviced apartments, with the project also including service areas such as a

kindergarten, supermarket, laundry and gym.

Meanwhile, the team is starting to work on the second Polaris project, this time in partnership with Al-Zamil, a Saudi multi-disciplinary group with a major presence in the Egyptian steel business. “It is a slightly smaller area but a very similar concept, which will be executed by Polaris, the same team again, launched in 2010. Many of the elements will be the same, but we do not plan office or housing space or as much emphasis on services. The focus will be more industrial,” Arikan says.

Sales began in 2010 and two of the biggest plot contracts have already finalised, one of them to Turkey’s largest manufacturer of hygienic products.

“Egypt already has one of the most promising economies in the region. I believe we have a very important role to play in seeing it expand and grow much further. This country already has 200 of Turkey’s most reputable companies operating here, but I believe we can make it attractive to many more, as well as the international manufacturing community,” he concludes. www.cepgraphics. com/Polaris_Last_webSite/home.html

February 11 www.bus-ex.com

159

Fabric soci of

In a fascinating insight into the flow of discarded garments from the West into the free ports of western India, and their subsequent return in different guises to Europe and the US, executive director Nohar Nath explains to John O’Hanlon how Kishco Group manages the complex net of supply, processing and demand

K

ishco Group is a long-established family business, having been founded in 1938 by Mr KG Nariman and his father. Back in those days it was a manufacturing company, making high-quality suiting fabric as well as metal goods. Over the years and the generations, the family abandoned manufacturing and focused its attention and expertise on trading raw materials, eventually establishing itself as a niche player importing and exporting textiles, fibre and yarn and selling it to customers all over the world. Today the group is run by KG Nariman’s daughter Mrs Minoo Nath, managing director, who looks after the financial and administrative aspects of the business; and her son, Nohar Nath, who takes care of sales and marketing.

160

www.bus-ex.com February 11

Kishco Group

iety February 11 www.bus-ex.com

161

Kishco Group trades in every kind of textile product category, whether natural fibre like cotton and wool or synthetic, polymer-based fabrics and blends. It can be regarded as a portal to the entire Indian textile industry in all its diversity, exporting anything from yarn to finished clothing, plain fabric in rolls, to value-added weaves like satin, denim, shirting and the like, any of which can be printed however the customer wants.

However none of this primary work is done by Kishco itself these days. The staff consists of just 20 specialist managers, logistics experts, purchasing and sales people who maintain a unique network of contacts in the industry, not just across India but right across the globe. It is preeminently a textile industry supply chain player, whose strengths lie in its knowledge of the global market and its ability to leverage the strengths of India as the hub of this network.

Fundamentally the business imports raw materials, has them processed, and re-exports them in the form of product. The key thing is the raw material though, which is largely recycled waste. “The world generates a massive amount of textile waste,” explains Nohar Nath. “There are two sources,

162

www.bus-ex.com February 11

consumer waste—mainly discarded clothing— and industrial waste from every point along the manufacturing value chain. It all has a value and can be used to manufacture other products.”

The business of sorting consumer waste moved from the developed world to Asia and North Africa as this labour-intensive activity became unviable.

One of its largest centres is now the Kandla Special Economic Zone in Gujarat, 600 kilometres to the north of Kishco’s Mumbai base and to which unimaginable quantities of waste clothing is brought from Europe, the US and elsewhere.

“We have a number of graders in Kandla who sort the material. We re-grade it into a number of categories—some new or good condition clothing can be sold in third world countries; some of it is used for fibre manufacture, and we make blankets or carpets out of it.”

Kishco gravitated towards recycling as its experience grew and as the new textile business became more and more competitive. It has been given a fair wind by the growing need for corporations around the world to improve their green credentials and to be able to report eco-friendly policies in their annual reports. Though legislation and regulation is rudimentary at present, consumers already like to see that the clothes they buy contain a percentage of recycled material: when targets and regulations governing this come through, as they inevitably will over the next decade, Kishco will be in just the right place, Nath believes.

An important product line would be industrial wipes, or wipers as they are called in India. Large quantities of cloths are used for cleaning anything from machinery in a factory to windows, floors, trains or ships’ engines. They are high volume, relatively low cost, but quite high spec products with regard to size, absorbency and other things the customer may need. “By buying recycled wipers the customer benefits twice—the cost is less and their reputation is enhanced. Our customers range from the smallest workshop to the largest corporation. For example, Walmart and Home Depot in the US use our product and put it on their shelves, while at the other extreme we sell to a lot of one-man units.”

Until 10 or 15 years ago, Nath continues, while there was a thriving market for cotton and wool clothing waste it was not economical to recycle petroleum-based fibres like polyester and nylon.

Kishco Group

“Natural fibres are still easier to recycle and yield more value but the technology has changed and we are able to handle oil-based fibres using modern machinery. We are constantly doing R&D work to see what different materials we can recycle and following that up with testing and market research.”

As the price of oil escalates, the advantage of recycled over new fibre is irrefutable.

While around half of Kishco’s direct customers are based in India, a growing number are in third world countries that are developing their own textile industries. Nath singles out Tanzania and Malawi in East Africa, and Senegal and Ghana in West Africa. “Tanzania is pretty much the hub for the textile recycling business in East Africa.

The Chinese were and still are involved, but they mainly stick to new textiles.”

Nevertheless, the Chinese product does compete with Kishco’s: such is their production efficiency

that they can often offer a new product at a cost that competes with the recycled item. If cost were the only factor, that might be a problem, Nath admits: “But many of our clients around the world actually prefer recycled to new product. The new product is rock bottom quality and the recycled as often as not contains better quality materials.”

Kishco is planning to stick to its core business for the foreseeable future, and focus more and more on recycling. Recycling is a bandwagon, Nath concedes, and more people are jumping onto it; but demand will grow as long as the world population keeps increasing and there is no danger of the flow of raw material decreasing from the profligate West. “We do believe there will be subsidies in the pipeline for companies that do recycling. Hopefully we might get some of those in India too; we will definitely benefit if and when that happens.” www.kishcogroup.com

February 11 www.bus-ex.com

163

hu

A

Mozambique is making great strides in improving its situation of Maputo is playing a significant role, as Alan 164

www.bus-ex.com February 11

Maputo Port Development Company

ub

n—and the port n Swaby learns

for progress U

nlike many forms of business, port authorities have it relatively easy when it comes to competition. Retailers, for example, invariably have to slug it out with many competitors in the same city or even the same location.

Harbours, on the other hand, are restricted in where they can go and once the best spots have been bagged, immediate competition is diminished.

February 11 www.bus-ex.com

165

Maputo Port Development Company

“Cargo through the entire port is running at 10 million tons per annum, which is up on our projections” Exports from the eastern half of South Africa could be despatched through the home port of Durban; but Maputo in Mozambique is nearer— not all that much by rail but once cargo is loaded on board, there is enough of a saving to be made to make Maputo a more attractive proposition.

“We handle a good slice of the mineral exports

from the Witwatersrand,” explains Capt. Ken Shirley, Port Authority director. “And shipping lines want continuity rather than chopping and changing all the time. As such, once we’ve secured a route, we would have to do something catastrophically bad to lose it.”

A nice situation to be in; but when the current

February 11 www.bus-ex.com

167

Maputo Port Development Company

LBH Group LBH Group is expanding its dynamic ships agency operations in Mozambique by continuously increasing its foothold and therefore has just opened a fully manned office in Nacala.

LBH Mozambique prides itself on the professional service our dedicated operations and C&F team renders to its clients.

We at LBH Mozambique understand Africa has her challenges; but with our local knowledge, enthusiasm and dedication we will ensure that your experience in Mozambique will be a memorable one. We are confident

in

Mozambique

and

her

people

and

therefore will continue to expand as the need arises and as more and more vessels call to the country.

management took over operations at the port seven years ago, things were very different.

Mozambique was still reeling from the effects of a long, debilitating civil war that despite having been settled a decade earlier, was still starving funds from every part of the economy.

“The port was being administered as efficiently as it could be,” explains Shirley, “but maintenance—let alone expansion—suffered from a lack of money.” As such, the government invited bids for the concession to run the port. Maputo Port Development Company (MPDC) formed a consortium comprising Mersey Docks (operators of Liverpool docks in the UK), the Swedish construction giants Skanska and the Portuguese terminal operators Tertia. Today, though, Mersey and Skanska have sold their interests to other equally experienced operators in DP World and Grimrod.

February 11 www.bus-ex.com

169

Maputo Port Development Company

Maersk Line Maersk Line has been a long supporter of Maputo Port. In 2009 Maersk Line extended and deepened its partnership with Maputo by launching the “M Express Service”. M Express is the first fixed day, weekly liner service to connect to the Far East. This groundbreaking service has since become well known as the most reliable service between Maputo and the Far East. Maersk Line’s aim to differentiate itself on the basis of unmatched reliability is underpinned by a solid and mutually beneficial relationship with Maputo Port. Maputo Port and Maersk Line will continue to work together to continuously enhance reliability for the benefit of shippers.

Bidding was a slow process, recalls Shirley, who was involved from day one. The process started in 2000 and the licence to operate was granted from April 2003. “There was so much to do,” he says.

“Apart from a schedule of repairing or replacing hardware, the number one priority was to dredge the channel back to its advertised depth of 9.4 metres. This, together with the high tide surge of at least another 2.5 metres means the port can handle boats in the Handymax class of up to 45,000 tons, both bulk cargo and containers.”

In reality, the dredging that needed to be done barely took the Belgian contactor Dredging International a month to complete; indicating just how short of cash the port had become. It’s work that needs to be done every year, after the rainy summer season, when millions of tons of silt are

“The port can handle boats in the Handymax class of up to 45,000 tons, both bulk cargo and containers”

February 11 www.bus-ex.com

171

Maputo Port Development Company

“Shipping lines want continuity rather than chopping and changing all the time. As such, once we’ve secured a route, we would have to do something catastrophically bad to lose it” washed down the Maputo River. Now, though, the dredgers have had to roll up their sleeves because the current task is to deepen the channel to 11 metres, requiring the removal of hard bedrock rather than soft mud.

But providing the largest ships with round-theclock opportunities to enter the port—rather than just at high tide—is part of the plan to improve

productivity. In fact the only real headache Shirley has is finding the capacity needed to accommodate the present level of traffic. “Cargo through the entire port,” he says, “is running at 10 million tons per annum, which is up on our projections. But the economy of the region is developing at a rapid pace and we need to have all the resources in place to meet demand.”

February 11 www.bus-ex.com

173

Maputo Port Development Company

Mozambique is barely recognisable compared with 20 years ago and huge strides have been made, albeit from a very low base. Despite having considerable resources, it remains one of the poorest countries in Africa and depends on foreign aid to balance the books. Nevertheless, after the end of the civil war, mining companies have begun to explore the country’s mineral reserves and there is now a sizeable amount of coal exports going through the port.

On the whole, though, Mozambique imports more than it exports and the nature of the port is highly mixed. As part of the set-up that MPDC inherited when it took over the port are four sub-concessions for coal, containers, sugar

February 11 www.bus-ex.com

175

176

www.bus-ex.com February 11

Maputo Port Development Company

and citrus fruits. There is now an extra one with the introduction of a new small but growing car terminal. Each of these is run autonomously and outside of MPDC’s day-to-day remit.

While the above specialise on one single cargo, MPDC has responsibility for the highly divergent remainder. Different cargoes need widely different techniques. It seems a little out of place for the 21st century but not altogether surprising under the circumstances that many bagged commodities are still loaded and offloaded by hand. Against a permanent workforce of around 600, occupying skilled and semi-skilled posts, as many as 1,000 extra broad shoulders are called in per shift to handle certain boats.

But despite the mountain of work to be done, Shirley is bullish about the future. “There is now an excellent rail connection with South Africa,”

he explains, “which can take the heavy loads and release pressure on the road system. But it is like all things here—the full potential will have to wait until the rolling stock is up to the right levels.”

The original concession to MPDC from the government was for a period of 15 years—hardly enough to encourage significant investment, considering that the concession is already in year seven. However, it has since been extended for a further 15 years; and with that comes plans for capital investment of $740 million over the next 20 years.

“We have the advantage of spare land,” says Shirley, “enabling new quays and terminals to be planned. Within five years we expect tonnage to have increased 60 per cent to 16 million tons per annum, while the number of ships calling should rise from the present 1,000 a year to 1,500.” www.portmaputo.com

February 11 www.bus-ex.com

177

merc India’s

T

he exact date when east met west—at least in Indian national shipping terms—is 2 October 1961. Prior to that date, there had been the East Shipping Company and the West Shipping Company. An act of parliament put them together and created the Shipping Corporation of India (SCI).

In the autumn of this year, then, the company will celebrate its 50th anniversary, with the government of India still holding 30 per cent of the business—a smaller, albeit the largest, shareholding.

Starting out as a marginal liner shipping company with just 19 vessels, SCI today has grown into a giant conglomerate having 76 ships of 5.1 million DWT and 61 ships of 0.2 million DWT under management. While remaining far behind some of the largest maritime nations, SCI today has a significant presence on the global shipping scene and is without

178

www.bus-ex.com February 11

Without an efficie would not be as v the most importan

Shipping Corporation of India

chant

strength

ent shipping industry, India’s economy vibrant as it is. Jeff Daniels looks at nt member of that community

February 11 www.bus-ex.com

179

Shipping Corporation of India

Champion Shipping Service Co., Ltd Champion Shipping Service Co., Ltd is based in Taiwan and has been General Agent for SCI in Taiwan since 1961 covering major ports in Taiwan. Champion Agencies (China) Ltd has been Market Agent for SCI in China since 1999 covering major Chinese ports.

We provide comprehensive services for shipping business, with high quality, professional, efficient and reliable service. Client satisfaction is our ultimate aim and will never be changed.

Far Eastern Services Far Eastern Services, Singapore and Malaysia, have been representing the Shipping Corporation of India Ltd in Singapore and Malaysia for the past 30 years and

more.

Its

associate,

OceanMasters,

Dubai,

represents SCI in UAE ports. These companies have been providing the full spectrum of marine services as a ‘one stop shipping service centre’. The group companies are now set to sail to new destinations including Myanmar, Qatar, East Africa, South Africa and China to coordinate and benefit owners by providing the same top quality services that exist in our present network. The companies are also ISO certified.

doubt India’s premier shipping line, owning and operating about one third of all India’s tonnage.

What’s more, SCI operates in practically all areas of shipping, servicing both national and international demands. With a continual eye on what the country needs in terms of shipping facilities, SCI has never shied from change and adaptation, diversifying over the years into different guises. Today it is the only Indian shipping company operating a break-bulk service, international container service, liquid/dry bulk service, offshore service and coastal passenger service, as well as manning and managing a large number of vessels on behalf of various government departments and organisations.

The mission of SCI is to serve India’s overseas and coastal seaborne trades as its primary flag carrier and to be an important player in the field of global maritime transportation, while not forgetting

the need to play a role in specific areas, such as developing the offshore industry infrastructure.

Students of Indian history will know that 2 October is also the birthday of Mahatma Gandhi— possibly India’s most famous son. Perhaps inspired by Gandhi’s concern for ordinary men and women, since 2009 SCI has undertaken to commit itself to social responsibility for the benefit of society at large. Each year, one per cent of net profit is being earmarked for use in community schemes in line with the government’s guidelines on corporate social responsibility.

To avoid spreading resources too thinly, SCI’s initiatives are specifically targeted at a few areas in education, health and family welfare, relief during natural disasters and in promotion of the arts and culture.

The company, since 2005 under the direction of managing director Mr S Hajara (who, incidentally, has been with the shipping company for 38 years), is structured in five divisions—three of them relating to front line shipping services and two responsible for backroom services.

By far the largest of these divisions is Bulk Carriers & Tankers, primarily there to serve India’s industrial needs through the movement of all types of dry bulk, liquid and gaseous cargoes. SCI is presently the major bulk carrier operator in India, with an assortment of 18 vessels in the Handy, Handymax and Panamax classes. At the time of acquisition, the vessels are carefully selected to meet the needs of incoming and outgoing loads varying from iron ore, coal and coke through to grain, fertiliser, steel products, plywood and ores such as bauxite.

In terms of tankers, SCI is the largest owner in India, with a well-diversified fleet of crude tankers in all sizes: MR, LR-I, LR-II, Aframax, Suezmax and VLCC. Since the mid 1970s, SCI’s tanker tonnage has paralleled the growth of Indian oil industry. Until the late 1990s, vessels predominantly catered for Indian crude and product transportation. This was done keeping in mind constraints posed by India’s limitations in ports and terminals, infrastructural limitations from depth of water and length of jetties.

The company’s Tanker Commercial department looks after scheduling and deployment of tankers for feeding crude to various Indian oil refineries.

Lighterage operations on the east and west

February 11 www.bus-ex.com

181

182

www.bus-ex.com February 11

Shipping Corporation of India

coasts are also undertaken to facilitate quick turnaround of tankers, which otherwise couldn’t call on certain ports due to physical restrictions.

These days, liquid petroleum gas and liquid natural gas are important contributions to India’s overall energy needs. The Specialized Vessels Cell (SVC) is part of the Bulk Carriers & Tankers division, and deals with the operations and management of two LPG carriers, three LNG carriers and three chemical carriers—all wholly owned by SCI but some on long term charter to energy companies.

SCI is the only Indian shipping company that operates liner services—by definition involving a huge number of shippers and corresponding consignees. By providing services to all the country’s major trading partners, liner services have become the backbone of the Indian export and import trade. The presence of SCI in this area has acted as a moderating factor on shipping rates, which would otherwise have been at the mercy of foreign shipping lines.

The Liner & Passenger Services division operates a regular network of global liner services from India to China and Japan in the east, and to the UK, Continental Europe and Black Sea ports in the west, with a container fleet of about 46,000 TEUs. What might not be well known is that India administers a number of communities on outlying islands off both the west and east coasts. In fact the Andaman & Nicobar Islands are closer to Burma than India. It’s part of the L&PS division’s responsibility to manage and operate passenger vessels and other specialised vessels belonging to Andaman & Nicobar Administration and Lakshadweep Administration, as well as government bodies such as the Department of Ocean Development and Geological Survey.

Although SCI’s financial results for last year were down on the previous year, the company expects a quick return to former high levels of profitability and is investing in new vessels with 31 new ships on order, ranging from two 3,000 DWT supply vessels at one end of the spectrum, to two 2.3 million ton Aframax crude oil carriers at the other. www.shipindia.com

February 11 www.bus-ex.com

183