Enterprise Africa May 2019

AFRICA

THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS

May 2019

www.enterprise-africa.net

Cloud Simplified From Tarsus Exclusive interview with Tarsus Technology Group CEO Miles Crisp

ALSO IN THIS ISSUE:

SMD Technologies / Portland / Concord Refrigeration / Eurolab

EDITOR’S LETTER

EDITOR Joe Forshaw  joe@enterprise-africa.co.za SENIOR PROJECT MANAGER Sam Hendricks  sam@enterprise-africa.co.za SENIOR PROJECT MANAGER Tommy Atkinson  tommy@enterprise-africa.co.za PROJECT MANAGER Shannon James  shannon@enterprise-africa.co.za PROJECT MANAGER James Davey  jamesd@enterprise-africa.co.za PROJECT MANAGER Chris Wright  chrisw@enterprise-africa.co.za FINANCE MANAGER Chelsea Pettifer  Chelsea@enterprise-africa.co.za SENIOR DESIGNER Liam Woodbine  liam@enterprise-africa.co.za CONTRIBUTOR Manelesi Dumasi CONTRIBUTOR Karl Pietersen CONTRIBUTOR David Napier CONTRIBUTOR Timothy Reeder CONTRIBUTOR Colin Chinery CONTRIBUTOR Benjamin Southwold CONTRIBUTOR William Denstone

Published by Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Rouen House, Rouen Road, Norwich NR1 1RB

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Technology businesses, and those active in the IT space, are now some of the fastest growing and most sustainable in southern Africa – the Fourth Industrial Revolution is well and truly here. Today, everything is connected, everything is always working, software is a constant state of flux, and the digital world is becoming more and more integrated with our traditional business processes.

The truth is, if you’re involved in technology, the future always looks exciting; and if you refuse to adopt the changes that technology forces, you’re probably already on a downward spiral.

So, this month we talk to Tarsus Technology Group – a leading distributor of tech products in South Africa – to find out about how this booming group of companies has become integral to the operations of its clients and their end users.

We also hear from SMD Technologies - a company posting extremely strong growth results and expanding into new markets around the world – where constant innovation is helping this electronics creator to deliver high-quality products at affordable prices, taking significant market shares as its brand’s reputations grow.

Then there’s Concord Refrigeration, the Durban-based supplier of supermarket display cabinets. This 50-year old manufacturer has had to adapt to embrace new technology to ensure its operations are in line with environmental expectations.

And Eurolab, the largest generic oncology company in South Africa, is focussed on the adoption of cutting-edge technology to deliver its inventive solutions all over the country.

We also hear from Avon & Dedisa Peaking Power – the company responsible for helping to balance the electricity grid during peak times – about how the technology across the two sites helps them go from “zero to one hundred” in just 30 minutes.

Get in touch with us and tell us how your business is utilising technology to take it to the next level. We’re always online @EnterpriseAfri1

Administration & Finance +44 (0)20 7193 0419 Advertising & Feature Sales +44 (0)20 8123 7859 Editorial & Design +44 (0)20 7193 2735 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Media Group Ltd 2019

Joe Forshaw EDITOR

GET IN TOUCH  +44 (0) 20 8123 7859  joe@enterprise-africa.co.za www.enterprise-africa.net

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06/NEWS: The News Snapshot A round up of some of the latest news stories from around the country

82/EXHIBITION CALENDAR: Key Upcoming Events Across the Country Our regular update to help you keep track of important events and exhibitions taking place across the spectrum of industry sectors

10/TARSUS TECHNOLOGY GROUP Cloud Simplified From Tarsus Tarsus Technology Group CEO Miles Crisp talks to Enterprise Africa about the company’s success delivering effective cloud-based solutions to clients across southern Africa. Alongside its hugely successful distribution business, and a host of other exciting group divisions, the Tarsus On Demand cloud offering is a quickly growing industry-leader.

10/ 4 / www.enterprise-africa.net

CONTENTS

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34/

40/

INDUSTRY FOCUS:TECHNOLOGY

INDUSTRY FOCUS:MEDICAL

10/TARSUS TECHNOLOGY GROUP Cloud Simplified From Tarsus

48/EUROLAB Revolutionising South African Oncology

18/SMD TECHNOLOGIES SMD Innovation Sparks Another Year of Double-Digit Growth

INDUSTRY FOCUS:DISTRIBUTION

INDUSTRY FOCUS:POWER 26/AVON & DEDISA PEAKING POWER Peak Performer INDUSTRY FOCUS:CONSTRUCTION 34/PORTLAND Portland Shows Strength Amidst Unstable Industry Backdrop

54/YAMAHA SOUTH AFRICA Quality Without Question Driving ‘Kando’ in SA 62/BARLOWORLD Leveraging Experience to Take Brands Global INDUSTRY FOCUS:MINING 68/SIBANYE STILLWATER Strong In the Face of Challenge

INDUSTRY FOCUS:MANUFACTURING

INDUSTRY FOCUS:FOOD AND DRINK

40/CONCORD REFRIGERATION Concord Stays Cool Amid Tough Trading Environment

74/DISTELL The Toast of Africa

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R7.9BN INVESTMENT TO UPSKILL UNEMPLOYED KZN YOUTH Around 160,000 unemployed youth in KwaZulu-Natal are set to benefit from an investment of R7.9 billion in new training programmes.

The training programmes are spearheaded by the Department of Labour’s Unemployment Insurance Fund (UIF) and Compensation Fund (CF).

They have partnered with 32 State-owned training providers and institutions that will roll out the programme over a threeyear period.

The learners, who will consist of the youth, CF and UIF beneficiaries, will undergo training that will equip them with skills to compete in the labour market or venture into starting their own businesses.

“The training will include theoretical and practical training and learners will receive monthly stipends. The training will include skills programmes, learnerships and artisanship,” the Department of Labour said in April.

The launch of the training programme is in line with the commitments of the Jobs Summit that was led by President Cyril Ramaphosa in 2018.

The programme will be launched by Labour Minister Mildred Oliphant and Minister Nkosazana Dlamini-Zuma, who is responsible for Planning, Monitoring and Evaluation.

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RIO TINTO APPROVES $463 MILLION SA INVESTMENT

©Rio Tinto - Richards Bay Minerals

South Africa’s largest mineral sands producer and beneficiation company, Rio Tinto, has approved the next stage in the development of Richards Bay Minerals (RBM) in South Africa through the construction of the Zulti South project.

The $463million (Rio Tinto share $343 million) investment will sustain RBM’s current capacity and extend mine life.

RBM currently operates four mines in the Zulti North lease area, a mineral separation plant and smelting facility.

The Zulti North orebody grade is declining, hence the Zulti South mine is required to maintain the output of highmargin zircon and rutile, and provide sufficient ore to support TiO2 sales.

The Zulti South mine (Phase 1) will underpin RBM’s supply of zircon and ilmenite over the life of mine.

Construction is scheduled to start in mid-2019, subject to the granting of all necessary permits, with first commercial production expected in late 2021. The investment will be fully

self-funded from RBM’s cash flows, with no additional debt or recourse to Rio Tinto. The project is expected to deliver an internal rate of return of 24 per cent (Rio Tinto share).

Rio Tinto chief executive JeanSébastien Jacques said: “Rio Tinto has a long history in South Africa, and today’s investment underscores our commitment for the coming decades and beyond.”

Rio Tinto Energy & Minerals chief executive Bold Baatar said: “RBM is an outstanding business, South Africa’s largest mineral sands producer and, equally importantly, a fully beneficiated metallurgical complex.

We not only mine, but produce valueadded products for customers around the world. We are proud of the value we create, and retain, in South Africa.

This is underscored by our position as KwaZulu Natal’s leading taxpayer, paying $79 million in taxes and royalties in 2018 alone.”

NEWS SNAPSHOT DEFY INVESTMENT TO BOOST SA ECONOMY Trade and Industry Minister Rob Davies recently launched Defy’s R130 million investment in South Africa that will not only boost the country as an investment destination but also aid in creating much-needed jobs.

The investment will see the multinational produce 6 to 7 and 5 to 10 kg top loader washing machines for both the local and export market. The investment is projected to produce a total of 75 new job opportunities that will manufacture 500 top loaders per shift.

Speaking at the announcement of the investment at Defy’s factory in Jacobs, Durban, Davies said the manufacturing development is a much-needed boost to the local community and African trade environment.

“We are on the cusp of a very big change for Africa and the ratification of the Africa Continental Free Trade Agreement, which was adopted by 22 members in Gambia on 22 April 2019, will open up the market for products manufactured from these countries. I hope also that this ratification will enable an expansion of South Africa’s exports into Africa as well and commit to work with initiatives of this nature,” he said.

The multinational will also invest in new cooking products. In July, Defy will launch a new outlook for their 60cm built-in ovens with an investment of approximately R7 million which will be followed by a new free-standing stove investment of approximately R18 million launching in the first quarter of 2020.

NISSAN INVESTS IN SOUTH AFRICA THROUGH NAVARA PICKUP Nissan has announced a R3 billion investment in its facility in Rosslyn, Pretoria to prepare the plant for production of the next generation Nissan Navara pickup.

The move expands the role of the plant as a Light Commercial Vehicle manufacturing hub for Nissan. The Navara will join the popular NP200 and NP300 models, which are already built at Rosslyn and sold in the domestic market, as well as up to 45 pan-African countries.

Production is expected to start in 2020 and will create around 1200 new jobs directly at the facility as well as across the local supply chain.

Depending on market conditions, it is anticipated Navara’s arrival will add 30,000 units to Rosslyn’s current annual production volume of 35,000, creating the need for a new, second shift at the plant.

President Ramaphosa said the decision to produce Navara

in South Africa was further proof of the increasing contribution of the automotive industry to the country. He said: “Automotive is already the largest part of South Africa’s manufacturing sector, contributing around 7.0% GDP annually and accounting for a third of manufacturing output. I am delighted Nissan will produce Navara here and congratulate the employees for their efforts in securing this important model.”

Nissan’s Africa, Middle East and India chairman, Peyman Kargar commented: “Africa is an essential part of Nissan’s M.O.V.E. to 2022 midterm plan in which we aim to double our presence across the Africa, Middle East and India region.

We already have a strong industrial footprint in Africa including plants in Egypt, Nigeria, South Africa and a planned facility in Algeria. Today’s announcement highlights the continuing evolution of Africa as

one of the most important global markets. In South Africa, this is supported by the government’s creation of a stable environment for long-term investment.”

Mike Whitfield, Managing Director for the Nissan Group of Africa, commented: “The new Navara is the perfect model for South Africa and our workforce is ready to build it, supported crucially by the government’s Automotive Production and Development Programme (APDP). Vehicles already account for around 14% of total exports from South Africa. Navara production will allow us to expand Rosslyn’s role as an export hub for Light Commercial Vehicles and contribute further to the local automotive sector, fully in line with the goals in the next phase of the APDP.” Navara has won multiple awards across the world since its launch, including the 2016 International Pickup of the Year.

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CAPITEC CHAIRMAN TO RETIRE Capitec Bank Chairman and industry heavyweight, Riaan Stassen, is set to retire in May. The Bank’s co-founder and chair since launch in 2001 will step down after helping to grow the bank to become one of the country’s major banking players. From the start, Stassen was clear that he wanted to disrupt the banking industry and make access to baking available to more.

Today, Capitec has more than 11.4 million clients, making it the fourth largest by subscriber base in South Africa, behind only Standard Bank, FNB and ABSA. In March, Capitec said its headline earnings in the year ended February 2019 rose 19% to R5.3bn, a better growth rate than any of its main rivals.

Capitec said Santie Botha, chair of Curro Holdings and Famous Brands and a nonexecutive director at Telkom, would take over as chair of the boards from June 1.

Riaan Stassen

8 / www.enterprise-africa.net

NEW ACTING CEO FOR TRANSNET The Transnet Board, headed by Dr Popo Molefe, has decided not to extend the contract of the Acting Group Chief Executive, Mr Tau Morwe whose contract comes to an ended at the start of May, after a sixmonth tenure in this role.

The Board acknowledged the good work done by Morwe in pursuit of the reorganisation and operational efficiencies at Transnet and expressed its appreciation.

To this extent the Board committed to continuing with the programme and plans started by Morwe.

In the interim, Mr Mohammed Mahomedy has been appointed as Transnet’s Acting Group Chief Executive. Mahomedy has been Transnet’s acting Chief Financial Officer for the past 12 months.

The stability of the organisation remains a key focus of the Board and this appointment was made with

Tau Morwe - ex Transnet CEO

this in mind, giving consideration to Mahomedy’s experience at Transnet over a period of more than 12 years.

Transnet is working towards filling critical vacancies that currently exist at executive level, including that of the GCE and GCFO, in the coming months.

NEW SAUDI-BACKED OIL REFINERY FOR SA? At the beginning of May, Energy Minister Jeff Radebe announced that the country is in discussions with Saudi Arabia about the construction of a new oil refinery on South African soil.

He did not give away much information regarding the location, but speculation has suggested that the Coega Special Economic Zone is being touted as a perfect home.

In his welcome address at the 4th IEF OFID Symposium on Energy Poverty in Cape Town, Radebe said that the country’s existing infrastructure is rapidly ageing and is no longer fit to deliver what is needed.

“We are in need of new infrastructure to meet the increasing demand for petrol and diesel,” he said.

The Symposium heard that many Africans still have no or interrupted access to electricity despite the continents natural resource wealth.

Radebe said that the final version of the long-awaited Integrated Resource Plan (IRP) would be presented to Cabinet next month, where further details of the country’s energy plan for the future would be detailed.

NEWS SNAPSHOT KIESWETTER BEGINS ROLE AS SARS COMMISSIONER The South African Revenue Service (SARS) has welcomed recently appointed Commissioner Edward Kieswetter with open arms, as he began his five-year tenure.

“In keeping with good governance as well as the relevant policies, the Commissioner has fully disclosed his outside interests and involvement in various

organisations,” said SARS in a statement.

Kieswetter has already commenced a review of his portfolio of interests and has submitted his resignation as Lead Independent Director of Shoprite.

“He has previously resigned from the boards of African Unity and GEMS Education, Africa. Other

than personal private investments, his significant involvement includes directorships on Transnet and Technology Innovation Agency, both State-owned enterprises,” said SARS. The revenue collector said Kieswetter has expressed his full commitment to manage his personal affairs in a manner that creates public confidence.

NEW SESHEGO FACTORY TO HIRE 150 PEOPLE

Limpopo province recently welcomed the opening of the new Supported Employment Enterprises (SEE) factory at Seshego Industrial Park, with 39 workers with disabilities currently on site.

At its peak, the SEE factory is expected to employ 150 or more people with disabilities, thereby giving them space in the labour market.

The opening of the SEE factory by the Department of Labour was given the thumbs-up by the community of Seshego and Labour Minister as a step in the right direction.

Speaker after speaker said the new factory would make a noticeable dent in unemployment.

Chief Kgabo Moloto, of Moletji, urged the community to support the initiative. He pledged the support of the 147 headmen in the Moletji District.

“We have since taken the decision to establish these factories in all provinces. I urge you to offer support by buying the products. I am very happy that we have come to witness the opening of the Limpopo SEE factory that I promised in Parliament during 2017,” the Minister said.

Some of the products manufactured by SEE factories include office and school furniture; hospital clothes; office safes and gates. The entity’s head office is located in Pretoria.

“Depending on the extent of support, the department may increase the number of factories in Limpopo to areas such as Vhembe District and Collins Chabane Municipality. In Gauteng, we have three, in the Eastern Cape two, in KZN two and in the Western Cape two,” the Minister said.

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TARSUS TECHNOLOGY GROUP

Cloud Simplified From Tarsus PRODUCTION: David Napier

Tarsus Technology Group CEO Miles Crisp talks to Enterprise Africa about the company’s success delivering effective cloud-based solutions to clients across southern Africa.

Alongside its hugely successful distribution business, and a host of other exciting group divisions, the Tarsus On Demand cloud offering is a quickly growing industry-leader.

10 / www.enterprise-africa.net

INDUSTRY FOCUS: TECHNOLOGY

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The ICT industry is perhaps one of the fastest changing of all. In the space of just three decades, the internet and advanced computing power has changed the way the world works, and the demand for faster, more efficient, easier to use, and more complex IT hardware and software continues to grow. Staying abreast of all of these changes is almost impossible and those companies operating in the space face a difficult task every day, helping their customers make their investments appropriately.

The whole shift in systems is becoming known as the Fourth Industrial Revolution – where technology is helping to blur the boundaries between the physical, digital, and biological worlds. Things like artificial intelligence (AI), the Internet of Things (IoT), virtual reality (VR), robotics,

3D printing, quantum computing and more are quickly disrupting every business sector and completely reshaping the customer experience.

Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, was the first to officially recognise the advent of the Fourth Industrial Revolution and he warned in 2016 that “the changes are so profound that, from the perspective of human history, there has never been a time of greater promise or potential peril”. This goes for both individuals and businesses. Just look at the likes of Nokia – a company which failed to keep up with technological advances and ultimately paid the price, giving up its significant market share to rivals very quickly.

In South Africa, one of the country’s leading IT distribution organisations,

Tarsus Technology Group (TTG), is going through a shift which is seeing it incorporate more and more cloudbased services as businesses embrace the IoT, big data and AI. Founded in 1985, TTG has adapted from simple distribution of IT hardware to become an integrated supplier of the highest quality products, solutions and professional services including supply chain optimisation, cloudbased solutions, IT security services, compliant disposal of IT goods and other electronic goods. Made up of five specific divisions, TTG’s expertise is vast and its brand is now among the most trusted in the market.

Tarsus Distribution is the biggest of the Group and surrounds the supply of technology products to wholesalers, retailers, and businesses through the reseller channel.

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TARSUS TECHNOLOGY GROUP

ON DEMAND CEO Miles Crisp, who has been with Tarsus for the past seven years and oversaw the rebrand from MB Technologies in 2015, says that Tarsus On Demand – the cloud services division - is starting to perform extremely well.

“It’s any of our services, or anywhere we sell, on a subscription or consumption basis - it’s not only cloud-specific services,” he says. “We have aligned ourselves very strongly with Microsoft, mainly because there is a large installed base and they are converting from a perpetual licensing basis very aggressively onto a subscription base for 365. We are partnering with them and we have 35% market share in South Africa on that process in our particular customer definition.

“The other part of it is Microsoft have finally brought large data centres online in South Africa. Because of historical data sovereignty issues, there has been a reluctance to move into the big international cloud service providers such as Microsoft. We are now selling their Azure product and we see enormous growth coming from that because end-users have the assurance that their data is being hosted in their geographical region.

“This is a very important and quickly growing area for us which is more than doubling every year. We expect it to more than double this year and then more than double annually, sustainably for the next few years,” details Crisp.

Microsoft in particular is looking to get customers onto subscription packages where they pay a monthly fee for access to software and only have access to the software for as long as they pay the subscription rather than purchasing a perpetual license. At the end of 2018, Microsoft hiked its license pricing by 10% to speed up the switch to a subscription basis. Microsoft’s popular Office 365 software is now only available

through a subscription model and, in most cases, this represents a saving compared to the pricing of a traditional perpetual license.

Microsoft data centres in Cape Town and Johannesburg, officially opened in March 2019, support Azure cloud services. Microsoft expects them to start supporting Office 365 by the third quarter and Dynamics 365 by the fourth quarter. For this reason, Crisp is confident that TTG can benefit.

“Our big volume business, which is mainly hardware across all different categories, is Tarsus Distribution and that is the bulk of the group from a turnover and gross margin perspective. By the end of this year, cloud distribution will comprise just 5% of group revenue but it will comprise much more at a gross margin line, doubling every year,” he says.

LOGISTICS Another quickly growing part of TTG is its logistics offering. Given the nature of the distribution division, logistics is a key element of the organisation. Successfully delivering goods to where they need to be has become second nature for Tarsus Distribution, but the company saw the opportunity to expand this area of expertise and this idea has been fruitful.

“Hardware distribution - PCs, printers, screens, peripherals, consumables, anything that requires physical delivery – that is the mothership for us,” says Crisp, commenting on the importance of the division.

“Another very fast-growing part of our business is third party logistics,” he adds. “We use our infrastructure to distribute our customer’s goods as a service - we don’t buy and sell the goods concerned. We handle all of the logistics

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INDUSTRY FOCUS: TECHNOLOGY

Tarsus Technology Group CEO Miles Crisp

// IF YOU LOOK AT WHAT IS CORE TO US, IT IS OUR LOGISTICS CAPABILITY AND OUR IT CAPABILITY // for one of the biggest IT retailers in the country and our warehouse becomes their hub. About half of what we move for them is product that we sell them and half is from elsewhere - for example, TV screens, toasters and microwave ovens that they also sell through their retail outlets. That part of our business is growing really fast and it’s thanks to our ability to work off existing infrastructure without additional cost.”

Tarsus is an approved distribution partner for a number of global brands

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including Acer, OKI, Canon, Dell, Epson, HP, Lenovo, Kaspersky, Samsung and many more. The network and experience that has been built up moving tech products around the region from its portfolio of brands has helped TTG develop a deep understanding of what is required for a successful logistics operation.

“It’s all contracted and accounted for through our distribution business, we own the warehouse from which we operate and we have control over the actual trucks, so it is a nice logistics service.

“We are working closely with the HiFi Corporation and Incredible Connection of the JD Group and we are bringing on many other customers at the same time. For example, we have handled the IT distribution for FNB on behalf of their service provider, Digital Planet, for several years,” says Crisp.

And while logistics is a growing part

of TTG, IT remains at the heart of what it does and the company maintains strong IT expertise so that staff can constantly communicate with clients, always offering the best advice and service.

“We do have technical capabilities.

For example, if things are returned to us, we have the capability to asses those goods and send them back for warranty, repair them, or push them into the second hand market. If you look at what is core to us, it is our logistics capability and our IT capability,” explains Crisp.

STRENGTH IN SA Headquartered in Johannesburg, between Sandton and Midrand, TTG has made its name trading in South Africa.

Its customer base is a largely a South African one, its suppliers (apart from international tech brands) are largely South African, and its knowledge and

INDUSTRY FOCUS: TECHNOLOGY

// BY THE END OF THIS YEAR, CLOUD DISTRIBUTION WILL COMPRISE JUST 5% OF GROUP REVENUE BUT IT WILL COMPRISE MUCH MORE AT A GROSS MARGIN LINE, DOUBLING EVERY YEAR // expertise is South African. But, as many companies do when they reach a certain size, TTG has looked to the continent for growth. The company is now present in Botswana, Namibia, Zimbabwe, Mozambique, Zambia, and East and West Africa.

Growth and strategy in key markets in East and West Africa has been reviewed recently as TTG looks to optimise its presence. Across Africa, each nation has its own rules, regulations, languages, cultures, and business characteristics, and successfully managing operations across multiple countries can be challenging.

“We don’t move physical goods to East and West Africa, it’s only software

16 / www.enterprise-africa.net

at this stage as the supply chain from South Africa into these regions is very complicated. Constant changes in rules and regulation mean we have to remain constantly vigilant and adjust strategy where necessary,” he says.

At the end of 2018, a study compiled

by World Wide Worx and Syspro found that South African companies are keen on adopting new technologies and, although slower than some developedcountry counterparts, as speed of advancement continues to increase, more than half of the companies surveyed in the study suggest that they would be interested in adopting new tech (big data, machine learning and blockchain for example) in the future.

Albeit at a slower pace, southern African companies based in neighbouring countries will likely follow suit. This is good news for TTG which, according to Crisp, will continue to look for growth opportunities in southern Africa.

“We are looking at the SADC region for growth,” he says. “Each country has different fortunes and they change quickly. We have seen a lot of growth in Botswana whereas we have seen severe constraints in Namibia because of a slow economy. Mozambique has just had the terrible cyclone which has impacted the country severely and that will result in a slowdown there for some time. Interestingly, we have seen a lot of

growth coming out of Zimbabwe. There is a lot of price control there and they have just had big increases in prices, but the availability of cash comes and goes so we remain cautious there.”

Outside of South Africa, Tarsus’ On Demand division, where software purchases on a subscription basis are sold, provides big opportunities for growth. TTG’s GAAP Point of Sale division, which caters for the hospitality industry, also provides big opportunities and is already active in Zimbabwe, Lesotho, Swaziland, Namibia, Zambia, Malawi, Uganda, Tanzania, and Kenya.

FLAT FUTURE? South Africa’s economic conditions have not encouraged strong growth in recent years, yet TTG has consistently delivered positivity. While the macro economic climate remains depressed and business leaders hunt for certainty, Crisp admits that the market might not be growing. The solution here is to grow market share.

“We’re not seeing growth in the industry as a whole but we have seen growth in market share. What is benefitting us at Tarsus is a change in the business model from actual transactional hardware purchases through to the cloud. We had the big investment recently from Microsoft and no other competitors have effectively matched it. The growth we are seeing comes from that kind of niche. In the actual distribution business growth has been fairly flat and we don’t expect that to change in a big way in the short-term future. There is still a latency around government policy and momentum with the changes that have been promised,” he says.

Tarsus Distribution is already an industry leader; GAAP is the undisputed leader in its sector; Tarsus On Demand is rapidly growing its share; Printacom and Tarsus Dispose-IT are all smaller contributors to overall revenue but both are looking to claim further market share.

To achieve this, Crisp says that customer service has to be the best it can be.

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“We pride ourselves on our customer service but we know our competitors also have impressive offerings,” he says.

“We are confident that we are doing a better job in the On Demand-cloud space and the migration of customers and their end users. The assistance we can give to resellers to move their customers on to a cloud basis instead of buying their own licensing is an area where we have invested heavily in expertise.

“We are confident that we are also the leaders in third party logistics and retail specifically. We supply retailers and retail is around a quarter of our business. Our customer service is the best because we have the ability to integrate quickly and efficiently into our customer’s existing systems. The supply chain systems are integrated with the systems of our customer

and that is seamless, without heavy documentation. In those categories, we are confident that our service levels are better and we are on top of our competition,” he adds.

This confidence positions TTG perfectly to help guide clients through the country’s migration into the Fourth Industrial Revolution. TTG has the hardware, it has the software, it has the expertise, it has the logistics, it has the presence, and it has the reputation.

“The world must embrace the Fourth Industrial Revolution because it is a new way of doing business that will be with us for a foreseeable future, and as government and society we should collaborate in creating the enabling environment for entrepreneurs to adapt and adopt the 4IR technologies for the creation of a better life for all,” said the Department of Trade and

Industry’s Deputy Director-General of Special Economic Transformation, Sipho Zikode at the opening of the South African Innovation Summit (SAIS) in Cape Town last year.

Entrepreneurs and business leaders will be forced to choose a technology partner, and TTG sits atop the industry with a positive outlook.

“We are happy that we are running efficiently. We will be watching our costs closely and trying to grow our top line quickly. Business success is all about efficiency, cost management, and managing the market, and that is what we do well,” Crisp concludes.

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SMD TECHNOLOGIES

SMD Innovation Sparks Another Year of

Double-Digit Growth PRODUCTION: Manelesi Dumasi

Leading personal and commercial electronics brand developer, SMD Technologies, is growing its product range, expanding its international reach, and increasing its presence as a trusted value for money electronics supplier. Managing Director, Avi Mishan tells Enterprise Africa that he is extremely positive about the future for this quickly growing business.

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INDUSTRY FOCUS: TECHNOLOGY

//

The growth of the consumer electronics industry over the past three years has been exceptional. Globally, market conditions have been unpredictable and various factors have caused uncertainty. The ever-changing nature of the retail industry has also created challenging conditions. But, the Consumer Electronics Association (CEA) said in January 2018 that global retail revenue for consumer electronics would be $351 billion, a 3.9% increase over 2017. In July 2018, the figure was revised to $377 billion.

In South Africa, consumer electronics spending grew at a compounded annual average growth rate of 7.3% to reach $10.6 billion in 2018. This remarkable growth is great news for companies involved. Globally, the likes of Apple, Samsung, LG, Fitbit, Sony are all noted as top-tier, highly priced brands that move millions of units every year.

But, if you look at the secondtier, where value for money without

20 / www.enterprise-africa.net

// THE BRAND OFFERS GREAT VALUE FOR MONEY AND CREATES REPEAT BUSINESS AS CUSTOMERS KNOW THEY GET GOOD VALUE AND A GOOD USER EXPERIENCE – THAT IS A CORE PRINCIPLE ON WHAT SMD TECHNOLOGIES IS BUILT ON // compromising on quality is the driver behind the purchase, you find that there are not too many recognised brand names.

Enter South Africa’s SMD Technologies. The Johannesburgbased company, founded in 2005 by entrepreneur business partners Avi Mishan and Simca Diskin, has grown to become the supplier of choice for retailers around the country, and increasingly around the world, who are looking to offer their customers true value for money consumer electronics.

At its core, SMD Technologies is a personal and commercial electronics

brand developer. “We are the fastest growing brand originator and distributor of high-quality consumer electronics, audio products and commercial electronics globally,” the company claims.

Home to well-known brands including Amplify, Bounce, Connex, Rocka, Travelwize, VX Gaming and WizeKids, SMD Technologies also has the regional partner licenses for brands including Disney, Marvel, DC, and many more major global trademarks.

But the flagship brand for SMD is Volkano. One of the fastest growing consumer electronic brands

SMD TECHNOLOGIES

worldwide, you can find a whole host of products under the Volkano stable.

High-tech Bluetooth wireless devices, headphones, earphones, speakers, power banks, phone accessories, computer peripherals and more are all offered at affordable prices. The brand is designed to be durable, aesthetically pleasing, and always high-quality.

VOLCANIC GROWTH Managing Director, Avi Mishan explains more about expansion of the popular Volkano brand.

“Whatever price point our products are in, we always want them to be the best value for money. That is what Volkano stands for,” he tells Enterprise Africa.

“Volkano is without doubt our biggest brand,” he adds. “You can ask any person on the street in South Africa if they have heard of Volkano and they will say yes. It’s become a household brand in the South African market; with headphones and earphones, we sold eight million units last year. The brand offers great value for money and creates repeat business as customers know they get good value and a good user experience – that is a core principle on what SMD Technologies is built on.”

Staying abreast of international trends, the company is venturing into wearable technology – described by some commentators as the biggest new tech innovation since the smartphone. This category includes all connected wrist, head and body-worn tech devices.

“A big focus for us is Volkano Active where we have launched a whole range of wearables – that’s products with heart monitors and GPS capability,” says Mishan. “We are launching with some of the big retailers and we are getting involved with the growing health and fitness trend. We also have launched wearable accessories which are compatible with Apple Watches,

Fitbits, Garmin watches and similar products. Straps, screens, and a whole range of compatible accessories. We see these industries as growing in Africa and we want to be a part of it.

Our wearables range will be launched in May and we will be going around all of the major sporting events in the country to showcase the range.”

The target for the company is to position the range as the preferred value for money brand and an alternative to the expensive international market players.

“I don’t think it will be a hard sell as it comes under the Volkano brand which people already know and trust.

The only big brands in the market right now are the international brands – Fitbit, Apple, Garmin and Tom Tom. There is no second-tier brand which is trusted in the market and that is

where we want to be,” says Mishan.

Innovation has been one of the keys to unlocking growth in the industry and the movement into wearables is proof that SMD is keen to advance its portfolio with inventive ideas.

“We are always trying to be innovative,” admits Mishan. “We have launched a new range of headphones with voice recognition that works with Siri and Google Assistant; we have launched a range of noise cancelling headphones; we launched a range with two drivers so there is double the bass and much improved sound.”

CONNEX VALUE In South Africa alone, there are 26 public universities and more than 50 higher education and training colleges. The student population

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INDUSTRY FOCUS: TECHNOLOGY

numbers around two million people.

Traditionally, students have turned to cheap laptops to fulfil their need for connection with the university.

Communicating with tutors, completing assignments, conducting research – all of these and more are vital in student life but often laptops are expensive and out of the reach of much of the population.

“For the African market specifically, laptop penetration is very low, only around 16.2% - that is extremely low compared to First World countries. The biggest barrier for African people is the price point,” explains Mishan.

// AS A BRAND, WE’VE HAD A GREAT RESPONSE. TO HAVE 5% OF THE MARKET, AS A NEW BRAND, IS VERY GOOD // 22 / www.enterprise-africa.net

SMD Technologies, through its Connex brand, has launched a new range of laptops designed to fill the void left by international brands. “We have managed to bring laptops into the South African market at a really affordable price with the hope of increasing the penetration rate.

“They are perfect for assignments at university or other studies. They offer great value for money. We are one of only a few Microsoft partners and an Intel partners in South Africa, and that brings extra quality to the package.

“We saw it as a trend in China, with entry-level laptops that are great value for money that have Microsoft operating systems, and are affordable.

We are making them available through non-traditional retailers including fashion retailers, like the Foschini Group, and furniture retailers. These retailers have been doing very well selling our laptops. They are aimed at the lower end of the market with entry level pricing and we have done extremely well, claiming 5% of the

market. Connex only does laptops at the moment. As a brand, we’ve had a great response. To have 5% of the market, as a new brand, is very good,” details Mishan.

Much-discussed in recent years, student finances in South Africa have been under the spotlight and anything that can help young learners to achieve their goals is welcomed with open arms.

The Connex brand will be utilised

by SMD in the future to further its innovation programme, welcoming more new products to the market, specifically in the growing Internet of Things (IoT) category.

“We have developed a whole new IoT range called Connex Connect. We are planning a big launch into the market in June after the products hit the shelves in May. We have developed a whole range of home products and an app, and the idea is again to offer the best value for money in the market. This will be a big focus for us and we see huge potential

SMD TECHNOLOGIES

in the market. Everything will be smart in the future and we think we can add to that,” states Mishan.

GLOBAL BUSINESS After major success in its home market, SMD Technologies has set its sights on growth in new geographies.

With offices in China, London and the US, global expansion is already well under way. Key in its international strategy is the US market, where the company has already started gaining significant traction. What started out at a conference in Chicago, where buyers and sellers and matched up, US business now represents a significant part of SMD’s offering.

“We officially opened in March 2018 in the USA,” details Mishan. “We are already dealing with a number of big retailers there including Office Depot, Forever 21, QVC shopping channel, Amazon, Citi Trends and many more retailers. We’ve had great traction; we’ve only been in the market for a year and the uptake has been unbelievable. What we need there now is more good people. Our future pipeline in the US is great and we are very excited about what will happen next. We have products from across the board; from car cradles, headphones, bags, and much more; but our biggest success has come with the Volkano brand which is our most comprehensive brand.”

In the UK, SMD was supplying products into a major high-street retailer but has since withdrawn from the arrangement to focus on different customers. Mishan says that the future is exciting as the operation in London is only small, offering plenty of room for expansion. He also hints at a potential deal with a new retailer that has sites in every town and city in the UK. Focus on the UK market will come after the US operation is running seamlessly.

A major coup for the SMD business in South Africa relates to its work with US brands – Disney,

// THERE IS NO SECOND-TIER BRAND WHICH IS TRUSTED IN THE MARKET AND THAT IS WHERE WE WANT TO BE //

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INDUSTRY FOCUS: TECHNOLOGY

Marvel and DC. The mega-popular entertainment brands are worldwide phenomenon, and gaining the exclusive rights to manufacture branded electronic goods for the SA market has significantly boosted SMD’s position.

“We won Disney partner of the Year in our first year, and Best Product of the Year in our second year,” exudes Mishan. “Across 22 countries in Africa, we are the only company that manufactures, under license, electronics including headphones, speakers, mice etc. We have just received the license for a host of new products and that will be revealed soon, but it is a very important part of

// EVERYTHING WILL BE SMART IN THE FUTURE AND WE THINK WE CAN ADD TO THAT // 24 / www.enterprise-africa.net

our business. We also have the rights for Marvel and DC and we have done some beautiful ranges across these three areas.

“We have added Israel to our Disney license and have already supplied containers into Israel. We are adding Turkey and the Philippines to our license, so the Disney product range is certainly something we will be expanding.”

MARKET LACKING SPARK? While the economic climate in South Africa has left a lot to be desired for many companies hunting for growth, SMD Technologies has been thriving.

While some have failed to adapt and allowed changing consumer habits to overtake, SMD has been innovating and working hard to ensure its products and brands are delivering what is needed.

“The economy is tough,” admits Mishan. “There is political instability and volatility in our exchange rate,” he

says. “Luckily, we have been blessed to get into an industry with lots of growth. We always keep going, we always look for new ideas, and the type of products we work with are things that people need and want.

Most importantly, we are about value for money and when the economy suffers, people have limited money to spend and that means they like to spend their money where they know they can get great value for money, like Volkano, rather than going for a big brand where they know they are paying for a name. As the economy gets more challenging, our brands can become more attractive.”

Consumer electronics is a growing sector, and for South Africa there remains much more room for development, especially with the advent of the Fourth Industrial Revolution. While this is the case, SMD will be at the market’s forefront.

“We are lucky to be in the right industry at the right time. The pie is

SMD TECHNOLOGIES

// WE ARE GROWING AND AS LONG AS WE ARE GROWING, WE ARE HAPPY // growing,” says Mishan. “A lot of people in Africa are still using feature phones and as they switch from feature phones to smart phones, they start needing all of the products we have.

Whether it’s headphones or power banks or speakers, the market is growing. We were one of the first to get into most of these categories in South Africa and the combined market growth and us creating a market has helped us to achieve success. Some of the retailers we are working with were never in these categories before and we helped them move into consumer electronics. They stuck with us and it’s been great growth for everyone.”

Typically positive, when asked about the future in South Africa,

Mishan – a Chartered Accountant by training – claims the feeling within SMD is nothing but upbeat and encouraging.

“I’m very optimistic,” he says.

“I think things in the economy will change. It won’t happen overnight but we must be a part of the change as entrepreneurs and companies that employ people. We must do all we can do to help the economy but I do feel optimistic.”

Currently, SMD Technologies employs around 350 people and all of these people will help push the company forward, in new areas, with new products, and new partners.

“We have a big pipeline of new ideas. Our future goal is to become an internationally recognised brand with offices in more different nations around the world. Our US business will be a very important part of that.

Success in the USA is crucial if we are to expand further internationally. We will always be first to market in our

categories and we want to be a onestop solution for our retailers across the world. We certainly see a lot of expansion, both geographically and in terms of product range,” says Mishan.

It has been quite the journey for a business which started 14 years ago with one partner selling scientific accounting calculators and the other importing electronics as a side project.

The consumer electronics market is growing, there is a clear space for a trusted, value for money supplier, and SMD has positioned itself perfectly.

“We are growing and as long as we are growing, we are happy. We see a good runway for the next couple of years, and it’s fantastic to be in an industry which has that positivity,” Mishan concludes.

WWW.SMDTECHNOLOGIES.CO.ZA

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Pylons in KZN © Graeme Williams

AVON & DEDISA PEAKING POWER

Peak

Performer PRODUCTION: Colin Chinery

The Avon and Dedisa power plants near Durban and Port Elizabeth are addressing two key South African issues; the critical role of peaking and emergency generation, and the significance of State/private sector partnerships. “For any country to thrive you have to have a very balanced and transparent working relationship between government and the private sector,” says Avon and Dedisa’s CEO Tebogo More. www.enterprise-africa.net / 27

INDUSTRY FOCUS: POWER

//

Forget chatlines, music videos or Google mapping: in South Africa, the most-downloaded app delivers alerts, schedules and forecasts for power outages and rolling blackouts.

It’s the download that never sleeps. In February 4,000 megawatts of power - enough to power three million households - was cut from the national grid to prevent it from collapsing.

Load shedding has been part of South African life since 2014, when it became clear that Eskom - state monopoly supplier since 1923 - was facing various challenges in meeting the national demand for power.

Struggling to generate enough electricity to meet demand, Eskom has recently re-introduced a system of rotating outages called load-

Dedisa Power Plant

28 / www.enterprise-africa.net

shedding; hitting small businesses and public services, investor confidence, and the public at large.

Amid this stygian gloom, to which South Africans respond mostly with stoical resignation, projects brought on stream via the Department of Energy’s independent power producer (IPP) have helped to somewhat ease the situation.

Notable among them are the 1,005-megawatt Avon and Dedisa peaking power plants, which commenced operation in 2015 and designed to help balance the grid’s fluctuating power needs by supplying Eskom at peak demand.

PRIVATELY-OWNED FIRST The 670MW Avon facility at Shakaskraal, 65 km north of Durban,

// WE WANT TO BE A VALUE-ADDED PARTNER TO THE SOUTH AFRICAN GOVERNMENT // together with its Dedisa 335MW facility sister power plant in Port Elizabeth, are the first large privatelyowned power generating plants initiated by the Department of Energy.

Awarded in 2006 in anticipation of the 2008 black outs, the Avon and Dedisa scheme went into a protracted stall, before construction finally started, a seamless operation, on budget and on time.

“We are positioned and ready to

AVON & DEDISA PEAKING POWER

provide supplementary power as and when needed, assisting Eskom with its generating challenges, and expecting an above-normal busy winter,” says CEO Tebogo More.

“We can go from zero to full load in less than half an hour and perform a fast-start from zero to 100% in 20 minutes.”

As-and-when extends beyond peak-time responses to emergency back-ups, a dual capability much tested last year.

“With a higher number of emergencies than anticipated last year, we ran more as an emergency power facility, so that has certainly been a challenge in terms of various logistics.”

Working with dispatachable generators – on/off, demandresponsive and dispatched at the request of power grid operators – is a highly testing operation.

“You never know when we will be dispatched, yet we have to be ready at all times. Having to navigate around that has been both interesting and challenging.”

A highly experienced energy and

finance professional, involved for ten years in the infrastructure sector value chain from financing to construction and operations, Tebogo More arrived as CEO 18 months ago, on appointment from Avon and Dedisa’s leading shareholder, the French multinational utility company, Engie.

“Previously, I was a senior developer looking at projects within southern Africa from the renewable perspective and across different technologies, including looking at Greenfield opportunities, typically through a tender process initiated by government.”

Before joining Engie in 2015 she was with the Aveng LTD Group, developing energy projects focussed largely on growth strategy, mergers and acquisitions.

“My background in power and gas has always been renewable energy, so this is the first time I have been involved with a dispatchable project.”

With a 38% shareholding, Engie is partnered by the Blackowned company Legend Power Solutions - 27%, Japanese-based Mitsui and Co - 25% - and the Peaker

// WE ARE POSITIONED AND READY TO PROVIDE BACK-UPS AS AND WHEN NEEDED, HELPING ESKOM WITH ITS GENERATING CHALLENGES, AND EXPECTING AN ABOVE-NORMAL BUSY WINTER //

// WE CAN GO FROM ZERO TO FULL LOAD IN LESS THAN HALF AN HOUR AND PERFORM A FASTSTART FROM ZERO TO 100 IN 20 MINUTES // Trust, representing broad based shareholding from KwaZulu-Natal and the Eastern Cape the two local, with 10%.

The power generated by these two open cycle gas turbine power plants are sold to Eskom under a Power Purchase Agreement over a 15-year term.

ON TO NATURAL GAS? Both plants are prepared for a possible future conversion to combined cycle and to natural gas, as part of the government’s planned introduction of natural gas to South Africa.

Natural gas is one of the cleanest, safest, and most convenient forms of energy, and recent on- and off-shore discoveries of significant quantities in Southern Africa - including a “significant” gas discovery off South Africa’s CONTINUES ON PAGE 32

www.enterprise-africa.net / 29

Travel / Technology Partner to Avon and Dedisa Peaking Power

Travel Nation are a 100% women owned and a level 1 BEE company

In a worldwide economy, the tourism sector caters a constant yearly growth of 8.6% in South Africa. With this in mind founder of eNtrav Technologies, Nirasha Lala in partnership with her longstanding colleague and business partner, Nonceba Gabotlhaelwe began this venture 3 years ago with the idea to integrate both travel and online.

Nirasha Lala, who has been in the tourism industry for over 17 years with a financial background, has successfully grown into a young entrepreneur, playing a fundamental role as the Chief Executive Officer at eNtrav Technologies.

Nonceba Gabotlhaelwe has been in the tourism industry for approximately 23 years and has headed up operations in various other conglomerates as well as the management of very large accounts. Today she plays an instrumental role in the internal structure and management of the business overseeing day to day operational requirements.

With a mission focussed on bringing simplicity and value in the way that corporates conduct and manage travel and an objective, as a responsible corporate citizen, to be recognized as a premier technology provider for travel and expense management for Corporate Clients and Travel Management Companies (TMC’s) in South Africa/African Continent by 2023, the eNtrav System/Solution has been designed as a fully agnostic and integrated corporate travel management platform. eNtrav will • Integrate online travel bookings by aggregating various Global Distribution System (GDS) and APIs (Application Programming Interface) • Facilitate competitive options and pricing for its customers, staying within the confines of a business travel policy • Through a holistic solution allow a client to utilise only one platform across various devices for all its travel requirements The eNtrav Supersite will be the foundation system built on .Net technology with various Input and Output API’s that will plug into the system. The plug-ins will include the following solutions: • • •

Enterprise Resource Planning (ERP) Global Distribution System (GDS) Integration Travel Fusion

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iVeri Payment Gateway Quik Software

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Several platforms are used at any given point in order to come up with a complete travel package for a traveller, introducing inefficiency Reporting on travel activities is therefore extremely difficult

In a current Client climate where • •

Most of the travel processes are manual (paper based) and are conducted via the phone and emails Difficulty is experienced in tracking what is really going on within a company’s travel activities

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INDUSTRY FOCUS: POWER

CONTINUED FROM PAGE 29

southern coastline by oil giant Total - represent a new dawn for the region’s energy landscape.

“This could well be a gamechanger for our country and will have significant consequences for our country’s energy security and the development of this industry,” President Ramaphosa told Parliament in the televised speech.

Could Avon and Dedisa be part of this game changer? “The plant design has always included the long-term view to convert to natural gas, but from a project and financing perspective, there’s always been the need to ensure we do specifically

Avon Power Plant

32 / www.enterprise-africa.net

and exactly what we are meant to be - which is a peaking plant.

“However, there is the opportunity to convert to gas as soon as there is a gas solution in the country with a steady and reliable availability of natural gas fuel. The capability is definitely there.

“It’s an issue on which we have been approached by a number of people, and from a shareholder and board perspective, one that we are looking at closely.”

However, for environmental groups such as Greenpeace, the Total exploration 175 km off South Africa’s coastline is “reckless,” warning of disturbances to marine life and averse global change impact.

ENVIRONMENTALLY AWARE As gas-fired power station operators, Avon and Dedisa are aware of the environmental and cost issues.

“South Africa is as concerned as the rest of the world, and gas is an issue that has been seriously investigated.

“The environmental awareness is there, and if you look at some of our shareholders you will see that Engie in particular, has embarked on a zero carbon transition and has halved its CO2 emissions between 2012 and 2018.

“De-carbonation is one of Avon and Dedisa’s main strategies, and each one of our shareholders is looking seriously into the ability to convert.”

Open cycle gas turbines use almost any hydrocarbon fuel from

AVON & DEDISA PEAKING POWER

high-octane gasoline to heavy diesel oils. And while higher operating cost is sometimes a criticism, Tebogo More says this is not an issue here.

“Peaking plants are not meant to be run for a long period. You are looking at about two hours a day depending on the peak times.

“So, in the grander scheme of things the numbers tally up. They only become expensive if they are then used as a base load - and we will definitely not get to that.”

Within a wide ownership structure, the role of the Peaker Trust, with its 10% share, has a special significance.

Established to promote and advance Broad-Based Black Enterprises, Peaker Trust dividends will go towards impacting individuals, including people with disabilities, establishing co-operatives, providing infrastructure to less fortunate areas, and contributing to local socioeconomic development initiatives.

The private-enterprise structure of Avon and Dedisa touches on another area of South African life – the issue of public confidence and trust.

A FUTURE FOR STATE/PRIVATE PARTNERSHIPS? With many Government-run businesses increasingly attacked for inefficiency and even corruption, could this privatestate partnership offer an example of sound working relationship?

“I think absolutely it does. For any country to thrive you have to have a very good balance, and a very good and transparent working relationship between government and the private sector.”

If South Africa is to sort out the energy crisis, says More, it is imperative the state and private sector work hand-in-hand.

“I don’t think the answer lies with either, but in a transparent partnership, with a combination of the skills and doing what we each do best.

“The private sector has a lot to offer in that it is not encumbered

Avon and Dedisa’s CEO Tebogo More

by the reputational damage, from which, let’s say, the public sector has basically suffered.

“At the same time, at the government level there is a much broader view of national needs.

“And of course, within the state sector you have pockets of excellence - and we certainly experience it with the teams we work with particularly from an Eskom perspective “Our relationship with Eskom is nothing short of completely professional and very knowledgeable.

We work very very well with them and have that essential transparency

and open communication. So there’s definitely a role to play from both sides.

“We want to be a value-added partner to the South African Government. And we can continue to do this by providing reliable power as and when we are called upon whether as a peaking operation or in sudden emergencies.”

WWW.PEAKERS.COM

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PORTLAND

Portland Shows Strength

Amidst Unstable Industry Backdrop PRODUCTION: David Napier

The family-run Portland Quarry, Readymix and Hollowcore business in the Western Cape is expanding its offering by improving its products and growing its reach around the province. In a challenging construction industry, this 30-year old company is a true sign of strength. General Manager Nicol Heyns talks to Enterprise Africa about Portland’s ongoing development.

//

South Africa’s construction industry remains on shaky ground. Research from FNB and the Bureau for Economic Research said in March that confidence in the industry is at its lowest point in more than 20 years, with more than 90% of respondents taking part in a quarterly survey unsatisfied with business conditions.

High national debt, little spending

34 / www.enterprise-africa.net

on infrastructure and a depressed economy have created what some industry commentators have labelled a ‘soft and crumbly sector’ where even some of the biggest names have not been able to weather the storm.

Since 2010, and the FIFA World Cup projects which flooded the industry with work, construction has slumped as major government infrastructure projects have either dried up or quickly

slowed down. A rebalancing of the industry has taken place and those companies involved have had to adapt to embrace a new reality.

President Ramaphosa has vowed to attract new foreign and local investment to the country, and in March he said that billions of Rand was already flowing into the market after just a few months of his investment drive.

In the construction industry, where

Walling at Cape Town Film Studios © NK Photography

INDUSTRY FOCUS: CONSTRUCTION

Heyns Family at Portland’s 30 Year Celebration

// ON THE READYMIX SIDE, YOU ALWAYS HAVE TO BE IN FRONT OF THE MARKET… WE WOULD DEFINITELY LIKE TO ADAPT OUR RANGE SO WE ARE AHEAD OF THE MARKET // projects usually last months and years, stability and market certainty are vital.

Unfortunately for South Africa, where stability and certainty are not easy to come by, these vital elements have not been delivered.

But there are pockets of positivity and groups who look to the future with vigour, seeing opportunities rather than threats. This is certainly the case at Portland, the Western Cape-based quarry, readymix and hollowcore business that supplies into the regional construction, building and

36 / www.enterprise-africa.net

infrastructure industries.

“The economy is the way it is, and it makes it tough to come through unscathed. You still have to run the business and you can’t just refuse to supply everyone. You have to negotiate the best terms with your clients and ensure you protect your business,” General Manager Nicol Heyns tells Enterprise Africa.

Having grown impressively over the past three decades, this family business has created employment for almost 200 people. Its products have been involved in some of the Western Cape’s most important construction projects, and the Heyns family is refusing to accept negativity in its business. Portland owns a large Malmesbury Hornfels quarry north of Cape Town, and readymix and hollowcore factories. After growing a strong client base and an excellent reputation, Portland is looking to expand across all areas.

DIGGING DEEP “Looking at future growth, we have done a lot of research across all areas of the business. We want to expand in

everything that we do,” says Heyns.

“The Western Cape is booming. The bigger construction companies and civil companies are trying to expand their footprint into the Western Cape because there is a lot of opportunity here. There is definitely enough opportunity here for Portland for the next 10-20 years.”

Increasing quarry tonnage, installing new readymix plants, growing the number of hollowcore products sold, and developing the company’s range of precast concrete products are all targets for the GM. The improvement of products is also on his radar, helping to further Portland’s reputation for quality.

“The target for the tonnage from the quarry went up a lot of the past two years but that is because the market demanded that from us. We had to bring in mobile crushers to help process the extra materials. It’s the same with readymix – we have done research about the different areas that could benefit from a new plant and if the market demands that we expand, we will certainly do so.

“With Hollowcore, we are currently expanding. We are not putting up extra

PORTLAND

// WE WILL ALWAYS TRY TO BE THE LEADER IN EVERYTHING THAT WE DO // factory space, but we are making some internal changes by looking at our curing methods to up our quantities by 30%.

“We want to become superior in what we do. At the quarry, we are looking at putting up wash plants so that we can deliver a better stone – that will help us grow our margins.”

Portland closely monitors the quality and variety of other products across different markets so that it can remain at the very front of the industry in South Africa. The company is now aspiring to higher standards in terms of basic megapascal (MPa) – a measure of strength or pressure.

“On the readymix side, you always have to be in front of the market,” says Heyns. “That is why we are looking at self-compacting concrete, we are looking at areas like the UAE where they have a standard of 60. 80, and 100 MPa concrete compared to South Africa where the standard is 25 or 35. We would definitely like to adapt our range so we are ahead of the market.”

Traditionally, Portland’s hollowcore business has been a supplier of decking and walling but the business has grown to manufacture other precast products for the construction sector.

“We also sell precast staircases, precast beams, precast lintels, precast columns and we think there is a big opportunity to expand this. We have doubled the size of our precast factory to be able to supply more staircases and beams, and we are entering a large project where everything is precast driven and must be concrete finished.”

This expansion and positive thinking is proof of Portland’s experience in the market. Over the past 30 years, the business has witnessed a number of national economic slowdowns and has adjusted to navigate them all. Preparing for when the market turns is vital, says Heyns.

“Unfortunately, the market and the

economy are very tough in South Africa, especially in the run up to the elections.

The developers are in two minds on whether to push forward or wait and see what happens. That is normal and construction is a cyclical industry but while you are in a slow period you must prepare for the next boom. At some point, things will turn around and you have to be prepared for the work that will come in your direction.”

HISTORIC SA BUSINESS Portland was established in 1988 by Heyns’ father Nico and business partner Helenus Scholtz. In the beginning, the business was focussed on property development with Nico being focussed

on development and Scholtz an attorney with an interest in deeds. The pair handled all building and construction, putting together teams and carrying out work, before also getting into marketing.

“When Portland started, it was called Portland Bouers (builders). For the first decade it was all about property development,” says Heyns.

“In 1998, Portland got the transport and marketing rights for Hardrock Quarry. Two years later, Portland acquired the quarry and registered the name as Portland Quarry. After acquiring the quarry, the company started Portland Readymix to buy directly from Portland Quarry.

“By the end of 2000, Portland Bouers, had 60-70 properties in the rental market and that was a big part of the business. On the marketing side, Nico and Helenus had grown their

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INDUSTRY FOCUS: CONSTRUCTION

activity and became 66% owners of RealNet Estate Agency.”

By 2003, Portland was no longer directly involved in building and development. While still purchasing parcels of land for development purposes, the company was now selling the land into the market at tender for a construction company to take on the project. All employees of Portland Bouers were moved to Portland Quarry, Portland Readymix and Portland Hollowcore which started in 2006.

Today Readymix and Hollowcore makes up around 40% of the total Portland Group each with Quarry representing around 20%.

In 2015, the Heyns family bought the stake from Helenus Scholtz and since then, it has been running as a family business. “My dad Nico is the Managing Director, my mother Kitta is also a Director, my sister Aniska is the Business Systems Manager, and I am the General Manager,” says Heyns.

“We do have our disagreements but overall, we all support each other. It’s nice to know that people in the office will back you, whatever the situation.

Walling at Youngman Roofing in Maitland

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We are a very good team and we all work together well, with the same outlook and the same goals.”

In order to keep a finger on the pulse of the development sector, Nico and Kitta Heyns established Nicka Beleggings Pty Ltd in 2005. The company works on small individual developments and is a completely separate entity from Portland. “They’ve completed a few developments and they are working on upmarket residential apartments. They are putting a beachfront building into the market now with units that are priced between R4-8 million. There are two more highend residential buildings going up later this year with around 40 units. All are located in Blouberg,” says Heyns.

SOLID PIPELINE Right now, Portland is supplying into a number of large construction and infrastructure companies that are involved in some major projects around the Western Cape. In the future, the company is looking to deepen its involvement in these projects and to build its reputation among these big clients.

“National Asphalt is a big client for the quarry and they buy a lot of road stone from us. We want to be able to supply all the stone requirement for National Asphalt as long as we are able to deliver the correct spec.

“Our other big customers are logistic companies who make deals with construction companies to supply product to their projects. On the Readymix side, we have great relationships with a number of clients from the development, building and construction industries. For example, we started supplying Balwin Construction earlier this year, everything is running well and we are looking forward to beginning a big project together in May. “For Hollowcore, Balwin is again a big customer and we are happy to be working with them on a precast design that is used across the Western Cape. Calgro M3 is very active with government projects and they are precast driven. They are expanding their footprint in the Western Cape and we are happy to be supplying them on the Belhar Gardens development. Concor is a strong brand in South Africa and

PORTLAND

we are busy building a relationship together. We are also excited about a relationship we are building with Stefanutti Stocks. These big companies are all starting to work more with precast and that is exciting for us,” details Heyns.

“For both Readymix and Hollowcore, Group 5 was a big customer but they are now in business rescue so we are in negotiations with the companies that are taking over the projects,” he adds.

Housing, commercial buildings, industrial property, roads, and more are all taking Portland products and the company’s reach continues to grow.

In terms of geographic expansion, with so much work still waiting in the Western Cape, Heyns is reluctant to push into other provinces at this time.

He explains that a strategy has been developed which will see Portland grow away from its home at the quarry in steady 50km steps.

“We want to grow the company but we don’t necessarily want to grow outside of the Western Cape at this stage,” he says. “We would like to expand our reach within 50km of our existing sites. We want to be the preferred supplier of the materials we

// OUR MAIN FOCUS IS TO IMPROVE OUR QUALITY AND IMPROVE OUR CLIENT SATISFACTION. THIS WILL MAKE US THE PREFERRED SUPPLIER IN THE AREAS THAT WE OPERATE AND CERTAINLY THE NUMBER ONE SUPPLIER FOR THE WESTERN CAPE //

WE FOCUS ON

SUPERIOR SERVICE AND ON-TIME DELIVERY AT COMPETITIVE PRICES

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offer in the Western Cape and so it doesn’t make sense to open up plants that are long distances away from our existing operation.”

This is a company that knows its market, and has 30 years of experience delivering quality. As the second generation of family leadership moves to the fore, the challenge will be to overcome slow market conditions.

“The Group 5 situation has been troublesome for the industry but we have been through this type of thing before with the likes of NMC and Botes & Kennedy.

“We know we have to run our business safely but we also know we must continue to push boundaries.

We will always try to be the leader in everything that we do so whatever work there is comes to us first, and with that I am confident,” says Heyns.

Compared to a construction industry which remains unsteady, Portland is strong and Portland is stable, and the people behind the business have built a robust strategy to take the company forward without allowing any cracks to show.

“Our main focus is to improve our quality and improve our client satisfaction. This will make us the preferred supplier in the areas that we operate and certainly the number one supplier for the Western Cape,” Heyns concludes.

WWW.PORTLAND.CO.ZA

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CONCORD REFRIGERATION

Concord Stays Cool

Amid Tough Trading Environment PRODUCTION: Karl Pietersen

Durban’s Concord Refrigeration is working with industry-leading corporate clients to deliver a first-class retail experience for customers. A manufacturer of refrigerated and heated supermarket display cases, Concord is increasing capacity at its factory while improving its environmental credentials. Managing Director Wernhard Barnardo tells Enterprise Africa more about the success of this 50-year old company in difficult market conditions. www.enterprise-africa.net / 41

INDUSTRY FOCUS: MANUFACTURING

//

The ‘Big 5 food retailers’ in South Africa account for more than 60% of all food retail sales. Shoprite, Pick n Pay, Spar, Woolworths and Cambridge Food have a combined store network of more than 5000 stores and attract millions of visitors every year. Whether you’re in the far-flung southern corner at Cape Agulhas or way up north close to the border in Musina, you’ll be able to find one of these retailers.

At the heart of all of their food offerings is being able to deliver fresh food, quickly, at low cost. But how can you keep fresh food chilled, frozen food cold, hot snacks warm, and all displayed in an attractive and convenient manner – especially across a major network? It’s not easy, but Concord Refrigeration – established in South Africa in 1969 – has the answer.

A manufacturer of refrigeration cabinets specifically designed to meet

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the needs of the retailer, this business is geared for efficiency and quality.

But it hasn’t been easy for Concord to position itself among the top businesses in the industry. Challenging economic conditions and a depressed and everchanging retail environment have forced Concord to adapt in order to continue growing.

Managing Director Wernhard Barnardo talks to Enterprise Africa about how Concord Refrigeration – a division of Southey Holdings – is changing to take on a modern challenge.

“No one goes through a recession and a retail industry being under such pressure without having to make changes,” he says. “A lot of the changes that have been seen at Concord over the past two years, came as a result of the downturn in the retail development space in South Africa. Even at the beginning of last year we went through two quarters of negative growth and

into recession. We are directly impacted by that because as soon as the retailer slows down with their rollout, we don’t have work to do. From 2016/17, there was a turndown into 2017/18 in terms of overall volume. We saw it coming so we had to scale down to ensure our cost structure made sense in a smaller market. We managed to do that successfully and we are looking very good at the moment.”

The company manufactures the entire storage and display cabinet, mainly for national supermarket chains. All of the cutting, welding and bending happens inhouse at Concord’s facility, north of Durban. The company also handles installation on site and assembles everything by hand to keep control over quality. Working closely with the retailer’s chosen refrigeration contractor, Concord has become a vital component in the delivery of a successful shopping experience.

CONCORD REFRIGERATION

// FOR US, WORKING CLOSELY WITH SUPPLIERS TO DELIVER THE TOP LEVEL OF SUPPORT TO CLIENTS IS NONNEGOTIABLE // A plan for future growth has already been developed for Concord and Barnardo explains that it will involve increasing capacity and automating more processes to maintain quality standards.

“Several cabinet manufacturers in our sector have closed their doors in the past 18-months. There will always be treading of a fine line, but we have proven that it is possible,” he says.

“A lot of people are looking at automation to become competitive.

Our company has grown organically over many years and, as a result, we are quite a manual operation. There are only small individual sections of the factory that are automated. Our competitors from around the world

have highly automated production.

Ultimately, we see Concord getting to that sort of arrangement in the next five years. We would like to have a large level of automation on the pre-assembly foaming operation and also on the component manufacturing operation.

We have already had that scenario designed and quoted, and we are ready to press the button on the project.

We are just waiting for the timing to be perfect as, after you invest more capital, you become more vulnerable to a downturn in turnover, so timing is critical. In terms of what we need to do, everything has been designed and we know exactly what we need to do.

The first step in the process has already been taken and that was moving us to a new, bigger, more open warehouse facility. The layout has been completed with that final design in mind and everything can be easily bolted on.

Material flow has been improved, our energy footprint has been dramatically reduced, and we are ready to increase our capacity. We now have a clear roadmap ahead of us for automation and it will happen as and when we feel the timing is appropriate.”

This type of expansion is necessary as Concord looks to continue servicing its national clients that are growing into Africa, while maintaining its ability to successfully deliver for individual customer requirements.

PROUDLY SOUTH AFRICAN Founded in 1969, originally named Halls Refrigeration, Concord Refrigeration is celebrating its 50th anniversary this year. Only a handful of manufacturing companies make it to the half-century milestone, and this cannot be achieved without an unerring focus on quality.

Concord has not always been involved in the manufacture of retail cabinets, but throughout its history it has developed a reputation for delivering products that meet international standards.

“Concord has gone through a lot of change. We haven’t always made the product we are making now – we have made everything from commercial refrigeration equipment to catering equipment for hotel chains. From there it evolved to the manufacturing of beverage coolers and under-bar fridges and freezers before we started making full commercial refrigeration units for the

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INDUSTRY FOCUS: MANUFACTURING

// YOU MUST BE ABLE TO CUSTOMISE FOR THE CLIENT – IT’S A KEY CAPABILITY REQUIRED IN THIS INDUSTRY // supermarket industry and the big key clients in that sector,” explains Barnardo.

“Making units for the likes of Shoprite and Pick n Pay really helped Concord to get off the ground. We make all types of cabinet – hot, ambient, chilled and freezer cabinets all for the big retail groups. We work with all the big corporates and a big part of what we do is also working with the franchisees and smaller independents.

Our big corporate clients include Shoprite, Checkers, Spar, Pick n Pay, Boxer, Choppies, Food Lovers Market and many more. These customers work on a much bigger scale than a smaller butchery chain for example, but we strive to serve all our clients’ needs.”

From its home at Phoenix Industrial Park in KwaZulu-Natal, Concord serves clients all over the country, and into southern Africa but the company refuses to open offices in other regions, demonstrating its 50-year experience, knowing what works and what doesn’t.

“We are located in Durban and this makes us very competitive in KZN and the northern regions of the country. We also pick up a lot of nice business in the Western Cape as everything is offered on a tender basis,” says Barnardo.

“In the past, we have opened up satellite sales offices in other parts of the country but we didn’t see a massive benefit. The manufacturing facility is the heart of our business and we see much more benefit in aligning ourselves with quality refrigeration contractors and partners around the country. We would prefer to appoint agents to assist us around the country.”

Concord Refrigeration offers

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warranty to all customers on all products and so the need for a countrywide presence is big. Typically, these warranties are serviced by trusted refrigeration contractors that Concord works with frequently. This helps the company avoid the need for a service team travelling nationally on a regular basis.

“We install the cabinets, they install the refrigeration system, and together we link up to the cabinets.

When it comes to a warranty call out where a quick turnaround is needed, it’s much better for the client, and for us, for the warranty to be serviced by the refrigeration contractor who installed the plantroom because you have to go to site to figure out if you have a problem with the cabinet or with the controls. Sending out one technician that is able to service everything is faster and better for everyone. Even if the problem is a fault with the cabinet, it is likely that the refrigeration contractor will be needed to rectify the issue.

“Overall, we find that this system works quite well and our competitors have moved away from this as it can be expensive in a market where every percentage counts. For us, working closely with suppliers to deliver the top level of support to clients is nonnegotiable,” insists Barnardo.

ONE-STOP SHOP A key selling point for Concord, and something which it has started emphasising more and more, is its ability to be fully flexible with the products and services it offers. Whether the customer is a multi-national mega corporate or a three-store franchise business, Concord can customise its service for each scenario.

“That is a major requirement in this industry,” admits Barnardo. “If you work with the big corporates, it’s easier as their development team will design a

specification that will be rolled out across all new stores. All of the big corporates have a development team that will put together specification for their rollout – it includes everything from the finish of the cabinet to the lights that are installed.

We work closely with them in developing that specification so that it can be rolled out seamlessly.

“When you work with individual retailers or smaller franchise owners, they have their own designs so you must be able to customise for the client – it’s a key capability required in this industry.”

How does the company remain at the forefront of technological developments and ensure it is able to offer its clients the most suitable offering? According to Barnardo, thorough research and development, and always keeping the entire process inhouse.

“We have an inhouse R&D team, everything is designed and manufactured inhouse, all the metal components are cut, bent and welded inhouse; even the efficiency elements like the design of the evaporating coil and airflow are planned inhouse and that is our IP which we maintain.”

This approach ensures products suit the store they are designed for. In southern Africa, this is vital as the environment requires a stronger cabinet compared to other international markets.

“In South Africa, and across other African countries that we export to, we see the need to manufacture very robust cabinets whereas our competitor’s products from around the world show a marked difference in durability. We pride ourselves on a robust and efficient cabinet that is built to last. We are in a tough trading environment so we try to keep all of the IP inhouse and handle all of the design and manufacture so that we can offer customers a full package,” says Barnardo.

// WE PRIDE OURSELVES ON A ROBUST AND EFFICIENT CABINET THAT IS BUILT TO LAST //

CONCORD REFRIGERATION

ENVIRONMENTAL ASSURANCES Today, a big concern for many in the manufacturing sector is the cost of producing high-quality goods that fall in line with environmental standards.

A retail cabinet is made from a mix of plastics, metals, and other materials, and it can use various gases to guarantee temperature consistency. To ensure its products meet the international standards the business is now recognised for, Concord has taken steps to update its manufacturing process so that new, friendlier materials are used.

“The insulated body of the cabinet is polyurethane foam injected. We have moved to a green system that doesn’t use Freon as a blowing agent and doesn’t have any negative impact on the environment,” explains Barnardo.

“Over the past 12-months we have installed new foaming technology and

we have seen improvements from using this system. We have also developed the capability to offer CO2 on all our cabinets as an alternative to R404. Using CO2 trans-critical systems is a quickly growing trend and requires a design change in the cabinets as the system runs at a significantly higher pressure, requiring different coils and piping.

In some cases, an energy saving of as much as 60% is realised by going to a CO2 trans-critical system.”

Ultimately, these environmental friendly changes have a lasting impact on the cabinet’s energy efficiency and by becoming more efficient, the cabinet is better for the customer and the environment in many ways.

“There is more than one driver behind going environmentally friendly.

Part of becoming environmentally friendly is becoming more energy

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// ENERGY EFFICIENCY IS PROBABLY THE BIGGEST DRIVER BEHIND ANY OF OUR DESIGN IMPROVEMENTS // efficient,” Barnardo says. “Energy efficiency is probably the biggest driver behind any of our design improvements across all of our equipment. It’s in many cases the driver behind decision making because, over the lifecycle of the equipment, the energy cost far outweighs the initial cost of the hardware. As a result, a lot of changes have been made which are environmentally friendly and energy efficient. For example, high efficiency

2019/04/24 12:02

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INDUSTRY FOCUS: MANUFACTURING

fans that use very little energy and also create very little heat; the use of modern LED lighting in the cabinet; closing cabinets with glass doors and the use of green polyurethane systems.”

INVESTORS IN EXCELLENCE In 2008, the family that founded Concord Refrigeration struck a deal which would see the business acquired by Southey Holdings. Southey has been growing its presence, starting out as a contractor for the mining industry, and today owns a large and diverse range of companies.

Marine, oil and gas, contracting, manufacturing, corporate services – Southey Holdings is an organisation recognised as one of the largest and most respected privately-owned groups in Africa. Labelled as ‘investors

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in excellence’, acquiring Concord was an obvious choice as one of the top two companies in its sector and a company with multi-national experience.

Barnardo, an engineer who previously served as manufacturing Operations Director in Southey Holdings before joining Concord in 2017, says that Southey’s backing is helpful for stability and forward planning.

“We report monthly results and we have certain controls in place e.g. when it comes to managing working capital, which is controlled at corporate level, but they are not involved in the day-to-day running of the business. They expect every company to run independently and stick to their budget.

“Because they do have a finger on the pulse through fairly detailed management

accounting, they can foresee potential problems and deal with those as they see necessary. While you do a good job and deliver against your budget, they remain largely uninvolved,” he says.

While under the Southey umbrella, Concord has taken home a number of ‘Supplier of the Year’ awards from various retail groups.

In the future, the company will look to continue servicing its large key clients in South Africa, and assist these clients as they grow into southern Africa and around the continent.

COOL COMPETITION One of the largest threats to Concord is the growing pressure from competition, especially from imported products which come into the market at

CONCORD REFRIGERATION

basement prices. “We see it on a daily basis. We have to compete with a field of international companies who all want to export into Africa through South Africa,” says Barnardo.

Manufacturers from the Far East and Europe see the potential for growth as Africa continues to develop and gaining foothold with the big retailers is an easy strategy to grow on the continent. “It’s a big market with a lot of development opportunity and a lot of the retail development on the continent is driven from South Africa. Overseas competitors come into South Africa with very keen pricing and interesting finance models, and that creates a lot of pressure,” admits Barnardo.

Combine this with a host of other challenges and the result is a tough

atmosphere for business.

“It’s made worse locally by the labour situation we have in the country. Manufacturing is under huge pressure because of imports, cost of materials, a depressed market, and an inefficient, expensive and militant labour force. This makes for a really challenging manufacturing industry – it definitely isn’t an easy sector to work in,” confirms Barnardo.

But Concord’s history, its reputation for excellence, and its ability to take on jobs of any size have helped the business to thrive where others have fallen to the wayside. Building relationships with the South Africa’s corporate food retailers and servicing those corporates successfully across the entire country continue to help Concord prosper.

“If I could do it again a hundred times, I would always do it the same way. Our market environment has been tough and that means we have to make hard decisions and act quickly. Getting things right is not easy and we have had to adjust the cost structure that was running previously – it has not been an easy road, but it has certainly been one worth taking. Where we were two years ago and where we are now is completely different and shows what we have done has been right,” concludes Barnardo.

For all retail environments, Concord Refrigeration remains the hottest link in the cold chain.

WWW.CONCORDREFRIGERATION.CO.ZA

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EUROLAB

Revolutionising South African Oncology PRODUCTION: William Denstone

Eurolab’s roots are firmly planted in South Africa, in whose pharmaceutical industry it now has more than 25 years’ experience, growing from a company only supplying quality oncology generics into South Africa’s largest and most innovative oncology outfit. “Our primary focus has always and will always be on patients,” says Eurolab, and this commitment is allowing it to bring new products to market and expand its reach all the time, William Denstone discovers. www.enterprise-africa.net / 49

INDUSTRY FOCUS: MEDICAL

//

Eurolab brings its trademark innovation and care to all aspects of cancer treatment, therapies and technologies, setting itself apart by being the only oncology company in Southern Africa to adopt a whole-of-cancer approach from diagnosis through treatment.

Eurolab provides oncology medicines that meet stringent quality standards whilst being affordable and always available. The Eurolab Aseptic Unit (ASU) is the only centralized sterile, Grade A cytotoxic mixing unit in South Africa, allowing a sterile product to be accurately measured and dosed to each individual patient.

The company’s gene sequencing machine, meanwhile, is a diagnostic tool to assist in a more accurate diagnosis and treatment approach for different forms of cancer. “We have

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partnered with local pathologists and haematologists to introduce this machine,” says Eurolab CEO Lynne du Toit, “and are currently busy with the validation of it.”

“Currently, all South African and African patients who want oncology testing done have to send their samples of tissue, tumours or blood abroad, at huge cost. By bringing in this machine we are able to perform these tests at a massively reduced cost.”

Eurolab underpins all these aspects with the very latest international research in immunology and oncology to provide cellular therapies.

GAMMA KNIFE INNOVATION Another of the crucial factors in its approach is Eurolab’s introduction of the cutting edge Leksell Gamma

// THE DEVELOPMENT OF THE GAMMA KNIFE CENTRE IN JOHANNESBURG BRINGS SOUTH AFRICA FIRMLY IN LINE WITH GLOBAL STANDARDS // Knife Icon radiosurgery technology. It is its first application in the Southern Hemisphere and only the fourth in the world, following the establishment of the country’s inaugural treatment centre at Netcare’s Milpark Hospital.

“The introduction of this advanced technology, which is

EUROLAB

Eurolab CEO Lynne Du Toit and General Manager of the Eurolab Aseptic Unit (ASU) Gavin Steel

// WE HOPE TO BE THE FIRST IN AFRICA OFFERING ACCESS TO CAR-T CELLS // internationally regarded as the gold standard in cranial radiosurgery, and the establishment of the Gamma Knife SA centre, have been firsts for the Southern African sub-continent, said Dr Maurizio Zorio, a neurosurgeon at the chosen hospital.

The technology is used in the treatment of malignant as well as benign brain, head and neck tumours, as well as for the treatment of functional disorders, such as acoustic neuromas, trigeminal neuralgia and vascular malformations.

“Since being introduced in April

2017, we’ve seen over the initial sixmonth period that there is great demand for this technology,” stated Dr Zorio, “and we are receiving an increasing number of enquiries from both doctors and patients around the country.”

“It is really exciting to consider the future potential of the Gamma Knife Icon locally, which has already been used to treat more than a million patients worldwide. The development of this centre in Johannesburg brings South Africa firmly in line with global standards,” added Dr Richard Friedland, chief executive officer of the Netcare Group.

NOVEL FORMULATIONS In line with its unerring policy of innovation, Eurolab is also looking to bring novel formulations into the South African market, in order to

treat rarer forms of cancer. “At our compounding facility, there is a sterile ready-mixed solution being made available to African and South African patients,” du Toit tells us. “We have recently received our license, which is a huge step for us, and will allow us to start producing at this facility.”

“Right now we are not in production, but we know more or less how many of these formulations we will producing for the South African market. When it comes to Africa, however - this is where volumes will be exponential.”

“We are planning to go to production at the end of June,” adds the Eurolab Aseptic Unit (ASU) General Manager Gavin Steel. “Given the highrisk nature and the level of technology we will start small, probably until September, and then start scaling up,”

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INDUSTRY FOCUS: MEDICAL

Steel explains, before giving some insight into the technicalities of this process and the efficiencies it affords.

“In a manufacturing environment we are able to generate efficiencies of scale due to the larger volumes which in turn translates into savings for the patient.”

EXPLORING MARKETS “We obviously want to start with the South African market, because it is also novel to South Africa, and then we will expand into the African markets as well.”

“We are exploring one market at a time,” Du Toit says. “We are currently busy in Tanzania, but we also recently met people who have relationships with the Kenyan market and hospitals there which they would like us to supply to. All these markets will open up gradually as and when we get our facility off the ground.

“Tanzania is our primary target,” Steel agrees, “but we have also had a lot of interest from two other countries, namely Botswana and Namibia. Given the close similarities between the regulatory environments we will likely be able to start servicing Namibia in the last quarter of this year.”

“Kenya, Ghana and Nigeria will probably be our next targets,” du Toit states, “because there are distribution facilities already in place which we can leverage off and the infrastructure is there in terms of hospitals and clinics.

This would make it much easier for us to distribute into those countries.”

“We have appointed a full-time representative in Tanzania,” Steel says, giving us some insight into the process of this expansion, “who then goes to establish relationships with oncologists currently practicing there.

From there, we grow the network.”

“Perhaps most exciting about this technology is that it allows an oncologist to perform his care through outreach, whereas before it had to be done in specialised hospitals and clinical environments. The centralized mixing facility removes the reliance

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P.O.Box 17397, Pretoria North, 0116 Tel: 012 541 0977 / 8 Fax: 012 541 0224 e-mail: info@clubref.co.za Reg No. CK 85/014432/23 Vat Reg No. 493 010 6655

EUROLAB

Established in 1976

Leading Supplier of Clean Rooms in Southern Africa

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upon specialized infrastructure and equipment at the treatment site. It unlocks very scarce resources in Africa.”

CAR-T THERAPY CAR-T therapy is a completely new type of therapy that uses the immune system to kill cancer cells, and forms the basis of one of Eurolab’s key next moves. “When it comes to cancer of the bone marrow or the bloodforming system, there are reasonable treatments available, but one group of patents does not respond to normal chemotherapy - children,” Steel tells us.

// OUR TECHNOLOGY UNLOCKS VERY SCARCE RESOURCES IN AFRICA //

“Their life expectancy is curtailed as a result.” However, giving hope is the research which has shown that CAR-T cells can remain in the body and continue to be active for a long period of time, meaning that unlike many other blood cancer drugs, CAR-T therapy is designed to be a one-time treatment. In some cases, it has cured people where all other treatments have failed.

“With CAR-T we harvest some of the white blood cells and then genetically enhance the cells, grow them and introduce them back into the patient. The result has been phenomenal, allowing people with very little hope to walk out of a hospital within a reasonable period of time,” Steel affirms.

“This therapy is currently only available predominantly in the US,

with a lot of recent activity in Israel.

We are in the process of developing the production technology and hope to be the first in Africa offering access to CAR-T cells.”

“Using the immune system to fight diseases like cancer is the new horizon, and so having the ability to manufacture that in Africa is very important,” Steel concludes on the very latest in Eurolab’s long line of patient-centred, highly innovative solutions in the ongoing fight to ameliorate the plight of cancer sufferers in Africa.

WWW.EUROLAB.CO.ZA

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YAMAHA SOUTH AFRICA

Quality Without Question Driving ‘Kando’ in SA PRODUCTION: Karl Pietersen

Yamaha South Africa distributes industry-leading products to customers across the southern African region. New Managing Director, Robin Van Rensburg is keen to accelerate the company’s progress as he looks to reinstate brand recognition and position Yamaha at the top of the pile in all sectors it competes in.

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Š Yamaha Motor Europe N.V.

INDUSTRY FOCUS: AUTOMOTIVE

//

In Hamamatsu, Japan in 1887, while Paul Kruger was still the state President of the South African Republic, Torakusu Yamaha was busy establishing his business, manufacturing musical instruments, specifically pianos and reed organs.

The company was incorporated in 1897 and Yamaha went on to become what we know today as one of the world’s most recognisable brands with almost 30,000 employees worldwide and an enviable product range including instruments, audio equipment, power products, motors, engines, motorcycles, golf cars, ATVs, and more.

Today, the company’s famous logo still reminds of its beginnings, picturing three interlocking musical tuning forks.

Yamaha products have been imported into South Africa for decades and, especially in motorcycles and marine, the company has carved out a niche in the top end of the market, targeting the premium space and customers looking for products of the finest quality.

© Yamaha Motor Europe N.V.

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But, with such superior products across such a range of sectors, Yamaha’s core message of delivering quality and ‘the performance of your life’ has fallen to the wayside somewhat, and competitors in the markets it operates in are looking to capitalise.

Enter Robin Van Rensburg. This auto-industry veteran has spent time with some of the country’s biggest international brands including Fiat Chrysler Automobiles, Jaguar Land Rover and BMW. Appointed as Yamaha South Africa’s Managing Director in October 2018, he has quickly gone about reestablishing the company’s impressive brand recognition by focussing on service delivery excellence.

“It’s been interesting,” he tells Enterprise Africa. “The first experience was learning the variety of products as that is the big difference compared to the other brands that I’ve worked with.

From road bikes to marine to music to golf cars – they’re all very different but intrinsically they stay true to Yamaha’s core values of quality.

“It’s been something of a baptism of fire as there is still a lot of work that needs to be done in re-establishing and reminding the market of just how good the brand is. On the service side, our dealer network was not up to the standard expected of Yamaha dealers.

Particularly in the rest of Africa – I look after the region from Mozambique Botswana, Namibia and Zambia – and we haven’t really done a good job of making sure those markets have a great service from Yamaha and so that will be the focus going forward.”

He highlights supremacy of the product range combined with world-class customer service as the two irreplaceable ingredients in a recipe for success.

// THERE IS STILL A LOT OF WORK THAT NEEDS TO BE DONE IN RE-ESTABLISHING AND REMINDING THE MARKET OF JUST HOW GOOD THE BRAND IS // “Without doubt, Yamaha has extremely strong brand recognition, even stronger than some of the international auto brands in the country.

It’s probably right up there with the BMWs in terms of recognition as a brand.

In terms of recognition in the premium space, that is where we need to do work because that is where we operate - our pricing is very relative to that sector.

Take BMW for example, a company also in the motorcycle space – our products can be more expensive than a BMW bike, so we have a lot of work to do to remind people of the brand. There are two elements to being premium: First is quality and reliability and then there’s the customer experience that goes with buying a premium product, and that is very important.”

NEW PRODUCTS Yamaha has recently introduced two exciting new products to the market for its South African customers. In the motorcycle and marine sectors, it has a new bike and a new outboard power engine which are top-of-the-range items and which will redefine standards in their industries.

“We’ve recently launched the Ténéré 700 internationally (the South African launch is expected towards the end of 2019) which is an adventure bike for a market where we do not complete well right now,” details Van Rensburg.

“That market is dominated by BMW and KTM and we haven’t had a strong product to compete in that space. Up until now, adventure bikes have been big 1200cc bikes which is great for a

YAMAHA SOUTH AFRICA

road bike as it is very smooth but as soon as you go on anything other than tar, it’s heavy and can become a handful, especially for inexperienced riders. So, an adventure bike with a smaller engine certainly has the potential to take market share.”

The Ténéré 700 has a 698cc, 2-cylinder, 4-stroke liquid cooled engine.

It is designed for longer journeys with both on and off-road capabilities.

Yamaha says it gives riders a new sense of total freedom thanks to its ability to redefine boundaries.

“On the marine side” says Van Rensburg, “we’ve just launched our big 425 horse power motor which plays in the top echelon of the market and has taken off very nicely. The big thing now is to right-size our dealer footprint.

We have had too many dealers and too many of them have been doing an

average job so what we want to do is put the right partners in place in the right areas which might mean having less dealers but doing a much stronger job from a customer service point of view.

We believe that we can have the right dealer network, with the right customer experience, with new products coming to us, and we certainly believe that will allow us to grow.

“In terms of revenue and potential for growth, motorcycles and marine are two key product areas for us. Our music business does really well on both audio and musical instrument sides but, in terms of room for growth, it’s not as big as marine or motorcycle,” he adds.

In each segment that Yamaha plays, there is room for significant growth and Van Rensburg is very keen to use firstclass service to build on the presence the brand already enjoys.

“We are market leaders in the marine business with 56% of the market for outboard motors. We are the market leader in personal water craft or wave runners. Our objective is to continue dominating in these sectors and to take further market share from our competitors. In the motorcycle business, we want to get back to the top in what we call the 500c and above road bike sector. We are very strong in off-road Enduro-type bikes and we will keep our position there. We want to grow our market share in the adventure bike segment with the Ténéré 700 and we believe we can also lead in the below 500cc road market. We also want to lead in golf carts where we remain the industry leader. Also, in the musical instrument business, we are the market leader and we intend to hold our position there,” he says.

www.enterprise-africa.net / 57

INDUSTRY FOCUS: AUTOMOTIVE

© Yamaha Motor Europe N.V.

CHALLENGES & SOLUTIONS Yamaha is also active in the power equipment and pro-audio sectors where products including lawnmowers, generators, water pumps, mixers, processors, power amplifiers and speakers are distributed through some of the country’s leading retailers and dealers. But, compared to marine and

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motorcycle, these sectors are much more challenging because of price sensitivity in the market.

“Power equipment is a very tough sector,” admits Van Rensburg. “It is very difficult to differentiate the engines. We make a quality engine but that comes at a price and a lot of guys that are buying those engines for lawnmowers

or generators aren’t necessarily looking for top-quality, they are looking for the best price. The audio business is also tough, simply because with modern music streaming, high-quality sound is not something that people strive for anymore. So, to differentiate our products against others in the market is very difficult.”

In that sector, Yamaha is looking to maintain its position as a premium product, being very selective of the retailers it goes through, but most importantly, working hard with the online channels. “In both musical instruments and audio equipment, we went on to Takealot.com and we had a reasonable first month, but I certainly believe that is something which will grow as people explore our range online and look for the good value,” says Van Rensburg.

For Yamaha across southern Africa, Van Rensburg is clear that his ambition is to unlock the potential of the entire region, but not going too fast and not doing things in an

YAMAHA SOUTH AFRICA

unsustainable manner are also very important in the Yamaha strategy.

Perfecting operations in one country at a time is how the brand will develop, starting with Mozambique.

“We think there is significant potential particularly with the marine business,” explains Van Rensburg.

“They have a massive coast line and they have big fishing businesses. On the leisure side, many tourists travel to Mozambique and ride quad bikes on the beach during adventure breaks, so we believe we can do a much better job there on the marine and bike side.

The next priority is Zambia where the marine business is not as big as Mozambique but there is still a big fishing and luxury market, certainly on the motorcycle side. When we get those going right, we will expand further north.”

POWERFUL POSITION TO GROW Operating at the top end of the market is a difficult thing to do in South Africa right now. On the one hand, your customers are the wealthy, where there is not a shortage of disposable income. But on the other, the uncertain economic climate and slow GDP growth rates have knocked confidence and some people and businesses have been holding onto money for longer than usual, considering their investments much more carefully before purchasing.

In February, the National Treasury announced that GDP growth was less than 1% in 2018 and will not reach more than 1.5% in 2019.

This backdrop has resulted in a conservative approach to spending.

“We have seen that over the last four years,” comments Van Rensburg.

// WE BELIEVE THAT WE CAN HAVE THE RIGHT DEALER NETWORK, WITH THE RIGHT CUSTOMER EXPERIENCE, WITH NEW PRODUCTS COMING TO US, AND WE CERTAINLY BELIEVE THAT WILL ALLOW US TO GROW // But he remains upbeat about the future, stating that in the longer-term, the growth potential in the region

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INDUSTRY FOCUS: AUTOMOTIVE

cannot be ignored and there are positive signs for business.

“There does seem to be an underlying confidence that postelections in May, we will have a leader that has common sense and, globally, there seems to be a belief that South Africa is the key to Africa. As long as the outcome of the elections in May is predictable, I certainly think we will see the market climb. What we know, according to our data, is that there is cash around but people are just not spending it.

“Having said that, we are already seeing an upturn. Our sales for the first two months were encouraging – people were starting to spend which is good news. Certainly, in the segment we play in, people have the money, it’s just about giving them the confidence to make their investments.”

This confidence will be important going forward as the two major stakeholders in Yamaha’s South African operation - Japan’s Yamaha Corporation and South Africa’s Bidvest – expect two things: “Profit and a return on capital” says Van Rensburg.

But, especially from Japan, strategy guidance is minimal and reasonably ‘hands off’ which gives Van Rensburg and the management team on the ground in Johannesburg the opportunity to develop a local plan, suitable for the local conditions.

“I have a lot more freedom than I’ve had before,” he says. “All they want to know is that the brand is well represented and we are growing our market share. Of course, there are certain things that Japan drives, specifically skills. We are on the same page with that as one of

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// OUR SALES FOR THE FIRST TWO MONTHS WERE ENCOURAGING – PEOPLE WERE STARTING TO SPEND WHICH IS GOOD NEWS // the challenges with our business is technical skills. Working with motors and engines is not a job that everybody coming out of school aspires to do. Youth unemployment here is at 60% so we are on a big drive to get into the technical colleges and get people into apprenticeships so that we start to get skills back in to the business as we need those skills to deliver the Yamaha promise of quality.”

KANDO South Africa’s auto-manufacturing sector is impressive, and remains a vital cog in the economic engine.

But Yamaha is happy to continue importing and does not have plans to move into the local manufacturing sector across any of its product lines. The only situation which could result in a change of strategy is if the country’s boatbuilding sector continues to decrease.

“We sell outboard motors but without boats there is nothing to put a motor on,” says Van Rensburg.

“The boatbuilding industry is really struggling, and a lot of the companies have disappeared. Yamaha has recognised this as an issue for Africa and we are looking at what could be possible if we can guarantee some kind of supply, but nothing is concrete yet. The benefit for us would be getting boats to sell as we are running out of boats to put outboard motors on and that is a risk.”

The other long-term risk for the company in South Africa is the global switch from combustion engines to electric motors. Here, Van Rensburg

YAMAHA SOUTH AFRICA

© Yamaha Motor Europe N.V.

// WE WANT TO GROW OUR MARKET SHARE IN THE ADVENTURE BIKE SEGMENT WITH THE TÉNÉRÉ 700 AND WE BELIEVE WE CAN ALSO LEAD IN THE BELOW 500CC ROAD MARKET // is sceptical about the shorter-term, saying: “South Africa still struggles to power its houses never mind a whole nation of electric vehicles.” However, he does admit that there could be a market for certain electric products in South Africa.

“They are experimenting and there is work happening on an electric scooter which I think would do very well here. We have a lot of fast food deliveries and they always return to a central point without driving a huge distance – if you have an electric scooter, it would take away big running costs and, depending on the

initial investment, I feel there would be a big place for it.”

In various international markets, both electric motorcycles and electric outboard engines have proved extremely competitive.

Until that technology, and demand, advances further in Africa, Yamaha will continue to focus on its core product range which has been refined over the years and is now well-known for its quality.

Yamaha follows a corporate philosophy built around the Japanese word ‘Kando’, a feeling of deep satisfaction and excitement gained

when interacting with a product of supreme quality and exceptional value. Whether it’s musical instruments, audio equipment, golf cars, marine engines, ATVs, motorcycles or any of the other fantastic products distributed in SA

by Yamaha, the company promises quality and the ‘performance of your life’ and Van Rensburg is adamant that this is still just the beginning for the brand in Africa.

“We are not even close to our potential yet. If we fix a lot of those basic elements around customer experience and add that to our great product range, we are certainly going to grow in South Africa and the rest of Africa,” he concludes.

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BARLOWORLD

Leveraging Experience to

Take Brands Global PRODUCTION: William Denstone

One of South Africa’s oldest companies, a reputation for ethical conduct, innovation and a commitment to giving back has ensured Barloworld a longevity which surpasses 117 years. A distributor of leading global brands, Barloworld provides integrated rental, fleet management, product support and logistics solutions and currently has operations in 16 countries around the world.

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INDUSTRY FOCUS: DISTRIBUTION

//

Headquartered in Johannesburg SA and Maidenhead UK, the core divisions of the Barloworld group comprise Equipment and Automotive and Logistics. Under these umbrellas fall earthmoving and power systems, and car rental, motor retail, fleet services, used vehicles and disposal

solutions, logistics management and supply chain optimisation respectively.

These flexible, integrated business solutions which Barloworld brings to customers are backed by leading global brands.

Behind Barloworld’s success and staying power has been a proven track record of building long-term relationships

with global principles and customers. This is paired with the ability to develop and grow businesses in diverse geographies, including challenging territories with high-growth prospects.

Of over 17,400 total employees, 79% are committed to serving Barlworld’s South African operations.

CATERPILLAR ACQUISITION The sale of its underperforming Iberian equipment business to privately owned Italian group Tesa S.p.A. in June brought Barloworld a R2.5 billion windfall.

The proceeds of this sale now look set to be put to excellent use in the form of the acquisition of a business from Caterpillar, the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.

“I have given myself a year to identify a business and I have already engaged Caterpillar,” explained Chief Executive Dominic Sewela to Reuters on the rationale behind the choice. “They have given me a commitment to a specific area.

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BARLOWORLD

“Equipment is the bulk of our business so it makes sense that we continue to invest in that area. I am looking for heavy construction and mining-related type of geographies,” Sewela outlined. The remainder of the proceeds from the recent sale would be brought back into South Africa, possibly to then buy back shares.

Barloworld Equipment is the official dealer for Caterpillar’s CAT construction, mining and industrial machine range in eleven southern African countries. In addition to the domestic dominance, it also holds the rights in Spain, Portugal, Siberia and the Russian far east.

POSITIVE PERFORMANCE The equipment division was the main contributor to an 18% rise in Barloworld’s full-year profit, which was aided significantly by strong

growth in mining. Operating revenue for the company’s Russian equipment business also boomed by 57% to $606 million in the year to the end of September, while revenues from the South African equipment unit rose 8.1% to R19.8 billion.

The growth was largely driven by higher equipment sales - up 21% - in South Africa, Mozambique and Zambia and rental revenues, which increased by 25%.

Return on equity also eclipsed the previous year, standing at 11.4% compared to 10.5%, while free cash generation of R3.6 billion beat the R3.4 billion of 2017. “The group produced a strong result in the reporting period, despite a difficult trading and economic environment,” summarised Sewela. “The solid performance was particularly due to robust earnings growth in Equipment

// WE ARE LOOKING FORWARD TO OUR NEW HEADQUARTERS BEING A PLACE WHERE WE CAN GROW AS A BUSINESS AND CREATE A BOLD NEW FUTURE // Russia, the turnaround of the Logistics business and the strong associate income from the Bartrac JV in the Katanga region of the DRC. “Equipment southern Africa and Automotive performances were satisfactory in a challenging economic cycle.

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INDUSTRY FOCUS: DISTRIBUTION

“The group will continue to focus on driving our businesses to their full potential through the optimal allocation of capital and the execution of our medium-term strategy; this sets a strong foundation for the pursuit of value-enhancing acquisitive growth opportunities that fit our capabilities and the optimisation of the group’s capital structure.”

SHARE OFFER OPENS In a move set to boost its empowerment credentials significantly, April saw Barloworld announce its R3.5bn BEE scheme, offering black South Africans the chance to buy shares in Khula Sizwe Property Holdings, a new black-owned commercial property company.

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Black investors and about 14,000 of Barloworld’s management and employees will own shares in Khula Sizwe, which was established for the empowerment scheme.

Khula Sizwe’s properties include motor retail properties with a market value of R1.68bn, industrial properties worth R914 million, commercial properties worth R95m, mixed commercial and industrial properties worth R13m, residential properties worth R29m and development properties worth R130m.

“Through Khula Sizwe, shareholders have the opportunity to invest in a property company with less volatility than a share-based scheme,” stated Tantaswa Fubu, Barloworld spokesperson

// THE GROUP WILL CONTINUE TO FOCUS ON DRIVING OUR BUSINESSES TO THEIR FULL POTENTIAL THROUGH THE OPTIMAL ALLOCATION OF CAPITAL AND THE EXECUTION OF OUR MEDIUM-TERM STRATEGY //

BARLOWORLD

and executive for human capital, adding that the offer to give black South Africans the opportunity to participate in a property-based B-BBEE share scheme that is not related to a share price was a first of its kind in the country.

“The company has guaranteed rental income from Barloworld as Khula Sizwe’s tenant, making their investment more stable with predictable cash flows, and reducing risk while creating value for shareholders.”

PRISTINE HEADQUARTERS The stunning new Barlow Park development in Sandton is a R3 billion project overseen by developer Atterbury, a mixed-use development that will be anchored by Barloworld and will house

the group’s new corporate headquarters as it moves into another new era.

It is being developed through a three-way partnership between Barloworld, Atterbury and African Rainbow Capital, with each group holding one-third of the landmark site.

The build is expected to roll out in phases over an eight-year period.

Construction commenced in July of 2018, with Sewela outlining that the redevelopment of Barlow Park was part of the group’s strategic focus to maximise the use of and unlock value in all its assets.

Meanwhile Kamogelo Mmutlana, CE of Barloworld Logistics, clarified that the planned fit-for-purpose building would operate as a high-performance centre, encouraging collaboration between

employees, engaging clients and offering a business centre where innovation and ideas flourished.

“We have deep-seated roots in Barlow Park, but this move will see us becoming part of an important business node within Gauteng,” Mmutlana said.

“This project is arguably one of the most ambitious in the history of Barloworld Logistics. We are looking forward to our new headquarters being a beacon for all our stakeholders, a landmark within the precinct and place where we can grow as a business and create a bold new future.”

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SIBANYE STILLWATER

Strong In the Face

of Challenge PRODUCTION: Timothy Reeder

Today, Sibanye-Stillwater stands as the third largest global producer of platinum and palladium, and features among the world’s top gold producing companies. With a renewed focus on safety and significant challenges now overcome, the Group looks to build on a hugely positive set of results to further cement itself at the top of SA, and world, mining. www.enterprise-africa.net / 69

INDUSTRY FOCUS: MINING

//

An independent, global precious metal mining group, Sibanye-Stillwater produces a unique product mix, including gold and the platinum group metals (PGMs).

Although relatively brief, Sibanye Stillwater’s sparkling history in South Africa dates back to 2012 and Gold Fields’s unbundling of its 100%-owned subsidiary, GFI Mining South Africa, comprising the Kloof, Driefontein and Beatrix gold mines.

A busy period of acquisitions and exchanges of significant assets culminated in the December 2016 announcement of Sibanye’s proposed acquisition of Stillwater Mining Company (Stillwater) in the US. Having been awarded Deal of the Year by Ansarada DealMakers in the February, May 2017 saw it conclude the largest PGM transaction globally in over a decade by successfully acquiring Stillwater, catapulting the Group into third spot among the world’s largest producers of palladium and platinum while remaining in the top ten global gold companies.

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SIGNIFICANT TRANSFORMATION Sibanye Gold Limited began trading as Sibanye-Stillwater at the end of August 2017, at which time the company also restructured itself by region, with the Southern Africa and the United States operations becoming separate entities.

Since then, the group and its operations have only gone from strength to strength, reflected by its dominant standing in such a globally competitive industry. “We take pride in the fact that we have grown SibanyeStillwater from what was perceived as a high-cost South African gold producer with limited operational life, into a globally-competitive South African precious metals company,” says Sibanye-Stillwater of the journey that it has taken to date.

“We have some of the highestgrade gold and PGM reserves in the world,” adds Sibanye-Stillwater CEO, Neal Froneman. “For the first 18 months we focused on turning this business around, cutting costs by 24% in the gold business and improving productivity. We also brought a lot

// WE ARE PLEASED THAT THE EXTENDED STRIKE AT OUR GOLD OPERATIONS HAS ENDED, WITHOUT UNDERMINING OTHER STAKEHOLDERS OR COMPROMISING THEIR RIGHTS // more of a technical focus into the business, and that all resulted in us building a very solid company from an operating point of view.

“Through the reduction in costs we were also able to double our reserves, providing the sustainability we needed.”

In South Africa, Sibanye-Stillwater’s gold producing assets and projects are located throughout the Witwatersrand Basin, with PGM assets set on the western limb of the Bushveld Complex, near Rustenburg.

SIBANYE STILLWATER

GOLD STRIKE CONCLUDED April brought the welcome - and eagerly awaited - news that the five-month strike by the Association of Mineworkers and Construction Union (AMCU) at its SA gold operations had been resolved, with both parties acknowledging the importance of re-assessing and developing a constructive working relationship moving forward.

This will entail the fostering of a safe and sustainable business, and one that creates value for all stakeholders, to be brought about via a facilitated ‘post-strike conflict’ relationshipbuilding program aimed at aligning leaders of both organised labour and management.

As part of this, ACMU has committed to the 2018 three-year wage agreement previously signed with the National Union of Mineworkers (NUM), while developing and implementing a plan to ensure a safe start and rampup of production post-strike, and to promote and ensure sustainable safe production together with the company.

On Sibanye-Stillwater’s part, all employees at its gold operations will receive a payment of R4,000 in the form of cash or a voucher to alleviate hardship, as well as the provision of transport to allow employees to return to work. Any employees who were dismissed for strike related misconduct will now also be subject to normal disciplinary proceedings, in line with the company’s disciplinarily code.

For both Sibanye-Stillwater and ACMU, the immediate focus will henceforth be on ensuring that the gold operations re-commence safely.

To enable this, initial shifts will consist of fit-for-work medicals, training and assessing work places before mining activities are allowed to re-commence in full confidence.

// WE ARE POSITIVE THAT OUR MINING IMPROVES LIVES //

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INDUSTRY FOCUS: MINING

Of the historic resolution, Neal Froneman declared: “We are pleased that the extended strike at our gold operations has ended, without undermining other stakeholders or compromising their rights.

“We are encouraged by AMCU’s

commitment to peace and safety, and are hopeful that the relationship can now be rebuilt in a constructive manner, for the future benefit of all stakeholders.

“It is with sadness that we reflect on the losses and hardship resulting from the strike, which include lives lost

and serious injuries sustained. We are fully committed to restoring the gold operations to profitability, for the benefit of all stakeholders including employees, the local communities and those dependent on the regional economy.”

STRONGER THAN EVER Overcoming challenge is an integral part of the Sibanye-Stillwater DNA, and recent months have called for greater resilience than ever in its lifetime.

This made the group’s most recently released set of results an even more impressive feat given the conditions in which they were achieved, and serve to give Sibanye-Stillwater an enviable platform from which to expand in the years to come.

This success was felt across the board, with a 41% improvement in safety in the second half of the year, relative to the regression of the first half, among the headline figures. This is crucial, particularly in light of the now-

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SIBANYE STILLWATER

// I AM PLEASED TO REPORT THAT WE HAVE EMERGED FROM A DIFFICULT PERIOD IN A ROBUST STATE // resolved conflict, and to underline its commitment, the group established the Global Safe Production Advisory Panel consisting of leading academics, and the marked improvement in H2 continues in 2019: seven million fatality-free shifts achieved by the group represents a new safe production record.

“It is again my privilege to report to all our stakeholders on the progress made by the Group during 2018,” outlined Chairman Sello Moloko. “I am pleased to report that we have emerged from this difficult period in a robust state with the appropriateness of our carefully considered strategy

to diversify, geographically and by commodity, already proven.”

Emerging strategically and operationally well-positioned to benefit from the significantly improved outlook for precious metals, after a 2018 which proved challenging in several ways, also reported was a 10% growth in revenue and 67% decline in level three and higher environmental incidents as a result of improved environmental management.

With the group’s Rustenburg and Aquarius acquisitions establishing Sibanye-Stillwater as a leading PGM producer and much future mine-tomarket PGM business to come in South Africa, Neal Froneman’s pride in where the group finds itself to date was wholly understandable.

“Sibanye-Stillwater has undergone many fundamental changes since it was established in February 2013,” he recognised, “transforming from a gold only producer with three mines in South

Africa into a globally diversified precious metals producer with operations and projects in five jurisdictions.

“Following the completion of the proposed acquisition of Lonmin, the group will rank as one of the largest primary producers of platinum and palladium, and associated PGMs, in the world.”

“We are positive that our mining improves lives and our vision to create superior value for all stakeholders is unwavering with all of our decisions and actions.” Sibanye-Stillwater’s progression has been holistic, of that there can be no doubt. It is an admirable method of operating: safety first, success will follow.

WWW.SIBANYESTILLWATER.COM

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DISTELL

The Toast of Africa PRODUCTION: William Denstone

Proudly and immovably rooted in South Africa, Distell is a global concern whose main business is the production, marketing and distribution of a diverse portfolio of award-winning alcoholic brands. Strong performance, award-winning service and astute external appointments are adding up to exciting times for this major market player. www.enterprise-africa.net / 75

INDUSTRY FOCUS: FOOD AND DRINK

//

The Distell Group is South Africa and Africa’s leading producer and marketer of wines, spirits, ciders and other readyto-drink (RTD) beverages. Its portfolio numbers some of the most loved and appreciated brands not only in South Africa, but the world over.

Having on its books such names as Amarula, Savanna, Hunter’s Dry, Durbanville Hills and Nederburg gives Distell a brand list which is just as diverse as the people who work on the products themselves. Distell’s products combine rich provenance and authenticity, and are carefully priced across the whole continuum from more everyday to the luxury end, in order to cater for the broadest spectrum of consumers.

Employing approximately 5500 people, Distell secures an annual turnover of R21.5 billion. “We craft distinctive alcoholic beverage brands,

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// WE ARE A PROUD AFRICAN ALCOHOLIC BEVERAGES COMPANY WITH HERITAGE, GLOBAL REACH, WORLD-CLASS PEOPLE AND THE ABILITY TO DO EXTRAORDINARY THINGS // enhance memorable moments and inspire responsible enjoyment,” says Distell of its central aims. “The value we create enriches the lives of our people, shareholders and the communities within which we live and work.”

DISTILLER OF THE YEAR “We are a proud African alcoholic beverages company with heritage, global reach, world-class people and the ability to do extraordinary things.

We exist to provide unique moments of social enjoyment through the responsible marketing of well-crafted ciders, wines and spirits,” continues

Distell of the driving forces behind its boundless growth.

The Icons of Whisky Awards, widely accepted to be one of the real barometers of success in the industry, were created to recognise exactly the extraordinary things Distell succeeds in delivering. Alongside its partner event the World Whisky Awards, the two never fail to be attended by some of the industry’s most respected figures.

Distell was, perhaps predictably by now, the undisputed champion on the night in March this year, crowned ‘Overall Distiller of the Year’ at the ceremony. The group’s winning streak

DISTELL

continued at the World Whisky Awards later the same evening, with three additional awards recognising the company’s international single malt and grain brands.

The gongs collected included prizes for Best Scotch, with Distell’s Islay Single Malt scooping the award for the second year in a row, and Best South African Grain for its Bain’s Cape Mountain Whisky. Distell itself was named Distiller of the Year.

Being collected in Glasgow, meanwhile, was a trio of awards at the 12th annual Òran Mór Whisky Awards, including Ledaig PX as Best Newcomer and Bains as Best Overseas Whisky.

This brought the overall total of global accolades to 17, an embarrassment of riches for Distell on a night of unprecedented glory.

Derek Scott, Brand Director for Malts at Distell International, said: “We are passionate about our malts portfolio and are continually working to provide exceptional whisky for new and loyal audiences alike.

“These awards are amongst the most respected and influential spirits competitions in the world and to have received so many accolades across our brands is huge testament to the talented teams across the distilleries.”

ASTUTE APPOINTMENT While long recognised globally for its own service excellence, Distell is also acutely aware of the importance of strong partnerships, and its appointment of French multinational advertising and public relations company Publicis to manage some of its prestigious brands is among its most astute to date.

Publicis Groupe is the oldest and one of the largest marketing and communications companies in the world, by revenue, headquartered in Paris. Founded in 1926, the world’s third largest communications group is famed for world-renowned creativity, best in class technology and digital and consulting expertise.

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INDUSTRY FOCUS: FOOD AND DRINK

// WE ARE PASSIONATE ABOUT OUR MALTS PORTFOLIO AND ARE CONTINUALLY WORKING TO PROVIDE EXCEPTIONAL WHISKY FOR NEW AND LOYAL AUDIENCES ALIKE //

Under its management will be Bernini, Extreme, Count Pushkin, Gordon’s Gin, J.C Le Roux, Klipdrift, Olof Bergh, Richelieu and Three Ships, among others. The appointment of Publicis concludes the second phase of Distell’s efforts to consolidate its agency portfolio, which the company views as a key part of its strategy going forward as it seeks to deliver on its global aspirations.

Throughout its history Distell has responded to the need to evolve and innovate as a business, in order to remain the leader in a very competitive sector. The world of communication agencies is facing its own challenges, too, and together the pair will look to adapt and continue to beat a path for others to follow.

“The dramatic changes in the global marketing communications landscape necessitated a complete re-look of our agency model as well as our internal response to this change,” explained Andre Beyers, Distell Marketing Director, Africa and lead for this project.

“Having got to know the Publicis team and offering through the first phase of the process, we are delighted to have them on board to look after this second batch of brands and look forward to a fruitful relationship,” added Donovan Hegland, Global Marketing Director for Distell.

DOMINANT PERFORMANCE Amid tough trading conditions and ever-growing competition, Distell was able to harness its expertise to emerge with strong revenue and margin improvement as its Africa growth strategy steadily gains momentum.

Reported revenue increased by 7.3%, with growth seen in 12 of its 15 largest brands and Distell also grew its comparable domestic market revenue by 7.8%, with comparable group revenue up by 9.1% to R14.4 billion on constant volumes There was solid domestic revenue growth in all three drink categories, while an exceptional

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DISTELL

// AFRICA REMAINS A PRIORITY REGION FOR US GIVEN THE CONTINENT’S GROWTH PROSPECTS AND OUR AMBITION TO BE AN AFRICAN CHAMPION // Africa performance was led by Kenya, Mozambique and Zambia.

These African markets delivered exceptional comparable revenue growth of 21.1% on sales volumes, an improvement of 12.7%. Again, outside the Southern African Customs Union

(SACU), Distell’s focus markets on the continent too delivered excellent results, seeing revenue and volume growth of 43% and 34.1% respectively, and lending yet further impetus to the company’s African growth ambitions.

“We are pleased with the momentum and continued resilience of our business,” said Distell’s Group CEO, Richard Rushton, of the performance. “Our results reflect the efficiency initiatives aimed at driving consistent market place execution and enhancing margins.

“I’m particularly encouraged with the stellar performance of our Africa operations at a time when we are increasing investments in route-tomarket capability and local production.”

This is particularly important, as since embarking on its new strategic

journey Distell has introduced a number of important steps across its business to ensure it is responsive to market needs and geared to respond effectively to the ever-changing global landscape.

“Looking ahead, we expect the current tough domestic environment to persist and economic growth to remain lacklustre,” Rushton continued. “We are, however, confident that our consumercentric approach and diversified portfolio of brands will enable us to capture growth opportunities.

“Africa remains a priority region for us given the continent’s growth prospects and our ambition to be an African champion.”

WWW.DISTELL.CO.ZA

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EXHIBITION FOCUS

African Construction Expo 2019 readies for a breakthrough Since the highs last experienced just before the 2010 Soccer World Cup, the construction sector in South Africa and on the African continent has yet to see an industry boom.

South Africa experienced a technical recession in the first and second quarters of this year. Coupled with 2018’s economic instability, woeful performances by state-owned enterprises and its negative effect on civil construction, as well as institutional uncertainly and policy paralysis that are typical of an election year, it certainly presents a less than favourable outlook for the South African construction industry.

However, there is cause for optimism with the South African government’s economic stimulus plan to inject billions into infrastructure development. Add Statistics SA Q2 figures, which suggest a 2.3% uptick in construction activity and the construction tide may rise sooner rather than later.

Research giant Fitch Solutions also expects 2019 to be the year the sector finally emerges from recession. The 2019 sub-Saharan Africa construction growth report expects year-on-year growth of 6.8%, considering the total infrastructure spend is expected to total R855 billion over the next 3 years, an increase of 2.5% from last year.

Fitch says Ethiopia, the continent’s top construction performer, is expected to increase its construction industry value to 12.3%. But industry growth in Zambia and Namibia is slowing down as Zambia faces fiscal challenges and rising debt while Namibia is seeing major projects coming to an end.

Against this background, construction professionals across Africa can mark their calendar for the year’s biggest industry event - the 7th Annual African Construction and Totally Concrete Expo taking place at Gallagher Convention Centre in Johannesburg from 11 to 13 June 2019.

“Given the construction industry’s challenges and contracting growth over the last decade, the expo affords an opportunity to rethink challenges the industry has been facing and mapping a positive way forward,” says TracyLee Behr, Portfolio Director of African Construction Expo at dmg events.

“The expo is the construction industry’s largest gathering of construction professionals and provides unique opportunities for the industry as a whole when 9 500 construction professionals from over 45 countries come together to do business, form and strengthen partnerships and learn from each other.”

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AFRICAN CONSTRUCTION EXPO 2019

Moreover, Behr explains that because this year’s expo is co-located with four other industry expos – Totally Concrete Expo; Pumps, Valves and Pipes Africa Expo; African Smart Cities Summit and African Construction Awards. “It is a chance for attending industry players to not only stake their claim in Africa’s construction industry but also to take holistic stock of the industry and come up with solutions that benefit the entire built environment value chain to ensure resilience,” she says.

Behr continues that it is critical for the construction sector to work to develop the necessary capacity and new technology today to be able to meaningfully contribute to the future worldwide economy.

Construction technology and new building methods remain the biggest disruptors for the construction industry.

So, the latest industry technology will be on display and will feature the best pump, valve and pipe engineering products, building materials and smart city technology to touch, feel and experience.

Beyond technology, innovation and creativity, the industry’s current and future workforce and leadership are expected to play a major role in order to operate seamlessly in the growing industry set against the fourth industrial revolution. Africa has a fast-growing young population and by providing them the opportunity to build and upskill fresh innovative talent, this will infuse fresh thinking into this sector. For that reason, the expo offers robust free workshop and training programmes to boost professional development and skill building.

A truly African event, the African Construction Expo – co-located with the Totally Concrete Expo, Pumps, Valves and Pipes Africa Expo, African Construction Awards as well as the African Smart Cities Summit – attracts buyers, sellers and contractors from over 45 countries, of which 15 are African.

For more information, or to secure attendance, visit www.africanconstructionexpo.com

11 - 13 June 2019 Gallagher Convention Centre Johannesburg, South Africa

Africa’s MUST-ATTEND show for the built environment

Benefits of attending SOURCE PRODUCTS Discover the latest products and innovations showcased by more than 250 exhibitors.

FIND NEW SUPPLIERS Meet face to face with your current and potential new suppliers.

FREE TRAINING Learn new professional skills, enhance your knowledge and gain CPD points.

REGISTER FOR FREE ENTRY AT: www.africanconstructionexpo.com Host city:

Co-located with:

11th

Silver sponsors:

Bronze sponsors:

2019

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EXHIBITION CALENDAR

KEY UPCOMING EVENTS ACROSS THE INDUSTRY Our regular update to help you keep track of important events and exhibitions taking place across the spectrum of industry sectors.

AFRICA TRAVEL INDABA MAY 02 - 04 | DURBAN Africa’s Travel Indaba brings together a showcase of Southern African tourism products and services for the international travel trade. Exhibitors at the Durban ICC includes, provincial authorities, provincial products and African Countries.

In the ICC, exhibitor categories include accommodation, tour operators, game lodges, transport, online travel, luxury products, Hidden Gems, media publications and industry associations.

Outdoor exhibitors include transport, camping and safari companies.

Africa’s Travel Indaba is one of the largest tourism marketing events on the African calendar and one of the top three ‘must visit’ events of its kind on the global calendar.

It showcases the widest variety of Africa’s best tourism products and attracts international buyers and media from across the world. Africa’s Travel Indaba is owned

by South African Tourism and organised by Synergy Business Events (Pty) Ltd. Africa’s Travel Indaba has won the awards for Africa’s best travel and tourism show. This award was presented by the Association of World Travel Awards.

AFRICAN UTILITY WEEK MAY 14 - 16| CAPE TOWN Over the last 19 years, African Utility Week has grown to be Africa’s premier meeting place for the entire power, energy and water value chain. It now forms part of Clarion Energy, with over 40 global events that cover the power, energy, oil, gas and water sectors making it one of Clarion Events largest portfolios.

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This new development also brings the co-location of POWERGEN Africa in 2019, adding an expanded focus on Generation (including renewables, off grid, fossil fuels and nuclear) while still concentrating on transmission and distribution (including metering), new technologies (including storage, mini grids, micro grids, IOT and ICT systems) and of course water.

The event offers attendees the opportunity to discuss real commercial propositions and streamline their purchasing process by connecting African utility, municipality and commercial decision makers with technology and service providers. In 2019, we will accelerate this process to ensure African Utility Week continues as the nexus for sourcing new business opportunities no matter your sector. This growth focus tracks the expected level of new projects coming online over the medium term on the continent.

South Africa’s Minister of Energy, Jeff Radebe is confirmed as the keynote speaker at the event.

AFRICA HEALTH MAY 28 - 30 | JOHANNESBURG Taking place from May 28 – 30 at Gallagher Convention Centre, the Africa Health exhibition attracts more than 10,500 healthcare professionals and host over 560 leading international and regional healthcare and pharmaceutical suppliers, manufacturers and service providers.

Africa Health is the largest gathering of healthcare companies, technology, products and services in the continent. The event is expected to welcome delegates from 39+ countries.

TRAVEL INDABA DURBAN ICC MAY 02 - 04 LAGOS MOTOR FAIR FEDERAL PALACE HOTEL MAY 06 – 11 EAST & CENTRAL AFRICA COM RADISSON BLU HOTEL, NAIROBI MAY 14 - 15 AFRICAN UTILITY WEEK CAPE TOWN ICC MAY 14 - 16 SECUREX SOUTH AFRICA GALLAGHER CONVENTION CENTRE MAY 14 - 16

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SOUTH AFRICAN MANUFACTURING EXPO NASREC EXPO CENTRE MAY 21 - 23 AFRICA HEALTH GALLAGHER CONVENTION CENTRE MAY 28 - 30 BUILDEXPO AFRICA – RWANDA KIGALI CONVENTION CENTRE MAY 23 – 25

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KNOWLEDGE

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